1.
Please provide a summary of your organization’s comments on the Aug 26, 2025 DAME Configurable parameters implementation working group discussion.
Energy Division (“ED”) staff appreciate the opportunity to comment on the DAME initiative and appreciate CAISO’s extensive analysis and facilitation of dialogue on this important topic.
ED staff request that CAISO provide its estimates of the historical imbalance reserve requirements for the CAISO system over the past year, using the Mosaic Quantile Regression model, as well as historical load, wind, and solar uncertainty. This information is needed to allow California load serving entities (“LSEs”) to estimate what their expected procurement obligations will be in advance of EDAM go-live. Specifically, ED staff request this information before the next configurable parameter meeting to ensure that LSEs and other stakeholders have the opportunity to review and analyze the information. While CAISO provided certain daily average imbalance reserve data in early 2025, the data is not sufficiently granular. LSEs and stakeholders need access to estimates of the hourly imbalance reserve requirements over the course of the day and how these might change over the course of a month in order to estimate their procurement obligations.
The lack of this information has impacts beyond individual LSEs. Should certain LSEs fail to meet their imbalance reserve requirements because they did not have sufficient time to plan their procurement, the CAISO BAA as a whole could fail the resource sufficiency evaluation (RSE) and incur the attendant penalties.
In addition, ED staff believe that in order to properly test the imbalance reserve requirement and the associated configurable parameters, it is important to start with an accurate assessment of the imbalance reserve requirements. Thus, in addition to providing historical information, ED staff request that CAISO use accurate estimates of imbalance reserve requirements in the testing environment so that CAISO can realistically assess many of the configurable parameters. ED staff encourages CAISO to work directly with the LSEs to give the support needed to allow the LSEs to calculate their imbalance reserve requirements, as we understand other BAAs have already been working with CAISO to develop this capability.
Given that the imbalance reserve requirement represents a new product and will likely have effects on energy prices and will impose new, additional costs on market participants, ED staff strongly encourage CAISO to work with realistic and accurate imbalance reserve requirements. The importance of testing these configurable parameters is very clear, as explained by the MSC in its DAME comments:
"[T]here are many elements of DAME for which there is no precedent of successful operational experience in other ISOs to learn from. These include the design of the deployment scenarios, methods for estimating net load uncertainty, procedures for assigning net load uncertainty to locations, and methods for accounting for storage resource state of charge over the day in the IFM and RUC. The CAISO is the innovator in addressing these issues and will need to adapt the design over time based on the results of testing the full software model when it is developed, and then again based on operational experience.
This adaptation will need to move at a more rapid pace than the glacial speed of typical stakeholder processes if it is to enable the CAISO and the WECC to meet the reliability needs of its evolving resource mix and public policy goals. At the same time, the CAISO should not be given permission to make willy-nilly day-to-day changes in parameters or constraints. There needs to be a process for identifying issues and discussing them with stakeholders, proposing then implementing changes, observing outcomes, and then commencing new cycles if needed. We support the stated intention of the CAISO in the Revised Final Proposal to inform and consult carefully with stakeholders in tuning the configurable parameters of the DAME design during testing, implementation, and go-live, and to work with the Department of Market Monitoring to report independently on the performance of alternative parameters and settings before and after implementation……we believe it is reasonable to take a conservative approach to implementation. This would involve both substantial testing before implementation and putting guardrails in place at least through a transition period."
(Opinion on Day-Ahead Market Enhancements (DAME) - James Bushnell, Member; Scott M. Harvey, Member, Benjamin F. Hobbs, Chair Members of the Market Surveillance Committee of the California ISO. Final, May 3, 2023)
