Comments on Final Proposal

FERC Order 831 - Import bidding and market parameters

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Comment period
Aug 31, 08:00 am - Sep 04, 05:00 pm
Submitting organizations
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BANC
Submitted 09/04/2020, 03:25 pm

Submitted on behalf of
Balancing Authority of Northern California

1. Provide your organization’s overall position on the FERC Order 831 – Import Bidding and Market Parameters final proposal:
Support
2. Provide a summary of your organization's comments on this proposal:

The Balancing Authority of Northern California (“BANC”) appreciates the opportunity to submit these comments on the California Independent System Operator (“CAISO”) FERC Order 831 – Import Bidding and Market Parameters Final Proposal, dated August 24, 2020 (“August Proposal”).

In comments on the Revised Draft Final Proposal (“July Proposal”), BANC and others expressed concerns about how the July Proposal would affect the economics and operation of their Balancing Authority Areas (“BAAs”) within the Energy Imbalance Market. BANC thanks the CAISO for addressing those concerns, and supports the revisions made in the August Proposal. In particular, BANC supports the revised proposal to set the threshold values for each BAA based on the NERC defined Balancing Authority ACE Limit (“BAAL”). BANC agrees that this approach provides a uniform and objective standard as well as balances stakeholder concerns about setting energy prices based on a $2000/MWh power balance penalty price when there are small infeasibilities that may or may not represent actual supply shortfalls.

To promote flexibility in the event that a more optimal threshold is later identified, the CAISO may wish to consider drafting tariff language that allows for the selection of a different objective threshold at some point in the future. The BAAL standard should then be included in the Business Practice Manual. This approach will enable the CAISO to make changes to the threshold metric without undertaking the more complex tariff amendment process.  

3. Provide your organization’s feedback on the Power Balance Constraint Relaxation Pricing and Constraint Penalty Prices as described in section 4.1:
4. Provide your organization’s feedback on screening import and virtual bids greater than $1,000/MWh as described in section 4.2:
5. Provide your organization’s feedback on the application of screening import and virtual bids greater than $1,000/MWh to Resource Adequacy Imports as described in section 4.2.1:
6. Provide your organization’s feedback on the Maximum Import Bid Price Calculation topic as described in section 4.2.2:
7. Provide your organization’s feedback on the proposed EIM classification as described in section 5:
8. Additional comments on the FERC Order 831 – Import Bidding and Market Parameters final proposal:

California ISO - Department of Market Monitoring
Submitted 09/10/2020, 04:23 pm

1. Provide your organization’s overall position on the FERC Order 831 – Import Bidding and Market Parameters final proposal:

http://www.caiso.com/Documents/DMMCommentsonFERCOrder831-ImportBiddingandMarketParametersFinalProposal-Sep102020.pdf

2. Provide a summary of your organization's comments on this proposal:

Please see Section 1 for link to DMM Comments.

3. Provide your organization’s feedback on the Power Balance Constraint Relaxation Pricing and Constraint Penalty Prices as described in section 4.1:

Please see Section 1 for link to DMM Comments.

4. Provide your organization’s feedback on screening import and virtual bids greater than $1,000/MWh as described in section 4.2:

Please see Section 1 for link to DMM Comments.

5. Provide your organization’s feedback on the application of screening import and virtual bids greater than $1,000/MWh to Resource Adequacy Imports as described in section 4.2.1:

Please see Section 1 for link to DMM Comments.

6. Provide your organization’s feedback on the Maximum Import Bid Price Calculation topic as described in section 4.2.2:

Please see Section 1 for link to DMM Comments.

7. Provide your organization’s feedback on the proposed EIM classification as described in section 5:

Please see Section 1 for link to DMM Comments.

8. Additional comments on the FERC Order 831 – Import Bidding and Market Parameters final proposal:

Please see Section 1 for link to DMM Comments.

Calpine
Submitted 09/04/2020, 02:30 pm

1. Provide your organization’s overall position on the FERC Order 831 – Import Bidding and Market Parameters final proposal:
Support with caveats
2. Provide a summary of your organization's comments on this proposal:

Calpine strongly encourages the CAISO to develop a comprehensive, integrated, transparent, energy-related scarcity pricing mechanism.  Recent events, including the speed with which energy and capacity shortages emerged, exposed the importance of transparent data which would signal possible shortages as well as potentially trigger scarcity pricing mechanisms that would, subject to market power restrictions, encourage delivery of all sources of incremental energy or demand response. Indeed the tumult of mid-August might have been lessened if all market participants were allowed to see and respond to the shortage conditions prior to and as they emerged. 

Reforms to Resource Adequacy mechanisms and capacity planning are clearly necessitated, but those changes alone may prove insufficient to draw energy to the state when needed most.  The current proposal, while arguably addressing the narrow conditions of Order 831, is incomplete and anachronistic.  The CAISO must endeavor, now, to rationalize the overall system of energy production and consumption incentives inside the State with those present outside the State (for we will be dependent upon imports for the foreseeable future).

IF the CAISO feels that it must respond to the FERC Order prior to this comprehensive review of, and revisions to scarcity provisions, Calpine asks that it include a commitment to do so in its compliance filing.

3. Provide your organization’s feedback on the Power Balance Constraint Relaxation Pricing and Constraint Penalty Prices as described in section 4.1:

Calpine continues to oppose a non-zero, supply-shortage threshold as a trigger to allow pricing and scaling of relaxation parameters to rise to the $2000 cap. 

First, we fundamentally disagree that the CAISO market system should ignore a material supply deficiency in the scheduling run that is less than an arbitrarily calculated threshold.  In our view, the first MW of a shortage is in fact a condition that would require an immediate response either in the DA markets or within or subsequent to a RT interval. Not taking action to allow prices to rise is potentially a conscious choice to “lean on” adjacent BAAs.  

Second, NERC standards are designed to influence and bound the reasonableness of real-time operations.  The expectation is that there are plenty of resources available and due to normal fluctuations, a BAA can run a negative Area Control Error for short periods of time without placing unreasonable burdens on adjoining BAAs or affecting system frequency.  The ISO proposes now that this same “forgiveness” can be applied as a trigger when there is an apparent resource shortage in the planning horizon (ex ante DA and RT markets.)  While convenient, this simple calculation of an acceptable shortage threshold seems misplaced. 

Third, the ISO uses this converted frequency bias metric presuming an initial condition that all other BAA’s are balanced (system frequency is 60 Hz) and there is no aggregate shortfall.  Yet it seems to envision that multiple entities simultaneously could run short without engaging the price/parameter trigger mechanism.  The CAISO should explain the consequences to reliability if multiple – or all – entities experienced supply shortages simultaneously albeit within the proposed threshold and defend their assumption that it is reasonable to allow such a condition without triggering price/parameter responses. 

It seems simply logical that the ISO would allow prices and relaxation parameters to rise – encouraging all forms of response – as soon as there was a non-zero supply shortage in the scheduling run.  In fact, and consistent with the comments of several parties, perhaps clearing prices and constraint parameters should be allowed to rise (as with a demand curve) long before supply is exhausted at demand parity.  

4. Provide your organization’s feedback on screening import and virtual bids greater than $1,000/MWh as described in section 4.2:

No further comments.

5. Provide your organization’s feedback on the application of screening import and virtual bids greater than $1,000/MWh to Resource Adequacy Imports as described in section 4.2.1:

No further comments.

6. Provide your organization’s feedback on the Maximum Import Bid Price Calculation topic as described in section 4.2.2:

Calpine supports the principles that (1) external hub prices represent demonstrable opportunity costs and (2) that “6 by 16” hub average prices (e.g., on ICE) must be scaled by hour. 

The CAISO proposes to establish a Maximum Import Bid Price based on the highest of PNW and DSW hubs.  Calpine agrees that these external hubs represent a reasonable representation of the opportunity cost of selling within California.  Allowing prices up to the highest hub level (at a minimum) will allow the CAISO to attract imports (specifically, uncommitted capacity) when needed most.

The ISO’s proposal to scale the external-hub, multi-hour prices by time of day also makes sense, including the proposal to use SMECs from a similar day with a similar demand profile.  As explained by the CAISO, the selection of the reference day would be completely within the discretion of the CAISO but explained in the BPMs.  Calpine is not convinced that those profiles would be made public and with this absence of transparency, it might lead to Market Participant confusion and uncertainty as to how bids were evaluated and parameters set.  Calpine would prefer that the CAISO post the scaling factors on OASIS when used. 

7. Provide your organization’s feedback on the proposed EIM classification as described in section 5:

No comments

8. Additional comments on the FERC Order 831 – Import Bidding and Market Parameters final proposal:

No Comments

NVE on behalf of Commenters
Submitted 09/04/2020, 06:22 am

Submitted on behalf of
Arizona Public Service, Idaho Power Company, NV Energy, PacifiCorp, Portland General Electric Company, and Puget Sound Energy

1. Provide your organization’s overall position on the FERC Order 831 – Import Bidding and Market Parameters final proposal:

These comments are submitted on behalf of Arizona Public Service, Idaho Power Company, NV Energy, PacifiCorp, Portland General Electric Company, and Puget Sound Energy (the “Commenters”) and represent the fifth round of comments (see May 28, 2019; December 19, 2019; May 20, 2020, and August 12, 2020 joint comments). Together with the Motion to Intervene and Protest of the EIM Entity Parties filed in FERC Docket No. ER19-2757 on September 26, 2019; it is the sixth time the Commenters have addressed these issues. The time has come to move this initiative forward.

2. Provide a summary of your organization's comments on this proposal:

In the Final Proposal, the CAISO would set the power balance penalty price used by the market to $2,000/MWh, and scale related price parameters accordingly, only for those intervals in which verified energy costs are greater than $1,000/MWh. Thus, the CAISO will use these higher priced parameters only when: (1) there is a submitted and cost-verified energy bid from a resource-specific resource greater than $1,000/MWh or (2) a CAISO-calculated “maximum import bid price,” used to screen the costs of imports, is greater than $1,000/MWh. The Commenters continue to support this element of proposal which is a significant improvement from the filing pending in Docket No. ER19-2757 and would maintain the power balance constraint parameter penalty price at $1,000/MWh during the overwhelming number of intervals.

3. Provide your organization’s feedback on the Power Balance Constraint Relaxation Pricing and Constraint Penalty Prices as described in section 4.1:

When the market uses the penalty prices scaled to a $2,000/MWh power balance constraint penalty price and must relax the power balance constraint, the CAISO proposes to set energy prices based on the amount of the shortfall in supply to meet demand. If the shortfall is no more than a calculated threshold value based on the NERC Balancing Authority Area Limit (BAALLow), then the market will set energy prices based on the price of the highest-priced cleared economic bid. Otherwise, the market will set prices based on the $2,000/MWh power balance constraint penalty price.

While the Commenters accept the proposal for purposes of moving this initiative forward, it is important to note that the BAALLow limit is not an indication of scarcity in an EIM Entity Balancing Authority Area. The normal deployment and replenishment of reserves within allotted timeframes is not a shortage event. See Price Formation in Organized Wholesale Markets, Staff Analysis of Shortage Pricing in RTO and ISO Markets October 2014 at 5 -7. According to the CAISO, “[t]his proposed threshold value represents the amount of supply that can be less than load while still maintaining system frequency within reliability criteria.” While the Commenters support the adoption of the CAISO’s proposal for a uniform, transparent mechanism to set the threshold value, the Commenters ask the CAISO to recognize that it is a proxy value but not a demonstration of scarcity.

The Commenters support further review of scarcity pricing in the CAISO’s markets. The CAISO acknowledges the concerns stakeholders have regarding scarcity pricing, and is addressing these as part of the Flexible Ramping Product Refinements initiative. Additionally, concerns will be addressed in Bundle 3 of the Extended Day-Ahead Market (EDAM) initiative or in a separate stakeholder initiative. The Commenters look forward to these future discussions and request that the CAISO continue to prioritize further review of scarcity pricing.

4. Provide your organization’s feedback on screening import and virtual bids greater than $1,000/MWh as described in section 4.2:
5. Provide your organization’s feedback on the application of screening import and virtual bids greater than $1,000/MWh to Resource Adequacy Imports as described in section 4.2.1:
6. Provide your organization’s feedback on the Maximum Import Bid Price Calculation topic as described in section 4.2.2:
7. Provide your organization’s feedback on the proposed EIM classification as described in section 5:

The CAISO proposes that the EIM Governing Body should have an advisory role in the approval of the proposed changes. The Commenters do not challenge this recommendation. The Commenters note that the history of this initiative is a great example of the need to proceed expeditiously with the proposal of the Governance Review Committee to implement full joint authority between the EIM Governing Body and the CAISO Board of Governors. In response to prior proposals, the Commenters questioned whether the initiative met the subjective test of being in response to the expressed “primary driver” concerns of EIM Entities. Then, after the CAISO, recommended that each EIM Balancing Authority Area would propose a permissible band calculated by their documented operational practices, the EIM Entities noted that the initiative would apply in a unique or different manner in the Balancing Authority Areas of the EIM Entities. The CAISO never addressed or even recognized this aspect of their prior proposal which was rejected in the Final Proposal’s use of a generally-applicable criteria.

What is clear, however, is that the application of the power balance constrain parameter price applies differently in the EIM where there is no co-optimization of ancillary services, no automatic recognition of ancillary service deployment, and a resource sufficiency test with physical separation to prevent leaning. The fact that a generally-applicable criteria could affect the EIM Entities in a different way than the CAISO Balancing Authority Area, illustrates the need for joint authority.

8. Additional comments on the FERC Order 831 – Import Bidding and Market Parameters final proposal:

Pacific Gas & Electric
Submitted 09/14/2020, 04:47 pm

Contact

e-mail: jur8@pge.com

phone: 202-297-7914

1. Provide your organization’s overall position on the FERC Order 831 – Import Bidding and Market Parameters final proposal:
No position

While PG&E agrees that the CAISO’s proposal is an incremental improvement on simply raising the import bid cap to $2000, PG&E believes CAISO should request an additional extension to raising the bid cap (particularly for non-resource specific RA imports) to consider both the events of the recent August 2020 high prices and the intersection of RA rule reforms.  PG&E believes that given the extreme summer events that occurred in August 2020 which left Californians with rotating electric interruptions and CAISO and WECC energy market prices above the bid caps, CAISO and FERC should take a more holistic look at bid caps in the West and California needs to plan for Resource Adequacy based on actual operating realities.  CAISO can raise the bid $2,000, however if bilateral markets can settle above $1000 for a 16-hour block of energy, then California could be outbid for that energy. As such, sound Resource Adequacy rules that can be counted on to provide the reliability benefits and energy flow that they were purchased for and at reasonable costs for energy is important to maintaining a stable and reliable market.

From an RA perspective California should not be paying for import capacity to only then have to compete for that associated energy in the markets, particularly when energy is scarce in the West and prices are at or above $1000/MWh. Raising the bid cap for certain RA import based on a shaped hub price as a part of FERC Order 831 compliance will require California to compete at higher prices, but price competition to incent RA imports should not be the solution to scarce conditions around the West.   Rather than figuring out a shaped price based on bilateral hubs, PG&E recommends CAISO simply require any import RA resources that can’t cost justify based on actual physical costs (such as increases in gas prices) to bid in at or below the current $1,000/MWh cap.

PG&E respects FERC’s Order to raise the bid cap from $1,000 to $2,000 and appreciates the CAISO’s considerations in doing so, however PG&E does not think that raising bid caps even higher in the bilateral markets or for CAISO are appropriate solutions in the future to addressing resource allocation during scarcity. If anything, further reduction of the West wide price caps should be considered to be reduced in the future to limit the market power suppliers have over a 16 hour block of energy during scare conditions.

Finally, PG&E can agree that virtual bids do not need to be limited by the maximum import bid price when the bid cap is raised, however the CAISO should continue to suspend virtual biding when there is actual scarcity concerns to ensure that the appropriate resources are committed in the day ahead and available in real time and any curtailment of exports are implemented with the appropriate priority.

2. Provide a summary of your organization's comments on this proposal:

Our previous objections not withstanding, PG&E looks forward to working with the CAISO as a part of the BPM process for shaping mitigated prices based on the bilateral hub price based on a single day with the stipulation that the sample day needs to have a price greater than $200. The CAISO argued that the shape of prices is different on high priced days, necessitating a higher price day to proportionally shape the hub price to reflect a higher price CAISO day. PG&E acknowledges this shaping difference, however the proportional shape of CAISO prices can vary and fluctuate tremendously based on how high the peak price is and looks forward to working with CAISO on an appropriate methodology. 

3. Provide your organization’s feedback on the Power Balance Constraint Relaxation Pricing and Constraint Penalty Prices as described in section 4.1:

PG&E appreciates the CAISO’s consideration of an appropriate megawatt threshold value that would make it appropriate to raise the penalty prices and bid cap.

4. Provide your organization’s feedback on screening import and virtual bids greater than $1,000/MWh as described in section 4.2:

PG&E does not oppose the CAISO’s proposal to screen and reduce RA imports to the maximum import bid price, but not apply the same screen to non-RA import bids and virtual bids.

5. Provide your organization’s feedback on the application of screening import and virtual bids greater than $1,000/MWh to Resource Adequacy Imports as described in section 4.2.1:

PG&E agrees with the CAISO’s proposal the limit RA import bids to the maximum import bid price when the bid cap is raised to $2000. RA imports should be held to stricter and lower bidding standards than non-RA imports as stipulation for receiving capacity payments.

6. Provide your organization’s feedback on the Maximum Import Bid Price Calculation topic as described in section 4.2.2:

As stated above, PG&E looks forward to working with CAISO to shape bilateral hub prices, not withstanding our concerns about applying a shaped price above $1000/MWh to RA imports.

Additional PG&&E opposes the CAISO’s proposal to calculate the maximum import bid price based on an energy price component that uses the maximum of Mid-C or Palo Verde.  As shown in August during the heatwave, there can be a sharp price difference between the two hubs and CAISO should not shape prices based on the higher when it would not reflect the market in which the RA import is sourcing from.

7. Provide your organization’s feedback on the proposed EIM classification as described in section 5:

No comment

8. Additional comments on the FERC Order 831 – Import Bidding and Market Parameters final proposal:

Powerex Corp.
Submitted 09/04/2020, 02:22 pm

1. Provide your organization’s overall position on the FERC Order 831 – Import Bidding and Market Parameters final proposal:
No position

Please see Powerex's comments available at 

https://powerex.com/sites/default/files/2020-09/CAISO%20Import%20Bidding%20and%20Market%20Parameters%20%28FERC%20Order%20831%29%20%E2%80%93%20Final%20Proposal.pdf

2. Provide a summary of your organization's comments on this proposal:

Please see Powerex's comments available at 

https://powerex.com/sites/default/files/2020-09/CAISO%20Import%20Bidding%20and%20Market%20Parameters%20%28FERC%20Order%20831%29%20%E2%80%93%20Final%20Proposal.pdf

3. Provide your organization’s feedback on the Power Balance Constraint Relaxation Pricing and Constraint Penalty Prices as described in section 4.1:

Please see Powerex's comments available at 

https://powerex.com/sites/default/files/2020-09/CAISO%20Import%20Bidding%20and%20Market%20Parameters%20%28FERC%20Order%20831%29%20%E2%80%93%20Final%20Proposal.pdf

4. Provide your organization’s feedback on screening import and virtual bids greater than $1,000/MWh as described in section 4.2:

Please see Powerex's comments available at 

https://powerex.com/sites/default/files/2020-09/CAISO%20Import%20Bidding%20and%20Market%20Parameters%20%28FERC%20Order%20831%29%20%E2%80%93%20Final%20Proposal.pdf

5. Provide your organization’s feedback on the application of screening import and virtual bids greater than $1,000/MWh to Resource Adequacy Imports as described in section 4.2.1:

Please see Powerex's comments available at 

https://powerex.com/sites/default/files/2020-09/CAISO%20Import%20Bidding%20and%20Market%20Parameters%20%28FERC%20Order%20831%29%20%E2%80%93%20Final%20Proposal.pdf

6. Provide your organization’s feedback on the Maximum Import Bid Price Calculation topic as described in section 4.2.2:

Please see Powerex's comments available at 

https://powerex.com/sites/default/files/2020-09/CAISO%20Import%20Bidding%20and%20Market%20Parameters%20%28FERC%20Order%20831%29%20%E2%80%93%20Final%20Proposal.pdf

7. Provide your organization’s feedback on the proposed EIM classification as described in section 5:

Please see Powerex's comments available at 

https://powerex.com/sites/default/files/2020-09/CAISO%20Import%20Bidding%20and%20Market%20Parameters%20%28FERC%20Order%20831%29%20%E2%80%93%20Final%20Proposal.pdf

8. Additional comments on the FERC Order 831 – Import Bidding and Market Parameters final proposal:

Please see Powerex's comments available at 

https://powerex.com/sites/default/files/2020-09/CAISO%20Import%20Bidding%20and%20Market%20Parameters%20%28FERC%20Order%20831%29%20%E2%80%93%20Final%20Proposal.pdf

Shell Energy
Submitted 09/04/2020, 04:25 pm

Contact

ian.d.white@shell.com

1. Provide your organization’s overall position on the FERC Order 831 – Import Bidding and Market Parameters final proposal:
Support with caveats
2. Provide a summary of your organization's comments on this proposal:

Shell Energy emphasizes the importance of aligning price caps in the CAISO and the other load areas in the
west to mitigate the potential for significant market distortions and seams issues that may otherwise arise
if prices are misaligned.

3. Provide your organization’s feedback on the Power Balance Constraint Relaxation Pricing and Constraint Penalty Prices as described in section 4.1:

Shell Energy supports relaxing the power balance constraints if there is a publicly accessible market-based
pricing index such as Mid-C or Palo Verde, external to the CAISO BAA, which settles above $1000/MWh,
in addition to the ISO’s other proposed considerations.

Shell Energy understands the CAISO priority for transparency, and urges the CAISO to post publicly, via the
OASIS page, when a cost-verified bid in excess of $1000/MWh is cleared. This will provide important and
timely information to market participants.

Further, Shell Energy notes that during times of stressed system conditions, out-of-market actions such as
exceptional dispatch and load biasing will likely be employed, so using the NERC BAAL standard of
approximately 234 MW for which to relax the power balance constraints is too high a threshold—
especially since other non-market action will likely already be deployed. Shell Energy agrees with other
commenters (WPTF, Powerex) that a graduated system be employed to avoid penalty pricing erroneously
for small MW shortages; however, a shortage is still a scarcity—and penalty pricing should be employed
to send proper market signals.

4. Provide your organization’s feedback on screening import and virtual bids greater than $1,000/MWh as described in section 4.2:

Shell Energy notes the CAISO grid is, at times, highly reliant upon economy energy imports to meet firm load
obligations inside the CAISO BAA. Imports are, highly complex and subject to numerous quantitative and
qualitative factors such as fuel costs, transmission availability, opportunity costs etc. Screening non-RA
import offers and subjecting them to the CAISO’s MIBP may not capture the true costs of providing an
import to the CAISO market. With this caveat, Shell Energy supports the proposal that non-RA import
offers above $1000/MWh be accepted when the power balance constraint penalty is in place. We
support not accepting a bid if the aforementioned conditions are not met; as opposed to accepting and
then mitigating the bid.

5. Provide your organization’s feedback on the application of screening import and virtual bids greater than $1,000/MWh to Resource Adequacy Imports as described in section 4.2.1:

Shell Energy believes it is discriminatory to apply additional bidding limitations to RA import resources. These
import resources have the same quantitative and qualitative factors as discussed above which apply to
setting “costs” for providing service. The MIBP may not reflect the costs to provide service as RA
resources may have costs in excess of the calculated MIBP. It would be impracticable to price into the
sale of system RA from imports the potential costs associated with extreme market events. Further,
exempting RA imports from make-whole payments is inequitable and without merit.

Different price mitigation strategies applied to economy energy imports vs. RA imports will result in market distortions
and likely unintended and unanticipated consequences. We are also concerned that FERC will see this distortion as affecting well-functioning markets and wholesale price formation and will likely disallow price caps on some energy imports to the CAISO.

6. Provide your organization’s feedback on the Maximum Import Bid Price Calculation topic as described in section 4.2.2:

Shell Energy supports use of the higher of the Palo Verde or Mid-Columbia index from which to calculate the MIBP. Shell Energy supports exploring the applicable super-peak index rather than the standard index.

Shell Energy is concerned that the daily-MIBP calculation will be an inadequate measure of relative costs

• The scaling factors must be transparent and published ahead of time, and cannot be arbitrary or opaque. The ISO has indicated a “similar day” will be chosen from which to mirror the scalars for the MIBP—this selection of a “similar day” is a subjective way to apply the MIBP. Further, there is no assurance that the “scaling” will have a similar profile or peak hour. This may result in the MIBP for some hours – potentially peak hours needed by the ISO – with low scaled prices, resulting in less supply available to the ISO to meet load. This scaling proposal is an invitation for distortionary effects on markets as the SMEC may not align with the peak hour set in a bilateral index. Shell Energy suggests that the MIBP simply be limited to 200% of the applicable super-peak index for either Palo Verde or Mid-Columbia, whichever is higher.

• Additionally, we encourage the ISO to use the DA MIBP as a starting point for RT and adjust RT if cost-based bids reset the MIBP. These DA bilateral indices are traded 24 to 72 hours in advance of the flow date. This time lag could result in MIBPs being set improperly, thus the CAISO would need to monitor RT. Unit trips, transmission de-rates, or VER availability may change and greatly affect pricing which will not be picked up by the CAISO DA MIBP calculation. 7.

7. Provide your organization’s feedback on the proposed EIM classification as described in section 5:

No Comment 

8. Additional comments on the FERC Order 831 – Import Bidding and Market Parameters final proposal:

Failure to correlate prices between the CAISO and neighboring BAAs will introduce seams issues and lead to potential market distortions. Scaling introduces a level of subjectivity not warranted and has the potential to misalign with the actual peak hour and to distort wholesale price formation—an issue of concern to FERC. These effects may deprive the ISO of energy needed to meet ISO load during critical system conditions. We look forward to a mechanism to properly align CAISO prices with neighboring BAA prices to ensure well-functioning markets, adequate supply and minimal seams issues.

Southern California Edison
Submitted 09/04/2020, 09:43 am

Contact

Aditya Chauhan, aditya.chauhan@sce.com

1. Provide your organization’s overall position on the FERC Order 831 – Import Bidding and Market Parameters final proposal:
Support

Southern California Edison (SCE) is generally supportive of the California Independent System Operator’s (CAISO) Final proposal[1].

 

SCE supports the proposal but reiterates its concerns in its prior comments

SCE continues to urge the CAISO to subject all imports, not just RA, to the CAISO calculated maximum import bid[2]. This is necessary to work towards RT liquidity. SCE also continues to maintain its other earlier comments[3].

SCE supports the reasonable proposal to use NERC BAAL standard to determine the threshold level which in turn determines whether prices are set by the highest priced bid or the $2000/MWh PBC. SCE agrees with the CAISO that this is appropriately reflective of real conditions, supported by reliability standards, and consistent with the spirit of Order 831.

 


[1] http://www.caiso.com/InitiativeDocuments/FinalProposal-FERCOrder831-ImportBidding-MarketParameters.pdf

[2] SCE also notes that the CAISO is not proposing mitigating import bids under its System Market Power Mitigation Initiative at this stage.

[3] http://www.caiso.com/InitiativeDocuments/SCEComments-FERCOrder831-ImportBidding-MarketParameters-RevisedDraftFinalProposal.pdf

2. Provide a summary of your organization's comments on this proposal:
3. Provide your organization’s feedback on the Power Balance Constraint Relaxation Pricing and Constraint Penalty Prices as described in section 4.1:
4. Provide your organization’s feedback on screening import and virtual bids greater than $1,000/MWh as described in section 4.2:
5. Provide your organization’s feedback on the application of screening import and virtual bids greater than $1,000/MWh to Resource Adequacy Imports as described in section 4.2.1:
6. Provide your organization’s feedback on the Maximum Import Bid Price Calculation topic as described in section 4.2.2:
7. Provide your organization’s feedback on the proposed EIM classification as described in section 5:
8. Additional comments on the FERC Order 831 – Import Bidding and Market Parameters final proposal:
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