M I L L A R W E...

MILLAR WESTERN FOREST PRODUCTS LTD.
Tel: 780.486.8200
Fax: 780.486.8282
April 28, 2014
Ms. Ruppa Minhas
Senior Commercial Analyst, Commercial Services
Independent System Operator, operating as AESO
2500 Calgary Place
330-5th Avenue S.W.
Calgary, AB T2P 0L4
Via email: [email protected]
Dear Ms. Minhas:
Millar Western Forest Products Ltd. (Millar Western) has reviewed the report Assessment of Load Shed
Service for Import (LSSi) Product. Our Whitecourt pulp mill has participated in LSSi since its inception
and welcomes the opportunity to provide input on the proposed modifications outlined in the report.
Millar Western wishes to register the following comments on the report recommendations:
1. Stability of available LSSi volumes between T-85 and T-20: Millar Western has some
reservations with the proposed contract revisions that would require a lock-down availability of T85, which would oblige the pulp mill to declare availability to arm 85 minutes as opposed to 25
minutes prior to the start of the hour. More than tripling the availability period would carry
significant risk for participants, exposing them to the financial consequences of running
interruptible load through a high-price hour. This could also undermine program intentions, in that
it will likely drive participants to adopt more conservative strategies, therefore resulting in fewer
megawatts available for arming during periods of increased volatility. On this point, Millar
Western supports the status quo.
2. Manual tripping of LSSi load through system controller’s directive: On the suggestion that
the LSSi contract be revised to allow loads to be manually tripped by the system controller in the
event of an AB–B.C. intertie contingency, Millar Western is seeking clarification: Is the AESO
suggesting a change to the 10 minute response time after receiving a directive?
3. Payments for LSSi availability when AB–B.C. intertie is on outage or LSSi cannot increase
import capability: Millar Western understands the logic of suspending during scheduled tie line
outages but would like to see these outages communicated in advance. We do not support
suspension of availability payments during other periods of constraint. During development of the
LSSi product, participants incurred significant costs to install the required equipment, despite
uncertain returns. The availability payment served as an incentive to enter into contracts,
providing some cash-flow certainty. Reducing these payments might result in the unwanted effect
of discouraging new megawatts from joining the program. In addition, Millar Western supports
maintaining the three-part payment structure – availability, arming and trip payments – in the
same format that is presently used.
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4.
Clarity in compliance: Millar Western fully supports the establishment of guidelines that specify
the AESO’s expectations and criteria. Distinguishing between minor, inadvertent compliance
issues and serious incidents that would constitute contract violations would remove some
uncertainty for participants and bring greater efficiency to the program.
We appreciate the opportunity to contribute to the ongoing evolution of LSSi. Should you have any
questions or wish to discuss these comments, please do not hesitate to contact me at your convenience.
Yours truly,
Gregg Nielsen
Controller, Pulp