Comments on January 23rd and February 20th - Working Group Session 3: Outage Management, Uplift, & DEB Distribution-Level & Paired Resources

1. Please provide a summary of your organization’s general comments on the stakeholder Working Group meetings held January 23rd and February 20th.

BETM remains supportive of CAISO's approach to this initiative and asks that the ISO prioritize some of the issues facing storage resources subject to utility distribution level charging constraints.  Given this issue impacts a subset of storage resources, BETM has concerns that these issues will be assigned lower priority and ultimately get placed on the back burner and deferred to future iterations.  BETM is optimistic that this will not happen,but is concerned none the less.   

2. Please provide your organization’s comments regarding the topics included in the topic groups, their categorization, and the prioritization of issues within the topic groups.

BETM would like to see the ISO prioritize utility level charging constraint items as well as OMS enhancements.  These two items likely will be linked given how CAISO is asking constrained resources to provide such information today.  

3. Please provide your organization's comments regarding the revised timeline as presented during the February 20th meeting.

No comments at this time.

4. Please provide your organization's comments regarding the overviews on Existing and Planned Storage Constraints.

No comments at this time.

5. Please provide your organization’s comments regarding the overview of outage reporting and nonlinearity issues, including the issues identified, and the potential solutions discussed.

As stated previously, a review of OMS is needed to better support storage resource participation. 

6. Please provide your organization’s comments regarding the overview of the storage default energy bid (DEB), including the potential changes discussed.

No comments at this time.

7. Please provide your organization’s comments regarding the overview of SOC Management and Capacity Awards.

No comments at this time.

8. Please provide your organization’s comments regarding the presentation made by Vistra during the January 23rd meeting.

No comments at this time.

9. Please provide your organization's comments regarding the overview of the SOC Definition & Calculation, including the description of the issue, the instances of inaccessible energy, and the potential changes explored.

No comments at this time.

10. Please provide your organization's comments regarding the overview of the Use of Implied Bid Spreads.

No comments at this time.

11. Please provide your organization's comments regarding the overview of Distribution-Level Storage Charging Constraints.

It is critical that any schedules or awards generated by CAISO for storage resources are feasible. Not have an effective and manageable way to represent utility level charging constraints to ISO is not a sustainable solution.  It is crucial that these discussions continue and get prioritized. The ISO has sufficient telemetry points that should be able to be used both from an energy and regulation dispatch perspective to accommodate resources with dynamic charge constraints.  OMS upgrades also will go a long way to providing the ISO the information it needs. 

12. Please provide your organization's comments regarding the overview of DEBs for Hybrid Resources.

No comments at this time.

13. Please provide your organization's comments regarding the presentation made by the Terra-Gen during the February 20th meeting.

No comments at this time.

14. Please provide any additional comments, feedback, or examples regarding stakeholder working group meetings held January 23 and February 20. You may upload documents, examples, or data using the “Attachments” field below.

No comments at this time.

1. Please provide a summary of your organization’s general comments on the stakeholder Working Group meetings held January 23rd and February 20th.

The California Community Choice Association (CalCCA) appreciates the opportunity to comment on the California Independent System Operator’s (CAISO) Storage Design and Modeling working group meetings. In summary, these comments recommend that the CAISO:

• Prioritize: (1) bid cost recovery (BCR) redesign and outage management system (OMS) enhancements; (2) nonlinearity at high and low states of charge (SOC); (3) the SOC definition and calculation; and (4) the biddable SOC participation pathway; 
• Further discuss potential solutions for reflecting the impact of nonlinearity on storage resources’ charge and discharge capabilities at high and low SOC levels; 
• Enhance OMS to align with the operational characteristics unique to storage outages and coordinate this initiative with the Resource Adequacy Modeling and Program Design (RAMPD) initiative to support the future unforced capacity (UCAP) design;
• Conduct a holistic exploration of when storage should receive BCR payments by starting with a thorough assessment of BCR drivers to clearly identify when BCR for storage is warranted; and

Explore how to define a hybrid resource default energy bid (DEB).

2. Please provide your organization’s comments regarding the topics included in the topic groups, their categorization, and the prioritization of issues within the topic groups.

CalCCA supports the CAISO’s proposed topic groups: (1) outage management, uplift, and DEB topics; (2) SOC management topics; and (3) distribution-level paired resources topics. CalCCA also agrees with beginning the initiative with topic group one. CalCCA’s priorities in this initiative include: (1) BCR redesign and OMS enhancements; (2) nonlinearity at high and low SOC; (3) the SOC definition and calculation, and (4) the biddable SOC participation pathway. 

3. Please provide your organization's comments regarding the revised timeline as presented during the February 20th meeting.

CalCCA has no comments on the revised timeline.

4. Please provide your organization's comments regarding the overviews on Existing and Planned Storage Constraints.

CalCCA has no comments at this time.

5. Please provide your organization’s comments regarding the overview of outage reporting and nonlinearity issues, including the issues identified, and the potential solutions discussed.

CalCCA supports examining how to reflect the impact of nonlinearity on storage resources’ charge and discharge capabilities at high and low SOC levels. This topic is a high priority for CalCCA, and CalCCA looks forward to additional discussion on the potential solutions before determining the best approach to reflecting nonlinearity.

CalCCA also supports the CAISO enhancing OMS to align with the operational characteristics unique to storage outages and agrees with the CAISO and stakeholders’ identification of issues related to OMS reporting for storage. The CAISO should coordinate this initiative with the RAMPD initiative to support the future UCAP design by ensuring outage types accurately reflect the reasons for unavailability and determining whether different outage types should apply to a UCAP calculation.[1]

[1]            See CalCCA Comments on Working Group Session 1 (Jan. 8, 2025): https://stakeholdercenter.caiso.com/Comments/AllComments/2b83f24a-ad3a-4c29-aae1-b3997d81b383#org-9caf2096-f795-4490-8fee-b3d8591d6e1c.

6. Please provide your organization’s comments regarding the overview of the storage default energy bid (DEB), including the potential changes discussed.

CalCCA has no comments at this time.

7. Please provide your organization’s comments regarding the overview of SOC Management and Capacity Awards.

CalCCA has no comments at this time.

8. Please provide your organization’s comments regarding the presentation made by Vistra during the January 23rd meeting.

CalCCA has no comments at this time.

9. Please provide your organization's comments regarding the overview of the SOC Definition & Calculation, including the description of the issue, the instances of inaccessible energy, and the potential changes explored.

CalCCA has no comments at this time.

10. Please provide your organization's comments regarding the overview of the Use of Implied Bid Spreads.

CalCCA appreciates the background material provided on the multi-interval optimization and implied spread bidding, and the CAISO’s commitment to continued documentation of additional examples and their relationship to BCR. The CAISO should conduct a holistic exploration of when storage should receive BCR payments by starting with a thorough assessment of BCR drivers under the current design to clearly identify when battery BCR is warranted.[1]

[1]            Ibid

11. Please provide your organization's comments regarding the overview of Distribution-Level Storage Charging Constraints.

CalCCA has no comments at this time.

12. Please provide your organization's comments regarding the overview of DEBs for Hybrid Resources.

CalCCA supports the CAISO exploring how to define a hybrid resource DEB within this initiative. Hybrid resources, like other resources, should be subject to local market power mitigation in noncompetitive conditions.

13. Please provide your organization's comments regarding the presentation made by the Terra-Gen during the February 20th meeting.

CalCCA has no comments at this time.

14. Please provide any additional comments, feedback, or examples regarding stakeholder working group meetings held January 23 and February 20. You may upload documents, examples, or data using the “Attachments” field below.

CalCCA has no comments at this time.

1. Please provide a summary of your organization’s general comments on the stakeholder Working Group meetings held January 23rd and February 20th.

Comments on Storage Design and Modeling

Working Group Session 2 and 3

Department of Market Monitoring

March 7, 2025

Overview

The Department of Market Monitoring (DMM) appreciates the opportunity to comment on the Storage Design and Modeling Working Group Session 2 and 3 held January 23 and February 20, 2025.[1]^,[2] In these comments, DMM adds to our previous comments from the ISO’s Storage Design and Modeling Working Group 1.[3] While DMM supports many items in the proposed scope of this initiative, DMM continues to strongly encourage the ISO to address the storage bid cost recovery (BCR) concerns as the top priority, before undertaking additional storage design enhancements that may considerably slow the pace of development for needed storage bid cost recovery enhancements.

In these comments, DMM addresses the following seven issues raised in the proposed storage design and modeling (SDM) initiative:

• Storage bid cost recovery (BCR), and co-located resources and settlements enhancements. DMM recommends the ISO complete a comprehensive review of BCR rules for batteries, and address the previously identified efficiency, gaming, and underlying bidding incentives issues. This should be the top priority in this initiative, and should be completed before undertaking other storage market design enhancements that may be complex and time consuming to develop and implement. DMM also recommends the ISO work to improve the settlement design for co-located resources in a timely manner, but not at the expense of first addressing the BCR design for storage resources.
• Storage default energy bids (DEB). Storage DEBs should be allowed to vary by hour, and change to reflect changing intraday opportunity costs. This may result in some hours with higher DEBs, and some hours with lower DEBs than would be produced under the current methodology. Additionally, the ISO should develop DEBs for storage resources in the Western Energy Imbalance Market (WEIM).
• Hybrid resource DEBs. Developing DEBs for hybrid resources should be a relatively high priority. Currently, hybrid resources are not subject to local market power mitigation (LMPM). These resources should be subject to LMPM, and the ISO should develop an expedited DEB to reflect the resources’ marginal costs. The DEB for hybrid resources can then continue to be enhanced as needed in future initiatives.
• Improved outage reporting and state-of-charge (SOC) limitations. DMM supports development of market model improvements that incorporate nonlinearities of storage resource operations. The recommendations include Masterfile parameters that adjust ramp rates when the resource is operating near the minimum and maximum SOC, and allow storage to submit bids based on SOC.
• Dynamic limits. DMM does not support extending dynamic limit functionality to storage resources. DMM believes any potential need for dynamic limits for storage resources would be obviated by other enhancements proposed in this initiative. Using dynamic limits in lieu of such enhancements would be an opaque approach to modeling storage resources, and could potentially reduce the reliability of storage resources, and allow for strategic gaming.
• SOC definition and calculation, and distribution-level storage constraints. DMM recommends the ISO improve the definition of SOC to clearly reflect energy that a resource has available to the market. DMM also supports allowing distribution-level resources the ability to dynamically reflect their distribution system limits.

Comments

Storage BCR design should be the top priority in this initiative, followed by co-located resources and settlement enhancements

DMM and the Market Surveillance Committee (MSC) have identified efficiency, gaming, and bidding incentive issues with the current BCR design for batteries.[4],[5] While the ISO continues to indicate that the topic of battery BCR is in scope for this initiative, the previous two stakeholder meetings have not proposed BCR improvements, nor reviewed storage BCR issues. Instead, a multitude of additional scope items have been discussed, the introduction of which risks significantly slowing any further progress on the issue of battery BCR. DMM continues to strongly recommend that addressing the core efficiency issues of battery BCR should be a priority ahead of the rest of this initiative. DMM understands there is an interdependency with storage DEBs, and has indicated this is also a high-priority concern, but reiterates this is secondary to storage BCR improvements.[6]

In general, DMM recommends that through the SDM initiative, the ISO clearly identify where storage BCR is warranted, and where it is not, in both the real-time and day-ahead markets. The resulting BCR design should address the core efficiency issues created by the current BCR design.

In addition to standalone batteries, co-located resources are becoming increasingly developed in the CAISO system. Due to some recently observed market outcomes involving co-located resources, DMM recommends the ISO work to improve the settlement design for co-located resources with urgency. However, DMM views this as a secondary priority to addressing the primary BCR design for storage resources.

Storage DEBs should vary hourly to incorporate changing intraday opportunity costs, and the ISO should develop a standard storage DEB for WEIM resources

DMM continues to recommend that the ISO improve storage default energy bids (DEBs) to vary across different hours of the day and better reflect real-time opportunity costs.[7] Specifically, DMM recommends enhancing real-time DEBs to capture intraday opportunity costs associated with potentially higher real-time prices based on changing real-time conditions.

Real-time conditions may differ from day-ahead conditions, leading to price differences across markets. The ISO’s real-time market software cannot estimate the opportunity costs of most storage resources with its current optimization horizon. Therefore, intraday opportunity costs estimated using day-ahead prices may be inaccurate, and may lead to inefficient dispatch when mitigation occurs. DMM continues to emphasize the importance of improving the opportunity cost component of the DEB calculation, and recommends estimating this opportunity cost beyond the current real-time optimization horizon, to provide a more realistic estimate of real-time opportunity cost.[8]

During the January 23 meeting discussion of developing a method to calculate real-time intraday opportunity costs, there was concern the estimates would not be of settlements quality, and thus should not be used. Currently, the opportunity cost component of the real-time storage DEB is calculated from day-ahead prices. Using day-ahead prices that are of settlement quality to estimate the real-time DEB only reflects the opportunity cost of a binding financial agreement from the day-ahead, but does not reflect the opportunity cost or value to system reliability needs in the real-time.

Given the significant differences that can materialize between day-ahead and real-time, even an opportunity cost component derived from a model with non-settlement quality real-time data would likely be superior to a static day-ahead price. Modeling opportunity costs in the real-time that reflect robust estimates of real-time intraday opportunity costs will be more precise than day-ahead estimates. This would be beneficial for both market efficiency and reliability.

DMM recommends the ISO work with stakeholders to develop a method to calculate a real-time intraday opportunity cost for storage that could be the foundation for an enhanced real-time storage DEB that varies hourly. Such an approach could result in DEBs that are higher in some hours—but lower in others—than the current storage DEB. This outcome supports more efficient mitigation that better aligns with real-time intraday opportunity costs that vary across the day.

Additionally, DMM notes that the current storage DEB is not available to storage resources in the WEIM. DMM recommends that in the near term, the ISO make the current storage DEB available to all WEIM resources. DMM further recommends the ISO extend any enhanced real-time storage DEB developed in this initiative to WEIM storage resources, adapting the model as necessary to meet the specific needs of the WEIM.

The ISO should develop DEBs for hybrid resources, and subject these resources to local market power mitigation

DMM continues to suggest that hybrid resource DEB development should be a high priority for the ISO.[9] Currently, hybrid resources are not subject to local market power mitigation, and do not have a functional DEB.

DMM recommends an initial approach to calculating a DEB for hybrid resources, using the maximum of the DEBs that apply to each of the generation components that make up the hybrid resource. In cases where the resource is paired with storage, the DEB would often be driven by the opportunity cost of the storage component. The storage component should follow the storage DEB enhancements proposed above, and be limited to the storage resource’s stored energy duration. This initial approach should be easy to implement, and should achieve the goal of subjecting hybrid resources to local market power mitigation in the near-term. After a near-term solution for hybrid DEBs is completed, hybrid resource DEBs should continue to be enhanced to more accurately reflect the costs of hybrid resources as a full system, rather than piecewise by generation component.

During the February 20 workshop, it was suggested that a hybrid DEB for a resource with a storage component should vary depending on whether the resource has the ability to grid charge. DMM recognizes this is a worthwhile consideration, but recommends the ISO move forward expeditiously with hybrid DEB development, and return to this consideration in a later enhancements phase. As well, this consideration may need to be extended to co-located storage resources that are using the off-grid charging indicator that prevents the storage resource from grid charging.

DMM supports improved outage reporting and market model improvements for SOC limitations specific to storage resources

DMM continues to support enhancements to storage outage reporting, and the incorporation of nonlinearities of storage operation into the market model.[10] Storage resources face limitations and outage types not currently covered in outage management system (OMS) that are unique to storage resources, such as negative Pmin and energy (SOC) limitations. DMM understands that one common limitation for storage resources are issues of foldback, or varying ramp rates at the upper and lower ends of a resource’s SOC range.

DMM recommends two non-mutually exclusive paths to address foldback:

1. Include foldback into resource characteristics through Master File as a variable ramp rate that differs at the extremes of SOC.
2. Allowing scheduling coordinators to bid based on their SOC, versus capacity.

With both of these improvements, the ISO could create an outage card option to represent foldback, which would further aid in an accurate representation of a storage resource to the market. Improved outage reporting will assist market operators and monitors in ensuring the system is operating reliably and efficiently. DMM continues to recommend ISO staff work together to coordinate the development of new storage outage types into resource adequacy policy developments.[11]

Lastly, there was a suggestion that dynamic limits could be used to manage SOC limitations in place of OMS. DMM does not support this use of dynamic limits, as discussed below.

The ISO should not extend the use of dynamic limits to non-hybrid resources

Stakeholders have suggested implementing dynamic limits for all storage resources to allow scheduling coordinators to manage issues such as foldback. DMM has previously recommended against this use of dynamic limits.[12]

The market model does not incorporate all of the information of the individual generation components of a hybrid resource, and as a result, the ISO developed dynamic limits for hybrid resources.[13] The dynamic limit is intended to allow hybrid resources to capture all constraints and operational objectives (e.g., reflect VER forecasts and manage SOC of storage components), and as a result have a feasible dispatch.

DMM does not recommend the ISO develop dynamic limits for storage resources, as the market model has visibility of storage resource operations that it lacks for hybrids. For example, SOC is modeled and managed in the market for storage resources. The ISO has visibility into a storage resource’s SOC, which factors into the resource’s market awards and dispatch. DMM understands that stakeholders may wish to use dynamic limits for storage resources to model different limitations, such as foldback or stranded energy. However, DMM believes these limitations would be better captured through other market enhancements proposed in this initiative. Such physical limitations of the resource could be more appropriately captured in Masterfile, and can be reflected in OMS when appropriate.

Furthermore, OMS is used for interdependent resource availability and performance policies, such as resource adequacy availability incentive mechanism (RAAIM) and forthcoming unforced capacity (UCAP). These policies are used to create incentives for resources’ operational and planning availability to the market. The dynamic limit does not enter into these incentive calculations, and thus would undermine the incentives for resource availability at potential times of resource scarcity.

The use of a dynamic limit for storage resources would create an opaque constraint that offers little information to market operators and monitors, and would be difficult to monitor, allowing for potential physical withholding and gaming between day-ahead and real-time markets.[14] Although the SOC and variable energy resource (VER) forecast components of hybrid resources are not used in market optimization, these data are available for monitoring purposes and provide a degree of insight into the use of dynamic limits for hybrid resources. However, for storage resources, data supporting the reasons dynamic limits may be used would not be available.  

As a result of these concerns, DMM recommends the ISO not extend the dynamic limit functionality to storage resources. OMS and Masterfile enhancements provide a much greater degree of visibility for the ISO and DMM. This is important for monitoring purposes and overlapping policies, such as RAAIM and forthcoming UCAP. To address nonlinearities in storage resource operation and foldback, the ISO should extend market functionality as discussed above, and continue to require the use of OMS to manage physical limitations of storage resources, where not otherwise captured in the market model.

Instances of observed lack of availability highlight the need to improve SOC definition, and better reflect distribution-level storage constraints in the market model

DMM has raised concerns to the ISO about the definition and calculation of SOC, and distribution-level storage constraints. The concerns arise from instances of observed lack of availability of storage resources.

The ISO’s tariff definition of SOC is not robust. While the definition specifies that SOC should reflect stored energy available to the CAISO markets, it does not provide a definition of availability, e.g., within what timeframe the stored energy must be available.[15] DMM recommends the ISO clarify a definition of SOC availability in the tariff, and consider including a standardized approach to calculating SOC.

Clarifications to the definition and calculation of telemetered SOC need to more accurately reflect the true SOC availability of storage resources to the market, at the time of market dispatch. DMM has identified cases in which the SOC is greater than zero, but the stored energy is unavailable to the market, and as a result the market is solving under inaccurate conditions for these resources. This tariff improvement should be a predicate to a system SOC mechanism discussed in Working Group Session 1.[16]

Distribution-level resources that participate in the CAISO market are subject to both the ISO’s tariff, and distribution system operator (DSO) tariffs. DSO tariffs can lead to operational limits that the ISO is unaware of, and thus limiting access to the resource. The ISO recently gave distribution-level storage resources OMS functionality to report DSO limitations, but OMS does not possess near real-time adjustments to a resource that a DSO tariff requires.

DMM recommends the ISO develop a transparent approach to reflect changing limits imposed on distribution-level resources by DSO tariffs. This could potentially be achieved through the use of dynamic limits by distribution-level resources, but only if they are registered in Masterfile as distribution-level resources, and only if there is sufficient data available for monitoring the use of such limits. In the absence of such data, the use of dynamic limits by distribution-level resources would suffer the same opacity as discussed in the sections above, and DMM would not recommend this approach to modeling limits faced by distribution-level resources.

[1] Storage Design and Modeling Working Group Session 2, California ISO, January 23, 2025: https://stakeholdercenter.caiso.com/InitiativeDocuments/Presentation-Storage-design-and-modeling-Jan-23-2025.pdf

[2] Storage Design and Modeling Working Group Session 3, California ISO, February 20, 2025: https://stakeholdercenter.caiso.com/InitiativeDocuments/Presentation-Storage-Design-and-Modeling-Feb-20-2025.pdf

[3] Comments on Storage Design and Modeling Working Group Session 1, Department of Market Monitoring, January 8, 2025: https://www.caiso.com/documents/dmm-comments-on-storage-design-and-modeling-working-group-session-dec-11-2024-jan-8-2025.pdf

[4] Opinion on Storage Bid Cost Recovery, James Bushnell, Scott M. Harvey, Benjamin F. Hobbs; Members of the Market Surveillance Committee, November 1, 2024: https://www.caiso.com/documents/market-surveillance-committee-final-opinion-storage-bid-cost-recovery-nov-01-2024.pdf

[5] Comments of the Department of Market Monitoring of the California Independent System Operator Corporation, Department of Market Monitoring, ER25-576-000, December 17, 2024: https://www.caiso.com/documents/dmm-comments-on-er25-576-storage-bcr-dec-17-2024.pdf

[6] Ibid.

[7] Comments on Storage Bid Cost Recovery and Default Energy Bids July 8, 2024 Workshop, Department of Market Monitoring, July 18, 2024: https://stakeholdercenter.caiso.com/Common/DownloadFile/6a07fe60-f791-489c-8100-64e2f7b55118

[8] Ibid.

[9] Comments on Storage Design and Modeling Working Group Session 1, Department of Market Monitoring, January 8, 2025: https://www.caiso.com/documents/dmm-comments-on-storage-design-and-modeling-working-group-session-dec-11-2024-jan-8-2025.pdf

[10] Ibid.

[11] Ibid.

[12] Ibid.

[13] While the market model has no visibility of each generation component in a hybrid, the ISO and DMM have access to the data to monitor dynamic limit use for hybrids.

[14] Comments on Hybrid Resources Final Proposal, Department of Market Monitoring, October 30, 2020: https://www.caiso.com/documents/dmmcomments-hybridresourcesphase2finalproposal-oct302020.pdf

[15] CAISO Tariff – Appendix A, California ISO, February 5, 2025: https://www.caiso.com/documents/appendix-a-master-definition-supplement-as-of-feb-5-2025.pdf

[16] Storage Design and Modeling Working Group Session 1, CAISO, December 11, 2024: https://stakeholdercenter.caiso.com/InitiativeDocuments/Presentation-Storage-Design-and-Modeling-Dec-11-2024.pdf

2. Please provide your organization’s comments regarding the topics included in the topic groups, their categorization, and the prioritization of issues within the topic groups.

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. Please provide your organization's comments regarding the revised timeline as presented during the February 20th meeting.

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. Please provide your organization's comments regarding the overviews on Existing and Planned Storage Constraints.

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.

5. Please provide your organization’s comments regarding the overview of outage reporting and nonlinearity issues, including the issues identified, and the potential solutions discussed.

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.

6. Please provide your organization’s comments regarding the overview of the storage default energy bid (DEB), including the potential changes discussed.

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.

7. Please provide your organization’s comments regarding the overview of SOC Management and Capacity Awards.

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.

8. Please provide your organization’s comments regarding the presentation made by Vistra during the January 23rd meeting.

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.

9. Please provide your organization's comments regarding the overview of the SOC Definition & Calculation, including the description of the issue, the instances of inaccessible energy, and the potential changes explored.

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.

10. Please provide your organization's comments regarding the overview of the Use of Implied Bid Spreads.

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.

11. Please provide your organization's comments regarding the overview of Distribution-Level Storage Charging Constraints.

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.

12. Please provide your organization's comments regarding the overview of DEBs for Hybrid Resources.

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.

13. Please provide your organization's comments regarding the presentation made by the Terra-Gen during the February 20th meeting.

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.

14. Please provide any additional comments, feedback, or examples regarding stakeholder working group meetings held January 23 and February 20. You may upload documents, examples, or data using the “Attachments” field below.

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 a summary of your organization’s general comments on the stakeholder Working Group meetings held January 23rd and February 20th.

In preparation for developing a straw proposal, these working group meetings covered multiple topics, including enhancements to energy storage Bid-Cost Recovery (BCR) provisions, storage Default Energy Bids (DEB), the storage outage submission process, and state of charge (SOC) management.  During the January and February meetings, stakeholders raised key issues which will help CAISO prioritize the overall initiative, but discussion remained broad and technically complex.  ED staff would appreciate CAISO presenting numerical examples using representative MW bid values and costs based on real-world data to illustrate how MWs and costs would flow through a theoretical pricing and scheduling run. This would enable stakeholders to understand how the theoretical calculations and models would work in real-world situations. 

In addition, ED staff is concerned about storage providers bidding at the price cap and that this bidding behavior could be considered a form of economic withholding.  In the working group discussions, some participants appear to be exploring the bounds of the market rules in a way that could constitutes the exercise of market power.  For example, during the January 23 meeting, a developer inquired about the possibility of submitting an "out of the money" bid (e.g., a very high or negative price) to avoid the charging requirement that is required to meet an Ancillary Service (AS) schedule.  In response, CAISO clarified that a charging bid is required. 

To support a constructive stakeholder process, we suggest CAISO keep discussions focused on improving market efficiency and operations, while being conscious of not unintentionally exploring ways to circumvent scheduling or bidding rules.  When such topics arise, CAISO could take the opportunity to more explicitly outline acceptable bidding practices, including which behaviors align with market objectives and why certain approaches may not be appropriate. 

As the market share of battery storage resources continues to grow, there is the possibility that some resource owners may offer “out of the money” bids as these resources seek to maintain a certain state of charge (SOC) for the availability assessment hours (AAH).  While the intent of the individual bidder is to manage its SOC, their bidding behavior may have the unintended consequence of distorting the market price of energy. In this case, the wrong price signal for the marginal value of energy could be sent to the market. Under extreme or unpredictable events, even with a low probability, this bidding behavior could have high economic consequences for ratepayers. 

2. Please provide your organization’s comments regarding the topics included in the topic groups, their categorization, and the prioritization of issues within the topic groups.

3. Please provide your organization's comments regarding the revised timeline as presented during the February 20th meeting.

4. Please provide your organization's comments regarding the overviews on Existing and Planned Storage Constraints.

5. Please provide your organization’s comments regarding the overview of outage reporting and nonlinearity issues, including the issues identified, and the potential solutions discussed.

Outage Management Systems - During the meeting in January, CAISO discussed the outage management system (OMS), state of charge (SOC), and capacity issues related to storage resources.  ED staff supports further discussions of stakeholder proposals to limit storage operators’ use of the OMS to regulate SOC levels to manage foldback (e.g. non-linear rates of charging/discharging at low charge levels).  Foldback impacts both resource responsiveness and dispatchability, and CAISO’s key concerns are related to resource reliability. The CPUC and CAISO are both considering a UCAP framework that would potentially use CAISO’s OMS (various status of work outage cards) to calculate a resource’s forced outage derate. The forced outage derate would then be applied to the Qualifying Capacity (QC) value of a resource on a going forward basis, essentially lowering its future resource adequacy (RA) value based on its historic outage performance. ED staff recommends that future development on this topic include consideration of how the OMS outage cards submitted for SOC management should be incorporated into a future UCAP framework. The UCAP framework is also being discussed in the CAISO’s RA initiative. 

RAAIM Implications - In the January workshop (Slide 20), some stakeholders proposed adding a special exclusion category to its OMS (“Technical Limitations not in Market Model” Nature of Work) for managing SOC. Some stakeholders also proposed that this new outage type be exempt from CAISO’s RA Availability Incentive Mechanism (RAAIM) which penalizes RA resources for underperformance. ED Staff does not support this proposal because customers are paying billions of dollars for capacity, and incentives should remain for the provider to find innovative ways to resolve the SOC foldback problem.  ED Staff is concerned this option could be abused to avoid providing the contract capacity when it is needed.  This policy issue is also being considered in the CAISO’s RA initiative.  

As described above, ED Staff does not support exemptions from RAAIM associated with the SOC issue. Despite the limitations of the CAISO system (which were known when contracts were signed), the energy storage providers need to provide their contract capacity. Therefore, incentives to provide that capacity should remain. Nevertheless, ED Staff recognizes that this involves technical issues that limit optimal operation of the batteries.  ED Staff recommends that CAISO analyze the quantity of capacity lost through the use of the outage cards to manage SOC. Finally, ED Staff has concerns about equity in terms of other generators which also have difficulty with the CAISO model and that are not exempt from RAAIM.    

6. Please provide your organization’s comments regarding the overview of the storage default energy bid (DEB), including the potential changes discussed.

At the stakeholder meetings, CAISO discussed issues regarding the calculation of default energy bids for storage resources. ED Staff shares CAISO’s concern associated with the potential to over- or under-estimate opportunity costs for DEBs and believes this issue merits further analysis, including concrete numerical examples exploring potential cost outcomes.  

7. Please provide your organization’s comments regarding the overview of SOC Management and Capacity Awards.

8. Please provide your organization’s comments regarding the presentation made by Vistra during the January 23rd meeting.

9. Please provide your organization's comments regarding the overview of the SOC Definition & Calculation, including the description of the issue, the instances of inaccessible energy, and the potential changes explored.

As CAISO explained, inaccessible energy is stored energy which cannot be transmitted due to a low SOC. ED Staff supports CAISO’s proposal to include SOC in tariff calculations to capture the impacts of voltage imbalances and identify energy that is inaccessible. Inaccessible energy should not qualify for CAISO awards since it would reward resource owners with payments without the necessary reliable transfer of energy. Therefore, to resolve this CAISO proposes to include the SOC level into tariff calculations.  

Separately and similar to #5 above, developers are declaring outages to manage SOC levels and ED Staff supports restricting such behavior. 

10. Please provide your organization's comments regarding the overview of the Use of Implied Bid Spreads.

11. Please provide your organization's comments regarding the overview of Distribution-Level Storage Charging Constraints.

If a storage asset is unable to charge it will be unable to meet CAISO dispatch guidelines, thus creating unanticipated supply deficits. To identify assets unable to charge due to distribution line constraints, ED Staff supports the CAISO identifying distribution level resources in the Master File to give the DSOs insights into assets experiencing operational limitations. DSO limitations are currently not reflected in the Master File and are currently transmitted to the CAISO through outage cards.  

12. Please provide your organization's comments regarding the overview of DEBs for Hybrid Resources.

13. Please provide your organization's comments regarding the presentation made by the Terra-Gen during the February 20th meeting.

14. Please provide any additional comments, feedback, or examples regarding stakeholder working group meetings held January 23 and February 20. You may upload documents, examples, or data using the “Attachments” field below.

1. Please provide a summary of your organization’s general comments on the stakeholder Working Group meetings held January 23rd and February 20th.

The California Energy Storage Alliance (CESA) appreciates the opportunity to comment on the Storage Design and Modeling working group sessions.  CESA reiterates that a holistic review of storage design and modeling is required before addressing narrow policy elements such as BCR.  The working groups provided a very good overview of the current and planned constraints applied to storage resources.  CESA requests that CAISO develop a document that outlines the constraint formulations for each of the following markets: integrated forward market, residual unit commitment, fifteen-minute market, and real-time dispatch.  Prior to releasing a straw proposal in this initiative, CAISO should hold another workshop to review the constraint formulation documentation by market.       

2. Please provide your organization’s comments regarding the topics included in the topic groups, their categorization, and the prioritization of issues within the topic groups.

The general scope identifies appropriate topics to include in a holistic review of storage participation in the market.  CESA agrees that some structure is needed to systematically address the identified issues but notes that potential SOC management topics could determine the appropriate storage uplift topic in group one.     

3. Please provide your organization's comments regarding the revised timeline as presented during the February 20th meeting.

CESA does not have an issue with the revised timeline. 

4. Please provide your organization's comments regarding the overviews on Existing and Planned Storage Constraints.

CESA appreciates CAISO’s documentation of current and planned storage constraints.  As stated in Question 1, CESA believes that reviewing a consolidated set of current and planned constraints by market would greatly benefit stakeholders and the success of this initiative.

5. Please provide your organization’s comments regarding the overview of outage reporting and nonlinearity issues, including the issues identified, and the potential solutions discussed.

CESA believes CAISO has accurately reflected outage reporting and non-linearity issues.  CESA supports modifications to the outage management system to better reflect the operational limitations of storage resources. The use of outage cards could be an interim solution that can be implemented with limited market impact.  This would create a bridge to more comprehensive market design changes that will require significant implementation complexity to accurately model and optimize storage resources to address foldback issues.

6. Please provide your organization’s comments regarding the overview of the storage default energy bid (DEB), including the potential changes discussed.

CESA agrees that the real-time storage DEB needs to be modified to better reflect real-time system conditions.  The real-time storage DEB needs to ensure that storage resources, when mitigated, remain in the market bid stack at a level high enough to prevent premature dispatch.  In addition, CAISO should provide information on the mitigation frequency of charging bids and reevaluate the appropriateness of mitigating charging bids.  Lastly, EIM storage resources should be able to use the same real-time storage DEB as resources located in CAISO.  This would require removing the day-ahead LMPs as an input to the real-time storage DEB, which CESA argues is the root cause of the ineffectiveness of the current real-time storage DEB.   

7. Please provide your organization’s comments regarding the overview of SOC Management and Capacity Awards.

CESA believes CAISO must immediately address the FRP market design flaws in both FMM and RTD.  FRP must consider the storage resource’s SOC when determining awards.  This is a significant price formation issue.  The current design suppresses FRP prices by allowing the market optimization to award FRP to storage resources that are unable to be dispatched for energy in subsequent market runs. The current design also impacts energy prices by suppressing prices when a tradeoff is needed between energy and deliverable FRP.  It also increases the likelihood of spurious price spikes because the ramping capability of the system was not accurately managed.

8. Please provide your organization’s comments regarding the presentation made by Vistra during the January 23rd meeting.

CESA is supportive of continued discussion of Vistra’s proposal to improve the storage modeling in the market and consider extending the use of the dynamic limit functionality to all storage resources to address foldback issues.  CESA also supports evaluating modeling improvements regarding UEL/LEL derates or rerates. In addition, the CAISO should review the effectiveness of the current attenuation factors for regulation and consider making attenuation factors a biddable parameter which would improve the participants control over regulation awards.  Vistra’s discussion on outage reporting expands upon the CAISO discussion above in Question 5. 

9. Please provide your organization's comments regarding the overview of the SOC Definition & Calculation, including the description of the issue, the instances of inaccessible energy, and the potential changes explored.

CESA notes that the term inaccessible energy is misleading.  The energy is accessible, but unlike in normal SOC states, the energy can be dispatched at a lower Pmax/Pmin and at a significantly higher cost that can’t currently be reflected in the market optimization.  CESA does agree that further discussion is warranted on best practices on SOC estimations, clarifications on SOC expectations of CAISO, and whether outages or Masterfile changes are the more efficient ways to reflect operational limitations.      

10. Please provide your organization's comments regarding the overview of the Use of Implied Bid Spreads.

CESA appreciates the discussion at the working group which highlighted that for an implied bid spread to be used by the market optimization, the SOC must be binding within the market horizon.  The market horizon of RTD is 65 minutes and FMM varies by market run between 1 hour and 1.75 hours.  There is not an issue with implied bid spreads in the IFM because all intervals are financially binding.  If system conditions change and advisory pricing does not materialize, this situation should be considered for bid cost recovery to ensure resources are made whole for following their binding dispatch.

11. Please provide your organization's comments regarding the overview of Distribution-Level Storage Charging Constraints.

CESA supports improving modeling of DSO level constraints to ensure feasible dispatch instruction to distribution connected resources.  CESA also recommends that this topic also be discussed within the Demand and Distributed Energy Market Integration Initiative working group. 

12. Please provide your organization's comments regarding the overview of DEBs for Hybrid Resources.

CESA supports enabling hybrid resources to bid above $1,000 when the offer cap is increased to $2,000.  In the Rules for Bidding Above the Soft Offer Cap initiative, hybrid resources were excluded from bidding above $1,000 because hybrid resources did not have a DEB in a footnote.  Similar logic as applied to the real-time storage bid should be applied to hybrid resources – will the DEB ensure that hybrid resources, when mitigated, remain in the market bid stack at a level high enough to prevent premature dispatch?   

13. Please provide your organization's comments regarding the presentation made by the Terra-Gen during the February 20th meeting.

CESA supports further discussion/clarification of the use of dynamic limits by hybrid resources and potentially extending to stand-alone and co-located storage.  As stated above, hybrid resources must be allowed to bid above $1,000 when the bid cap is increased to $2,000.  If a hybrid DEB is a pre-requisite for bidding above the soft offer cap, then Terra-Gen has clearly described how the hybrid DEB and dynamic limits together ensure appropriate dispatch of the resource. 

14. Please provide any additional comments, feedback, or examples regarding stakeholder working group meetings held January 23 and February 20. You may upload documents, examples, or data using the “Attachments” field below.

The FMM is the second interval of the real-time unit commitment (RTUC) process.  RTUC has between seven and four 15-minute intervals.  Starting with seven 15-minute intervals, each subsequent RTUC run is reduced by one interval until reaching four intervals at which point the next run returns to seven intervals.  The real-time dispatch is running every five minutes with the first interval financially binding.  CAISO should review how FMM FRP awards are managed in RTD during the first 15 minutes – ie the period when the prior FMM runs binding interval is now the first interval. For example, are FRP awards from FMM held fixed in the corresponding three RTD intervals and not allowed to be reoptimized?      

1. Please provide a summary of your organization’s general comments on the stakeholder Working Group meetings held January 23rd and February 20th.

No comments.

2. Please provide your organization’s comments regarding the topics included in the topic groups, their categorization, and the prioritization of issues within the topic groups.

No comments.

3. Please provide your organization's comments regarding the revised timeline as presented during the February 20th meeting.

No comments.

4. Please provide your organization's comments regarding the overviews on Existing and Planned Storage Constraints.

No comments.

5. Please provide your organization’s comments regarding the overview of outage reporting and nonlinearity issues, including the issues identified, and the potential solutions discussed.

No comments.

6. Please provide your organization’s comments regarding the overview of the storage default energy bid (DEB), including the potential changes discussed.

No comments.

7. Please provide your organization’s comments regarding the overview of SOC Management and Capacity Awards.

No comments.

8. Please provide your organization’s comments regarding the presentation made by Vistra during the January 23rd meeting.

No comments.

9. Please provide your organization's comments regarding the overview of the SOC Definition & Calculation, including the description of the issue, the instances of inaccessible energy, and the potential changes explored.

No comments.

10. Please provide your organization's comments regarding the overview of the Use of Implied Bid Spreads.

No comments.

11. Please provide your organization's comments regarding the overview of Distribution-Level Storage Charging Constraints.

No comments.

12. Please provide your organization's comments regarding the overview of DEBs for Hybrid Resources.

No comments.

13. Please provide your organization's comments regarding the presentation made by the Terra-Gen during the February 20th meeting.

No comments.

14. Please provide any additional comments, feedback, or examples regarding stakeholder working group meetings held January 23 and February 20. You may upload documents, examples, or data using the “Attachments” field below.

CES requests that the CAISO offer market participants more visibility into the occurrence of multi-interval optimization (MIO) driving certain dispatch (or non-dispatch) signals. Since advisory prices used in MIO are not visible to market participants, this creates uncertainty regarding (a) uneconomic dispatch signals when lower advisory prices fail to materialize and (b) economic non-dispatch signals when higher advisory prices fail to materialize. If advisory prices cannot be made publicly available, then CES recommends some statistics be provided on the frequency of MIO driving such market results, especially during peak demand conditions. This information will help market participants better understand the logic behind CAISO real-time market optimization results.

1. Please provide a summary of your organization’s general comments on the stakeholder Working Group meetings held January 23rd and February 20th.

PG&E appreciates CAISO’s “setting the table” for the Energy Storage Enhancements initiative by providing a detailed baseline of information about current storage modeling and concerns.  The CAISO presentations have yielded discussions of important issues and ideas, most of which can be categorized as near-term or economic issues. PG&E supports further discussion on many of these issues as they can improve the performance of NGR and Hybrid resources in the near term.

Additionally, PG&E views this initiative as having long-term two goals:

1. Enabling market integration of battery storage to maximize the economic utilization of the grid.
2. Assuring CAISO and other EDAM/WEIM BAAs that sufficient storage energy is available in advance of all periods of reliability need (i.e., not dispatching storage too early).

This latter issue (#2) was identified (but not resolved) in the prior energy storage initiative. How to divide up 20+GW of battery storage to both meet the peak while also being price responsive?

PG&E would like to see the CAISO and stakeholders to make time and space to address this issue in this initiative.

Both the short-term fixes and long-term goals need to be addressed.  CAISO needs to find a balance between the short-term fixes and long-term goals when prioritizing the initiative’s work and in considering the implications of changes to resource models, market design, or performance requirements.

PG&E additionally appreciates Vistra and Terra-Gen for stepping up to make detailed presentations on the spectrum of concerns important to them, and for their openness to new approaches to solving problems in this space.

2. Please provide your organization’s comments regarding the topics included in the topic groups, their categorization, and the prioritization of issues within the topic groups.

3. Please provide your organization's comments regarding the revised timeline as presented during the February 20th meeting.

PG&E suggests that several problems/fixes that have been raised in the workshops to date can potentially be “carved out” and dealt with prior to or independently of the larger initiative effort, as was done with storage Bid Cost Recovery (BCR) in the price formation enhancements effort.  Specifically, PG&E suggests the following items for consideration:

1. Potential changes to Outage Management System (OMS), or how OMS is used, that would allow battery foldback to be handled in a way more acceptable to battery operators.
2. Incorporation of FRP into real-time battery SOC constraints to improve deliverability of FRP by batteries.
3. Clarification of the reportability of battery limitations, especially those on State of Charge (SOC) constraints, in OMS (i.e., thresholds, tickets that have no effect on P_min/P_max but do affect market operations, etc.)
4. A proposal for a hybrid Default Energy Bid (DEB) calculation.  PG&E supports the DMM’s proposed approach to creating a hybrid DEB, which in most cases will be near-identical to what the battery DEB taken alone would have been.
5. Agreement by CAISO that the hybrid’s dynamic limit tool can be used to restrict dispatch range when the battery component of the hybrid is hitting, or close to hitting, an SOC limit.

On the other hand, PG&E recommends prioritizing the above tasks over an effort to finalize the calculation of the NGR BCR to resolve all outstanding issues. We are concerned that due to conflicting interests, that effort could hamper the initiative as a whole if it is assumed that it must be resolved before Track 2 and 3 of the initiative.  This feedback is not meant to hamper discussion, but rather to keep expectations of agreement realistic. 

4. Please provide your organization's comments regarding the overviews on Existing and Planned Storage Constraints.

While acknowledging the “envelope constraints” constraining NGR awards in hours following imbalance reserve awards will be implemented as part of DAME (and should be tested for correctness in that implementation), PG&E suggests  starting with low or zero values for the envelope constraint parameters rather than the currently planned 85% values, and to modify the envelope constraint parameters if it becomes clear that batteries are unable to deliver their imbalance reserves in real time using existing market mechanisms to manage their States Of Charge (SoC). 

5. Please provide your organization’s comments regarding the overview of outage reporting and nonlinearity issues, including the issues identified, and the potential solutions discussed.

PG&E agrees that the Outage Management System (OMS) should be used, if possible, to address the foldback constraint batteries face when dispatch takes them close to State of Charge (SoC) maximum or minimum.  A change to the battery market model to fully optimize battery awards considering foldback should be considered in Track 2, but that plan shouldn’t forestall taking action sooner using OMS.

6. Please provide your organization’s comments regarding the overview of the storage default energy bid (DEB), including the potential changes discussed.

As mentioned above, PG&E is skeptical whether storage DEB changes can be taken to their conclusion at the beginning of this initiative process.  Several interesting ideas have been proposed, and PG&E would like to review detailed descriptions of how they would be implemented.  PG&E is concerned about DEBs that vary hour by hour in unpredictable ways, as has been proposed by DMM, but perhaps there is a middle ground capturing the DMM concerns while keeping the DEB predictable and transparent.

One continuing puzzle with respect to NGR DEB construction is the seemingly unintended, and even perverse, mitigation of charge bids indicating a high willingness to buy energy due to mitigation of the discharge portion of an NGR bid.  The puzzle seems to arise because there are two different cases in which a battery’s bid may be mitigated: in the first, the bid is mitigated because the Local Market Power Mitigation (LMPM) solution indicates the battery will be dispatched to meet local demand, and the bid value  is above the battery’s DEB.  In the second, it is mitigated even those its discharge bid is not taken in the LMPM solution, because other resources in the same local area would be discharged at prices above their DEBs and hence need to be mitigated.  In the first case, given that the battery’s discharge bid was awarded in the LMPM, its charge bid and its mitigation would seem to be irrelevant, whereas in the second case, it seems as though the battery should be treated as a demand rather than supply, and hence not mitigated.  PG&E would appreciate further discussion of this puzzle in any discussion of NGR DEB modifications.

PG&E also suggests that a methodology for DEB calculation that is extensible to longer duration storage should be in scope for this initiative.  One approach that should be considered is to generalize the method for calculating limited energy hydro DEBs based on a submitted monthly forecast of operations, which will properly generalize to the value of storage energy beyond a single daily cycle.

7. Please provide your organization’s comments regarding the overview of SOC Management and Capacity Awards.

As mentioned above, PG&E agrees that Flexible Ramping Product (FRP) awards should be considered in the RT SOC calculations in order to assure batteries’ deliverability, and would appreciate a detailed proposal for this change. 

8. Please provide your organization’s comments regarding the presentation made by Vistra during the January 23rd meeting.

9. Please provide your organization's comments regarding the overview of the SOC Definition & Calculation, including the description of the issue, the instances of inaccessible energy, and the potential changes explored.

10. Please provide your organization's comments regarding the overview of the Use of Implied Bid Spreads.

PG&E appreciated CAISO’s review of the reasons that Implied Bid Spreads cannot be incorporated into the day ahead or real time markets without making unrealistic assumptions about initial and final SoC of battery resources. 

11. Please provide your organization's comments regarding the overview of Distribution-Level Storage Charging Constraints.

PG&E agrees that use of OMS to capture Distribution-Level Storage Charging Constraints is a plausible approach to addressing these constraints, at least in the near term, and suggests that in general, if the NGR model cannot properly capture all constraints that a resource operator is subject to, this may point to use of a different market model (such as the hybrid model) rather than to unwieldy changes to the NGR model itself. 

12. Please provide your organization's comments regarding the overview of DEBs for Hybrid Resources.

PG&E believes DMM’s proposal for a hybrid resource DEB calculation is a sensible one, and that a detailed straw proposal should be developed based on this concept. 

13. Please provide your organization's comments regarding the presentation made by the Terra-Gen during the February 20th meeting.

PG&E appreciated Terra-Gen’s catalog of issues specific to the hybrid resource market model.  As stated above, PG&E agrees that the dynamic limit tool is intended to be used by hybrid resources to identify any short-term constraints on their dispatch range, including those due to SoC constraints.

PG&E suggests that the hybrid model could be modified to enable fuller and less problematic participation of hybrid battery components in the regulation markets.  Such a modification could for example enable the regulation signal to be applied directly to the battery component under conditions similar to those applied to batteries using the REM model, which preserve battery SoC at a single level so far as is possible.

14. Please provide any additional comments, feedback, or examples regarding stakeholder working group meetings held January 23 and February 20. You may upload documents, examples, or data using the “Attachments” field below.

The CAISO presentations have yielded discussions of important issues and ideas, most of which can be categorized as near-term or economic issues. PG&E supports further discussion on many of these issues as they can improve the performance of NGR and Hybrid resources in the near term.

Additionally, PG&E views this initiative as having long-term two goals:

1. Enabling market integration of battery storage to maximize the economic utilization of the grid.
2. Assuring CAISO and other EDAM/WEIM BAAs that sufficient storage energy is available in advance of all periods of reliability need (i.e., not dispatching storage too early).

This latter issue (#2) was identified (but not resolved) in the prior energy storage initiative. How to divide up 20+GW of battery storage to both meet the peak while also being price responsive?

PG&E would like to see the CAISO and stakeholders to make time and space to address this issue in this initiative.

Both the short-term fixes and long-term goals need to be addressed.  CAISO needs to find a balance between the short-term fixes and long-term goals when prioritizing the initiative’s work and in considering the implications of changes to resource models, market design, or performance requirements.

1. Please provide a summary of your organization’s general comments on the stakeholder Working Group meetings held January 23rd and February 20th.

PGE thanks the CAISO staff and stakeholders for the commitment to a comprehensive review of current storage topics. 

PGE has commenced the commercial operation of three BESS facilities and has plans for additional facilities in the future. Accordingly, PGE staff are in the early stages of utilization of these resources and seek to leverage their flexibility within the CAISO market. Moving forward, PGE would like to have better integration of our BESS resources in the real-time market.

Current tools for BESS SOC management, including outage cards and bid control, are useful but do not unlock the full operational benefits of BESS resources.

PGE is interested in additional learning opportunities given the recent addition of BESS to our resource stack. This could include additional context and examples behind Multi-Interval Optimization (MIO) functionality and how the MIO would solve from T-75 through RT as SOC changes.

2. Please provide your organization’s comments regarding the topics included in the topic groups, their categorization, and the prioritization of issues within the topic groups.

PGE believes the working group topics well organized and prioritized.

3. Please provide your organization's comments regarding the revised timeline as presented during the February 20th meeting.

PGE is satisfied with the current working group timeline.

4. Please provide your organization's comments regarding the overviews on Existing and Planned Storage Constraints.

PGE advocates for functionality to automate SOC constraints for RT-only participants. This could streamline various issues, including SOC min/max management. PGE is in favor of targeted integration of SOC constraints to allow market participants more granular control over resource dispatch, while avoiding introducing excessive complexity to market optimization.

5. Please provide your organization’s comments regarding the overview of outage reporting and nonlinearity issues, including the issues identified, and the potential solutions discussed.

PGE supports allowing technical limitations for storage resources. For example, PGE would support an option or requirement in the master file to communicate a resource’s charging and discharging curve, allowing market participants to better communicate the nonlinear nameplate capacity of a resource near its min/max value.

Separately, PGE is open to full CAISO market participants having outage card functionality to designate min/max boundaries to reflect physical limitations.

6. Please provide your organization’s comments regarding the overview of the storage default energy bid (DEB), including the potential changes discussed.

PGE is tentatively supportive of DEB multiplier modification as interim change. PGE is open to exploring options which allow participants to better capture opportunity costs.

7. Please provide your organization’s comments regarding the overview of SOC Management and Capacity Awards.

No comment

8. Please provide your organization’s comments regarding the presentation made by Vistra during the January 23rd meeting.

PGE is open to further exploration of the changes proposed by Vistra, including a feasibility and/or impact analysis. As a WEIM participant, PGE advocates for solutions that are interoperable with the RT-only participant model.

9. Please provide your organization's comments regarding the overview of the SOC Definition & Calculation, including the description of the issue, the instances of inaccessible energy, and the potential changes explored.

PGE appreciates the explanation of the SOC calculation and welcomes the education as market participants, especially within the EIM footprint, integrate additional storage resources.

PGE supports various improvements outlined by the ISO, including improved SOC estimation and telemetry, tariff clarifications of “available energy” and refinements to master file modifications and outage reporting. These improvements are timely given new resource integration underway across the region.

10. Please provide your organization's comments regarding the overview of the Use of Implied Bid Spreads.

While the use case for implied bid spreads is clear, PGE asks to explore an opt in/opt out model for enabling this functionality, whether at a system or resource-specific level. Allowing participant choice, even for a defined period, would allow for market participants to adjust to and test the functionality of implied bid spread and the MIO.

11. Please provide your organization's comments regarding the overview of Distribution-Level Storage Charging Constraints.

No comment

12. Please provide your organization's comments regarding the overview of DEBs for Hybrid Resources.

PGE does not currently participate any hybrid resources but is interested in hearing the perspectives of participants who do.

13. Please provide your organization's comments regarding the presentation made by the Terra-Gen during the February 20th meeting.

14. Please provide any additional comments, feedback, or examples regarding stakeholder working group meetings held January 23 and February 20. You may upload documents, examples, or data using the “Attachments” field below.

1. Please provide a summary of your organization’s general comments on the stakeholder Working Group meetings held January 23rd and February 20th.

San Diego Gas and Electric (SDG&E) appreciates the opportunity to comment on the last two Storage Design and Modeling initiative working groups and supports the CAISO’s proposal to kick off the first phase of the initiative addressing topic group 1 (outage reporting & nonlinearity issues, State-of-Charge definition & calculation). This initiative should develop sufficient tools to aid storage scheduling coordinators in managing their resources, and SDG&E supports moving forward to develop solutions that support efficient and reliable outcomes.

2. Please provide your organization’s comments regarding the topics included in the topic groups, their categorization, and the prioritization of issues within the topic groups.

SDG&E supports the three high-level topic groups for discussion, as well as the inclusion of outage reporting & nonlinearity issues and State-of-Charge (SOC) definition & calculation in the first straw proposal. While we are supportive of the proposed schedule, SDG&E would like CAISO to outline how it plans to address the other topics included in the first group in the initiative timeline. While we think that proposals on outage reporting and SOC will help inform the direction stakeholders may take on any future uplift redesign and Default Energy Bid (DEB) modifications, it is critical to tackle all of these issues in a timely manner. The scope of the initiative should cover all identified topics and encompass all areas that impact storage resources. Issues with storage uplift and the default energy bid have been ongoing for storage resources and market participants need resolution on these topics, especially considering the anticipated volume of storage resources in the market.

3. Please provide your organization's comments regarding the revised timeline as presented during the February 20th meeting.

SDG&E has no objections to the revised timeline as presented during the February 20^th meeting but reiterates its request for clarification on when CAISO plans to address storage uplift and default energy bids.

4. Please provide your organization's comments regarding the overviews on Existing and Planned Storage Constraints.

The overviews of existing and planned storage constraints were very useful for establishing a foundation for how the different constraints might interact with each other. To continue building on this, SDG&E recommends that CAISO develop numerical examples that illustrate how these market constraints will overlap with each other, focusing especially on impacts to the resource’s SOC and its market awards/dispatch.

5. Please provide your organization’s comments regarding the overview of outage reporting and nonlinearity issues, including the issues identified, and the potential solutions discussed.

SDG&E strongly supports the inclusion of outage reporting and non-linearity issues in the scope of the upcoming straw proposal. We believe there are opportunities to improve generator data so that CAISO can utilize the full range of capabilities of storage resources. In their proposal, CAISO should consider how the operational profiles for the entire charge and discharge cycles could be integrated into the storage parameters through the GRDT. This could be used in the market model to forecast both charge and discharge decays, baking that information into the expected system performance when dispatched. Using the real-time system charge and discharge capabilities to inform resource availability is SDG&E’s preferred approach to managing these resources, as it will result in more efficient outcomes while increasing overall system reliability. We look forward to the straw proposal on this topic.  

6. Please provide your organization’s comments regarding the overview of the storage default energy bid (DEB), including the potential changes discussed.

No comment.

7. Please provide your organization’s comments regarding the overview of SOC Management and Capacity Awards.

No comment.

8. Please provide your organization’s comments regarding the presentation made by Vistra during the January 23rd meeting.

No comment.

9. Please provide your organization's comments regarding the overview of the SOC Definition & Calculation, including the description of the issue, the instances of inaccessible energy, and the potential changes explored.

SDG&E strongly supports CAISO’s proposal to enhance the SOC definition and calculation to ensure resource constraints are adequately reflected in the market. Accurately evaluating the real-time availability of the storage fleet is critical, as many of the challenges associated with storage management are rooted in SOC management. SDG&E sees a lot of value in accounting for foldback in the telemetry conveyed to CAISO. As to the concerns raised on voltage imbalance, SDG&E believes those operational characteristics are appropriately reflected in the minimum and maximum continuous limit in the RDT, and do not need to be further accounted for in the SOC definition or calculation.

10. Please provide your organization's comments regarding the overview of the Use of Implied Bid Spreads.

No comment.

11. Please provide your organization's comments regarding the overview of Distribution-Level Storage Charging Constraints.

While SDG&E supports examining distribution-level storage constraints in this initiative, we do not believe the dynamic limit tool would be an appropriate way to account for DSO level constraints. The charging restrictions for these resources are on an hourly basis, and use of dynamic limits would likely be overly burdensome for scheduling coordinators. Thus far, use of outages to indicate charging constraints has been successful. However, SDG&E is open to identifying these resources in the Masterfile and operating the charging restrictions monthly to give operators more insight into their operational limitations.

12. Please provide your organization's comments regarding the overview of DEBs for Hybrid Resources.

SDG&E supports development of a DEB for hybrid resources. It will be critical to develop a careful, thoughtful, durable solution for these resources. However, in terms of prioritization, SDG&E agrees that any enhancements to hybrid (as well as distribution level resources) should be addressed in a separate, and later, track of the initiative.

13. Please provide your organization's comments regarding the presentation made by the Terra-Gen during the February 20th meeting.

SDG&E believes that the issues raised by Terra-Gen regarding hybrid resources and the use of dynamic limits are thoughtfully considered and that it would be appropriate to examine the use cases for this tool in the scope of this initiative.

14. Please provide any additional comments, feedback, or examples regarding stakeholder working group meetings held January 23 and February 20. You may upload documents, examples, or data using the “Attachments” field below.

SDG&E would like to thank CAISO for its approach to policy development in this initiative. Focusing the first few working groups on foundational level setting in each of the key topic group areas will allow for meaningful engagement by stakeholders as the initiative progresses. SDG&E looks forward to continued participation in the stakeholder process.

1. Please provide a summary of your organization’s general comments on the stakeholder Working Group meetings held January 23rd and February 20th.

SCE appreciates CAISO providing the opportunity to comment on the Storage Design and Modeling initiative.   SCE’s comments can be found under the subsequent questions.

2. Please provide your organization’s comments regarding the topics included in the topic groups, their categorization, and the prioritization of issues within the topic groups.

SCE supports the current topics, categorization, and prioritization of issues currently proposed. 

3. Please provide your organization's comments regarding the revised timeline as presented during the February 20th meeting.

SCE supports the revised timeline but urges CAISO to not be tied to schedules but rather whether effective solutions can be developed.   It is essential for the schedule to be flexible to accommodate any unforeseen complexities that may arise during the discussions.

4. Please provide your organization's comments regarding the overviews on Existing and Planned Storage Constraints.

SCE seeks clarity on whether CAISO is proposing to include imbalance reserves (IR) in both the Intergrated Forward Market (IFM) and real time ancillary service state-of-charge (ASSOC) constraints. The ASSOC constraint in the realtime market is binding and forces a battery to charge or discharge—regardless of whether the instruction is economic—ensuring sufficient state-of-charge (SOC) to satisfy the constraint in every AS awarded interval. Including imbalance reserves in the realtime ASSOC constraint could lead to uneconomic charge and discharge instructions that are not eligible for Bid Cost Recovery (BCR).   And it could hinder the IR awarded energy from being dispatched, as both the energy SOC and ASSOC constraints are simultaneously enforced. Since IR awarded in the IFM has a must offer obligation to economically bid energy in the Real-Time Market (RTM), there should be no need to include IR in the realtime ASSOC constraint. 

SCE would also like clarity on how CAISO proposes to dispatch IR energy.  Previous documents state that spin and non-spin are called on through Real-Time Contingency Dispatch and Real-Time Disturbance Dispatch. Is IR expected to be dispatched through the normal Real-Time Economic Dispatch process?

5. Please provide your organization’s comments regarding the overview of outage reporting and nonlinearity issues, including the issues identified, and the potential solutions discussed.

SCE does not have a solution for addressing nonlinearity issues like fold-back but suggests that more discussions are needed on how to model energy storage in the market software.  The approach may be very similar to the creation of Multi-Stage Generation mechanisms developed many years ago. Experience with the market revealed that combined cycle plants with different stages did not fit neatly into simple bidding and market solutions due to the nonlinearity when units transitioned from one stage to another.  It required some out-of-the-box thinking to figure out how to treat these resources so that the market could handle them correctly.

A similar situation seems to be occurring with storage resources.  As operators of storage resources gain more experience, they are realizing that storage resources may not fit well into the existing market models. It will take time, thought, and effort to rectify the situation, but as was done for multi-stage resources, SCE believes that a solution can be developed.  

6. Please provide your organization’s comments regarding the overview of the storage default energy bid (DEB), including the potential changes discussed.

SCE is interested in exploring the concept of separate DEBs for charging and discharging.  This could help in better reflecting the costs and operational constraints of storage resources.  The idea of having separate DEBs could also help address market power issues, where a storage resource might strategically bid to maximize profits, potentially leading to market inefficiencies.  While SCE is not certain that the proposal would benefit the market, SCE believes it is worth exploring further to understand its potential benefits and implications.

7. Please provide your organization’s comments regarding the overview of SOC Management and Capacity Awards.

SCE does not have any comments at this time.

8. Please provide your organization’s comments regarding the presentation made by Vistra during the January 23rd meeting.

SCE does not have any comments at this time.

9. Please provide your organization's comments regarding the overview of the SOC Definition & Calculation, including the description of the issue, the instances of inaccessible energy, and the potential changes explored.

SCE supports modifications to the Master File to include additional parameters that could better inform the market of an energy storage resource’s capability at specific SOC.   SCE recommends CAISO explore developing parameters that provides buffers for high SOC and low SOC to address the non-linearity issues with charging and discharging at these levels.   These parameters are essential for providing CAISO with accurate representation of the resource’s true capabilities. Additionally, these parameters can also be accompanied by different ramping and discharging capabilities. 

SCE has experienced numerous incidents where a storage resource, close to full SOC, received Automatic Generation Control (AGC) signals for Ancillary Service (AS) Regulation Down but was unable to fully charge to 100% due to the non-linearity issues with SOC.  The current market’s inability to identify the limitations of storages at certain SOC affects the AS regulation accuracy certifications and what is actually available to the market.

Furthermore, it is also unclear how CAISO accounts for SOC when sending AGC signals to resources.  SCE requests more information on how CAISO determines this.

10. Please provide your organization's comments regarding the overview of the Use of Implied Bid Spreads.

SCE is supportive of the use of Implied Bid Spreads. This helps maximize the value of energy storage resources. However, the use of implied spreads does not seem to be consistent. There have been instances where the Day-Ahead market awards did not take into account that the bid spread had materialized and instead awarded an energy storage resource as if it were a conventional resource—based only on the nominal dollar value of the submitted bid.      

SCE is also concerned about the lack of information in the Business Process Manual (BPM) explaining how Implied Bid Spreads are utilized by the market.  If CAISO is indeed using Implied Bid Spreads, it should be reflected in the market BPMs to clarify when and how spreads are utilized for market participants.

11. Please provide your organization's comments regarding the overview of Distribution-Level Storage Charging Constraints.

SCE supports the inclusion of distribution-level storage (e.g., WDAT storage that is eligible for wholesale market participation) resources in the CAISO Masterfile. Identifying these resources with a specific flag is an improvement to the status quo, providing operators with better insight into potential operational limitations.  However, to enhance the effectiveness of this approach, SCE recommends that CAISO also explore the implementation of real-time telemetered capabilities, which would allow CAISO to automatically receive critical information on dynamic Distribution-Level storage charging constraints.  This approach would eliminate the need for workarounds such as submitting outages when these resources reach their operating limits.

12. Please provide your organization's comments regarding the overview of DEBs for Hybrid Resources.

SCE does not have any comments at this time.

13. Please provide your organization's comments regarding the presentation made by the Terra-Gen during the February 20th meeting.

SCE does not have any comments at this time.

14. Please provide any additional comments, feedback, or examples regarding stakeholder working group meetings held January 23 and February 20. You may upload documents, examples, or data using the “Attachments” field below.

SCE does not have any comments at this time.

1. Please provide a summary of your organization’s general comments on the stakeholder Working Group meetings held January 23rd and February 20th.

2. Please provide your organization’s comments regarding the topics included in the topic groups, their categorization, and the prioritization of issues within the topic groups.

3. Please provide your organization's comments regarding the revised timeline as presented during the February 20th meeting.

4. Please provide your organization's comments regarding the overviews on Existing and Planned Storage Constraints.

5. Please provide your organization’s comments regarding the overview of outage reporting and nonlinearity issues, including the issues identified, and the potential solutions discussed.

6. Please provide your organization’s comments regarding the overview of the storage default energy bid (DEB), including the potential changes discussed.

7. Please provide your organization’s comments regarding the overview of SOC Management and Capacity Awards.

8. Please provide your organization’s comments regarding the presentation made by Vistra during the January 23rd meeting.

9. Please provide your organization's comments regarding the overview of the SOC Definition & Calculation, including the description of the issue, the instances of inaccessible energy, and the potential changes explored.

10. Please provide your organization's comments regarding the overview of the Use of Implied Bid Spreads.

11. Please provide your organization's comments regarding the overview of Distribution-Level Storage Charging Constraints.

12. Please provide your organization's comments regarding the overview of DEBs for Hybrid Resources.

13. Please provide your organization's comments regarding the presentation made by the Terra-Gen during the February 20th meeting.

14. Please provide any additional comments, feedback, or examples regarding stakeholder working group meetings held January 23 and February 20. You may upload documents, examples, or data using the “Attachments” field below.

1. Please provide a summary of your organization’s general comments on the stakeholder Working Group meetings held January 23rd and February 20th.

Terra-Gen appreciates the opportunity to provide comments on the California Independent System Operator's (CAISO) Storage Design and Modeling working group sessions held on January 23rd and February 20th. We commend the CAISO for its comprehensive presentations and educational materials, which have facilitated valuable stakeholder discussions. Terra-Gen’s comments focus on enhancing market design to accurately represent the operational capabilities and costs of storage and hybrid resources, thereby promoting efficient dispatch and reliable grid operations.

Terra-Gen strongly believes that a comprehensive evaluation of storage design and modeling is essential. We stress the significance of understanding the constraint formulations across all relevant markets (IFM, RUC, FMM, RTD). To this end, Terra-Gen recommends a consolidated document detailing these constraints, followed by a workshop to review this information prior to the release of a draft proposal. This fundamental comprehension is vital for effective policy development.

2. Please provide your organization’s comments regarding the topics included in the topic groups, their categorization, and the prioritization of issues within the topic groups.

Terra-Gen agrees that the identified topics are suitable for a thorough evaluation. We acknowledge the need for structured issue resolution and support the ongoing discussions regarding State of Charge (SOC) management, which directly impacts storage uplift and other related areas. We also encourage CAISO to include an intentional review of hybrid resource related issues for consideration within each relevant topic group to ensure that relevant policy design elements are not overlooked for hybrid resources.

3. Please provide your organization's comments regarding the revised timeline as presented during the February 20th meeting.

Terra-Gen understands the existing timeline that CAISO has provided, as updated during its February 20^th meeting. The initial milestones seem to be reasonable, but Terra-Gen recommends the CAISO proved an adequate timeline for this initiative to allow adequate time for robust stakeholder engagement and fully vetting any proposals. Candidly, the CAISO has made a habit of rushing storage related efforts that have resulted in haphazard and fragmented policy and flawed implementation, particularly over the past five years of storage policy development.  This initiative is an opportunity to correct this prior approach and set the storage policy design effort on the right track and Terra-Gen believes that the CAISO should not rush through the proposal development process without ensuring that each topic group has adequately coordinated with any interactions within and between storage policy concepts and topic groups.

4. Please provide your organization's comments regarding the overviews on Existing and Planned Storage Constraints.

Terra-Gen recognizes the value of the CAISO’s detailed overview of existing and planned storage constraints. We recommend converting the presentation materials into a more accessible document for broader stakeholder understanding. We support further discussions regarding the planned envelope constraints, requesting illustrative examples of their impact on resource awards and schedules, particularly concerning potential limitations on energy and IRU/IRD awards.

Terra-Gen expresses concern regarding the CAISO’s Day-Ahead Market Enhancements (DAME) envelop equation policy design.  The CAISO effort under DAME added yet another layer of constraints to further complicate storage market design.  It is unclear how this additional constraint will interact with the existing energy and AS SOC constraints.

Terra-Gen recommends that CAISO take additional time to provide further background and examples of how these different constraints will be applied and demonstrate the results of different likely scenarios of storage market outcomes. This additional work and exploration will provide market participants and the CAISO with confidence that is DAME envelop equation policy will work as intended or help identify any potential unintended consequences or shortcomings that will be exposed during implementation and market simulation.

5. Please provide your organization’s comments regarding the overview of outage reporting and nonlinearity issues, including the issues identified, and the potential solutions discussed.

Terra-Gen agrees that the CAISO has accurately identified outage reporting and non-linearity challenges. We support the implementation of interim solutions such as outage cards to address foldback issues, while recognizing the need for more extensive market design changes to accurately model storage resource limitations. Terra-Gen seeks clarification regarding the distinction between issues raised by various parties, and further supports discussions on the use of varied ramp rates based on SOC.

Terra-Gen highlights that it has experienced the shortcomings of CAISO’s outage management implementation for storage resources. Terra-Gen recommends the CAISO strongly consider proposing to implement new functionality to allow for overlapping Load Max derates, which are necessary to properly model BESS availability. This overlapping capability should also be available for Max Energy, and Min Energy.

6. Please provide your organization’s comments regarding the overview of the storage default energy bid (DEB), including the potential changes discussed.

Terra-Gen advocates for modifications to the real-time storage DEB to better reflect real-time system conditions and prevent premature dispatch. We believe the CAISO should provide information on the mitigation frequency of charging bids and reevaluate their appropriateness. Terra-Gen believes that ensuring opportunity costs are appropriately reflected in the storage DEB is paramount. Terra-Gen also recommends consideration of non-zero default VOM values for the storage DEB to ensure differentiation between charging and discharging costs.

7. Please provide your organization’s comments regarding the overview of SOC Management and Capacity Awards.

Terra-Gen offers the following recommendations to enhance the effectiveness and price formation of the Flexible Ramping Product (FRP) market, specifically within the Fifteen Minute Market (FMM) and Real-Time Dispatch (RTD). We believe these suggestions can contribute to improved market stability and efficiency.

A key area for consideration is the incorporation of the SOC of storage resources when awarding FRP. We observe that the current design, which does not explicitly account for SOC, may lead to price formation challenges and impact market efficiency and reliability. Specifically, the current market optimization may award FRP to storage resources that, due to their SOC, are unable to deliver energy in subsequent market intervals. This practice could potentially contribute to the suppression of FRP prices, resulting in a market signal that may not fully reflect the value of flexible ramping capability. This situation could also present challenges for storage operators.

Additionally, this design characteristic may have implications for energy prices. When the market is required to balance the awarding of energy and deliverable FRP, the current structure may prioritize potentially undeliverable FRP, which could contribute to the suppression of energy prices. This allocation may create a disconnect between market signals and physical system needs, potentially leading to less efficient dispatch and increased costs. Furthermore, the current design may increase the potential for unintended price volatility.

Terra-Gen offers the following recommendations for CAISO's consideration:

• Explore the implementation of a market design that explicitly incorporates the SOC of storage resources when determining FRP awards.
• Review the market optimization to ensure that FRP awards are aligned with the deliverability of energy, to support efficient resource allocation.
• Consider increased transparency regarding the factors influencing FRP awards and energy dispatch, to facilitate informed decision-making by market participants and potentially mitigate price volatility.

8. Please provide your organization’s comments regarding the presentation made by Vistra during the January 23rd meeting.

Terra-Gen supports continued discussion of proposals to improve storage modeling, including the extension of dynamic limit functionality to all storage resources. We also support evaluating modeling improvements regarding upper and lower economic limit derates or rerates, and the potential for biddable attenuation factors for regulation.

9. Please provide your organization's comments regarding the overview of the SOC Definition & Calculation, including the description of the issue, the instances of inaccessible energy, and the potential changes explored.

Terra-Gen supports further discussion on SOC estimation best practices, clarification of CAISO’s SOC expectations, and the efficient reflection of operational limitations, noting the term “inaccessible energy” is misleading. Terra-Gen also recommends further discussion regarding the use of Masterfile parameters and suggests the CAISO consider the feasibility of using telemetry on the units max available power for use in the dispatch of hybrid resources.

10. Please provide your organization's comments regarding the overview of the Use of Implied Bid Spreads.

Terra-Gen appreciates the clarification provided on the use of implied bid spreads. Terra-Gen strongly supports the continued eligibility for bid cost recovery for storage resources that follow binding dispatch instructions when advisory pricing does not materialize.

11. Please provide your organization's comments regarding the overview of Distribution-Level Storage Charging Constraints.

Terra-Gen supports improved modeling of distribution-level constraints to ensure feasible dispatch instructions.

12. Please provide your organization's comments regarding the overview of DEBs for Hybrid Resources.

The CAISO has previously indicated that hybrid resource DEBs would be required to enable these resources to bid above the soft offer cap ($1000/MWh) following the Order 831 bid cap changes. This topic was subsequently included in the initial scoping of the Storage Design and Modeling initiative.  Terra-Gen strongly supports enabling hybrid resources to bid above $1,000 when the offer cap is increased to $2,000.

Terra-Gen strongly recommends that the concept of dynamic limits be discussed in close coordination with any effort to develop hybrid resource DEB formulation or apply mitigations to hybrid resources. The inherent complexity of hybrid resources, particularly those with two fuel types, necessitates a more nuanced DEB formulation. Any proposed hybrid DEB methodology must carefully consider the need for resource owners to manage SOC outside of the market framework, as the CAISO does not currently model hybrid SOC within its market optimization. Additionally, the methodology should account for variable energy resource (VER) fuel availability and the management of grid charging restrictions.

Furthermore, the integration of two distinct technologies with differing marginal and variable costs complicates the potential for fair application of a DEB methodology. The dynamic nature of these costs, which can fluctuate significantly over various timeframes, adds another layer of complexity. If the CAISO intends to develop a hybrid resource DEB methodology, it should also include consideration that Scheduling Coordinators (SC) should be allowed to utilize dynamic limits specifically for SOC management purposes.

Mitigation of hybrid resources can result in a loss of control and potential mismanagement of the storage component's SOC. This can also negatively impact the SC's ability to observe grid charging limitations or fulfill CAISO dispatch instructions. To ensure clarity and operational efficiency, allowing hybrid resource dynamic limits to be used for SOC management should be explicitly stated in the CAISO tariff and Business Practice Manuals (BPMs). This will provide clear guidance to market participants and prevent potential concerns and disputes regarding the appropriate use of dynamic limits.  Terra-Gen also recommends that hybrid resources be allowed to request reference level changes to accurately reflect costs when exceeding the soft offer cap.  

13. Please provide your organization's comments regarding the presentation made by the Terra-Gen during the February 20th meeting.

Terra-Gen expresses our appreciation for the opportunity to present on hybrid resource issues during the February 20^th meeting. We reiterate our presentation feedback and working group discussion for further consideration here:

Terra-Gen provides comments on the application of dynamic limits and outage management for hybrid resources and believes that optimizing these functionalities is critical for ensuring accurate representation of hybrid resource capabilities and promoting efficient market participation.

Existing Tariff and BPM Provisions:

Current tariff language and Business Practice Manuals (BPMs) acknowledge the use of dynamic limits for hybrid resources. Specifically, tariff section 30.5.6.2 and BPM section 2.1.21.1 outline the ability of Scheduling Coordinators (SCs) to submit hybrid dynamic limits to reflect various operational scenarios, including SOC limitations and onsite charging.

Terra-Gen requests the CAISO address the fact that it has never explicitly noted SOC management in its tariff provisions for dynamic limits, and the fact that it has removed previously existing language referencing "SOC management" from its BPMs. Terra-Gen also highlights that the tariff and BPM sections noted above include references to the functions of "reflecting onsite charging" and "managing onsite charging" which are inherently linked to the concept of SOC management for hybrid resources.

Terra-Gen recommends that CAISO review its existing tariff and BPM provisions, as well as the intent noted in its prior Hybrid Resource policy development.  Terra-Gen requests the CAISO include in its initiative scope, the need to discuss specifically allowing for SOC management as an appropriate application for hybrid resource dynamic limits. This is particularly relevant and timely given the CAISO’s efforts to develop hybrid resource DEBs and apply its mitigation framework to hybrid resources.

Application of Dynamic Limits and Ancillary Services (AS) Provision:

The provision of AS by hybrids, particularly regulation, has revealed the limitations of the current implementation. Dynamic limit functionality was not integrated into the CAISO Automated Generator Control (AGC) system during initial changes, leading to the current practice of using outage cards for AS availability signaling.

This practice presents significant challenges due to the time lag between outage submission and market reflection (approximately 45 minutes). Terra-Gen recommends that the CAISO explore the feasibility of implementing dynamic limits for AS availability instead of relying on outage cards. This would require modifications to the AGC logic.

Furthermore, AS procurement in real-time (RT) is limited to the Fifteen Minute Market (FMM), resulting in 15-minute granularity, procured 45 minutes in advance. This creates difficulties in communicating hybrid resource availability for AS, with no mechanism to indicate changes other than contacting the RT Operations desk. The CAISO has indicated that SCs cannot set dynamic limits below the AS award amount to mitigate this issue.

Hybrid Outage Card and Forecasting Issues:

Terra-Gen recommends exploring the feasibility and impact of updating the Outage Management System (OMS) to allow for sub-resource ID level outage or derate submissions. This would enhance the granularity of information provided to the CAISO.

Additionally, the CAISO should address the issue of Variable Energy Resource (VER) component outages and derates not flowing into the CAISO VER forecast used by the market for hybrids. This deficiency impacts system-wide RUC forecasts and procurement levels, leading to inefficient bidding and resource management. Implementing OMS component-level submissions and integrating hybrid VER component forecasting into market processes is crucial.

The Resource Adequacy (RA) concept of Unforced Capacity (UCAP), currently under consideration for storage capacity accreditation, further underscores the need for component-level information for hybrid resource derates or outages. This component level outage data is essential for the fair application of UCAP to hybrid resources.

Further Stakeholder Discussions and Clarifications:

Terra-Gen recommends further stakeholder and CAISO discussions to address the following:

• Clarification on the appropriate use of outage cards versus dynamic limits for real-time participation: This includes exploring the use of dynamic limits for both energy and AS availability and updating the current AGC implementation.
• Clarification on the appropriate use of dynamic limits for SOC management.
• Consideration of how dynamic limits should be utilized during mitigation: Clear tariff and BPM guidance is needed.
• Discussion on the use of dynamic limits for standalone storage: This could offer a solution for better SOC management and reflection of unmodeled constraints.

Terra-Gen believes that addressing these issues will enhance the accuracy and efficiency of hybrid resource participation in the CAISO markets.

14. Please provide any additional comments, feedback, or examples regarding stakeholder working group meetings held January 23 and February 20. You may upload documents, examples, or data using the “Attachments” field below.

Terra-Gen believes that the recommendations outlined in these comments will contribute to the development of a more efficient and reliable market design that accurately represents the capabilities and costs of storage and hybrid resources. We look forward to continued engagement with the CAISO and other stakeholders in this important initiative. 

1. Please provide a summary of your organization’s general comments on the stakeholder Working Group meetings held January 23rd and February 20th.

WPTF appreciates the comprehensive efforts made by CAISO in providing detailed educational materials and background information on key topics. These efforts have been invaluable and will facilitate more robust discussions during the policy development phase. The detailed overviews on issues like storage constraints, outage reporting, DEBs, and SOC management have greatly enhanced participants' understanding and engagement in the discussions. We believe that such thorough education will ensure more informed decision-making and a smoother policy development process.

Specifically, we commend CAISO for its comprehensive presentation on existing and planned storage constraints, as it was the first document to cover all constraints in such detail. The information presented on outage reporting and nonlinearity issues was also appreciated, as it highlighted technical challenges that may not be familiar to all stakeholders. Additionally, the opportunity to discuss DEB changes, SOC management, and other critical topics has been instrumental in advancing understanding and fostering productive conversations.

We encourage continued discussion on various issues, such as planned envelope constraints, non-zero VOM values for the storage DEB, and hybrid resource DEBs, to ensure that all potential impacts are well-understood and addressed. Overall, WPTF remains supportive of CAISO's approach to ensuring that stakeholders are well-informed, and we look forward to continued engagement as these topics evolve.

2. Please provide your organization’s comments regarding the topics included in the topic groups, their categorization, and the prioritization of issues within the topic groups.

WPTF continues to seek confirmation from CAISO on which topic group or current effort will take ownership of the following: (1) allowing storage resources to bid above the soft offer cap in the day-ahead market, and (2) permitting PDR to bid above the soft offer cap when costs exceed the cap. Both of these issues were raised in 2024 and deferred to either this effort or the Price Formations effort. Given that both of those efforts are underway, we ask the CAISO to confirm which one will address these issues so they do not inadvertently get over-looked.

3. Please provide your organization's comments regarding the revised timeline as presented during the February 20th meeting.

4. Please provide your organization's comments regarding the overviews on Existing and Planned Storage Constraints.

WPTF appreciates the time and effort that went into providing a comprehensive educational presentation on existing and planned storage constraints. We believe this is the first and only document that covers all such constraints in detail. It was extremely helpful, and we request that CAISO modify the presentation materials to focus solely on the constraints and convert this into a word document or training material so it is more accessible and digestible to participants who did not benefit from the verbal descriptions and discussion.

We also believe it may be worthwhile to have further discussions regarding the planned envelope constraints. While we understand that these constraints were included in the DAME policy effort, we have some reservations about potential unintended consequences. As we continue to examine how all the existing and planned constraints interact, we ask that CAISO provide examples of how these constraints would work on a hypothetical resource providing energy and IRU/IRD (assuming ancillary services are excluded initially), so all participants can fully understand how they may impact awards and schedules. Our primary concern is that it seems as though once a resource reaches the upper or lower envelope constraint, it may no longer be awarded any energy or IRU/IRD for the rest of the trading day. We are seeking confirmation from the CAISO through examples if in fact that is a potential outcome.

5. Please provide your organization’s comments regarding the overview of outage reporting and nonlinearity issues, including the issues identified, and the potential solutions discussed.

WPTF appreciates the discussion of these technical issues, which may not be familiar to participants who do not operate storage resources. To the extent that these technical issues are not reflected in the market—except when submitting outages or modifying other parameters—resulting in infeasible schedules, we support further discussions on how to ensure the market has the most accurate information available in the most efficient way.

We seek additional clarification on the issues raised. During the stakeholder meeting, it seemed as though there were two separate issues raised—one by PG&E and one by Vistra. Could CAISO please clarify whether these are indeed distinct issues that need to be addressed in different ways, or if they are the same issue being described in different terms? For example, if the issue is a resource cannot be dispatched to its pmin or pmax once it reaches a certain SOC then having a higher/lower pmin/pmax reflected in the market may be a potential solution for this issue. Additionally, if the issue is once a resource reaches a certain SOC then for every 1 MWh its charging, it actually only increases its SOC by .5MWh, then maybe a separate solution should be considered to addres this issue. WPTF looks forward to the additional clarification and further discussion. 

6. Please provide your organization’s comments regarding the overview of the storage default energy bid (DEB), including the potential changes discussed.

WPTF supports further discussion of all the potential changes noted. We believe it is essential to ensure that the DEB accurately reflects costs, so that when a resource is mitigated, it does not lead to suboptimal outcomes. This could also be the topic within this effort that takes ownership of allowing storage resources to bid above the soft offer cap in the day-ahead market as well when costs exceed that cap.

Additionally, we ask that CAISO consider establishing a non-zero default VOM value for the storage DEB component. Currently, storage resources opting for the storage DEB must negotiate a VOM value, otherwise it is set to $0/MWh. When the VOM value is set to $0/MWh and the cost portion of the DEB calculation sets the DEB (as opposed to the opportunity cost portion), the resource will have the same DEB for both its charging and discharging operating ranges, which seems inaccurate. By setting a default VOM value, CAISO can ensure there is at least some differentiation in the DEB between charge and discharge ranges and potentially reduce the need for extensive negotiations. The CAISO could consider setting this default value based on already negotiated values.  

7. Please provide your organization’s comments regarding the overview of SOC Management and Capacity Awards.

8. Please provide your organization’s comments regarding the presentation made by Vistra during the January 23rd meeting.

9. Please provide your organization's comments regarding the overview of the SOC Definition & Calculation, including the description of the issue, the instances of inaccessible energy, and the potential changes explored.

WPTF supports further discussion regarding the instances of inaccessible energy. We want to consider all implications of changes to SOC estimates, ensuring that any adjustments to the SOC constraints and definitions do not lead to unintended consequences.

10. Please provide your organization's comments regarding the overview of the Use of Implied Bid Spreads.

We appreciate the examples and discussion provided during the meeting.

11. Please provide your organization's comments regarding the overview of Distribution-Level Storage Charging Constraints.

WPTF supports ensuring that any schedules or awards generated by CAISO for storage resources are feasible. If WDATs include limitations not visible to the CAISO market, and those limitations result in infeasible schedules, it is crucial that these discussions continue. Such limitations could introduce reliability risks. For example, if the CAISO market expects a resource to discharge during net load peak hours but the WDAT limitations prevent that resource from charging, it will not be available when needed.

12. Please provide your organization's comments regarding the overview of DEBs for Hybrid Resources.

If a DEB is developed for hybrid resources, it will be crucial to ensure that these resources can request reference level changes to accurately reflect costs when they exceed the soft offer cap. 

13. Please provide your organization's comments regarding the presentation made by the Terra-Gen during the February 20th meeting.

14. Please provide any additional comments, feedback, or examples regarding stakeholder working group meetings held January 23 and February 20. You may upload documents, examples, or data using the “Attachments” field below.