Comments on 6/18 RAMPD Call

1. Please provide your organization’s feedback on any scope items that should be added or removed from “Track 1: Modeling, Defaults and Accreditation”.

The Alliance for Retail Energy Markets (AReM) does not oppose moving forward with the Track 1 scope. Its only concern centers on CAISO’s plan to issue surveys to load-serving entities (LSEs) for resource planning data to conduct loss of load expectation (LOLE) modeling. AReM has already provided detailed comments on its concerns that conducting a separate survey risks the CAISO using different data and underlying assumptions than the California Public Utilities Commission (CPUC) that also conducts LOLE analysis. AReM will not duplicate all those past comments here, but only reiterate its recommendation that CAISO obtain resource planning data directly from the CPUC when available to minimize any risk of data discrepancies and reduce the LSE reporting burden.

2. Please provide your organization’s feedback on any scope items that should be added or removed from “Track 2: Outage and Substitution & Availability and Incentive Mechanisms”.

AReM has no suggested changes to the scope and does not oppose moving forward with Track 2. 

3. Please provide your organization’s feedback on any scope items that should be added or removed from “Track 3: Backstop Reform”.

AReM has provided extensive comments within the working group process about the need to reform how demand response (DR) resource credits are treated to prevent the current situation in which the CPUC counts DR resources as resource adequacy (RA) capacity while CAISO does not. AReM is pleased to see that CAISO is open to further discussion within Track 3 regarding this issue and hopes there will be a resolution soon. AReM will continue to participate in these discussions.

CAISO discusses its willingness to consider a backstop for energy sufficiency at the system level. Given CAISO is not adopting the CPUC’s slice-of-day (SOD) resource counting framework, AReM has concerns about the prospect of a backstop for energy sufficiency that uses different resource counting than SOD. Once again, this risks an LSE being determined compliant on RA requirements by the CPUC but then held liable for backstop costs by the CAISO due to the use of different RA standards. AReM would not support this approach. AReM is open to further discussion of a CAISO backstop of energy sufficiency in place of current front-stop procurement under SOD rules, which would need to be coordinated with the CPUC.

4. Please provide your organization’s feedback on the scope items not included in any of the three tracks, but are either left out or scoped for future working group discussion.

CAISO has left discussions regarding Flex RA capacity to a future working group. AReM recommends CAISO reconsider this and take this issue up now. With the large amount of flexible battery capacity that has come online this year, it would be prudent to discuss the future need for front-stop Flex RA procurement.  

5. Please provide your organization’s feedback to WTPF’s presentation, “The Role of CAISO LOLE Modeling in Reliability Planning”.

Like WPTF, AReM supports using robust LOLE modeling to develop resource adequacy standards to ensure the 0.1 LOLE target is met. AReM’s only concern with CAISO taking on LOLE modeling responsibilities is that it is duplicative with LOLE studies conducted by the CPUC. AReM does not support having dueling LOLE studies, potentially with different assumptions and conflicting results. To that end, CAISO should coordinate with the CPUC to explore allowing the CAISO to be the LOLE modeler in place of the CPUC Energy Division or, at a minimum, using consistent data sources and assumptions in their LOLE modeling to prevent confusion.

At the Working Group, WPTF was also critical of the California Energy Commission (CEC) load forecast. AReM agrees with the comments at the Working Group that CAISO should not unilaterally dismiss, change, or otherwise undermine the CEC load forecast. If there are technical concerns with the load forecast process or assumptions, those should be brought to the CEC for resolution. To do otherwise would risk the CAISO deviating in its modeling and practices from other resource planning activities, including integrated resource planning, that still rely on the CEC load forecast. As stated before, AReM is seeking greater consistency among planning rules and practices and not further splintering.

6. Please provide any feedback not already captured.

AReM thanks CAISO for its careful consideration of the stakeholder comments in this working group and has no additional feedback at this time. 

1. Please provide your organization’s feedback on any scope items that should be added or removed from “Track 1: Modeling, Defaults and Accreditation”.

The California Community Choice Association (CalCCA) supports the California Independent System Operator’s (CAISO) scope of Track 1, which was presented on Slide 16 and includes:

• Conducting a probabilistic assessment to evaluate the sufficiency of the current or expected CAISO balancing authority area (BAA) resource adequacy (RA) portfolio in forward time frames;
• Updating the CAISO’s default resource counting rules and planning reserve margin (PRM) to reflect the reliability contribution of different resource types and achieve a 0.1 loss-of-load expectation (LOLE); and
• Addressing ambient derates and considering the development of an unforced capacity (UCAP) mechanism.

These scope items will help support the reliability and availability of the RA portfolio. They will require coordination with the local regulatory authorities who are responsible for setting counting rules and PRMs dependent upon their unique RA program structures.

2. Please provide your organization’s feedback on any scope items that should be added or removed from “Track 2: Outage and Substitution & Availability and Incentive Mechanisms”.

The CAISO’s Track 2 scope items were presented on Slide 28. The CAISO should move forward with the scope items listed in Table 1 for the reasons described in the table.

Table 1: Scope Items that Should be Included in Track 2

The CAISO should remove the following items from the Track 2 scope, as described in Table 2.

Track 2: Scope Items that Should be Removed from Track 2

[1] https://stakeholdercenter.caiso.com/Comments/AllComments/97779f5e-e0a7-4b0f-ad97-855c6cc08ead#org-fe78f059-eae0-4c19-ad57-f3767aa36546.

[2]            Id.

[3] https://stakeholdercenter.caiso.com/Comments/AllComments/a79881e1-374a-4d13-aa17-cbbf7e631b3a#org-6b240e6d-295e-4f19-9bf2-280896d7b4a4.

[4]            Id.

[5]            Id.

3. Please provide your organization’s feedback on any scope items that should be added or removed from “Track 3: Backstop Reform”.

The CAISO presented its Track 3 scope items on Slide 31. The CAISO should move forward with these scope items, which include:

• Obtaining visibility into the availability of resources for backstop;
• Evaluating alternative designs to obtain backstop capacity more efficiently and reliably by addressing the lack of competitive solicitation process (CSP) bids and redefining needed attributes; and
• Developing solutions beyond exceptional dispatch to cure extended day-ahead market resource sufficiency evaluation failures more efficiently and reliably.

As the CAISO is evaluating alternative designs to obtain backstop capacity, it must consider how current RA market dynamics will affect CAISO’s access to CPM capacity through the CSP. The lack of CSP offers is not a function of the way the CAISO’s current backstop processes are designed but rather a function of the current lack of capacity that has RA market prices unprecedentedly high. This does not signal a need to change the current CPM soft-offer cap (SOC). The process for defining the SOC works as intended, covering going-forward fixed costs of the marginal resources on the system and mitigating market power.[1] It is not intended to be competitive with bi-lateral market prices, which currently reflect market scarcity rather than resources’ costs.

If the concern is that capacity will sell to other markets rather than make itself available for CPM, the solution is not increasing the SOC. Instead, the CAISO may need to request the Federal Energy Regulatory Commission (FERC) to implement a capacity market cap for the West, like it has for the energy market. The FERC enforces an energy price cap for the CAISO market and other energy transactions in the West.  In 101 FERC ¶ 61,061, the FERC stated the purpose of the West-wide SOC was to avoid potential “disincentives to bid into the CAISO markets”.[2] If capacity market prices West-wide are extending well beyond those necessary to cover generator costs, the CAISO may need to request the FERC to implement a cap for the capacity markets in the west to avoid disincentives where the CAISO CPM has a cost-based SOC that other markets do not.

In addition, the CAISO should add the treatment of “credited” resources (resources count for RA under the CPUC rules but are not shown on CAISO supply plans) to the scope of Track 3. The CAISO should work with the CPUC to ensure credited resources’ RA capacity is recognized, either through changes to the CPUC rules to have credit resources shown on supply plans or through a CAISO tariff change to recognize credited resources when allocating CPM costs.

[1]            Revised Discussion Paper & Draft Recommendation Plan, Version 2 (June 14, 2024) at 22.

[2]            101 FERC ¶ 61,061 at 20

4. Please provide your organization’s feedback on the scope items not included in any of the three tracks, but are either left out or scoped for future working group discussion.

CalCCA has no comments at this time.

5. Please provide your organization’s feedback to WTPF’s presentation, “The Role of CAISO LOLE Modeling in Reliability Planning”.

WPTF’s presentation included a proposal that would extend the CAISO’s reliability-must-run (RMR) authority to reliability needs identified up to four years forward. If RMRs become more prevalent in the CAISO footprint, the CAISO should consider implementing a more rigorous review process of the costs used to set the RMR contract price. This would ensure customer costs are mitigated while generators reasonably recover their own costs and prevent excessive customer expense on RMR procurement. A more rigorous review process could involve bringing the Department of Market Monitoring (DMM) into the review process, as the DMM has the expertise necessary to assess the reasonableness of the RMR contract price given estimated generator costs.

6. Please provide any feedback not already captured.

CalCCA has no additional comments at this time.

1. Please provide your organization’s feedback on any scope items that should be added or removed from “Track 1: Modeling, Defaults and Accreditation”.

As described in the discussion paper, CDWR-SWP agrees with the prioritization and recommendations ready to advance to the policy development stage and the determination that additional discussion is needed on certain subtopics prior to recommending these topics move into policy development. CAISO encouraged stakeholders to offer observations or suggest longer-term changes to future policy.

CDWR appreciates acknowledgement in the discussion paper that, as expressed by some LRAs including CDWR, they have their own jurisdictional rights on setting PRM and counting rules. An excerpt from page 12 of the discussion paper:

“Finally, several local regulatory authority representatives shared reminders in their comments that each LRA retains the ability to set its own PRM and resource counting rules while opposing the idea of the ISO instituting minimum or otherwise prescriptive rules for either of these.”

CDWR urges CAISO to continue to respect the jurisdictional rights of LRAs, including CDWR, to set their own PRM and counting rules in the pathway forward on revising default criteria.

2. Please provide your organization’s feedback on any scope items that should be added or removed from “Track 2: Outage and Substitution & Availability and Incentive Mechanisms”.

As described in the discussion paper, CDWR-SWP agrees with the prioritization and recommendations ready to advance to the policy development stage. The track 2 will focus on reforming the ISO’s outage and substitution processes to improve incentives, incentives for LSEs to show all contracted RA capacity, consider when and how to provide more time for resources owners to perform required maintenance, RAAIM reform or elimination considering both outage and substitution incentives and update to the resource counting. CDWR-SWP appreciates acknowledgement of CDWR’s observation on how allowing less than a day susbtitution could help system reliability. An excerpt from page 16 of the discussion paper:

“Specifically, the California Department of Water Resources (CDWR) suggested the ISO allow outage substitution of less than a day.”

The discussion paper also acknowledges opposition from and the challenges for some LRAs on moving to 100% annual binding RA showing. An excerpt from page 11 of the discussion paper: “California Department of Water Resources, Cal Advocates, Six Cities, and NCPA opposed moving to such a 100% year ahead binding showing structure”. CDWR reiterates that it is necessary to update its water operation and resource forecast on a monthly basis which necessitates monthly resource adequacy showings.

3. Please provide your organization’s feedback on any scope items that should be added or removed from “Track 3: Backstop Reform”.

As described in the discussion paper, CDWR-SWP agrees with the prioritization and recommendations ready to advance to the policy development stage. The Track 3 will address, a) transparency and the CAISO backstop products; b) Day Ahead Sufficiency in EDAM for the ISO BAA: medium/long term solutions; curing EDAM deficiencies and cost allocations.

4. Please provide your organization’s feedback on the scope items not included in any of the three tracks, but are either left out or scoped for future working group discussion.

DWR has no comment at this time.

5. Please provide your organization’s feedback to WTPF’s presentation, “The Role of CAISO LOLE Modeling in Reliability Planning”.

CDWR has no comment at this time.

6. Please provide any feedback not already captured.

No further comments.

1. Please provide your organization’s feedback on any scope items that should be added or removed from “Track 1: Modeling, Defaults and Accreditation”.

The Public Advocates Office at the California Public Utilities Commission (Cal Advocates) is the state-appointed independent ratepayer advocate at the California Public Utilities Commission (CPUC).  Our goal is to ensure that California ratepayers have affordable, safe, and reliable utility services while advancing the state’s environmental goals.  Our efforts to protect ratepayers include energy, water, and communications regulation advocacy.

The CAISO outlined its plans to implement Loss of Load Expectation (LOLE) reliability modeling in Track 1 of the Resource Adequacy Modeling and Program Design (RAMPD) stakeholder initiative.  Cal Advocates requests that the CAISO publish a timeline for its Track 1 modeling process in advance of presenting an inputs and assumptions document.  This would allow stakeholders to allocate the staff resources needed for a thorough analysis.

Further, Cal Advocates provides the following responses and recommendations on the California Independent System Operator’s (CAISO) June 18, 2024, RA Modeling and Program Design (RAMPD) Working Group and June 14, 2024, Revised Discussion Paper:

• The forthcoming Issue Paper should (i) consider the confounding interaction between competitive solicitation process (CSP) bid volumes and the CPUC’s “effective” planning reserve margin (PRM), and (ii) analyze the high volume of CSP bids during the gas price spike of December 2022-January 2023;
• Cal Advocates opposes the Western Power Trading Forum’s (WPTF) call for the CAISO to assert itself over the resource adequacy (RA) planning jurisdiction of local reliability authorities (LRAs); and
• Cal Advocates supports WPTF’s recommendation that the CAISO analyze whether the flexible RA product still serves a necessary function in reliability planning.

2. Please provide your organization’s feedback on any scope items that should be added or removed from “Track 2: Outage and Substitution & Availability and Incentive Mechanisms”.

Cal Advocates has no comments at this time.

3. Please provide your organization’s feedback on any scope items that should be added or removed from “Track 3: Backstop Reform”.

During the December 6, 2023 and April 29, 2024 working group meetings, CAISO staff described the competitive solicitation processes (CSPs) that seek capacity for Capacity Procurement Mechanism (CPM) designations.  CAISO staff highlighted a significant drop in offers into the CSPs since 2020,[1] and noted that “[i]f the ISO is unable to procure capacity to CPM, the CAISO BA has the direct risk of not having sufficient capacity to reliably operate the grid.”[2]

Cal Advocates urges the CAISO to consider two factors in the forthcoming Issue Paper which so far have not been covered in the CPM working groups.  First, the drop in offers may not imply such a dire reliability risk.  This is due to the confounding interactions of CSP bidding with the CPUC’s “effective” PRM, which may act as a “sponge” on former CSP bidders.  The CPUC set uncapped capacity procurement targets for the investor-owned utilities (IOU) for the summer of 2021[3] and established targets of 2,000-3,000 MWs for the summers of 2022 and 2023.[4]  Effective PRM procurement is intended to take place after the month-ahead RA showings by load-serving entities (LSEs).  This after-market timing implies that effective PRM procurement represents demand-side competition for the supply that might otherwise bid into the CSP. 

Figure 1 reproduces the CAISO’s graph illustrating CSP offers, overlaid with the effective PRM procurement targets (in red) and excess procurement reported by the IOUs for 2022-2023 (black dashed lines).[5]  The capacity procured to serve the effective PRM targets shown in Figure 1 could have counterfactually bid into the CSPs.  Cal Advocates does not disagree that the CAISO may lack insight into the contracting status of the seemingly-absent CSP capacity.  However, Cal Advocates notes that the CSP bid absence does not necessarily imply elevated reliability risk.

Figure 1: CSP Offers by MW, Overlaid with Effective PRM Targets (Red) and Realized Procurement (Black Dashed Lines)

Second, the volume of CSP bids during December 2022-February 2023 represents a clear post-2020 outlier period in the CAISO’s graph.  Cal Advocates requests that the CAISO provide analysis to explain why upwards of 1,500-3,000 MW were bid into the CSP process when those months coincided with a large spike in the price of natural gas and electricity.[6]  Cal Advocates also recommends that the CAISO explore the interaction of unexpectedly high electricity prices during winter and CSP bidding.  Given the intra-monthly nature of the CSP bidding process, Cal Advocates further recommends that the CAISO analyze the timing and volume of CSP bids next to the daily natural gas prices observed over the same period, such as shown in the DMM graph reproduced below.

Figure 2: Daily Natural Gas Prices, December 2022 – January 2023[7]

[1] Resource Adequacy Modeling and Program Design Working Group, June 18, 2024 (Working Group Slides) at 32.  Available at: https://stakeholdercenter.caiso.com/InitiativeDocuments/Presentation-Resource-Adequacy-Modeling-and-Program-Design-Jun-18-2024.pdf.

[2] Revised Discussion Paper & Draft Recommendation Plan, Version 2, June 14, 2024 (Revised Discussion Paper) at 23.  Available at: https://stakeholdercenter.caiso.com/InitiativeDocuments/RevisedDiscussionPaperandDraftRecommendationPlan%20-%20June%2014%202024.pdf.

[3] Decision (D.) 21-02-028, Decision Directing Pacific Gas and Electric Company, Southern California Edison Company, and San Diego Gas & Electric Company to Seek Contracts for Additional Power Capacity for Summer 2021 Reliability, February 11, 2021.  Available at: https://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M366/K441/366441341.PDF.

[4] D.21-12-015, Phase 2 Decision Directing Pacific Gas and Electric Company, Southern California Edison Company, and San Diego Gas & Electric Company to Take Actions to Prepare for Potential Extreme Weather in the Summers of 2022 and 2023, December 2, 2021.  Available at: https://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M428/K821/428821475.PDF.

[5] The black dashed lines are approximate representations of the sum of monthly effective PRM procurement reported by the IOUs in their Excess Resources Reports as of May 24, 2024.  Available at: https://www.cpuc.ca.gov/industries-and-topics/electrical-energy/electric-power-procurement/resource-adequacy-homepage/resource-adequacy-compliance-materials.

[6] CAISO Department of Market Monitoring, Q1 2023 Report on Market Issues and Performance, September 19, 2023 at 5-7.  Available at: https://www.caiso.com/documents/2023-first-quarter-report-on-market-issues-and-performance-sep-19-2023.pdf.

[7] CAISO Department of Market Monitoring, Q1 2023 Report on Market Issues and Performance, September 19, 2023, Figure 1.2 at 6.  Available at: https://www.caiso.com/documents/2023-first-quarter-report-on-market-issues-and-performance-sep-19-2023.pdf.

4. Please provide your organization’s feedback on the scope items not included in any of the three tracks, but are either left out or scoped for future working group discussion.

Cal Advocates has no comments at this time.

5. Please provide your organization’s feedback to WTPF’s presentation, “The Role of CAISO LOLE Modeling in Reliability Planning”.

WPTF asserts that the “CAISO has the clearest authority over RA deliverability tests, local and flexible RA rules, unexpected RA need procurement, and generator retirement/mothball approval,” and recommends that the CAISO take a more assertive interpretation of its Public Utilities Code Section 380-prescribed role “in consultation with” the CPUC.[1]  Cal Advocates disagrees, and reiterates that the CAISO should respect LRA jurisdiction over the operation of RA programs.[2]  As Cal Advocates noted in its comments from the previous working group in the context of CAISO making CPM designations:[3]

Any Capacity Procurement Mechanism (CPM) designation based on RA showings[4] should not result in CAISO backstop to a capacity level beyond the aggregated RA requirements of the LRAs.  A backstop that meets an additional reliability level determined by the CAISO would effectively override and invalidate the RA programs of LRAs.  Thus, LRAs in compliance with their own established RA requirements would be faced with additional procurement charges based on CAISO-determined reliability needs.  Additionally, the Federal Energy Regulatory Commission (FERC) recognizes states’ role to develop and maintain RA programs and acknowledges the CAISO’s “deference to the RA programs of [LRAs]” in the development of CAISO’s Tariff.[5]  Ultimately, the CPUC can establish, implement, and enforce its RA requirements.[6]

Notwithstanding disagreements over jurisdiction, Cal Advocates supports WPTF’s recommendation that the CAISO analyze whether the flexible RA product is necessary for reliability.  Cal Advocates supports reevaluating flexible RA needs throughout the RAMPD working groups as a likely low-hanging fruit for reducing both ratepayer costs and RA program complexity overall.[7],[8]

[1] WTPF, The Role of CAISO LOLE Modeling in Reliability Planning, June 18, 2024 at 13.  Available at: https://stakeholdercenter.caiso.com/InitiativeDocuments/Presentation-WPTF-The-Role-of-CAISO-LOLE-Modeling-in-Reliability-Planning-Jun-18-2024.pdf.

[2] Cal Advocates appreciates that CAISO staff acknowledged the robustness of the ever-growing inter-agency coordination process and interpretation of the CAISO’s role within that context.  See Jun [sic] 18, 2024 - Resource Adequacy Modeling and Program Design Working Group recording at 57:30.  Available at: https://youtu.be/gLI2k_dijQ4?si=4tqHC4QdCUFxmQd6&t=3446.

[3] Cal Advocates Comments on the April 29-30, 2024, RA Modeling and Program Design (RAMPD) Working Groups and April 29, 2024 Discussion Paper, May 17, 2024 at #2.  Available at: https://stakeholdercenter.caiso.com/Comments/AllComments/4726dcff-0976-4bbe-a424-6382c3a38012#org-154a4233-2a8c-43a6-b0d7-d74dc5f944ff.

[4] The CAISO Tariff enables CPM designations based on deficient LRA showings, but also for unexpected and significant events.  CAISO, Resource Adequacy Modeling and Program Design Working Group, April 29-30, 2024 at 15.  Available at: https://www.caiso.com/InitiativeDocuments/Presentation-ResourceAdequacyModeling-ProgramDesign-Apr29-30-2024.pdf.

[5] 116 FERC ¶ 61,274, Order Conditionally Accepting the California Independent System Operator’s Electric Tariff Filing to Reflect Market Redesign and Technology Upgrade, September 21, 2006 (FERC MRTU Order) at paragraphs 1117, 1118, and 1153.  Available at: http://www.caiso.com/Documents/September21_2006OrderConditionallyAccepting2_9_06MRTUfilinginDocketNos_ER06-615-000andER02-1656-027_etal_.pdf.

[6] Public Utilities Code Sections 380(a) and 380(e).

[7] Cal Advocates, Comments on Working Group Meeting of January 16, 2024, January 30, 2024 at Section 7.  Available at: https://stakeholdercenter.caiso.com/Comments/AllComments/97779f5e-e0a7-4b0f-ad97-855c6cc08ead#org-d38a86af-fb94-48de-aa28-3f8bf842398c.

[8] Cal Advocates, Comments on the April 29-30, 2024, RA Modeling and Program Design (RAMPD) Working Groups and April 29, 2024 Discussion Paper, May 17, 2024 at #8.  Available at: https://stakeholdercenter.caiso.com/Comments/AllComments/4726dcff-0976-4bbe-a424-6382c3a38012#org-154a4233-2a8c-43a6-b0d7-d74dc5f944ff.

6. Please provide any feedback not already captured.

 Cal Advocates has no comments at this time.

1. Please provide your organization’s feedback on any scope items that should be added or removed from “Track 1: Modeling, Defaults and Accreditation”.

MRP supports the path forward for this track laid out by the CAISO. In particular, MRP strongly supports the CAISO re-examining its default Planning Reserve Margin (“PRM”) and default Resource Adequacy (“RA”) capacity counting rules.  While the CAISO has consistently referred to these standards as “default” standards rather than “minimum” standards, MRP encourages the CAISO to facilitate a conversation about whether these standards should be minimum standards to discourage Load-Serving Entities (“LSEs”) within the CAISO’s Balancing Authority Area (“BAA”) from leaning on other LSEs or the CAISO’s backstop procurement. 

Regarding the path forward, MRP requests the CAISO provide additional opportunities for discussion when certain aspects of the track are reached or completed.  Such updates would include:

1. The final portfolio that it is using to meet 100% of each LSE’s load plus PRM for the year ahead study.
2. Notice when the short-term study is complete and whether 0.1 LOLE was achieved.
3. A discussion of the mid-term study approach and whether the default PRM should be set to monthly, seasonal or annual granularity.

Given the uncertainty of what future NQC values and methodologies might result, MRP does not recommend the CAISO to use any future NQC values for purposes of these studies.

2. Please provide your organization’s feedback on any scope items that should be added or removed from “Track 2: Outage and Substitution & Availability and Incentive Mechanisms”.

MRP generally supports the path forward for this track laid out by the CAISO. 

3. Please provide your organization’s feedback on any scope items that should be added or removed from “Track 3: Backstop Reform”.

MRP generally support the path forward for this track laid out by the CAISO.  To properly redesign the CAISO’s Competitive Solicitation Process (“CSP”), the CAISO must consider whether its program (1) provides sufficient incentives for non-RA capacity to offer into the CSP and (2) achieves the 0.1 LOLE reliability target.  If one or more monthly RA portfolios are deficient and the CAISO elects to not procure capacity to cure the deficiency, the purpose of the CAISO’s backstop procurement processes is unclear.   Such topics, and others raised by MRP’s previous set of comments, should be discussed in this track.

4. Please provide your organization’s feedback on the scope items not included in any of the three tracks, but are either left out or scoped for future working group discussion.

As the CAISO has identified in the various tracks, there are a myriad interdependencies among the tracks.  MRP hopes that these tracks will not occur in a siloed, sequential fashion, but rather in parallel so that ideas and discussions can flow between the tracks.  The CAISO has recognized that its current program is peak-demand based and does not reflect changes that will be forthcoming from the CPUC’s slice-of-day RA program.  These two differing programs and their resulting PRMs will create immediate interoperability problems. The CAISO should identify and discuss the consequences of the CAISO’s RA program using a non-peak hour based PRM as the peak-based PRM.  MRP believes this can create artificial sufficiency and risk reliability.

5. Please provide your organization’s feedback to WTPF’s presentation, “The Role of CAISO LOLE Modeling in Reliability Planning”.

MRP appreciates both WPTF’s presentation and the CAISO including that presentation as part of the June 18 meeting.

MRP reiterates and emphasizes several of the presentation’s conclusions:

1. The need for the reliability assessments to be “calibrated” to account for climate change, either through the load forecast process or through some other aspect of the reliability planning process (e.g., incorporating a factor to account for increasing volatility and uncertainty in the PRM.  (Presentation, pages 9-10)
2. The need to clarify the role of the state’s Strategic Reliability Reserve (“SRR”) in reliability planning.  (Presentation, pages 16-17)
3. The CAISO’s prominent role in evaluating how the disparate agency program elements come together to maintain reliability for the CAISO Balancing Authority Area.  MRP agrees that this role is unique to the CAISO, not necessarily because of the CAISO’s unique ability to assess the reliability impacts of the interaction of the various programs – entities other than the CAISO possess the ability to perform LOLE modeling to make that assessment – but because the CAISO alone has the statutory obligation to maintain BAA reliability.  (Presentation, page 18)
4. The “reliability gap” beyond the next RA compliance year that exists due to (1) the limited duration of the CAISO’s backstop authority and (2) the lack of a robust LOLE-based forward reliability assessment for that time frame.  This gap, left unaddressed, will continue to force California to rely on inefficient short-term mechanisms to keep resources at risk of retirement in operation as needed to maintain reliability. (Presentation, page 23)
5. Stack analyses are not sufficient to properly assess whether the disparate procurement programs are able to maintain reliability to the desired metric. 

While MRP strongly agrees with the presentation, MRP also offers two relatively minor but important observations. 

First, on slide 20, the presentation rhetorically asks why there was firm load shedding in 2020 when the peak load that year was only 3,000 MW higher than three years prior.  The presentation then notes that 5 GW of thermal generating unit retirements made the difference between tight system conditions and normal system conditions.  While MRP agrees with this conclusion, it does not fully address that the reliability event reflected a fundamentally changed system.  The firm load shedding on August 14 and 15, 2020, began at 6:51 pm and 6:26 pm, respectively[1] – at the time of system net peak demand, not at the time of system peak demand. The RA program, still focused on ensuring resource adequacy at the time of peak demand, did not anticipate or address the need to ensure reliability at the time of system net peak demand.  The lesson to be learned from this event is that the most challenging reliability events may no longer take place during the peak demand hour, and that, as the system continues to evolve, the time of greatest concern may shift from the summer months to the winter months (i.e., during the so-called “dunkelflaute” conditions of multiple days with low solar and wind (and, conceivably, large amounts of gas-fired generation capacity on maintenance outages) that affect the ability to charge the ever-growing fleet of battery energy storage systems), or may still involve summer days in which wildfires reduce solar production and trip transmission lines and affect the ability to transfer power from one area to another.  As the system evolves, the CAISO, working with stakeholders and state agencies, must be able to creatively anticipate what conditions will create reliability challenges and take steps to proactively address those situations.

Second, the presentation observes that Public Utilities Code Section 380 notes that the California Public Utilities Commission, in consultation with the CAISO, shall establish RA requirements. The presentation properly notes that the phrase “in consultation with” is vague and has historically been de facto interpreted as the CPUC setting the system-wide reliability level and the CAISO administering it.[2]   MRP agrees that this vague phrase does not properly define the CAISO’s role, but it does leave open the possibility that the CAISO’s “consultation” role would include the kind of LOLE modeling that the CAISO is contemplating – and MRP fully supports – in Track 1 of this initiative. MRP also observes that, more precisely, the CPUC has been setting the system-wide RA capacity targets, which MRP holds have not ensured that the system achieves at least 1 0.1 LOLE over the past few years. MRP supports the CAISO and the state agencies expressly codifying a given reliability metric as the reliability target[3] and the CAISO performing the analysis to determine what procurement is needed to meet that standard, both in the next RA compliance year but also in the years beyond that, to ensure the resources needed to meet that performance level are cost-effectively retained. 

[1] CAISO January 13, 2021 Root Cause Analysis Mid-August 2020 Extreme Heat Wave at page 45, Figure 4.3.

[2] Presentation, page 13.

[3] MRP offers that the reliability metric that is used to ensure resource adequacy for the CAISO’s Balancing Authority Area (“BAA”) should be expressly codified.   Currently 0.1 LOLE is that generally accepted but un-codified metric.  Given that some stakeholders have questioned as to whether that metric is the right metric for LSEs within the CAISO’S BAA, however, an open discussion as to what metric should apply to the CAISO BAA is warranted.   

6. Please provide any feedback not already captured.

MRP appreciates the CAISO acknowledging that all the RA issues are interrelated.  To reiterate, while MRP agrees that “boiling the RA ocean” – i.e., trying to address all these issues simultaneously in a massive RA-wide initiative – probably would not be the optimal approach, MRP urges the CAISO to keep the interrelatedness of these issues in mind as it works through the proposed tracks.

1. Please provide your organization’s feedback on any scope items that should be added or removed from “Track 1: Modeling, Defaults and Accreditation”.

NCPA believes CAISO already has sufficient modeling data made available to it in portfolios submitted in the TPP. If necessary, CAISO should consider enhancing requirements for those data submissions.

NCPA appreciates CAISO’s continued acknowledgment of LRA authority to establish resource counting rules. The current resource counting rules established by NCPA’s member LRAs either align with, or are superior to, the CAISO default resource counting rules for determining what RA amount NCPA member resources can reliably provide. NCPA looks forward to working with CAISO, the CPUC, and other stakeholders in the parallel policy track to consider and review updated default resource counting rules.

CAISO should not establish a minimum PRM for all LRAs.  Establishing a PRM for individual LSEs is not the role of the CAISO, rather that is the role of the applicable LRA. While using a 0.1 LOLE standard to measure or test the portfolios submitted in RA showings could yield useful information that could be used by LRAs charged with establishing PRMs, NCPA remains concerned that a 0.1 LOLE study embedded in the process to establish a PRM will provide variable results that could result in a moving PRM target.  This is one of the reasons why establishing PRMs has relied heavily on engineering and regulatory judgments.

Resource accreditation should remain with LRAs, which are best positioned to evaluate their resources and accredit accordingly. To the extent that CAISO does pursue changes to the default counting rules, including any consideration of UCAP, such rules should be designed to capture the true capacity value of all resources, rather than using class averages or other shortcuts. The goal should be for superior resources to be valued as such and for inferior resources to reflect their deficiencies. CAISO needs every valid increment of capacity it can obtain. It should not establish rules that derate existing capacity that has been performing accordingly on the grid.   

2. Please provide your organization’s feedback on any scope items that should be added or removed from “Track 2: Outage and Substitution & Availability and Incentive Mechanisms”.

NCPA is prepared to work with CAISO and other stakeholders to improve outage reporting, add more flexibility to substitution requirements to better ensure timely maintenance of facilities and mitigate planned to forced outage reporting, as well as review and enhance RAAIM to the extent possible. NCPA supports continuing to link RAAIM prices to the CPM Soft-Offer cap but acknowledges that 60% of the soft offer cap may be too low.

NCPA appreciates CAISO’s recognition of the challenges LRAs face if CAISO were to move to annual showings.  NCPA reiterates that the monthly showing process should be retained as it allows the opportunity to fine tune the portfolios and address gaps in the most economical way for ratepayers.  NCPA considers this to be a critical element of the current RA program.

Regarding RAAIM applicability, NCPA believes the following statement reiterated by certain stakeholders and the CAISO is meaningless and should no longer be repeated in the policy development stage: “RAAIM is applied only to a fraction of the RA fleet”.[1] Does that mean 1/100 or 99/100, or something in between? What type of resources does RAAIM not apply to? If the author(s) of that statement are implying that RAAIM only applies to a small fraction of the RAAIM fleet, and a large volume of VERs (i.e., Wind and Solar) are exempt, then that is a blatant distortion of the fact that RAAIM applies to a large fraction of the RA Fleet NQC due the massive reduction in VER QC after application of the ELCC or other factors. Solar counted for 0 MW NQC in December of 2022 based on the ELCC

[1] https://stakeholdercenter.caiso.com/InitiativeDocuments/RevisedDiscussionPaperandDraftRecommendationPlan%20-%20June%2014%202024.pdf p.14

3. Please provide your organization’s feedback on any scope items that should be added or removed from “Track 3: Backstop Reform”.

Through this initiative, NCPA seeks to have CAISO formalize and document its current modeling practices and CPM decision-making. NCPA supports CAISO’s commitment to more visibility and analysis. By and large, NCPA believes most unshown NQC is reserved to support RA substitution or to back PT exports by LSEs in non-ISO BAAs. As part of its investigation into resources that could potentially bid into the CSP, CAISO should have visibility into such usage and should report out aggregate historical results in the stakeholder process in order to help estimate how much NQC is really available. CAISO should also be able to report how much substitution capacity has been shown since PRR 1343 was implemented in order to try to estimate how much capacity is unshown.

NCPA supports the current CPM soft offer cap and recurring reevaluations required by the CAISO tariff. Current market prices, driven by scarcity and fear, are massively misaligned with any realistic costs associated with running a facility. High market prices render the CPM process obsolete since the massively high market prices are incentivizing resources to secure RA contracts and to be shown as RA to the fullest extent possible. A resource that does not wish to market itself in light of such high prices is likely doing so either A) to avoid being subject to must offer obligation, bid insertion, outage substitution requirements, other operational purposes, or B) it already is committed to external to ISO LSEs. CAISO would have to question the quality of any capacity that can’t find an RA contract and must turn to CPM. For 2024, all previously RMR’d resources either had an RA contract or retired. There are no RMR contracts for 2024.  If CAISO desires to make such resources available in CPM, then MOO, Bid Insertion, as well as substitution rules need to be overhauled. Otherwise, similar to RMR, there will be no resources to offer to CPM. CAISO could also perform non-RA capacity price surveys in other markets in order to confirm that CAISO RA bilateral prices are more than high enough to incent marketers to make the capacity available to CAISO LSEs.

4. Please provide your organization’s feedback on the scope items not included in any of the three tracks, but are either left out or scoped for future working group discussion.

We have no comments at this time.  

5. Please provide your organization’s feedback to WTPF’s presentation, “The Role of CAISO LOLE Modeling in Reliability Planning”.

We have no comments at this time.  

6. Please provide any feedback not already captured.

 We have no other feedback at this time.

1. Please provide your organization’s feedback on any scope items that should be added or removed from “Track 1: Modeling, Defaults and Accreditation”.

PG&E appreciates the clarification CAISO provided on the process and topics to be addressed in Track 1, as outlined in the updated revised discussion paper and presented at the working group meeting. As highlighted by PG&E and other stakeholders in previous comments, PG&E continues to recommend that CAISO include in the scope of Track 1 the need to perform a backcast analysis of the system Planning Reserve Margin (PRM) for the entire CAISO BAA. This data is crucial for evaluating the effectiveness of these values in meeting load and system operating requirements (see comments submitted on May 17).

PG&E recommends increased coordination between CAISO and all LRAs on all topics listed in Track 1: LOLE modeling; default PRM and counting rules; development of UCAP mechanism; and ambient derates due to temperature. Additionally, PG&E suggests that CAISO schedule joint working group sessions with all LRAs on these topics.

As CAISO acknowledges, the advancement and implementation of Track 1 depend on the policy development of Track 2, especially concerning:

1. The clarification of the forced outage definition;
2. The forced outage data to use in the UCAP counting; and
3. The updated UCAP-PRM using any adopted UCAP methodology.

PG&E recommends that CAISO provides stakeholders with an indicative timeline of the next steps and clarifies how the interdependencies between the tracks will be handled. Coordination between CAISO and all LRAS, especially regarding the development of UCAP, should align with the CPUC RA proceeding (Rulemaking 23-10-011) and subsequent proceedings.

2. Please provide your organization’s feedback on any scope items that should be added or removed from “Track 2: Outage and Substitution & Availability and Incentive Mechanisms”.

PG&E appreciates CAISO’s consideration of stakeholder’s comments and supports the addition to the scope of Track 2 the need for additional analysis to further study and discuss the reliability implications of forced outages lacking replacement capacity and to study all the drivers behind forced outage rates. 

PG&E recommends that CAISO provide stakeholders with an indicative timeline of the next steps and clarifies how the interdependencies between the tracks will be handled. In particular, CAISO needs to provide more detail regarding the interplay between counting rules and incentive mechanisms, and the relation of the incentive mechanism to bilaterial capacity prices.

3. Please provide your organization’s feedback on any scope items that should be added or removed from “Track 3: Backstop Reform”.

The modeling effort of Track 1 has a direct impact on the current backstop and future backstop reform to be discussed in Track 3. In case the modeling effort could trigger backstop actions, PG&E requests CAISO to add to the scope of Track 3 an assessment and revision of the cost causation and cost causality.  Historically, CAISO has been less concerned with identifying deficient LSEs and assigning cost to them than in identifying an overall system shortage.

PG&E recommends that CAISO provides stakeholders with an indicative timeline of the next steps and clarifies how the interdependencies between Track 1 and Track 3 tracks will be handled.

4. Please provide your organization’s feedback on the scope items not included in any of the three tracks, but are either left out or scoped for future working group discussion.

PG&E supports the working group efforts to continue to:

• Discuss changes to the requirements for and types of RA capacity (including Flexible RA).
• Assess if and how the CAISO should look at capacity and energy across the day for setting requirements, resource counting, backstop, etc.
• Consider any evolution to the CAISO’s deliverability methodology.
• Analyze interoperability with existing and emerging RA programs.

5. Please provide your organization’s feedback to WTPF’s presentation, “The Role of CAISO LOLE Modeling in Reliability Planning”.

PG&E appreciates WPTF’s presentation and supports CAISO enhancing cooperation with other agencies in terms of reliability planning. However, too few details were provided about specific proposals to support recommended actions.

6. Please provide any feedback not already captured.

PG&E recommends that CAISO provides stakeholders with an indicative timeline of the next steps and clarifies how the interdependencies between the tracks will be handled.

1. Please provide your organization’s feedback on any scope items that should be added or removed from “Track 1: Modeling, Defaults and Accreditation”.

SDG&E is largely supportive of the Track 1 scope items and the plan outlined in the June 14 Revised Discussion Paper (Paper) for how CAISO will move forward on this topic. However, SDG&E is concerned about the data sources CAISO will use in its modeling efforts. While CAISO received a majority stakeholder response to the survey, approximately 30% of LSE data is missing. CAISO’s proposal for developing resource portfolios for the LSEs which did not submit survey responses is a good first step, but more transparency and discussion on the inputs and assumptions will be needed to ensure the gaps of missing data are filled in accurately. Accurate data and inputs are critical to ensure that any resulting analysis is meaningful and grounded in reasonable assumptions. SDG&E recommends that in addition to sharing a draft inputs and assumptions document with stakeholders, CAISO hold a workshop dedicated to this topic so that stakeholders may address any questions and concerns to the proposed inputs and preliminary results.  

Further, while SDG&E agrees that a forward-looking assessment is critical given how rapidly the resource mix is changing and the new resources coming online, a backcast analysis using the previous year could be a valuable data point for establishing a new PRM, especially if the most current dataset is not accurate. We recommend CAISO consider this in the Track 1 scope. 

2. Please provide your organization’s feedback on any scope items that should be added or removed from “Track 2: Outage and Substitution & Availability and Incentive Mechanisms”.

SDG&E supports the Track 2 scope proposed by CAISO in the Paper and at the June 18 workshop, and supports moving these issues to the policy development stage. Improving the current outage process and addressing the current lack of substitute capacity are high priority actions given the potential impact on system reliability. The threshold issue appears to be streamlining the outage process, including ensuring that the universe of available substitute capacity is identified and contracted with as needed to support outages. SDG&E appreciates CAISO’s openness to evaluating RAAIM, as well as the new ideas put forth by parties regarding redesign of the outage process. It will also be important to incorporate consideration of interdependencies and anticipated upcoming changes that could impact the RA market. Regarding interdependencies, the Paper identifies several, including the link between RAAIM and the CPM soft offer cap. With respect to upcoming changes, SDG&E recommends that CAISO consider anticipated supply and demand changes, and how these factors could ultimately impact the tight supply and related pricing issues in the current RA market, and the effectiveness of any new or revised policies, moving forward. One recent data point example related to supply is the CPUC’s May 2024 Resource Tracking Data report,1 which shows significant development of new projects under contract with CPUC-jurisdictional LSEs through 2026, with ~15+ GW of new resources (~11+ GW NQC) slated to come online by 2027. 

3. Please provide your organization’s feedback on any scope items that should be added or removed from “Track 3: Backstop Reform”.

Although SDG&E supports examining medium- and longer-term solutions associated with the BAA Resource Sufficiency Evaluation (RSE), including curing potential EDAM RSE deficiencies in the ISO BA and more accurately assigning costs associated with these failures, it is unclear why this item is included in the scope of Track 3 rather than in the Day-Ahead Sufficiency Initiative. If CAISO decides to include this issue in the RAMPD policy initiative instead of the Day-Ahead Sufficiency Initiative, it would be helpful to understand how these policy initiatives will relate or deal with overlapping issues.   

4. Please provide your organization’s feedback on the scope items not included in any of the three tracks, but are either left out or scoped for future working group discussion.

No comment.

5. Please provide your organization’s feedback to WTPF’s presentation, “The Role of CAISO LOLE Modeling in Reliability Planning”.

No comment.

6. Please provide any feedback not already captured.

No comment.

1. Please provide your organization’s feedback on any scope items that should be added or removed from “Track 1: Modeling, Defaults and Accreditation”.

In general, the Six Cities do not oppose the scope of topics that the CAISO has designated for consideration in Track 1, with the understanding that the description of topics as included in the Discussion Paper does not necessarily presuppose specific outcomes.  The Six Cities agree that beginning the policy phase of this initiative with data analysis will allow for informed consideration of policy determinations, and the Cities also agree that focusing on the near term (versus the mid- and longer term periods included in the CAISO’s load serving entity (“LSE”) survey) would provide more useful information.  At the same time, the Six Cities encourage the CAISO to perform a backward-looking analysis of overall “performance” during the most recent RA year so that the CAISO and stakeholders have a baseline understanding of the sufficiency of the RA fleet.  With respect to the CAISO’s proposed consideration of Unforced Capacity (“UCAP”) approaches, as outlined in prior comments, the Six Cities are not opposed to evaluating UCAP as an alternative to current counting conventions, but ask the CAISO to provide more details about the process and timing for the parallel UCAP phase of this track.  In addition, consideration of any change to the default PRM should be coordinated with any anticipated implementation of a UCAP approach.

2. Please provide your organization’s feedback on any scope items that should be added or removed from “Track 2: Outage and Substitution & Availability and Incentive Mechanisms”.

The Six Cities appreciate the inclusion of their two proposals—consideration of whether and how to form a substitute RA “pool” and modification of the monthly showing process to enable capacity to vary on a day-to-day basis—in this track. 

More broadly, the Six Cities agree with the CAISO that additional information and analysis would be useful to inform discussions about outages and substitution, including data about forced outage rates and impacts to the Planning Reserve Margin (“PRM”).  In particular, any consideration of changes to the default PRM should take into account the anticipated impacts of implementing a UCAP methodology, and vice versa.  Coordinated and contemporaneous evaluation of UCAP and PRM is necessary to avoid overlapping or duplicative adjustments for outages.  It is also appropriate to consider if the various outage types that the CAISO currently uses should be updated.  Based on the Discussion Paper, it appears that the CAISO intends to undertake a broad and holistic review of the outage process for RA capacity.  Although the Six Cities do not support the Middle River Power (“MRP”) proposal to move to a single annual RA showing for LSEs, the Six Cities are supportive of the CAISO’s intended consideration of a wide range of potential improvements to the outage process, do not view the four options identified at pages 19-20 of the Discussion Paper as exclusive, and understand that there may be additional approaches to the outage and substitution process that could be considered as this track advances.

Finally, the Six Cities agree with a review of the RA Availability Incentive Mechanism and whether this should be revised or replaced. 

3. Please provide your organization’s feedback on any scope items that should be added or removed from “Track 3: Backstop Reform”.

The Six Cities do not oppose the CAISO’s proposals to evaluate issues related to its Capacity Procurement Mechanism authority as a part of this initiative.  The Six Cities continue to believe that the use of backstop procurement should be discretionary and should occur only in circumstances where there is an actual need to be addressed, rather than as an automated process in the event RA procurement does not meet a specified level (and in the absence of a need for the capacity).

In general the Six Cities support establishing a more accelerated timeline for Tracks 1 and 2.  Track 3 includes topics that the Six Cities believe do not present concerns that are as immediate as the Track 1 and 2 items. 

4. Please provide your organization’s feedback on the scope items not included in any of the three tracks, but are either left out or scoped for future working group discussion.

The Six Cities are disappointed that the CAISO has deferred, for an unspecified period of time, consideration of two recommendations presented by the Six Cities during the working group process: (1) crediting against an LSE’s forecasted monthly peak load the load reducing capacity for in-front-of-the-meter battery resources, and (2) allowing locally developed projects to meet some percentage of RA needs without deliverability to the entire network, not to exceed load within a specified local area.  The Six Cities view these suggestions as straightforward and capable of being implemented quickly and easily; they are low-hanging fruit that can help to mitigate the challenges posed by over-crowding of the CAISO’s interconnection queue.  The CAISO has not responded substantively to these suggestions by the Six Cities, nor identified any reasons why they could not or should not be implemented.

A recent presentation by GridLab at the June 20, 2024 meeting of the Western Energy Imbalance Market Regional Issues Forum asserted the potential for more than 7500 MW of capacity benefits and more than $750 million in annual investment savings from various types of “Virtual Power Plant” resources by 2035.  (See the GridLab presentation at Presentation-WEIM-Regional-Issues-Forum-GridLab.pdf (westerneim.com), Slides 6-7).  A presentation by Portland General Electric (“PGE”) at the same meeting indicated that PGE plans to develop 2,000 MW of VPP-enabled MW by 2030 to offset 25% of its peak usage.  (See the PGE presentation at PowerPoint Presentation (westerneim.com), Slide 2).  Recognizing and encouraging the types of resources described in the Six Cities’ recommendations above would provide reliability benefits superior to many types of VPP resources, because they could be visible to CAISO operating personnel and dispatchable.  The Six Cities urge the CAISO to reconsider the decision to defer action on the Cities’ recommendations and to move forward promptly and open-mindedly to evaluate those suggestions.

5. Please provide your organization’s feedback to WTPF’s presentation, “The Role of CAISO LOLE Modeling in Reliability Planning”.

The Six Cities support probabilistic modeling of loss of load expectation (“LOLE”) as an important input for the resource planning processes conducted by Local Regulatory Authorities (“LRAs”).  The Six Cities also support active coordination between the CAISO and LRAs regarding system needs, operational challenges, and evolution and sufficiency of the resource fleet.  However, collaborative development and sharing of information with LRAs and other regulatory authorities (e.g., the California Energy Commission) need not and should not result in expansion of CAISO tariff authority to preempt or override the resource planning responsibilities of LRAs.  Stated differently, it is highly desirable that the CAISO assemble and evaluate information regarding system reliability, share that information with the entities responsible for resource planning and procurement, and offer its recommendations regarding resource needs, but the CAISO does not and should not have authority to dictate resource planning and procurement policies.  Moreover, the CAISO’s information sharing and coordination activities should actively and systematically include all LRAs, not just the California Public Utilities Commission.

6. Please provide any feedback not already captured.

The Six Cities have no further comments at this time.