Comments on February 13, 2024 working group

1. Provide a summary of your organization’s comments on the 2/13 RAMPD Working Group discussion:

The Alliance for Retail Energy Markets (AReM) thanks the CAISO for its continuing efforts to improve resource adequacy (RA). As discussed in previous comments, AReM’s primary focus in this working group is to encourage CAISO to include in its problem statement issues of differences between RA rules used by the CAISO and California Public Utilities Commission (CPUC). AReM encourages the CPUC and CAISO to increase coordination to prevent the occurrence of last August when AReM members were assessed cost responsibility for a capacity procurement mechanism (CPM) event despite being compliant with CPUC RA rules due to the CPUC’s and CAISO’s different treatment of demand response (DR) resources.

In these comments, AReM reiterates the scope of the issues it is seeking to be included in the CAISO working group problem statement and provides feedback on the CAISO’s proposal for a “path forward,” which is the process CAISO will use to determine what issues to include in scope.

2. Provide your organization’s comments on the review of feedback received on problem statements 2 and 3:

Unfortunately, problem statement 3 received very little discussion at the working group meeting in favor of an extended discussion of problem statement 2. AReM reiterates its position that the scope of problem statement 3 include reducing risk of assessing CPM cost allocation on load-serving entities (LSE) that are compliant with local regulatory authority (LRA) RA requirements, and, more specifically, eliminating any difference in treatment of DR resources by the CPUC and CAISO.

Treatment of DR resources was discussed by stakeholders when CAISO was considering Proposed Revision Request (PRR) 1280. Although PRR 1280 was ultimately withdrawn, the CAISO Staff statement on the withdrawal (see document attached to these comments) affirmed that the “only LRA-provided credits it will consider in pro-rating the CPM costs are those that are ‘RA Capacity,’ i.e., credits that solely allocate the capacity from a resource on a RA supply plan.” After the August 2023 CPM event, AReM members that were compliant with CPUC RA requirements were notified by CAISO that they were being assessed cost responsibility for the CAISO CPM event. Inquiries into the matter with the CAISO and CPUC revealed that the CPUC allows LSEs to count DR credits toward their RA requirements for DR programs run by the investor-owned utilities. However, these RA credits are not shown on any CAISO supply plans and are not counted as RA capacity by the CAISO in determining CPM cost responsibility.

AReM now requests that the CAISO include in the scope of problem statement 3 in this working group coordination with the CPUC to resolve discrepancies in treatment of DR resources such that CPM cost allocation will not be assessed on LSEs compliant with LRA RA requirements over this issue.

3. Provide your organization’s comments on the CAISO presentation, Continued Exploration of Problem Statements: Deliverability:

No comment at this time.

4. Provide your organization’s comments on the CAISO presentation, Prior 2021 UCAP Proposal Refresher:

No comment at this time.

5. Provide your organization’s comments on the CPUC presentation, RA Proceeding UCAP Scoring:

No comment at this time.

6. Provide your organization’s comments on the panel discussion, Stakeholder Perspectives on Balancing Resource Counting with Availability and Performance Incentives:

No comment at this time.

7. Provide your organization’s comments on the CAISO presentation, Potential Modeling Frameworks:

No comment at this time.

8. Additional comments:

At the end of the working group meeting, CAISO presented a slide with a “Proposal for Path Forward.” Step one in this proposal, “Maturity of an issue,” indicates an issue becomes mature after it “has been presented and discussed, comments and edits to the problem statement by participants received, presentations provided from CAISO staff and others, and panel discussion has occurred.” On the issue of discrepancy in treatment of DR resources between the CPUC and CAISO, AReM and other parties have submitted written comments and discussed those comments at the working group meetings, but there have not been formal presentations or panel discussions. As discussed in AReM’s previous comments, AReM opines that formal presentations and panel discussion are not necessary for this issue to be mature. The issue has already been discussed through the PRR 1280 process and should be generally understood by all parties. The CPUC submitted comments on October 23 that indicated it was willing to take this issue up again with the CAISO. The key stakeholder that needs to coordinate with the CPUC to resolve the issue is the CAISO itself.

AReM understands that previous discussion during the PRR 1280 process did not end in a resolution of the matter, i.e. the risk of CPM cost allocation to LRA-compliant LSEs remained. However, now that this unjust CPM cost allocation has actually occurred, this elevates the matter. AReM, thus, encourages the CPUC and CAISO to try again to resolve the issue.

If CAISO requires further stakeholder discussion of this issue for its working group process, AReM seeks inclusion in that process. For instance, California Community Choice Association (CalCCA) mentioned in comments submitted January 30 that it would be willing to participate on a panel discussion regarding PRR 1280 issues. AReM would gladly do so as well, if it helps move the issue to maturity under CAISO's rules.

Step two of the “Proposal for a Path Forward” discusses using polls of participants to understand opposition to problem statement scope. AReM does not oppose this step, but recommends the CAISO be clear in any polls that “opposition” refers to opposition on the merits of any scope change rather than feedback on issue prioritization. Issues of prioritization should be separately handled. For instance, it should be clear if CAISO declines to include the issue of DR discrepancy discussed in these comments because it is simply prioritizing other issues. Stakeholders should know if there is an expectation that the CAISO will take up the matter later compared to rejecting AReM’s, CalCCA’s, and the CPUC’s recommendation to include this issue in scope on the merits. This will assist AReM in determining next steps regarding this issue. 

1. Provide a summary of your organization’s comments on the 2/13 RAMPD Working Group discussion:

The California Community Choice Association (CalCCA) appreciates the opportunity to submit comments on the February 13, 2024, Resource Adequacy (RA) Modeling and Program Design Working Group meeting (Working Group). The California Independent System Operator Corporation’s (CAISO) role in the RA program is critical to ensuring sufficient capacity is available to the market to support reliable electric service. To enhance the CAISO’s program design, tools, and modeling, the CAISO should adopt the following recommendations described in detail herein:

• The CAISO should closely monitor the results of the next Deliverability Assessment(s) to gauge the effectiveness of the Generator Deliverability Assessment Review initiative’s modifications, report back to stakeholders, and, as warranted, revisit key elements of this effort for future modifications.
• The CAISO should leverage many of the principles and proposal elements from its prior 2021 unforced capacity (UCAP) proposal.
• The CAISO should couple UCAP with clarifications to the definitions of outage types and bid insertion rules.
• As part of this initiative and the California Public Utilities Commission’s (Commission) RA proceeding (R.23-10-011), the CAISO and CPUC should seek to resolve differences between each entity’s proposal and adopt a uniform UCAP counting framework that produces resource-specific UCAP values. 
• The CAISO should encourage and provide opportunities for all Local Regulatory Authorities (LRAs) to adopt the same resource counting and availability incentive methodology. As an alternative, if some LRAs adopt a UCAP methodology while others do not, the best way to ensure comparable treatment across LRAs is to balance resource counting and Planning Reserve Margin (PRM) setting in a manner that ensures the same reliability target across LRAs.
• The CAISO should add stack analyses to accompany its proposed probabilistic modeling framework.
• To develop 100 percent projected RA showings for the year-ahead needed for the short-term assessment, the CAISO should estimate the 100 percent RA showings using the information it has that market participants do not.
• To obtain projected estimates of contracted capacity needed for the medium-term assessment, the CAISO should coordinate with the CPUC, which already collects the data necessary to estimate incremental new additions as part of its Joint Reliability Planning Assessment^[1] (Joint Assessment).

[1]           See, for example, the expected contracted resources from the Joint Reliability Planning Assessment - SB 846 Fourth Quarterly Report, Tables 3 and 4: https://efiling.energy.ca.gov/GetDocument.aspx?tn=25342. CalCCA used this data to perform its stack analysis of RA sufficiency for years 2024-2026, Exhibit A: https://docs.cpuc.ca.gov/PublishedDocs/Efile/G000/M524/K571/524571013.PDF.

2. Provide your organization’s comments on the review of feedback received on problem statements 2 and 3:

CalCCA has no comments on the stakeholder feedback received on problem statements 2 and 3 at this time.  

3. Provide your organization’s comments on the CAISO presentation, Continued Exploration of Problem Statements: Deliverability:

In the workshop, the CAISO reviewed the changes proposed in the Generation Deliverability Methodology Review Final Proposal aimed at ensuring deliverability requirements balance reliability and cost containment and are not unduly burdensome. As communicated within the Generation Deliverability Methodology Review initiative,[1] CalCCA supports the proposed modifications, but recommends that over the next 12 months, the CAISO closely monitors the results of the next Deliverability Assessment(s) to gauge the effectiveness of the modifications, report back to stakeholders, and, as warranted, revisit key elements of this effort for future modifications.

[1]           https://stakeholdercenter.caiso.com/Comments/AllComments/00e00fb1-d7c8-49db-a7e6-090daecf421a#org-cb335852-8962-4646-8d56-0de010bb02ca.

4. Provide your organization’s comments on the CAISO presentation, Prior 2021 UCAP Proposal Refresher:

The CAISO’s 2021 UCAP proposal contains many principles and proposal elements that the CAISO and CPUC should leverage as they develop their UCAP methodology. Such elements include:  

• Allowing UCAP to dynamically capture forced outage rates rather than relying on the PRM; Under UCAP, the PRM would only need to cover operating reserves and forecast error;
• Calculating resource-specific UCAP values to maintain the incentives individual generators have to maintain their plants and limit forced outages;
• Differentiating UCAP values by season to capture any potential patterns in forced outages due to temperature or other seasonal factors;
• Assessing forced outages during the tightest supply cushion hours or when generation is in demand;
• Applying counting rules in a manner that puts all technology types on a level playing field and accurately reflects their capabilities in both the year-ahead and month-ahead timeframe – this should include a review of the counting methodologies for all resources (including those that would use UCAP, like thermal and storage, and those that would not, like hydro); and
• Setting the must-offer obligation at the deliverable qualifying capacity amount rather than the UCAP amount so that enough supply is offered into the market to account for expected forced outages without substitution.

The CAISO should couple UCAP with clarifications to the definitions of outage types (forced, planned, urgent, and opportunity) so that generators are clear about what outage type they need to define their outages as, and which outage types UCAP applies to. The CAISO should also revisit its bid insertion rules to ensure that resources are incentivized to properly submit outages when they are unavailable so that UCAP values accurately reflect availability.

5. Provide your organization’s comments on the CPUC presentation, RA Proceeding UCAP Scoring:

During the workshop, the CPUC presented its UCAP proposal Energy Division submitted in the RA proceeding, R.23-10-011.[1] The CPUC’s proposal would produce technology-specific UCAP values rather than unit-specific UCAP values. Unit-specific UCAP values are necessary because they provide incentives for units to be available and take actions to minimize forced outages. Technology-specific values diminish these incentives by not directly rewarding resources that are reliable with higher UCAP values and directly penalizing resources that are not reliable with lower UCAP values. The CAISO and the CPUC should leverage Outage Management System (OMS) to develop publicly available UCAP values and give generators an opportunity to validate the value as they do with NQC today. OMS appears to be a superior data source given it tracks outages for all CAISO resources, while Generating Availability Data System (GADS) only tracks outages for a subset of resources.

The CPUC’s proposed methodology and the CAISO’s previous UCAP proposal differ in a number of ways (technology-specific versus unit-specific UCAP values, monthly versus seasonal UCAP values, Effective Forced Outage Rate of Demand (EFORd) versus tightest supply cushion, etc.). As part of this initiative and the CPUC’s RA proceeding, the CAISO and CPUC should seek to resolve these differences and adopt a uniform UCAP counting framework.  

[1]           Order Instituting Rulemaking to Oversee the Resource Adequacy Program, Consider Program Reforms and Refinements, and Establish Forward Resource Adequacy Procurement Obligations, Rulemaking (R.) 23-10-011 (10/12/23): https://apps.cpuc.ca.gov/apex/f?p=401:56::::RP,57,RIR:P5_PROCEEDING_SELECT:R2310011.

6. Provide your organization’s comments on the panel discussion, Stakeholder Perspectives on Balancing Resource Counting with Availability and Performance Incentives:

CalCCA appreciates the opportunity to hear the perspectives of other panelists regarding resource counting and its interactions with availability and performance incentives. The panel discussion was helpful in informing the following recommendations. 

The CAISO should encourage and provide opportunities for all LRAs to adopt the same resource counting and availability incentive methodology. Regardless of the LRA and load-serving entity (LSE), all resources participate in the same market and should have the same incentives to be available. The CAISO should adopt a UCAP methodology collaboratively with all LRAs to align on availability incentives and resource counting to the greatest extent possible.

As an alternative, if some LRAs adopt a UCAP methodology while others do not, the best way to ensure comparable treatment across LRAs is to balance resource counting and PRM setting in a manner that ensures the same reliability target across LRAs. LRAs using UCAP should adjust their PRMs so that the portion of the PRM that accounts for forced outage rates is removed because it is instead accounted for in the counting rules for resources. The CAISO or the California Energy Commission could evaluate PRMs and recommend higher PRMs for those LRAs that choose to use a less reliable accounting of expected resource output. This would place requirements on a similar basis; one that accounts for expected outages within the resource counting and the other that counts for it in the PRM.

A UCAP counting framework should have the following key attributes. First, UCAP values should be unit-specific. The CAISO should collect data as needed to calculate accurate, unit-specific UCAP values. Non-unit-specific UCAP values, like technology-specific values, do not create the same incentive to conduct planned maintenance to keep the plants reliable. It may be necessary to use an average technology-based UCAP value for new resources that do not yet have data to create their own UCAP. The CAISO could consider using a class average of the newest resources in the class for which data is available before transitioning resources to unit-specific values. Second, the CAISO should calculate UCAP values for all deliverable generators at all times regardless of whether they are being shown for RA at a given time or not. This will ensure all resources capable of providing RA have the same incentives to maintain their plant and have a high UCAP value for when they sell RA in the future. Third, the CAISO should not allow an option to get out of UCAP accounting by providing replacement/substitution. UCAP eliminates the need to manage risk associated with providing substitution while evaluating all resources on a level playing field.  Fourth, a UCAP counting framework should allow for the full elimination of Resource Adequacy Availability Incentive Mechanism (RAAIM). UCAP provides better availability incentives than RAAIM because it ties resource-specific performance to RA prices, which are currently much higher than the RAAIM penalty price. This problem cannot be solved by modifying the RAAIM price because, by design, the RAAIM price is too static to drive performance when RA prices change.  Fifth, information about UCAP values should be publicly available so that the market can reasonably forecast RA credit for the next year. Finally, UCAP should be set on an annual basis the June prior to the annual showings so that LSEs know the value of resources they are contracting for and do not have uncertainty during the RA year.

CalCCA appreciates the Six Cities’ presentation on current challenges in resource procurement and strongly agrees with the Six Cities’ conclusion that “LSEs are unable to build, buy, or import RA-eligible capacity at a reasonable price at this time.” CalCCA has reached a similar conclusion through its stack analysis of the RA supply and demand balance from 2023 through 2026 and its analysis of the Federal Energy Regulatory Commission’s Electronic Quarterly Reports.[1]

CalCCA does not take a position on the Six Cities conceptual proposals at this time but asks clarifying questions on conceptual proposals three and four. First, it would be helpful to understand how conceptual proposal three differs from the CAISO’s existing Capacity Procurement Mechanism. Second, is the purpose or effect of conceptual proposal four to modify the must-offer obligation of RA shown for different days? Answers to these questions will aid in developing a position on these proposals.

[1]           Public Version California Community Choice Association’s Comments on Assigned Commissioner’s Scoping Memo and Ruling, R.23-10-011 (Jan. 19, 2024), Exhibit A: https://docs.cpuc.ca.gov/PublishedDocs/Efile/G000/M524/K571/524571013.PDF.

7. Provide your organization’s comments on the CAISO presentation, Potential Modeling Frameworks:

The CAISO proposes to perform modeling to ensure capacity sufficiency in the short-term, medium-term, and long-term. In the short-term modeling (year-ahead), the CAISO will assess whether the year-ahead RA showings are adequate to meet a reliability target. In the medium-term modeling (2-4 years ahead), the CAISO will assess whether the current level of authorized procurement and contracted capacity is sufficient to meet a reliability target. In the long-term modeling (5-10 years ahead), the CAISO will assess whether long-term planning will produce resource-adequate portfolios that meet reliability targets. The CAISO’s proposed study scope appears to offer valuable information about the sufficiency of the RA fleet to meet demand, but the CAISO should add stack analyses to accompany the probabilistic modeling for the reasons described in its December 20, 2023 comments.[1] 

The CAISO indicates that to conduct its modeling, it may need to solicit information from LSEs that it would use to make assumptions about what types of resources LSEs will have under contract in each time period. This information the CAISO would request LSEs provide for the short-term and medium-term includes:

• Short-term – monthly non-binding 100 percent projected RA “soft showings” for the year-ahead; and
• Medium-term – projected estimates of contract capacity including incremental new additions (including CAISO resource IDs and queue numbers for new resource additions) and retirement assumptions.

This type of information is necessary for the CAISO to fully capture the projected availability of RA capacity and avoid results that show false capacity insufficiencies. The CAISO should, however, adopt the following recommendations for information gathering:

• To develop 100 percent projected RA showings for the year-ahead needed for the short-term assessment, the CAISO should estimate the 100 percent RA showings using the information it has that market participants do not. The CAISO has access to all LSE year-ahead (YA) showings and supply plans. The CAISO also has the current NQC list as well as knowledge of historical RA imports in the YA and month ahead (MA) time frame and the trend of those imports over time.  Equipped with that knowledge, the CAISO is in the best position to use its available data to understand what is likely to be available to CA LSEs to meet the remaining MA RA requirement. Given the information that the CAISO has, the CAISO can identify resources on the NQC list that have not been shown in the YA RA showings and use that information to make better assumptions about what resources will be shown between the YA and MA.
• To obtain projected estimates of contracted capacity needed for the medium-term assessment, the CAISO should coordinate with the CPUC, which already collects the data necessary to estimate incremental new additions as part of its Joint Assessment.[2] Such coordination would ensure the CAISO and CPUC are using consistent data sources to identify expected new resources and would minimize the administrative burden on LSEs who already report such data in various places. The CAISO could then combine this data with the NQC list and retirement assumptions to result in a full list of new and existing capacity expected to be available in the medium term.

[1]           https://stakeholdercenter.caiso.com/Comments/AllComments/1aafa171-55d2-4e71-869e-f2b78a0718c9.

[2]           See, for example, the expected contracted resources from the Joint Reliability Planning Assessment - SB 846 Fourth Quarterly Report, Tables 3 and 4: https://efiling.energy.ca.gov/GetDocument.aspx?tn=25342. CalCCA used this data to perform its stack analysis of RA sufficiency for years 2024-2026 at the following link in Exhibit A: https://docs.cpuc.ca.gov/PublishedDocs/Efile/G000/M524/K571/524571013.PDF. 

8. Additional comments:

CalCCA has no additional comments at this time.

1. Provide a summary of your organization’s comments on the 2/13 RAMPD Working Group discussion:

The discussion highlighted some of the components such as Unforced Capacity (UCAP), Planning Reserve Margin (PRM), counting rules, Resource Adequacy Availability Incentive Mechanism (RAAIM), short term and mid-term survey, among others. It appears that more work is needed on each of them including input from updates in the CPUC and CEC RA processes development.

2. Provide your organization’s comments on the review of feedback received on problem statements 2 and 3:

Problem Statement #2

RAAIM: Certain resources may still need RAAIM exemption, such as a Participating Load (PL) due to its modeling limitation and being subject to systemwide emergency support procedures.

UCAP: CDWR prefers resource specific UCAP if UCAP is implemented. However, it is to be noted that significant hydrologic changes may nullify the UCAP adjustments resulting in under or over estimation of resource availability, in the case of hydro resources. An analysis using UCAP estimation on CAISO systemwide hydro resources for years with significant hydrological changes (dry or wet) using a common counting method (e.g., CPUC’s dispatchable hydro counting method under Slice of Day framework) may indicate the effectiveness of UCAP adjustments in comparison to the actual generation during those years with significant hydrology changes from prior year. CDWR’s analysis of its own hydro resources indicates significant changes (multiples of 10% compared to UCAP adjustments of 10%) in resource capacity availability year to year and month to month depending on the hydrology and water demand. While there may not be significant changes to other resource types, hydro resources may be subject to significant changes due to hydrology. With the current provision to increase qualifying (QC) capacity within a year, some of those changes could be captured for an increase to some extent. Ideally, for an improved and more predictable availability of a hydro resource (that relies on hydrology and water demand), periodic updates of the forecast would be a better option than locking the forecast based on historical performance for counting.

Under the “RA Enhancements” initiative (inactive now), CDWR had provided comments regarding UCAP. At the detail level of discussion on UCAP, CDWR would like to refer to those comments and questions [1].

Flex RA: CDWR may provide further comments when details are discussed with the CAISO analysis on its effectiveness and allocations.

Outage Substitution: A more granular approach such as allowing outages for less than a single day may allow non-RA resource capacity to be available for resource substitution, specifically during tighter reserve margin periods (or tighter supply cushion hours) in a stressed day to improve reliability.

Some participants have raised questions about elimination of RAAIM with UCAP implementation. Further analysis may be needed for those options.

Default PRM: A load serving entity (LSE) that is capable of shifting or dropping load (such as hydro pumping and being subject to system emergency support operating procedure) is not a critical load that poses grid reliability risks. The flexibility to drop or postpone load significantly mitigates the need such an LSE has to call upon RA resources, and that flexibility should be taken into account in setting or analyzing the impact of a PRM,

Problem Statement #3

No comment at this time.

[1] https://www.caiso.com/InitiativeDocuments/CDWRComments-ResourceAdequacyEnhancementsWorkingGroup-Jun102020.pdf; https://www.caiso.com/InitiativeDocuments/CDWRComments-ResourceAdequacyEnhancements-ThirdRevisedStrawProposal.pdf

3. Provide your organization’s comments on the CAISO presentation, Continued Exploration of Problem Statements: Deliverability:

No comment at this time.

4. Provide your organization’s comments on the CAISO presentation, Prior 2021 UCAP Proposal Refresher:

It provides background on the prior UCAP effort at a high level. For more detailed aspects, that initiative should be referred to.

5. Provide your organization’s comments on the CPUC presentation, RA Proceeding UCAP Scoring:

Resource specific UCAP scoring supports some of the findings presented by CAISO regarding outages.

6. Provide your organization’s comments on the panel discussion, Stakeholder Perspectives on Balancing Resource Counting with Availability and Performance Incentives:

As stated in the section 2 above, for certain resources such as dispatchable hydro that depend on forecast of hydrology for resource availability, an analysis of UCAP adjustments (to the reported existing net qualifying capacity values and the CPUC proposed counting method) impact compared to actual generation (for years with significant changes in hydrology) would indicate potential effectiveness of such adjustments in relation to the availability of such resources.

7. Provide your organization’s comments on the CAISO presentation, Potential Modeling Frameworks:

For short term modeling, CDWR supports a 100% non-binding annual showing beyond current requirements in annual showings and the CAISO may publish the aggregated results. It is to be noted that monthly filing may be different than the annual filing both in demand and supply.

ISO could use the annual RA filing template, instead of the format in the presentation, that may include flexible RA showings (non-binding as well beyond current annual filing requirement). This helps in gathering information on flexible RA as well.

8. Additional comments:

1. For an improved and more predictable availability of its resources, CDWR prefers maintaining its own counting rule due to its uniqueness (associated primary function of water delivery based on hydrology and water demand, and with the recognition of uniqueness by the CAISO tariff section 9.3.1.2.1)

2. Imposing higher PRM applicable to the IOUs may not be appropriate for CDWR because of its flexibility to shift load with prices and being subject to operating procedure (#4420) to support grid in system emergency.

3. For an improved and more predictable forecast of load and availability of its resources, based on CDWR’s analysis, CDWR prefers updating its load and resources forecast on a monthly basis for RA purposes,  hence maintaining monthly RA updates would be a better approach.

1. Provide a summary of your organization’s comments on the 2/13 RAMPD Working Group discussion:

Please see the attached comments from the Department of Market Monitoring.

2. Provide your organization’s comments on the review of feedback received on problem statements 2 and 3:

Please see the attached comments from the Department of Market Monitoring.

3. Provide your organization’s comments on the CAISO presentation, Continued Exploration of Problem Statements: Deliverability:

Please see the attached comments from the Department of Market Monitoring.

4. Provide your organization’s comments on the CAISO presentation, Prior 2021 UCAP Proposal Refresher:

Please see the attached comments from the Department of Market Monitoring.

5. Provide your organization’s comments on the CPUC presentation, RA Proceeding UCAP Scoring:

Please see the attached comments from the Department of Market Monitoring.

6. Provide your organization’s comments on the panel discussion, Stakeholder Perspectives on Balancing Resource Counting with Availability and Performance Incentives:

Please see the attached comments from the Department of Market Monitoring.

7. Provide your organization’s comments on the CAISO presentation, Potential Modeling Frameworks:

Please see the attached comments from the Department of Market Monitoring.

8. Additional comments:

Please see the attached comments from the Department of Market Monitoring.

1. Provide a summary of your organization’s comments on the 2/13 RAMPD Working Group discussion:

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. 

Cal Advocates appreciates the opportunity to respond to the RA Modeling and Program Design (RAMPD) Working Group of February 13, 2024.  Below, Cal Advocates recommends that the CAISO present more data and descriptions of how existing resource availability and performance tools in order to better inform potential solutions to Problem Statement 2.

2. Provide your organization’s comments on the review of feedback received on problem statements 2 and 3:

Problem statement 2 considers requirements for Resource Adequacy (RA) capacity, including resource performance and availability rules, and the Resource Adequacy Availability Incentive Mechanism (RAAIM).[1]  RAAIM is an important tool to enforce RA must offer obligations through incentive payments and penalty charges based on RA resource availability in the day-ahead or real-time markets.  Availability is based on how much capacity an RA resource offers to the CAISO through economic bids or self-schedule, in comparison to how much capacity the resource is obligated to offer during availability assessment hours.[2]  The CAISO presented aggregated data for RAAIM exempt and non-exempt capacities, in addition to RAAIM penalties and payments, at this initiative and in the annual reports of the Department of Market Monitoring (DMM).[3] 

To facilitate an evaluation of existing availability tools, the CAISO should provide additional information on RAAIM in the RAMPD working groups to better establish if and how RAAIM has failed to incentivize resource availability.[4]  An adequate solution to properly incentivize RA availability cannot be accomplished without a clear understanding of how RAAIM works and how it may be inadequate.  Unforced Capacity (UCAP) accreditation considered in this initiative may also replace RAAIM with a new availability incentivization approach, and understanding any shortcomings of RAAIM would help inform a replacement design in UCAP.  Cal Advocates requests that the CAISO present the following information at a future RAMPD working group:

• A list of resource technologies (or other conditions) that exempt an RA resource from RAAIM penalties,[5] and why an exemption is warranted;
• Why the RAAIM penalty rate of 60% of the Capacity Procurement Mechanism Soft Offer Cap was found appropriate at the time RAAIM was implemented, and if the current penalty rate of $3.79/kW-month is effective at incenting availability;[6]
• Comparative data showing whether RAAIM-exempt resources have higher outage rates than non-exempt resources and the amount of substitution capacity provided by exempt and non-exempt resources during outages;[7]
  • DMM reported that RAAIM-exempt capacity bid relative less capacity than non-exempt capacity.[8]  The CAISO should provide more granular data concerning resource technologies and explain any reasons for why it may be reasonable for RAAIM-exempt capacity to be less available than non-exempt capacity.
• Data showing percentages of different outage types that caused a RAAIM penalty.  This information would inform UCAP outage considerations.

Additionally, the CAISO should make clear in this initiative the consequences for underperformance (also known as “uninstructed deviations”).  While RAAIM measures availability, performance measures the amount of energy delivered by the resource with respect to the CAISO dispatch award volume.  Cal Advocates requests that the CAISO describe any and all consequences of underperformance that exist today to support development of effective solutions incentivizing performance consistent with Problem Statement 2.[9]  The CAISO should describe how the settlement process determines underperformance volumes to ensure any replacement incentive design is feasible or what modification to the settlement process may be required.

[1] CAISO, Resource Adequacy Modeling and program Design Working Group, December 6, 2023 at 43.  Available at: https://www.caiso.com/InitiativeDocuments/Presentation-Resource-Adequacy-Working-Group-Dec62023.pdf.

[2] CAISO Business Practice Manual Configuration Guide: Monthly RAAIM Settlement CC 8830, Version 5.1.  Available at: https://bpmcm.caiso.com/Lists/PRR%20Details/Attachments/987/BPM%20-%20CG%20CC%208830%20Monthly%20Resource%20Adequacy%20Availability%20Incentive%20Mechanism%20Settlement_5.1.docx.

[3] CAISO, Resource Adequacy Modeling and program Design Working Group, December 6, 2023 at 71 and 75.  See also CAISO, 2022 Annual Report on Market Issues & Performance, July 11, 2023 (DMM 2022 Report) at 225 and 234-236.  Available at: https://www.caiso.com/Documents/2022-Annual-Report-on-Market-Issues-and-Performance-Jul-11-2023.pdf.

[4] Cal Advocates has previously requested RAAIM data in this initiative (RAMPD October 6, 2023 Working Group Comments of the Public Advocates Office at Section 2) and Middle River Power (MRP) has also requested metrics for an in-depth assessment of RAAIM.  MRP, RAMPD January 16, 2024 Working Group Comments of Middle River Power, January 30, 2024 at Section 2.  Available at: https://stakeholdercenter.caiso.com/Comments/AllComments/97779f5e-e0a7-4b0f-ad97-855c6cc08ead#org-ac67783e-1003-454f-93ac-1d717da2adff.

[5] This data could mirror RAAIM exemptions as listed at the CAISO Tariff Section 40.9.2, but the CAISO should clarify if any additional RAAIM exemptions are effectuated in current market processes.

[6] DMM has expressed concern that RAAIM penalties may “become insignificant compared to potential resource adequacy payments” and thus suppliers may be more willing to sell RA capacity that is likely to be unavailable.  DMM 2022 Report at 249-250.

[7] MRP requested this information previously.  MRP, RAMPD January 16, 2024 Working Group Comments of Middle River Power, January 30, 2024 at Section 2.

[8] DMM 2022 Report at 225.

[9] CAISO Tariff Section 11.23 and a number of Business Practice Manual Configuration Guides (namely Charge Codes 2407 and 4470) consider deviation penalties but it is unclear if and how deviation penalties are implemented in current CAISO operations.

3. Provide your organization’s comments on the CAISO presentation, Continued Exploration of Problem Statements: Deliverability:

Cal Advocates provides no comment on this topic at this time.

4. Provide your organization’s comments on the CAISO presentation, Prior 2021 UCAP Proposal Refresher:

Cal Advocates provides no comment on this topic at this time.

5. Provide your organization’s comments on the CPUC presentation, RA Proceeding UCAP Scoring:

Cal Advocates provides no comment on this topic at this time.

6. Provide your organization’s comments on the panel discussion, Stakeholder Perspectives on Balancing Resource Counting with Availability and Performance Incentives:

Cal Advocates provides no comment on this topic at this time.

7. Provide your organization’s comments on the CAISO presentation, Potential Modeling Frameworks:

Cal Advocates provides no comment on this topic at this time.

8. Additional comments:

Cal Advocates has no additional comments at this time.

1. Provide a summary of your organization’s comments on the 2/13 RAMPD Working Group discussion:

Middle River Power LLC (“MRP”) appreciates that the CAISO, within the working group process, has invested the time to develop and vet problem statements.  Problem statements are an essential but often overlooked or discounted part of any policy process.  That said, the RAMPD working group process, which began in October 2023, now seems to be becalmed. 

First, the process lacks an overall schedule that sets forth topics of discussion for each working group meeting and a vision for how long the working group process will run.  While MRP understands that RA is complex, it would be helpful to project how long the workshop process is expected to last, with an understanding that such dates are all tentative. 

Second, MRP requests that each working group meeting begin with a review of the previous discussion topics and what work, if any, was performed after the previous meeting.  Each meeting should end with a list of topics for the next meeting and a list of work that is expected to be performed as the result of “today’s” discussion.  This will help provide continuity between each meeting. 

Third, the working group process remains focused on formulating problem statements 2 and 3, and the process for concluding this work and moving to the next phase of the initiative is not clear to MRP.   It is also unclear to MRP whether problem statement 1 has been finalized and what the path forward for addressing this problem is. 

Finally, while MRP appreciates the CAISO launching this initiative by first seeking to describe the problems that this initiative is seeking to address, MRP believes the time is now ripe to finish defining the problem statements.  This should be done by first sharing any data that stakeholders and the Market Surveillance Committee members requested to support the problem statements and then by proposing and considering potential solutions. 

2. Provide your organization’s comments on the review of feedback received on problem statements 2 and 3:

MRP respectfully points the CAISO to comments submitted earlier by MRP on these problem statements.   

3. Provide your organization’s comments on the CAISO presentation, Continued Exploration of Problem Statements: Deliverability:

While the CAISO, on slide 16, offers that it is striving to ensure that deliverability requirements strike the right balance between reliability and cost containment, MRP disagrees that trying to find this balance this is the CAISO’s responsibility.  Instead, the CAISO’s deliverability requirements should ensure that energy from RA resources can be dependably delivered to load under stressed system conditions, but also, given the CPUC’s slice-of-day framework, under other conditions that could be expected to be encountered across the worst day. 

4. Provide your organization’s comments on the CAISO presentation, Prior 2021 UCAP Proposal Refresher:

Please see below.

5. Provide your organization’s comments on the CPUC presentation, RA Proceeding UCAP Scoring:

The CAISO’s previously-proposed method for calculating seasonal UCAP values looked at resource availability across the tightest supply cushion hours.  In contrast, the CPUC’s proposed method involves determining monthly values by taking the sum of (1) ambient derates, as determined by a multi-variable regression linking resource ambient temperature-related derates to particular weather stations and (2) Equivalent Forced Outage Rates for demand (EFORd).  Ultimately, a single technique is required, and the two different methodologies (CPUC and CAISO) must be reconciled and an appropriate data source that does not double-count outages must be used.  As MRP noted in its comments to the CPUC, ambient derates are often not a linear function of ambient temperature due to other affecting factors such as inlet cooling.  Finally, MRP remains opposed to any UCAP methodology that does not immediately restore lost availability when corrective maintenance is performed.

If the purpose of a UCAP methodology is to match the amount of RA capacity that a generator can sell with the unit’s actual capabilities, MRP offers that this initiative consider setting Qualifying Capacity values based on demonstrated performance during seasonal unit testing.  Such an approach might provide more reliable and equitable capacity values than a method that uses historical performance over a subset of hours.  Moreover, such an approach would obviate the CAISO UCAP proposal’s problem of taking years to fully performance improvement.  A testing program would require many details to be worked out, but such a program might prove a suitable alternative to a complex UCAP framework.

6. Provide your organization’s comments on the panel discussion, Stakeholder Perspectives on Balancing Resource Counting with Availability and Performance Incentives:

As MRP has stated in previous workshops, the success of the RA framework hinges on being able to determine the portfolio of resources needed to maintain 0.1 LOLE on an annualized basis, the counting methodologies of those resources, and the ability and willingness of market participants to procure those resources or an equivalent portfolio of resources.  An aggressive UCAP framework that reduces the amount of capacity that resources can sell as RA – and caps what units are required to offer to the CAISO – could leave MW that may still be available but which the CAISO may be able to access only through exceptional dispatch, triggering a CPM designation.

7. Provide your organization’s comments on the CAISO presentation, Potential Modeling Frameworks:

MRP continues to support the CAISO developing and applying the ability to conduct stochastic reliability modeling in the near-, mid-, and long-term.   With regards to slide 98 in the presentation, MRP notes that assuming the peak month showings represent the portfolio of resources that is available across the year may simplify the analysis, but it is not consistent with the current monthly design of the RA program.   This proposed simplification is not the only annual/monthly mismatch in the RA program – the annual 0.1 LOLE target is also not consistent with the current monthly program design.  Moreover, by the CAISO’s admission, the CAISO’s cumbersome POSO process is solely an artifact of the monthly RA program design.  Given these things, MRP asks if the monthly program design should also be a topic for reconsideration or whether this sacred cow – which is supposed to result in reduced program costs even though resources must recover their annual costs whether they sell one month or twelve months of RA capacity – cannot be reassessed. 

8. Additional comments:

MRP has no additional comments.  

1. Provide a summary of your organization’s comments on the 2/13 RAMPD Working Group discussion:

NCPA reiterates that CAISO must respect the jurisdictional rights of all LRAs (and their respective LSEs), including the right of LRAs to establish RA qualifying capacity counting rules.  If a foundational goal is to provide incentives to LSEs to procure the most reliable resources that provide the best RA to the system, which it should be, a “one size fits all” approach based on resource categories and classes does not serve that purpose well. There can be immense variability in the performance of a new or well-maintained project compared to an old one (even within the same technology class). Some projects have advantages in location, physical features or efficiency that make them superior to others of the same type. NCPA member LRAs developed their counting criteria to measure what individual projects can actually provide and how they actually perform. This makes these counting rules superior to the CAISO default counting rules and to other class-based systems.

NCPA strongly believes that it is critical that CAISO properly value hydroelectric and other use-limited resources on an individualized basis.  As NCPA has further described in its previous comments, NCPA’s hydroelectric project was designed to have a significant hydroelectric head pressure in all operating conditions, enabling it to release stored water in critical periods for multiple hours at a time, even in severe drought conditions. The standardized counting rules NCPA has seen would devalue that project and the RA that it can provide based on historical averages. Going forward, providing reliable and affordable service to California ratepayers requires accurately valuing the unique attributes of all generators and capturing that value. Failure to do so could result in over-procurement of capacity, further increasing ratepayer costs, and disadvantaging LRAs and LSEs that have historically made significant investments in capacity that continues to reliably serve the system’s needs. Proper valuation is particularly important for hydroelectric projects, on which California is uniquely dependent during high load conditions. Imports also make up a large share of the hydroelectric capacity California has historically relied upon, and eventually it will be important to ensure that hydroelectric resources in California are valued appropriately compared to those outside California that may be participating in programs such as WRAP.

Non-CPUC jurisdictional LSEs have the ability to closely study and evaluate the resources in their jurisdictions and can adopt counting rules that allow for tailored and realistic results. NCPA’s objection to standard counting rules has been that they do not make these distinctions, and are focused more on ease of implementation and are not focused on accurately evaluating the benefits of individual units. To the extent that stakeholders coalesce around rules that value all resources appropriately, there could be less divergence among LRA rules.

NCPA continues to support the current RAAIM program by which CAISO incentivizes availability along with the requirement for the RAAIM price to be set at 60% of the cost of new entry based upon the Capacity Procurement Mechanism Soft Offer Price.  NCPA believes the Capacity Procurement Mechanism Soft Offer Price provides an appropriate incentive because it reflects the cost of new entry for the current resource technology that is predominant in the CAISO and RA market today.  In fact, the Capacity Procurement Mechanism Soft Offer Price is a critical market design element to protect against market power.

While many stakeholders have commented in favor of UCAP, UCAP has been the subject of past stakeholder discussions that failed to result in its adoption. Over the past five years, stakeholders have been unable to reach consensus on a workable UCAP framework due to challenges posed in tracking and defining forced outages as well as agreeing to a final capacity value (is it UCAP, QC, NQC, DQC, etc.?). Further, NCPA opposes fleet, zonal, or technology type UCAP factors. Any UCAP methodology should accurately reflect the performance and capabilities of its individual RA resources.

CAISO indicates that six (6) LRAs have established PRMs that are less than the default 15% PRM.  If the CAISO cannot identify the individual LRAs, it would be helpful for CAISO to clarify what portion of the CAISO BAA load is represented by the six (6) LRAs that have been identified.  NCPA assumes that the six (6) LRAs of focus represent an insignificant amount of load in the CAISO BAA, and therefore do not pose or create a reliability risk for the system.  This information will be important to ensure stakeholders do not exaggerate concerns with the PRMs set by LRAs that represent an insignificant amount of load in the CAISO BAA (e.g., if a LRA representing a LSE with 3 MWs of peak load with a PRM less than 15%, that in itself will not create a reliability concern in the CAISO BAA).

2. Provide your organization’s comments on the review of feedback received on problem statements 2 and 3:

Please see comments above.

3. Provide your organization’s comments on the CAISO presentation, Continued Exploration of Problem Statements: Deliverability:

No comment at this time.  

4. Provide your organization’s comments on the CAISO presentation, Prior 2021 UCAP Proposal Refresher:

CAISO’s UCAP refresher lacked context for why UCAP has not already been adopted. While the UCAP concept may seem like an attractive cure-all or magic bullet to real or perceived RA program issues such as RA generator showings and outage substitution, previous UCAP proposals quickly became mired in disagreements once parties begin diving into details. Parties were unable to come to a consensus on a UCAP framework in either the CAISO RA Enhancements initiatives or CPUC slice-of-day workgroups. Parties could not achieve consensus on which hours or how many prior years to measure for calculation of forced outage rates, how to track forced outages, or even what a forced outage actually is. CAISO currently measures availability assessment hours mostly on non-holiday weekdays between HE 17 and HE 21 (4PM to 9PM PPT) with the assumption that those hours are mostly likely to have the thinnest supply cushion. On rare occasions, CAISO has observed scarcity during the morning ramp which has resulted in a proposal to move from reasonable and predictable set of hours to effectively measuring random hours, which could result in reliability issues during net peak hours. Parties also were not able to agree how many years back to assess or how to weight such years. For example, why should a generator be severely penalized for a forced outage a year or two ago that may have resulted in significant upgrades that enhanced performance and reliability for the unit? Parties also concluded that neither GADS nor OMS sufficiently tracked forced outages for the purpose of calculating UCAP and that either system would need a significant overhaul to accomplish such a task or a new system would need to be developed.

CAISO defines Forced Outages in its Tariff as “an Outage for which sufficient notice cannot be given to allow the Outage to be factored into the Day Ahead Market or RTM bidding processes”. In practice, the deadline to provide notice of a forced outage has veered between the actual T-1 day 10AM Day Ahead Market close to T-7 when the window opens to submit schedules in SIBR. NCPA does not necessarily object to a definition of a forced outage being tied to when it is reported but notes that it is inconsistent with the Tariff definition. The arbitrary nature of the Forced Outage definition makes it impossible to derive UCAP inputs from it.

Further, many Forced Outages are not associated with reliability issues for a given generator. Most generators in CAISO are contractually prohibited from performing planned maintenance during summer months in order to ensure they are available during the highest load months. It is unrealistic to defer periodic minor maintenance on these complex pieces of machinery from May through October and expect them to perform when needed during stressed conditions. CAISO recognizes this by offering Forced Short Notice Opportunity Outages. These outages allow a generator operator to utilize the CAISO’s 7-day resource adequacy capacity trend to monitor weather, supply, and load conditions to help determine an appropriate window in which to submit an opportunity outage request to CAISO. Opportunity outages also allow generator operators to quickly address any minor issues that arise before they can result in major failures with significant downtime.

Finally, many Forced generator outages are completely outside of the control of the generator. For example, as PTOs harden and otherwise upgrade their systems against wildfire threats, they routinely take transmission assets offline with little or no coordination or notice to generators, which are then pushed into forced outages. Generators must not be punished with NQC/UCAP derates for outages caused by transmission owners.    

While current RAAIM penalties may create a disincentive for market participants to show all RA capacity under contract to the CAISO, there are many reasons other than RAAIM penalties that incent market participants to continue to show only the required amount of RA to the CAISO. Removing RAAIM, by itself, will not change those incentives. For example, as long as resource capacity shown to the CAISO as RA is subject to the MOO, market participants will limit their showing to the required minimum. Being subject to MOO significantly limits a generator’s flexibility to control how and when its capacity is made available to the CAISO markets. Most generating resources are complex machines, and maintaining the flexibility to control operations is critically important to owners. The MOO as currently enforced significantly impacts this flexibility. As long as there are obligations associated with RA that may alter the way a resource owner would prefer to manage the unit, LSEs that own or control those units will have an incentive to show the minimum. CAISO should not expect removal of RAAIM to completely change generation incentives.

CAISO also seems to suggest that resources that are not subject to RAAIM do not have proper incentives to perform preventive maintenance on equipment. This assumption is simply not correct. Generating resources are very expensive investments; in many cases costing hundreds of millions of dollars. Regardless of RA requirements, and the associated rules that continuously change, owners of non-RA resources only profit when they are dispatched to provide energy or AS by the CAISO; thus, resource owners have a very strong financial incentive to remain available. Not to mention various contractual obligations to bond holders or investors, to maintain resources in a way that maximizes availability, and to ensure the durability and life of the project.  Companies do not build multi-million dollar generating facilities to not operate them and produce product; this would be akin to building a manufacturing facility, and never actually producing any good using that facility.

While RAAIM does not consider a resource’s actual performance, the day-ahead and real-time markets provide performance incentives as do other CAISO market rules. NCPA strongly believes that RA is not the tool for this concern.

5. Provide your organization’s comments on the CPUC presentation, RA Proceeding UCAP Scoring:

Please see response to item 4.  

6. Provide your organization’s comments on the panel discussion, Stakeholder Perspectives on Balancing Resource Counting with Availability and Performance Incentives:

No comment at this time.  

7. Provide your organization’s comments on the CAISO presentation, Potential Modeling Frameworks:

No comment at this time.  

8. Additional comments:

None at this time.  

1. Provide a summary of your organization’s comments on the 2/13 RAMPD Working Group discussion:

PG&E appreciates the opportunity to offer its comments on Resource Adequacy modeling and program design Working Group #5.

PG&E’s comments can be summarized as follows: 

• PG&E recommends that CAISO or the DMM provide additional educational insights into the history of RAAIM and how both policies (UCAP and RAAIM) can complement each other.
• PG&E proposes principles for consideration in the development and adoption of any UCAP methodology.
• PG&E requests a comprehensive analysis by CAISO and/or the DMM that specifically addresses planned and forced outages.
• PG&E requests clarification on two aspects of the enhanced deliverability methodology: how it influences the deliverability of existing resources and how it may affect congested hours.
• Follow-up to the Market Surveillance Committee (MSC) meeting (of 2/23/2024), PG&E recommends further discussion on applying ambient derates to the NQC of thermal resources across all LRAs in the CAISO BAA.

2. Provide your organization’s comments on the review of feedback received on problem statements 2 and 3:

PG&E continues to support further discussion and exploration of the sub-issues listed under problem statement 2 and 3 (see questions 4, 5 and 6 for additional comments on RAAIM/UCAP discussion).

3. Provide your organization’s comments on the CAISO presentation, Continued Exploration of Problem Statements: Deliverability:

PG&E appreciates CAISO’s update on the deliverability methodology enhancements.

Additionally, PG&E requests clarification on the following aspects:    

• The enhanced methodology’s influence on the deliverability of existing resources.
• How the changes may affect the number of congested hours.
• A possible quantification of these impacts.  

4. Provide your organization’s comments on the CAISO presentation, Prior 2021 UCAP Proposal Refresher:

PG&E recommends that the CAISO RA WG allocate time to review specific aspects of CAISO prior 2021 UCAP proposal:

• Reevaluation of the assessment availability hours to define the UCAP/NQC: CAISO proposed to determine UCAP assessment hours by identifying which hours fall into the top percentage of the tightest RA supply cushion hours for each season (i.e., supply cushion). The supply cushion was originally based on RAAIM assessment hours. PG&E recommends CAISO consider the UCAP methodology based on all hours (to adapt to the changes under the CPUC implementation of the Slice-of-Day framework).
• DQC/NQC terminology: PG&E recommends a deeper assessment of how existing contracts will be impacted by the changes of the NQC definition.
• PG&E recommends further discussion on the resource-specific counting rules and the outages definition and the type of forced outages counting in the UCAP assessment.

5. Provide your organization’s comments on the CPUC presentation, RA Proceeding UCAP Scoring:

In the CPUC proceeding (R.23-10-011), PG&E submits the following principles for consideration in the development and adoption of any UCAP methodology. PG&E believes that a final methodology should strive to meet all these principles and in cases in which a final methodology does not meet a particular principle, the rationale for failing to meet the principle should be outlined in a final decision.

A viable UCAP methodology should:

• Be adopted and implemented simultaneously by the CPUC and CAISO to avoid the use of significantly different qualifying capacity (“QC”) values between the CPUC and CAISO and complications that could stem from those differences in programs;
• Be adopted in tandem with an adjustment to the PRM to reflect the shift of resource outage uncertainty from the PRM to the QC value;
• Be adopted in conjunction with changes to CAISO’s Resource Adequacy Availability Incentive Mechanism (“RAAIM”);
• Be at the resource-specific level to avoid QC value distortions that are inevitable when applying an average-based approach;
• Use public data so that resource owners can reasonably calculate a QC value;
• Feature reasonable timing for implementation (e.g., it would be ill-advised to implement a significant change like UCAP beginning with the 2025 RA compliance year when slice-of-day is being fully implemented for the first time).

6. Provide your organization’s comments on the panel discussion, Stakeholder Perspectives on Balancing Resource Counting with Availability and Performance Incentives:

The panel discussion highlighted 1) some support to further explore UCAP methodology and revise the Planning Reserve Margin accordingly; 2) divisive views on the potential of UCAP to replace RAAIM:

• PG&E recommends the CAISO or the DMM provide more educational background on RAAIM history and on how both policies (UCAP and RAAIM) could be complementary.

The panel discussion also stressed the need to further consider the CPUC/CAISO coordination and outages data quality for UCAP implementation:

• PG&E requests a thorough analysis by CAISO and/or the DMM covering planned and forced outages and the use of forced outages in place of planned outages. PG&E supports DMM suggestion to enhance outage reporting requirements.

7. Provide your organization’s comments on the CAISO presentation, Potential Modeling Frameworks:

PG&E reiterates the need for CAISO to clarify RA only analysis objectives and guide stakeholders to prevent misuse in resource procurement justifications. While CAISO states the analysis aims for transparency, details on how the CAISO intends stakeholders to use this information for procurement decisions require further clarity (see PG&E's comments submitted on 12/20).  

8. Additional comments:

PG&E provides additional comments following the MSC meeting of 2/23/2024, discussing RA counting, PRM and performance incentives.

CAISO’s presentation showed on slide 11 the RA outages due to ambient derates, highlighting that “50,000 MW peak load has approximately a 4% ambient derate, whereas a 20,000 MW peak load has approximately a 2% ambient derate”.  Ambient derates are considered and reported as forced outages and could therefore cause a higher forced outages rate of the RA fleet.

PG&E recommends further discussion to take into account ambient derates in the NQC determination of thermal resources across all LRAs in the CAISO BAA for more accurate RA counting rules.

1. Provide a summary of your organization’s comments on the 2/13 RAMPD Working Group discussion:

The Six Cities provide the following comments below:

• Greater clarity is needed with respect to the process for finalization of Problem Statements 2 and 3. 
• While the CAISO has identified and is implementing changes in its deliverability assessment methodology, the Six Cities request that the CAISO provide stakeholders with information demonstrating that these changes are having a beneficial effect on the amount of deliverability available for allocation to resource adequacy (“RA”) resources.
• The Six Cities do not oppose consideration of unforced capacity (“UCAP”) proposals, but their support for a UCAP structure will depend on its design and other policy determinations through this initiative.
• While there is a shared interest in reliability among local regulatory authorities and their load-serving entities (“LSEs”) throughout the CAISO balancing authority area (“BAA”) and coordination of policies to ensure reliability among local regulatory authorities remains appropriate, any policy enhancements determined through this initiative should preserve the authority of local regulatory authorities. 

2. Provide your organization’s comments on the review of feedback received on problem statements 2 and 3:

The Six Cities are unclear on which elements of Problem Statements 2 and 3 still require discussion and refinement.  It would be helpful for the CAISO to post a document containing the current drafts of these problem statements, with any revisions that have been incorporated through the working group meetings.  The CAISO has previously requested stakeholder comments on these problem statements, and they have been discussed—seemingly extensively—in multiple stakeholder meetings.  It would be helpful to know when these problem statements will be considered finalized so that working group activities can turn to other steps in this initiative process. 

The Six Cities appreciate the CAISO’s continuing efforts to solicit stakeholder feedback and incorporate it into the working group discussions.  Given the broad range of issues under consideration, this is not an easy task.  However, the Six Cities did want to note that the comment summaries provided at the February 13^th meeting relating to Problem Statements 2 and 3 do not seem to capture the Six Cities’ comments.  For example, slide 10 states that the Six Cities support UCAP; a more precise statement as to our position is that we are not opposed to considering UCAP.  Whether the Six Cities can affirmatively support UCAP depends on the design of the UCAP structure and the resolution of the other issues in this initiative.  Additionally, with respect to Flex RA, the Six Cities’ position is stated as “Oppose DAME IRU/URD”.  The Six Cities do not know what this means, but their position is that the Flex RA program may warrant revisiting in light of the new products being implemented through the Day Ahead Market Enhancements initiative.  Finally, on slide 11, the Six Cities’ position on the topic of the CAISO BAA Resource Sufficiency Evaluation is that this issue does not belong within this stakeholder process. 

3. Provide your organization’s comments on the CAISO presentation, Continued Exploration of Problem Statements: Deliverability:

The Six Cities acknowledge that the CAISO has recently completed a review of its deliverability assessment criteria in the Generation Deliverability Methodology Review initiative and is slated to begin implementation of the changes identified in that initiative in the near term.  The Six Cities request that the CAISO develop metrics and report information to stakeholders regarding the implementation of these changes and whether there is a basis for the CAISO to conclude that they have resulted in a measurable increase in the amount of deliverability available for allocation.  The availability of and access to deliverability is critical to the ability of CAISO LSEs to meet existing RA requirements, so it is essential that the CAISO actively monitor whether the revised deliverability criteria are having a positive effect on the timing and quantity of new RA resources to come online. 

4. Provide your organization’s comments on the CAISO presentation, Prior 2021 UCAP Proposal Refresher:

The Six Cities do not have comments on this presentation at this time.

5. Provide your organization’s comments on the CPUC presentation, RA Proceeding UCAP Scoring:

It would be constructive for the CPUC to continue to provide updates to the CAISO in this initiative, because it appears that the CPUC’s UCAP proposals remain under consideration and may be subject to refinement through CPUC processes.  There is benefit in continued coordination between the CPUC and the CAISO on this topic. 

At the same time, it should not be a foregone conclusion that any CPUC decision to implement UCAP counting rules should necessarily result in any requirement within the CAISO that UCAP be adopted by other local regulatory authorities. 

6. Provide your organization’s comments on the panel discussion, Stakeholder Perspectives on Balancing Resource Counting with Availability and Performance Incentives:

The Six Cities thank the CAISO for the opportunity to participate in the panel.  At this time, the Six Cities reiterate their views that while discussions about adoption of potential UCAP methodologies have a place in this initiative, this is a longer term conversation.  It will take at least a year—and possibly longer—to develop and implement a UCAP structure, particularly given the CAISO’s goal of working with local regulatory authorities to obtain alignment on a possible methodology.  The Six Cities continue to believe that this initiative should entail consideration of short term changes that can be adopted more quickly.  In particular, the discussion about management of outages and replacement capacity during the February 13^th working group meeting suggests that consideration of the Six Cities' recommended changes to permit daily values for RA resources would be beneficial. 

Specifically, the Six Cities recommend modification of the monthly RA showing process to allow different RA values for internal RA resources for different days of the month, subject to the sum of the RA values for each day satisfying the monthly RA requirement for the LSE submitting the showing.  As an example, for a resource eligible to provide RA capacity of 100 MW, the Six Cities propose that an LSE be permitted to include variable amounts of capacity from the resource (not to exceed 100 MW) for different days in a monthly showing, provided that the sum of the capacity values for all resources shown by the LSE for a given day equals or exceeds the LSE’s monthly requirement.  It is the Six Cities’ understanding that such variable showings currently are permitted for import resources, and the Cities request that the CAISO extend the ability to submit different RA values for a resource for days within a month to include not only import RA resources but also RA resources located within the CAISO BAA.

There would be significant, reliability-enhancing benefits of allowing variable daily RA values for internal resources within monthly showings.  When LSEs are required to show the same RA value for a given resource for each day of a month, they are more likely to not include the resource in a monthly showing for a month in which they anticipate a need to perform maintenance on the resource.  By allowing different values to be submitted for RA resources for different days within a month, resources could effectively substitute for each other for different days (with the CAISO having full visibility in advance of the resources relied upon for each day) while maintaining the total RA shown for each day at the level of the LSE’s requirement.  This would facilitate performance of regular maintenance and reduce incentives to hold back RA capacity that has been contracted for by an LSE but is not needed to meet the RA requirement in a given month.  It also would support additional bilateral trading of RA capacity among LSEs for substitute capacity purposes.  Allowing variable daily RA values within monthly showings is likely to make satisfaction of RA requirements more efficient, thereby making more RA capacity available and enhancing the ability of LSEs to achieve full compliance with RA objectives.

7. Provide your organization’s comments on the CAISO presentation, Potential Modeling Frameworks:

The Six Cities do not have comments on this presentation at this time. 

8. Additional comments:

During the February 13^th working group discussion, several participants commented on the desirability of greater coordination and/or consistency among RA policies developed by the CAISO and local regulatory authorities.  The Six Cities fully support coordination among the CAISO and local regulatory authorities and emphasize that all local regulatory authorities have a shared in interest in reliability of service within the CAISO BAA.  A high degree of coordination, however, need not and should not result in encroachment on the authority of local regulatory authorities to establish policies for procurement by their LSEs.  Moreover, complete consistency in RA policies is not an essential requirement for maintaining reliability.  To the contrary, different approaches to ensuring RA may contribute to a higher degree of reliability.