Comments on GHG 11/12 Call

1. Does your organization intend to use the out of market accounting and reporting approach report to meet organizational or regulatory emission reduction goals?

The Salt River Project Agricultural Improvement and Power District (SRP), Arizona Public Service (APS) and Tucson Electric Power (TEP), collectively identified as the Arizona Utilities, are currently evaluating the use of market accounting and reporting to inform their approved carbon reduction corporate goals. The Arizona Utilities plan to continue engaging with the CAISO to address any concerns with this accounting and reporting approach that may impact their approved carbon reduction corporate goals in order to ensure equitable and transparent reporting. Arizona does not have state-mandated GHG emission reduction goals. SRP’s goals are set and monitored by its governing Board of Directors. 

2. Is your organization’s preference to use a residual rate calculated at the Balancing Authority Area (BAA), Load Serving Entity (LSE), or Scheduling Coordinator (SC) level? [See slides 14, and 18-21 of the November 12, GHG Coordination Working Group presentation]

The Arizona Utilities prefer to use a residual rate calculated at the LSE level rather than the BAA or SC level.  The Arizona Utilities have Corporate Sustainability Goals that are based on retail energy.  Including loads and resources at a BAA or SC level would not accurately represent the generation used to serve retail load.  The Arizona Utilities recognize that providing statistics at an LSE level will require additional time and cost to implement, as resources and contracts would need to be mapped to an LSE, however it will provide for more accurate and meaningful accounting. 

The Arizona Utilities also recommend an option for LSEs to identify embedded loads that may not be part of retail load to allow the report to accurately capture emission that serve the retail component of loads for an entity.

3. Does your organization have a need for, or see value in, the residual rate BAA level approach as an interim, near-term, approach ahead of the development of a LSE or SC level residual rate which may take additional cost and time? [See slides 14-21 of the presentation]

While the LSE level residual rate is useful for tracking, the BAA level rate could be used for informational purposes.

4. If your organization prefers a more granular LSE – level approach for the residual rate:

a. Describe why your organization prefers this level of granularity. b. How do you suggest data sharing with LSEs? c. Should the load data used, be actual data or forecast data?

a. Describe why your organization prefers this level of granularity.

Please reference the Arizona Utilities comment to question #2.

b. How do you suggest data sharing with LSEs?

The Arizona Utilities recommend CAISO share raw data with LSEs to allow flexibility to meet their reporting needs.

c. Should the load data used, be actual data or forecast data?

Load data should be actual, metered load to produce an accurate report.

5. Please provide your organization’s feedback on the concept of a residual climate region. [see slides 9, 14, and 19]

a. Does your organization support the notion of a BAA or LSE level climate region? Why or why not? b. Does your organization have any feedback on if there needs to be a CAISO determination of who is in the climate region for producing a residual emissions rate?

a. Does your organization support the notion of a BAA or LSE level climate region? Why or why not?

The Arizona Utilities do not support the notion of a BAA or LSE level climate region.  Such an approach would give preferential treatment to entities situated in a climate region and distort the market by potentially causing cost-shifts.  The Arizona Utilities remain concerned that this would have preferential treatment of entities with state-mandated goals such as Oregon utilities as compared to entities with voluntary corporate GHG reduction goals such as the Arizona Utilities.  Arizona does not have state-mandated GHG emission reduction goals, but the Arizona Utilities do have voluntary corporate GHG reduction goals. SRP’s goals are set and monitored by its governing Board of Directors.  While it remains unclear how a climate region will be determined, the Arizona Utilities are concerned that any mechanism that treats participants differently and preferentially could create cost shifts and artificial market distortions that are preferential in treatment.

b. Does your organization have any feedback on if there needs to be a CAISO determination of who is in the climate region for producing a residual emissions rate?

This question may not be applicable to the Arizona Utilities, as they do not support a climate region determined by CAISO or participants. The Arizona Utilities support the use of a single residual rate.

6. When it comes to the types of supply contracts that support accounting for either the LSE or SC level residual rate [see slide 11]:

a. If your organization believes contracts less than 10 days are necessary to include, please describe what types of contracts these represent and how material they are to your portfolio. b. Please provide your organization’s feedback on if contracts need to be validated between parties, and if so, who would perform this function.

a. If your organization believes contracts less than 10 days are necessary to include, please describe what types of contracts these represent and how material they are to your portfolio.

For accurate accounting, the framework should include contracts less than 10 days. These contracts would include short-term (primarily day ahead or real time) bilateral contracts that could be material, depending on system or market conditions.  These contracts could be resource-specific or system generation.

b. Please provide your organization’s feedback on if contracts need to be validated between parties, and if so, who would perform this function.

The Arizona Utilities would support further discussion on this topic, including which elements of the contracts would need to be shared and which would not need to be shared to preserve confidentiality.

7. If your organization is a multi-jurisdictional entity (MJE), how do you want to be modeled, and is it at the BAA, LSE, or SC level [see slide 9]?

While the Arizona Utilities are not multi-jurisdictional entities, their BAA’s do contain embedded loads.  Ideally, the model will allow entities to identify these loads and calculate emissions used to serve load at a retail level.

8. For all approaches, please provide your suggestions on if and how the CAISO should account for EDAM/WEIM transfers, storage, DR, etc.

The Arizona Utilities encourage further discussion on accounting for transfers, storage, and DR.  One option for accounting for storage and pumping is to treat them as a load during withdrawal periods.  The Arizona Utilities recommend coordination with CARB as needed to unify the approach if possible. 

9. Regardless of the approach considered, what approach does your organization recommend the CAISO assume for the emission factor for resources that are not participating in the report?

Should the CAISO take the approach to assume that if an emissions factor isn’t specified in the master file, that the CAISO relies on an emissions rate determined by regulators; if that is not available, the ISO uses the resource’s emissions factor reported to the Energy Information Agency (EIA); if that is not available the ISO uses eGRID data; and if that is not available the CAISO would impute the emissions factor based on its heat rate? [see slide 12]

The Arizona Utilities agree with the approach outlined by the CAISO.

10. Based on your organization’s preferred residual rate approach, who should be able to view this data? [see slide 12]

Only the reporting entity and relevant state regulatory bodies with jurisdiction should be able to view this data.  For any public reports, data should be presented in an aggregated form to protect confidentiality.

11. Rather than the Accounting and Reporting Approach, and receiving data on the residual rate, would your organization prefer to see either an average of the marginal resource(s) at a gen-node or an average of all resources at a gen-node? If so, what value does this provide? [see slides 22-23]

The Arizona Utilities do not have a use case for receiving data on a gen-node basis at this time.

12. Please provide your organization’s feedback on the counterfactual options approach presentation. [see slides 25-32]

The Arizona Utilities appreciate the information shared by the CAISO on the counterfactual options.  At a high level, the position of the Arizona Utilities is that the counterfactual should minimize secondary dispatch and avoid passing costs to the non-GHG regulation zone.  At this time, the Arizona Utilities welcome additional discussion of the counterfactual options and requests simulated examples as discussed by the CAISO.

13. Is there any feedback your organization would like to provide that is not already captured?

The Arizona Utilities request clarification on how linking the California and Washington cap and trade programs may impact the pricing zone design and emissions reporting, as well as possible future cap and trade programs.

1. Does your organization intend to use the out of market accounting and reporting approach report to meet organizational or regulatory emission reduction goals?

 Yes – with the caveat that BPA is not subject to these programs but has load obligations to ~135 retail utilities, many of whom have GHG reporting or compliance obligations and would benefit from the out-of-market accounting and reporting approach.  BPA’s customers have been clear that emissions impacts from BPA’s participation in an organized market is of utmost importance to them.

2. Is your organization’s preference to use a residual rate calculated at the Balancing Authority Area (BAA), Load Serving Entity (LSE), or Scheduling Coordinator (SC) level? [See slides 14, and 18-21 of the November 12, GHG Coordination Working Group presentation]

 BPA strongly believes LSE is the correct level for GHG accounting and reporting. (Note, this assumes LSE level would include BPA as a power provider, as BPA is not technically an LSE). 

3. Does your organization have a need for, or see value in, the residual rate BAA level approach as an interim, near-term, approach ahead of the development of a LSE or SC level residual rate which may take additional cost and time? [See slides 14-21 of the presentation]

 At this time, BPA does not believe there is value to BPA in the BAA level approach.

4. If your organization prefers a more granular LSE – level approach for the residual rate:

a. Describe why your organization prefers this level of granularity. b. How do you suggest data sharing with LSEs? c. Should the load data used, be actual data or forecast data?

The LSE-level approach is the correct level of granularity for GHG reporting.  In the electricity sector, GHG reporting is typically load-based.  BAA level granularity would inherently presume that the generation in a BAA first and foremost meets load in the BAA.  However, that is often not the case.  For example in BPA’s BAA there may be IPPs committed to load in another BA. Additionally, some BAA’s are comprised of LSEs both inside and external to GHG zones, rendering BAA-level accounting impractical.  

For load within BPA’s BAA the CAISO could treat BPA as the “LSE” and provide the data to BPA.  While BPA is technically not an LSE, it has contractual load obligations to retail utilities, many of whom BPA supplies all or most of their power demand.  BPA could then include the data in its reporting of emissions, which is then utilized by its utility customers, similar to how reporting is done today.  We recognize this situation may be unique to BPA.

Bonneville suggests that load data should be actual data; forecast data would be incorrect and require a true-up.

5. Please provide your organization’s feedback on the concept of a residual climate region. [see slides 9, 14, and 19]

a. Does your organization support the notion of a BAA or LSE level climate region? Why or why not? b. Does your organization have any feedback on if there needs to be a CAISO determination of who is in the climate region for producing a residual emissions rate?

BPA supports the CAISO recognizing that this could be done through mutual agreement by LSEs.  BPA does not have feedback on how climate regions should be determined at this time.

6. When it comes to the types of supply contracts that support accounting for either the LSE or SC level residual rate [see slide 11]:

a. If your organization believes contracts less than 10 days are necessary to include, please describe what types of contracts these represent and how material they are to your portfolio. b. Please provide your organization’s feedback on if contracts need to be validated between parties, and if so, who would perform this function.

As BPA stated in its prior comments, if the CAISO did not enable less than 10-day contracts to be recorded and assigned to the purchasing entity then it could hinder the value and use of low-carbon specified source contracts in the future.  This could reduce motivation for utilities and IPPs with clean  resources (including ACS) to offer short term bilateral transactions to balance load.   

BPA feels the contracts should be validated to be recorded.  This is a function that would likely need to be done by the CAISO.

7. If your organization is a multi-jurisdictional entity (MJE), how do you want to be modeled, and is it at the BAA, LSE, or SC level [see slide 9]?

Per BPA’s previous statements, BPA should be modeled at the “LSE” level with BPA as the “LSE” for loads within the BPA BAA.  While BPA is not a traditional LSE in the sense that BPA does not meet retail load, BPA believes this is most akin to the provided modeling BPA as a market participant and supplier of power responsible for meeting load in its service territory.

8. For all approaches, please provide your suggestions on if and how the CAISO should account for EDAM/WEIM transfers, storage, DR, etc.

 No comment at this time. 

9. Regardless of the approach considered, what approach does your organization recommend the CAISO assume for the emission factor for resources that are not participating in the report?

Should the CAISO take the approach to assume that if an emissions factor isn’t specified in the master file, that the CAISO relies on an emissions rate determined by regulators; if that is not available, the ISO uses the resource’s emissions factor reported to the Energy Information Agency (EIA); if that is not available the ISO uses eGRID data; and if that is not available the CAISO would impute the emissions factor based on its heat rate? [see slide 12]

BPA recommends the CAISO use EIA/eGRID data, and, if not available, impute an emission factor based on heat rate. BPA does not object to using state emission rates, but BPA is not sure if states all default to EIA data or could potentially use different emission factors.  Thus, BPA the CAISO check in with air regulators if it would like to prioritize using state determined emission factors to avoid potential conflicts.

10. Based on your organization’s preferred residual rate approach, who should be able to view this data? [see slide 12]

 It is not clear to BPA what “this” data would encompass.  However, BPA notes it is not concerned with sharing aggregated residual emission data publicly.

11. Rather than the Accounting and Reporting Approach, and receiving data on the residual rate, would your organization prefer to see either an average of the marginal resource(s) at a gen-node or an average of all resources at a gen-node? If so, what value does this provide? [see slides 22-23]

While this may be interesting data, it does not replace the need for LSE level accounting and reporting.

12. Please provide your organization’s feedback on the counterfactual options approach presentation. [see slides 25-32]

At this time, BPA is still digesting this information and does not have any comments.  Given the complexity of the topic, BPA needs more time to understand and think about it.

13. Is there any feedback your organization would like to provide that is not already captured?

BPA continues to appreciate the CAISO creating space for this dialogue and working towards a GHG accounting approach that will work for many.  BPA encourages the CAISO to continue to promote iterative stakeholder dialogue on these challenging issues.  Additionally, BPA feels the group could benefit from stepping back and looking at what the overarching objective is and seeing how all of these pieces fit together.

1. Does your organization intend to use the out of market accounting and reporting approach report to meet organizational or regulatory emission reduction goals?

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

2. Is your organization’s preference to use a residual rate calculated at the Balancing Authority Area (BAA), Load Serving Entity (LSE), or Scheduling Coordinator (SC) level? [See slides 14, and 18-21 of the November 12, GHG Coordination Working Group presentation]

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

3. Does your organization have a need for, or see value in, the residual rate BAA level approach as an interim, near-term, approach ahead of the development of a LSE or SC level residual rate which may take additional cost and time? [See slides 14-21 of the presentation]

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

4. If your organization prefers a more granular LSE – level approach for the residual rate:

a. Describe why your organization prefers this level of granularity. b. How do you suggest data sharing with LSEs? c. Should the load data used, be actual data or forecast data?

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

5. Please provide your organization’s feedback on the concept of a residual climate region. [see slides 9, 14, and 19]

a. Does your organization support the notion of a BAA or LSE level climate region? Why or why not? b. Does your organization have any feedback on if there needs to be a CAISO determination of who is in the climate region for producing a residual emissions rate?

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

6. When it comes to the types of supply contracts that support accounting for either the LSE or SC level residual rate [see slide 11]:

a. If your organization believes contracts less than 10 days are necessary to include, please describe what types of contracts these represent and how material they are to your portfolio. b. Please provide your organization’s feedback on if contracts need to be validated between parties, and if so, who would perform this function.

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

7. If your organization is a multi-jurisdictional entity (MJE), how do you want to be modeled, and is it at the BAA, LSE, or SC level [see slide 9]?

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

8. For all approaches, please provide your suggestions on if and how the CAISO should account for EDAM/WEIM transfers, storage, DR, etc.

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

9. Regardless of the approach considered, what approach does your organization recommend the CAISO assume for the emission factor for resources that are not participating in the report?

Should the CAISO take the approach to assume that if an emissions factor isn’t specified in the master file, that the CAISO relies on an emissions rate determined by regulators; if that is not available, the ISO uses the resource’s emissions factor reported to the Energy Information Agency (EIA); if that is not available the ISO uses eGRID data; and if that is not available the CAISO would impute the emissions factor based on its heat rate? [see slide 12]

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

10. Based on your organization’s preferred residual rate approach, who should be able to view this data? [see slide 12]

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

11. Rather than the Accounting and Reporting Approach, and receiving data on the residual rate, would your organization prefer to see either an average of the marginal resource(s) at a gen-node or an average of all resources at a gen-node? If so, what value does this provide? [see slides 22-23]

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

12. Please provide your organization’s feedback on the counterfactual options approach presentation. [see slides 25-32]

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

13. Is there any feedback your organization would like to provide that is not already captured?

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

1. Does your organization intend to use the out of market accounting and reporting approach report to meet organizational or regulatory emission reduction goals?

Yes. It is useful for the Green-e® Energy program and all voluntary renewable energy programs and customers to have information about resource-specific allocations of energy to LSEs by the markets, both to facilitate the sale of “bundled” renewable energy products sourcing from generation in the market and to avoid double counting and double claiming where this information may be used for sate compliance or reporting programs. Since RECs are the accounting and verification instrument used in the voluntary renewable energy market (as they are for state RPS and other load-based GHG programs), it will be critical that the Accounting and Reporting Approach (and such an approach will only be useful to the voluntary market and other programs that rely on RECs if it) is coordinated with the REC system—meaning, it includes a means by which to report null power and a null power-adjusted residual mix, ownership of the associated attributes or RECs is required for allocation of a renewable generation resource to an LSE, and allocation data is shared with WREGIS.

2. Is your organization’s preference to use a residual rate calculated at the Balancing Authority Area (BAA), Load Serving Entity (LSE), or Scheduling Coordinator (SC) level? [See slides 14, and 18-21 of the November 12, GHG Coordination Working Group presentation]

An LSE-level residual rate, as presented, would be preferred and would be consistent with other residual mix data that is commonly use and needed for GHG emissions reporting at the LSE and consumer level. See our Guidance for Calculating Residual Mix.

3. Does your organization have a need for, or see value in, the residual rate BAA level approach as an interim, near-term, approach ahead of the development of a LSE or SC level residual rate which may take additional cost and time? [See slides 14-21 of the presentation]

Not at this time.

4. If your organization prefers a more granular LSE – level approach for the residual rate:

a. Describe why your organization prefers this level of granularity. b. How do you suggest data sharing with LSEs? c. Should the load data used, be actual data or forecast data?

No comment at this time.

5. Please provide your organization’s feedback on the concept of a residual climate region. [see slides 9, 14, and 19]

a. Does your organization support the notion of a BAA or LSE level climate region? Why or why not? b. Does your organization have any feedback on if there needs to be a CAISO determination of who is in the climate region for producing a residual emissions rate?

No additional comments at this time.

6. When it comes to the types of supply contracts that support accounting for either the LSE or SC level residual rate [see slide 11]:

a. If your organization believes contracts less than 10 days are necessary to include, please describe what types of contracts these represent and how material they are to your portfolio. b. Please provide your organization’s feedback on if contracts need to be validated between parties, and if so, who would perform this function.

 No comment at this time.

7. If your organization is a multi-jurisdictional entity (MJE), how do you want to be modeled, and is it at the BAA, LSE, or SC level [see slide 9]?

N/A

8. For all approaches, please provide your suggestions on if and how the CAISO should account for EDAM/WEIM transfers, storage, DR, etc.

 No comment at this time.

9. Regardless of the approach considered, what approach does your organization recommend the CAISO assume for the emission factor for resources that are not participating in the report?

Should the CAISO take the approach to assume that if an emissions factor isn’t specified in the master file, that the CAISO relies on an emissions rate determined by regulators; if that is not available, the ISO uses the resource’s emissions factor reported to the Energy Information Agency (EIA); if that is not available the ISO uses eGRID data; and if that is not available the CAISO would impute the emissions factor based on its heat rate? [see slide 12]

No comment at this time.

10. Based on your organization’s preferred residual rate approach, who should be able to view this data? [see slide 12]

In general, LSE-specific allocation data (disaggregated by resource and/or LSE) can be made available only to LSEs, if there are confidentiality concerns. Market residual mix information should be publicly available along with other aggregated generation, allocation and attribution data.

In addition, market allocation data, aggregated by generator and by month, should be shared with WREGIS. We have recommended that CAISO provide to WREGIS, for each generating unit registered in WREGIS, the quantity of electricity in a given period that was bid into the market and either attributed to load on a resource-specific basis in certain states or zones or allocated on a resource-specific basis to an LSE. Specifically, for each resource that is registered with WREGIS, the market should report to WREGIS the sum of allocated MW for that resource in a given month to LSEs by state before REC issuance for that month. Additional LSE- and resource-specific data can be shared with WREGIS (e.g., allocated MW volume information by resource) if an LSE elects to do so.

WREGIS could be asked to put this information on an equivalent quantity of RECs from each resource. That information would be seen by the individual account holders of those RECs and REC program administrators. We do not expect that WREGIS would issue public reports that include market allocation information. Furthermore, WREGIS-registered generators that have already agreed to use CAISO as the qualified reporting entity for generation data used for certificate issuance in WREGIS could simply agree to have CAISO share attribution/allocation data with WREGIS as well.

11. Rather than the Accounting and Reporting Approach, and receiving data on the residual rate, would your organization prefer to see either an average of the marginal resource(s) at a gen-node or an average of all resources at a gen-node? If so, what value does this provide? [see slides 22-23]

 This information would not be equivalent to market residual mix information and would be less useful to LSEs and consumers reporting emissions associated with delivered and purchased electricity. It may be useful for other purposes, e.g., evaluating the impact of purchased generation or load management activities.

12. Please provide your organization’s feedback on the counterfactual options approach presentation. [see slides 25-32]

None at this time.

13. Is there any feedback your organization would like to provide that is not already captured?

Not at this time.

1. Does your organization intend to use the out of market accounting and reporting approach report to meet organizational or regulatory emission reduction goals?

Yes. PacifiCorp serves retail customers in several states with renewables and emissions-reduction compliance obligations. 

2. Is your organization’s preference to use a residual rate calculated at the Balancing Authority Area (BAA), Load Serving Entity (LSE), or Scheduling Coordinator (SC) level? [See slides 14, and 18-21 of the November 12, GHG Coordination Working Group presentation]

In the near term, PacifiCorp would utilize the residual rate calculated at the BAA level as opposed to the LSE or SC level but is supportive of the iterative approach CAISO suggests to developing LSE-level information. PacifiCorp’s existing compliance paradigms allow it to claim resources to retail load (on a planning basis and in actuals) for its compliance – which are examples of the “resource assignment to load” approach that is inherent in the out-of-market accounting and reporting approach proposed by CAISO.  As such, PacifiCorp will calculate internally its resource assignment allocation at the LSE level for “primary compliance” reporting and does not need the CAISO to do a preparation of this information, thus and can rely on the BAA approach. It may be appropriate to also reduce the BAA residual mix by LSE assignments as an interim approach. 

PacifiCorp acknowledges that it is likely an LSE-level approach will need to be developed, but for PacifiCorp’s requirements, this is less of a near-term priority. Currently, PacifiCorp’s states’ greenhouse gas reporting and compliance requirements use a fixed annual emissions factor assigned to unspecified power. However, it is anticipated that GHG paradigms will leverage “residual” emissions rates to more accurately reflect the market emissions rate in this type of reporting. To report on an apples-to-apples basis, in principle, a residual mix incorporating an LSE-assigned resource approach should be used consistently across all entities who are regulated at the LSE level. Development of this view is a lower near-term priority because PacifiCorp’s compliance relies on assigned resources to load. This approach reduces its risk exposure relying on emitting market purchases on a forecast basis, because PacifiCorp’s resource planning incorporates regional compliance targets. Therefore, the emissions of the residual mix will pose only pose a significant risk to its compliance position when the Company is short for its allocated generation to load in actuals. 

3. Does your organization have a need for, or see value in, the residual rate BAA level approach as an interim, near-term, approach ahead of the development of a LSE or SC level residual rate which may take additional cost and time? [See slides 14-21 of the presentation]

PacifiCorp is responsible for multi-state reporting at the LSE level and does so by cost allocating its resources to those states from both sides of its system (i.e., PACE and PACW). This mechanism is based on longstanding Commission-approved cost allocation agreements reflecting PacifiCorp’s system sharing among retail customers. As the agreements of PacifiCorp resources paid by retail customers are at the LSE retail load level, and are accounted for at the generator level based on agreed percentage-based methodologies of resource shares allocated to those retail customers, PacifiCorp proposes, at the onset of the residual rate, to allow PacifiCorp to reduce from the residual mix its assigned resources for compliance states.  

PacifiCorp recognizes that this is an imperfect approach that would blend between the BAA and LSE method when accounting for resources that are claimed for compliance so that they are not accounted for in the residual mix of resources. Overall, this would address the protections against double counting requirements in frameworks such as Washington’s CETA. PacifiCorp understands the CAISO will have to upgrade its technology in order to accommodate LSE level reporting granularity but believes this is the correct approach to accommodate entities which have compliance obligations at the LSE level that would differ from an obligation shown at the BAA level. 

4. If your organization prefers a more granular LSE – level approach for the residual rate:

a. Describe why your organization prefers this level of granularity. b. How do you suggest data sharing with LSEs? c. Should the load data used, be actual data or forecast data?

Ultimately, air regulators and utility commissions will govern the reporting and compliance requirements for LSEs. Currently, PacifiCorp’s compliance frameworks for both forecast and actuals are calculated at the annual level, so an annual frequency would be sufficient. It is anticipated that a refinement of the unspecified rate will be required in both actuals and forecast data and PacifiCorp suggests CAISO develop approaches for both. 

5. Please provide your organization’s feedback on the concept of a residual climate region. [see slides 9, 14, and 19]

a. Does your organization support the notion of a BAA or LSE level climate region? Why or why not? b. Does your organization have any feedback on if there needs to be a CAISO determination of who is in the climate region for producing a residual emissions rate?

At this time, PacifiCorp is generally neutral on this proposal until a more specific proposal on how this climate region would be developed. PacifiCorp agrees that this proposal would need some type of cooperative agreement with stakeholders and a verifier to confirm the emissions intensity of potential participants to ensure that the climate regions residual rate would in fact be cleaner than the remainder of the market or else the overall integrity of the climate regions goal would be jeopardized and the incentive to join reduced. 

6. When it comes to the types of supply contracts that support accounting for either the LSE or SC level residual rate [see slide 11]:

a. If your organization believes contracts less than 10 days are necessary to include, please describe what types of contracts these represent and how material they are to your portfolio. b. Please provide your organization’s feedback on if contracts need to be validated between parties, and if so, who would perform this function.

PacifiCorp does not anticipate material differences to the residual rate based on its own for contract types that are 10 days or less, however, is supportive of this enhancement if market participants find value in this functionality. It would be ideal for the CAISO to validate through a market application, ahead of the market run, to ensure accurate data is being reflected from both market participants. 

7. If your organization is a multi-jurisdictional entity (MJE), how do you want to be modeled, and is it at the BAA, LSE, or SC level [see slide 9]?

As stated above, PacifiCorp would benefit from the BAA level residual rate and suggests exploring, also reducing the BAA residual rate by its assigned resources to load, depending on evolution of regulations. Ultimately an LSE-level approach would be most appropriate. 

8. For all approaches, please provide your suggestions on if and how the CAISO should account for EDAM/WEIM transfers, storage, DR, etc.

PacifiCorp does not have a strong preference at this time and would like additional discussions in the working group around this topic.  

9. Regardless of the approach considered, what approach does your organization recommend the CAISO assume for the emission factor for resources that are not participating in the report?

Should the CAISO take the approach to assume that if an emissions factor isn’t specified in the master file, that the CAISO relies on an emissions rate determined by regulators; if that is not available, the ISO uses the resource’s emissions factor reported to the Energy Information Agency (EIA); if that is not available the ISO uses eGRID data; and if that is not available the CAISO would impute the emissions factor based on its heat rate? [see slide 12]

PacifiCorp anticipates this question is not applicable to its organization as its resources will be participating in the framework. If other market participants do not have this data available for the CAISO to utilize for the report, PacifiCorp would defer other stakeholders as to the preferred data sets to substitute for Masterfile information. Presumably, resource specific data, such as EIA data, or regulator data, would be a more granular approach and eGRID data would represent a regional view. There may be tradeoffs with accuracy of each data set, however, PacifiCorp does not have a preference at this time. 

10. Based on your organization’s preferred residual rate approach, who should be able to view this data? [see slide 12]

Because the data represents market participants at an aggregate level (mitigating confidentiality concerns), coupled with the intention to use the residual rate as a market-wide default rate in public reporting, PacifiCorp believes the data should be available publicly. 

11. Rather than the Accounting and Reporting Approach, and receiving data on the residual rate, would your organization prefer to see either an average of the marginal resource(s) at a gen-node or an average of all resources at a gen-node? If so, what value does this provide? [see slides 22-23]

PacifiCorp prefers the Accounting and Reporting approach because it would support regulatory evolution as it currently understands its trajectory. CAISO could also prepare the data suggested above, but PacifiCorp does not anticipate using it at this time. 

12. Please provide your organization’s feedback on the counterfactual options approach presentation. [see slides 25-32]

PacifiCorp continues to support the CAISO’s FERC approved counterfactual approach as described during the workshop. 

13. Is there any feedback your organization would like to provide that is not already captured?

No, PacifiCorp is appreciative of the CAISO staff and their hardwork on this continued effort.

1. Does your organization intend to use the out of market accounting and reporting approach report to meet organizational or regulatory emission reduction goals?

Yes. Portland General Electric (“PGE”) views the accounting and reporting approach as an important initial step to harmonize expanded participation in the CAISO EDAM and our emissions reductions goals outlined in part by HB2021 (Oregon). Notwithstanding the outcome of this initiative, PGE will need to request approval from Oregon Department of Quality to change the current DEQ accounting and reporting approach.

PGE desires inclusion in the GHG intra-pricing zone and views state policies like Oregon’s HB 2021 to be at least as stringent as the cap-and-trade programs in place in California and Washington. PGE’s clean portfolio buildout is well underway and could result in considerable excess generation during various hourly intervals. PGE’s surplus of non-emitting resources will benefit all market participants, including (but not exclusive to) those participants with binding emissions reduction targets. PGE’s requested changes are driven by the desire to fully account for this value.

PGE acknowledges the hesitancy from various working group participants to support this change. One stated concern is that PGE’s lack of a pricing mechanism to signal GHG constraints could present risks to market functioning during some intervals. This risk needs to be considered in conjunction with the risk for entities within non-priced, GHG capped states: that market prices and margins derived from market sales will not enable such participants to buy allowances to offset emission compliance obligations. 

PGE believes that there are additional avenues to address market price distortion concerns. For example, Commissioner Tawney’s (Public Utilities Commission of Oregon) presentation materials at the May 2024 working group referenced a potential GHG shadow price mechanism, which could allow PGE to avoid spreading GHG pricing impacts to other market participants while preserving the overall benefits of the improved accounting and reporting design.

PGE is evaluating the implications of a GHG shadow pricing mechanism, including what regulatory approvals would be required, and requests additional conversation on this design option.

2. Is your organization’s preference to use a residual rate calculated at the Balancing Authority Area (BAA), Load Serving Entity (LSE), or Scheduling Coordinator (SC) level? [See slides 14, and 18-21 of the November 12, GHG Coordination Working Group presentation]

PGE’s preference is to use a residual rate calculated at the LSE level. This granularity would allow PGE to track emissions specific to each LSE within the PGE BAA.

3. Does your organization have a need for, or see value in, the residual rate BAA level approach as an interim, near-term, approach ahead of the development of a LSE or SC level residual rate which may take additional cost and time? [See slides 14-21 of the presentation]

There may be a value in the residual rate BAA level approach as an interim solution due to the additional efforts potentially required to develop either the LSE or SC-level residual rate. However, PGE would strongly encourage that the BAA-level approach explicitly be interim only, including determining beginning and end dates.

4. If your organization prefers a more granular LSE – level approach for the residual rate:

a. Describe why your organization prefers this level of granularity. b. How do you suggest data sharing with LSEs? c. Should the load data used, be actual data or forecast data?

1. PGE desires information specifically on an LSE level since that is the basis of the HB2021 reporting rules.
2. We would like a simple portal where authorized users from each entity can access specific datasets. Access to each portal should be limited to the specific entities or their agents.
3. PGE requests additional discussion regarding which load data should be used, whether actual or forecast. If forecast data is used, along which timeline? PGE continues to evaluate this question internally.

PGE requests additional discussion regarding which load data should be used, whether actual or forecast.

5. Please provide your organization’s feedback on the concept of a residual climate region. [see slides 9, 14, and 19]

a. Does your organization support the notion of a BAA or LSE level climate region? Why or why not? b. Does your organization have any feedback on if there needs to be a CAISO determination of who is in the climate region for producing a residual emissions rate?

PGE recognizes and appreciates the efforts of CAISO staff in proposing the residual climate region concept in consideration of PGE and other stakeholders’ feedback. PGE still advocates for our inclusion in the intra-GHG pricing zone noted in response #1, though PGE values the climate region concept as an additional tool.

The climate region concept could benefit entities with emissions reduction goals and policies. However, as mentioned in response #1, market participants within the existing intra-GHG pricing zones already have particularly stringent GHG emissions reduction goals. Therefore, depending on the eventual criteria for inclusion in the residual climate region, PGE is concerned that the remaining entities included in the Climate Region may not offer a clean enough residual emissions factor to ensure PGE meets its GHG emissions reduction target in part via market participation.

In essence, PGE would be in a position to sell non-emitting energy to other market participants while buying from the market at a higher emissions factor from market participants that are not mandated by law to build an ever-greener portfolio.

6. When it comes to the types of supply contracts that support accounting for either the LSE or SC level residual rate [see slide 11]:

a. If your organization believes contracts less than 10 days are necessary to include, please describe what types of contracts these represent and how material they are to your portfolio. b. Please provide your organization’s feedback on if contracts need to be validated between parties, and if so, who would perform this function.

PGE believes that contracts less than 10 days in duration are necessary to include in the GHG accounting tool. This is because these contracts may be entered into as means to procure clean energy for PGE retail customers. Because these contracts could be needed to maintain compliance with PGE GHG goals, it’s important that the CAISO have the ability to track and assign the non-emitting attributes to PGE or any emissions-constrained LSE.

Such contracts would need to be validated between parties to ensure accuracy and traceability. This could entail a CAISO-hosted interface where one market participant confirms the transaction entered by the other party. PGE is interested in exploring precedent in other organized markets to mitigate excessive development costs.

7. If your organization is a multi-jurisdictional entity (MJE), how do you want to be modeled, and is it at the BAA, LSE, or SC level [see slide 9]?

N/A

8. For all approaches, please provide your suggestions on if and how the CAISO should account for EDAM/WEIM transfers, storage, DR, etc.

Storage accounting, as outlined in the WPTF design, is appropriate. PGE is interested in participating in future conversations regarding demand response accounting and other market functions. At this time, PGE believes these applications would be secondary or better suited as EDAM year one enhancements.

9. Regardless of the approach considered, what approach does your organization recommend the CAISO assume for the emission factor for resources that are not participating in the report?

Should the CAISO take the approach to assume that if an emissions factor isn’t specified in the master file, that the CAISO relies on an emissions rate determined by regulators; if that is not available, the ISO uses the resource’s emissions factor reported to the Energy Information Agency (EIA); if that is not available the ISO uses eGRID data; and if that is not available the CAISO would impute the emissions factor based on its heat rate? [see slide 12]

The proposed approach seems reasonable for resources not participating in the report. It would offer various avenues for reporting an accurate emission factor and is appropriately sequenced.

10. Based on your organization’s preferred residual rate approach, who should be able to view this data? [see slide 12]

Individual participating entities and their respective regulators should have access to their own residual rate data. Granular data specific to any sole entity should not be published externally.

11. Rather than the Accounting and Reporting Approach, and receiving data on the residual rate, would your organization prefer to see either an average of the marginal resource(s) at a gen-node or an average of all resources at a gen-node? If so, what value does this provide? [see slides 22-23]

PGE seeks clarity that the question of an average of all resources versus an average of the marginal resources at a gen node would be complimentary to the Accounting and Reporting Approach, not a replacement.

PGE also requests additional discussion of this choice at upcoming working groups to clarify how this design choice would impact the functionality and accuracy of the accounting tool.

12. Please provide your organization’s feedback on the counterfactual options approach presentation. [see slides 25-32]

PGE continues to internally evaluate the counterfactual options. PGE has no additional comment at this time.

13. Is there any feedback your organization would like to provide that is not already captured?

1. Does your organization intend to use the out of market accounting and reporting approach report to meet organizational or regulatory emission reduction goals?

Not currently.  The clean energy requirements applied to most PGP members is the Clean Energy Transformation Act (CETA) in Washington. CETA compliance is based on Renewable Energy Certificates (RECs) and does not require load-based accounting.  However, it is possible that the out of market accounting and reporting approach could be used to validate use of RECs under CETA for energy dispatched into organized markets. The Washington Utilities and Transportation Commission (UTC) has recently issued draft rules implementing CETA that appears to contemplate this approach.[1]

PGP’s primary regulatory concern with the out of market accounting and reporting approach has to do with the double-counting provisions of CETA and the treatment of excess clean energy that is contributed to a residual mix. Under CETA, if excess clean energy is identified by fuel type and reflected in a residual mix as zero-emitting, the associated RECs may not be eligible for CETA compliance. If an entity with excess clean energy retains all of the RECs associated with their owned/contracted resource production, the underlying energy is considered ‘null’ power i.e., stripped of its renewable attributes including fuel type and emissions. PGP has understood that there will be an approach to remove null power from the residual rate and is interested in further dedicated discussion on this issue.  

[1] See Docket UE-210183

2. Is your organization’s preference to use a residual rate calculated at the Balancing Authority Area (BAA), Load Serving Entity (LSE), or Scheduling Coordinator (SC) level? [See slides 14, and 18-21 of the November 12, GHG Coordination Working Group presentation]

PGP’s response to this question depends upon the treatment of null power and may depend on the view of Washington State regulators with respect to the application of Washington’s double-counting rules. Calculating the residual rate at the BAA level could make it more challenging for individual LSEs to confirm that their individual clean excess is not being reflected in the residual mix by fuel type and as non-emitting. However, aggregating at the BAA level may alleviate double-counting concerns if hourly individual LSE null power values are not published. PGP is interested in more focused discussion on this topic.

Outside of concerns related to addressing null power, PGP supports the goal of calculating a residual rate at the LSE level, since this is where individual entity emissions accounting is performed. Until there is an LSE-level calculation as part of the accounting and reporting framework, entities will need to perform additional calculations or make separate assumptions to create their individual emissions reports.

3. Does your organization have a need for, or see value in, the residual rate BAA level approach as an interim, near-term, approach ahead of the development of a LSE or SC level residual rate which may take additional cost and time? [See slides 14-21 of the presentation]

PGP does not have a specific need for a residual rate but does see potential value in the interim approach of calculating the residual rate at the BAA level.

4. If your organization prefers a more granular LSE – level approach for the residual rate:

a. Describe why your organization prefers this level of granularity. b. How do you suggest data sharing with LSEs? c. Should the load data used, be actual data or forecast data?

As noted above, PGP’s preference depends on how null power and double-counting issues are resolved. However, load-based emissions accounting, which is the type of emissions accounting that uses a residual rate, is generally performed at the LSE-level. If the intent of the out of market accounting and reporting approach is to create a report that entities can use for compliance purposes, it will likely need to be a the LSE-level. While this is a general rule, there may be instances, for example Bonneville load-following customers who are not balancing owned/contracted resources with load, where calculations do not need to be performed at the individual LSE level.

Since the accounting is performed after the market runs, the load data used should be actual data.

5. Please provide your organization’s feedback on the concept of a residual climate region. [see slides 9, 14, and 19]

a. Does your organization support the notion of a BAA or LSE level climate region? Why or why not? b. Does your organization have any feedback on if there needs to be a CAISO determination of who is in the climate region for producing a residual emissions rate?

PGP has some concerns with the climate region concept but would appreciate additional discussion to more fully understand how it may work and the potential impacts. While recognizing the factors underlying the request for a climate zone, PGP does have some concern with the optics and potential arbitrary creation of ‘winners and losers’ and the challenge of defining who is eligible to access a cleaner residual rate. Further, this approach may make sense in the context of California, Oregon, and Washington if those states policies have spurred renewable investment in those states. However, the logic begins to break down if entities or states in the ‘climate region’ are more geographically separated. Other than Colorado, states in the Intermountain West generally do not have clean energy goals; however, a number of utilities within those states have corporate clean energy goals. It may prove challenging to rationally exclude any entities from the climate region unless they volunteer to opt out.

In addition or as a potential alternative to the concept of a climate region, PGP recommends consideration of sub-regional or state-specific residual rates. This approach would base the calculation of a sub-regional rate based on considerations of geography and transmission constraints versus state policy decisions. A sub-regional rate could be developed and published with the footprint-wide rate as well as individual BAA rates. Sub-regional rates could be developed at the request of individual market participants or handled through a process that could be established in this initiative.

6. When it comes to the types of supply contracts that support accounting for either the LSE or SC level residual rate [see slide 11]:

a. If your organization believes contracts less than 10 days are necessary to include, please describe what types of contracts these represent and how material they are to your portfolio. b. Please provide your organization’s feedback on if contracts need to be validated between parties, and if so, who would perform this function.

PGP supports a validation process for contracts between parties. While open to approaches, it seems reasonable to enable either counterparty to enter or submit contractual data and request validation from the non-submitting counterparty.

7. If your organization is a multi-jurisdictional entity (MJE), how do you want to be modeled, and is it at the BAA, LSE, or SC level [see slide 9]?

PGP is not an MJE but a number of PGP members are LSEs with Bonneville’s multi-state BAA. As noted, PGP does not have specific compliance requirements that must be met through an LSE-specific report. However, particularly for entities within Bonneville’s BAA that are not load-following customers, LSE-level modeling and reporting is more useful given Bonneville’s size and number of customers. As noted above, PGP may have concerns depending on the treatment of null power and whether individual LSEs will be confident that any excess clean energy for which RECs are retained are appropriately reflected in any residual mix.

8. For all approaches, please provide your suggestions on if and how the CAISO should account for EDAM/WEIM transfers, storage, DR, etc.

PGP does not have a specific suggestion at this time and recommends further discussion on each of these topics to better understand the issues and potential options for addressing them.

9. Regardless of the approach considered, what approach does your organization recommend the CAISO assume for the emission factor for resources that are not participating in the report?

Should the CAISO take the approach to assume that if an emissions factor isn’t specified in the master file, that the CAISO relies on an emissions rate determined by regulators; if that is not available, the ISO uses the resource’s emissions factor reported to the Energy Information Agency (EIA); if that is not available the ISO uses eGRID data; and if that is not available the CAISO would impute the emissions factor based on its heat rate? [see slide 12]

PGP supports this approach.

10. Based on your organization’s preferred residual rate approach, who should be able to view this data? [see slide 12]

In general, PGP supports transparency and the publication of data unless it is confidential and commercially sensitive. However, PGP is concerned that 5-minute granularity raw data may be challenging for regulators and non-market participants to manage. It may be useful to dedicate future discussions on report and data publication format to better understand the metrics that may be published. PGP is also specifically concerned with respect to how null power may be identified and published.

11. Rather than the Accounting and Reporting Approach, and receiving data on the residual rate, would your organization prefer to see either an average of the marginal resource(s) at a gen-node or an average of all resources at a gen-node? If so, what value does this provide? [see slides 22-23]

This data has the potential to be useful for multiple purposes and PGP is supportive of further discussion on this. However, marginal or average locational emissions do not accomplish the same goals as the out of market accounting and reporting approach the working group is considering.  Critical to the accounting and reporting approach is the incorporation of owned and contracted resources and entity-specific claims to energy and emissions. Under this approach, the residual rate reflects who “owns” the energy and emissions and aligns the reporting and accounting with the individual investments made by market participants. Locational emissions rates may be useful for other purposes but do not reflect this critical piece for purposes of load-based emissions accounting.

12. Please provide your organization’s feedback on the counterfactual options approach presentation. [see slides 25-32]

PGP appreciates the additional overview of counterfactual approaches, in particular the comparison slide and tradeoffs reflected on slide 33.

13. Is there any feedback your organization would like to provide that is not already captured?

PGP requests some additional discussion regarding the approach for allocating BAA or LSE-level emissions to the residual rate. The assumption in CAISO’s materials is that the allocation will be done at the average emissions rate of the LSE or BAA. However, there may be other rational approaches to performing this allocation that entities may employ in their own reporting approaches e.g., allocation to the residual based on economic stack.  Entities with mixed portfolios may also be interested in ensuring that renewable resources are allocated to their own load first to avoid issues of null power and double-counting. PGP requests further information regarding the assumption that an average emissions approach will be used.

Another issue that may need further clarification and discussion is how to treat entities who are not participating in the reporting and accounting approach. PGP’s assumption has been that not all LSEs (or BAAs) may be interested in submitting the needed contractual data or other information required to participate in the accounting framework. It is not clear from the materials or discussion whether CAISO views the program as voluntary or not.  This could use clarification, and, if it is not required for all market participants, some discussion is needed with respect to how to treat entities who are not participating.

1. Does your organization intend to use the out of market accounting and reporting approach report to meet organizational or regulatory emission reduction goals?

SDG&E is currently evaluating the suitability of the out-of-market accounting and reporting approach report for meeting our organizational and regulatory emissions reduction goals. California IOUs already have mandatory reporting requirements at the CPUC for Renewable Portfolio Standards goals, but understanding CAISO’s planned methodologies, metrics, data granularity, and reporting timelines will help us assess whether the report can be used for other purposes. 

2. Is your organization’s preference to use a residual rate calculated at the Balancing Authority Area (BAA), Load Serving Entity (LSE), or Scheduling Coordinator (SC) level? [See slides 14, and 18-21 of the November 12, GHG Coordination Working Group presentation]

Because the cost of implementing LSE- or BAA-based accounting could differ significantly, SDG&E requests that CAISO provide initial cost estimates, as it would be helpful to better understand the cost of implementation for both approaches. Additionally, it would also be helpful to understand what LSE-specific compliance requirements for those LSEs participating in EDAM would benefit from having LSE-specific reporting and what reporting challenges those LSEs would face if the CAISO adopted a BAA-reporting level approach. For example, it would be helpful to understand if there are LSE or entity-specific reporting requirements for LSEs or entities that will or plan to participate in EDAM.

3. Does your organization have a need for, or see value in, the residual rate BAA level approach as an interim, near-term, approach ahead of the development of a LSE or SC level residual rate which may take additional cost and time? [See slides 14-21 of the presentation]

SDG&E appreciates CAISO’s efforts to provide context for the cost to participants under a BAA Level residual, SC residual, or LSE residual rate.  However, it would be helpful if CAISO could provide initial estimates for each of these options, given that certain approaches could increase costs for LSEs.

4. If your organization prefers a more granular LSE – level approach for the residual rate:

a. Describe why your organization prefers this level of granularity. b. How do you suggest data sharing with LSEs? c. Should the load data used, be actual data or forecast data?

No response.

5. Please provide your organization’s feedback on the concept of a residual climate region. [see slides 9, 14, and 19]

a. Does your organization support the notion of a BAA or LSE level climate region? Why or why not? b. Does your organization have any feedback on if there needs to be a CAISO determination of who is in the climate region for producing a residual emissions rate?

No comments.

6. When it comes to the types of supply contracts that support accounting for either the LSE or SC level residual rate [see slide 11]:

a. If your organization believes contracts less than 10 days are necessary to include, please describe what types of contracts these represent and how material they are to your portfolio. b. Please provide your organization’s feedback on if contracts need to be validated between parties, and if so, who would perform this function.

No comments.

7. If your organization is a multi-jurisdictional entity (MJE), how do you want to be modeled, and is it at the BAA, LSE, or SC level [see slide 9]?

No comments.

8. For all approaches, please provide your suggestions on if and how the CAISO should account for EDAM/WEIM transfers, storage, DR, etc.

No comments.

9. Regardless of the approach considered, what approach does your organization recommend the CAISO assume for the emission factor for resources that are not participating in the report?

Should the CAISO take the approach to assume that if an emissions factor isn’t specified in the master file, that the CAISO relies on an emissions rate determined by regulators; if that is not available, the ISO uses the resource’s emissions factor reported to the Energy Information Agency (EIA); if that is not available the ISO uses eGRID data; and if that is not available the CAISO would impute the emissions factor based on its heat rate? [see slide 12]

While SDG&E is still internally discussing the best approach to maintain data integrity and consistency for the emission factor for resources that are not participating in the report, CAISO’s tiered approach appears to ensure the use of accurate and reliable data, while also providing the flexibility to use alternative sources when necessary.

10. Based on your organization’s preferred residual rate approach, who should be able to view this data? [see slide 12]

Given the sensitivity of LSE GHG data, it should generally remain private and be accessible only to authorized internal personnel within the LSE and CAISO authorized representatives.

11. Rather than the Accounting and Reporting Approach, and receiving data on the residual rate, would your organization prefer to see either an average of the marginal resource(s) at a gen-node or an average of all resources at a gen-node? If so, what value does this provide? [see slides 22-23]

No comments.

12. Please provide your organization’s feedback on the counterfactual options approach presentation. [see slides 25-32]

No comments.

13. Is there any feedback your organization would like to provide that is not already captured?

N/A

1. Does your organization intend to use the out of market accounting and reporting approach report to meet organizational or regulatory emission reduction goals?

No comment.

2. Is your organization’s preference to use a residual rate calculated at the Balancing Authority Area (BAA), Load Serving Entity (LSE), or Scheduling Coordinator (SC) level? [See slides 14, and 18-21 of the November 12, GHG Coordination Working Group presentation]

Because the GHG Accounting and Reporting is intended to facilitate LSE level accounting of emissions associated with serving load, WPTF considers that it would be most appropriate to calculate the market residual emission rate at the LSE level. However, we believe that additional discussion is necessary of the method used to calculate the emissions associated with excess energy contributed by an LSE to the market residual when that entity is long. Given the differences in state policies and voluntary goals for GHG accounting, CAISO may need to accommodate other methods for contributing excess energy to the residual market supply. For instance, LSEs may prefer, potentially at the direction of a state regulator, that excess energy be considered as being supplied by gas generators first. This method is consistent with the California Power Source Disclosure program and the CPUC’s IRP planning for LSE GHG targets.

3. Does your organization have a need for, or see value in, the residual rate BAA level approach as an interim, near-term, approach ahead of the development of a LSE or SC level residual rate which may take additional cost and time? [See slides 14-21 of the presentation]

WPTF recommends that CAISO prioritize development of an LSE level residual rate.

4. If your organization prefers a more granular LSE – level approach for the residual rate:

a. Describe why your organization prefers this level of granularity. b. How do you suggest data sharing with LSEs? c. Should the load data used, be actual data or forecast data?

1. As stated in our response to 1 above, the intent of the GHG Accounting and Reporting is to support LSE level accounting of emissions associated with serving load. To achieve this objective, it is necessary that all calculations related to GHG accounting, including the residual rate, be performed at the LSE level.
    
2. WPTF recommends that CAISO provide an interface for individual LSEs to confidentially provide data to enable GHG accounting to the CAISO, and to receive confidential GHG accounting data from CAISO.
    
3. GHG accounting for LSEs individually and collectively should be on the basis of actual load.

5. Please provide your organization’s feedback on the concept of a residual climate region. [see slides 9, 14, and 19]

a. Does your organization support the notion of a BAA or LSE level climate region? Why or why not? b. Does your organization have any feedback on if there needs to be a CAISO determination of who is in the climate region for producing a residual emissions rate?

1. WPTF believes that the CAISO’s GHG Accounting and Reporting program could support the notion of climate region at the LSE level.  Under this model, LSEs that are interested in cooperating with other LSEs to enable use of a lower emission rate during periods when LSE are short energy could voluntarily do so. To be clear, this would not be part of the intra-GHG Pricing Zone adjustment but rather an additional step or adjustment solely betweeen supply from the cooperating LSEs. Such an arrangement would effectively enable one or more LSE’s clean energy length to serve another LSE(s) load during periods when the latter entity has a shortfall. Excess energy would be contributed to the market residual supply only when the climate region as a whole is long (i.e. designated supply of all LSEs in the climate region exceeds collective load of those LSEs. 
    
2. The LSEs that elect to participate in such arrangements would define the terms of their arrangement among themselves (e.g. conditions for LSE participation, and how excess energy of individual participating LSEs supports load of LSEs with a shortfall) and advise CAISO of these terms and participating entities.  It is not necessary for CAISO to define the terms of any climate region although we suspect that state regulators may need to engage at some point.

6. When it comes to the types of supply contracts that support accounting for either the LSE or SC level residual rate [see slide 11]:

a. If your organization believes contracts less than 10 days are necessary to include, please describe what types of contracts these represent and how material they are to your portfolio. b. Please provide your organization’s feedback on if contracts need to be validated between parties, and if so, who would perform this function.

WPTF anticipates that new contractual models and markets for transacting clean energy will evolve as demand for clean energy resources increases, and LSEs are subject to increasingly stringent GHG emission or clean energy targets or voluntary goals. While contracts of less than 10 days are not currently common, the GHG Accounting and Reporting program should provide LSEs the option of claiming contracts with duration of less 10 days. However, it may not be necessary to enable these contracts to be registered with CAISO prior to the DA market run. Further discussion of this issue is warranted.

7. If your organization is a multi-jurisdictional entity (MJE), how do you want to be modeled, and is it at the BAA, LSE, or SC level [see slide 9]?

No comment.

8. For all approaches, please provide your suggestions on if and how the CAISO should account for EDAM/WEIM transfers, storage, DR, etc.

Assuming by EDAM/WEIM transfers, the CAISO is referring to the optimized transfers between BAAs which are unspecified, then they should be added to (imports) or taken from (exports) the market residual. WPTF would appreciate confirmation from the CAISO that they are solely talking about the unspecified transfers between BAAs.

For DR, WPTF does not believe they need to be accounted for assuming actual load is used (as opposed to forecasted load). Whenever a DR is dispatched, this will show up as reduced actual load. If it’s accounted for in some way in the GHG accounting and reporting, it may create a double counting issue.

As WPTF proposed in our presentations on GHG Accounting and Reporting, we do not believe that it is necessary to separately account for emissions associated with charging and discharging of storage resources that are committed to particular LSEs. Rather, CAISO simply needs to designate the storage resources to the particular LSE, and adjust the LSE’s actual load by the amount of energy charged or discharged. To the extent the LSE also has a non-emitting resource associated with that storage (either contractually, co-located, or hybrid) those non-emitting resources will be in the LSE’s portfolio and help offset the increased load during storage charging hours which will more than likely be when the non-emitting resources are generating. In other words, the higher load during charging hours can be offset by the non-emitting generation.

Regarding IPP-owned storage resources that are not committed to an LSE that has elected to participate in GHG Accounting and Reporting (‘market storage’); emissions should be assigned to these resources when they are discharged using an emission rate that the resource was charged at. CAISO should enable storage resources to account for and track the energy used for charging and discharging in a manner analogous to tracking for LSEs. Specifically, CAISO should enable operators of storage resources to claim committed generation. This would cover both hybrid and co-located resources, as well as storage resources that have contractual relationships with non-emitting resources elsewhere in the grid. In periods when market storage resources are charging at levels in excess of any generation of the resource’s committed supply, this charging will be considered to be supplied by market residual energy – as will be done for LSEs. Unlike LSEs however, CAISO would track the emissions and emission rate associated with charging market storage resources (and as needed average over time) and use that emission rate when calculating the emissions contributed to the market residual supply when the storage resources discharge.  

9. Regardless of the approach considered, what approach does your organization recommend the CAISO assume for the emission factor for resources that are not participating in the report?

Should the CAISO take the approach to assume that if an emissions factor isn’t specified in the master file, that the CAISO relies on an emissions rate determined by regulators; if that is not available, the ISO uses the resource’s emissions factor reported to the Energy Information Agency (EIA); if that is not available the ISO uses eGRID data; and if that is not available the CAISO would impute the emissions factor based on its heat rate? [see slide 12]

WPTF prefers that CAISO use EPA’s eGRID annual average emission factor for all resources, where available, as those emission factors are based on data reported to EPA by resource operators. Calculation of emission factors for contracts and imports under state programs, such as those of California, Washington and Oregon is also based on EPA eGRID. Thus, use of the eGRID factors would promote consistency in GHG accounting at the state level. However, discussion with state regulators would be helpful.

10. Based on your organization’s preferred residual rate approach, who should be able to view this data? [see slide 12]

WPTF supports public reporting of aggregated data used to calculate the residual rate for each hourly interval. Such aggregated data should include the MW and associated emissions by fuel/technology type in the residual mix.

11. Rather than the Accounting and Reporting Approach, and receiving data on the residual rate, would your organization prefer to see either an average of the marginal resource(s) at a gen-node or an average of all resources at a gen-node? If so, what value does this provide? [see slides 22-23]

WPTF does not support calculation or provision of emissions data at the gen-node level.

12. Please provide your organization’s feedback on the counterfactual options approach presentation. [see slides 25-32]

WPTF disagrees with CAISO’s characterization of secondary dispatch on slide 26, as it suggests that any and all attribution of low or non-emitting resources to a GHG regulation area results in secondary dispatch. Rather, WPTF asserts that secondary dispatch occurs only when low or non-emitting resources are inappropriately attributed to GHG regulation areas. Because the definition of secondary dispatch is the basis by which the alternative counterfactual should be evaluated, it is important what this definition is. The definition of what is secondary dispatch is also a policy decision that requires input from regulators in the GHG regulation areas.

The purpose of the counterfactual is to approximate the optimal use of resources such that the amount of excess energy that can be attributed to serving load in a GHG area can be identified. What “excess” energy is in the context of GHG regulated areas is a policy discussion that needs to be had. For example, is it remaining energy above and beyond what would be used to serve local load or is it energy above and beyond what would be used to serve any load in the non-GHG regulated areas? Each counterfactual presented by the CAISO during the workshop assumes a different definition of excess energy and we as a stakeholder community need to engage in a policy discussion as to what the appropriate definition is for excess energy such that we can develop the best baseline for identifying available generation to be attributed to serve load in the GHG area.

CAISO counterfactual: Implicitly assumes that excess energy is energy remaining only after all resources not already contracted to serve load in the GHG regulation area first serve all other load. In other words, this counterfactual assumes excess clean energy outside the GHG-regulation area will first serve load in other areas outside the GHG-regulated area, even load in areas that the clean energy resources are not contracted to serve. This will have the impact of preventing any low cost non-emitting resources that are not contracted to load in the GHG regulation areas from being able to serve load in the GHG area, as those resources are likely to be fully dispatched in the counterfactual run. In doing so, it is (1) preventing the ability for the non-emitting resources to benefit from serving load in the GHG area and (2) have a higher cost overall because now higher-emitting resources are going to be used to serve load in the GHG area.

Vistra counterfactual: Implicitly assumes that resources in the non-GHG regulated area are first used to serve “local” load. This then allows any additional energy to be accessible by the market to serve either load in the GHG area or load outside the GHG area; it does not first assume excess energy outside the GHG area will first serve all load outside the GHG area. Additionally, because it would prevent transfers between BAAs, the Vistra counterfactual increases likelihood that some low-cost, non-emitting energy that is not contracted to load in the GHG regulation areas will be available to be attributed to the GHG regulation areas because those resources would only be dispatched up to the level of load in the host BAA in the counterfactual run. This is superior to the CAISO’s approach, as it puts the GHG regulation areas on a more equal footing with the rest of the market footprint in competing for clean energy.  

WPTF disagrees with the CAISO that the Vistra approach will increase secondary dispatch just because it results in more volume that can be attributed to serve load in the GHG area. Recall secondary dispatch is all based on whether or not the attributed capacity overlaps with the baseline and is more likely to occur when the actual schedule is closer to the baseline. The Vistra approach will likely result in a lower baseline and to the extent clean energy resources are dispatched well above the baseline in the actual market run, there is more capacity available to be attributed without overlapping with the baseline.

No GHG cost counterfactual: This counterfactual proposal is an interesting idea and one that warrants more clarification and ideally some examples that show how this type of model would work. More importantly though, this approach seems to be more than just changing the counterfactual run in the GHG market design and has some elements of a zonal approach we would like to better understand.

Based on the discussion during the last meeting, it is our understanding that the first run (i.e., without any GHG costs included) will set a level of imports that will be priced at an average emissions rate and charged to load. No resource will be attributed any of those MW. The second run (i.e., IFM run with GHG costs) will then determine how many more MW from external resources were needed to serve load in the GHG area and those will be attributed on a resource-specific basis and receive the GHG revenues. Furthermore, only resources dispatched above the counterfactual run will receive attribution. Thus, this seems like it could not only significantly impact the GHG cost and pricing but also the value proposition for resources external to the GHG area especially if non-emitting resources are no longer benefiting from the inframarginal GHG revenues because these low-cost non-emitting resources are likely to be dispatched to pmax during the counterfactual run.

13. Is there any feedback your organization would like to provide that is not already captured?

WPTF respectfully requests that the CAISO run some simulations and/or create excel models that show how the various counterfactuals would work using the same resource and load scenarios.