Comments on Oct 16, working group session 10

1. Please provide your general feedback on the session, structure and direction the Demand and Distributed Energy Market Integration working group meeting on Oct 16, 2025.

2. Do the six problem statements accurately reflect the challenges facing DER participation?

United generally supports the six problem statements, and we appreciate the work of CAISO staff to capture the workgroup discussions. 

We note that the issues identified for the DERA framework apply to DER and DR participation more generally, including under PDR and other frameworks. For instance, the discussion of RA qualification certainly aspplies to market-integrated DR more generally. We have some concern that a problem statement limited to DERA then cannot be cross-linked or prioritized with other problem statements. So we would support broadening the language where possible to incorporate DR and DER participation in general.

In addition, the 6th problem statement could be revised to be more direct in its discussion of dual participation. And instead of speculating about what the (if any) perceived problem may motivate a dual participation prohibition, we recommend the problem statement just state that dual participation is currently often prohibited or prevented, and this leaves substantial potential resources out of the market.

3. Are there any additional considerations to the ISO assessment for the captured problem statements

Economic-based Demand Response Participation Model Problem Statement 1 (BTM storage exports)

United is highly supportive of including export of energy in PDR performance. Addressing the existing problems preventing battery export from being recognized in PDR performance would be one of, if not the single most, impactful action that the CAISO can take to realize the significant and growing fleet of both stationary battery storage and vehicle battery storage as grid assets integrated into the CAISO market.

The assessment of this problem statement reveals what may bve a flaw in the problem statement wording. United believes that the conceptualization of PDR model as load reduction can still accomodate battery export, if that load reduction is measured at the appropriate level. Specifically, load reduction measured at the subLAP level can still account for battery export from individual sittes. The "problem" then is the point of measurement. If the problem statement were revised to include this distinction, then the assessment would not be concerned that the basic model of load curtailment is out of scope.

4. Additional comments, include any other feedback not captured above.

1. Please provide your general feedback on the session, structure and direction the Demand and Distributed Energy Market Integration working group meeting on Oct 16, 2025.

The California Community Choice Association (CalCCA) appreciates the opportunity to comment on the October 16, 2025, meeting of the Demand and Distributed Energy Market Integration (DDEMI) Working Group (WG). CalCCA recommends that the CAISO take the following actions related to the issues and topics discussed at the WG meeting:

• Modify problem statement three for the Distributed Energy Resources Aggregations (DERA) market participation model to eliminate the implication that the California Independent System Operator (CAISO) and the California Public Utilities Commission (CPUC) must sequentially address modifications to existing methodologies for determining resource adequacy (RA) eligibility;
• Modify DERA problem statement six, which addresses separate resources located at a single service account participating in separate aggregations, to clarify that it applies to retail and wholesale market participation models beyond DERA and that it is a concern for all aggregators and program administrators; and
• Include regulatory and implementation assessments of discussion topic two, Economic-Based Demand Response (DR) Participation Model, problem statement two, which highlights the use of device-level metering. These assessments should address modifying the CAISO’s systems and processes to accommodate less accurate, device-integrated meters and telemetry, and applying a discount factor to the metered performance to compensate for the lower degree of accuracy.

2. Do the six problem statements accurately reflect the challenges facing DER participation?

CalCCA generally supports the six problem statements for the DERA market participation model, but with modifications to problem statements three and six.

First, problem statement three addresses the lack of a pathway for DERAs to qualify for RA, citing the need to address this issue at both the CAISO and the CPUC. CalCCA agrees and notes that the inability to provide RA is one of the primary barriers to DER expansion. However, the problem statement implies that the actions of the CAISO and the CPUC must be sequenced to resolve the RA counting issue. While the CAISO and the CPUC each have separate jurisdictional responsibilities regarding the qualification of DERAs for RA, activities to modify these processes do not need to occur sequentially. In other words, the CAISO should not wait for the CPUC to develop a Qualifying Capacity (QC) methodology before addressing changes to deliverability, visibility, and Net Qualifying Capacity (NQC) methodologies. The reverse is also true. The CPUC does not need to, nor should it, wait for the CAISO to address deliverability issues and NQC methodologies before developing its own QC methodology. Given that RA accounting is a high priority for DER participation, the CAISO and the CPUC should both begin to make progress on their respective responsibilities so that all outstanding issues can be addressed in a time-efficient manner.

CalCCA recommends that problem statement three be revised to eliminate the implication that the issue needs to be addressed sequentially by the CAISO and the CPUC. The following revision to problem statement three should be made, with deletions in strikethrough and additions in bold:

There is currently no pathway for DER aggregations (DERAs) to qualify for resource adequacy, and this is a multi-agency issue needing the CAISO’s attention because the CAISO would need to address or help resolve some issues (including deliverability determination and visibility) before the CPUC would develop a Qualifying Capacity methodology, as well as because the CAISO needs to develop Net Qualifying Capacity methodologies resolving this issue requires the attention of both the CAISO and the CPUC. The CPUC would be responsible for developing a new Qualifying Capacity methodology, while the CAISO would be responsible for developing its deliverability assessment and the Net Qualifying Capacity methodology for these resources. Coordination between the CAISO and the CPUC would be necessary to address these and other issues, such as ensuring the required level of visibility into DERAs participating in the CAISO markets. However, these issues can be addressed by the CAISO and CPUC simultaneously.

Second, problem statement six, which highlights the concern about separate resources at a single site participating in separate aggregations, also applies to other market participation models beyond DERA and is a concern for all aggregators and program administrators. The example included in problem statement six highlights the potential conflict between the DERA and Proxy Demand Response (PDR) economic DR participation models. CalCCA notes that this same concern applies to the conflicting operations of DERs enrolled in any other market participation models, as well as to DER participation in wholesale and retail markets. In addition, the problem statement states that “utilities may be concerned that the battery operation for DERA participation impacts the other program.” These concerns extend beyond just utilities and their programs. Other aggregators, including CCAs and third-party entities, will be affected by this issue.

CalCCA recommends that problem statement six be rephrased to clarify that it applies to any aggregator or program administrator, and that the problem statement’s concern can occur with any other market participation model at the wholesale and retail levels. CalCCA suggests the following revision to problem statement six, with deletions in strikethrough and additions in bold:

Where separate resources at a single site participate in separate aggregations, such as a battery participating in a DER aggregation while the whole home using smart thermostat and heat pump water heater participates in a PDR, utilities aggregators and program administrators may be concerned that the battery operation for DERA participation impacts the other program. This concern applies to aggregations in other wholesale market participation models, as well as in retail markets.

3. Are there any additional considerations to the ISO assessment for the captured problem statements

Problem statement two, under discussion topic two, Economic-Based DR Participation Model, describes the administrative and cost barriers related to the current revenue-grade metering requirements that restrict the ability to use device-level metering on individual resources within an aggregation. The CAISO provided a policy assessment for this problem statement, but did not offer regulatory or implementation assessments. CalCCA recommends incorporating the following regulatory and implementation assessments for problem statement two to ensure the CAISO can adequately and fairly address this issue:

• Regulatory: Device-integrated meters are less accurate than revenue-grade meters. Allowing the use of device-integrated meters for measuring the performance of inverter-based DERs and smart appliances may require the CAISO to apply a discount factor to compensate for the lower accuracy of these meters to avoid over-compensating participating customers. The CAISO would need to clarify further and discuss with stakeholders the mechanism for applying the discount factor, so that both the CAISO and stakeholders can fully understand and assess the regulatory impacts of this change (i.e., tariff impacts, the need to coordinate with LRAs, etc.).
• Implementation: Implementation of device-integrated meters would require the CAISO to modify its metering requirements to allow device-integrated, non-revenue-grade metering and telemetry for smart appliances, such as thermostats, heat pumps, and heat pump water heaters, as well as inverter-based DERs. The CAISO would also need to modify its systems to allow for the discounting of metered performance data, compensating for the less accurate device-integrated meters.

4. Additional comments, include any other feedback not captured above.

 CalCCA has no additional comments or feedback at this time.

1. Please provide your general feedback on the session, structure and direction the Demand and Distributed Energy Market Integration working group meeting on Oct 16, 2025.

During the October 16 presentation, CAISO’s assessment framework was described as follows:

• Policy considers what policy development might entail, including potential solutions and challenges.
• Regulatory focuses on FERC approval and coordination with local regulatory authorities.
• Implementation evaluates the level of effort required to implement a solution, categorized as low, medium, high, or varies.

The California Department of Water Resources – State Water Project (CDWR-SWP) appreciates the effort to provide a structured and practical lens for reviewing the wide range of stakeholder input. However, CDWR-SWP would like to respectfully highlight a key consideration:

All problem statements and stakeholder presentations were originally developed using the six guiding principles outlined in the updated Discussion Paper: Efficiency, Competition, Feasibility, Simplicity, Reliability/Compliance, and Public Policy.

While CDWR-SWP understands that the three-category assessment (Policy, Regulatory, Implementation) may help organize the initial review, we encourage CAISO to ensure that the final evaluation and prioritization of problem statements remain grounded in the original six principles: Efficiency, Competition, Feasibility, Simplicity, Reliability/Compliance, and Public Policy. These principles were recommended by CAISO to “facilitate assessment of prioritization and potential trade-offs between approaches”[1].They provided a shared framework that stakeholders used to shape and refine their contributions.

Utilizing this original framework in the final assessment phase is important not only to maintain consistency with the process CAISO established, but also to ensure fairness across all problem statements. Each was developed with these principles in mind and evaluating them under a different structure may unintentionally disadvantage certain proposals or dilute the intent behind stakeholder input.

To support this, CDWR-SWP offers the following interpretation of how the two frameworks align:

CDWR-SWP hopes this perspective is helpful as the working group moves toward finalizing its recommendations and significant consideration is given to implementing problem statements that align with a large number of guiding principles, even if implementation assessment is ranked high. The regulatory assessment should not ignore the potential for substantial benefits to the CAISO market. Thank you for your continued collaboration and openness to stakeholder input. 

[1] California Independent System Operator (CAISO), Demand and Distributed Energy Market Integration Working Group Discussion Paper at 4 (June 13, 2025).

2. Do the six problem statements accurately reflect the challenges facing DER participation?

No comment.

3. Are there any additional considerations to the ISO assessment for the captured problem statements

CDWR-SWP appreciates CAISO’s effort to assess Participating Load (PL) problem statements. However, we believe the assessment of Problem Statements 1 and 2 on page 22 of the October 16, 2025 presentation requires further refinement and/or additional context. CDWR-SWP also would like to clarify that discrete dispatch feature described in Problem Statement 3 would be beneficial in improving efficiency and accuracy but is not requirement to enable PL participation in the Real-Time Market (RTM).

Problem Statement 1

To achieve additional demand capacity in real-time for Resource Adequacy purposes, participating loads (PL) need the ability to submit upward and downward energy bids for demand in the real-time market. If provided while preserving key features such as energy offers, contingency bidding, and non- spin ancillary services; would enhance system flexibility and improve market efficiency.

CDWR-SWP agrees with the core of this problem statement and supports CAISO’s recognition that enabling upward and downward energy bids from PL would enhance system flexibility and market efficiency. However, the CAISO’s assessment should go further in recognizing that PL resources are already integrated into CAISO systems and have demonstrated reliable performance. These resources can respond to real-time price signals and can provide additional capacity without requiring major structural changes to the market or costly additions to the grid.

The Department of Market Monitoring (DMM) has supported this direction. In its July 11, 2025 comments, DMM recommended that demand response be modeled as Participating Load whenever technologically feasible and that real-time load bidding be expanded to improve demand curve responsiveness and reduce reliance on marginal generation. DMM emphasized that this would allow uneconomical load to drop off, freeing up capacity and lowering real-time system costs.

DMM’s March 2025 report on demand response performance further supports this position. It found that:

• Demand response participation in RA declined from 3–4% to 2.6% in 2024.[1]
• Third-party DR performance averaged only 54% of scheduled curtailments, while utility DR averaged 81%.²
• Proxy DR resources were bid into the market only 44% of the time on high-load days.²

These findings highlight the need to prioritize high-performing, integrated DR models like PL. CDWR-SWP’s PL have shown to reliably and accurately to respond to market signals, and excess capacity available to participate in the RTM; therefore, CDWR-SWP recommends that CAISO recognizes the comparative reliability and availability of PL in its assessment and prioritize implementation accordingly.

Problem Statement 2
Participating Load (PL) resources cannot submit energy bids in the RTM to decrease/increase consumption. This does not allow full participation due to constraints imposed by the current PL model and wholesale DR market. Allowing PL’s full participation to bid energy and respond to real-time market signals without limiting it to DR events, would allow it to better respond with providing greater system flexibility by shifting demand and additional slope to the demand curve.

CDWR-SWP agrees that the current PL model limits full participation and that enabling real-time energy bidding would allow PL to better respond to system needs. However, the CAISO’s assessment characterizes the required changes as a full “overhaul” of the PL model. CDWR-SWP believes this overstates the implementation burden.

PL resources already participate in the Day-Ahead Market and provide Non-Spin Ancillary Services. The necessary improvements to enable RTM participation should be built on this existing functionality. CDWR-SWP would appreciate clarity from CAISO about its concerns with building on functionality that already exists.  CDWR-SWP recommends a phased, opt-in approach that preserves existing rights under Participating Load Agreements (PLAs), including use-limited designations, contingency-only bidding, and RA qualification.

Problem Statement 3
Certain Participating Loads can only operate in full on/off states cannot follow dispatch instructions between their minimum and maximum output levels.

a. These loads need the ability to submit upward and downward bids that reflect discrete operations, while maintaining the core features of the Participating Load Models and Agreement.

b. Difference between resource operations and market schedules can result in significant uninstructed deviation costs.

CDWR-SWP does support implementation of this problem statement but also believes that discrete dispatch functionality described in this problem statement is not required to enable PL participation in RTM, although it would improve efficiency. Therefore, PL participation in the RTM or RTLB should be pursued independently of this functionality.  While some PL resources operate in discrete modes, CDWR-SWP can bring forward PL capacity without requiring discrete dispatch functionality. The CAISO should not delay broader PL participation based on the need to accommodate discrete operations. This issue can be addressed separately and incrementally, if needed.

Additional Consideration: Financial Analysis

CDWR-SWP recommends that the CAISO include financial analysis as part of its final assessment. This analysis should evaluate the ratepayer value of enabling RTLB for PL, including:

• Avoided costs of dispatching high-priced generation
• Reduced curtailments of renewable energy
• Improved DR performance and availability
• Benefits of fully utilizing existing capacity, such as the avoided costs of building new capacity
• Additional PL resource participation, which could be enabled by RTLB for PL

CDWR-SWP suggests that a financial analysis would likely demonstrate the substantial benefits of implementing RTLB. FERC has recognized the benefits of demand-side bidding, finding that it “help[s] mitigate market power…lessen[s] the severity of price spikes…applies downward market pressure on prices [and] help[s] to allocate scarce supplies efficiently.”[2] These benefits would not be limited to Participating Load resources alone - RTLB has the potential to enhance reliability and deliver economic value to the broader market and to ratepayers. Other stakeholders, particularly renewable generators, would benefit from reduced curtailments during over-generation conditions. Reducing curtailments would also support California’s renewable energy goals by maximizing the use of infrastructure that is already installed and included in rates. CDWR-SWP has significant megawatts of available Participating Load capacity that could benefit the CAISO market, and adopting RTLB for PL would likely increase the total demand-side capacity available to support grid reliability and efficiency.

FERC Opinion on Participating Load:

CDWR-SWP respectfully notes that CAISO may find it increasingly difficult to reconcile the growing benefits of RTLB with FERC’s policy preference for allowing demand-side resources to participate in markets on a basis comparable to other resources.[3] In 2002, CAISO told FERC that it was “committed to establishing effective demand response and overcoming the existing technical barriers.”[4] It pointed to the Participating Load Program, where CAISO told FERC it was “proposing to expand the flexibility for loads to participate in its market-based program.”[5] CDWR-SWP understands CAISO’s concerns regarding the complexity of implementing RTLB but respectfully suggests that further delay may risk missing critical opportunities.[6] The benefits of RTLB are only increasing, CAISO’s rates are rising as the grid expands to accommodate additional renewable generation and growing load. As renewable generation increases, so too will curtailments. At the same time, new load could be encouraged to be more flexible if a market-based solution such as RTLB were available to provide that incentive. FERC has previously required wholesale demand-side bidding programs, recognizing that developing such programs would support participation in and development of demand-side bidding programs.[7]

CDWR-SWP points out that CAISO has an obligation to ratepayers and market participants to overcome any implementation difficulties and harness the benefits that RTLB would provide to them.

[1] California ISO, Department of Market Monitoring, Demand Response Issues and Performance 2024 at Section 2.5 and Figure 2.13 (Mar. 14, 2025).

[2] CDWR-SWP, Motion to Intervene and Comments of the California Department of Water Resources State Water Project at 7, Cal. Ind. Sys. Op. Corp., FERC Docket No. ER09-1048-000, eLibrary No. 20090526-5252.

[3] San Diego Gas & Elec. Co. v. Sellers of Energy & Ancillary Servs. into Markets Operated by the CAISO, 95 FERC P 61,115, 61,357-58 (2001). See also Regional Transmission Organizations, Order No. 2000, 89 FERC ¶ 61,285 at 31,217 (1999) (”Demand-side bidding is desirable to the extent it is technically feasible, because without it, demand response decreases and market power is easier to exercise. The availability of price responsive demand also reduces price volatility in the markets.”) (footnotes omitted).

[4] See Wholesale Competition in Regions with Organized Electric Markets, Order No. 719, 125 FERC ¶ 61,071, P 18 (2008). FERC’s goal of fully integrating demand-side resources into organized markets should not “be delayed until every barrier to demand response, whether retail or wholesale, technological or regulatory, is identified and addressed.” Wholesale Competition in Regions with Organized Electric Markets, 122 FERC ¶ 61,167, P 109 (2008).

[5] CAISO, Motion for Leave to File Answer and Answer at 152, San Diego Gas & Elec. Co. v. Sellers of Energy & Ancillary Servs. into Markets Operated by the CAISO, FERC Docket No. EL00-95-001 (June 17, 2002), eLibrary No. 20020617-5238.

[6] Id. at 151.

[7] San Diego Gas & Elec. Co. v. Sellers of Energy and Ancillary Services into Markets Operated by the CAISO, 95 FERC ¶ 61,115 at 61,358. See also N.Y. Indep. Sys. Operator, Inc., 108 FERC 61,188, P 30 (2004) (“We recognize that there are certain impediments to enhanced demand side participation that are outside the NYISO’s control. Nevertheless we expect the NYISO to work with market participants to expedite the inclusion of any demand side enhancements that [real-time scheduling] software can accommodate.”)

4. Additional comments, include any other feedback not captured above.

CDWR-SWP would appreciate greater clarity on how the problem statements will be assessed and qualified for advancement to the Policy phase.  Specifically, how many initiatives will be selected for advancement? Will CAISO distinguish between near-term and longer-term goals? How will the ranking be determined? It would be helpful for CAISO to outline the structure, prioritization criteria, and timeline for implementation in the forthcoming Discussion Paper. 

1. Please provide your general feedback on the session, structure and direction the Demand and Distributed Energy Market Integration working group meeting on Oct 16, 2025.

The DDEMI Working Group has made solid progress to date.  Though it has taken ten sessions to finalize the problem statements, it was critical that this time be taken by the CAISO to bring stakeholders up to a common level of understanding of each of the themes and to ensure that the problem statements are well developed.  The CAISO assessments of the problem statements were very informative and transparent, especially their application of the Policy, Regulatory, and Implementation perspectives.  Considering the problem statements through these lenses has been useful to help inform the feasibility of addressing each problem statement in the next phase of the initiative.  However, any decisions on which problem statements to pursue should also take into consideration the benefits of doing so.  The Council recommends the CAISO include this additional assessment category for each problem statement in the final discussion paper.  With this foundational work almost completed, the Council is hopeful that the process of issuing Issue Papers and straw proposals will proceed more quickly.

2. Do the six problem statements accurately reflect the challenges facing DER participation?

The Council provides its observations on each of the draft DERA problem statements:

- DERP requiring wholesale market interconnection (WDAT), as opposed to Rule 21 interconnection, is unworkable for BTM batteries due to cost, extended timelines, and inability to allow for net billing tariff participation:

This is an accurate statement.

- DERP does not allow NEM/NBT resources to participate, and because most BTM batteries are interconnected through Rule 21 as NEM/NBT resources, they are ineligible to participate in DER aggregations:

This is an accurate statement.

- There is currently no pathway for DER aggregations (DERAs) to qualify for resource adequacy, and this is a multi-agency issue needing the CAISO’s attention because the CAISO would need to address or help resolve some issues (including deliverability determination and visibility) before the CPUC would develop a Qualifying Capacity methodology, as well as because the CAISO needs to develop Net Qualifying Capacity methodologies:

This is a generally accurate statement. Because the CAISO and CPUC have jurisdiction over different pieces of the Resource Adequacy picture, the Council recommends that, to the extent the CAISO plans to develop a stakeholder initiative to address this problem statement, it should coordinate with the CPUC Demand Response staff to ensure that the key CPUC-jurisdictional issues can be addressed in the Demand Response rulemaking.

- DERP does not allow individual batteries sized greater than 1 MW to participate in an aggregation, but resources larger than 1 MW can provide benefits and should be allowed to participate:

This is an accurate statement.

- BTM batteries must manage retail rates 24/7, so requiring DERP resources to be considered as 24/7 CAISO resources by imposing wholesale rates for all hours of the day is extremely problematic, versus considering DERP as wholesale market resources only during hours when they are bid or self-scheduled into the market:

This statement is unclear because it appears that DERP resources may not be subject to a 24x7 must-offer obligation (MOO) because they are not Resource Adequacy resources.  In the PDR-DERP-NGR-LFA Summary Comparison Matrix, there is a note at the end under Summary of Bidding Requirements for Resources Providing System RA Capacity stating that the DERP is ineligible to provide RA, which appears to imply that DERP resources are not subject to an MOO.[1] To the extent that this is correct, the problem statement would be rendered moot.  However, if DERP resources are in fact required to be available 24x7 despite being ineligible to provide RA, this problem statement is accurate.

- Where separate resources at a single site participate in separate aggregations, such as a battery participating in a DER aggregation while the whole home using smart thermostat and heat pump water heater participates in a PDR, utilities may be concerned that the battery operation for DERA participation impacts the other program:

This problem statement is overly vague and speculative. The Council recommends it be removed.

[1] https://www.caiso.com/documents/participationcomparison-proxydemand-distributedenergy-storage-forecastadjustment.pdf

3. Are there any additional considerations to the ISO assessment for the captured problem statements

N/A

4. Additional comments, include any other feedback not captured above.

N/A

1. Please provide your general feedback on the session, structure and direction the Demand and Distributed Energy Market Integration working group meeting on Oct 16, 2025.

Comments on Demand and Distributed Energy Market Integration Working Group

Department of Market Monitoring

November 6, 2025

Summary

The Department of Market Monitoring (DMM) appreciates the opportunity to comment on the Demand and Distributed Energy Market Integration Working Group presentation dated October 16, 2025.[1] In these comments, DMM summarizes our previous comments from the Demand and Distributed Energy Market Integration (DDEMI) Working Group Meetings as the ISO develops their Discussion and Issue Papers.

DMM appreciates the work that is going into the DDEMI effort. However, the ISO has not presented information on the costs and benefits of these enhancements. DMM recommends that an assessment of the effort required for these market improvements should be included in this stakeholder process. Without any such assessment, it appears to DMM these enhancements should have a lower priority than numerous other policy efforts currently underway, such as EDAM congestion rent allocation refinements, congestion revenue rights reforms, storage bid cost recovery and default energy bids, and uncertainty products.

DMM offers summaries of our previous comments on the following five topics:

• Baselines methodologies. DMM cautions against adding additional baseline methodologies that take resources to develop, introduce additional potential for error in calculation, and may ultimately go unused. DMM recommends improving the “control group” baseline methodology, and cautions against any prescriptive baseline methodology based on historical averages.
• RDRR modeling. Reliability Demand Response Resources (RDRR) should have their minimum on-line times, minimum load costs, and start-up costs accurately included in the market only as necessary to accurately model the physical characteristics of the resources. Should these parameters be included, DMM recommends the ISO have processes in place to validate the reasonableness of these parameter submissions. Additionally, DMM supports the removal of discrete dispatch size limits for RDRR, to the extent this may be needed to more accurately reflect RDRR physical operating characteristics.
• Modeling demand response resources as participating load. DMM recommends the ISO incrementally work to evolve demand response to a demand-side resource from the current supply-side model. Further, DMM recommends in this stakeholder process the ISO consider the interactions of this change to long-term planning for resource adequacy obligations, and methods to value the resource adequacy of demand-side resources if they are treated as load.
• Real-time load bidding. DMM supports enhancements to real-time load bidding for resources that are able to respond to real-time economic signals to increase market reliability and efficiency.
• Western Energy Imbalance Markets (WEIM) demand response models. DMM supports expanding the demand response models available to WEIM entities. Real-time load bidding and resource participation are preferred models. However, DMM cautions any model must not allow for double counting of the resource capacity in the resource sufficiency evaluation test.

Comments

Baseline methodologies

Demand response baselines are an empirically estimated counterfactual used to determine a precise and accurate response of the resource in the absence of any action. The goal of demand response baselines are similar to those found in the economic literature to study the impacts of a rule or policy. The goal of such estimation procedures are to provide a “what-if” the policy (or schedule) was not in place, in order to estimate the impact of the policy (or demand response deployment). To accurately and precisely estimate these impacts, the econometric methods use differences in time and space to isolate the effect.

The ISO currently offers more than 50 demand response baseline methodologies to estimate the response of a range of demand response methodologies and technologies. These methodologies generally use difference using control groups (space) and day matching (time) to estimate the impact of a demand response event. The ISO also offers methods with meter generation output and sub-metering arrangements to estimate the performance of specific types of demand response.

In the current initiative, DMM recognizes that some stakeholders are proposing the development of new baseline methodologies and enhancements to existing baseline methodologies. The goal of baselines should be to create a like-for-like estimate when the resources are scheduled—or not—that are compared against robust counterfactual conditions.[2]^,[3] DMM understands that existing baseline methodologies were developed with this intent, with extensive stakeholder input in past policy initiatives. Therefore, DMM asks stakeholders to clarify how the current baselines that utilize the current estimation procedures are insufficient to estimate the impacts of demand response events, and why the extensive number of existing baseline methodologies are so underutilized.[4]

DMM cautions against adding additional baseline methodologies unless absolutely necessary. Additional baseline methodologies can be prone to errors, miscalculations, and potential strategic gaming. Additionally, the development of new baseline methodologies requires staff time and resources. DMM recommends the ISO carefully consider the need for additional methodologies, as the current set of options is underutilized, and the day matching methods appear robust for the majority of resources.

Among the existing baseline methodologies, the control group approach offers a conceptually sound and empirically grounded framework for estimating demand response. This methodology compares the performance of like-for-like resources—evaluating differences in demand between dispatched and non-dispatched customer accounts—to estimate the treatment effect. Such comparative techniques are widely accepted in economic analysis for constructing counterfactuals. These methods can be extended to include counterfactual estimates in time, as well as space. Despite its analytical robustness, few resources have utilized the control group methodology recently.

Importantly, the control group approach is applicable to behind-the-meter storage resources, provided a suitable comparison customer account is available that is not dispatched and shares similar operational characteristics. Pacific Gas and Electric has proposed enhancements to this methodology, which DMM generally supports.[5] These enhancements include registration and methodological refinements aimed at expanding the pool of comparable resources and improving the accuracy of demand response measurement for scheduled events.

Separately, Leap has proposed a “prescriptive” baseline methodology, currently used in a California Energy Commission program.[6] While conceptually similar to the control group approach, the prescriptive baseline relies on a state-level average and is established in advance of the operational period. DMM cautions against adopting this methodology within the ISO market framework. Unlike the control group approach, the prescriptive baseline does not meet the like-for-like standard necessary for reliable counterfactual estimation. Demand response performance is often sensitive to ambient conditions, and a statewide average fails to account for temporal and locational variability. As such, DMM does not recommend implementing the prescriptive baseline as proposed, given its inability to reflect the near-identical load patterns and conditions required for accurate measurement. As a result, DMM recommends the ISO develop methods to improve the control group baseline methodology for improved baseline estimation.

Reliability demand response resource modeling

DMM continues to support efforts to ensure that Reliability Demand Response Resources (RDRR) have their physical and economic characteristics accurately represented in the market.[7]^,[8],[9] These characteristics may include minimum on-line time, startup costs, and minimum load costs. If RDRR require the ability to reflect these parameters to ensure accurate scheduling and cost recovery, their inclusion in the market model is appropriate. Doing so supports continued participation of RDRR and helps preserve access to these reliability resources.

In the development of the discussion and issue papers, DMM recommends the ISO also consider the broader implications for operational integrity and market efficiency. Accurate representation of resource characteristics contributes to efficient commitment and dispatch decisions, and helps ensure that market outcomes reflect actual system capabilities and costs. These changes include the elimination of the 100 MW cap for discrete RDRR, which may allow some market participants to more accurately reflect their resources to the market, supporting more efficient access to reliability resources.

While DMM supports consideration of proposals to allow RDRR to submit additional operating parameters, the ISO should ensure that appropriate validation processes are in place to assess the reasonableness of submitted commitment costs. Currently, Proxy Demand Response (PDR) resources are permitted to submit a broader range of operating parameters, including minimum on-line times and startup costs. This precedent suggests that similar functionality could be extended to RDRR.

DMM has observed instances where PDR resources have submitted disproportionately high commitment costs relative to the capacity offered. To maintain market efficiency and avoid distortions in commitment decisions, DMM recommends that the ISO develop clear guidelines and validation protocols for commitment cost submissions if this functionality is expanded to RDRR.

The ISO should work toward a long-term goal of modeling demand response resources as participating load

DMM continues to recommend a long-term goal of modeling demand response as a load resource rather than as a supply-side resource whenever technologically feasible.[10] Treating demand response as a real-time demand-side resource improves market efficiency by adding slope to the demand curve, which enhances reliability and reduces system costs by avoiding uneconomic load scheduling.

Near-term enhancements could expand the existing day-ahead participating load model to real-time. Over time, as technology and experience evolve, additional demand response models could be adapted to support broader demand-side integration. In the development, the ISO should maintain or improve baseline integrity and measurement accuracy.

Modeling demand response as load will require coordination with the current capacity planning framework. Price-responsive demand affects both long-term load forecasts and the qualifying capacity of resources. DMM recommends the ISO consider how participating load interacts with resource adequacy forecasting and accreditation processes.

Additionally, demand response model enhancements proposed for WEIM balancing authorities could serve as pilot programs to test and refine this functionality.

Real-time load bidding

DMM continues to support enhancements to market design that enable load resources to respond to real-time economic signals.[11]^,[12] Under the current framework, load may submit economic bids in the day-ahead market, however all load is served in real-time without regard to price. This includes participating load resources that may be capable of adjusting consumption in response to real-time price signals. The same limitation applies to load-serving entities within Western Energy Imbalance Market (WEIM) balancing authorities, as discussed further below.

DMM supports the introduction of real-time bidding functionality—initially for participating load resources—as a means to improve system flexibility and introduce additional slope to the demand curve. A more responsive demand curve can enhance price formation, reduce reliance on higher-cost supply by enabling existing on-line capacity to meet system needs without requiring additional supply, and thereby lowering real-time system costs and improving overall market efficiency of real-time dispatch. Over time, this functionality could be incrementally extended to other demand response models, provided the resources demonstrate the ability to respond reliably to real-time market conditions so the ISO does not unforeseeably end up having more load than clears the market for the resource.

To support implementation and assess feasibility, DMM recommends that the ISO consider pilot efforts focused on real-time load bidding. Pilots would allow for evaluation of operational impacts, participant responsiveness, and potential benefits to system reliability and cost efficiency. Such efforts would also provide valuable insights into the scalability of real-time load bidding across different resource types and balancing authorities.

Western Energy Imbalance Market

DMM recommends that the ISO explore development of real-time load bidding functionality for Western Energy Imbalance Market (WEIM) entities. Like the CAISO balancing authority, other WEIM balancing authorities lack the ability to economically schedule load in real-time because generation is matched to forecasted load. Enabling real-time load bidding would allow WEIM entities to self-schedule inflexible load while bidding flexible load, thereby introducing price-responsive demand into their balancing areas. This could enhance system reliability and reduce costs by improving dispatch efficiency.

To support implementation, DMM recommends pilot efforts to evaluate operational feasibility, participant responsiveness, and market impacts across WEIM entities.

Resource adequacy

In developing real-time load bidding functionality, DMM highlights the importance of clarifying how real-time participating load resources would interact with resource adequacy (RA) accreditation. Participating load resources that submit bids similar to demand response and demonstrate verifiable load reductions should be eligible to receive qualifying capacity, or adjust RA procurement obligations. While RA accreditation is under the purview of local regulatory authorities (LRAs), DMM encourages the ISO to coordinate with LRAs to ensure appropriate monitoring and verification of RA treatment for these resources.

DMM supports expanded demand response participation models for use in the Western Energy Imbalance Market

DMM supports expanding demand response participation models to enhance functionality for WEIM entities. This could include enabling DR registration and allowing base schedule adjustments to reflect DR programs. DMM recommends these models support real-time bidding of demand response as participating load, where feasible.

Currently, demand response in the WEIM participates either as supply-side dispatchable demand response (DDR) or as a non-price-responsive load modifier. While DDR enables economic dispatch, load modifiers lack transparency and do not support robust performance evaluation.

WEIM entities have expressed interest in DR participation using their own Performance Evaluation Methodologies (PEMs). DMM recommends the ISO further evaluate this approach, as less-transparent PEMs may compromise resource performance and market integrity.

To avoid capacity leaning, DMM recommends the ISO assess how demand response participation interacts with the resource sufficiency evaluation. Demand response capacity must not be double counted—e.g., shown both as a resource and as a base schedule adjustment—which could mask capacity shortfalls at the balancing authority level.

As a long-term goal, DMM supports modeling demand response as real-time participating load. Extending real-time load bidding and base schedule adjustment capabilities would be a viable first step toward this goal, provided WEIM demand response resources are technologically capable.

[1] Demand and Distributed Energy Market Integration Working Group, California ISO, October 16, 2025: https://stakeholdercenter.caiso.com/InitiativeDocuments/Presentation-Demand-and-Distributed-Energy-Market-Integration-Oct-16-2025.pdf

[2] Comments on Demand and Distributed Energy Market Integration, Department of Market Monitoring, March 28, 2025: https://www.caiso.com/documents/dmm-comments-on-demand-and-distributed-energy-market-integration-mar-28-2025.pdf

[3] Comments on Demand and Distributed Energy Market Integration, Department of Market Monitoring, May 1, 2025: https://www.caiso.com/documents/dmm-comments-on-demand-and-distributed-energy-market-integration-apr-07-2025-working-group-may-01-2025.pdf

[4] Comments on Demand and Distributed Energy Market Integration, Department of Market Monitoring, February 21, 2025, p 3: https://www.caiso.com/documents/dmm-comments-on-demand-and-distributed-energy-market-integration-feb-05-2025-working-group-feb-21-2025.pdf

[5] Proposal to Revise Demand Response Control Group Settlement Methodology, Pacific Gas and Electric, March 3, 2025: https://stakeholdercenter.caiso.com/InitiativeDocuments/Presentation-PGE-Settlement-Methodology-Mar-03-2025.pdf

[6] Prescriptive Baselines in CAISO, Leap, March 3, 2025: https://stakeholdercenter.caiso.com/InitiativeDocuments/Presentation-Leap-Prescriptive-Baselines-Mar-03-2025.pdf

[7] Comments on RDRR Bidding Enhancements Issue Paper/Straw Proposal, Department of Market Monitoring, November 12, 2021: https://www.caiso.com/documents/dmm-comments-rdrr-bidding-enhancements-issue-paper-straw-proposal-nov-12-2021.pdf

[8] Comments on RDRR Bidding Enhancements Revised Straw Proposal, Department of Market Monitoring, January 11, 2022: https://www.caiso.com/documents/dmm-comments-reliability-demand-response-resource-bidding-enhancements-revised-straw-proposal-jan-11-2022.pdf

[9] Comments on Demand and Distributed Energy Market Integration Working Group, Department of Market Monitoring, July 22, 2025: dmm-comments-on-demand-and-distributed-energy-market-integration-jul-08-2025-working-group-jul-22-2025.pdf

[10] Comments on Demand and Distributed Energy Market Integration Working Group Discussion Paper, Department of Market Monitoring, July 11, 2025: dmm-comments-on-demand-and-distributed-energy-market-integration-jun-13-2025-working-group-discussion-paper-jul-7-2025.pdf

[11] Comments on Demand and Distributed Energy Market Integration, Department of Market Monitoring, February 21, 2025: https://www.caiso.com/documents/dmm-comments-on-demand-and-distributed-energy-market-integration-feb-05-2025-working-group-feb-21-2025.pdf

[12] Comments on Demand and Distributed Energy Market Integration Working Group Discussion Paper, Department of Market Monitoring, July 11, 2025: dmm-comments-on-demand-and-distributed-energy-market-integration-jun-13-2025-working-group-discussion-paper-jul-7-2025.pdf

2. Do the six problem statements accurately reflect the challenges facing DER participation?

Please see the PDF attached below the final question for DMM's fully formatted complete set of comments. For the reader's convenience, the complete text of the comments is pasted in response to #1, but there may be some formatting errors.

3. Are there any additional considerations to the ISO assessment for the captured problem statements

Please see the PDF attached below the final question for DMM's fully formatted complete set of comments. For the reader's convenience, the complete text of the comments is pasted in response to #1, but there may be some formatting errors.

4. Additional comments, include any other feedback not captured above.

Please see the PDF attached below the final question for DMM's fully formatted complete set of comments. For the reader's convenience, the complete text of the comments is pasted in response to #1, but there may be some formatting errors.

1. Please provide your general feedback on the session, structure and direction the Demand and Distributed Energy Market Integration working group meeting on Oct 16, 2025.

The California Large Energy Consumers Association (CLECA) appreciates CAISO's continued collaborative approach in the D-DEMI Working Group and the clear presentation of progress toward finalizing problem statements. The October 16^th session provided valuable transparency regarding the ISO's transition from issue identification to assessment and scoping for policy development.

2. Do the six problem statements accurately reflect the challenges facing DER participation?

CLECA finds that the problem statements accurately reflect the challenges facing DER participation, particularly those addressing Reliability Demand Response Resources (RDRR).

3. Are there any additional considerations to the ISO assessment for the captured problem statements

Start-Up Cost Considerations for Reliability Demand Response Programs

CLECA supports the inclusion of startup or shut down costs for RDRRs as a potential means to improve economic dispatch accuracy. CLECA also recognizes CAISO's observation that individual customer startup cost verification would necessitate appropriate validation mechanisms and that establishing such mechanisms presents legitimate administrative challenges within the existing RDRR framework.

However, CLECA respectfully submits that verification concerns should not preclude the establishment of a tariff mechanism for RDRR startup cost recovery, particularly given that CAISO’s existing framework for generator startup costs already provides a proven model. The process for incorporating RDRR startup costs can be established now, with detailed validation of resource-specific costs through a subsequent process. This two-tier approach accommodates complex multi-component cost parameters without requiring all verification details to be resolved now.

CLECA also acknowledges that retail tariffs may need to be updated to accommodate the inclusion of startup costs. However, the focus on this process should be on wholesale tariff updates that enable the inclusion of startup costs as appropriate.

RDRR Minimum-On-Time (MOT)

CLECA supports CAISO's assessment that "more accurate representation of resources' MOTs would be operationally valuable to the ISO."[1] This conclusion aligns with CLECA's longstanding position that extending the allowable MOT parameter provides operational benefits to CAISO and market participants.

CLECA believes the most appropriate MOT is aligned with CAISO’s Reliability Demand Response Resource Minimum on time Final Proposal published January 18^th, 2024[2] which proposed a MOT plus Start-Up time of 255 minutes based on the STUC horizon, explaining:

The STUC runs once at the beginning of each hour and looks ahead eighteen 15-minute intervals, i.e., a Time Horizon of four hours and 30 minutes (i.e., 270 minutes).¹³ However, only 255 minutes are available to perform the unit commitment process. Therefore, a Short Start Unit must have a Start-Up Time plus Minimum Run Time less than or equal to 255 minutes.

To ensure that an RDRR remains dispatchable in RTPD and considered in the STUC process, while extending its minimum on time beyond 1 hour, the CAISO proposes to align the RDRR requirement with the definition established for a Short Start Unit. Alignment with the definition of a Short Start Unit makes the RDRR minimum on time requirement synonymous with the Minimum Run Time requirement for Short Start Units.

The CAISO proposes that an RDRR have a minimum on time that combined with its Start-Up Time does not exceed 255 minutes.

Implementing an allowable MOT over the RTPD time horizon of 7 intervals would provide some incremental improvement; however, this improvement would be limited compared to the STUC horizon. CLECA requests additional information and quantification of the implementation effort between the RTPD and STUC horizons. CAISO may want to consider a phased implementation starting with increasing the allowable MOT to the RTPD horizon, followed by the STUC horizon.

[1] California Independent System Operator, Demand and Distributed Energy Market Integration Working Group, Presentation at Working Group Session 10, slide [18] (Oct. 16, 2025), available at https://stakeholdercenter.caiso.com/InitiativeDocuments/Presentation-Demand-and-Distributed-Energy-Market-Integration-Oct-16-2025.pdf

[2] California Independent System Operator, Reliability Demand Response Resource Minimum On Time, Final Proposal, (Jan. 18, 2024), available at https://www.caiso.com/documents/final-proposal-reliability-demand-response-resource-minimum-on-time-jan18-2024.pdf

4. Additional comments, include any other feedback not captured above.

No additional comments at this time.

1. Please provide your general feedback on the session, structure and direction the Demand and Distributed Energy Market Integration working group meeting on Oct 16, 2025.

CALSSA appreciates the opportunity to provide written comments, in addition to the robust discussion during the working group meeting on October 16. That meeting included a productive discussion of the CAISO staff’s assessment of policy, regulatory, and implementation considerations for most of the problem statements identified throughout the working group process to date. However, because the problem statements for the DER participation discussion topic have not been finalized,  we did not have an opportunity to hear the staff’s assessment of those problem statements, and hope to have the opportunity to review and provide our thoughts on the staff’s assessment before the final discussion paper is released.

2. Do the six problem statements accurately reflect the challenges facing DER participation?

Economic-Based Demand Response Participation Model Problem Statement 1 (BTM storage exports)

Problem Statement:

“While PDR is the most compatible CAISO model for BTM-interconnected storage, because it is conceptualized as load curtailment, it does not include any measured export of energy from individual locations to measure performance of the resource via any of existing PEMs—including MGO—so that BTM storage aggregations cannot offer the full resource capability, and PDR performance is artificially capped at levels reflecting conservative estimates of site load, resulting in significant energy from BTM storage that is unused during events and unavailable to the CAISO market.”

This problem statement represents the top priority issue for CALSSA and its member companies. Including export of energy in PDR performance is the single most impactful action that the CAISO can take to mobilize the significant and growing fleet of BTM battery storage as grid assets integrated into the CAISO market. 

The problem statement accurately captures the challenge that BTM storage has faced in participating in the CAISO market. The main concerns are as follows.

• PDR does not include measured export of energy beyond the customer’s utility meter. This caps performance at significantly lower than what could be made available, including because fleet operators must conservatively estimate site load. 
• Despite this significant flaw, no alternative to PDR is more compatible and feasible for BTM exporting resources, including energy storage. 

Because the lack of credit for exports limits both performance and compensation in the CAISO market and the ability to access full resource adequacy value, we want to confirm that the scope of this problem statement includes addressing any actions the CAISO would need to take to ensure that methodologies for resource adequacy accreditation include exports. See our response to question 3 regarding Economic-based Demand Response Participation Problem Statement 1 for further comments on this issue.

We recognize that the problem statement may be more complex than necessary. We suggest a revised problem statement that we believe simplifies and clarifies it without changes to the substance:

“PDR is conceptualized as load curtailment, but the current framework does not credit the full level of load curtailment that distribution-connected PDRs are able to provide. Currently, PDR performance is measured at the utility-meter level, and measured export of energy past the meter is excluded. This artificially caps PDR performance at levels reflecting conservative estimates of site load, rather than the full sub-LAP-level load reduction that these resources can provide. As a result, significant energy from BTM storage is unused during events and unavailable to the CAISO market.”

Distributed Energy Resource Participation Problem Statement 3 (resource adequacy)

Problem Statement:

“There is currently no pathway for DER aggregations (DERAs) to qualify for resource adequacy, and this is a multi-agency issue needing the CAISO’s attention because the CAISO would need to address or help resolve some issues (including deliverability determination and visibility) before the CPUC would develop a Qualifying Capacity methodology, as well as because the CAISO needs to develop Net Qualifying Capacity methodologies.”

The October 16 working group discussed problem statement formulation for the sixth discussion topic, DER participation. For the most part, these problem statements capture the challenges they aim to identify. We wish to offer some further thoughts and refinements for two of these problem statements.

For the third problem statement, related to resource adequacy, first, as discussed during the October 16 meeting, we want to ensure that the problem statement does not imply that the CPUC must wait for the CAISO to resolve issues before the CPUC can develop a Qualifying Capacity methodology or take other steps to enable exporting DERs to receive RA credit.

Second, we wish to clarify that while this is an issue for the DERA participation model, it is not limited to that model. 

Thus, we recommend making minor changes to the problem statement as follows:

“There is currently no pathway for exporting DERs in aggregations (including those participating through the DERA model) to qualify for resource adequacy, and this is a multi-agency issue needing the CAISO’s attention because the CAISO may need to address or help resolve some issues (including deliverability determination and visibility) to support the CPUC’s work in developing a Qualifying Capacity methodology, as well as because the CAISO needs to develop Net Qualifying Capacity methodologies for DERA.”

See our response to question 3 regarding Economic-based Demand Response Participation Problem Statement 1 for further comments on this issue.

Distributed Energy Resource Participation Problem Statement 6 (dual participation)

Problem Statement:

“Where separate resources at a single site participate in separate aggregations, such as a battery participating in a DER aggregation while the whole home using smart thermostat and heat pump water heater participates in a PDR, utilities may be concerned that the battery operation for DERA participation impacts the other program.”

At the October 16 working group, it became evident that the problem statement should be revised to more clearly point to the issue, which is related to different devices at the same customer site participating separately, including through separate aggregations managed by different providers. In discussion with CAISO staff, we understood that there may be concern by utilities about the impact of operation of one device (e.g., a battery) on another device’s (or the customer site’s) performance in the other program. 

From the perspective of CALSSA and members, the goal of this problem statement is to identify the issue that current rules do not allow for separate participation of individual devices at a customer site. We suggest revising the problem statement to better capture this goal, and we hope that this also captures the crux of the issue from the CAISO perspective. Our suggested revision is as follows:

“CAISO site-level registration does not allow separate resources at a single site to participate in different aggregations for separate compensation from those services, such as a battery participating in a DER aggregation or a PDR resource while a smart thermostat at the same customer site participates in a separate PDR aggregation.”

Importantly, this issue is not limited to participation through the DERA model. The issue could also arise when a customer seeks to enroll separate devices in two PDR aggregations or in one PDR aggregation and a separate, non-CAISO integrated program. While we discussed the issue in the context of the DERA model during the working group, we also have noted that we are focused on articulating and addressing issues for DER participation in CAISO markets more broadly, and across models. The issue of enabling device-level participation in CAISO-integrated aggregations is one such cross-cutting issue.

PEM Problem Statement 6 (device-level registration)

Problem Statement: 

“Requirement for registration of locations to be at the service account level prevents aggregators from developing resources at the level of the customer’s device.”

CALSSA and several other stakeholders have articulated concerns about the issue of registration being at the service account level and have expressed support for a problem statement on this topic. We appreciate the CAISO including this problem statement among those discussed during the October 16 meeting. We continue to support this problem statement as important to address a significant obstacle to BTM resources being able to participate in the CAISO market, and we strongly believe this problem statement should be addressed in the policy development stage.

See our response to question 3 regarding this problem statement for further comments on this issue.

PEM Problem Statement 2 (existing PEMs are not well suited for technologies such as BTM batteries)

Problem Statement: 

“Existing PEMs, such as the commonly used 5-in-10 and 10-in-10 approaches, are not well suited for emerging DR participation (inclusive of all technology types such as Behind-the-meter batteries, aggregations, Electric Vehicle charging, etc.) whose frequent dispatching distorts baseline calculations.”

During the working group meeting, CAISO staff asked whether the problem statements accurately reflect the finalized understanding from the working group. This problem statement does not reflect input CALSSA and others have provided. In comments submitted on July 11, CALSSA and Tesla each expressed concern that the wording of this problem statement casts the problem in a way that treats frequent dispatch as negative, “distorting” baseline calculations. We both also expressed concern that this problem statement should expressly acknowledge that existing PEMs do not account for full performance of exporting resources, and called for the problem statement to explicitly include that existing PEMs do not account for exports. Similar concerns were expressed by various stakeholders during the May 13 working group meeting. 

However, the problem statement was not changed to address these considerations. Therefore, we reiterate our request for a change to this problem statement. We suggest the following:

“Existing PEMs, such as the commonly used 5-in-10 and 10-in-10 approaches, are not well suited for emerging DR participation (inclusive of all technology types such as Behind-the-meter batteries, aggregations, Electric Vehicle charging, etc.) whose performance is not well accounted for by existing baseline calculations because of their frequent dispatching and because existing PEMs do not account for exports.”

3. Are there any additional considerations to the ISO assessment for the captured problem statements

We appreciate the CAISO sharing their assessment of the problem statements developed during the working group scoping process. We recognize the value of identifying problem statements for which there are significant policy, regulatory, or implementation challenges to addressing issues. That said, the existence of significant challenges should not be used as a reason to reject or deprioritize problem statements and issues that have high potential to make a meaningful difference in the ability to access the CAISO market. 

Economic-based Demand Response Participation Model Problem Statement 1 (BTM storage exports)

Problem Statement:

“While PDR is the most compatible CAISO model for BTM-interconnected storage, because it is conceptualized as load curtailment, it does not include any measured export of energy from individual locations to measure performance of the resource via any of existing PEMs—including MGO—so that BTM storage aggregations cannot offer the full resource capability, and PDR performance is artificially capped at levels reflecting conservative estimates of site load, resulting in significant energy from BTM storage that is unused during events and unavailable to the CAISO market.”

1. Regulatory considerations

CAISO staff identified a regulatory consideration that the “problem” of PDR not including measured export of energy may be out of scope of the demand response/load curtailment model.

During the working group process, CALSSA and others have commented that the original model of demand response (limited to load curtailment) does not reflect the current landscape of demand-side resources that participate in CAISO markets through demand response participation models, including PDR. This does not mean that exporting resources should be considered out of scope; rather, it points to a need to reconceptualize demand response to better account for the flexibility of resources that involve BTM storage and other technologies that can export beyond a customer meter and even deliver net negative energy across an aggregation, as well as offering mixed load/generation profiles. 

For this reason, we appreciate the CAISO staff stating that the problem statement could be scoped appropriately, showing willingness to rethink past approaches and mindsets.

2. Policy considerations

With respect to policy considerations, CAISO staff noted that determining deliverability under a reformed PDR model that includes exports may require additional analysis and policy development efforts. 

In our view, assessing deliverability to the CAISO system is not needed for purposes of including exports in measuring and compensating performance in the CAISO market from PDR resources. Still, we appreciate CAISO staff calling out deliverability, because it merits discussion for purposes of resource adequacy accreditation for exports from PDR resources. If the CAISO has a role in determining the appropriate resource adequacy credit or developing a methodology for measuring it, the issue should be deemed to be within the scope of this problem statement and should be part of the policy development for incorporating exports into a reformed PDR model. That said, we also do not believe there is a deliverability issue for resource adequacy purposes for a reformed PDR, given that exports will not reach the transmission system.

Economic-based Demand Response Participation Model Problem Statement 2 (metering requirements)

Problem statement:

“Current metering requirements for PDR restrict the ability to use device-level metering. Requiring revenue-grade meters (with ANSI C12 metering standards) on each individual resource within an aggregation creates significant administrative and cost barriers.”

CAISO staff noted a policy consideration that to date, ISO policy has been to align with LRA requirements. We appreciate that this problem statement has been scoped in for attention given that history. 

In the policy development phase, we would like the working group to pursue changing the CAISO’s current policy approach. More specifically, we would like to explore how the question of metering standards can be resolved within the DDEMI process, potentially having the CAISO set a standard. This can be done with coordination with the CPUC, and doing so would be preferable to deferring to the CPUC’s requirements as the CAISO has done in the past.

PEM Problem Statement 6 (device-level registration)

Problem Statement: 

“Requirement for registration of locations to be at the service account level prevents aggregators from developing resources at the level of the customer’s device.”

This problem statement addresses an issue that is a high priority to make it much easier to access the CAISO market. It is important for BTM resources such as battery storage to be able to participate through PDR and potentially other participation models. It should be prioritized even though CAISO staff identified significant policy, regulatory, and implementation challenges.

4. Additional comments, include any other feedback not captured above.

As we have said throughout the working group process, reforming the PDR model to include exports and addressing metering requirements are top priorities for CALSSA and member companies. Therefore, we would like to have these reforms addressed early in the policy development process. 

Related problem statements under the PEM topic are also high priorities that should be addressed early, including problem statement 2 (existing PEMs are not well suited for emerging DR participation—including exporting DERs like BTM batteries) and problem statement 6 (device-level registration).

During the working group, we have also identified a number of obstacles to using the DERA model. Those challenges are complex. In our view, addressing them is important for the longer term. The DDEMI working group should also tackle these issues during the policy development phase, after the PDR and PEM issues above.

1. Please provide your general feedback on the session, structure and direction the Demand and Distributed Energy Market Integration working group meeting on Oct 16, 2025.

The direction and structure of the last DDEMI working group meeting was appropriate overall. After spending roughly ten months developing problem statements on a number of different issues, it was helpful to revisit the problem statements comprehensively to review and address any outstanding questions. I also appreciated CAISO staff’s efforts to provide a preliminary assessment of the feasibility and implementation burden for each of the problem statements discussed. This assessment helped give stakeholders an insight into how CAISO staff is thinking about implementation and sets up future discussions on potential solutions for the problem statements.

2. Do the six problem statements accurately reflect the challenges facing DER participation?

The six problem statements introduced in the October 16 working group meeting, collectively grouped under the “DERA” topic on slides 8-10, do a good job overall capturing the challenges facing DER participation under the DERA framework, but they could be widened to capture issues connected to “distributed energy resource participation” more broadly. For example, as mentioned in the last working group meeting, the third problem statement connected to RA qualification is an issue that impacts supply-side DR resources more generally, not just those participating through DERA. 

As such, Leap suggests editing this problem statement to say something like “There is currently no pathway for exporting DERs in aggregations—including DER aggregations (DERAs)—to qualify for resource adequacy…” to make it more clear that this is not an issue solely connected to the DERA model. As discussed in the working group meeting, Leap would also avoid framing this problem statement in a way that implies CAISO must act before the CPUC here, as it’s likely that CAISO and the CPUC can work on this issue simultaneously. 

In addition, the sixth problem statement currently doesn’t appear to describe an actual problem, but merely the possibility of a problem. The idea that utilities “may be” concerned about separate resource participation seems speculative, and given CAISO’s limited bandwidth to address an already long list of problem statements, it’s inadvisable to include problem statements attempting to address problems that haven’t actually materialized. 

Based on Leap’s understanding, the actual problem facing DR resources is that distinct devices at a single site cannot participate in separate aggregations. This creates conflicts when technology providers that control different technologies within a customers’ home try to enroll those devices in separate aggregations. This “enrollment conflict” issue hinders DR enrollment because DR providers are blocked from enrolling their customers’ new devices in DR programs if other devices that those customers already own are enrolled in another providers’ aggregation. If CAISO intends to keep this problem statement, Leap recommends rewriting it to call out this problem more directly. 

Finally, Leap recommends adding the following problem statement on the management of customer meters in DERAs, which Leap raised in the October 16 meeting and which presently exists as a barrier to DERA participation today:

"DERAs currently require UDC review every time the composition of the aggregation changes, which is administratively infeasible because customers are added and removed from aggregations monthly as customers are recruited or churn."

3. Are there any additional considerations to the ISO assessment for the captured problem statements

Leap appreciates the CAISO staff’s efforts to develop an initial assessment of the problem statements. Recognizing that this is a preliminary assessment, Leap will reserve most of its comments for when assessment is more fully developed in the next Discussion Paper. At this point, Leap offers the following feedback:

First, the current approach doesn’t appear to consider how much benefit would be provided if a particular problem statement were addressed. This could lead CAISO to prioritize problem statements that are relatively easy to solve but wouldn’t actually accomplish much if they were fixed. For example, Problem Statement #1 under Discussion Topic #1 scored “low” on implementation burden, but it’s not clear what concrete benefits would be created by removing underutilized baseline methodologies from CAISO’s tariff. Even if implementation burden is low, using staff and stakeholders’ time to discuss which baseline methodologies should be removed could be a waste of time if all it accomplished was reducing the amount of text in CAISO’s tariff. To effectively prioritize problem statements, CAISO should not just consider which problem statements are easiest to address, but also which would create the greatest positive impacts if they were solved. 

Second, Leap suggests being more consistent in applying the “high/medium/low” format in the Implementation category. This format is clear and concise, but not every problem statement assessment includes a ranking on this spectrum. For example, Problem Statement #5 under Discussion Topic #1 simply states “Would require updates to DR registration system and/or process to represent control group to ISO for validation of performance measurements,” without any identification of how difficult those updates would be to implement. This makes it difficult for stakeholders to understand the relative difficulty of addressing this problem statement compared to other problem statements. Leap recognizes that this is a preliminary assessment and that the relative difficulty of each solution may not be fully understood at this point, but as they become more known, Leap recommends being consistent in the application of this high/low/medium format so that comparisons between problem statements are more actionable. 

Finally, Leap has specific concerns about the assessment of Problem Statement #1 under Discussion Topic #2, which is focused on PDR’s compatibility with BTM-interconnected storage. The assessment noted that this problem statement could be out of scope for a load curtailment model, and that deliverability concerns may require additional analysis. Leap believes that neither of these concerns are relevant here, and the fact that they were included in the assessment may have more to do with how this particular problem has been framed and discussed. The problem discussed here is not just about crediting exports but also about a misalignment in how PDRs are aggregated vs. evaluated, which causes these resources’ distribution-level load reductions to be undercounted and which are clearly in scope of both this working group and the PDR framework. 

Specifically, while PDRs are aggregated at the subLAP level, their performance is evaluated at the meter level. This misalignment means that CAISO only looks at PDR load reductions behind the meter, rather than all load reductions that the PDR creates behind the subLAP. For example, batteries exporting at the distribution level but not sending power back to the transmission system (e.g. where the load at the subLAP remains positive) are creating a load reduction at the distribution level consistent with the PDR concept, but they are not compensated for that load reduction because the PDR framework unnecessarily caps load reductions at the meter level. In other words, battery exports reduce the load that CAISO needs to serve at the subLAP level, but those load reductions aren't compensated in the current PDR framework. 

To make this more clear, Leap suggests reframing this problem statement to something similar to the below:

"PDR is conceptualized as load curtailment, but the current framework doesn’t credit the full level of load curtailment that distribution-connected PDRs are able to provide. Currently, PDR performance is measured at the meter level, and measured export of energy past the meter are excluded. This artificially caps PDR performance at levels reflecting conservative estimates of site load, rather than the full subLAP-level load reduction that these resources can provide. As a result, significant energy from BTM storage is unused during events and unavailable to the CAISO market."

4. Additional comments, include any other feedback not captured above.

Overall, Leap appreciates CAISO’s diligence in addressing the full spectrum of challenges that DR faces in CAISO’s wholesale market. The final list of problem statements provides a fairly comprehensive account of existing barriers, and separating them into discussion topics helped keep them organized (with the caveat that some problem statements can and do cut across these discussion topics). 

However, Leap is concerned by the absence of a problem statement focused on friction in the data authorization process for market-integrated DR. The low success rates for customers attempting to authorize data sharing via the investor-owned utilities (IOUs) ShareMyData platform is a substantial barrier to enrolling customers in supply-side DR at scale, and in the interest of developing a comprehensive list of the problems impacting DR participation in the wholesale market, Leap would recommend adding the below problem statement to Discussion Topic #2 (i.e. “Economic-based DR Participation Model”).

"Currently, the IOUs’ ShareMyData platform is the only pathway for customers to authorize data sharing with third-party DR providers. This limits the options that DR providers have in streamlining the data authorization process and prevents them from implementing more modernized and customer-friendly authorization methods that can verify a customer’s identity without requiring utility-specific login or account information."

Leap recognizes CAISO’s limited bandwidth requires discretion in adding new problem statements, but in this case, solutions that have been discussed for other problem statements (e.g. device-level enrollments) can potentially address data authorization challenges as well. When developing solutions, stakeholders can make clear that a proposed solution connects to multiple problem statements, reducing any administrative burden that adding this problem statement might create. In fact, it’s important to capture this critical issue as a problem statement specifically so that stakeholders can identify if and when proposed solutions can address multiple issues, which would inform how different solution sets are prioritized by CAISO. 

In addition, when developing solutions, it may be preferable to group these discussion topics under different tracks, rather than addressing them sequentially as was done with the problem statements. Although some of the discussion topics overlap, others are quite distinct and are relevant to different subsets of stakeholders. For example, Discussion Topics #2 and #6 are primarily connected to stakeholders participating as Proxy Demand Resources, while Discussion Topic #3 is connected to stakeholders participating as RDRRs. Meanwhile, Discussion Topic #4 seems specifically connected to hydrogen electrolyzers, and aspects of Discussion Topic #5 seem mostly related to non-California participants in EDAM. 

Rather than holding one long working group meeting each month addressing a specific topic, it might be preferable to hold several smaller working group meetings each month, with each meeting addressing a different discussion topic (or groups of discussion topics). For example, topics connected to economic-based DER market participation (e.g. PDR and DERA) could be addressed in a separate track, along with issues connected to PEMs (which are closely connected to PDR participation). Topics related to RDRRs, Load Resources, and EDAM participation could be addressed in their own separate tracks.  

Assuming CAISO staff’s bandwidth allows these discussion topics to be addressed in separate “tracks,” this would help increase stakeholder engagement and allow the development of solutions for all topics to move forward more quickly, because stakeholders would not need to wait months for the working group meetings to circle back around to the topic that affects them. This would also reduce the need to spend future sessions reviewing past discussions, because there would not be multi-month breaks in stakeholders’ opportunities to engage on the policy discussions they're engaged on. Stakeholders would still be free to attend multiple working group meetings if their interests span multiple discussion areas, but those with more limited interests would be able to focus on those interests specifically.

Finally, as mentioned in the working group meeting, Leap recommends considering dependencies between problem statements when assessing the benefits of solving them. For example, it may be the case that allowing batteries larger than 1 MW to participate in a DERA (i.e. Problem Statement #4 under the DERA topic) is a relatively easy change. However, if CAISO doesn’t simultaneously change the other issues obstructing DERA participation (e.g. lack of RA credit, WDAT requirement, 24/7 reliability requirement), then increasing the participation size limit may not matter because most batteries would still be blocked from participating in DERAs anyway. 

In this case, CAISO should not consider the feasibility of solving Problem Statement #4 in isolation, but assess it alongside the feasibility of implementing the other changes that would be required to make the DERA product usable. This underscores the importance of considering the benefits of solving problem statements alongside their costs. Problem statements whose solutions would create benefits independent of other reforms should be prioritized, while problem statements that would not realize their benefits unless other, more challenging problem  statements are solved should be deprioritized.

1. Please provide your general feedback on the session, structure and direction the Demand and Distributed Energy Market Integration working group meeting on Oct 16, 2025.

Marin Clean Energy (MCE) appreciates the opportunity to comment on topics discussed during the October 16, 2025 working group meeting. We thank the CAISO team for outlining clear next steps in terms of a final Discussion Paper, followed by an Issue Paper and the corresponding comment opportunities. MCE looks forward to continuing to participate in the Policy Initiative Stakeholder Process for Demand and Distributed Energy Market Integration (DDEMI).

As this initiative moves forward, MCE recommends the CAISO:

• Provide additional regulatory, policy, and implementation details in the Discussion Paper to help stakeholders assess potential solutions, benefits, challenges, and prioritization of problem statements.
• Enable near-term pilots with independent measurement and verification to evaluate proposed or modified Performance Evaluation Methodologies (PEMs) and Proxy Demand Resource (PDR) models before formal tariff or BPM changes.
• Support expanded use of the control group methodology by allowing use of non-participant data for control group baselines without registration or opt-in, and by exploring use of prescriptive baselines that DR providers can adapt for their programs.

2. Do the six problem statements accurately reflect the challenges facing DER participation?

MCE generally agrees with the problem statements presented on the DER aggregation (DERA) participation model, including the proposed revisions discussed during the working group meeting.

• MCE encourages the CAISO to present revised problem statements that consider the respective jurisdictions and current proceedings of the CAISO and the CPUC, and to frame problem statements in a manner that enables flexible solutions and progress, rather than any particular sequencing of actions between the CAISO and CPUC.
• MCE also supports the inclusion of a problem statement addressing dual participation, but emphasizes that dual participation concerns extend beyond utility resources and the DERA model.

MCE looks forward to reviewing the revised problem statements in the Discussion Paper, and reserves the right to provide additional feedback on the final statements.

3. Are there any additional considerations to the ISO assessment for the captured problem statements

• MCE strongly supports the CAISO’s interest in expanding use of control group baselines due to their robust statistical methodology.

The control group methodology can yield more accurate outputs and reduce exogenous distortions to customer baseline calculations, but its use is constrained by current rules, especially the requirement to register non-participant accounts for “matched” control groups.

• MCE encourages the CAISO to remove the registration or opt-in requirement for LSEs with existing access to non-participant data as an expeditious way to increase utilization of control group baselines.
  • For LSEs such as MCE, removal of the registration or opt-in requirement would directly resolve a significant barrier by allowing the use of their customers’ data for non-participant control group formation.
• MCE encourages the CAISO to assess potential solutions for both LSE and third party aggregators, and to include additional assessment detail within the Discussion paper.
• MCE also encourages the CAISO to include additional assessment details for implementing the prescriptive baseline concept proposed by Leap, including a modified approach whereby a state entity, such as the CPUC, creates standardized state-level load profiles while leaving it to the demand response providers to calculate the baseline for their unique demand response programs.

MCE recognizes the FERC open access concern outlined in the regulatory assessment for this problem statement–that the CAISO “may be required to consider ability for third party aggregators to utilize non-registered control groups.” However, MCE notes that such consideration should not preclude an expeditious and efficient solution for other parties, such as non-IOU LSEs. MCE encourages the CAISO to assess potential solutions for both LSE and third party aggregators, and to include additional assessment detail within the Discussion paper, while acknowledging that the ultimate solutions may somewhat differ.

As an LSE, MCE already has access to the requisite non-participant customer data – data which MCE already uses in CAISO settlements. MCE further appreciates that third party aggregators may in some instances face distinct challenges related to data access, which requires coordination with the CPUC to address. As stated above in our answer to Question 2, MCE encourages the CAISO to present revised problem statements that consider the respective jurisdictions and roles of the CAISO and CPUC, including the CPUC’s ongoing proceedings addressing non-participant data access for third party aggregators.

Problem Statement 2.1

• MCE encourages the CAISO to implement pilots with independent measurement and verification to demonstrate the efficacy of proposals for a modified Proxy Demand Resource (PDR) model, and to add the necessary details for soliciting and authorizing said pilots within the final assessment outlined in the Discussion Paper.

MCE believes that pilots could be implemented in the near term by evaluating the performance of modified PDR designs while continuing to require adherence to existing rules and regulations for PDR. MCE is currently developing a framework for demonstrating the value of a modified PDR model that allows for some level of export from participating accounts with installed energy storage, which would increase participation and enhance overall performance of the PDR model. Piloting of MCE’s approach, as well as other potential approaches to mPDR design and implementation, will help inform and support the CAISO’s mPDR assessment and other necessary processes prior to seeking approval for revised tariffs, or updating BPMs.

4. Additional comments, include any other feedback not captured above.

MCE has no additional comments at this time. We look forward to reviewing and providing feedback on the Discussion Paper.

1. Please provide your general feedback on the session, structure and direction the Demand and Distributed Energy Market Integration working group meeting on Oct 16, 2025.

Nostromo Energy appreciates the CAISO soliciting stakeholder comments for the October 16th, 2025, Demand and Distributed Energy Market Integration Initiative Working Group and offers the following comments. 

2. Do the six problem statements accurately reflect the challenges facing DER participation?

Nostromo Energy believes that the problem statements have been developed to sufficient accuracy and that these issues are ready to proceed to the formal policy phase.

3. Are there any additional considerations to the ISO assessment for the captured problem statements

N/A

4. Additional comments, include any other feedback not captured above.

Nostromo believes that the working group dialogue will be a key driver to enable CAISO to integrate new Demand Response technologies towards meeting the objectives of California Senate Bill 846 to bring 7 GW of “shift” resources into the market by 2030.  We believe that 2 problem statements have been clearly identified that would support these objectives most efficiently, and can be described in 2 specific policy objectives:
1) Establish the necessary minimum metering requirements for sub-metered or behind-the-meter systems (as captured in Discussion Topic 1, problem 3) 

and

2) Develop effective, accurate PEMs for the different sub-metered or behind-the-meter systems and new technologies discussed over the course of the working group sessions (as captured in Discussion Topic 1, problem 2).  This includes the development of an accurate thermal PEM, as Nostromo presented to the working group earlier this year.

1. Please provide your general feedback on the session, structure and direction the Demand and Distributed Energy Market Integration working group meeting on Oct 16, 2025.

PG&E appreciates CAISO's lead and the contribution of a diverse group of stakeholders to develop the problem statements that are representative of the challenges and opportunities facing demand and distributed energy resource participation in the CAISO markets.  PG&E also appreciates ISO’s assessment of the problem statements from the policy, regulatory, and implementation perspectives. PG&E looks forward to continued progress as specific policy initiatives get underway in the next phase of DDEMI. 

PG&E provides comments regarding the October 16, 2025 working group meeting and the ISO Assessment of the DDEMI problem statements below. 

2. Do the six problem statements accurately reflect the challenges facing DER participation?

Registration of Control Group end users in DRRS 

PG&E appreciates CAISO’s recognition of the robust statistical value that control group baselines offer for wholesale demand response settlement. We emphasize that the current requirement for demand response program non-participants in control groups to be registered in the Demand Response Registration System presents a significant barrier to broader implementation. Removal of this barrier is essential for enabling the use of the control group methodology, improving DR performance measurement, and mitigating concerns regarding compliance with consumer data privacy regulations. PG&E supports exploring updates to the registration system and associated processes to enable LSE’s and third-party aggregators to represent control groups without compromising privacy or open access principles. We look forward to collaborating with CAISO and stakeholders to develop a path forward that balances methodological rigor, regulatory compliance, and market accessibility. 

Exports from BTM DERs 

PG&E supports CAISO’s efforts to prioritize reforms that make the PDR model an eligible pathway for behind-the-meter storage exports. While PDR is currently a compatible model for BTM-interconnected resources, its conceptualization as load curtailment excludes measured exports, resulting in performance caps that do not reflect the full capabilities of these resources. PG&E recognizes that barriers such as double compensation need to be resolved, as well as deliverability, as CAISO notes in the assessment. 

PG&E notes the importance of this issue as it is being raised to the CPUC as part of the Enhanced Demand Response OIR (R.25-09-004) and Resource Adequacy OIR (R.25-10-003).  We recommend that CAISO and CPUC work in parallel to resolve any jurisdictional barriers. There is substantial untapped capacity in the BTM space, and both CAISO and CPUC must accelerate efforts to unlock its value for the grid.  

3. Are there any additional considerations to the ISO assessment for the captured problem statements

PG&E offers comments on the following ISO problem statement assessments: 

Problem Statement:  

Existing PEMs, such as the commonly used 5-in-10 and 10-in-10 approaches, are not well suited for emerging DR participation (inclusive of all technology types such as Behind- the-meter batteries, aggregations, Electric Vehicle charging, etc.) whose frequent dispatching distorts baseline calculations.  

PG&E Comment: 

PG&E concurs with CAISO’s assessment of the PEM problem statement related to the suitability of the day matching baselines for frequently dispatched technologies.  Baselines should measure usual behavior during non-dispatch periods to ensure the response to CAISO market award is incremental. This also relates to the issue of double compensation, where the daily use of DERs is already being compensated on the retail side via NEM/NBT rates. 

Problem Statement: 

Current metering requirements for PDR restrict the ability to use device-level metering. Requiring revenue-grade meters (with ANSI C12 metering standards) on each individual resource within an aggregation creates significant administrative and cost barriers  

PG&E Comment: 

PG&E supports CAISO’s assessment that the CPUC or relevant LRA should develop the protocols for device-level metering and establish standards for measurement, following a process similar to that used for electric vehicles with submetering protocols. 

Problem Statement: 

CAISO limits RDRR to a discrete dispatch limit of 100MW even if the resource is larger than 100MW, with exception criteria which may be too limiting to represent the programs. 

PG&E Comment: 

PG&E supports revisiting the exception criteria to the RDRR discrete dispatch limit of 100 MW, considering the potential growth of large loads that may not be able to respond to continuous dispatch instructions. 

4. Additional comments, include any other feedback not captured above.

n/a

1. Please provide your general feedback on the session, structure and direction the Demand and Distributed Energy Market Integration working group meeting on Oct 16, 2025.

Renew Home appreciates the efforts of CAISO staff in leading the DDEMI working group and the progress they have made leading the working group. Renew Home’s feedback at this time is focused on specific problem statements related to the Performance Evaluation Methodologies (PEMs) outlined below, particularly the barriers related to control group baseline methodologies, as well as device-level measurement and service account-level registration. 

2. Do the six problem statements accurately reflect the challenges facing DER participation?

Regarding Problem Statement 3: BTM device-level measurement is not recognized for use in developing baselines for PEM options. Performance evaluations depend on energy measurement (load and generation) and don’t recognize non-energy metered technologies contributions to load reduction calculation equivalents.

Renew Home strongly supports this problem statement, given the significant marginal contribution of HVAC loads to summer and winter peaks and the extent to which HVAC load reductions can be robustly measured with compressor runtime, which is measured and recorded by smart thermostats. Renew Home recognizes the appropriate conversion between runtime and load must be determined empirically and regularly updated and validated.

Regarding Problem Statement 5: Requirement for control group end users to be registered in the Demand Response Registration System limits use of non-participating end users within a control group and is in conflict with consumer data privacy rules.

Renew Home finds the existing problem statement 5 does not reflect our barriers to implementing a control group, which is Renew Home’s preferred baseline methodology type. For Renew Home, the requirement that control group users be registered in the DRRS is not only acceptable but critical to our desired control group methodology implementation.

The current methodology requires monthly validation, meaning the control group remains static within each month. Because the comparison group must be selected and tested for statistical equivalence, it cannot necessarily be selected randomly (though random selection may produce a satisfactory group). Within a month, the methodology functions more like a matched comparison group. Renew Home prefers to randomly select a control group for each event. This has the added benefit of accounting for effects of previous dispatches (i.e., fatigue in the event of consecutive events).

Additionally, the minimum control group size of 150 is much larger than required to reach an acceptable level of accuracy and precision. Renew Home suggests these accuracy and precision metrics should be the primary guides to the minimum control group size for each resource. A significantly lower minimum (for example, 15) could be used as a backstop.

Renew Home recognizes that the control group may comprise customers from multiple subLAPs, which provides some flexibility in reaching the minimum. However, it introduces new complications to ensure the weather conditions of the control group appropriately match the conditions of the treatment group. This may need to be accounted for by stratifying the control group sampling, adding another complication. Sampling across multiple subLAPs with variable weather conditions to increase the control group size may have the unintended consequence of reducing the accuracy and precision of the control group methodology.

Other than the minimum control group size, the rules appear to have guardrails tailored to commercial customers. Renew Home understands that with aggregations of commercial customers with heterogeneous loads, it is critical to take steps to ensure the control group resembles the treatment group. While there is some variation across homes, residential loads are significantly more homogeneous. Accordingly, strictly random control groups are generally appropriate for residential customers. Perhaps instead of validating each control group, the control group methodology can periodically assess the population for sufficient homogeneity such that truly randomized control groups can continually be drawn from the population. For populations that fail such a test, the existing methodology may be sufficient.

Renew Home recognizes there may be challenges and concerns with letting a DR provider select its own control groups. These could be addressed by allowing the code and associated processes for selecting the control group to be audited by the CAISO, or even by having CAISO implement the control group randomization. While Renew Home prefers the former for reduced technical burden, the primary priority is to implement true randomized control groups on an event-by-event basis.

Regarding Problem Statement 6: Requirement for registration of locations to be at the service account level prevents aggregators from developing resources at the level of the customer’s device.

Renew Home supports this problem statement. The current system does protect against dual payment for the same load reduction but often does so at the expense of participation of different DERs and compensation for the respective load reductions of each.

Account-level registration requires all DERs in a PDR participant home or building to be managed (i.e., enrolled, dispatched, and compensated) by the same DRP (or DERP), or else not be managed at all. In contrast, a paradigm in which different devices within a single premise are managed by different DRPs is possible. For directly measurable loads like EVSE and batteries, it is straightforward to remove the device load from the whole-premise load. This would allow load reductions to be measured relative to the residual premise load. Alternatively, in conjunction with problem statement 3, each resource could be measured independently (the EVSE and/or battery measured directly, and the HVAC load measured using smart thermostat runtime telemetry).

Under this paradigm, it may be necessary to identify co-located DERs even when controlled by different DRPs. Registration of devices may not so much replace registration of service accounts but rather supplement it.

3. Are there any additional considerations to the ISO assessment for the captured problem statements

Renew Home has no additional comments at this time.

4. Additional comments, include any other feedback not captured above.

Renew Home looks forward to continued collaboration on this initiative.

1. Please provide your general feedback on the session, structure and direction the Demand and Distributed Energy Market Integration working group meeting on Oct 16, 2025.

SCE appreciates the opportunity to comment on the opportunity to comment on the October 16, 2025, working group meeting.  SCE’s feedback can be found under question #4.

2. Do the six problem statements accurately reflect the challenges facing DER participation?

?SCE does not have any additional comments.

3. Are there any additional considerations to the ISO assessment for the captured problem statements

SCE does not have any additional comments.

4. Additional comments, include any other feedback not captured above.

SCE appreciates CAISO’s efforts to develop solutions that would accurately reflect Reliability Demand Response Resources (RDRR) capabilities. SCE agrees that the current RDRR minimum on time requirement may not accurately reflect an RDRR’s operational minimum on time within the real-time market optimization horizon dispatch consideration. Eliminating the minimum on-time requirement of one hour or less would be a positive step towards enhancing the market operation of these resources. SCE supports modifications that will provide resource owners with greater flexibility to model their resources’ physical operating limits and any limits that may be bound by contractual and/or tariff provisions.

1. Please provide your general feedback on the session, structure and direction the Demand and Distributed Energy Market Integration working group meeting on Oct 16, 2025.

We appreciate the October 16 working group meeting and the opportunity to receive CAISO’s feedback on the proposed problem statements from policy, regulatory, and implementation perspectives. However, discussions related to the DERA model problem statement remain incomplete. We would like to hear CAISO’s assessment of these issues and provide working group members an opportunity to share follow-up input before the discussion paper is published.

2. Do the six problem statements accurately reflect the challenges facing DER participation?

Problem Statement 1 - Economic-based Demand Response Participation Model on BTM Storage Exports 

This problem statement accurately captures the key challenge that behind-the-meter (BTM) storage faces in participating in the CAISO market - fair compensation for exported energy. Including energy exports in PDR performance evaluation is Sunrun’s top priority in working with CAISO staff. We encourage CAISO to look beyond the traditional demand response framework when considering the role and capabilities of PDR. We look forward to developing solutions that address policy concerns around battery export compensation. The current lack of credit for battery exports limits both performance and compensation in the CAISO market, representing the primary barrier to integrating tens of thousands of residential batteries into the wholesale market.

Problem Statement 2 - 1) PEMs: Existing PEMs are not well suited for technologies such as BTM batteries, 2) metering requirements

We share CalSSA and Tesla’s concerns that the current framing of this problem statement - linking frequent dispatch to baseline distortion - suggests that frequent battery dispatch is undesirable. In reality, frequent battery dispatch provides essential grid services, particularly during summer peak periods, by reducing system and local peak demand and generating savings for all ratepayers. We recommend revising the phrase “whose frequent dispatching distorts baseline calculation” to: “whose performance is not properly captured under current baseline methods, as these approaches overlook frequent dispatch behavior and fail to include exported energy in their calculations.”

Regarding the challenges of device-level metering under ANSI C12 standards, we appreciate CAISO's recognition of the issue. We encourage CAISO to use the policy development phase to establish its own metering standard. This proactive step, taken in coordination with the CPUC, is highly preferable to simply adopting the CPUC's requirements, which has been CAISO's practice in the past.

Problem Statement 3 - Distributed Energy Resource Participation (DERA) on Resource Adequacy (RA)

RA value is one of the primary value streams for behind-the-meter (BTM) storage in the wholesale market. However, we want to clarify that this problem statement should not suggest that the CPUC must wait for CAISO to address ISO-jurisdictional issues before developing a qualifying capacity (QC) methodology for BTM storage with export capabilities. 

Problem Statement 6 - Distributed Energy Resource Participation (DERA) on Dual Participation and Device Level Registration

Based on the discussion during the last working group meeting, this problem statement should be revised to more clearly address the issue of dual participation. Sunrun would like to provide additional clarification on this topic. The primary objective should be to prevent double compensation for the same service - not to prohibit dual participation itself. Customers should be able to enroll multiple devices in different programs or products, provided that no device receives compensation twice for delivering the same grid service. In this context, we recommend reframing the problem statement as follows, “CAISO site-level registration currently prevents separate resources located behind a single customer utility meter from participating in distinct aggregations that provide separate compensations for different services  -  for example, a battery participating in one PDR resource while the home’s smart thermostat and heat pump water heater participate in another PDR aggregation.” On the other hand, we continue supporting the problem statement around device level registration which is a key barrier to BTM storages to participate in the CAISO market.

3. Are there any additional considerations to the ISO assessment for the captured problem statements

4. Additional comments, include any other feedback not captured above.

1. Please provide your general feedback on the session, structure and direction the Demand and Distributed Energy Market Integration working group meeting on Oct 16, 2025.

Tesla appreciates the productive and well-organized October 16 DDEMI working group meeting. The session provided a clear overview of the progress made so far and helped frame where CAISO sees opportunities to move from discussion to action. The structure of the meeting encouraged good dialogue and helped highlight which problem areas are ready for policy development. We found it especially useful in focusing attention on key priorities for distributed energy resources, including behind-the-meter storage participation. Tesla encourages CAISO to share its upcoming assessment of the Distributed Energy Resource (DER) problem statements before finalizing the discussion paper so stakeholders can confirm the details are captured accurately. Overall, the meeting was a positive step forward and set the stage for shifting from identifying issues to developing practical solutions that improve PDR access and metering and performance options for distributed storage.

2. Do the six problem statements accurately reflect the challenges facing DER participation?

Economic-Based Demand Response Participation Model – Problem Statement 1 (BTM storage exports)

Problem Statement:
“While PDR is the most compatible CAISO model for BTM-interconnected storage, because it is conceptualized as load curtailment, it does not include any measured export of energy from individual locations to measure performance of the resource via any of existing PEMs -including MGO- so that BTM storage aggregations cannot offer the full resource capability, and PDR performance is artificially capped at levels reflecting conservative estimates of site load, resulting in significant energy from BTM storage that is unused during events and unavailable to the CAISO market.”

Tesla Response:
Tesla strongly supports this problem statement and agrees that it captures one of the most important issues for distributed storage today. The current PDR model treats behind-the-meter resources purely as load reduction and doesn’t credit exported energy in performance calculations. This limits how much energy a storage aggregation can bid into the market, even when it could safely and reliably deliver more. The result is a large amount of flexible capacity sitting unused, which reduces the benefits these batteries could provide for grid reliability and efficiency.

Tesla recommends keeping this issue squarely within the scope of the DDEMI initiative and prioritizing it for near-term action. Expanding the PDR framework to include exports would allow BTM batteries to show their full performance and be compensated fairly for the energy they provide. It would also allow CAISO to tap into a growing fleet of distributed storage that’s already installed and capable of responding quickly to grid needs. This reform should also align with future coordination on resource adequacy counting to make sure exported energy from these resources can be recognized in both markets.

Economic-Based Demand Response Participation Model – Problem Statement 2 (Metering requirements)

Problem Statement:

“Current metering requirements for PDR restrict the ability to use device-level metering. Requiring revenue-grade meters (with ANSI C12 metering standards) on each individual resource within an aggregation creates significant administrative and cost barriers”

Tesla Response:
Tesla supports this problem statement and agrees that current metering requirements are one of the main barriers preventing behind-the-meter storage aggregations from participating efficiently in CAISO markets. Requiring an ANSI C12 revenue-grade meter at every individual device adds unnecessary cost and complexity, particularly for residential and small-commercial systems, without meaningfully improving accuracy.

CAISO should take an active role in addressing this issue within the DDEMI initiative rather than deferring to existing CPUC requirements. The ISO can and should explore alternative approaches to verify performance and settlement quality. Aligning metering standards with current technology capabilities would significantly lower participation costs while maintaining data integrity and confidence in market outcomes.

Distributed Energy Resource Participation – Resource Adequacy

Problem Statement:
“There is currently no pathway for DER aggregations (DERAs) to qualify for resource adequacy, and this is a multi-agency issue needing the CAISO’s attention because the CAISO would need to address or help resolve some issues (including deliverability determination and visibility) before the CPUC would develop a Qualifying Capacity methodology, as well as because the CAISO needs to develop Net Qualifying Capacity methodologies.”

Tesla Response:
Tesla generally supports this problem statement and agrees that it highlights a critical gap in how DERs are treated under the Resource Adequacy framework. Today, there is no clear process for DER aggregations, whether under the DERA model or other participation models, to receive qualifying capacity credit, even when these resources are dispatchable and measurable.

Tesla recommends broadening the language slightly so that it covers all exporting distributed energy resources, not just those using the DERA model. The issue is relevant to any DER aggregation that can deliver energy or reduce load in response to market signals. Addressing this challenge will require coordination between CAISO and the CPUC to align on deliverability criteria, visibility requirements, and the data needed for accurate capacity accreditation.

This should be considered a top-priority area for continued work under DDEMI. Recognizing the capacity value of distributed storage and other DERs will improve resource adequacy planning, reduce system costs, and create more consistent participation opportunities across programs and technologies.

Distributed Energy Resource Participation – Dual Participation

Problem Statement:
“Where separate resources at a single site participate in separate aggregations, such as a battery participating in a DER aggregation while the whole home using smart thermostat and heat pump water heater participates in a PDR, utilities may be concerned that the battery operation for DERA participation impacts the other program.”

Tesla Response:
Tesla agrees that this problem statement identifies an important and growing challenge as customer sites add multiple flexible devices. Current CAISO and utility rules generally prevent different devices behind the same meter from participating separately in different programs or aggregations.

This limitation prevents customers and aggregators from fully using their devices to support grid needs and slows innovation in distributed energy programs. Tesla suggests refining this problem statement to make clear that the goal is to enable secure and verifiable device-level participation while preventing double counting. Moving toward device-level registration and telemetry standards would allow multiple technologies at the same site to participate independently.

Performance Evaluation Methodology – Existing PEMs not well suited for emerging DERs

Problem Statement:
“Existing PEMs, such as the commonly used 5-in-10 and 10-in-10 approaches, are not well suited for emerging DR participation (inclusive of all technology types such as behind-the-meter batteries, aggregations, electric vehicle charging, etc.) whose frequent dispatching distorts baseline calculations.”

Tesla Response:
Tesla agrees this problem statement highlights an important issue but needs clarification to better describe the real challenge. The main problem is that existing baseline methodologies don’t accurately measure the performance of frequently dispatched or exporting resources, such as BTM batteries and EV charging.

Tesla recommends updating the statement to make clear that the issue is not with frequent dispatch itself but with how current PEMs fail to capture that performance and how they don’t account for exports. The next phase of DDEMI should prioritize developing PEM options that reflect the operational behavior of modern DERs, including their ability to both consume and export energy.

3. Are there any additional considerations to the ISO assessment for the captured problem statements

Tesla appreciates CAISO’s assessment of the problem statements developed through the DDEMI working group process. The evaluation provides helpful context on which issues can be advanced quickly (like PDR) and which may require more coordination or longer-term policy work. Tesla agrees that it’s valuable to identify both the opportunities for easier implementation and the areas with more complex regulatory or technical challenges. However, we encourage CAISO not to deprioritize issues simply because they involve greater complexity or interagency coordination. Some of the most impactful reforms, like enabling BTM storage exports and modernizing metering requirements, may be challenging but are essential to expanding meaningful market access. Addressing these areas will have a significant, lasting impact on DER participation and should remain within scope as CAISO moves from defining problems to developing policy solutions.

4. Additional comments, include any other feedback not captured above.

Keep BTM Storage Exports In Scope. The problem of PDR export exclusion must remain within the DDEMI initiative and not be deferred to future proceedings. CAISO’s own assessment identifies a straightforward market-policy solution; this should be developed now to enable near-term participation of the rapidly growing distributed storage fleet.

Establish a CAISO–CPUC Coordination Track. Tesla recommends that CAISO formally establish a coordination mechanism with the CPUC to address cross-jurisdictional issues, particularly those related to revenue-grade metering, qualifying capacity, and dual participation. The DDEMI initiative presents an opportunity for both agencies to align on technical and policy requirements.

Encourage Innovation in Measurement and Verification. CAISO should continue exploring ways to incorporate inverter-level telemetry and device-level data for performance measurement. Tesla’s experience with programs such as the Demand Side Grid Support (DSGS) program demonstrates that high-fidelity inverter telemetry can provide settlement-quality accuracy without the cost and complexity of individual ANSI C12 meters.

Focus on Implementation Readiness. To realize the benefits of distributed storage quickly, CAISO should prioritize implementable reforms that can take effect as soon as possible. Incremental improvements, such as alternative PEMs that recognize exports, and revisions to PDR metering, can support unlocking substantial capacity while more comprehensive reforms progress. Tesla specifically recommends that issues related to unlocking the PDR program should be prioritized and addressed first in the next phases of this initiative.

1. Please provide your general feedback on the session, structure and direction the Demand and Distributed Energy Market Integration working group meeting on Oct 16, 2025.

The Vehicle Grid Integration Council (VGIC) supports the DDEMI initiative addressing modifying PDR to accommodate exports from energy storage. Electric vehicles (EVs) also participate in PDR, and bidirectional electric vehicles (EVs) are also a form of energy storage that could provide exports to the wholesale market.

VGIC is concerned by statements made at the October 16 meeting that the CAISO might consider export issues out of scope due to issues surrounding deliverability. VGIC believes that there could be solutions that allow behind-the-meter assets to provide exports without requiring deliverability. CAISO should ensure that export issues are taken up in the DDEMI initiative and that the issue is scoped appropriately to be discussed in this venue.

2. Do the six problem statements accurately reflect the challenges facing DER participation?

3. Are there any additional considerations to the ISO assessment for the captured problem statements

4. Additional comments, include any other feedback not captured above.

1. Please provide your general feedback on the session, structure and direction the Demand and Distributed Energy Market Integration working group meeting on Oct 16, 2025.

We appreciated the ISO including their assessment of the problem statements. This is helpful to get a sense of where there may be opportunities to clarify problem statements or address initial concerns of the ISO.

2. Do the six problem statements accurately reflect the challenges facing DER participation?

Yes. In particular, Voltus wishes to voice our support for Problem Statement 3 under Discussion Topic 1 particularly with respect to device-level measurement, as also mentioned in Problem Statement 6, and Discussion Topic 2, Problem Statement 2. 

Discussion Topic 2, Problem Statement 1 reads: “While PDR is the most compatible CAISO model for BTM-interconnected storage, because it is conceptualized as load curtailment,...” We would like to point out that PDR also provides a streamlined registration mechanism whereas DERP and NGR require more discrete interconnection processes. This makes the PDR model far more practical for large quantities of BTM resources.

3. Are there any additional considerations to the ISO assessment for the captured problem statements

Regarding the ISO's assessment of Discussion Topic 2, Problem Statement 1, we are concerned about the mention of this problem potentially being out of scope from a regulatory standpoint. Voltus shares the opinion of other stakeholders that this problem statement in particular related to BTM storage resources’ capability being capped at the site load is of paramount importance to address in this working group. Additional clarification on what considerations are required to ensure this problem remains in-scope would be greatly appreciated.

4. Additional comments, include any other feedback not captured above.

1. Please provide your general feedback on the session, structure and direction the Demand and Distributed Energy Market Integration working group meeting on Oct 16, 2025.

Overall, Vote Solar appreciates the direction that the Demand and Distributed Energy Market Integration working group has taken.  Vote Solar has begun participating in this group at the September meeting and intends to participate in meetings going forward. 

We appreciate the summary of the problem statements which provide a reasonably clear assessment of the progress that the working group has made in articulating the barriers that demand response and distributed energy resources providers face in participating in the wholesale markets.  Vote Solar believes that there is a great opportunity to make use of the large amounts of solar and battery storage that have already been deployed by businesses and households across the state to support system reliability.  In addition, we believe that the widespread deployment of these resources will continue and even accelerate in the future.

Vote Solar agrees that the implementation of the Distributed Energy Resource Aggregation model (DERA) has yielded relatively low participation despite the CAISO’s early efforts in creating this market participation model. While there are several barriers to participation, the key obstacle, from Vote Solar’s perspective, is the inability of aggregators to qualify for resource adequacy which means going through the WDAT interconnection process.  To overcome this obstacle the CAISO will need to examine and change its deliverability requirements for DERs and streamline the WDAT interconnection process.

The CAISO’s requirement that a DER provider obtain a WDAT interconnection rather than allowing a Rule 21 interconnection is unworkable for virtually all DER developers and aggregators and will severely limit participation in DERA.  WDAT barriers include 1) technical complexity; 2)  high costs and delays; and 3) challenges to market integration.  

1.Technical Incompatibility and Over-Studying

Under CAISO's rules, any wholesale-exporting project larger than 1 MW is forced into the WDAT process. Almost all projects under 5 MW are distribution-level resources that do not typically create bulk transmission system reliability issues in isolation. DER projects in the WDAT queue must pass Screen Q to determine if they impact the bulk transmission grid. This screen has become an automatic failure point for virtually all projects over 1 MW.

System impact studies use the CAISO's system-wide transmission cluster process, which require studying many projects that may never be built. These studies often overstate the network upgrades that will be needed, causing small DER projects to fail the screen due to modeled interactions with speculative, distant resources,   Instead, a DER should be evaluated on its actual local grid impact.

2. Disproportionate Costs and Delays

Connecting a 1 MW project via the WDAT can take twice as long and cost up to eight times as much as connecting at the exact same site through the streamlined Rule 21 process. The lack of streamlined procedures in the WDAT creates uncertainty for developers submitting applications, leading to prolonged study times.

3. Integration with the CAISO Wholesale Market

For a DER to count toward Resource Adequacy (RA) requirements and receive capacity payments, it must be studied and awarded Transmission Plan Deliverability via the CAISO interconnection cluster process.

WDAT forces the project into the years-long cluster study queue, designed for large, bulk-transmission projects. This lengthy time period undermines the competitive advantage of DERs, which should be faster to deploy.

If a WDAT project seeking FCDS deliverability gets stuck behind complex transmission network upgrades, it may be forced to convert to Energy-Only (EO) status, eliminating its valuable RA capacity contribution and undermining the project's financial model.

In essence, the WDAT acts as a cumbersome, outdated regulatory filter that subjects small, local DERs to the complexity and study requirements of large-scale projects, unnecessarily delaying capacity that could be used for California's grid reliability.

The CAISO (and the CPUC) should look to ERCOT for the types of reforms that can provide clearer and less conflicted interconnection processes for selected DERs that will enable them to quickly participate in the wholesale energy market

2. Do the six problem statements accurately reflect the challenges facing DER participation?

Overall the problem statements are presented clearly by the CAISO staff.  Vote Solar agrees that there will be a need to estimate the potential benefits of proposed solutions to prioritize those that need to advance to near-term implementation.

Vote Solar believes that the level of benefits obtained from modifying the Proxy Demand Response model will be substantial for improving system and local reliability and for creating a more efficient wholesale power market through the participation of a more diverse set of resources.  

We agree with the problem statement that the current PDR model does not include a way to account for exports of energy from individual locations within the aggregation.  We also agree with the observation that significant available capabilities of BTM batteries are left unused because of the model participation rules.   

The problem statement indicates that an energy market solution to this problems is straightforward with low implementation costs.  However, the problem statement also observes that determining deliverability may require additional analysis and policy development. 

We do not believe that this question about deliverability should be considered as outside the scope for this working group.  In fact, this working group is well placed to discuss and come up with solutions for addressing this deliverability problem.  We encourage the CAISO look at this issue from a broad perspective and prioritize implementation of solutions advanced through the DDEMI initiative.

3. Are there any additional considerations to the ISO assessment for the captured problem statements

Vote Solar strongly believes that allowing load aggreators and load serving entities to have the ability to submit upward and downward demand bids in the real-time market has a large potential to create economic benefits to power consumers.  We understand that there is a lot of complexity in changing the market rules for this demand flexibility initiative.  However, as the problem statement notes the opportunity to enhance system flexibility and improve market efficiency is substantial. 

We understand that the complexity of developing and implementing demand flexibility solutions may require a longer time frame than some of the other topic areas.  While we support prioritizing work on modifying the PDR program we also believe that the CAISO should continue to devote resources to this opportunity.  

4. Additional comments, include any other feedback not captured above.

The explosive growth of data centers—driven largely by Artificial Intelligence will challenge grid reliability in the near future.  Demand flexibility may need to become a mandatory component of the interconnection process for new very large loads like data centers.  Curtailing consumption from the grid or shifting loads to different times or locations in response to grid conditions or price signals will be increasing important over the next several years.

Flexible Interconnection as is being carried out by ERCOT may offer a pathway to obtaining more controllable load in the CAISO footprint and mitigating the need for costly transmission upgrades and the procurement of new power supplies.  

Vote Solar is not recommending that flexible interconnection be added to the scope of this working group.  Instead, we are raising the likelihood that there may be a lot of potentially flexible load in the near future and that CAISO models will need to adapt to these new market dynamics.

1. Please provide your general feedback on the session, structure and direction the Demand and Distributed Energy Market Integration working group meeting on Oct 16, 2025.

PacifiCorp, Portland General Electric, and the Sacramento Municipal Utility District (collectively, WEIM/EDAM Participants), submit these joint comments to the CAISO as current Western Energy Imbalance Market (WEIM) participants and future Extended Day-Ahead Market (EDAM) participants. The WEIM/EDAM Participants appreciated the effective summary presented by CAISO staff during the October 16, 2025, working group session that walked stakeholders through the discussions to date, with the intention to advance the working group towards next steps. As the DDEMI effort continues, greater clarity for how these assessments and future scoping activities apply to WEIM and EDAM Participants will be essential to developing solutions that are practical for regional market participants.

2. Do the six problem statements accurately reflect the challenges facing DER participation?

Overall, the six problem statements capture key barriers to Demand Response (DR) and Distributed Energy Resource (DER) participation. However, the WEIM/EDAM Participants believe the Performance Evaluation Methodology (PEM) framework warrants focused attention given its direct implications for regional integration, in addition to the telemetry and metering requirements.

The WEIM/EDAM Participants appreciate the CAISO’s recognition that the existing PEM framework has become too rigid to accommodate demand-side bidding and behind-the-meter (BTM) resources. The WEIM/EDAM Participants strongly encourage the CAISO to pursue a FERC filing to modernize the 2010 precedent that requires PEMs to be hard coded in the ISO tariff. That legacy requirement, while appropriate when performance methodologies were first standardized, now limits innovation and regional harmonization. A modified framework would preserve FERC oversight, maintain transparency, and allow the CAISO to respond to technological and programmatic evolution without repeated tariff filings. The WEIM/EDAM Participants envision this framework functioning similarly to how the CAISO administers metering policies today – through clearly documented standards, subject to ISO approval and audit, but without the inflexibility of codifying each methodology in the CAISO tariff.

The WEIM/EDAM Participants understand the continued use of PEMs as a settlement and verification tool and seek a model that allows participants to select or design the PEM most effective for their resource mix and regulatory environment, consistent with CAISO-approved standards. This flexible approach would enable BAAs to determine whether a PEM, direct metering, or a hybrid approach best captures true performance, without undermining consistency or reliability. Further, the WEIM/EDAM Participants request the CAISO revise the current business practice manuals to explicitly state requirements for WEIM/EDAM Participants to allow for clear documentation of the requirements they are subject to.

The WEIM/EDAM Participants request the CAISO either enhance the current proxy demand response (PDR) participation model or create a new one that works for broader DR/DER programs. The WEIM/EDAM Participants found there to be a limitation in the registration of demand response programs as PDRs, which extends beyond the selection of a PEM during the registration process. The WEIM/EDAM Participants believe the PDR-based telemetry and metering requirements, which are codified in the CAISO tariff, are not reflective of the operational realities of demand-side bidding and BTM programs currently implemented within non-CAISO Balancing Authority Areas (BAA).

For many of these programs, particularly those exceeding 10 MW of aggregated capability, the requirement to provide direct telemetry modeled after the PDR construct is impractical. These participants rely instead on validated metering and statistically sound PEMs to estimate performance for settlement and verification. The CAISO should recognize that regional market participants external to the CAISO BAA participate or operate in BAAs whose direct responsibility is to both maintain reliability and have a vested interest in maintaining accurate performance evaluation. Accordingly, such market participants should be afforded the flexibility to propose and justify PEMs that align with their local regulatory requirements, data availability, and customer-program design, subject to CAISO approval.

3. Are there any additional considerations to the ISO assessment for the captured problem statements

The WEIM/EDAM Participants support the CAISO’s efforts to automate the load forecast adjustment (LFA) process. The WEIM/EDAM Participants request the CAISO to walk through the LFA process in both the WEIM and EDAM contexts, inclusive of functionality, timing, validation, and interaction with the future EDAM resource sufficiency evaluation’s demand forecasts in a future working group meeting. The implementation of the LFA has the potential to resolve most known issues brought forth by stakeholders in the real-time framework, such as the five percent threshold, however, clarification and additional information is needed. Notwithstanding, because LFA directly affects how demand-side resources are represented in the market, the WEIM/EDAM Participants view transparency on this process as integral to the DDEMI effort.

4. Additional comments, include any other feedback not captured above.

The WEIM/EDAM Participants encourage the CAISO to continue evolving the DDEMI Working Group to better support participation from non-CAISO BAA market participants. A clear companion guide should be developed to identify which topics and participation models apply uniquely (or jointly) to external CAISO market participants, with concise explainers incorporated into meeting materials.

To facilitate deeper collaboration, the CAISO should consider establishing a recurring DDEMI subgroup specifically for WEIM and EDAM participants. Such a forum could focus on implementation details, cross-BAA interoperability issues, and model alignment questions that are not directly relevant to internal CAISO participants.

These enhancements would improve regional engagement and help non-CAISO participants provide targeted and constructive input as EDAM implementation approaches.

1. Please provide your general feedback on the session, structure and direction the Demand and Distributed Energy Market Integration working group meeting on Oct 16, 2025.

WPTF appreciates the opportunity to provide brief comments on the problem statements and scoping discussions presented to date.

We propose a new problem statement below related to existing Proxy Demand Resource (PDR) bidding rules. This issue was originally raised in the aftermath of the August 2020 events and while CAISO agreed to address the issue, it continued to be deferred. Specifically, we are referring to the need for PDRs to have the ability to bid above the soft energy bid cap when its opportunity costs result in costs greater than $1,000/MWh, consistent with the flexibility granted to other resource types. We believe this should be explicitly included in the scope of this initiative.

2. Do the six problem statements accurately reflect the challenges facing DER participation?

WPTF respectfully requests that CAISO include an additional problem statement to address a long-standing issue with current PDR bidding rules. Below is a draft problem statement for the CAISO to consider:

“Current bidding rules prevent Proxy Demand Response (PDR) resources from being able to reflect costs in the market when the costs are greater than the soft energy bid cap of $1,000/MWh. This results in inefficient use of the PDR resources and does not provide equitable treatment relative to all other resources that are able to reflect costs greater than $1,000/MWh.”

In response to FERC Order 831, resources are permitted to submit bids above the $1,000/MWh soft offer cap during specific system conditions. While CAISO implemented this flexibility for most resource types, it did not extend the same capability to PDRs. The August 2020 events clearly demonstrated the need for PDRs to be able to reflect their true costs (e.g., opportunity costs) when system conditions justify bids above $1,000/MWh.

At the time, CAISO and stakeholders chose to defer this issue in order to focus on broader policy priorities, with the understanding that PDR bidding flexibility would be revisited as part of the storage effort. It is our understanding based on CAISO responses that PDR bidding will be addressed within this effort rather than the on-going storage initiative. We ask CAISO to honor that commitment and ensure this known gap is resolved within this current initiative.

Without the ability to bid above $1,000/MWh under certain system conditions, when other resources can, PDRs risk being dispatched too early. This premature dispatch occurs because PDRs remain lower in the bid stack while other resources are priced above $1,000/MWh. Since many PDRs have limited availability each day, early dispatch can mean they are no longer available during critical peak hours, increasing both market inefficiencies and reliability risks.

3. Are there any additional considerations to the ISO assessment for the captured problem statements

4. Additional comments, include any other feedback not captured above.