Comments on straw proposal and May 25-26 meeting discussion

Extended day-ahead market

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Comment period
May 27, 04:00 pm - Jun 16, 05:00 pm
Submitting organizations
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ACP-California
Submitted 06/16/2022, 02:23 pm

Submitted on behalf of
ACP-California

Contact

Caitlin Liotiris (ccollins@energystrat.com)

1. EDAM VOLUNTARY MODEL: Please provide your organization’s comments on the proposed structure of the EDAM voluntary participation model as described in section II.A.1 of the EDAM straw proposal.

ACP-California supports the expansion of Western organized wholesale markets, with an hope that incremental market development will continue, ultimately culminating with a Western RTO. The proposed, voluntary structure of EDAM appears to offer an important incremental step on the path towards further market integration. But ACP-California hopes EDAM truly is a “stepping stone” along the path to a full RTO in the West and one which can provide meaningful benefits to a diverse set of existing and future clean energy resources across the EDAM footprint. To that end, to the extent the EDAM market design can put participants on a glide path towards an RTO and begin to address issues that must be grappled with under an RTO, ACP-California supports those efforts. The voluntary nature of EDAM appears to offer an attractive option for Western utilities to take an incremental step in Western market advancement and, therefore, ACP-California supports the voluntary nature and structure outlined in the Straw Proposal.

2. EDAM FEES: Please provide your organization’s comments on the proposed framework of the EDAM fee structure as described in section II.A.2 of the EDAM straw proposal.

The voluntary EDAM model offered by CAISO, the proposed fee structure (allowing a single entity to move forward with EDAM and not requiring a critical mass), along with the absence of exit fees and a short exit notice period are likely to be strong incentives for Western utilities to begin participation in EDAM. Thus, ACP-California generally supports the approach CAISO has proposed for the EDAM fee structure. CAISO should ensure that the ultimate EDAM fee structure and exit provisions can maintain the same level of ease of entry/initiation of EDAM and exit as are currently proposed.

3. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on the concept of market transfers (occurring through the EDAM and WEIM) having equal priority to load to the extent an individual EDAM BAA faces severe emergency conditions as discussed in section II.A.3 of the EDAM straw proposal.
4. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on whether the failure of the day ahead resource sufficiency evaluation should have a bearing on the level of priority afforded to market transfers (EDAM and WEIM) souring from an EDAM BAA facing emergency conditions and sinking in the EDAM BAA that failed the resource sufficiency evaluation.
5. CONFIDENCE IN MARKET TRANSFERS: Please provide any additional comments on the topic of confidence in market transfers (occurring through the EDAM and WEIM).
6. TRANSMISSION COMMITMENT: Please provide your organization’s comments on the overall framework of transmission buckets in the context of making transmission available to the EDAM as described in section II.B.1 of the EDAM straw proposal.

The transmission commitment framework for EDAM needs to be considered holistically, including its implications for transmission purchases (shorter-term and long-term) outside of the EDAM framework, as those purchases will have important implications for the incentives to join EDAM and for how much transmission revenue may need to be collected via “Bucket 3.” Along these lines, CAISO needs to thoroughly consider the implications of the EDAM market design for Transmission Customers/Transmission Rights Holders and not only for Transmission Providers. To date, much of the discussion has focused on implications for BAAs or Transmission Service Providers. But those entities are directly affected by the incentives and implications for their Transmission Customers/Transmission Rights Holders. We encourage CAISO to broaden the considerations of transmission commitment to include the impacts on Transmission Customers/Transmission Rights Holders going forward.

In the subsequent comments, ACP-California recommends a number of technical workshops on transmission-related items to further flesh out the Straw Proposal and to further explore impacts on Transmission Customers. We point out concerns with the concept of automatically provisioning unscheduled point-to-point (PTP) transmission rights into Bucket 2, support use of an uplift charge (rather than a hurdle rate) for Bucket 3, and advocate for additional discussions on the potential transmission requirements that might be imposed within EDAM BAAs, as these have important implications for the EDAM transmission provision proposal.

7. TRANSMISSION COMMITMENT: Please provide your organization’s perspective on Bucket 2 transmission and whether it should be made available to the EDAM only through a voluntary framework or through a more general rule that transmission unscheduled by 10am of the day ahead is automatically made available to the EDAM for optimization as described in the straw proposal.
Consider the implications of transmission customers retaining the ability to exercise those transmission rights between the day ahead and real time markets and the potential implications on redispatch.

ACP-California understands the appeal of the proposal to automatically provision unscheduled PTP transmission rights for EDAM use via Bucket 2, as it would provide additional transmission for EDAM to use for optimization. However, we strongly oppose this proposal under the current market design and suggest additional discussion and workshops to further review this issue.

As CAISO understands, if EDAM automatically takes unscheduled PTP transmission rights for EDAM use, when those rights are scheduled on for use after the day-ahead market run, the real-time market will need to redispatch and there will be redispatch costs. Currently, those real-time redispatch costs are allocated through the EIM sub-allocation mechanisms, which are crude and do not ensure that the owners of the transmission rights are protected from redispatch costs, but simply allocates cost across metered demand and exports. Thus, if this proposal moves forward, it has the likely outcome of devaluing (or, conversely, increasing risks of) day-ahead and longer transmission service in EDAM footprints. This may have the unintended consequence of reducing transmission service purchase in EDAM BAAs, which would be problematic and increase the bucket of revenues that may need to be collected via Bucket 3.

ACP-California requests that CAISO consider this proposal, and its implications, in one of the technical workshops in late-June/early-July. This will provide stakeholders an opportunity to discuss the proposal, its implications, and potentially consider alternatives. One alternative that might be explored is providing some form of transmission cost compensation to transmission customers whose rights are used under this approach. These costs could potentially be collected via the same mechanism that is ultimately implemented for Bucket 3, which would have the benefit of treating Transmission Customers/Transmission Rights Holders consistently with Transmission Providers.

8. TRANSMISSION COMMITMENT: Please provide your organization’s perspective on the compensation options for bucket 3 transmission described in the EDAM straw proposal.
More specifically, consider whether Bucket 3 transmission rates should be reflected in the market optimization through a direct hurdle rate or should the reduced transmission revenues be addressed outside of the market optimization through after the fact cost recovery.

CAISO has considered several approaches for recovering costs associated with “Bucket 3” transmission. Approach 1 would generally use a hurdle rate within the market optimization. ACP-California generally opposes the use of hurdle rates in EDAM and encourages structures that would minimize or eliminate hurdle rates within the market optimization, such that EDAM commitment and dispatch benefits can be maximized.  Approach 2 would use a “reciprocity” framework consistent with the EIM framework for transmission use. While this approach is appealing, it is unlikely to be viable (without modification) in the day-ahead timeframe given the magnitude of transmission costs and the likely imbalance in cost impacts between potential participants. Thus, Approach 3, which would recover these costs via an uplift allocation, appears to be the optimal solution. ACP-California supports the use of Approach 3 and provides additional context in our response to question #9.

9. TRANSMISSION COMMITMENT: Please provide your organization's comments on the concept of Bucket 3 transmission costs being recovered outside of the market optimization, should the ISO through the EDAM process work toward a design for transmission revenue recovery, based on one of the options described (3A, 3B, 3C), in order to keep the EDAM entity whole as a result of EDAM participation.
Some questions to consider: are there additional variations to the described options; what should be the recoverable lost transmission revenues; how should the lost transmission revenues be allocated (or a transactional basis, across load in EDAM or to each EDAM entity to allocate to its customers); how do the described options impact bidding incentive in the EDAM market.

ACP-California generally supports Approach 3 for Bucket 3 transmission revenue recovery. CAISO has put forward three different potential uplift allocation methodologies within Approach 3 (3A, 3B, and 3C). While each has its own list of potential pros and cons, it is likely that each party’s preference will depend on how they would be allocated costs under the proposed uplift approach. ACP-California recommends further exploring these options in a future technical workshop. Additionally, CAISO should consider whether a blend or combination of these options might result in the optimal uplift design. For instance, 50% of uplift could be allocated based on transactions, 25% on load, and 25% on pre-EDAM transactions (or some variation thereof).

We also reiterate the interest, as discussed in response to question #7, in exploring the use of Transmission Customers rights via Bucket 3 in exchange for transmission cost recovery of some sort. This would help keep the EDAM entity whole as it would address the potential reduction of value in transmission rights for Transmission Customers under an EDAM construct

Finally, we note that the use of an uplift charge under Bucket 3, rather than using a hurdle rate, has the added benefit of aligning the transmission costs and dispatch approaches within EDAM and the EIM. This benefit alone is substantial and reason to pursue Approach 3. ACP-California looks forward to further discussion on Bucket 3 in future technical workshops this summer.

10. TRANSMISSION COMMITMENT: Please provide your organization’s comments on any other aspects of the transmission commitment in EDAM topic.

ACP-California does not oppose the CAISO’s bucket structure in general. However, it is important to recognize that all transmission commitment discussions to date have been focused on EDAM Entities and Transmission Providers. Implications for Transmission Customers, third-party generators in EDAM, and third-party load in EDAM have not been discussed. While we recognize the interest in leaving many of the intra-BAA transmission-related decisions to the EDAM Entities themselves, there should, at a minimum, be EDAM-wide high-level principles developed. A high-level understanding of the requirements and implications for transmission within BAAs is necessary in order to understand the implications of the EDAM market design on generators and loads within EDAM BAAs.

It is also important to recognize the degree of autonomy that currently appears to be provided to EDAM Entities under the EDAM market design. If EDAM Entities are left with this level of autonomy to determine market rules within their footprint, it would be prudent for the body with governance authority over EDAM to have some input and oversight into determining whether EDAM Entities rules are consistent with the overall market design. This is particularly important in the West where there is a wide range of regulatory structures for potential EDAM Entities, with some being subject to FERC oversight and others not subject to FERC jurisdiction. It will be critical for one body, the body tasked with EDAM governance, to have a degree of oversight across the market rules as a whole and we look forward to further discussions on this topic within the EDAM market design framework and the Governance Review Committee process.

11. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the process for conducting the EDAM RSE as described in section II.B.2 of the EDAM straw proposal.
This includes comments on the ability to conduct advisory RSE tests prior to the binding run, the timing of the RSE, the new tool, inputs, and other elements.

Within Section II.B.2.c.3. CAISO discusses Variable Energy Resource (VER) supply bids in EDAM. As discussed in the Straw Proposal, CAISO is proposing to require all participating VERs to submit Residual Unit Commitment (RUC) availability bids in the day-ahead market up to their variable energy forecast. This rule would be necessary because many VERs choose not to submit day-ahead bids up to their forecasts and because CAISO is not proposing to extend convergence bidding into the non-CAISO portions of EDAM (at least initially). ACP-California has concerns with the current proposal, which would result in different bidding rules for VERs in CAISO and in the non-CAISO EDAM footprint. These differences may have unintended consequences and result in inequitable treatment of VERs in CAISO and EDAM. If this requirement is necessary for VERs in the non-CAISO portion of EDAM, then ACP-California requests that CAISO explore expanding the requirement to apply equally to the entirety of the EDAM footprint (including CAISO). Alternatively, CAISO should work with stakeholders to brainstorm other solutions to this problem, seeking a solution that ensures comparable bidding rules and treatment of VERs in CAISO and in non-CAISO EDAM BAAs. 

12. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposed treatment of WSPP Schedule C and like firm energy contracts within the EDAM RSE.
These arrangements are commonly relied upon across the west, including the ISO. The ISO proposed that these count toward the RSE by being self-scheduled and that these arrangements reduce the RSE obligation. Consider providing comments on whether these should be allowed to count in their current form (limited knowledge of source of supply or transmission quality); whether the market is expected to evolve toward providing more specific source information; how these firm energy contracts should be modeled (whether sourcing from adjoining BAA or another method); any additional considerations.
13. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s perspective on the ISO proposal, and associated reliance, on day ahead intertie bids (not associated with resource adequacy).
Some questions to consider: should these arrangements count toward the RSE; should these be monitored for performance and delivery; should additional criteria be imposed, such as an attestation, on these to provide an added level of confidence in performance.
14. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the treatment of demand response and its different types and functions for purposes of passing the RSE.
15. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposed EDAM RSE failure consequences approach under which transfers would be allowed under an RSE failure at a penalty price.
Please comment on what an appropriate penalty price would be.
16. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposed EDAM RSE failure consequences approach which distinguishes the consequences depending upon whether the failure occurred under “normal conditions” as compared to “stressed system conditions.”
Please include consideration of potential different frameworks, how “stressed system conditions” can be defined; and any other perspectives on the structure of failure consequences and their impact on developing a robust RSE.
17. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the concept of a pooled WEIM RSE for entities passing the EDAM RSE, as described in the straw proposal and stakeholder meeting.
18. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provider your organization’s comments on any other elements of the EDAM RSE not raised by the questions above.
19. INTEGRATED FORWARD MARKET (IFM) AND RESIDUAL UNIT COMMITMENT (RUC): Please provide your organization’s comments on considerations related to the IFM and RUC as part of EDAM.
This includes consideration of the role of the RUC process as a critical component of the EDAM and the proposal that all supply offered into IFM is also offered in the RUC.
20. INTEGRATED FORWARD MARKET (IFM) AND RESIDUAL UNIT COMMITMENT (RUC): Please provide your organization’s comments on the role of the imbalance reserve market product, currently being developed in the Day-Ahead Market Enhancements initiative, in the EDAM.
21. MARKET POWER MITIGATION (MPM): Please provide your organization’s comments on the proposal to extend the WEIM market power mitigation framework to the EDAM and the further evaluation of potential market power mitigation enhancements within the Price Formation Enhancements initiative.
22. CONVERGENCE BIDDING: Please provide your organization’s comments on the proposal for a transition period under which convergence bidding is only a market feature in the ISO BAA and not available in other EDAM BAAs at the onset of the EDAM.
23. CONVERGENCE BIDDING: Please include any additional comments on the topic of convergence bidding within EDAM.
24. EXTERNAL RESOURCE PARTICIPATION: Please provide your organization’s comments on the ISO initial leaning toward extending the WEIM framework of external resource participation to the EDAM.
Under this framework the ISO would continue to allow source specific and non-source specific supply (intertie bids) to be economically offered into the ISO BAA. Non-ISO EDAM entities would continue to support source specific supply (pseudo-ties and dynamics), the self-scheduling of supply under contract, but intertie bidding would not be allowed at the intertie of the EDAM BAA.

ACP-California highlights that allowing external resource participation could increase market efficiency in EDAM. More expansive external resource participation could increase the benefits of EDAM and create a more effective dispatch by allowing resources outside the footprint to make supply offers into EDAM. However, we recognize that external resource participation raises a set of questions and design challenges that may be difficult to address and also keep EDAM’s go-live date on schedule. Thus, ACP-California will not oppose an EDAM market design that, initially, excludes external resource participation as long as this issue is revisited, in-earnest, at a date-certain after EDAM implementation. Regardless of external participation rules, EDAM must ensure equitable access to the market across the footprint and CAISO should be certain that the elimination of external resource participation at the EDAM boundaries does not create inequities for market participation within the footprint.

25. EXTERNAL RESOURCE PARTICIPATION: Please include any additional comments on the topic of external resource ability to participate in the EDAM.

While not precisely related to external resource participation, ACP-California requests that CAISO provide additional details on how resources within EDAM or wheeling through EDAM can demonstrate delivery to CAISO once EDAM is implemented. Today, and within EDAM, resources from either outside of the EDAM footprint or within the EDAM footprint will need to demonstrate delivery to the CAISO for GHG and RPS compliance purposes. While CAISO is considering GHG accounting and reporting in the Straw Proposal, it does not appear to address RPS delivery requirements and how those could be met within the EDAM footprint or for resources delivering across the EDAM footprint to CAISO. CAISO should provide time for additional stakeholder discussion on this issue.

ACP-California requests clarification that dynamically transferred resources (dynamic schedules and pseudo ties) from within or across the EDAM footprint will continue to be able to deliver as they do today (and will have associated e-Tags to demonstrate their delivery to CAISO). And there should be additional discussions on how non-dynamic resources can demonstrate delivery to CAISO.  At present, under the EDAM Straw Proposal, it appears as though the only option for non-dynamic resources to delivery from within or across EDAM to CAISO would be through self-scheduling. If self-scheduling is the only mechanism CAISO envisions entities will have to demonstrate delivery of non-dynamic resources from without or outside EDAM to CAISO, then we encourage CAISO to explore other options, such as the concept of “Base Scheduling.”  This topic should be explored in a technical workshop and should include representatives from the CPUC and CEC that can help explore the RPS delivery requirements and how they would interact with EDAM.

26. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s overall comments, including potential suggested enhancements, on the resource specific approach to GHG accounting as described in section II.E of the EDAM straw proposal.
27. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the resource specific’s approach use of the RSE solution as the counterfactual for measuring secondary dispatch.
28. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the resource specific approach’s measures to limit secondary dispatch.
29. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s overall comments, including potential suggested enhancements, on the zonal approach to GHG accounting as described in section II.E of the EDAM straw proposal.
30. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the design of the hurdle rate for the zonal approach.
31. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the treatment of resources outside the GHG regulation area as internal to a GHG regulation area on a long-term or short-term basis, using the GHG pseudo tie functionality, in the zonal approach.
32. GREENHOUSE GAS ACCOUNTING: Please provide any additional comments on the GHG topic that were not captured by the questions above.
33. TRANSFER REVENUE ALLOCATION: Please provide your organization’s comments on the proposed transfer revenue allocation approach as described in section II.D.1 of the straw proposal and any other aspects of the transfer revenue allocation discussion topic.

In developing a transfer revenue allocation approach, CAISO should strive to ensure that all parties are treated equally. Thus, the proposal generally should not differentiate between CAISO and other EDAM BAAs and should treat all BAAs and transfer revenues in a comparable manner.

Transfer revenue allocation is another topic area where stakeholders would benefit from a more granular discussion. Specially, the current proposal and discussion has focused on allocation to BAAs/Transmission Providers. However, there are critical details on how those entities would, in turn, sub-allocate to their own customers. These more granular discussions are important to understanding the impacts of EDAM and its transmission revenue allocation method to individual generators and to loads within the BAA. To further explore these issues, ACP-California requests that CAISO host a technical work shop on transfer revenue allocation and that it include discussions about sub-allocation of revenues beyond the BAA-level.

34. SETTLEMENTS: Please provide your organization’s comments on settlements aspects of the EDAM described thus far, recognizing these will develop as the design evolves, as discussed in section II.D.2 of the EDAM straw proposal.

ACP-California requests additional discussion on settlement implications for generators within EDAM BAAs and whether settlements would likely flow directly from CAISO or from the EDAM Entity. Additionally, to the extent there are EDAM Entity settlements and suballocations to load and generation customers with EDAM BAAs, we support standardization and consistency in these settlements. CAISO should commit to working with stakeholders to develop a template or standardized plans to help ease the burden on loads and generators that transact across multiple EDAM BAAs.

35. EDAM TECHNICAL WORKSHOPS: Please provide your organization’s comments on the upcoming EDAM technical workshops. Which key components of the straw proposal should be further discussed in EDAM technical workshops.
Please be as specific as you as possible.

As discussed throughout these comments, ACP-California recommends a number of topics for the upcoming technical workshops. Specifically, the following topics appear to require additional discussion and exploration:

  • The question of whether to provision unscheduled transmission rights to EDAM under Bucket 2, specifically:
    • The implications of this proposal on the incentives to purchase transmission across EDAM BAAs; and
    • Whether a mechanism could be designed to provide some compensation to transmission customers whose rights could be used under Bucket 2 (a middle ground between only taking these rights if they are donated and to automatically provisioning them to EDAM without compensation)
  • The specific uplift approach for Bucket 3 transmission
    • ACP-California suggests that some combination of 3A, 3B, and 3C be explored
    • CAISO should also embark on a data gathering exercise to ensure it understands the magnitude of costs that would need to be recovered in this bucket
    • There should also be consideration of whether unscheduled transmission customers rights could be available for use in this bucket and would receive some form of compensation
  • How resources can demonstrate delivery to CAISO from within or through EDAM for RPS Portfolio Content Category #1 and other purposes
    • Clarification of approach for dynamically transferred resources
    • Discussion on how non-dynamic resources could demonstrate delivery
      • If this will only be available through a self-schedule, ACP-California suggests exploring other concepts, such as the “Base Scheduling” concept
  • Transfer revenue allocation
    • Including the discussion of principles for how sub-allocation might take place from EDAM BAAs to their customers
36. GENERAL COMMENTS: Please provide your organization’s comments on any other elements or aspects of the EDAM straw proposal.

ACP-California offers additional comments in several areas and also requests some clarification on the EDAM Straw Proposal. As discussed more below, these response to this general question:

  • ACP-California supports EDAM’s development and hopes the market provide meaningful benefits for clean energy across the region and will help move the region toward further market developments, including an RTO
  • Emphasize that CAISO’s proposals have focused on the EDAM Entities (principally BAAs) but that implications for generators and loads within EDAM areas are critical
    • Request that this dynamic be considered in determining the appropriate governance structure for EDAM
    • Request that principles are developed for how EDAM Entities should implement their own, internal provisions for their customers and that a centralized governing body review final EDAM Entity provisions for consistency with the market design
  • Support allowing any BAA, including generation-only BAAs, to be eligible to join EDAM
  • Note the importance of specifying how delivery to CAISO could be demonstrated under an EDAM framework from outside (wheeling through) EDAM and within EDAM for both:
    • Dynamic resources
    • Non-dynamic resources

ACP-California strongly supports the expansion of organized wholesale market in the West, including EDAM. However, it is important to note that EDAM should be an incremental step towards additional regional coordination and cooperation. While EDAM many offer a number of benefits, it does not offer the same level of benefits that can be provided by implementation of a full RTO. Thus, one of the primary benefits of EDAM is development of relationships and trust, along with market policies and governance frameworks that can be used as building blocks for a future RTO, where more benefits can be captured. ACP believes there may be significant benefits to clean energy resources under EDAM, including reduced curtailment and the expansion of options for selling small amounts of uncontracted output. However, the benefits of an RTO are much greater and include additional structures to incent the development and construction of clean energy resource to meet corporate energy goals, something that appears unlikely under EDAM. Given this, we urge the CAISO, potential EDAM entities, and other stakeholders to think of EDAM as an incremental step in western market expansion and not the “end game.” To the extent market design elements can be implemented to help put the market on “glide path” towards an RTO or begin to address any RTO-specific design challenges, they should be pursued.

While ACP-California generally supports the EDAM framework outlined in the Straw Proposal, we also note that, at present, it is incredibly difficult to understand the likely impacts on (both existing and future) clean energy resources within EDAM BAAs. This is in large part because many of the market design elements will be left to individual EDAM BAAs to implement. These design elements will have substantive impacts on generators in the EDAM footprint and include potential transmission requirements, and allocation of transfer revenues within the BAA. During the upcoming technical workshops it would be highly valuable for CAISO to propose, at a minimum, high-level principles that individual EDAM BAAs should abide by in making these decisions. Ideally, such decisions and market design elements would be implemented by CAISO and would be consistent across the entirety of the EDAM footprint. But if this is not feasible, at a minimum, common principles should be pursued. Additionally, because of the significant decisions that individual EDAM Entities will make in implementing EDAM, there should be a role for a centralized governing body to review individual market participant provisions to ensure they are consistent with the overall EDAM market design and do not result in inequitable treatment of resources/loads across EDAM. This is especially important in the West where not all EDAM Entity tariff provisions will be reviewed by FERC, as many entities are not FERC jurisdictional.

In general, in developing EDAM, it is important to provide equitable treatment across BAAs, generators, and loads within the footprint. To that end, ACP-California requests clarification that less traditional BAAs (such as a generation-only BAA) would be eligible to join EDAM. Under the EIM structure, generation-only BAAs are eligible to participate in the EIM and must meet the same requirements as traditional BAAs. We hope the same would be true for EDAM and that EDAM participation would be an option for generation-only BAAs.

We also request clarification on CAISO’s current thinking of how resources outside of CAISO could demonstrate delivery to CAISO from within EDAM or from outside (i.e., wheeling through) EDAM. Today, resources have a number of reasons why they must demonstrate delivery to CAISO, including GHG and RPS compliance purposes. The Straw Proposal seems to indicate that dynamically transferred resources (both pseudo-ties and dynamic schedules) could continue to demonstrate delivery to CAISO in the same way they do today. ACP-California requests confirmation of this and further discussion in future workshops. Additionally, we request more information on how non-dynamic resources could demonstrate delivery from within or through EDAM to CAISO. If the only currently envisioned approach to this type of resource delivery demonstration is through self-schedules, we encourage CAISO to work with stakeholders to identify other mechanisms that could be used and which would still allow economic bidding in EDAM by these resources. For instance, some stakeholders have discussed the concept of “base schedules” for this (and other) purposes. We request additional discussion and details during an upcoming technical workshop.

ACP-California appreciates the CAISO’s continued efforts to improve organized market outcomes in the West, including the development of the EDAM Straw Proposal. We look forward to continuing to work with CAISO on the details of EDAM, including through upcoming technical workshops.

Arizona Public Service
Submitted 06/16/2022, 04:42 pm

Contact

Tyler Moore (Tyler.Moore@aps.com)

1. EDAM VOLUNTARY MODEL: Please provide your organization’s comments on the proposed structure of the EDAM voluntary participation model as described in section II.A.1 of the EDAM straw proposal.

Comments Attached

2. EDAM FEES: Please provide your organization’s comments on the proposed framework of the EDAM fee structure as described in section II.A.2 of the EDAM straw proposal.

Comments Attached

3. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on the concept of market transfers (occurring through the EDAM and WEIM) having equal priority to load to the extent an individual EDAM BAA faces severe emergency conditions as discussed in section II.A.3 of the EDAM straw proposal.

Comments Attached

4. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on whether the failure of the day ahead resource sufficiency evaluation should have a bearing on the level of priority afforded to market transfers (EDAM and WEIM) souring from an EDAM BAA facing emergency conditions and sinking in the EDAM BAA that failed the resource sufficiency evaluation.

Comments Attached

5. CONFIDENCE IN MARKET TRANSFERS: Please provide any additional comments on the topic of confidence in market transfers (occurring through the EDAM and WEIM).

Comments Attached

6. TRANSMISSION COMMITMENT: Please provide your organization’s comments on the overall framework of transmission buckets in the context of making transmission available to the EDAM as described in section II.B.1 of the EDAM straw proposal.

Comments Attached

7. TRANSMISSION COMMITMENT: Please provide your organization’s perspective on Bucket 2 transmission and whether it should be made available to the EDAM only through a voluntary framework or through a more general rule that transmission unscheduled by 10am of the day ahead is automatically made available to the EDAM for optimization as described in the straw proposal.
Consider the implications of transmission customers retaining the ability to exercise those transmission rights between the day ahead and real time markets and the potential implications on redispatch.

Comments Attached

8. TRANSMISSION COMMITMENT: Please provide your organization’s perspective on the compensation options for bucket 3 transmission described in the EDAM straw proposal.
More specifically, consider whether Bucket 3 transmission rates should be reflected in the market optimization through a direct hurdle rate or should the reduced transmission revenues be addressed outside of the market optimization through after the fact cost recovery.

Comments Attached

9. TRANSMISSION COMMITMENT: Please provide your organization's comments on the concept of Bucket 3 transmission costs being recovered outside of the market optimization, should the ISO through the EDAM process work toward a design for transmission revenue recovery, based on one of the options described (3A, 3B, 3C), in order to keep the EDAM entity whole as a result of EDAM participation.
Some questions to consider: are there additional variations to the described options; what should be the recoverable lost transmission revenues; how should the lost transmission revenues be allocated (or a transactional basis, across load in EDAM or to each EDAM entity to allocate to its customers); how do the described options impact bidding incentive in the EDAM market.

Comments Attached

10. TRANSMISSION COMMITMENT: Please provide your organization’s comments on any other aspects of the transmission commitment in EDAM topic.

Comments Attached

11. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the process for conducting the EDAM RSE as described in section II.B.2 of the EDAM straw proposal.
This includes comments on the ability to conduct advisory RSE tests prior to the binding run, the timing of the RSE, the new tool, inputs, and other elements.

Comments Attached

12. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposed treatment of WSPP Schedule C and like firm energy contracts within the EDAM RSE.
These arrangements are commonly relied upon across the west, including the ISO. The ISO proposed that these count toward the RSE by being self-scheduled and that these arrangements reduce the RSE obligation. Consider providing comments on whether these should be allowed to count in their current form (limited knowledge of source of supply or transmission quality); whether the market is expected to evolve toward providing more specific source information; how these firm energy contracts should be modeled (whether sourcing from adjoining BAA or another method); any additional considerations.

Comments Attached

13. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s perspective on the ISO proposal, and associated reliance, on day ahead intertie bids (not associated with resource adequacy).
Some questions to consider: should these arrangements count toward the RSE; should these be monitored for performance and delivery; should additional criteria be imposed, such as an attestation, on these to provide an added level of confidence in performance.

Comments Attached

14. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the treatment of demand response and its different types and functions for purposes of passing the RSE.

Comments Attached

15. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposed EDAM RSE failure consequences approach under which transfers would be allowed under an RSE failure at a penalty price.
Please comment on what an appropriate penalty price would be.

Comments Attached

16. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposed EDAM RSE failure consequences approach which distinguishes the consequences depending upon whether the failure occurred under “normal conditions” as compared to “stressed system conditions.”
Please include consideration of potential different frameworks, how “stressed system conditions” can be defined; and any other perspectives on the structure of failure consequences and their impact on developing a robust RSE.

Comments Attached

17. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the concept of a pooled WEIM RSE for entities passing the EDAM RSE, as described in the straw proposal and stakeholder meeting.

Comments Attached

18. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provider your organization’s comments on any other elements of the EDAM RSE not raised by the questions above.

Comments Attached

19. INTEGRATED FORWARD MARKET (IFM) AND RESIDUAL UNIT COMMITMENT (RUC): Please provide your organization’s comments on considerations related to the IFM and RUC as part of EDAM.
This includes consideration of the role of the RUC process as a critical component of the EDAM and the proposal that all supply offered into IFM is also offered in the RUC.

Comments Attached

20. INTEGRATED FORWARD MARKET (IFM) AND RESIDUAL UNIT COMMITMENT (RUC): Please provide your organization’s comments on the role of the imbalance reserve market product, currently being developed in the Day-Ahead Market Enhancements initiative, in the EDAM.

Comments Attached

21. MARKET POWER MITIGATION (MPM): Please provide your organization’s comments on the proposal to extend the WEIM market power mitigation framework to the EDAM and the further evaluation of potential market power mitigation enhancements within the Price Formation Enhancements initiative.

Comments Attached

22. CONVERGENCE BIDDING: Please provide your organization’s comments on the proposal for a transition period under which convergence bidding is only a market feature in the ISO BAA and not available in other EDAM BAAs at the onset of the EDAM.

Comments Attached

23. CONVERGENCE BIDDING: Please include any additional comments on the topic of convergence bidding within EDAM.

Comments Attached

24. EXTERNAL RESOURCE PARTICIPATION: Please provide your organization’s comments on the ISO initial leaning toward extending the WEIM framework of external resource participation to the EDAM.
Under this framework the ISO would continue to allow source specific and non-source specific supply (intertie bids) to be economically offered into the ISO BAA. Non-ISO EDAM entities would continue to support source specific supply (pseudo-ties and dynamics), the self-scheduling of supply under contract, but intertie bidding would not be allowed at the intertie of the EDAM BAA.

Comments Attached

25. EXTERNAL RESOURCE PARTICIPATION: Please include any additional comments on the topic of external resource ability to participate in the EDAM.

Comments Attached

26. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s overall comments, including potential suggested enhancements, on the resource specific approach to GHG accounting as described in section II.E of the EDAM straw proposal.

Comments Attached

27. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the resource specific’s approach use of the RSE solution as the counterfactual for measuring secondary dispatch.

Comments Attached

28. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the resource specific approach’s measures to limit secondary dispatch.

Comments Attached

29. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s overall comments, including potential suggested enhancements, on the zonal approach to GHG accounting as described in section II.E of the EDAM straw proposal.

Comments Attached

30. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the design of the hurdle rate for the zonal approach.

Comments Attached

31. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the treatment of resources outside the GHG regulation area as internal to a GHG regulation area on a long-term or short-term basis, using the GHG pseudo tie functionality, in the zonal approach.

Comments Attached

32. GREENHOUSE GAS ACCOUNTING: Please provide any additional comments on the GHG topic that were not captured by the questions above.

Comments Attached

33. TRANSFER REVENUE ALLOCATION: Please provide your organization’s comments on the proposed transfer revenue allocation approach as described in section II.D.1 of the straw proposal and any other aspects of the transfer revenue allocation discussion topic.

Comments Attached

34. SETTLEMENTS: Please provide your organization’s comments on settlements aspects of the EDAM described thus far, recognizing these will develop as the design evolves, as discussed in section II.D.2 of the EDAM straw proposal.

Comments Attached

35. EDAM TECHNICAL WORKSHOPS: Please provide your organization’s comments on the upcoming EDAM technical workshops. Which key components of the straw proposal should be further discussed in EDAM technical workshops.
Please be as specific as you as possible.

Comments Attached

36. GENERAL COMMENTS: Please provide your organization’s comments on any other elements or aspects of the EDAM straw proposal.

Comments Attached

Avangrid Renewables
Submitted 06/16/2022, 02:01 pm

Contact

Molly Croll (molly.croll@avangrid.com)

1. EDAM VOLUNTARY MODEL: Please provide your organization’s comments on the proposed structure of the EDAM voluntary participation model as described in section II.A.1 of the EDAM straw proposal.

Avangrid Renewables (AVRN) is a developer and owner operator of renewable generation  throughout the United States, with significant resources located in the western region. We have development projects and aspirations in California and throughout the west. We operate a generation-only balancing area within Bonneville Power Administration’s transmission system and we will be joining the WEIM in 2023. We also hold numerous long-term point-to-point and network transmission rights, including at CAISO interties, in the Northwest and elsewhere. As a result, we bring diverse interests to our evaluation of EDAM and how its implementation will affect our business.

AVRN supports the voluntary participation model proposed in the EDAM straw proposal. However, we note that EDAM implementation will create potential impacts on market participants that are not afforded a choice of whether or not to participate. For example, generators with facilities that are a part of a BA joining EDAM will automatically be “in” EDAM and responsible for any new scheduling, bidding, settlement, and GHG compliance obligations that follow. Transmission customers will also be affected through changes in allocation of costs and benefits for transmission rights optimized in EDAM, and re-optimized in Real-time, in some cases depending on how individual transmission owners elect to address this allocation. Finally, as a Generation-Only Balancing Area that could become a voluntary EDAM participant, we note that EDAM participation by certain BAs will have a forcing-effect on other BAs. For entities who rely on physical bilateral transactions between those timeframes, EDAM may have the consequence of dramatically reducing physical bilateral markets such that alternatives to EDAM participation are infeasible.

 

Avangrid Renewables supports the development of western regional markets toward the development of a fully-formed western RTO, which would eliminate pancaked transmission tariffs and streamline dispatch of generation across a wide are of the western interconnect. However, we recommend that the CAISO and potential EDAM participants acknowledge the impacts to all market participants in the formation of EDAM and provide attention and processes for equitable and minimally disruptive transitions. We hope that EDAM development will be a foundation for trust-building and an opportunity to begin addressing some of the trickiest components of RTO design (e.g., transmission cost allocation). It is with this lens that we offer feedback on potential near/mid-term impacts from the straw proposal design.

2. EDAM FEES: Please provide your organization’s comments on the proposed framework of the EDAM fee structure as described in section II.A.2 of the EDAM straw proposal.
3. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on the concept of market transfers (occurring through the EDAM and WEIM) having equal priority to load to the extent an individual EDAM BAA faces severe emergency conditions as discussed in section II.A.3 of the EDAM straw proposal.
4. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on whether the failure of the day ahead resource sufficiency evaluation should have a bearing on the level of priority afforded to market transfers (EDAM and WEIM) souring from an EDAM BAA facing emergency conditions and sinking in the EDAM BAA that failed the resource sufficiency evaluation.
5. CONFIDENCE IN MARKET TRANSFERS: Please provide any additional comments on the topic of confidence in market transfers (occurring through the EDAM and WEIM).
6. TRANSMISSION COMMITMENT: Please provide your organization’s comments on the overall framework of transmission buckets in the context of making transmission available to the EDAM as described in section II.B.1 of the EDAM straw proposal.

Avangrid Renewables is concerned that the transmission framework proposed in the straw proposal focused almost entirely on how EDAM entities who are also transmission owners/TSPs will utilize transmission for their own resource sufficiency, make transmission available to the market, and recover lost revenues. EDAM participants who are not TSPs, as well as transmission customers, will have to adjust how they utilize and schedule their transmission rights and will also be subject to lost revenues or insufficient cost recovery. The CAISO should dedicate time to exploring and resolving these issues in future workshops.

We also seek clarity from the CAISO as the straw proposal at times conflated the concept of “EDAM entity” and “TSP who is an EDAM entity.” As a generation-only BA, our understanding is that we would not be eligible to collect Bucket 3 transmission revenues directly from EDAM   because we do not own or operate interties at the edge of our BA (although we do have rights on CA-OR interties outside our BA.) These and other unique cases should be explored directly as part of future transmission workshops.

7. TRANSMISSION COMMITMENT: Please provide your organization’s perspective on Bucket 2 transmission and whether it should be made available to the EDAM only through a voluntary framework or through a more general rule that transmission unscheduled by 10am of the day ahead is automatically made available to the EDAM for optimization as described in the straw proposal.
Consider the implications of transmission customers retaining the ability to exercise those transmission rights between the day ahead and real time markets and the potential implications on redispatch.

Avangrid Renewables is concerned that the Bucket 2 proposal would severely limit transmission customers ability to flexibly schedule their transmission rights according to their delivery requirements and market opportunities. The CAISO has thus far ignored that transmission customers in bilateral markets not only schedule resources on their own rights but also hedge forward rights in the market. The proposal for unscheduled transmission rights to be automatically optimized in EDAM will have consequences for transmission customers who regularly schedule their rights in real-time. These transmission customers will have no assurance that a) equivalent capacity will remain available; and b) that they will not bear additional settlement charges associated with redispatch  when scheduling these rights in real-time. One effect may be that transmission customers over-schedule on their transmission rights in the Day-Ahead time frame which would both limit their opportunity to earn congestion rents (or otherwise monetize) those rights and would certainly be suboptimal for EDAM as a whole. Further, the straw proposal leaves it up to individual EDAM entities to determine how revenues earned from EDAM due to utilization of internal and transfer transmission rights will be allocated to transmission customers or used to offset future transmission rates. Therefore, we cannot expect to reasonably recover costs, nor can we expect to recover lost revenues associated with our optimization of transmission today in the markets.

 

The CAISO should endeavor to provide a better incentive for transmission customers to provide their rights to EDAM by ensuring they will be properly compensated by EDAM and the associated TSP/EDAM entity. This may require a mechanism, such as a TC “hurdle rate” as contemplated in the Transmission work group process and proposed by WPTF, ACP, NIPPC and others.

8. TRANSMISSION COMMITMENT: Please provide your organization’s perspective on the compensation options for bucket 3 transmission described in the EDAM straw proposal.
More specifically, consider whether Bucket 3 transmission rates should be reflected in the market optimization through a direct hurdle rate or should the reduced transmission revenues be addressed outside of the market optimization through after the fact cost recovery.
9. TRANSMISSION COMMITMENT: Please provide your organization's comments on the concept of Bucket 3 transmission costs being recovered outside of the market optimization, should the ISO through the EDAM process work toward a design for transmission revenue recovery, based on one of the options described (3A, 3B, 3C), in order to keep the EDAM entity whole as a result of EDAM participation.
Some questions to consider: are there additional variations to the described options; what should be the recoverable lost transmission revenues; how should the lost transmission revenues be allocated (or a transactional basis, across load in EDAM or to each EDAM entity to allocate to its customers); how do the described options impact bidding incentive in the EDAM market.
10. TRANSMISSION COMMITMENT: Please provide your organization’s comments on any other aspects of the transmission commitment in EDAM topic.
11. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the process for conducting the EDAM RSE as described in section II.B.2 of the EDAM straw proposal.
This includes comments on the ability to conduct advisory RSE tests prior to the binding run, the timing of the RSE, the new tool, inputs, and other elements.

Avangrid Renewables is preparing for RSE in EIM currently. We have questions regarding how a generation-only EDAM participant would demonstrate resource sufficiency in EDAM as several elements of the proposal (including the Imbalance Reserve Product requirement) may or may not apply. We request an opportunity to review with this with CAISO staff.

12. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposed treatment of WSPP Schedule C and like firm energy contracts within the EDAM RSE.
These arrangements are commonly relied upon across the west, including the ISO. The ISO proposed that these count toward the RSE by being self-scheduled and that these arrangements reduce the RSE obligation. Consider providing comments on whether these should be allowed to count in their current form (limited knowledge of source of supply or transmission quality); whether the market is expected to evolve toward providing more specific source information; how these firm energy contracts should be modeled (whether sourcing from adjoining BAA or another method); any additional considerations.

Avangrid Renewables supports the straw proposal’s plan for treatment of WSPP-C contracts as offsetting RSE obligations of EDAM participants. We agree that these contracts are prevalent across the west and have been part of the well-functioning market for over a decade, including supporting the provision of RA deliveries into California. Undermining the value of these contracts in EDAM RSE would be highly disruptive.

We understand the CAISO and EDAM stakeholders’ desire to potentially “evolve” WSPP-C contracts to account for source, zone, or associated transmission rights for RSE and GHG accounting purposes. However, we urge stakeholders to be cautious as the liquidity of the WSPP-C product is one of the attributes that makes this product valuable and useful in the market.

13. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s perspective on the ISO proposal, and associated reliance, on day ahead intertie bids (not associated with resource adequacy).
Some questions to consider: should these arrangements count toward the RSE; should these be monitored for performance and delivery; should additional criteria be imposed, such as an attestation, on these to provide an added level of confidence in performance.
14. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the treatment of demand response and its different types and functions for purposes of passing the RSE.
15. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposed EDAM RSE failure consequences approach under which transfers would be allowed under an RSE failure at a penalty price.
Please comment on what an appropriate penalty price would be.
16. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposed EDAM RSE failure consequences approach which distinguishes the consequences depending upon whether the failure occurred under “normal conditions” as compared to “stressed system conditions.”
Please include consideration of potential different frameworks, how “stressed system conditions” can be defined; and any other perspectives on the structure of failure consequences and their impact on developing a robust RSE.
17. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the concept of a pooled WEIM RSE for entities passing the EDAM RSE, as described in the straw proposal and stakeholder meeting.

Avangrid Renewables is generally supportive of “pooled WEIM RSE” for entities passing EDAM RSE as we agree the diversity benefit of EDAM should be shared among sufficient participants.

However, we are concerned about how this proposal will be implemented and the potential effect on non-EDAM EIM entities. We expect there may be a period of time in which EDAM would have a number of  active participants while other, newer or less certain EIM entities are not yet prepared to join. The effect of EDAM RSE may mean that EIM-only entities will face more difficulties passing EIM RSE given that large EDAM entities will seek to become sufficient in the day-ahead time frame, and, if they fail, will seek to cure their deficiencies between day-ahead and real-time. We also expect that EDAM entities may have greater visibility into the constraints and supplies in the market than EIM-only participants who may be disadvantaged within a tight market to acquire necessary EIM RSE resources. While the pooled test won’t itself exacerbate this challenge, it would enhance benefits of EDAM while EIM-only entities face a higher RSE burden. The CAISO should explore how to ensure fair treatment and RSE obligations for EIM entities while EDAM is implemented, with special attention to the period of time in which EDAM may be a patchwork of participating and non-participating BAs.

18. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provider your organization’s comments on any other elements of the EDAM RSE not raised by the questions above.
19. INTEGRATED FORWARD MARKET (IFM) AND RESIDUAL UNIT COMMITMENT (RUC): Please provide your organization’s comments on considerations related to the IFM and RUC as part of EDAM.
This includes consideration of the role of the RUC process as a critical component of the EDAM and the proposal that all supply offered into IFM is also offered in the RUC.
20. INTEGRATED FORWARD MARKET (IFM) AND RESIDUAL UNIT COMMITMENT (RUC): Please provide your organization’s comments on the role of the imbalance reserve market product, currently being developed in the Day-Ahead Market Enhancements initiative, in the EDAM.

Avangrid Renewables understands that reliability in EDAM will depend in large part on success of the new IFM and RUC market products. While we have not been participating in the DAME process, we are aware that many questions remain about how the Imbalance Reserve and Reliability Capacity products will be implemented, how certain resources (California RA and VERs) will be obligated to bid these new products, and the multiple market power mitigation mechanisms built into the proposal.

We find it difficult to evaluate the role of these new products in EDAM when design in DAME is unresolved. As a potential gen-only EDAM participant and future EIM participant, we’re uncertain at this point about what our obligations will be to bid these products into the IFM and RUC. More generally, we question whether concurrent DAME and EDAM design processes will yield satisfactory and certain results for participants contemplating joining EDAM.

21. MARKET POWER MITIGATION (MPM): Please provide your organization’s comments on the proposal to extend the WEIM market power mitigation framework to the EDAM and the further evaluation of potential market power mitigation enhancements within the Price Formation Enhancements initiative.
22. CONVERGENCE BIDDING: Please provide your organization’s comments on the proposal for a transition period under which convergence bidding is only a market feature in the ISO BAA and not available in other EDAM BAAs at the onset of the EDAM.
23. CONVERGENCE BIDDING: Please include any additional comments on the topic of convergence bidding within EDAM.
24. EXTERNAL RESOURCE PARTICIPATION: Please provide your organization’s comments on the ISO initial leaning toward extending the WEIM framework of external resource participation to the EDAM.
Under this framework the ISO would continue to allow source specific and non-source specific supply (intertie bids) to be economically offered into the ISO BAA. Non-ISO EDAM entities would continue to support source specific supply (pseudo-ties and dynamics), the self-scheduling of supply under contract, but intertie bidding would not be allowed at the intertie of the EDAM BAA.
25. EXTERNAL RESOURCE PARTICIPATION: Please include any additional comments on the topic of external resource ability to participate in the EDAM.

Avangrid Renewables supports the proposal for inter-tie bidding at the CAISO border as this is necessary for maintenance of California RPS PCC1 obligations.

Avangrid Renewables seeks clarity from the CAISO about how dynamically transferred resources outside California delivering to a California LSE for RPS compliance will be accommodated in EDAM. We also request clarity on how Bucket 2 RPS contracts from out-of-state resources delivering to California could be validated in EDAM. EDAM design should respect existing contracts and California law that requires verification of delivery at the California border.

26. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s overall comments, including potential suggested enhancements, on the resource specific approach to GHG accounting as described in section II.E of the EDAM straw proposal.

Avangrid Renewables would like to understand tracking and management of GHG “bid adders” as relevant to GHG reporting. We remain uncertain about where the tracking and compliance obligations will lie in each proposal for resources that are delivering from a non GHG-zone to an in-GHG zone.

Additionally, we would be interested in further analysis on the potential dynamic nature of GHG adders associated with a resource’s bid, and how dispatch and settlements will result across the EDAM footprint.

27. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the resource specific’s approach use of the RSE solution as the counterfactual for measuring secondary dispatch.
28. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the resource specific approach’s measures to limit secondary dispatch.
29. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s overall comments, including potential suggested enhancements, on the zonal approach to GHG accounting as described in section II.E of the EDAM straw proposal.

Avangrid Renewables does not take a firm position on GHG accounting approach at this time. Although we see several merits in the simplicity and load-focused nature of the zonal, the formation of an appropriate hurdle rate and the rules and requirements for designating a “specified” resource from a non-GHG zone will ultimately determine our position on this approach.

Avangrid Renewables seeks clarity from the CAISO’s straw proposal surrounding the “Zonal Approach” (2.E.2.b) and the associated hurdle rates. Furthermore, in terms of the path 1 and 2 options to designate a resource as “resource-specific” from within a non-GHG zone, we require clarity on whether and how a resource might be able to toggle between “in-zone” and “out-of-zone” treatment when import schedules are dynamic.  For example, on page 36 of the straw proposal, the CAISO notes that for “path 2” resources in a zonal approach, the “ISO will be unable to validate dynamically that the resource meets state air regulatory requirements for resource-specific treatment.” Clarity on what this means for different types of imports will help us evaluate this proposal further. 

30. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the design of the hurdle rate for the zonal approach.

As noted above, we’re concerned that a hurdle rate established by a regulatory agency for a non-GHG zone will be too high or unduly punitive for clean resources unable to secure specified treatment or for portfolios of resources that are consistently cleaner than a more generic unspecified average emissions rate.

31. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the treatment of resources outside the GHG regulation area as internal to a GHG regulation area on a long-term or short-term basis, using the GHG pseudo tie functionality, in the zonal approach.

We would welcome further workshops on the design and development of qualifications for “path 1” and “path 2” designations for "GHG pseudo ties". While we agree with some stakeholders who suggest criteria might involve transmission (firm and conditional firm) or contract, we also envision that there may need to be accommodations for portfolios of resources that regularly deliver cleaner-than-average supplies into a GHG-zone (similar to an asset controlling supplier designation under Cap and Trade programs).

32. GREENHOUSE GAS ACCOUNTING: Please provide any additional comments on the GHG topic that were not captured by the questions above.

Avangrid Renewables suggests that CAISO and design proponents lead stakeholders through basic modeling efforts to indicate and accurately describe the pros and cons of both zonal and resource-specific approaches. Given the diversity of market participants who will be affected by these rules as well as the regulatory nuances of California and Washington’s programs, we will need more time and analysis to understand the compliance and pricing impacts of each approach.

33. TRANSFER REVENUE ALLOCATION: Please provide your organization’s comments on the proposed transfer revenue allocation approach as described in section II.D.1 of the straw proposal and any other aspects of the transfer revenue allocation discussion topic.

Avangrid does not support the CAISO’s proposal to differently allocate transmission revenues associated with interties at the CAISO border. We see no justification for treating this ATC revenue differently and fear that the CAISO’s “whichever side fills up first” approach would unfairly limit cost-recovery opportunities for inter-tie rights holders who already will be subject to EDAM-TSP’s decisions on how to allocate revenues to their customers.

34. SETTLEMENTS: Please provide your organization’s comments on settlements aspects of the EDAM described thus far, recognizing these will develop as the design evolves, as discussed in section II.D.2 of the EDAM straw proposal.
35. EDAM TECHNICAL WORKSHOPS: Please provide your organization’s comments on the upcoming EDAM technical workshops. Which key components of the straw proposal should be further discussed in EDAM technical workshops.
Please be as specific as you as possible.

As stated above, we recommend CAISO conduct workshops focused on needs and considerations of diverse market participants, including Gen-Only BAs, transmission customers, and IPPs. We also request further investigation into the resource-specification options in the zonal GHG approach.

36. GENERAL COMMENTS: Please provide your organization’s comments on any other elements or aspects of the EDAM straw proposal.

Avangrid appreciates the opportunity to comment on the straw proposal and encourages CAISO to direct additional time and attention in this program design phase to address questions and concerns of all market participants.

Balancing Authority of Northern California
Submitted 06/16/2022, 04:12 pm

Submitted on behalf of
Balancing Authority of Northern California

Contact

Kevin Smith (smith@braunlegal.com)

1. EDAM VOLUNTARY MODEL: Please provide your organization’s comments on the proposed structure of the EDAM voluntary participation model as described in section II.A.1 of the EDAM straw proposal.

The Balancing Authority of Northern California (BANC) appreciates the opportunity to submit its comments on the CAISO’s Extended Day-Ahead Market (EDAM) straw proposal.The Balancing Authority of Northern California (BANC) appreciates the opportunity to submit its comments on the CAISO’s Extended Day-Ahead Market (EDAM) straw proposal.

BANC supports the voluntary participation model.  BANC wants to emphasize, however, that voluntary does not mean that an EDAM Entity should be free to choose participation on a daily basis. For example, if the CAISO retains intertie bidding at the CAISO boundaries, an EDAM Entity would not be able to choose to participate in either EDAM or provide intertie bids for its resources.  Once the voluntary decision to participate in EDAM has been made, the EDAM Entity must settle all of its transactions, loads and resources, in the EDAM.

2. EDAM FEES: Please provide your organization’s comments on the proposed framework of the EDAM fee structure as described in section II.A.2 of the EDAM straw proposal.

No comments at this time on the proposed fee structure, except to note that the level of implementation and ongoing fees will be material to BANC in determining whether it is economically prudent to participate. It will be important to know the proposed fees as parties evaluate cost/benefits for joining EDAM.

3. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on the concept of market transfers (occurring through the EDAM and WEIM) having equal priority to load to the extent an individual EDAM BAA faces severe emergency conditions as discussed in section II.A.3 of the EDAM straw proposal.

BANC supports the general concepts described by the CAISO, including the obligation of the Balancing Authority (BA) to deploy continency reserves in accordance with its obligations (BANC is a member of the Western Power Pool Reserve Sharing Group or “RSG”), but it does have a concern that the current process of priority should be more transparent to EDAM participants.  This might be accomplished by a clear articulation of exactly how priority is maintained in a non-discriminatory basis.  BANC understands that priority decisions are driven by multiple factors, including penalty factors and operator decisions.  To the extent practicable, however, some of this decision tree should be clear and transparent.  For example, the use of effectiveness factors in the prioritization.  BANC also believes that transparent post-event assessments and reports by market monitors will ensure root causes can be addressed and the performance of prioritization can be evaluated.

 

On another related matter, currently, the California-Oregon Intertie or “COI” is curtailed under specific contract procedures --1/3, 1/3, 1/3 for the three lines that form the COI. One of these lines, the 1600 MW California-Oregon Transmission Project, is inside the BANC BA Area (BAA).  BANC wants to ensure that current obligations are retained in EDAM.

4. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on whether the failure of the day ahead resource sufficiency evaluation should have a bearing on the level of priority afforded to market transfers (EDAM and WEIM) souring from an EDAM BAA facing emergency conditions and sinking in the EDAM BAA that failed the resource sufficiency evaluation.

There may need to be consideration of different protocols under certain market conditions to lessen the impact of operating in emergency conditions.  Whether market suspension or something else should be considered is something BANC would like to see further, detailed discussion in future technical workshops.

5. CONFIDENCE IN MARKET TRANSFERS: Please provide any additional comments on the topic of confidence in market transfers (occurring through the EDAM and WEIM).

This is a foundational element of the market and without this confidence, EDAM benefits can be eviscerated. The EDAM entities are BAs and continue to have individual BA reliability obligations independent of the market itself.  Moreover, for the market to optimally run, participants must be able to rely on the market solution, which could involve taking a unit (or units) off-line, which may not be capable of being restarted in a timeframe useful to backfill lost transfers.  Thus, this confidence is quite fundamental.

6. TRANSMISSION COMMITMENT: Please provide your organization’s comments on the overall framework of transmission buckets in the context of making transmission available to the EDAM as described in section II.B.1 of the EDAM straw proposal.

As BANC has noted in stakeholder discussions, BANC believes that the so-called “bucket approach” has provided a useful framework in describing the varying transmission uses by market participants, including the EDAM entity.  As also noted, BANC acknowledges that its views on the buckets and how transmission should be made available has changed based on new factors that were not thoroughly considered prior to the stakeholder meetings the CAISO hosted between January and the middle of March 2022.  Perhaps, in summary, there are ultimately two forms of transmission with respect to the optimization, scheduled and unscheduled, the latter of which is available for the market optimization. This is discussed further below in these comments.

7. TRANSMISSION COMMITMENT: Please provide your organization’s perspective on Bucket 2 transmission and whether it should be made available to the EDAM only through a voluntary framework or through a more general rule that transmission unscheduled by 10am of the day ahead is automatically made available to the EDAM for optimization as described in the straw proposal.
Consider the implications of transmission customers retaining the ability to exercise those transmission rights between the day ahead and real time markets and the potential implications on redispatch.

BANC generally supports the concept that unscheduled or unreleased bucket 2 transmission purchased by a transmission customer pursuant to an Open Access Transmission Tariff (OATT) should be made available to the market after 10:00 am.  However, as discussed below, there may be exceptions that are best resolved as between the Transmission Service Provider (TSP) and the Transmission Customer (TC). 

 

On the concept of release, most OATTs follow the FERC pro forma OATT (Section 13.8), which states, inter alia, that:

 

Schedules for the Transmission Customer’s Firm Point-To-Point Transmission Service must be submitted to the Transmission Provider no later than 10:00 a.m. [or a reasonable time that is generally accepted in the region and is consistently adhered to by the Transmission Provider] of the day prior to commencement of such service.  Schedules submitted after 10:00 a.m. will be accommodated, if practicable.” 

 

Thus, there is clearly a right to schedule, but that right is not absolute after 10:00 a.m.  We therefore believe that bucket 2 can be made available for use in the optimization after 10:00 a.m. should the TSP decide to do so.  This does not necessarily mean that the TC cannot schedule after 10:00 a.m., but there may be financial consequences for such schedules if redispatch costs are incurred by the TSP.  However, these costs may be fully or partially offset by transfer revenues collected on that path, or the TSP can choose to assign them in another way under its tariff – other potential allocations might be considered as well, such as a more general market uplift since these costs may be hard to directly assign in some instances.  In any event, further discussion on this point is merited.

 

We believe that the best course is for the CAISO to require, in its EDAM Tariff, that the EDAM entity provide the EDAM Market Operator its scheduling limits by 10:00 a.m.  Anything available beyond these limits should be available for the optimization. It will be in the interest of the EDAM entity to maximize available transmission, but there may be specific arrangements or practices that need to be addressed uniquely between the TSP and the TC, and this should be able to be accommodated.  But again, the interest is to make the maximum amount of transmission available to the optimization.

 

Separate and apart from OATT-based firm point-to-point contracts, there are also potential legacy arrangements that allow the TC to schedule beyond the 10:00 a.m. timeline. These arrangements must be respected in EDAM and can also be protected by self-schedules and would not be part of the optimization unless made available by the customer.  

 

Added is the ability of the TC to turn over its firm point-to-point to the EDAM and benefit from transfer revenues.  

8. TRANSMISSION COMMITMENT: Please provide your organization’s perspective on the compensation options for bucket 3 transmission described in the EDAM straw proposal.
More specifically, consider whether Bucket 3 transmission rates should be reflected in the market optimization through a direct hurdle rate or should the reduced transmission revenues be addressed outside of the market optimization through after the fact cost recovery.

Based on discussions over the past several months, BANC notes that hurdle rate concept for bucket 3 initially advanced in the “Extended-Day Ahead Market Common Design Principles and Concepts” may be problematic.  For one, there is a significant asymmetry between the CAISO and non-CAISO hurdle rates due to the CASIO TAC/WAC rates.  Second it will potentially result in rate pancaking between EDAM areas and diminish EDAM benefits.  Finally, the initial assumptions about the amount of capacity needed from bucket 3 have changed (i.e., higher than originally assumed).  We will discuss this latter point further below.  BANC therefore supports exploring other non-hurdle options for bucket 3 transmission.

 

When bucket 3 was first discussed, the underlying assumption was that very little bucket 3 transmission would be needed to enable critical EDAM BAA-to-BAA transfers.  Indeed, it was originally assumed that a majority of the market transfers would occur under bucket 1, which is made available for purposes of meeting the Resource Sufficiency Examination (RSE).  As this was further discussed, however, it became apparent bucket 1 was not as robust as originally thought in terms of making transfer capacity available between participating EDAM BAAs.  Thus, more bucket 3 would be needed to ensure market liquidity. 

 

Based on this expanded need for bucket 3 transmission, BANC now prefers exploring options that will ensure greater releases of bucket 3 transmission.  We believe that a potentially high hurdle rate and rate pancaking will serve to add, rather than reduce, market friction.  Instead, we would like to further explore some form of market uplift or market charge that will be used to offset the estimated lost transmission revenues which are directly related to EDAM participation, largely in the form of lost short-term firm and non-firm sales.  Conceptually, this “lost revenue requirement” should be relatively easy to calculate for the TSPs and could be applied on a volumetric basis to all market demand or by some other means.  The lost revenue requirement would be a factor of the TSP’s total revenue requirement, reduced by all bilateral transmission sales made and potentially further offset by transfer revenues collected by the TSPs over some period (e.g., annually), to the extent these transfer revenues are in excess of the revenues needed to make customers whole from market exposure (native load and OATT).  More discussion is needed on this topic as to how to best determine the lost revenue calculation, when any true ups would be performed (annually seems best to BANC, to allow for the accounting of bilateral sales and offsetting transfer revenues, but this may be impractical for some TSPs), and from which customers this should be collected (e.g., all EDAM Demand?).  Key in this is ensuring such an added cost is as small as possible.

 

One other issue is whether any market charge or uplift should be applied solely in the EDAM or also carried through to the WEIM to avoid arbitrage incentives between the Day Ahead and Real Time markets.

9. TRANSMISSION COMMITMENT: Please provide your organization's comments on the concept of Bucket 3 transmission costs being recovered outside of the market optimization, should the ISO through the EDAM process work toward a design for transmission revenue recovery, based on one of the options described (3A, 3B, 3C), in order to keep the EDAM entity whole as a result of EDAM participation.
Some questions to consider: are there additional variations to the described options; what should be the recoverable lost transmission revenues; how should the lost transmission revenues be allocated (or a transactional basis, across load in EDAM or to each EDAM entity to allocate to its customers); how do the described options impact bidding incentive in the EDAM market.

All options should be discussed further with stakeholders, along with examples, however, some variation of 3A and 3B appears preferable to BANC (although, admittedly, we are not entirely clear on either).  The driving principle initially should be simplicity:  calculate total expected lost revenues based on available transmission revenue data; calculate an expected rate (possibly on the conservative side initially) as applied to the determined customer set (e.g., all EDAM demand and assign volumetrically); track the revenues collected as an offset to this revenue requirement; and true up with the TSPs to ensure they are effectively revenue neutral (or at least not materially impacted) by providing transmission to EDAM. Annual (or other interval) adjustments can be made to better align the proposed uplift/market charge to actual calculations.  These expected lost revenue requirements should be transparent to all EDAM participants, and all EDAM entities should strive to impose the least cost on the market to maximize EDAM benefits.

10. TRANSMISSION COMMITMENT: Please provide your organization’s comments on any other aspects of the transmission commitment in EDAM topic.

BANC supports the following general principles in support of the transmission commitment:

 

Transmission Design Principles

 

  • Maximize Transmission Access for Market Optimization – the lifeblood of EIM (and eventually an EDAM) is flexibility and the ability to transfer between entity BAAs
    • Bucket 2 – 10 am scheduling deadline for OATT transmission and consider Redispatch if needed to accommodate firm rights holder (costs allocation for redispatch and/or exceptions, such as pre-OATT arrangements or for unique bucket 2 customers, are to be addressed by the TSP or handled as a general market uplift)
    • Bucket 3 – ATC made available and expected lost revenues are recovered via some form of market uplift

 

  • Ensure TSP Full Cost Recovery of Lost Revenues Attributable to EDAM Participation – numerous options to verify and collect these costs (TSPs which are wheeled through should likewise be made whole)
    • Offsetting Revenues, including OATT sales and surplus Transfer Revenues, should be used to offset/minimize these shortfalls

 

  • Prevent Cost Shifts between Customer Classes

 

  • Transmission Revenues Collected from the Market through any Uplift are Solely to Make TSPs Participating in EDAM Whole – any surplus revenues collected will be used to lower the uplift in the next cycle

 

  • Ensure Compatibility with Existing OATT Structures – recognizing that over the longer term, bilateral markets will be impacted by EDAM and will change

 

  • Flexibility in the Design to Accommodate the Unique and Supportable Needs of Diverse EDAM Participants – just as EIM was able to accommodate the needs of certain unique participants, like BANC, EDAM should be flexible enough to allow FERC-approved exceptions
11. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the process for conducting the EDAM RSE as described in section II.B.2 of the EDAM straw proposal.
This includes comments on the ability to conduct advisory RSE tests prior to the binding run, the timing of the RSE, the new tool, inputs, and other elements.

BANC supports the general construct described in the Straw Proposal, including the ability of the EDAM entity to conduct advisory runs, prior to the binding process at 10:00 a.m.  BANC also supports the CAISO’s timetable for the advisory and binding RSE runs.

12. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposed treatment of WSPP Schedule C and like firm energy contracts within the EDAM RSE.
These arrangements are commonly relied upon across the west, including the ISO. The ISO proposed that these count toward the RSE by being self-scheduled and that these arrangements reduce the RSE obligation. Consider providing comments on whether these should be allowed to count in their current form (limited knowledge of source of supply or transmission quality); whether the market is expected to evolve toward providing more specific source information; how these firm energy contracts should be modeled (whether sourcing from adjoining BAA or another method); any additional considerations.

BANC supports the ability of EDAM entities to count WSPP Schedule C and like firm energy arrangements.  For BANC and its members, these contracts are reliable and are part of our internal RA framework.  That noted, we would add a caveat that contracts that have a history of non-performance should not be included.  This might require some form of attestation by the entity relying on the contract, or performance history.  Moreover, if there are patterns of non-delivery on a forward basis, there should be some determination made as to whether a particular contract should continue to be allowed to be counted for the RSE.  Such an evaluation might be addressed by the CAISO Department of Market Monitoring (DMM) and/or an Independent Market Expert (IME).

 

One benefit of EDAM is that, over time, it will likely result in a greater convergence of resource planning and RA program administration among EDAM participants.  This might ultimately include adopting new forward contracting rules that may not be part of EDAM on Day 1, but as new resources are contracted for, these rules can be applied prospectively from some point (e.g., as related to source-specificity and/or identified firm transmission).  But to impose this at the onset could be costly and disruptive to many reliable arrangements entered into in good faith and under the current, or then-existing, market rules and assumptions.

13. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s perspective on the ISO proposal, and associated reliance, on day ahead intertie bids (not associated with resource adequacy).
Some questions to consider: should these arrangements count toward the RSE; should these be monitored for performance and delivery; should additional criteria be imposed, such as an attestation, on these to provide an added level of confidence in performance.

BANC does not believe non-RA intertie bids should count towards RSE.  While perhaps this merits additional discussion around whether there may be mechanisms that can allow such bids to be counted, such as strong penalties, attestations and transparent reporting, at a high level, this appears problematic. Additionally, certain market conditions may be more favorable than others to support the use of intertie bids for CAISO RSE tests. These conditions would need to be clearly defined and transparent in nature.  In summary, BANC remains concerned that allowing such bids could pose reliability risks and should not be part of the initial start-up, but we are willing to have further discussions on the issue.

14. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the treatment of demand response and its different types and functions for purposes of passing the RSE.

Demand Response is likely to play a bigger role in BANC portfolios as we move through the decade.  Entities that can demonstrate control should be able to use DR as part of RSE regardless of whether it is dispatched internally as load modification or optimized and dispatched as a Virtual Power Plant by the CAISO.  It would be expected that entities would need to report on performance in either case.

15. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposed EDAM RSE failure consequences approach under which transfers would be allowed under an RSE failure at a penalty price.
Please comment on what an appropriate penalty price would be.

BANC supports the concept that transfers should be allowed for a sufficient penalty price, however, serial leaning needs to be further addressed and prevented.  This might include ratcheted penalties for repeated leaning and eventual limits on transfers.  Determining the penalty price is an admittedly difficult endeavor.  As in the response to #13 and #16, market conditions could be a consideration for the severity of penalty pricing.  In any case, serial leaning needs a scaled penalty construct. However, addressing serial leaning and scaled penalties should require some form of fair evaluation perhaps by the CAISO DMM and/or an IME.

16. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposed EDAM RSE failure consequences approach which distinguishes the consequences depending upon whether the failure occurred under “normal conditions” as compared to “stressed system conditions.”
Please include consideration of potential different frameworks, how “stressed system conditions” can be defined; and any other perspectives on the structure of failure consequences and their impact on developing a robust RSE.

BANC supports exploring different frameworks to address stressed system conditions.  Most of the time when there is adequate supply, RSE failure will be of no market consequence.  During times of stress, however, failures could trigger larger reliability consequences.  During some conditions, such as an EEA, perhaps even market suspension may be in order, and each BAA can address its own reliability needs first and foremost. 

17. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the concept of a pooled WEIM RSE for entities passing the EDAM RSE, as described in the straw proposal and stakeholder meeting.

BANC supports the concept of a pooled WEIM RSE for entities passing the EDAM RSE.

18. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provider your organization’s comments on any other elements of the EDAM RSE not raised by the questions above.

No further comments at this time. 

19. INTEGRATED FORWARD MARKET (IFM) AND RESIDUAL UNIT COMMITMENT (RUC): Please provide your organization’s comments on considerations related to the IFM and RUC as part of EDAM.
This includes consideration of the role of the RUC process as a critical component of the EDAM and the proposal that all supply offered into IFM is also offered in the RUC.

BANC supports the application of the IFM and the RUC to EDAM participants.  Any supply used to meet the RSE has indicated its availability should have the requirement to offer into the IFM process and optionally into the RUC process.  To the extent an EDAM BAA has supply it has not relied on for its RSE, EDAM must respect that the BAA has the option to hold back some (or all) of that supply to preserve its reliability obligations – inclusive of transmission and/or resources required to meet its reserve sharing obligations.  In most operating hours where there is no scarcity, it would be in the EDAM entity’s self-interest to offer as much supply into the IFM as possible.

20. INTEGRATED FORWARD MARKET (IFM) AND RESIDUAL UNIT COMMITMENT (RUC): Please provide your organization’s comments on the role of the imbalance reserve market product, currently being developed in the Day-Ahead Market Enhancements initiative, in the EDAM.

BANC recognizes the importance in EDAM of a properly designed and administrated imbalance reserve product.  Having a product allowing a more granular procurement and being dispatchable on a 15-minute basis is important to address VER uncertainty.  This will also further facilitate the pooling of a diversity benefit across the entire EDAM footprint.  Overall, this will provide greater economic and reliability benefits. However, BANC does have concerns about the ability of the CAISO to complete both the DAME and EDAM processes under the current timelines.

21. MARKET POWER MITIGATION (MPM): Please provide your organization’s comments on the proposal to extend the WEIM market power mitigation framework to the EDAM and the further evaluation of potential market power mitigation enhancements within the Price Formation Enhancements initiative.

No comments at this time.

22. CONVERGENCE BIDDING: Please provide your organization’s comments on the proposal for a transition period under which convergence bidding is only a market feature in the ISO BAA and not available in other EDAM BAAs at the onset of the EDAM.

BANC supports the concept of simplicity in the initial EDAM start up.  While BANC recognizes the important role convergence bidding plays in organized markets, we believe there will be enough complexities and adjustments that the EDAM entities will need to address at start up.  We therefore support reassessment of convergence bidding some time after start up when there has been sufficient time for the non-CAISO BAAs to gain market experience.

23. CONVERGENCE BIDDING: Please include any additional comments on the topic of convergence bidding within EDAM.

No further comments at this time.

24. EXTERNAL RESOURCE PARTICIPATION: Please provide your organization’s comments on the ISO initial leaning toward extending the WEIM framework of external resource participation to the EDAM.
Under this framework the ISO would continue to allow source specific and non-source specific supply (intertie bids) to be economically offered into the ISO BAA. Non-ISO EDAM entities would continue to support source specific supply (pseudo-ties and dynamics), the self-scheduling of supply under contract, but intertie bidding would not be allowed at the intertie of the EDAM BAA.

BANC supports the CAISO’s direction that intertie bidding would only be available at the CAISO interties and not at the boundaries of non-CAISO EDAM entities.  Among other things, this will avoid free riders wheeling over EDAM entity transmission and posing reliability risks. After some operational experience by the non-CAISO EDAM BAAs, this can be revisited.

 

Additionally, only non-EDAM entity supply should be eligible to economically bid at the CAISO interties.  In other words, if an entity elects to participate in EDAM, it will be required to settle all its supply resources through the EDAM.

25. EXTERNAL RESOURCE PARTICIPATION: Please include any additional comments on the topic of external resource ability to participate in the EDAM.

No further comments at this time.

26. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s overall comments, including potential suggested enhancements, on the resource specific approach to GHG accounting as described in section II.E of the EDAM straw proposal.

As California entities, the LSEs within BANC already account for all GHG for their own resources as well as their imports.  Therefore, the resource specific approach would be technically acceptable. 

 

As stated in the straw proposal, GHG regulation will continue to evolve area by area.  The resource specific approach seems scalable with this evolution. One item to consider for further discussion is how would this approach work If GHG regulation and markets move to publishing carbon intensities by hour.    

 

BANC’s concerns with the resource specific approach lie in the broader acceptance of the approach by EDAM entities and their regulators outside of California. 

27. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the resource specific’s approach use of the RSE solution as the counterfactual for measuring secondary dispatch.

BANC has no issues with this approach and appreciates the effort to address secondary dispatch.

28. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the resource specific approach’s measures to limit secondary dispatch.

BANC has no issues with this approach and appreciates the efforts to address secondary dispatch. 

29. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s overall comments, including potential suggested enhancements, on the zonal approach to GHG accounting as described in section II.E of the EDAM straw proposal.

As in the answer to #26, BANC already accounts for GHG in its generation and imports.  This approach is likely technically acceptable to BANC. 

 

There are two low to moderate concerns:

  • This approach would entail additional effort for market design as compared to resource specific. 
  • As in #26, it is not clear how this approach would work in the scenario where markets publishing hourly carbon intensities (data considerably more accurate than simply agreeing on an intensity for a period for determining zonal transfers).   Further discussion would be needed. 
30. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the design of the hurdle rate for the zonal approach.

BANC has no issue with the hurdle rate other than the concern listed in the second bullet of #29.

31. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the treatment of resources outside the GHG regulation area as internal to a GHG regulation area on a long-term or short-term basis, using the GHG pseudo tie functionality, in the zonal approach.

BANC has no issue with the use of a GHG pseudo tie.

32. GREENHOUSE GAS ACCOUNTING: Please provide any additional comments on the GHG topic that were not captured by the questions above.

None.

33. TRANSFER REVENUE ALLOCATION: Please provide your organization’s comments on the proposed transfer revenue allocation approach as described in section II.D.1 of the straw proposal and any other aspects of the transfer revenue allocation discussion topic.

BANC generally supports the CAISO’s approach to the proposed allocation of transfer revenues in EDAM.  We do not think that EDAM should be the mechanism to redirect non-EDAM CRR revenues. 

34. SETTLEMENTS: Please provide your organization’s comments on settlements aspects of the EDAM described thus far, recognizing these will develop as the design evolves, as discussed in section II.D.2 of the EDAM straw proposal.

No comments at this time.

35. EDAM TECHNICAL WORKSHOPS: Please provide your organization’s comments on the upcoming EDAM technical workshops. Which key components of the straw proposal should be further discussed in EDAM technical workshops.
Please be as specific as you as possible.

Confidence in EDAM Transfers

  • Discuss possible transparency metrics or procedures, along with regular market monitor reporting, to provide external BAA confidence in non-discriminatory treatment related to priority

 

Transmission

  • Bucket 2 – further discussion on 10 a.m. release of transmission and its impacts.  A discussion with TSPs to better understand how redispatch costs might be addressed.
  • Bucket 3 – explore various non-hurdle rate options and the best mechanism to ensure recovery of lost revenues directly related to EDAM participation.  Develop a simplified assessment of expected lost revenues among the CAISO and the EDAM entity TSPs (i.e., a sample expected revenue requirement) and various uplift scenarios 

 

RSE

  • More discussion on WSPP Schedule C and other firm arrangements to ensure performance is tracked and consider counting consequences for repeat failures
  • Whether Intertie Bids with an unspecified source and non-RA obligation should be counted by the CAISO for RSE
    • Accountability mechanisms
  • RSE failure Consequences  

 

GHG

  • Further details and discussion of two GHG models – source-specific and zonal

 

Other

  • Further discussion on the calculation and application of the Diversity Benefit in EDAM.

 

36. GENERAL COMMENTS: Please provide your organization’s comments on any other elements or aspects of the EDAM straw proposal.

BANC has no further comments at this time.

Bay Area Municipal Transmission Group (BAMx)
Submitted 06/16/2022, 03:34 pm

Submitted on behalf of
Silicon Valley Power (City of Santa Clara) and City of Palo Alto Utilities

Contact

Paulo Apolinario (papolinario@svpower.com)

1. EDAM VOLUNTARY MODEL: Please provide your organization’s comments on the proposed structure of the EDAM voluntary participation model as described in section II.A.1 of the EDAM straw proposal.

The Bay Area Municipal Transmission Group (BAMx)[1] is pleased to submit these comments on the EDAM straw proposal and May 25-26 meeting discussion.

BAMx supports voluntary participation in the EDAM by Western Energy Imbalance Market (WEIM) entities as generally described in EDAM straw proposal section II.A.1, but urges CAISO to clarify that once a Balancing Authority Area (BAA) voluntarily chooses to participate in EDAM, all of that BAA's loads, resources and transmission must, with limited exceptions, participate in the EDAM. While EDAM entities will continue to provide OATT transmission service, any transmission not self-scheduled by rightsholders must be made available for EDAM optimization, along with BAA loads and resources. An EDAM BAA should not be allowed to carve out portions of its transmission from the EDAM.


[1] BAMx comprises City of Palo Alto Utilities and City of Santa Clara, Silicon Valley Power.

 

2. EDAM FEES: Please provide your organization’s comments on the proposed framework of the EDAM fee structure as described in section II.A.2 of the EDAM straw proposal.

BAMx supports CAISO's proposed framework for the EDAM fee structure described in EDAM straw proposal section II.A.2. In particular, BAMx supports tracking and true-up of actual implementation costs for each EDAM entity vs. their implementation deposits. BAMx also supports the use of the Market Services charge and the WEIM System Operations charge, as those cost causation-based charges are updated and evolve over time.

3. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on the concept of market transfers (occurring through the EDAM and WEIM) having equal priority to load to the extent an individual EDAM BAA faces severe emergency conditions as discussed in section II.A.3 of the EDAM straw proposal.

BAMx is wondering what the impact of market transfers having equal priority to load would be on the Transmission Services and Market Scheduling Priorities initiative.  In particular, if EDAM transfers are firm, with equal curtailment priority to native load, what would be the reason for parties to obtain such scheduling priorities?

 

BAMx respects the need for confidence in market transfers to encourage robust market participation, however, the straw proposal seems to focus more on how BAA’s with organized markets would build confidence in market transfers. For example, BAA’s with purely bilateral markets may not have processes and concepts such as RUC or Imbalance Reserve products. Would the differences between EDAM and WEIM market transfer prices be the only mechanism for identifying and discouraging a BAA from deviating from its EDAM market transfer commitments (especially with consideration to Real Time/EIM re-optimized dispatches). Without penalties or an enforcement for “uninstructed deviations” from EDAM transfers, BAA’s could potentially be leaning on such transfers that might fail to commit through the operational timeline. Furthermore, transparency is much easier achieved in BAA’s with organized markets and published data as opposed to BAA’s without.

4. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on whether the failure of the day ahead resource sufficiency evaluation should have a bearing on the level of priority afforded to market transfers (EDAM and WEIM) souring from an EDAM BAA facing emergency conditions and sinking in the EDAM BAA that failed the resource sufficiency evaluation.

No comments at this time.

5. CONFIDENCE IN MARKET TRANSFERS: Please provide any additional comments on the topic of confidence in market transfers (occurring through the EDAM and WEIM).

No comments at this time.

6. TRANSMISSION COMMITMENT: Please provide your organization’s comments on the overall framework of transmission buckets in the context of making transmission available to the EDAM as described in section II.B.1 of the EDAM straw proposal.

The transmission bucket framework appears to be a workable approach. Both Bucket 1 and Bucket 2 include all transmission previously sold to native load customers or third parties. As noted in the Straw Proposal, the transmission service provider already is compensated for Bucket 1 capacity through transmission reservations and contracts or transmission access charges. Similarly, the transmission provider already is compensated for Bucket 2 capacity. Thus, both Bucket 1 and Bucket 2 transmission should be made available hurdle-free for market optimization unless self-scheduled by rights holders. 

 

The CAISO is proposing that Transfer Revenues be credited to rights holders that self-schedule using their rights and to rights holders that release unused rights prior to the day-ahead market. The former is analogous to the Perfect Hedge that credits congestion charges to rights holders within ISO, but the latter goes even further. More discussion is needed about whether rights holders within the CAISO BAA should receive similar treatment for releasing unused rights as is proposed for rights holders in the non-CAISO BAAs, or whether released rights of non-CAISO rights holders should be treated similarly to the CAISO rights holders (i.e., not receive compensation for the EDAM use of their unscheduled rights).

 

See further comments below about use of unscheduled rights and potential alternative compensation mechanisms to avoid hurdle rates for Bucket 3 transmission.

 

7. TRANSMISSION COMMITMENT: Please provide your organization’s perspective on Bucket 2 transmission and whether it should be made available to the EDAM only through a voluntary framework or through a more general rule that transmission unscheduled by 10am of the day ahead is automatically made available to the EDAM for optimization as described in the straw proposal.
Consider the implications of transmission customers retaining the ability to exercise those transmission rights between the day ahead and real time markets and the potential implications on redispatch.

As noted in response to Item 1, once a Balancing Authority Area (BAA) voluntarily chooses to participate in EDAM, all of that BAA's loads, resources and transmission must, with limited exceptions, participate in the EDAM. Transmission rights holders should be free to use their rights by submitting self-schedules, but any unscheduled rights should be available for optimization in the EDAM. BAMx believes it is extremely important that any unscheduled transmission within each EDAM BAA be made available to EDAM for optimization of transfers. This is true for all three Buckets. Otherwise, there will be a misalignment between the day-ahead market and the real-time market results that is created by systematically excluding transmission from the day-ahead optimization. The Bucket 1 and Bucket 2 transmission should be made available without hurdle rates. CAISO experienced so-called phantom congestion when it initially held back transmission associated with existing transmission contracts and transmission ownership rights in case those rights were later utilized in real-time. This created a systematic modeling error that resulted in predictable distortions between day-ahead and real-time market prices. The approach was changed to make the unscheduled transmission available to the day-ahead market, while allowing parties with pre-existing real-time scheduling rights to exercise those rights. While this results in the system at times having to be redispatched to accommodate real-time schedule changes, the associated costs are outweighed by the benefits from making more transmission available to the optimization and from more accurate system modeling. As CAISO has noted, the pro forma OATT requires firm point-to-point transmission to be scheduled by 10:00 am (or a reasonable time generally accepted in the region and is consistently adhered to by the Transmission Provider (TP)). Schedules submitted after 10:00 am will be accommodated, if practicable. The unscheduled transmission is then available to be released by the TP as non-firm transmission in real-time. Given that the unscheduled transmission would otherwise be released in real-time anyway, including it in the day-ahead optimization is appropriate and does not infringe on the customer's rights to use their transmission. If those customers subsequently exercise real-time rights (to the extent they have such rights), the redispatch costs can be allocated to the host BAA for reallocation to the transmission provider and/or transmission customer pursuant to their OATT. The transmission provider can use the transfer revenues obtained as a result of using the unscheduled rights in the EDAM optimization to offset potential redispatch costs. In addition, the redispatch costs will not necessarily be charges – they also can be credits, depending on what has changed between day-ahead and real-time.

8. TRANSMISSION COMMITMENT: Please provide your organization’s perspective on the compensation options for bucket 3 transmission described in the EDAM straw proposal.
More specifically, consider whether Bucket 3 transmission rates should be reflected in the market optimization through a direct hurdle rate or should the reduced transmission revenues be addressed outside of the market optimization through after the fact cost recovery.

Including a hurdle rate for Bucket 3 transmission could significantly reduce the efficiency of the EDAM market optimization. The hurdle rate for ISO Bucket 3 transfers currently would be approximately $16/MWh, and could be $20/MWh when EDAM is implemented. Many of the potential EDAM BAAs would have hurdle rates in the range of $3-$6/MWh. Even these "low" hurdle rates could result in otherwise economically efficient transfers being blocked. It therefore seems reasonable to explore whether reduced transmission revenues should be addressed outside of the market optimization through after-the-fact cost recovery, or whether the transfer revenues realized from the Bucket 3 transmission should be the sole compensation.

9. TRANSMISSION COMMITMENT: Please provide your organization's comments on the concept of Bucket 3 transmission costs being recovered outside of the market optimization, should the ISO through the EDAM process work toward a design for transmission revenue recovery, based on one of the options described (3A, 3B, 3C), in order to keep the EDAM entity whole as a result of EDAM participation.
Some questions to consider: are there additional variations to the described options; what should be the recoverable lost transmission revenues; how should the lost transmission revenues be allocated (or a transactional basis, across load in EDAM or to each EDAM entity to allocate to its customers); how do the described options impact bidding incentive in the EDAM market.

BAMx believes more discussion is needed about whether and how EDAM entities (including CAISO) should be kept whole for lost Bucket 3 transmission sales as a result of EDAM participation. Focusing only on lost sales of Bucket 3 transmission may be a too narrow view of the costs and benefits of EDAM participation. At a minimum, any assessment of the lost transmission sales revenues must consider the offsetting transfer revenue benefits. To ignore these benefits could grossly overstate the impacts of the lost Bucket 3 transmission sales. Further, EDAM participation will confer additional benefits of reduced cost to serving load that will be difficult to directly attribute to the use of Bucket 3 transmission, but which nonetheless will benefit participants from such use.

 

Finally, it is important to recognize that, should CAISO's preferred approach for allocating transfer revenues be adopted (i.e., all transfer revenues between CAISO and other EDAM BAAs would be retained solely by the non-CAISO BAAs), only non-CAISO EDAM BAAs would receive incremental transfer revenues resulting from making their Bucket 3 transmission available without a hurdle rate. CAISO would not receive any transfer revenue benefit to help offset the loss of wheeling access charge revenues, while non-CAISO BAAs would receive all of the transfer revenues resulting from CAISO making Bucket 3 transmission available with no hurdle rate. As further described below in response to Item 33, BAMx believes that transfer revenues should be shared between CAISO and non-CAISO EDAM BAAs.

 

10. TRANSMISSION COMMITMENT: Please provide your organization’s comments on any other aspects of the transmission commitment in EDAM topic.

No comments at this time.

11. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the process for conducting the EDAM RSE as described in section II.B.2 of the EDAM straw proposal.
This includes comments on the ability to conduct advisory RSE tests prior to the binding run, the timing of the RSE, the new tool, inputs, and other elements.

BAMx supports conducting the day ahead RSE using the bids and self-schedules to be used in the binding run.

12. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposed treatment of WSPP Schedule C and like firm energy contracts within the EDAM RSE.
These arrangements are commonly relied upon across the west, including the ISO. The ISO proposed that these count toward the RSE by being self-scheduled and that these arrangements reduce the RSE obligation. Consider providing comments on whether these should be allowed to count in their current form (limited knowledge of source of supply or transmission quality); whether the market is expected to evolve toward providing more specific source information; how these firm energy contracts should be modeled (whether sourcing from adjoining BAA or another method); any additional considerations.

BAMx supports the CAISO's proposal to count WSPP Schedule C firm energy contracts towards the EDAM RSE. These instruments are commonly used throughout the WECC and have comparable or better reliability as compared to physical resources. BAMx also supports modeling these resources as being distributed throughout the source BAA, unless more specific information is available about the specific resources supporting the contract prior to the deadline for submitting binding bids.

13. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s perspective on the ISO proposal, and associated reliance, on day ahead intertie bids (not associated with resource adequacy).
Some questions to consider: should these arrangements count toward the RSE; should these be monitored for performance and delivery; should additional criteria be imposed, such as an attestation, on these to provide an added level of confidence in performance.

BAMx supports counting intertie bids towards the RSE, whether or not they are associated with resource adequacy obligations. These are financially binding commitments and are essential resources used by CAISO to serve CAISO load. The intertie bids are analogous to bilateral market transactions (e.g., WSPP Schedule C transactions) that other EDAM entities will be able to use to meet their RSE obligations.

14. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the treatment of demand response and its different types and functions for purposes of passing the RSE.

No comments at this time.

15. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposed EDAM RSE failure consequences approach under which transfers would be allowed under an RSE failure at a penalty price.
Please comment on what an appropriate penalty price would be.

BAMx supports allowing EDAM transfers under an RSE failure at a penalty price (under certain circumstances described in Item 16), but only to the extent that the penalty prices will be applied outside of the EDAM market optimization. That is, the use of the penalty prices should not directly affect the EDAM market optimization, and should be applied only to the party failing the RSE (and only under certain circumstances as described in Item 16).

16. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposed EDAM RSE failure consequences approach which distinguishes the consequences depending upon whether the failure occurred under “normal conditions” as compared to “stressed system conditions.”
Please include consideration of potential different frameworks, how “stressed system conditions” can be defined; and any other perspectives on the structure of failure consequences and their impact on developing a robust RSE.

BAMx supports distinguishing RSE failures during "normal conditions” as compared to "stressed system conditions." Only during the latter should the penalty prices be applied. During normal conditions, a party failing the RSE is not likely to materially impact other market participants, and it makes sense to allow for economically efficient transfers to occur without penalizing participants for failing the RSE in these circumstances.

17. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the concept of a pooled WEIM RSE for entities passing the EDAM RSE, as described in the straw proposal and stakeholder meeting.

No comments at this time.

18. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provider your organization’s comments on any other elements of the EDAM RSE not raised by the questions above.

No comments at this time.

19. INTEGRATED FORWARD MARKET (IFM) AND RESIDUAL UNIT COMMITMENT (RUC): Please provide your organization’s comments on considerations related to the IFM and RUC as part of EDAM.
This includes consideration of the role of the RUC process as a critical component of the EDAM and the proposal that all supply offered into IFM is also offered in the RUC.

No comments at this time.

20. INTEGRATED FORWARD MARKET (IFM) AND RESIDUAL UNIT COMMITMENT (RUC): Please provide your organization’s comments on the role of the imbalance reserve market product, currently being developed in the Day-Ahead Market Enhancements initiative, in the EDAM.

No comments at this time.

21. MARKET POWER MITIGATION (MPM): Please provide your organization’s comments on the proposal to extend the WEIM market power mitigation framework to the EDAM and the further evaluation of potential market power mitigation enhancements within the Price Formation Enhancements initiative.

No comments at this time.

22. CONVERGENCE BIDDING: Please provide your organization’s comments on the proposal for a transition period under which convergence bidding is only a market feature in the ISO BAA and not available in other EDAM BAAs at the onset of the EDAM.

No comments at this time.

23. CONVERGENCE BIDDING: Please include any additional comments on the topic of convergence bidding within EDAM.

No comments at this time.

24. EXTERNAL RESOURCE PARTICIPATION: Please provide your organization’s comments on the ISO initial leaning toward extending the WEIM framework of external resource participation to the EDAM.
Under this framework the ISO would continue to allow source specific and non-source specific supply (intertie bids) to be economically offered into the ISO BAA. Non-ISO EDAM entities would continue to support source specific supply (pseudo-ties and dynamics), the self-scheduling of supply under contract, but intertie bidding would not be allowed at the intertie of the EDAM BAA.

BAMx believes that self-schedules within the EDAM footprint (between any EDAM BAAs) should only be allowed in instances in which the party submitting the balanced self-schedule has registered a complete path from a specific generator source to a registered sink, using contracted transmission rights. In all other instances, generation and load should bid into the EDAM optimization and the value of the ETSR should be determined by the EDAM optimization.
 

It seems strange to limit access to intertie bidding for the rest of the EDAM boundary, while non-EDAM entities continue their access. Could this create advantages for certain market participants over others or incentivize not participating in EDAM to maintain access to economic bidding? BAMx requests that CAISO provide an additional explanation of the pros/cons of allowing or prohibiting intertie bidding at the non-CAISO EDAM boundaries.

25. EXTERNAL RESOURCE PARTICIPATION: Please include any additional comments on the topic of external resource ability to participate in the EDAM.

No comments at this time.

26. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s overall comments, including potential suggested enhancements, on the resource specific approach to GHG accounting as described in section II.E of the EDAM straw proposal.

No comments at this time.

27. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the resource specific’s approach use of the RSE solution as the counterfactual for measuring secondary dispatch.

No comments at this time.

28. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the resource specific approach’s measures to limit secondary dispatch.

No comments at this time.

29. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s overall comments, including potential suggested enhancements, on the zonal approach to GHG accounting as described in section II.E of the EDAM straw proposal.

No comments at this time.

30. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the design of the hurdle rate for the zonal approach.

No comments at this time.

31. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the treatment of resources outside the GHG regulation area as internal to a GHG regulation area on a long-term or short-term basis, using the GHG pseudo tie functionality, in the zonal approach.

No comments at this time.

32. GREENHOUSE GAS ACCOUNTING: Please provide any additional comments on the GHG topic that were not captured by the questions above.

No comments at this time.

33. TRANSFER REVENUE ALLOCATION: Please provide your organization’s comments on the proposed transfer revenue allocation approach as described in section II.D.1 of the straw proposal and any other aspects of the transfer revenue allocation discussion topic.

BAMx believes more explanation is needed about how the transfer revenue value will be determined. The Straw Proposal does not include important details. For example, it appears that transfer revenues will be based on the Marginal Energy Cost (MEC) differences between the sending and receiving BAAs. BAMx understands that the MEC will be based on the shadow price of the power balance constraint for each BAA. This means that the transfers are assumed to represent the marginal cost of serving the last megawatt of load in each BAA, without regard to the impact of the transfers on internal transmission constraints. Put another way, each BAA is responsible for managing its internal congestion costs. If the transfer revenues are shared equally between the sending and receiving BAAs (as would be the case under the Shared Transfer Revenue Distribution approach), using the MEC approach would be reasonable since it would recognize that the transfers could not take place without the transmission provided by both the sending and receiving BAA. If, however, the transfer revenues are not shared (as would be the case under the CAISO's preferred Transmission Contribution Distribution approach), then CAISO would receive no transfer revenue benefit from the transfers. Instead, the non-CAISO sending EDAM BAA would be treated as if the resources used for the transfers to the CAISO were located inside the CAISO at the aggregate of the CAISO load; and the non-CAISO receiving BAA would be treated as if the non-CAISO BAA loads were located inside the CAISO. This approach makes the CAISO transmission needed to effectuate the transfer freely available, with the CAISO receiving no direct benefit from the EDAM transfers that will clearly create direct benefits for other EDAM participants.

 

BAMx is concerned that CAISO's preferred approach fails to recognize that both the CAISO and sending BAAs are providing the transmission needed to facilitate the EDAM transfer and should therefore share the transfer revenues equally. Conversely, congestion associated with the Intertie Constraint is associated with schedules at the intertie that are not optimized as EDAM transfers and, therefore, should not be shared. Linking the allocation on the basis of whether non-EDAM transactions at the intertie compete with EDAM transfers is not appropriate on its face, since the EDAM transfers cannot take place without the transmission being made available from both sending and receiving BAAs. Further, doing so could create inappropriate incentives for intertie bidding that could impact the allocation of transfer revenues. Our expectation is that as more transmission is made available to the EDAM, the volume of Intertie transactions will decrease and the frequency of ITC binding will decrease. This will naturally shift most of the value to the ETSR constraint with a corresponding reduction in the amount of ITC congestion revenues. BAMx believes it is appropriate for both BAAs to share the ETSR transfer revenues, while leaving the ITC congestion revenues with the BAA that is managing the congestion. Because of this, BAMx does not support the CAISO’s preferred Transmission Contribution Distribution approach (Approach 1), but supports the Shared Transfer Revenue Distribution approach (Approach 2), where Transfer Revenues are distributed appropriately between both BAA’s while each BAA retains and manages the distribution of its own internal congestion rents.

 

BAMx also believes that the manner in which CAISO Intertie CRRs are settled should be changed to align with the expected shift away from intertie scheduling to EDAM resource scheduling. The same transmission that currently is used for Intertie transactions will increasingly be used for EDAM transactions, and the CAISO participants that fund the transmission should continue to benefit from that transmission. One option would be to retain the current CRR allocation process, but to change the CRR settlements to use the weighted average value of the CAISO share of the ETSR revenues and the ITC congestion revenues to fund the Intertie CRRs. This would preserve the hedging value for Intertie CRR holders, without disrupting the allocation process.

34. SETTLEMENTS: Please provide your organization’s comments on settlements aspects of the EDAM described thus far, recognizing these will develop as the design evolves, as discussed in section II.D.2 of the EDAM straw proposal.

No comments at this time.

35. EDAM TECHNICAL WORKSHOPS: Please provide your organization’s comments on the upcoming EDAM technical workshops. Which key components of the straw proposal should be further discussed in EDAM technical workshops.
Please be as specific as you as possible.

BAMx requests that time be dedicated in the workshops to describing the rationale for each of the three transfer revenue allocation options, including examples of specific scheduling points and transfer locations between non-CAISO EDAM BAAs and between CAISO and non-CAISO EDAM BAAs. In particular, the ownership and contractual rights related to the transmission needed to facilitate the transfers and intertie schedules should be compared and contrasted so that parties could better understand the basis for the information shared on Slides 64 through 67 of the May 25 stakeholder meeting. In addition, BAMx requests discussion of how congestion costs within CAISO and non-CAISO EDAM BAAs will be determined, collected and allocated to market participants, including a discussion of what, if anything, is different about how congestion costs are determined within CAISO and non-CAISO EDAM BAAs.

  

BAMx requests that the workshops describe in detail how the Marginal Energy Cost (MEC) will be calculated and how that will impact the calculation of congestion within each EDAM BAA and across EDAM BAAs. In particular, will the creation of separate MEC value reference points mean that the marginal cost of congestion will not be comparable across EDAM BAAs?

 

BAMx requests that the workshops include a discussion of Integrated Balancing Authority Area (IBAA) pricing and an explanation of why IBAA pricing should or should not continue, given that the loads, resources, and transmission of EIM entities and EDAM entities are inextricably integrated with the existing Western EIM and the proposed EDAM.

36. GENERAL COMMENTS: Please provide your organization’s comments on any other elements or aspects of the EDAM straw proposal.

No comments at this time.

Bonneville Power Administration
Submitted 06/16/2022, 01:58 pm

Contact

Briana Allen (bkallen@bpa.gov)

1. EDAM VOLUNTARY MODEL: Please provide your organization’s comments on the proposed structure of the EDAM voluntary participation model as described in section II.A.1 of the EDAM straw proposal.

Bonneville[1] largely supports the voluntary participation methods surrounding market entry and exit outlined in the proposal, as well as the transitional measures which would allow new EDAM entities to enter the market with a reduced risk of experiencing or creating adverse market impacts.  However, Bonneville is concerned that the voluntary participation model may not afford load serving entities within a participating BAA with a meaningful opportunity to decline to participate in the EDAM.

Bonneville seeks clarification about the impacts of the proposal for full resource participation on entities within our BAA. Many resource owners and operators may not have a desire for their own resources to participate in the EDAM and may want to be able to be unaffected by the market. Additionally, Bonneville markets power from federal generation resources that may fall within EDAM entity BAAs. Bonneville seeks additional information on how the EDAM participation model impacts the non-participating entities within a BAA, including resource modeling expectations, requirements for submitting self-schedules and how the market will exclude those schedules from the optimization, and settlement impacts. 

Similarly, the proposal states that “[o]nce in the EDAM, the entity will offer its BAA supply and load into the market, which will optimize generation commitment to meet the demand across the footprint, deriving benefits of EDAM.”   It is unclear to Bonneville whose “load” is being referenced in this statement.  In most Pacific Northwest BAAs, the BA does not own or control all the load in its BAA. Specifically, Bonneville asks the CAISO for clarification on the following questions:

  1. Can self-scheduled resources be associated with particular loads?
  2. Does the CAISO assume that all demand in a BAA will be bid in to the market (even if self-scheduled)?
  3. Similarly, will all loads be settled, even if there is a self-scheduled resource that could be dedicated to a non-participating load?
  4. How will the EDAM proposal account for loads of LSEs that decline to participate within the boundaries of an EDAM BAA? 
  5. On the other side of the coin, how will the EDAM proposal account for a participating entity’s loads that are physically located within the boundaries of a non-participating BAA?

Additionally, Bonneville seeks clarification on how the EDAM proposal for full resource participation would impact the current WEIM participation structure that allows participating and non-participating resources. For example, does this mean that all resources in a participating BAA would have a contractual relationship with the CAISO?

Bonneville has a long-term contractual and statutory obligation to serve its preference customers with federal power and the answers to these overarching questions are fundamental for a market design that is consistent with these obligations.

 


[1] Bonneville is a federal power marketing administration within the U.S. Department of Energy that markets electric power from 31 federal hydroelectric projects and some non-federal projects in the Pacific Northwest with a nameplate capacity of 22,500 MW. Bonneville currently supplies 30 percent of the power consumed in the Northwest. Bonneville also operates 15,000 miles of high voltage transmission that interconnects most of the other transmission systems in the Northwest with Canada and California. Bonneville is obligated by statute to serve Northwest municipalities, public utility districts, cooperatives and then other regional entities prior to selling power out of the region.

2. EDAM FEES: Please provide your organization’s comments on the proposed framework of the EDAM fee structure as described in section II.A.2 of the EDAM straw proposal.

Bonneville believes the proposal for how EDAM Fees will be determined and assessed seem reasonable and are in alignment with the fee structure of the WEIM.  Bonneville is interested in learning what methods and assumptions the CAISO is using to project that EDAM onboarding fees will be less than WEIM implementation costs.

3. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on the concept of market transfers (occurring through the EDAM and WEIM) having equal priority to load to the extent an individual EDAM BAA faces severe emergency conditions as discussed in section II.A.3 of the EDAM straw proposal.

Bonneville does not support equal priority for load and exports.  In the case of the priority given to market transfers in emergency conditions, Bonneville sees the proposal to curtail EDAM transfers on an equal priority basis to load as pre-emptive and that curtailment determinations should continue to be made in real-time.  Bonneville suggests the CAISO should maintain plans for out-of-market supply and operational tools in the EDAM time-horizon to follow NERC standards to avoid load shed.

The proposal states that “if there is a risk of load shed in a BAA, export EDAM transfers be afforded equal priority to load and thus may be curtailed or reduced on a pro rata basis with load subject to operator coordination and application of good utility practice.”  This would violate NERC standards and OATTs.  Under NERC standards and OATTs today, transmission providers curtail point-to-point transfers and redispatch NT resources to continue serving load within the BAA.  Exports from the BAA thus are not afforded equal priority to load because exports on point-to-point must be curtailed (if such curtailments will relieve the constraint(s)) prior to shedding load. 

It is unclear to Bonneville how providing equal priority rights to EDAM Exports comports with or can co-exist with NT Redispatch under the OATT and emergency measures such as contingency reserve deployment. The concept of curtailing point-to-point transmission only at the same time as shedding load would require a fundamental shift for transmission providers and is not likely something that would be acceptable to load serving entities across the Pacific Northwest. 

4. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on whether the failure of the day ahead resource sufficiency evaluation should have a bearing on the level of priority afforded to market transfers (EDAM and WEIM) souring from an EDAM BAA facing emergency conditions and sinking in the EDAM BAA that failed the resource sufficiency evaluation.

Bonneville supports the development of incentives to discourage EDAM BAAs and CAISO from failing the resource sufficiency evaluation and placing too much reliance on real-time purchases to maintain reliability.

5. CONFIDENCE IN MARKET TRANSFERS: Please provide any additional comments on the topic of confidence in market transfers (occurring through the EDAM and WEIM).

Confidence in market transfers is paramount to assuming benefits in any organized market, and Bonneville supports a design that increases that confidence for potential market participants.  However, the mechanisms to create that confidence must be supported by a foundation of well-functioning products and services, be balanced with the ability for OATT entities to meet their OATT obligations, and enable BAAs to take appropriate and swift actions to address reliability concerns on their systems.  Bonneville suggests further discussions through the CAISO stakeholder process to fully understand the implications on each of these impacted areas.

6. TRANSMISSION COMMITMENT: Please provide your organization’s comments on the overall framework of transmission buckets in the context of making transmission available to the EDAM as described in section II.B.1 of the EDAM straw proposal.

As one of the largest transmission service providers in the West, Bonneville has a strong interest in how transmission is provided to EDAM amidst the backdrop of open access transmission principles and each EDAM Transmission Service Provider (TSP) maintaining their NERC functions and responsibilities.  Bonneville believes there are many details that require further discussion before it can fully evaluate the feasibility and workability of how the OATT construct would be upheld alongside the EDAM design in a manner that respects existing transmission rights, obligations, and principles.

Bonneville generally supports the overall concept of distinguishing the three buckets of transmission made available to enable EDAM transfers to support separate and distinct functions. However, Bonneville has concerns about the details of each transmission bucket design, and therefore does not support the underlying design elements of the transmission buckets as they have been proposed.

Bucket 1 transmission is meant to be firm or conditional firm transmission that is needed to support resource sufficiency plans, and therefore must be made available to the market to ensure a reliable day-ahead commitment and support confidence in market transfers.[1]  The EDAM straw proposal later proposes that WSPP Schedule C and ISO RA Import contracts, along with economic bids at the CAISO interties, should count towards meeting the EDAM Resource Sufficiency Evaluation despite the fact that the source (both resource and source BAA) and transmission are unknown at the time of the day-ahead market optimization.[2]  The allowance of any firm energy contracts which do not have identifiable firm or conditional firm transmission at the time of the day-ahead market optimization is contradictory to the foundational reasons for providing bucket 1 transmission. 

Additionally, allowing these types of contracts to count towards bucket 1 transmission will likely undermine confidence in the firmness of bucket 1 transmission, and could lead to unintended consequences with the usage of bucket 2 transmission, particularly if the CAISO decides to pursue a market design which automatically assumes unscheduled bucket 2 transmission may be used for day-ahead market optimization.  Specifically, by these WSPP Schedule C and ISO RA Import contracts not having their own transmission identified, the unscheduled bucket 2 transmission would presumably be used to support transfers of those contracts in the market optimization. This enables transmission in support of those contracts to go unsourced, and for the contract holders to lean on the participants who have previously purchased those bucket 2 transmission rights for their own intended uses.  Given this concern, Bonneville may support the allowance of WSPP Schedule C and ISO RA Import contracts to count towards meeting resource sufficiency if and when the source and transmission is known at the time of the EDAM optimization.  Understanding this is not always the case, Bonneville suggests the CAISO initiate a stakeholder process to transition away from these contracts as they are currently constituted.  More details on this suggestion are captured in response to comment #12.

Bonneville also has concerns about the EDAM presuming the availability of unscheduled transmission rights for bucket 2 transmission that a transmission rights holder does not electively donate to the market for use.  The Energy Policy Act of 2005[3] prohibits the Federal Energy Regulatory Commission from forcing the conversion of firm transmission rights to financial rights for any “electric utility or person” in the Pacific Northwest.  Bonneville requests that CAISO and stakeholders further analyze the implications of this statute and develop an understanding on the realm of feasibilities for entities in the Pacific Northwest to participate in a Day-ahead market.  

In addition to these concerns, the proposal for bucket 3 transmission donation suggests that all Available Transfer Capability (ATC) at the time of the day-ahead market run would be made available to EDAM for optimization.  This construct essentially diminishes the need for transmission customers to continue to purchase point-to-point transmission beyond their bucket 1 needs because the additional transmission would be made available by the TSP to the market for use.  This results in shifting transmission cost recovery onto load or creates a higher uplift charge for the market, creates uncertainty in the transmission rate recovery process for TSPs, and undermines the value of the transmission bucket construct.  Bonneville expands on this concern in comment #8.

 


[1] See section B.1.a.1 of the CAISO Straw Proposal – Extended Day-Ahead Market dated April 28, 2022.

[2] See section B.2.c.5.a of the CAISO Straw Proposal – Extended Day-Ahead Market dated April 28, 2022.

[3] 16 U.S.C. § 824r (2005).

7. TRANSMISSION COMMITMENT: Please provide your organization’s perspective on Bucket 2 transmission and whether it should be made available to the EDAM only through a voluntary framework or through a more general rule that transmission unscheduled by 10am of the day ahead is automatically made available to the EDAM for optimization as described in the straw proposal.
Consider the implications of transmission customers retaining the ability to exercise those transmission rights between the day ahead and real time markets and the potential implications on redispatch.

As stated in Bonneville’s response to comment #6, Bonneville has concerns about the EDAM presuming the availability of unscheduled transmission rights for bucket 2 transmission that a transmission rights holder does not electively donate to the market for use.  While the proposal notes a caveat that transmission rights holders would still be able to use their unscheduled rights out of market between day-ahead and real-time, this would result in market re-optimization and likely increase congestion costs.  This construct inherently conflicts with OATT rights by forcing firm transmission rights holders to pay additional congestion costs to use those rights.  For the proposal to assume that buckets 1 and 2 transmission are available for market optimization, it appears to require the consent of OATT transmission customers within a participating BAA.  Given the improbability of all transmission customers in the Pacific Northwest and throughout an EDAM footprint to agree to make their transmission available to the market in exchange for the potential of receiving congestion revenues, Bonneville strongly suggests the CAISO work with stakeholders to develop an option for meaningful non-participation.

8. TRANSMISSION COMMITMENT: Please provide your organization’s perspective on the compensation options for bucket 3 transmission described in the EDAM straw proposal.
More specifically, consider whether Bucket 3 transmission rates should be reflected in the market optimization through a direct hurdle rate or should the reduced transmission revenues be addressed outside of the market optimization through after the fact cost recovery.

Bonneville does not support the “reciprocity” approach to making bucket 3 transmission available to the market at an uncompensated rate, and currently has concerns about the use of both out-of-market after the fact transmission compensation mechanisms, and a BAA-specified hurdle rate for transmission compensation. Bonneville requests further exploration of alternatives to be completed in this area.

Bonneville is concerned that the bucket 3 proposal could provide a strong disincentive for the purchase of point-to-point transmission going forward because all unsold ATC would be made available to the market.  This could leave TSPs without means to recover costs associated with such transmission because point-to-point customers could access the transmission as unsold without prior reservations. This would likely result in TSPs recovering more costs through its network rates, which could be considered an inappropriate allocation of costs to network customers who would essentially be paying for the costs of point-to-point users who are awarded “unsold” ATC under the bucket 3 framework.  Bonneville elaborates on this concern in response to comment #10, and suggests that TSPs have the ability to determine how much ATC is made available to the market for optimization.

Bonneville also believes that the use of bucket 3 transmission by the market needs to be compensated at a rate that adequately covers the cost of the transmission capacity made available to the market, and what transmission is actually used or is forecasted to be used.  This means that regardless of the rate mechanism used, the TSP must have the ability to provide adequate inputs into that rate construct to instill confidence that costs are fairly allocated among users of the system. 

Principally, Bonneville firmly believes that both transmission costs and transmission compensation should be based on cost causation, which has not been adequately addressed in the current proposals. Generally, a hurdle rate compensation method better aligns with cost causation principles, as compared to an out-of-market after the fact compensation approach. However a BAA-specified hurdle rate would still not meet this principle because of the intricacies of the transmission system in the Pacific Northwest. Bonneville suggests the CAISO work with stakeholders to consider alternative bucket 3 transmission compensation methods than those currently proposed, such as a zonal rate. A zonal rate has the potential to reduce significant rate pancaking that may occur in areas of the Pacific Northwest, simply based on the laws of physics in relation to BAA boundaries and line ownership, when generation is dispatched. During this process, Bonneville encourages the CAISO to work with stakeholders to estimate the lost transmission revenue impacts that would occur with EDAM given a range of participation scenarios and assumptions, which could be informative in determining preferred methods of bucket 3 transmission compensation.

9. TRANSMISSION COMMITMENT: Please provide your organization's comments on the concept of Bucket 3 transmission costs being recovered outside of the market optimization, should the ISO through the EDAM process work toward a design for transmission revenue recovery, based on one of the options described (3A, 3B, 3C), in order to keep the EDAM entity whole as a result of EDAM participation.
Some questions to consider: are there additional variations to the described options; what should be the recoverable lost transmission revenues; how should the lost transmission revenues be allocated (or a transactional basis, across load in EDAM or to each EDAM entity to allocate to its customers); how do the described options impact bidding incentive in the EDAM market.

While Bonneville has concerns about bucket 3 transmission cost recovery via out-of-market transactions as noted in comment #8, we would like to clarify our understanding of approaches 3A and 3B.  Bonneville interprets the proposal as allowing each EDAM BAA to provide to CAISO its “lost revenue” associated with unsold, offered transmission, and the CAISO would make the BAA whole through a market-wide uplift.  Approach 3A uses a volumetric-based uplift, while Approach 3B uses an end-of-year uplift applied to loads and/or imports/exports. Bonneville requests additional information on how a volumetric-based uplift would be calculated. Bonneville also requests clarification on whether a make-whole uplift would be based upon individual TSP costs or an EDAM-wide cost pool.

10. TRANSMISSION COMMITMENT: Please provide your organization’s comments on any other aspects of the transmission commitment in EDAM topic.

Bonneville offers considerations, or seeks clarity, in regards to transmission network and system modeling, bucket 3 transmission determinations, existing transmission contracts and the preservation of OATT rights, and “appropriate settlements” as referenced in the EDAM proposal.

Bonneville maintains concerns iterated in the initial round of EDAM development in 2019 regarding the need to model and manage to physical transmission system limitations, such as flowgates, as defined by each BAA.  Operating the market in a way that accurately solves around true constraints, system operating limits, and limits defined by each TSP is of the utmost importance in ensuring a reliable market dispatch and outcome.  Bonneville would like to clearly understand how the physical network constraints align, or do not align, with the modeled points of transfer for settlement purposes, as disparity between these physical constraints and potentially fictitious points of transfer may lead to artificial system congestion and/or disparity in settlement outcomes.  Bonneville requests further clarity on this topic.

In the case of bucket 3 transmission, which consists of unsold ATC offered by the EDAM entity, in its TSP function, to support transfers at interfaces between EDAM BAAs, Bonneville generally supports this construct so long as two conditions persist.  The first is that bucket 3 transmission must be adequately and appropriately compensated for market use, as noted in our response to comments #8 and #9.  Second, the TSP must have the ability to determine capacity limits related to how much ATC is available for market use.  The EDAM proposal indicates that all unsold ATC will be donated by the TSP to support market transfers; however, for many reasons including but not limited to maintaining system reliability, minimizing unnecessary cost shifts, and ensuring Bonneville can meet its statutory obligations, Bonneville must retain the ability to determine what ATC is made available for market use.  We believe this could be handled in several ways, for example the market could assume that all ATC is available but allow each TSP the ability to inform the CAISO what needs to be excluded for a set period of time, or perhaps conversely by allowing each TSP to communicate how much ATC is available for market use for a set period of time.  Bonneville is open to working through the CAISO stakeholder process to explore which alternative is the most efficient and effective for the overall market design.

Bonneville would also like clarification on CAISO’s proposal regarding Existing Transmission Contracts. Pages 12-13 of the proposal discuss preserving pre-OATT and OATT rights within the EDAM market construct. The proposal seems to indicate that customers with these rights may be able to insulate their resources and loads from market optimization.  Bonneville requests further information on this proposal.  Specifically, CAISO’s proposal for buckets 1-3 appears to suggest that almost all of the existing transmission rights for a BAA will be offered into the EDAM for optimization.  In light of that proposal, Bonneville would appreciate an explanation of which pre-OATT or OATT rights would be able to utilize the protections afforded by this section.  The proposal describes the method for preserving existing transmission rights between two “EDAM BAAs” and with intra-BAA transmission.  However, there is no discussion of how existing transmission rights would be preserved in a transfer between a non-EDAM BAA and EDAM BAA.  Please describe whether and how these transmission rights, scheduled outside of the market, would be accommodated by EDAM.

Lastly, the proposal states that transactions that have registered with the CAISO as existing transmission rights will receive “appropriate settlements,” (Pg. 12).  Bonneville would appreciate an explanation and an example of what an “appropriate settlement” would result in. 

11. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the process for conducting the EDAM RSE as described in section II.B.2 of the EDAM straw proposal.
This includes comments on the ability to conduct advisory RSE tests prior to the binding run, the timing of the RSE, the new tool, inputs, and other elements.

Bonneville generally supports the RSE framework as described in the Straw Proposal but recognizes there will be continued development of details before implementation.  We emphasize providing as much flexibility as possible to meet the daily RSE requirement because the bilateral markets can be illiquid, especially after 9 am.  Additionally, traded capacity products are not standard and can be very difficult to purchase in the day-ahead and real time markets.  Bonneville particularly seeks the necessary resource operation flexibility to participate in the EDAM framework, including adhering to the RSE timeline and for the potential requirement of providing a matching quantity of reliability capacity in the day-ahead market Residual Unit Commitment (RUC) process.  The management of hydro resources in the EDAM using daily energy limits alone will not provide the flexibility necessary to maintain Bonneville’s competing system obligations.

12. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposed treatment of WSPP Schedule C and like firm energy contracts within the EDAM RSE.
These arrangements are commonly relied upon across the west, including the ISO. The ISO proposed that these count toward the RSE by being self-scheduled and that these arrangements reduce the RSE obligation. Consider providing comments on whether these should be allowed to count in their current form (limited knowledge of source of supply or transmission quality); whether the market is expected to evolve toward providing more specific source information; how these firm energy contracts should be modeled (whether sourcing from adjoining BAA or another method); any additional considerations.

Bonneville supports the CAISO pursuing further discussion among stakeholders on the allowance of WSPP Schedule C contracts to count towards the RSE.  Ultimately, Bonneville would like to be able to support the allowance of these contracts to count towards the RSE, but acknowledges there are current limitations with these contracts, including that they may not always have the full integrity of identifiable transmission and supply source information by the RSE binding time of 10 am.  Bonneville suggests the CAISO work with stakeholders to determine a reasonable solution for the inclusion of WSPP Schedule C contracts for EDAM at its inception, as well as develop a preferred future-state outcome which best addresses the current limitations, along with a roadmap to implement over time.

13. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s perspective on the ISO proposal, and associated reliance, on day ahead intertie bids (not associated with resource adequacy).
Some questions to consider: should these arrangements count toward the RSE; should these be monitored for performance and delivery; should additional criteria be imposed, such as an attestation, on these to provide an added level of confidence in performance.

Bonneville supports counting supply offers over interties for RSE if those offers come from a specified source (generator or aggregation) and have associated firm transmission.  We acknowledge that tagging cannot take place until awards are known, but we encourage CAISO to think creatively about ways to determine dependability of supply offers.  One possibility could be to certify generators or entities, similar to certifying generators that sell Regulation, so that some portion of their supply offers can be deemed firm enough for RSE.  Repeated poor performance/delivery could become grounds for a reduction in certification. 

14. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the treatment of demand response and its different types and functions for purposes of passing the RSE.

CAISO proposes to include “emergency only” demand response be counted as a load reduction for EDAM BAAs as part of RSE.  While Bonneville appreciates that individual BAAs could hypothetically still meet load under stressed conditions, we are concerned that these resources are highly unlikely to be dispatched and will therefore increase the likelihood of leaning in most cases.  If emergency conditions truly exist, it is appropriate for entities to face the financial or transfer consequences of failing RSE. 

Bonneville supports RSE load modification for only price responsive demand response that bids into the market. 

15. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposed EDAM RSE failure consequences approach under which transfers would be allowed under an RSE failure at a penalty price.
Please comment on what an appropriate penalty price would be.

Bonneville supports the approach in which transfers (into the BA) would be allowed under an RSE failure at a penalty price.  Bonneville supports a hurdle rate that may be either static or dynamic, and we expect it will be set sufficiently high so as to remove potential incentives for leaning.  Bonneville is supportive of tiered penalty prices that increase with failure frequency. 

16. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposed EDAM RSE failure consequences approach which distinguishes the consequences depending upon whether the failure occurred under “normal conditions” as compared to “stressed system conditions.”
Please include consideration of potential different frameworks, how “stressed system conditions” can be defined; and any other perspectives on the structure of failure consequences and their impact on developing a robust RSE.

Bonneville does not support limiting transfers due to RSE failure in “normal system conditions.”  It would be difficult to predict if bilateral transaction costs will align with EDAM market clearing prices during non-stressed system conditions.  Because such purchases would be outside the standard trading timeframe, and if EDAM enforced a financial penalty structure for RSE failure, it is possible the costs of bilateral transactions would not align with EDAM market clearing prices.  Bonneville supports an after-the-fact administrative penalty to a BAA persistently failing the RSE.

During “stressed system conditions,” Bonneville supports having the options of EDAM transfer limitations or being subject to a hurdle rate in the market clearing process, including being subject to an after-the-fact administrative penalty for persistent failures.  Bonneville believes a hurdle rate set at the ISO bid cap is too high.  Further, Bonneville encourages the ISO to consider additional criteria defining stressed system conditions in the June–September period, hours ending 16–22.

17. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the concept of a pooled WEIM RSE for entities passing the EDAM RSE, as described in the straw proposal and stakeholder meeting.

Bonneville supports pursuing pooled EDAM BAAs for WEIM RSE, but have questions regarding potential implementation.  In particular, what is the expected impact on individual BAA’s diversity benefits, and how does CAISO intend to ensure deliverability of imbalance reserves (which are procured nodally) within the pooled footprint?  We encourage CAISO to take steps to ensure that intra-pool leaning does not occur without penalty to provide proper incentive to continue passing RSE as individual BAAs. 

18. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provider your organization’s comments on any other elements of the EDAM RSE not raised by the questions above.

Bonneville encourages the CAISO to provide reasonable flexibility for an EDAM participant to cure RSE failure without incurring penalties until necessary.  It should be noted a bilateral daily market does not currently exist for a 15-minute dispatchable product.

Base Schedules could also serve an important role in the EDAM RSE, as they do today. Base Schedules may provide a simple way to tie generation commitment to load.  Further details on this is addressed in response to comment #36. 

19. INTEGRATED FORWARD MARKET (IFM) AND RESIDUAL UNIT COMMITMENT (RUC): Please provide your organization’s comments on considerations related to the IFM and RUC as part of EDAM.
This includes consideration of the role of the RUC process as a critical component of the EDAM and the proposal that all supply offered into IFM is also offered in the RUC.

In recognition of long-start resources, economic demand bids, and virtual bids, RUC appears to be a necessary component.  According to the CAISO, RUC will address additional uncertainty, for sufficiency purposes, beyond the imbalance needs incurred between the IFM and RTD.  Bonneville requests the CAISO to provide more information regarding the calculation of this incremental uncertainty and its dependence on the RUC process.  In particular, how much does the need for RUC decrease if the EDAM proposal both incorporates an Imbalance Reserve Product and foregoes virtual bidding for at least one year?  For supply offerings to both IFM and RUC, it is critical to Bonneville that its hydro resources are supported by bid parameters fully enabling the management of both generation flexibility and operational constraints.

Bonneville requests clarification on whether the RUC process results in any changes to self-scheduled resource schedules. This could be problematic or unworkable for hydro resources that are self-scheduled to maintain operational or environmental requirements. It is Bonneville’s understanding that even if a resource is Self-Scheduled in the day-ahead market, it may be reduced through uneconomic adjustment down to the relevant minimum load in the day-ahead market or real-time market if needed to resolve a network constraint or to resolve resource operational or inter-temporal constraint violations.  Will the EDAM proposal contain similar functionality to move a self-scheduled resource off of its self-schedule?  If so, under what circumstances would that occur?  Could a Self-scheduled resource be moved off of its self-schedule for reasons unrelated to serving its own load? 

20. INTEGRATED FORWARD MARKET (IFM) AND RESIDUAL UNIT COMMITMENT (RUC): Please provide your organization’s comments on the role of the imbalance reserve market product, currently being developed in the Day-Ahead Market Enhancements initiative, in the EDAM.

Bonneville supports the Imbalance Reserve Product (IRP) as a vital and efficient way of addressing uncertainty between IFM and RTD.  Introducing the IRP allows for transparent price formation by allowing RUC to primarily address physical supply shortfalls resulting from virtual bidding in the IFM.  In addition, removal of the real time must-offer obligation (at $0) associated with resource adequacy transactions allows RA to focus on ensuring sufficient supply in the day-ahead window, while the IRP once again transparently supplies any additional need caused by IFM-RTD uncertainty. 

Bonneville reiterates its concerns with multiple new market power mitigation measures outlined in response to the latest DAME initiative proposal.[1]  These measures are sufficiently inappropriate as to warrant the introduction of an opt-out where entities can request to forego awards rather than have bids mitigated.  Bonneville is unwilling to allow over-mitigation to endanger its ability to reliably meet load without market reliance.

 


[1] See “BPA Comments – DAME Third Revised Straw Proposal – 19May2022_Final.docx,” submitted May 19, 2022.

21. MARKET POWER MITIGATION (MPM): Please provide your organization’s comments on the proposal to extend the WEIM market power mitigation framework to the EDAM and the further evaluation of potential market power mitigation enhancements within the Price Formation Enhancements initiative.

Bonneville supports including potential market power mitigation enhancements within the Price Formation Enhancements initiative because we expect that initiative will allow for additional time to examine nuanced effects and unintended consequences from expansive mitigation.  We have some concern that not specifically addressing problems with proposed Day-Ahead Market Enhancements MPM enhancements in the EDAM process will reduce CAISO’s willingness to explore optimal mitigation strategies, including the introduction of conduct and impact testing for market power.  We appreciate CAISO listening to concerns of use-limited hydro generators regarding situations where working to achieve hydro system operational objectives may mistakenly be considered market power.

22. CONVERGENCE BIDDING: Please provide your organization’s comments on the proposal for a transition period under which convergence bidding is only a market feature in the ISO BAA and not available in other EDAM BAAs at the onset of the EDAM.

Bonneville supports a transition period of up to one year.  Bonneville would also like to be reassured the CAISO believes no unintended, undesirable consequences will result from not enabling convergence bidding in EDAM participant footprints while allowing convergence bidding to continue in the CAISO footprint. In addition to a transition period, the Straw Proposal stated the CAISO would need to consider interim bidding requirements in the EDAM BAAs to maintain appropriate market incentives. Please provide specific details and examples regarding these interim bidding requirements.

23. CONVERGENCE BIDDING: Please include any additional comments on the topic of convergence bidding within EDAM.

Bonneville recommends additional CAISO led workshops focused on convergence bidding for prospective EDAM participants.  These workshops should include numerical case examples for demand and supply bidders, allowing participants to better understand the mechanics, benefits and risks associated with convergence bidding in the CAISO.  We expect these workshops will also provide clarity on “interim bidding requirements” that may be implemented during the transition period. 

24. EXTERNAL RESOURCE PARTICIPATION: Please provide your organization’s comments on the ISO initial leaning toward extending the WEIM framework of external resource participation to the EDAM.
Under this framework the ISO would continue to allow source specific and non-source specific supply (intertie bids) to be economically offered into the ISO BAA. Non-ISO EDAM entities would continue to support source specific supply (pseudo-ties and dynamics), the self-scheduling of supply under contract, but intertie bidding would not be allowed at the intertie of the EDAM BAA.

Bonneville strongly believes external resource participation in EDAM should be a day-one feature.  Bonneville fully understands the reliability concerns associated with allowing bids from unknown external resources, but if the external bid is coming from a specific resource or system sale and can provide a transmission tag to the EDAM border, the reliability risk is mitigated.  For example under the straw proposal, WEIM Participating Resources would be precluded from participating in EDAM if they were not in a participating EDAM BAA, even though those resources are both known and reliable. The exceptions described in the straw proposal for pseudo-tied resources and dynamic schedules would only be options for a very limited subset of resources and would exclude several reliable resources from the market and are essentially just avenues for resources to become “internal” to an EDAM BAA. 

Optimally, all the balancing authorities in the West would join the EDAM at the same time, but the more likely scenario will be similar to the WEIM with some initial participation and others taking longer to join or choosing not to join at all.  Most of the potential EDAM participants currently trade with each other in the robust bilateral market and rely on these trades to economically meet their loads.  Putting unnecessary obstacles on external resource participation in the EDAM could have a significant impact on the amount of energy that is currently traded among these parties.  In addition, allowing external resource participation from known reliable resources will allow those entities that will take longer to fully join the EDAM the opportunity to gain experience and be more prepared when and if they do join the EDAM.

Also, to the extent non-EDAM entities have load in EDAM BAAs, Bonneville encourages CAISO consider external resource participation that preserves the ability to self-supply imbalance reserves to these loads.  Entities should retain choice in determining whether to rely on other BAAs or serve their own load. 

Bonneville believes that external resource participation can be a viable and beneficial market design feature on day one of EDAM if concerns about reliability can be addressed (which Bonneville believes to be attainable) and therefore strongly encourages the CAISO to work through the specific concerns raised in the public stakeholder process to enable external resource participation at all EDAM entity BAA borders.  Bonneville does not support the inconsistent approach outlined in the EDAM proposal to allow external resource participation at the ISO BAA border, but not allowing it at non-ISO BAA borders. 

25. EXTERNAL RESOURCE PARTICIPATION: Please include any additional comments on the topic of external resource ability to participate in the EDAM.

No additional comments.

26. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s overall comments, including potential suggested enhancements, on the resource specific approach to GHG accounting as described in section II.E of the EDAM straw proposal.

Bonneville appreciates the CAISO’s recognition of the importance of the EDAM market design as it pertains to GHG accounting and reporting, and thanks CAISO staff for facilitating the working group discussions.  Bonneville is interested in ensuring the market design enables a reasonably accurate accounting of GHG emissions that meets state program requirements in the near-term and affords enough flexibility to meet those requirements in the long-term as well. 

Over 63 percent of Bonneville’s firm power sales to its preference customers are made to utilities in the state of Washington, and Bonneville sales to Washington utilities account for about 50 percent of the electricity consumed in the state.  As the CAISO is aware, Washington state passed a cap-and-invest program in 2021 (the Climate Commitment Act or CCA) and a mandate for Washington retail utilities to be 100 percent carbon-neutral by 2030 (the Clean Energy Transformation Act or CETA).  Given these Washington state laws and other local carbon-reduction goals, Bonneville’s customer utilities are concerned about the impact that participation in markets could have on emissions attributed to the federal system.  Bonneville has estimated that participation in the EIM could as much as double its Asset Controlling Supplier (ACS) emissions factor, which applies to sales to California’s cap-and-trade program as well as to Washington’s cap-and-invest program.  This impact would be even more significant in the EDAM if there is not an appropriate design for GHG accounting. Bonneville requests further exploration of alternatives to be completed in this area to ensure negative impacts are minimized.

Bonneville does not believe that the expansion of the current EIM design for GHG accounting to the EDAM, as described in the straw proposal, provides for an accurate or durable long-term solution for GHG accounting.  The main reason for this is that Bonneville does not believe the resource specific approach sufficiently addresses secondary dispatch and thus does not provide reasonably accurate GHG accounting.  This is discussed further in response to comment #28.

27. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the resource specific’s approach use of the RSE solution as the counterfactual for measuring secondary dispatch.

No specific comment at this time.

28. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the resource specific approach’s measures to limit secondary dispatch.

Bonneville is particularly concerned about the levels of secondary dispatch in the EDAM because of the likelihood of state environmental regulators accounting for these additional emissions under their respective state programs, and the subsequent impacts that could have on Bonneville’s customers.  Given the high level of secondary dispatch in the EIM resulting from this approach, the California Air Resource Board applies an “EIM Outstanding Emissions” calculation and essentially accounts for all EIM imports into the state as unspecified under California’s cap-and-trade program.  As Washington regulators develop rules for accounting for emissions attributed to EIM imports into the state, they will look to California for guidance.  This approach may be manageable for California load today for the EIM.  However, in the long-run applying this approach to the EDAM while state requirements and GHG reduction targets also get more aggressive jeopardizes EDAM market participants’ and LSEs’ ability to meet state standards. 

The current EIM GHG accounting design, even with the GHG enhancements that were implemented in 2018, results in high levels of unaccounted for secondary dispatch.[1]  To Bonneville’s knowledge, the CAISO has not modelled or estimated how much secondary dispatch would result under the application of the proposed resource specific approach in the EDAM.  However, based on Bonneville’s understanding of the approach, Bonneville is not confident that it does a better job of minimizing secondary dispatch as compared to the EIM design, and is concerned that the secondary dispatch volumes may actually increase because of the greater volume of transactions in an EDAM. 

Bonneville appreciates the efforts of the Western Power Trading Forum (WPTF) to share an alternative variation to this approach.  WPTF’s variation could be more effective at minimizing secondary dispatch than the CAISO’s proposed version of the resource specific approach because the WPTF variation limits the attribution of transfers to serve a GHG regulation area to incremental dispatch above an optimized baseline schedule.  However, without the CAISO modeling these two approaches, it is difficult to objectively identify whether WPTF’s proposed variation sufficiently minimizes secondary dispatch, and whether there are real impacts to price formation that should be weighed against it.  

Thus, at this time, absent modeling that shows the contrary, Bonneville does not believe the resource specific approach provides sufficient assurance that it can deliver reasonably accurate GHG accounting to make it a durable approach for the EDAM. 

 


[1] See Presentation-CurrentFrameworkforGreenhouseGas-GHG-AccountingwithinCAISOMarkets-Costs-Feb22-2022.pdf:  “Percentage of Transfers Serving CAISO Load that are potentially secondary dispatch”

29. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s overall comments, including potential suggested enhancements, on the zonal approach to GHG accounting as described in section II.E of the EDAM straw proposal.

The zonal approach shows promise of providing a more durable accounting solution for the EDAM, and Bonneville appreciates the efforts of those that developed the framework of this new approach.  The approach eliminates the false precision associated with “deeming” specific resources to have served load in a state with a GHG program.  It also diminishes the concerns with secondary dispatch while providing ways for specific resources outside of a GHG zone to be identified as serving load within the zone.  However, the newness of the approach poses challenges as well.  Bonneville would like to see design specifics like hurdle rates and resource specific pathways for meeting load in a GHG zone further explored and identified before making conclusions on a preferred approach.  Additional time is also needed to address the mechanics of reporting and compliance, which present a very different construct than current practices, for state regulators to assess whether this design could meet their state regulatory programs.  Unfortunately, there was not sufficient time in the work group to fully discuss and develop this approach.  Therefore, Bonneville urges the CAISO to put additional time into working with stakeholders to develop this approach for the EDAM.  All stakeholders would benefit from the CAISO modeling the two approaches so the trade-offs in providing accurate GHG accounting versus market efficiencies can be better assessed.

30. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the design of the hurdle rate for the zonal approach.

Setting an appropriate hurdle rate is an important consideration for the zonal approach.  Bonneville believes that as long as there are rules in place to allow resources outside the GHG area to be identified as meeting load in the GHG area at a specified emission rate, then using an unspecified emissions rate is a reasonable starting point.  However, Bonneville is open to the market design using a different hurdle rate that more closely reflects the emission rates of resources outside the GHG zone over a given time period.  The identification and use of a hurdle rate other than the unspecified emissions factor identified in state programs would need to be closely coordinated with state regulators.

31. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the treatment of resources outside the GHG regulation area as internal to a GHG regulation area on a long-term or short-term basis, using the GHG pseudo tie functionality, in the zonal approach.

There should be rules in place to allow resources outside the GHG area to be identified as meeting load in the GHG area at a specified emissions rate.  Situations where this should occur includes but is not limited to rules that enable surplus hydro located outside the GHG zone to be identified as meeting load inside the GHG zone at a specified emissions rate.  Bonneville believes these rules need to be developed in close coordination with state regulators to ensure they align with the intent of the state programs and provide sufficient assurance to state regulators that secondary dispatch has been adequately addressed.

32. GREENHOUSE GAS ACCOUNTING: Please provide any additional comments on the GHG topic that were not captured by the questions above.

Bonneville would like to comment on two additional considerations.

First, to the extent the market design needs to accommodate two GHG areas or zones, as it seemingly will to accommodate both California’s and Washington’s programs, Bonneville asks the CAISO to clarify how the model will determine which resources are deemed to which states (aside from the obvious pseudo-ties).  For example, if the least cost resource, including the GHG adder, is a hydro generator in the Pacific Northwest, is that generator deemed to California or Washington?  Is there a priority or criteria as to which state is deemed to have load met by the resource?  If the programs are not linked, would the price discrepancy in the GHG adder or GHG costs between states influence that priority?  This is a critical factor for understanding how well the design will work across multiple state programs and whether it will achieve equitable solutions.

Second, Bonneville also notes that Washington’s cap-and-invest program identifies power sales from a federal power marketing administration such as Bonneville as imports into the state, regardless of the fact that there are federal resources physically located in the state of Washington.  Under any approach taken for GHG accounting in the EDAM, the market design for GHG accounting would need to be able to accommodate this Washington regulatory construct.

33. TRANSFER REVENUE ALLOCATION: Please provide your organization’s comments on the proposed transfer revenue allocation approach as described in section II.D.1 of the straw proposal and any other aspects of the transfer revenue allocation discussion topic.

Bonneville supports transfer and congestion revenue allocation methodologies which result in distributing revenues to the entity making transmission available to the market.  An approach of this kind will encourage the continued sourcing of transmission by customers of transmission providers, as well as provide an incentive for entities to donate transmission to the market for improved market benefits. 

In the proposals, CAISO suggests allocations between entities at transfer points at either a default “proration” of 50:50 or 100:0 depending on the proposal.  Given Bonneville’s previous comments on concerns of the transmission donation and compensation proposals creating a dis-incentive for the procurement of point-to-point transmission, Bonneville seeks to further understand the impacts of the proposed transfer revenue and congestion rent allocation methodologies on these concerns.  Bonneville suggests the CAISO work with stakeholders to evaluate how a pro rata allocation of transfer and congestion revenues, as opposed to methods based on pre-defined ratios, would impact transmission procurement and donation incentives, and align with the principle of equitable compensation to parties making transmission available to the market.

Additionally, the EDAM will inherently create congestion on flowgates and other internal transmission constraints; therefore, Bonneville requests the CAISO consider a common congestion rent allocation framework that would be associated with all transmission, including internal network constraints (and not just at BAA boundaries). 

34. SETTLEMENTS: Please provide your organization’s comments on settlements aspects of the EDAM described thus far, recognizing these will develop as the design evolves, as discussed in section II.D.2 of the EDAM straw proposal.

Bonneville does not currently have explicit feedback on the proposed settlements aspects for EDAM.  Market operations will directly impact how settlements will ultimately resolve; therefore, Bonneville is interested in analyzing settlements scenarios based on a variety of operational assumptions once the market design is further refined.

35. EDAM TECHNICAL WORKSHOPS: Please provide your organization’s comments on the upcoming EDAM technical workshops. Which key components of the straw proposal should be further discussed in EDAM technical workshops.
Please be as specific as you as possible.

While not an exhaustive list, Bonneville would like to see the following technical discussions occur with stakeholders in the near term. Details on the following areas can be found in the associated responses to comments:

  • Revisit the application of WSPP Schedule C, ISO RA Import, and economic bids at ISO interties toward the RSE, and associated transmission implications.  Strive for amenable initial and long-term solutions.
  • Developing alternate bucket 3 transmission compensation mechanisms which better align with cost causation.
  • Discussing alternate transfer revenue and congestion rent allocation methodologies that may better support continued transmission procurement and donation to the market in alignment with equitable revenue/rent allocation to the donating parties.
  • Additional workshops focused on convergence bidding for prospective EDAM participants.  These workshops should include numerical case examples for demand and supply bidders, allowing participants to better understand the mechanics, benefits, and risks associated with convergence bidding in the CAISO.  We expect these workshops will also provide clarity on “interim bidding requirements” that may be implemented during the transition period.
  • Further development and evaluation of the GHG zonal approach alternative.
36. GENERAL COMMENTS: Please provide your organization’s comments on any other elements or aspects of the EDAM straw proposal.

Transfer of Title - Bonneville requests clarification from CAISO on whether title for energy transactions in EDAM will pass to CAISO.  If so, when?  If not, how is the transfer of title from the seller to a purchaser accounted for?

Base Scheduling - Given that potential EDAM Entities and their customers would still have significant commercial and reliability activities before entering the EDAM timeframe, the CAISO should consider Base Schedules as a mechanism that bridges those activities and EDAM.  Base Schedules can provide a clear tool to demonstrate compliance with important legal, regulatory, and reliability requirements, such as Bonneville giving statutory preference and priority to public bodies and cooperatives in disposing of electric energy generated by the Federal projects (i.e., Federal Columbia River Power System). Base Schedules can be useful for participants to signal their participation in other programs without inhibiting the market (e.g., Base Schedules should not prohibit economic bidding).  Bonneville strongly encourages the CAISO to consider developing a base scheduling mechanism for EDAM, or something similar, in collaboration with stakeholders to accommodate these types of obligations.

Brookfield Renewable
Submitted 06/16/2022, 11:00 am

Contact

Steve Greenleaf (Steve.Greenleaf@brookfieldrenewable.com)

1. EDAM VOLUNTARY MODEL: Please provide your organization’s comments on the proposed structure of the EDAM voluntary participation model as described in section II.A.1 of the EDAM straw proposal.

Brookfield Renewable supports the EDAM voluntary participation model. 

2. EDAM FEES: Please provide your organization’s comments on the proposed framework of the EDAM fee structure as described in section II.A.2 of the EDAM straw proposal.

Brookfield Renewable generally supports the CAISO’s proposed cost-based ratemaking and activity-based accounting fee structure. 

3. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on the concept of market transfers (occurring through the EDAM and WEIM) having equal priority to load to the extent an individual EDAM BAA faces severe emergency conditions as discussed in section II.A.3 of the EDAM straw proposal.

Brookfield Renewable supports the concept that EDAM transfers should have the same priority as internal load.  Absent such certainty, entitles will not have confidence in the market.  While the CAISO’s straw proposal focuses on confidence in EDAM/WEIM transfers, Brookfield Renewable also notes that market participants must also have confidence in non-EDAM bilateral market transfers, including the use of any third-party transmission rights they may possess.  It is therefore imperative that, among other issues, the CAISO move forward in parallel with the EDAM effort on its long-term (2024) Transmission Scheduling and Market Priorities initiative so that market participants can also have confidence in high-priority non-EDAM wheel-through transactions. 

4. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on whether the failure of the day ahead resource sufficiency evaluation should have a bearing on the level of priority afforded to market transfers (EDAM and WEIM) souring from an EDAM BAA facing emergency conditions and sinking in the EDAM BAA that failed the resource sufficiency evaluation.

No comments at this time.

5. CONFIDENCE IN MARKET TRANSFERS: Please provide any additional comments on the topic of confidence in market transfers (occurring through the EDAM and WEIM).

No comments at this time.

6. TRANSMISSION COMMITMENT: Please provide your organization’s comments on the overall framework of transmission buckets in the context of making transmission available to the EDAM as described in section II.B.1 of the EDAM straw proposal.

Brookfield Renewable general supports the “bucket” framework for classifying transmission where Bucket 1 transmission is that made available by an EDAM entity to serve its load and satisfy its resource sufficiency requirements, Bucket 2 is third-party transmission rights than can be voluntarily made available to the EDAM for compensation, and Bucket 3 is additional available transmission capacity that may be available from the EDAM subject to rate recovery.

7. TRANSMISSION COMMITMENT: Please provide your organization’s perspective on Bucket 2 transmission and whether it should be made available to the EDAM only through a voluntary framework or through a more general rule that transmission unscheduled by 10am of the day ahead is automatically made available to the EDAM for optimization as described in the straw proposal.
Consider the implications of transmission customers retaining the ability to exercise those transmission rights between the day ahead and real time markets and the potential implications on redispatch.

First and foremost, Brookfield Renewable believes that a customer’s transmission rights should be preserved consistent with their rights under their contract or as defined in the appropriate transmission provider tariff. If those rights permit a customer to utilize them in the real-time/operational timeframe, i.e., prior to the T-20 e-tagging timeline, then the EDAM design should support such usage, likely through real-time redispatch. Brookfield Renewable does not support a model where customers automatically lose those rights after the day-ahead market runs.

Brookfield Renewable also recommends that Bucket 2 transmission be biddable wherein transmission rightsholders could be compensated at a level greater than just congestion costs. Brookfield Renewable believes that if compensation is limited to congestion rights, rightsholders may not have sufficient incentive to make their transmission available to the EDAM on a forward basis.  

8. TRANSMISSION COMMITMENT: Please provide your organization’s perspective on the compensation options for bucket 3 transmission described in the EDAM straw proposal.
More specifically, consider whether Bucket 3 transmission rates should be reflected in the market optimization through a direct hurdle rate or should the reduced transmission revenues be addressed outside of the market optimization through after the fact cost recovery.

At this juncture, and subject to further evaluation, Brookfield Renewable has concerns with the hurdle rate concept and would support an approach where transmission is made available through a hurdle-free reciprocity framework.  While Brookfield Renewable would generally like the market optimization to reflect all marginal costs and thus avoid out-of-market uplifts or costs, Brookfield Renewable is concerned that separate hurdle rates for all balancing authority area (“BAA”) to BAA transfers would potentially create rate pancaking and undermine the efficiency of the EDAM. To the extent that a transmission service provider(s) can demonstrate a significant loss of revenue and an inability to recover its costs, Brookfield Renewable would support some form of after-market and after-the-fact recovery of those costs.

9. TRANSMISSION COMMITMENT: Please provide your organization's comments on the concept of Bucket 3 transmission costs being recovered outside of the market optimization, should the ISO through the EDAM process work toward a design for transmission revenue recovery, based on one of the options described (3A, 3B, 3C), in order to keep the EDAM entity whole as a result of EDAM participation.
Some questions to consider: are there additional variations to the described options; what should be the recoverable lost transmission revenues; how should the lost transmission revenues be allocated (or a transactional basis, across load in EDAM or to each EDAM entity to allocate to its customers); how do the described options impact bidding incentive in the EDAM market.

See above comments.

10. TRANSMISSION COMMITMENT: Please provide your organization’s comments on any other aspects of the transmission commitment in EDAM topic.

No comments at this time. 

11. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the process for conducting the EDAM RSE as described in section II.B.2 of the EDAM straw proposal.
This includes comments on the ability to conduct advisory RSE tests prior to the binding run, the timing of the RSE, the new tool, inputs, and other elements.

Brookfield Renewable is generally supportive of the CAISO’s RSE proposal. The proposed timing and functionality appears to satisfy EDAM entity needs. Overall, although not directly related, Brookfield Renewable believes that the RSE will be an important check and monitor of each EDAM entity’s approach to resource adequacy and how those resources are made available to the market.  

12. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposed treatment of WSPP Schedule C and like firm energy contracts within the EDAM RSE.
These arrangements are commonly relied upon across the west, including the ISO. The ISO proposed that these count toward the RSE by being self-scheduled and that these arrangements reduce the RSE obligation. Consider providing comments on whether these should be allowed to count in their current form (limited knowledge of source of supply or transmission quality); whether the market is expected to evolve toward providing more specific source information; how these firm energy contracts should be modeled (whether sourcing from adjoining BAA or another method); any additional considerations.

Brookfield Renewable supports fully counting WSPP Schedule C transactions. As noted by the CAISO, these transactions are common and reliable and are an important and functional aspect of the bilateral market in the West. Brookfield Renewable supports modeling these transactions from the source BAA.

13. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s perspective on the ISO proposal, and associated reliance, on day ahead intertie bids (not associated with resource adequacy).
Some questions to consider: should these arrangements count toward the RSE; should these be monitored for performance and delivery; should additional criteria be imposed, such as an attestation, on these to provide an added level of confidence in performance.

Brookfield Renewable supports permitting the CAISO to count, to some extent and subject to study, intertie bids in its RSE evaluation. That said, intertie bids are not analogous to import RA offers/schedules and should not have import RA-like must-offer/schedule requirements. Intertie bids are financial positions in the day-ahead market and can legitimately be unwound (bought back) in the real-time market depending on market conditions. To the extent that the CAISO wants/needs to rely on these bids to satisfy its RSE, it must continue to focus on proper price formation (including scarcity pricing) in its markets in order to attract/ensure delivery.

14. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the treatment of demand response and its different types and functions for purposes of passing the RSE.

No comments at this time.

15. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposed EDAM RSE failure consequences approach under which transfers would be allowed under an RSE failure at a penalty price.
Please comment on what an appropriate penalty price would be.

Brookfield Renewable supports financial penalties/consequences for RSE failures as opposed to transfer limitations.

16. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposed EDAM RSE failure consequences approach which distinguishes the consequences depending upon whether the failure occurred under “normal conditions” as compared to “stressed system conditions.”
Please include consideration of potential different frameworks, how “stressed system conditions” can be defined; and any other perspectives on the structure of failure consequences and their impact on developing a robust RSE.

Brookfield Renewable supports an approach that “ratchets” the financial consequences for RSE failures based on system conditions, as those conditions are defined by objective metrics, e.g., the NERC EEA definitions.

17. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the concept of a pooled WEIM RSE for entities passing the EDAM RSE, as described in the straw proposal and stakeholder meeting.

Brookfield Renewable supports further examination of an RSE evaluation conducted on an EDAM/WEIM footprint basis.

18. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provider your organization’s comments on any other elements of the EDAM RSE not raised by the questions above.

No additional comments.

19. INTEGRATED FORWARD MARKET (IFM) AND RESIDUAL UNIT COMMITMENT (RUC): Please provide your organization’s comments on considerations related to the IFM and RUC as part of EDAM.
This includes consideration of the role of the RUC process as a critical component of the EDAM and the proposal that all supply offered into IFM is also offered in the RUC.

Brookfield Renewable supports an EDAM market model that includes both an IFM and a RUC process. In general, Brookfield Renewable supports a requirement wherein CA RA capacity and capacity used by EDAM entities to satisfy their RSE requirements be offered into RUC. Economic offers (non-RA/RSE) into the day-ahead market but not selected should not have an obligation to offer into RUC but could voluntarily do so. At present, Brookfield Renewable is open to either a sequential IFM-RUC process, as exists today, or further consideration of an integrated IFM-RUC design. While the sequential design works well today in the context of the CAISO market today, an integrated design may be more suitable for a broader market with multiple variables of load/supply balance, variability, uncertainty, and where, perhaps, not all market features apply uniformly across the EDAM footprint (i.e., convergence bidding).

20. INTEGRATED FORWARD MARKET (IFM) AND RESIDUAL UNIT COMMITMENT (RUC): Please provide your organization’s comments on the role of the imbalance reserve market product, currently being developed in the Day-Ahead Market Enhancements initiative, in the EDAM.

Brookfield Renewable generally supports development of a bid-based imbalance reserve product to address the uncertainty that may develop between the day-ahead and real-time markets. That said, Brookfield Renewable shares the concern expressed by certain stakeholders that the DAME design, with multiple products (Energy, AS, IRP up, IRP down, RC up, RC down) combined with multiple layers of mitigation may not produce the results desired, i.e., reliance on market-based products to satisfy operator needs/requirements regarding variability and uncertainty and thus reduce costly out-of-market operator actions. A simpler approach, focused on a new IRP, may be simpler and easier to implement across a broader market footprint with multiple stakeholders with competing market interests. Perhaps the CAISO should focus on implementing a new IRP that can address a common need – the need to address operating uncertainty.

21. MARKET POWER MITIGATION (MPM): Please provide your organization’s comments on the proposal to extend the WEIM market power mitigation framework to the EDAM and the further evaluation of potential market power mitigation enhancements within the Price Formation Enhancements initiative.

Brookfield Renewable does not oppose extension of the existing WEIM market power mitigation framework to the EDAM but cautions that further extension of any market power mitigation measures in the EDAM may subvert the CAISO’s objective in implementing price formation enhancements that support good price signals. Brookfield Renewable therefore supports further evaluation of any such measures in, and in the context of, the CAISO’s recently launched price formation enhancements initiative, including the consideration of scarcity and fast-start pricing. Brookfield Renewable has not yet seen any CAISO analysis or study that demonstrates there is a need to implement any form of system market power mitigation, and is deeply concerned that such measures could undermine the effectiveness of any scarcity or fast-start pricing measures. As noted by the CAISO and the CAISO Market Surveillance Committee, prices in the CAISO market during recent heat events were at times oddly low compared to regional market prices during those same periods and Brookfield Renewable is concerned that ad hoc system market power mitigation measures may undermine the CAISO’s ability to attract supply during stressed system conditions.            

22. CONVERGENCE BIDDING: Please provide your organization’s comments on the proposal for a transition period under which convergence bidding is only a market feature in the ISO BAA and not available in other EDAM BAAs at the onset of the EDAM.

In general, Brookfield Renewable supports convergence bidding across the EDAM footprint. Convergence bidding is an important tool to both converge day-ahead and real-time prices and to discipline and incent good load forward-scheduling practices.  Brookfield Renewable is concerned that having convergence bidding only in the CAISO footprint could create seams issues and anomalous market results. Notwithstanding these concerns, Brookfield Renewable appreciates the potential need for a short transition period for non-CAISO EDAM entities so that they can first become comfortable with EDAM market results prior to the introduction of convergence bidding.

23. CONVERGENCE BIDDING: Please include any additional comments on the topic of convergence bidding within EDAM.

No comments.

24. EXTERNAL RESOURCE PARTICIPATION: Please provide your organization’s comments on the ISO initial leaning toward extending the WEIM framework of external resource participation to the EDAM.
Under this framework the ISO would continue to allow source specific and non-source specific supply (intertie bids) to be economically offered into the ISO BAA. Non-ISO EDAM entities would continue to support source specific supply (pseudo-ties and dynamics), the self-scheduling of supply under contract, but intertie bidding would not be allowed at the intertie of the EDAM BAA.

On a long-term basis, Brookfield Renewable supports development of intertie bidding capability at non-CAISO EDAM interties. Such intertie bidding could establish market incentives that could incent additional supply to the EDAM footprint, especially during scarcity conditions. Brookfield Renewable acknowledges the need to ultimately address the external resource modelling and reliability issues raised by the CAISO and EDAM entities with respect to implementing intertie bids at the non-CAISO EDAM interties. At a minimum, and to start, Brookfield Renewable supports continuation of supporting source- and contract specific imports at EDAM entity interties.  

25. EXTERNAL RESOURCE PARTICIPATION: Please include any additional comments on the topic of external resource ability to participate in the EDAM.

No additional comments.

26. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s overall comments, including potential suggested enhancements, on the resource specific approach to GHG accounting as described in section II.E of the EDAM straw proposal.

In general, Brookfield Renewable supports further analysis of the resource-specific and zonal GHG models.  While Brookfield Renewable understands the CAISO’s desire to utilize its existing methodology (or an enhanced version of that methodology), Brookfield Renewable recommends that the CAISO further evaluate the proposed models to limit inappropriate resource attribution. With respect to the resource-specific model, Brookfield Renewable urges further evaluation of the RSE-based counterfactual model to assess whether additional enhancements can be made to increase accuracy. To that end, Brookfield Renewable recommends that the CAISO further assess whether a transmission-constrained model can be utilized, understanding that introducing additional constraints raises issues with respect to the balance between accuracy and the CAISO’s and EDAM entities’ ability and need to develop and deploy a workable and useable (i.e., permits EDAM entities to run the RSE model offline). Finally, Brookfield Renewable acknowledges the CAISO’s concerns that limiting so-called “deeming” to the incremental dispatch above an established baseline may adversely impact price formation, i.e., LMP formation, and agrees that such issues must be addressed in the context of developing a final resource-specific GHG model that relies on some form of baseline schedule/counterfactual.      

27. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the resource specific’s approach use of the RSE solution as the counterfactual for measuring secondary dispatch.

See above comments.

28. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the resource specific approach’s measures to limit secondary dispatch.

See above comments.

29. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s overall comments, including potential suggested enhancements, on the zonal approach to GHG accounting as described in section II.E of the EDAM straw proposal.

No comments at this time.

30. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the design of the hurdle rate for the zonal approach.

No comments at this time.

31. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the treatment of resources outside the GHG regulation area as internal to a GHG regulation area on a long-term or short-term basis, using the GHG pseudo tie functionality, in the zonal approach.

No comments at this time.

32. GREENHOUSE GAS ACCOUNTING: Please provide any additional comments on the GHG topic that were not captured by the questions above.

No comments at this time.

33. TRANSFER REVENUE ALLOCATION: Please provide your organization’s comments on the proposed transfer revenue allocation approach as described in section II.D.1 of the straw proposal and any other aspects of the transfer revenue allocation discussion topic.

No comments at this time.

34. SETTLEMENTS: Please provide your organization’s comments on settlements aspects of the EDAM described thus far, recognizing these will develop as the design evolves, as discussed in section II.D.2 of the EDAM straw proposal.

No comments at this time.

35. EDAM TECHNICAL WORKSHOPS: Please provide your organization’s comments on the upcoming EDAM technical workshops. Which key components of the straw proposal should be further discussed in EDAM technical workshops.
Please be as specific as you as possible.

No comments at this time.

36. GENERAL COMMENTS: Please provide your organization’s comments on any other elements or aspects of the EDAM straw proposal.

Brookfield Renewable Trading and Marketing LP (“Brookfield Renewable”) appreciates the opportunity to provide comments on the CAISO’s Extended Day-Ahead Market (“EDAM”) straw proposal. Brookfield Renewable supports the CAISO’s and stakeholder’s efforts to create a viable day-ahead market structure that complements the existing bilateral market construct. In support of that goal, Brookfield Renewable recommends that, while supporting the proposed voluntary participation model, the CAISO work towards a market model wherein, to the extent practicable and perhaps understanding the need for transition periods, common market rules apply across all EIM entities.   

California Air Resources Board
Submitted 06/16/2022, 03:47 pm

Contact

RYAN W SCHAULAND (ryan.schauland@arb.ca.gov)

1. EDAM VOLUNTARY MODEL: Please provide your organization’s comments on the proposed structure of the EDAM voluntary participation model as described in section II.A.1 of the EDAM straw proposal.
2. EDAM FEES: Please provide your organization’s comments on the proposed framework of the EDAM fee structure as described in section II.A.2 of the EDAM straw proposal.
3. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on the concept of market transfers (occurring through the EDAM and WEIM) having equal priority to load to the extent an individual EDAM BAA faces severe emergency conditions as discussed in section II.A.3 of the EDAM straw proposal.
4. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on whether the failure of the day ahead resource sufficiency evaluation should have a bearing on the level of priority afforded to market transfers (EDAM and WEIM) souring from an EDAM BAA facing emergency conditions and sinking in the EDAM BAA that failed the resource sufficiency evaluation.
5. CONFIDENCE IN MARKET TRANSFERS: Please provide any additional comments on the topic of confidence in market transfers (occurring through the EDAM and WEIM).
6. TRANSMISSION COMMITMENT: Please provide your organization’s comments on the overall framework of transmission buckets in the context of making transmission available to the EDAM as described in section II.B.1 of the EDAM straw proposal.
7. TRANSMISSION COMMITMENT: Please provide your organization’s perspective on Bucket 2 transmission and whether it should be made available to the EDAM only through a voluntary framework or through a more general rule that transmission unscheduled by 10am of the day ahead is automatically made available to the EDAM for optimization as described in the straw proposal.
Consider the implications of transmission customers retaining the ability to exercise those transmission rights between the day ahead and real time markets and the potential implications on redispatch.
8. TRANSMISSION COMMITMENT: Please provide your organization’s perspective on the compensation options for bucket 3 transmission described in the EDAM straw proposal.
More specifically, consider whether Bucket 3 transmission rates should be reflected in the market optimization through a direct hurdle rate or should the reduced transmission revenues be addressed outside of the market optimization through after the fact cost recovery.
9. TRANSMISSION COMMITMENT: Please provide your organization's comments on the concept of Bucket 3 transmission costs being recovered outside of the market optimization, should the ISO through the EDAM process work toward a design for transmission revenue recovery, based on one of the options described (3A, 3B, 3C), in order to keep the EDAM entity whole as a result of EDAM participation.
Some questions to consider: are there additional variations to the described options; what should be the recoverable lost transmission revenues; how should the lost transmission revenues be allocated (or a transactional basis, across load in EDAM or to each EDAM entity to allocate to its customers); how do the described options impact bidding incentive in the EDAM market.
10. TRANSMISSION COMMITMENT: Please provide your organization’s comments on any other aspects of the transmission commitment in EDAM topic.
11. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the process for conducting the EDAM RSE as described in section II.B.2 of the EDAM straw proposal.
This includes comments on the ability to conduct advisory RSE tests prior to the binding run, the timing of the RSE, the new tool, inputs, and other elements.
12. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposed treatment of WSPP Schedule C and like firm energy contracts within the EDAM RSE.
These arrangements are commonly relied upon across the west, including the ISO. The ISO proposed that these count toward the RSE by being self-scheduled and that these arrangements reduce the RSE obligation. Consider providing comments on whether these should be allowed to count in their current form (limited knowledge of source of supply or transmission quality); whether the market is expected to evolve toward providing more specific source information; how these firm energy contracts should be modeled (whether sourcing from adjoining BAA or another method); any additional considerations.
13. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s perspective on the ISO proposal, and associated reliance, on day ahead intertie bids (not associated with resource adequacy).
Some questions to consider: should these arrangements count toward the RSE; should these be monitored for performance and delivery; should additional criteria be imposed, such as an attestation, on these to provide an added level of confidence in performance.
14. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the treatment of demand response and its different types and functions for purposes of passing the RSE.
15. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposed EDAM RSE failure consequences approach under which transfers would be allowed under an RSE failure at a penalty price.
Please comment on what an appropriate penalty price would be.
16. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposed EDAM RSE failure consequences approach which distinguishes the consequences depending upon whether the failure occurred under “normal conditions” as compared to “stressed system conditions.”
Please include consideration of potential different frameworks, how “stressed system conditions” can be defined; and any other perspectives on the structure of failure consequences and their impact on developing a robust RSE.
17. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the concept of a pooled WEIM RSE for entities passing the EDAM RSE, as described in the straw proposal and stakeholder meeting.
18. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provider your organization’s comments on any other elements of the EDAM RSE not raised by the questions above.
19. INTEGRATED FORWARD MARKET (IFM) AND RESIDUAL UNIT COMMITMENT (RUC): Please provide your organization’s comments on considerations related to the IFM and RUC as part of EDAM.
This includes consideration of the role of the RUC process as a critical component of the EDAM and the proposal that all supply offered into IFM is also offered in the RUC.
20. INTEGRATED FORWARD MARKET (IFM) AND RESIDUAL UNIT COMMITMENT (RUC): Please provide your organization’s comments on the role of the imbalance reserve market product, currently being developed in the Day-Ahead Market Enhancements initiative, in the EDAM.
21. MARKET POWER MITIGATION (MPM): Please provide your organization’s comments on the proposal to extend the WEIM market power mitigation framework to the EDAM and the further evaluation of potential market power mitigation enhancements within the Price Formation Enhancements initiative.
22. CONVERGENCE BIDDING: Please provide your organization’s comments on the proposal for a transition period under which convergence bidding is only a market feature in the ISO BAA and not available in other EDAM BAAs at the onset of the EDAM.
23. CONVERGENCE BIDDING: Please include any additional comments on the topic of convergence bidding within EDAM.
24. EXTERNAL RESOURCE PARTICIPATION: Please provide your organization’s comments on the ISO initial leaning toward extending the WEIM framework of external resource participation to the EDAM.
Under this framework the ISO would continue to allow source specific and non-source specific supply (intertie bids) to be economically offered into the ISO BAA. Non-ISO EDAM entities would continue to support source specific supply (pseudo-ties and dynamics), the self-scheduling of supply under contract, but intertie bidding would not be allowed at the intertie of the EDAM BAA.
25. EXTERNAL RESOURCE PARTICIPATION: Please include any additional comments on the topic of external resource ability to participate in the EDAM.
26. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s overall comments, including potential suggested enhancements, on the resource specific approach to GHG accounting as described in section II.E of the EDAM straw proposal.
27. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the resource specific’s approach use of the RSE solution as the counterfactual for measuring secondary dispatch.
28. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the resource specific approach’s measures to limit secondary dispatch.
29. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s overall comments, including potential suggested enhancements, on the zonal approach to GHG accounting as described in section II.E of the EDAM straw proposal.
30. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the design of the hurdle rate for the zonal approach.
31. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the treatment of resources outside the GHG regulation area as internal to a GHG regulation area on a long-term or short-term basis, using the GHG pseudo tie functionality, in the zonal approach.
32. GREENHOUSE GAS ACCOUNTING: Please provide any additional comments on the GHG topic that were not captured by the questions above.
33. TRANSFER REVENUE ALLOCATION: Please provide your organization’s comments on the proposed transfer revenue allocation approach as described in section II.D.1 of the straw proposal and any other aspects of the transfer revenue allocation discussion topic.
34. SETTLEMENTS: Please provide your organization’s comments on settlements aspects of the EDAM described thus far, recognizing these will develop as the design evolves, as discussed in section II.D.2 of the EDAM straw proposal.
35. EDAM TECHNICAL WORKSHOPS: Please provide your organization’s comments on the upcoming EDAM technical workshops. Which key components of the straw proposal should be further discussed in EDAM technical workshops.
Please be as specific as you as possible.
36. GENERAL COMMENTS: Please provide your organization’s comments on any other elements or aspects of the EDAM straw proposal.

(See full formatted text in attachment)

June 14,2022

Elliot Mainzer
President and Chief Executive Officer
California Independent System Operator
250 Outcropping Way
Folsom, California 95630

Dear Mr. Mainzer:

The California Air Resources Board (CARB) appreciates the opportunity to submit these comments on the Extended Day-Ahead Market (EDAM) Straw Proposal released by the California System Operator (CAISO) on April 28, 2022. We believe a clean, reliable, and affordable electricity grid is critical to the state’s transition away from fossil fuel combustion across the economy. With that in mind and our history of collaboration, we are submitting these comments to ensure successful coordination continues. CARB supports CAISO’s efforts to develop EDAM proposals that include an accounting framework for greenhouse gas (GHG) emissions that ensures the accurate accounting of California’s GHG emissions as required by Assembly Bill (AB) 32, enables resources to opt-in to serve California load, and meets the GHG accounting needs of other states.

The EDAM Straw Proposal includes two design options to address GHG accounting: (1) CAISO’s “Resource-Specific Approach” that builds on the GHG accounting framework in the Western Energy Imbalance Market (WEIM); and (2) a “Zonal Approach” that includes long- and short-term resource-specific pathways (Path 1 and Path 2, respectively) and a hurdle rate for resources that opt into serving load in GHG jurisdictions (specifically, California and Washington state) but that do not fall under a resource-specific pathway. CARB appreciates the time taken by CAISO and stakeholder in developing these approaches. CARB has some observations regarding these two approaches, described below.

It appears the Zonal Approach, as described in the Straw Proposal, may not meet CARB’s legal and regulatory requirements. CARB has two areas of concern: (1) the point of regulation for imported electricity subject to the hurdle rate, and (2) the potential impact the Zonal Approach may have on emissions leakage and accurate accounting of California’s GHG emissions. There are also areas of CAISO’s Resource-Specific Approach that CARB would like to better understand, including its impact on California’s GHG accounting and the extent to which it will minimize emissions leakage.

For the Zonal Approach, we understand the point of regulation has not yet been determined for reporting GHG emissions and assessing a Cap-and-Trade Program compliance obligation associated with electricity imported to California under the hurdle rate. However, the proposed design raises questions about whether the Zonal Approach can meet CARB’s requirements. It is unclear whether the GHG reporting and Cap-and-Trade Program compliance requirements for hurdle rate transfers can be assigned to the entity responsible for delivering the electricity to California. CARB established the first jurisdictional deliverer (FJD) approach to regulating electricity imports at the outset of the Cap-and-Trade Program after taking account of CARB’s statutory requirements under AB 32, to rigorously and consistently account for all of California’s GHG emissions including emissions from imported electricity, and under federal law.[1] The FJD approach was developed through extensive public process as part of Western Climate Initiative and CARB’s rulemaking process. The approach is designed to ensure that in-state generators of electricity and electricity importers are treated the same way and to provide for the level of accuracy and verification necessary to ensure consistency in reporting across all sectors covered by the Cap-and-Trade Program. This source-based accounting method is also consistent with the Intergovernmental Panel on Climate Change accounting methods. The FJD approach also places the GHG reporting and compliance obligation requirements on the entity responsible for delivering the electricity to California, ensuring that electricity imports are regulated in a legally and administratively feasible way.

The GHG accounting framework for EDAM must support the FJD approach and meet CARB’s legal and regulatory requirements. It is also essential that the entity responsible for reporting also holds the corresponding Cap-and-Trade Program compliance obligation. It is unclear if assigning hurdle rate transfers to the participating resource scheduling coordinators that are responsible for the transfers into California meets these requirements.

Additionally, the Zonal Approach may not adequately support the accurate accounting of California’s GHG emissions and may risk emissions leakage. The resource-specific pathways in the Zonal Approach may be able to facilitate CARB’s specified source reporting requirements. However, because importers of electricity from higher emission resources (i.e., resources with an emission rate higher than the emission rate used in the hurdle rate) will be incentivized to utilize the hurdle rate, the overall design of the Zonal Approach may negatively impact the accurate reporting of specified source emissions to California and result in emissions leakage. As a next step, CARB recommends that the expected impact on GHG accounting and any improvements related to leakage of the Zonal Approach over CAISO’s Resource-Specific Approach, be clearly described, and demonstrated. If adopted, the Zonal Approach must support CARB’s specified source reporting requirements and minimize emissions leakage so that the approach satisfies AB 32 requirements.

CARB is also concerned that the Zonal Approach may create unintended effects for similar resources that (1) fall under Path 1 requirements, (2) serve California under the hurdle rate, or (3) are located in California. As described above, the Zonal Approach may create incentives for entities that import electricity to California from some external resources to report at a lower GHG emissions rate, and therefore to be assessed a lower Cap-and-Trade Program compliance obligation, by using the hurdle rate instead of the higher resource-specific emissions rate. This option will not be available to California resources and may not be available to Path 1 resources, both of which will have compliance obligations calculated based on measured fuel consumption. The EDAM design should facilitate the comparable treatment of in-state resources and all resources that meet CARB’s specified source reporting requirements.

After many years of working with CAISO and stakeholders, CARB understands the WEIM GHG design and appreciates CAISO’s efforts to improve on that design in the Resource-Specific Approach, including by limiting deeming to California to instances where there are exports from other balancing areas. CARB would like to better understand to what extent the Resource-Specific Approach would minimize the emissions leakage relative to the design of the current WEIM and how the Resource-Specific Approach would interact with the rest of the EDAM design. This includes understanding the potential scale of future leakage in the EDAM, the robustness and role of the resource sufficiency evaluation in the GHG design and whether it will be binding, and how well the proposed design will reflect transmission constraints. In addition, CARB wants to ensure that there would be sufficient and accurate data available under the Resource-Specific Approach to support CARB’s reporting and verification requirements. In particular, CARB wants to understand the potential impacts of netting imports and exports; what data will be available to support identifying the point of receipt into California, including for pseudo-tied resources; and what role, if any, e-tags may have in the Resource-Specific Approach.

CARB recognizes and supports that both approaches intend to recognize state geographical boundaries, facilitate the ability for multiple jurisdictions to track their GHGs, and track the transfer of electricity between jurisdictions. All these elements are critical for CARB’s programs. CARB also appreciates CAISO and stakeholder’s efforts to address GHG accounting issues in the EDAM and looks forward to continuing to work to develop a robust EDAM design that supports the accurate accounting of California’s GHG emissions while ensuring the availability of clean, reliable, and affordable electricity.

Sincerely,

image-20220616153803-1.png

Rajinder Sahota, Deputy Executive Officer, Climate Change and Research

 


[1] CAL. CODE REGS. tit. 17, §§ 95811(b), 95812(c)(2).

California Community Choice Association
Submitted 06/16/2022, 01:50 pm

Contact

Shawn-Dai Linderman (shawndai@cal-cca.org)

1. EDAM VOLUNTARY MODEL: Please provide your organization’s comments on the proposed structure of the EDAM voluntary participation model as described in section II.A.1 of the EDAM straw proposal.

The California Community Choice Association (CalCCA) appreciates the opportunity to comment on the California Independent System Operator Corporation’s (CAISO) Extended Day-Ahead Market (EDAM) straw proposal and May 25-26 meeting. The voluntary nature of EDAM must be carefully designed to maximize participation and to ensure non-CAISO balancing authority areas (BAA) and market participants in the CAISO BAA participate in the market comparably to the greatest extent possible. The CAISO’s proposal states, “resources located in an EDAM BAA will participate in the market.” EDAM BAAs would not elect which resources participate in the day-ahead market through base scheduling, as is done today in the Western Energy Imbalance Market (WEIM).  The CAISO should clarify whether this means all loads and resources in an EDAM BAA would be scheduled through EDAM or some portion of loads and resources. These parameters will interact with the development of the resource sufficiency evaluation (RSE), transmission commitment, and potentially other aspects of the proposal.  

2. EDAM FEES: Please provide your organization’s comments on the proposed framework of the EDAM fee structure as described in section II.A.2 of the EDAM straw proposal.

CalCCA has no comments at this time.

3. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on the concept of market transfers (occurring through the EDAM and WEIM) having equal priority to load to the extent an individual EDAM BAA faces severe emergency conditions as discussed in section II.A.3 of the EDAM straw proposal.

Establishing confidence in market transfers from all EDAM participants is critical to a successful EDAM. The CAISO’s proposal correctly maintains the responsibility of each EDAM participant for the reliability of its BAA. All BAAs in the western interconnection must follow North American Electric Reliability Corporation (NERC) and Western Electricity Coordinating Council (WECC) reliability standards and should continue to use all operational tools at their disposal when needed to maintain system reliability.  As the CAISO notes in its proposal, these tools could include seeking emergency assistance from neighboring BAAs, deploying reserves, curtailing lower priority transactions, employing other out-of-market capacity or reliability programs, and arming load. The CAISO should clarify how these out-of-market operator tools align with the CAISO’s operation of EDAM and when EDAM transfers would be cut pro-rata with load under emergency conditions. The CAISO should also clarify the relative priorities of wheel-throughs through an EDAM BAA, including CAISO and non-CAISO BAAs, which would be established in an EDAM context.

4. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on whether the failure of the day ahead resource sufficiency evaluation should have a bearing on the level of priority afforded to market transfers (EDAM and WEIM) souring from an EDAM BAA facing emergency conditions and sinking in the EDAM BAA that failed the resource sufficiency evaluation.

The CAISO does not propose to apply a different level of priority to transfers with a BAA that has failed the day-ahead RSE. CalCCA supports this approach provided a robust RSE is in place to ensure each BAA brings sufficient capacity to the EDAM prior to participating in the day-ahead market. The RSE should be coupled with consequences for failure of the RSE such that a BAA’s failure of the RSE does not create reliability challenges for BAAs that pass the resource sufficiency evaluation. BAAs that fail the RSE should take all measures available to it to cure RSE deficiencies before the real-time. Under this context, CalCCA agrees with the CAISO’s proposal to forego a different level of priority for BAAs that fail the day-ahead RSE to avoid exacerbating reliability challenges in the BAA that fails the day-ahead RSE.

5. CONFIDENCE IN MARKET TRANSFERS: Please provide any additional comments on the topic of confidence in market transfers (occurring through the EDAM and WEIM).

CalCCA has no comments at this time. 

6. TRANSMISSION COMMITMENT: Please provide your organization’s comments on the overall framework of transmission buckets in the context of making transmission available to the EDAM as described in section II.B.1 of the EDAM straw proposal.

CalCCA has no comments at this time.

7. TRANSMISSION COMMITMENT: Please provide your organization’s perspective on Bucket 2 transmission and whether it should be made available to the EDAM only through a voluntary framework or through a more general rule that transmission unscheduled by 10am of the day ahead is automatically made available to the EDAM for optimization as described in the straw proposal.
Consider the implications of transmission customers retaining the ability to exercise those transmission rights between the day ahead and real time markets and the potential implications on redispatch.

CalCCA has no comments at this time.

8. TRANSMISSION COMMITMENT: Please provide your organization’s perspective on the compensation options for bucket 3 transmission described in the EDAM straw proposal.
More specifically, consider whether Bucket 3 transmission rates should be reflected in the market optimization through a direct hurdle rate or should the reduced transmission revenues be addressed outside of the market optimization through after the fact cost recovery.

CalCCA has no comments at this time.

9. TRANSMISSION COMMITMENT: Please provide your organization's comments on the concept of Bucket 3 transmission costs being recovered outside of the market optimization, should the ISO through the EDAM process work toward a design for transmission revenue recovery, based on one of the options described (3A, 3B, 3C), in order to keep the EDAM entity whole as a result of EDAM participation.
Some questions to consider: are there additional variations to the described options; what should be the recoverable lost transmission revenues; how should the lost transmission revenues be allocated (or a transactional basis, across load in EDAM or to each EDAM entity to allocate to its customers); how do the described options impact bidding incentive in the EDAM market.

CalCCA has no comments at this time.

10. TRANSMISSION COMMITMENT: Please provide your organization’s comments on any other aspects of the transmission commitment in EDAM topic.

CalCCA has no comments at this time.

11. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the process for conducting the EDAM RSE as described in section II.B.2 of the EDAM straw proposal.
This includes comments on the ability to conduct advisory RSE tests prior to the binding run, the timing of the RSE, the new tool, inputs, and other elements.

CalCCA generally supports the CAISO’s proposed process for conducting the EDAM RSE at 10 a.m., prior to the operating day using bids into the day-ahead market to determine feasible operating schedules.

12. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposed treatment of WSPP Schedule C and like firm energy contracts within the EDAM RSE.
These arrangements are commonly relied upon across the west, including the ISO. The ISO proposed that these count toward the RSE by being self-scheduled and that these arrangements reduce the RSE obligation. Consider providing comments on whether these should be allowed to count in their current form (limited knowledge of source of supply or transmission quality); whether the market is expected to evolve toward providing more specific source information; how these firm energy contracts should be modeled (whether sourcing from adjoining BAA or another method); any additional considerations.

CalCCA supports the inclusion of WSPP Schedule-C and like firm energy contracts in the EDAM RSE. California load-serving entities (LSEs) rely upon these energy contracts to fulfill their RA obligations and the suppliers of non-resource-specific RA imports have bidding requirements put in place by the California Public Utilities Commission (CPUC) to ensure their availability in the CAISO market at certain prices during critical hours. These contracts are relied upon to provide reliability through the RA program and likewise should be considered in the RSE.  

13. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s perspective on the ISO proposal, and associated reliance, on day ahead intertie bids (not associated with resource adequacy).
Some questions to consider: should these arrangements count toward the RSE; should these be monitored for performance and delivery; should additional criteria be imposed, such as an attestation, on these to provide an added level of confidence in performance.

CalCCA supports the ability to use import bids not associated with RA in the RSE. Imports bid into the day-ahead market above the amount shown for RA are available to provide energy to the BAA it is bidding into and, therefore, should be counted toward the RSE. If the CAISO is concerned about non-RA import bid performance, the CAISO should initially monitor these bids to ensure those bids that clear the market result in imports delivering to their schedule.

14. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the treatment of demand response and its different types and functions for purposes of passing the RSE.

From the California perspective, demand response should be included in the RSE. In the CAISO market, the two supply-side demand response participation models, proxy demand response and reliability demand response, allow demand response resources to submit bids in the day-ahead market for the hours the resources are available, reflective of their use limitations. Reliability demand response bids can only be used by the market upon the CAISO declaration of a warning or emergency. So long as reliability demand response can be called upon prior to cutting EDAM transfers in emergency conditions, it should count towards the RSE.

15. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposed EDAM RSE failure consequences approach under which transfers would be allowed under an RSE failure at a penalty price.
Please comment on what an appropriate penalty price would be.

CalCCA supports RSE failure consequences that are financial in nature as an alternative to transfer limitations. This approach recognizes BAAs may still be able to procure supply through the day-ahead market without creating reliability challenges.

16. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposed EDAM RSE failure consequences approach which distinguishes the consequences depending upon whether the failure occurred under “normal conditions” as compared to “stressed system conditions.”
Please include consideration of potential different frameworks, how “stressed system conditions” can be defined; and any other perspectives on the structure of failure consequences and their impact on developing a robust RSE.

The CAISO proposes not to limit transfers during normal system conditions. This recognizes that participating BAAs can access surplus supply through bi-lateral transactions, although some form of monitoring may be necessary to ensure no BAA is persistently failing the RSE.

During stressed system conditions, the CAISO proposes to apply consequences to BAAs failing the RSE. BAAs failing the RSE could elect to be subject to either (1) transfer limitations; or (2) a hurdle rate in the market clearing process at the bid cap for additional transfers. The CAISO proposes to implement this hurdle rate during expected stressed system conditions, HE 16-22 from June to September, when the value of energy will more closely correlate to the bid cap. These months and hours generally align with when the CAISO BAA would expect to experience tight supply conditions, and as the CAISO notes, the majority of the load in the Western Interconnection experiences summer peaking conditions. Should the definition of stressed system conditions include times when other BAAs experience stressed system conditions so that RSE failures during this period do not result in reliability issues in other BAAs?

17. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the concept of a pooled WEIM RSE for entities passing the EDAM RSE, as described in the straw proposal and stakeholder meeting.

CalCCA has no comments at this time. 

18. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provider your organization’s comments on any other elements of the EDAM RSE not raised by the questions above.

CalCCA has no comments at this time. 

19. INTEGRATED FORWARD MARKET (IFM) AND RESIDUAL UNIT COMMITMENT (RUC): Please provide your organization’s comments on considerations related to the IFM and RUC as part of EDAM.
This includes consideration of the role of the RUC process as a critical component of the EDAM and the proposal that all supply offered into IFM is also offered in the RUC.

CalCCA has no comments at this time. 

20. INTEGRATED FORWARD MARKET (IFM) AND RESIDUAL UNIT COMMITMENT (RUC): Please provide your organization’s comments on the role of the imbalance reserve market product, currently being developed in the Day-Ahead Market Enhancements initiative, in the EDAM.

The CAISO must consider the interactions between the imbalance reserve product and California’s resource adequacy (RA) program to maintain the RA program’s reliability and cost-effectiveness. This requires the assurance that California RA resources are able to support California reliability through real-time and that RA resources are not paid twice for the same capacity. As proposed in the Day-Ahead Market Enhancements (DAME) initiative, the imbalance reserve product has the potential to diminish real-time reliability by removing the real-time RA must offer obligation and increase California customer costs by requiring an imbalance reserve payment for capacity already paid for through an RA contract. CalCCA reiterates its request and the requests of other stakeholders for the CAISO to provide more analysis that explains the perceived benefits of the imbalance reserves in terms of reliability and cost.

Under an EDAM construct, the CAISO should further explore a mechanism to allow different bids for imbalance reserves for internal and external BAAs, as Southern California Edison proposed in its comments to the DAME Third Revised Straw Proposal.[1] This approach would better maintain the integrity of the California RA program while integrating imbalance reserves into the EDAM.

 


[1]             SCE Comments (May 19, 2022), at 4.

21. MARKET POWER MITIGATION (MPM): Please provide your organization’s comments on the proposal to extend the WEIM market power mitigation framework to the EDAM and the further evaluation of potential market power mitigation enhancements within the Price Formation Enhancements initiative.

The CAISO should further evaluate potential market power mitigation enhancements, including assessing market power across groupings of BAAs. CalCCA supports further evaluation of potential market power mitigation enhancements in the Price Formation Enhancements initiative. Establishing a robust market power mitigation methodology will be especially critical as the CAISO considers other price formation issues such as scarcity pricing and fast-start pricing.

22. CONVERGENCE BIDDING: Please provide your organization’s comments on the proposal for a transition period under which convergence bidding is only a market feature in the ISO BAA and not available in other EDAM BAAs at the onset of the EDAM.

CalCCA has no comments at this time.

23. CONVERGENCE BIDDING: Please include any additional comments on the topic of convergence bidding within EDAM.
24. EXTERNAL RESOURCE PARTICIPATION: Please provide your organization’s comments on the ISO initial leaning toward extending the WEIM framework of external resource participation to the EDAM.
Under this framework the ISO would continue to allow source specific and non-source specific supply (intertie bids) to be economically offered into the ISO BAA. Non-ISO EDAM entities would continue to support source specific supply (pseudo-ties and dynamics), the self-scheduling of supply under contract, but intertie bidding would not be allowed at the intertie of the EDAM BAA.

CalCCA has no comments at this time.

25. EXTERNAL RESOURCE PARTICIPATION: Please include any additional comments on the topic of external resource ability to participate in the EDAM.

CalCCA has no comments at this time.

26. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s overall comments, including potential suggested enhancements, on the resource specific approach to GHG accounting as described in section II.E of the EDAM straw proposal.

CalCCA has no comments at this time.

27. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the resource specific’s approach use of the RSE solution as the counterfactual for measuring secondary dispatch.

CalCCA has no comments at this time.

28. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the resource specific approach’s measures to limit secondary dispatch.

CalCCA has no comments at this time.

29. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s overall comments, including potential suggested enhancements, on the zonal approach to GHG accounting as described in section II.E of the EDAM straw proposal.

CalCCA has no comments at this time.

30. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the design of the hurdle rate for the zonal approach.

CalCCA has no comments at this time.

31. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the treatment of resources outside the GHG regulation area as internal to a GHG regulation area on a long-term or short-term basis, using the GHG pseudo tie functionality, in the zonal approach.

CalCCA has no comments at this time.

32. GREENHOUSE GAS ACCOUNTING: Please provide any additional comments on the GHG topic that were not captured by the questions above.

CalCCA has no comments at this time.

33. TRANSFER REVENUE ALLOCATION: Please provide your organization’s comments on the proposed transfer revenue allocation approach as described in section II.D.1 of the straw proposal and any other aspects of the transfer revenue allocation discussion topic.

CalCCA has no comments at this time.

34. SETTLEMENTS: Please provide your organization’s comments on settlements aspects of the EDAM described thus far, recognizing these will develop as the design evolves, as discussed in section II.D.2 of the EDAM straw proposal.

CalCCA has no comments at this time.

35. EDAM TECHNICAL WORKSHOPS: Please provide your organization’s comments on the upcoming EDAM technical workshops. Which key components of the straw proposal should be further discussed in EDAM technical workshops.
Please be as specific as you as possible.

CalCCA has no comments at this time.

36. GENERAL COMMENTS: Please provide your organization’s comments on any other elements or aspects of the EDAM straw proposal.

CalCCA has no comments at this time.

California Department of Water Resources
Submitted 06/15/2022, 03:41 pm

Contact

Rodrigo (rodrigo.avalos@water.ca.gov)

1. EDAM VOLUNTARY MODEL: Please provide your organization’s comments on the proposed structure of the EDAM voluntary participation model as described in section II.A.1 of the EDAM straw proposal.

None.

2. EDAM FEES: Please provide your organization’s comments on the proposed framework of the EDAM fee structure as described in section II.A.2 of the EDAM straw proposal.

None.

3. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on the concept of market transfers (occurring through the EDAM and WEIM) having equal priority to load to the extent an individual EDAM BAA faces severe emergency conditions as discussed in section II.A.3 of the EDAM straw proposal.

CDWR supports that BAA native loads have equal priority to EDAM transfers (exports or wheel-throughs) under severe emergency conditions.  Under severe conditions, where there is a risk of load shed in a BAA, priority should not be given to export transfers (meaning that load is curtailed ahead of export transfers).   The burden of reducing load or curtailing exports under limited transmission capacity should be distributed evenly (load and exports curtailed in equal amounts).

4. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on whether the failure of the day ahead resource sufficiency evaluation should have a bearing on the level of priority afforded to market transfers (EDAM and WEIM) souring from an EDAM BAA facing emergency conditions and sinking in the EDAM BAA that failed the resource sufficiency evaluation.

None.

5. CONFIDENCE IN MARKET TRANSFERS: Please provide any additional comments on the topic of confidence in market transfers (occurring through the EDAM and WEIM).

None.

6. TRANSMISSION COMMITMENT: Please provide your organization’s comments on the overall framework of transmission buckets in the context of making transmission available to the EDAM as described in section II.B.1 of the EDAM straw proposal.

None.

7. TRANSMISSION COMMITMENT: Please provide your organization’s perspective on Bucket 2 transmission and whether it should be made available to the EDAM only through a voluntary framework or through a more general rule that transmission unscheduled by 10am of the day ahead is automatically made available to the EDAM for optimization as described in the straw proposal.
Consider the implications of transmission customers retaining the ability to exercise those transmission rights between the day ahead and real time markets and the potential implications on redispatch.

None.

8. TRANSMISSION COMMITMENT: Please provide your organization’s perspective on the compensation options for bucket 3 transmission described in the EDAM straw proposal.
More specifically, consider whether Bucket 3 transmission rates should be reflected in the market optimization through a direct hurdle rate or should the reduced transmission revenues be addressed outside of the market optimization through after the fact cost recovery.

None.

9. TRANSMISSION COMMITMENT: Please provide your organization's comments on the concept of Bucket 3 transmission costs being recovered outside of the market optimization, should the ISO through the EDAM process work toward a design for transmission revenue recovery, based on one of the options described (3A, 3B, 3C), in order to keep the EDAM entity whole as a result of EDAM participation.
Some questions to consider: are there additional variations to the described options; what should be the recoverable lost transmission revenues; how should the lost transmission revenues be allocated (or a transactional basis, across load in EDAM or to each EDAM entity to allocate to its customers); how do the described options impact bidding incentive in the EDAM market.

None.

10. TRANSMISSION COMMITMENT: Please provide your organization’s comments on any other aspects of the transmission commitment in EDAM topic.

None.

11. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the process for conducting the EDAM RSE as described in section II.B.2 of the EDAM straw proposal.
This includes comments on the ability to conduct advisory RSE tests prior to the binding run, the timing of the RSE, the new tool, inputs, and other elements.

CDWR understands that the framework and structure of the RSE described in this section is intended to apply to all EDAM BAAs, including the CAISO.  CDWR also understands that all resources will continue to be allowed to self-schedule in the day-ahead market and the EDAM design will continue to support California’s resource adequacy program.  CDWR asks the CAISO to clarify if self-scheduled hydro resources and pumping loads (specifically, participating loads providing resource adequacy and/or non-spin) will count towards the CAISO BAA passing the RSE.  If not, will there be any consequences to the individual scheduling coordinator?  Section II.B.2.c.(2) is not clear on this.

12. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposed treatment of WSPP Schedule C and like firm energy contracts within the EDAM RSE.
These arrangements are commonly relied upon across the west, including the ISO. The ISO proposed that these count toward the RSE by being self-scheduled and that these arrangements reduce the RSE obligation. Consider providing comments on whether these should be allowed to count in their current form (limited knowledge of source of supply or transmission quality); whether the market is expected to evolve toward providing more specific source information; how these firm energy contracts should be modeled (whether sourcing from adjoining BAA or another method); any additional considerations.

None.

13. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s perspective on the ISO proposal, and associated reliance, on day ahead intertie bids (not associated with resource adequacy).
Some questions to consider: should these arrangements count toward the RSE; should these be monitored for performance and delivery; should additional criteria be imposed, such as an attestation, on these to provide an added level of confidence in performance.

None.

14. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the treatment of demand response and its different types and functions for purposes of passing the RSE.

None.

15. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposed EDAM RSE failure consequences approach under which transfers would be allowed under an RSE failure at a penalty price.
Please comment on what an appropriate penalty price would be.

None.

16. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposed EDAM RSE failure consequences approach which distinguishes the consequences depending upon whether the failure occurred under “normal conditions” as compared to “stressed system conditions.”
Please include consideration of potential different frameworks, how “stressed system conditions” can be defined; and any other perspectives on the structure of failure consequences and their impact on developing a robust RSE.

None.

17. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the concept of a pooled WEIM RSE for entities passing the EDAM RSE, as described in the straw proposal and stakeholder meeting.

None.

18. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provider your organization’s comments on any other elements of the EDAM RSE not raised by the questions above.

None.

19. INTEGRATED FORWARD MARKET (IFM) AND RESIDUAL UNIT COMMITMENT (RUC): Please provide your organization’s comments on considerations related to the IFM and RUC as part of EDAM.
This includes consideration of the role of the RUC process as a critical component of the EDAM and the proposal that all supply offered into IFM is also offered in the RUC.

None.

20. INTEGRATED FORWARD MARKET (IFM) AND RESIDUAL UNIT COMMITMENT (RUC): Please provide your organization’s comments on the role of the imbalance reserve market product, currently being developed in the Day-Ahead Market Enhancements initiative, in the EDAM.

None.

21. MARKET POWER MITIGATION (MPM): Please provide your organization’s comments on the proposal to extend the WEIM market power mitigation framework to the EDAM and the further evaluation of potential market power mitigation enhancements within the Price Formation Enhancements initiative.

None.

22. CONVERGENCE BIDDING: Please provide your organization’s comments on the proposal for a transition period under which convergence bidding is only a market feature in the ISO BAA and not available in other EDAM BAAs at the onset of the EDAM.

None.

23. CONVERGENCE BIDDING: Please include any additional comments on the topic of convergence bidding within EDAM.

None.

24. EXTERNAL RESOURCE PARTICIPATION: Please provide your organization’s comments on the ISO initial leaning toward extending the WEIM framework of external resource participation to the EDAM.
Under this framework the ISO would continue to allow source specific and non-source specific supply (intertie bids) to be economically offered into the ISO BAA. Non-ISO EDAM entities would continue to support source specific supply (pseudo-ties and dynamics), the self-scheduling of supply under contract, but intertie bidding would not be allowed at the intertie of the EDAM BAA.

None.

25. EXTERNAL RESOURCE PARTICIPATION: Please include any additional comments on the topic of external resource ability to participate in the EDAM.

None.

26. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s overall comments, including potential suggested enhancements, on the resource specific approach to GHG accounting as described in section II.E of the EDAM straw proposal.

None.

27. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the resource specific’s approach use of the RSE solution as the counterfactual for measuring secondary dispatch.

None.

28. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the resource specific approach’s measures to limit secondary dispatch.

None.

29. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s overall comments, including potential suggested enhancements, on the zonal approach to GHG accounting as described in section II.E of the EDAM straw proposal.

None.

30. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the design of the hurdle rate for the zonal approach.

None.

31. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the treatment of resources outside the GHG regulation area as internal to a GHG regulation area on a long-term or short-term basis, using the GHG pseudo tie functionality, in the zonal approach.

None.

32. GREENHOUSE GAS ACCOUNTING: Please provide any additional comments on the GHG topic that were not captured by the questions above.

None.

33. TRANSFER REVENUE ALLOCATION: Please provide your organization’s comments on the proposed transfer revenue allocation approach as described in section II.D.1 of the straw proposal and any other aspects of the transfer revenue allocation discussion topic.

None.

34. SETTLEMENTS: Please provide your organization’s comments on settlements aspects of the EDAM described thus far, recognizing these will develop as the design evolves, as discussed in section II.D.2 of the EDAM straw proposal.

None.

35. EDAM TECHNICAL WORKSHOPS: Please provide your organization’s comments on the upcoming EDAM technical workshops. Which key components of the straw proposal should be further discussed in EDAM technical workshops.
Please be as specific as you as possible.

None.

36. GENERAL COMMENTS: Please provide your organization’s comments on any other elements or aspects of the EDAM straw proposal.

None.

California Efficiency + Demand Management Council
Submitted 06/16/2022, 03:46 pm

Submitted on behalf of
California Efficiency + Demand Management Council

Contact

Luke Tougas (l.tougas@cleanenergyregresearch.com)

1. EDAM VOLUNTARY MODEL: Please provide your organization’s comments on the proposed structure of the EDAM voluntary participation model as described in section II.A.1 of the EDAM straw proposal.

The Council reserves comment.

2. EDAM FEES: Please provide your organization’s comments on the proposed framework of the EDAM fee structure as described in section II.A.2 of the EDAM straw proposal.

The Council reserves comment.

3. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on the concept of market transfers (occurring through the EDAM and WEIM) having equal priority to load to the extent an individual EDAM BAA faces severe emergency conditions as discussed in section II.A.3 of the EDAM straw proposal.

The Council reserves comment.

4. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on whether the failure of the day ahead resource sufficiency evaluation should have a bearing on the level of priority afforded to market transfers (EDAM and WEIM) souring from an EDAM BAA facing emergency conditions and sinking in the EDAM BAA that failed the resource sufficiency evaluation.

The Council reserves comment.

5. CONFIDENCE IN MARKET TRANSFERS: Please provide any additional comments on the topic of confidence in market transfers (occurring through the EDAM and WEIM).

The Council reserves comment.

6. TRANSMISSION COMMITMENT: Please provide your organization’s comments on the overall framework of transmission buckets in the context of making transmission available to the EDAM as described in section II.B.1 of the EDAM straw proposal.

The Council reserves comment.

7. TRANSMISSION COMMITMENT: Please provide your organization’s perspective on Bucket 2 transmission and whether it should be made available to the EDAM only through a voluntary framework or through a more general rule that transmission unscheduled by 10am of the day ahead is automatically made available to the EDAM for optimization as described in the straw proposal.
Consider the implications of transmission customers retaining the ability to exercise those transmission rights between the day ahead and real time markets and the potential implications on redispatch.

The Council reserves comment.

8. TRANSMISSION COMMITMENT: Please provide your organization’s perspective on the compensation options for bucket 3 transmission described in the EDAM straw proposal.
More specifically, consider whether Bucket 3 transmission rates should be reflected in the market optimization through a direct hurdle rate or should the reduced transmission revenues be addressed outside of the market optimization through after the fact cost recovery.

The Council reserves comment.

9. TRANSMISSION COMMITMENT: Please provide your organization's comments on the concept of Bucket 3 transmission costs being recovered outside of the market optimization, should the ISO through the EDAM process work toward a design for transmission revenue recovery, based on one of the options described (3A, 3B, 3C), in order to keep the EDAM entity whole as a result of EDAM participation.
Some questions to consider: are there additional variations to the described options; what should be the recoverable lost transmission revenues; how should the lost transmission revenues be allocated (or a transactional basis, across load in EDAM or to each EDAM entity to allocate to its customers); how do the described options impact bidding incentive in the EDAM market.

The Council reserves comment.

10. TRANSMISSION COMMITMENT: Please provide your organization’s comments on any other aspects of the transmission commitment in EDAM topic.

The Council reserves comment.

11. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the process for conducting the EDAM RSE as described in section II.B.2 of the EDAM straw proposal.
This includes comments on the ability to conduct advisory RSE tests prior to the binding run, the timing of the RSE, the new tool, inputs, and other elements.

The Council reserves comment.

12. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposed treatment of WSPP Schedule C and like firm energy contracts within the EDAM RSE.
These arrangements are commonly relied upon across the west, including the ISO. The ISO proposed that these count toward the RSE by being self-scheduled and that these arrangements reduce the RSE obligation. Consider providing comments on whether these should be allowed to count in their current form (limited knowledge of source of supply or transmission quality); whether the market is expected to evolve toward providing more specific source information; how these firm energy contracts should be modeled (whether sourcing from adjoining BAA or another method); any additional considerations.

The Council reserves comment.

13. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s perspective on the ISO proposal, and associated reliance, on day ahead intertie bids (not associated with resource adequacy).
Some questions to consider: should these arrangements count toward the RSE; should these be monitored for performance and delivery; should additional criteria be imposed, such as an attestation, on these to provide an added level of confidence in performance.

The Council reserves comment.

14. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the treatment of demand response and its different types and functions for purposes of passing the RSE.

The Council supports the Straw Proposal’s proposed treatment of EDAM Entities’ load modification and demand response (collectively, “DR”) in the RSE.  For the sake of clarity, the Council adopts the term of “non-participating DR” used by the CAISO in its Proposed Revision Request (PRR) 1438 for DR that does not conform with the CAISO’s Proxy Demand Resource (PDR) and Reliability Demand Response Resource (RDRR) products.

It is logical to require that any reduction of the demand forecast on account of non-participating DR should be contingent on a commitment to dispatch the DR during the associated time period in the real-time market.  In addition, the CAISO should also consider adapting its PDR and/or RDRR products for EDAM Entities in the future to incentivize them to show these resources to meet their respective RSEs.

15. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposed EDAM RSE failure consequences approach under which transfers would be allowed under an RSE failure at a penalty price.
Please comment on what an appropriate penalty price would be.

The Council reserves comment.

16. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposed EDAM RSE failure consequences approach which distinguishes the consequences depending upon whether the failure occurred under “normal conditions” as compared to “stressed system conditions.”
Please include consideration of potential different frameworks, how “stressed system conditions” can be defined; and any other perspectives on the structure of failure consequences and their impact on developing a robust RSE.

The Council reserves comment.

17. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the concept of a pooled WEIM RSE for entities passing the EDAM RSE, as described in the straw proposal and stakeholder meeting.

The Council reserves comment.

18. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provider your organization’s comments on any other elements of the EDAM RSE not raised by the questions above.

The Council reserves comment.

19. INTEGRATED FORWARD MARKET (IFM) AND RESIDUAL UNIT COMMITMENT (RUC): Please provide your organization’s comments on considerations related to the IFM and RUC as part of EDAM.
This includes consideration of the role of the RUC process as a critical component of the EDAM and the proposal that all supply offered into IFM is also offered in the RUC.

The Council reserves comment.

20. INTEGRATED FORWARD MARKET (IFM) AND RESIDUAL UNIT COMMITMENT (RUC): Please provide your organization’s comments on the role of the imbalance reserve market product, currently being developed in the Day-Ahead Market Enhancements initiative, in the EDAM.

The Council reserves comment.

21. MARKET POWER MITIGATION (MPM): Please provide your organization’s comments on the proposal to extend the WEIM market power mitigation framework to the EDAM and the further evaluation of potential market power mitigation enhancements within the Price Formation Enhancements initiative.

The Council reserves comment.

22. CONVERGENCE BIDDING: Please provide your organization’s comments on the proposal for a transition period under which convergence bidding is only a market feature in the ISO BAA and not available in other EDAM BAAs at the onset of the EDAM.

The Council reserves comment.

23. CONVERGENCE BIDDING: Please include any additional comments on the topic of convergence bidding within EDAM.

The Council reserves comment.

24. EXTERNAL RESOURCE PARTICIPATION: Please provide your organization’s comments on the ISO initial leaning toward extending the WEIM framework of external resource participation to the EDAM.
Under this framework the ISO would continue to allow source specific and non-source specific supply (intertie bids) to be economically offered into the ISO BAA. Non-ISO EDAM entities would continue to support source specific supply (pseudo-ties and dynamics), the self-scheduling of supply under contract, but intertie bidding would not be allowed at the intertie of the EDAM BAA.

The Council reserves comment.

25. EXTERNAL RESOURCE PARTICIPATION: Please include any additional comments on the topic of external resource ability to participate in the EDAM.

As the Council stated above, the CAISO should seek to develop versions of PDRs and RDRRs to which EDAM Entities can conform their own DR programs and resources while preserving the option for non-participating DR to reduce the demand forecast as part of the RSE.  Market-integrated DR products will provide an avenue for EDAM Entities to earn energy market revenues while providing additional resources that the CAISO can further leverage to realize the benefits of greater regional integration.

26. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s overall comments, including potential suggested enhancements, on the resource specific approach to GHG accounting as described in section II.E of the EDAM straw proposal.

The Council reserves comment.

27. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the resource specific’s approach use of the RSE solution as the counterfactual for measuring secondary dispatch.

The Council reserves comment.

28. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the resource specific approach’s measures to limit secondary dispatch.

The Council reserves comment.

29. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s overall comments, including potential suggested enhancements, on the zonal approach to GHG accounting as described in section II.E of the EDAM straw proposal.

The Council reserves comment.

30. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the design of the hurdle rate for the zonal approach.

The Council reserves comment.

31. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the treatment of resources outside the GHG regulation area as internal to a GHG regulation area on a long-term or short-term basis, using the GHG pseudo tie functionality, in the zonal approach.

The Council reserves comment.

32. GREENHOUSE GAS ACCOUNTING: Please provide any additional comments on the GHG topic that were not captured by the questions above.

The Council reserves comment.

33. TRANSFER REVENUE ALLOCATION: Please provide your organization’s comments on the proposed transfer revenue allocation approach as described in section II.D.1 of the straw proposal and any other aspects of the transfer revenue allocation discussion topic.

The Council reserves comment.

34. SETTLEMENTS: Please provide your organization’s comments on settlements aspects of the EDAM described thus far, recognizing these will develop as the design evolves, as discussed in section II.D.2 of the EDAM straw proposal.

The Council reserves comment.

35. EDAM TECHNICAL WORKSHOPS: Please provide your organization’s comments on the upcoming EDAM technical workshops. Which key components of the straw proposal should be further discussed in EDAM technical workshops.
Please be as specific as you as possible.

The Council reserves comment.

36. GENERAL COMMENTS: Please provide your organization’s comments on any other elements or aspects of the EDAM straw proposal.

The Council reserves comment.

California ISO - Department of Market Monitoring
Submitted 06/17/2022, 03:39 pm

Contact

Ryan Kurlinski (rkurlinski@caiso.com)

1. EDAM VOLUNTARY MODEL: Please provide your organization’s comments on the proposed structure of the EDAM voluntary participation model as described in section II.A.1 of the EDAM straw proposal.

Please see DMM's complete set of comments in the attached PDF below.

2. EDAM FEES: Please provide your organization’s comments on the proposed framework of the EDAM fee structure as described in section II.A.2 of the EDAM straw proposal.

Please see DMM's complete set of comments in the attached PDF below.

3. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on the concept of market transfers (occurring through the EDAM and WEIM) having equal priority to load to the extent an individual EDAM BAA faces severe emergency conditions as discussed in section II.A.3 of the EDAM straw proposal.

Please see DMM's complete set of comments in the attached PDF below.

4. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on whether the failure of the day ahead resource sufficiency evaluation should have a bearing on the level of priority afforded to market transfers (EDAM and WEIM) souring from an EDAM BAA facing emergency conditions and sinking in the EDAM BAA that failed the resource sufficiency evaluation.

Please see DMM's complete set of comments in the attached PDF below.

5. CONFIDENCE IN MARKET TRANSFERS: Please provide any additional comments on the topic of confidence in market transfers (occurring through the EDAM and WEIM).

Please see DMM's complete set of comments in the attached PDF below.

6. TRANSMISSION COMMITMENT: Please provide your organization’s comments on the overall framework of transmission buckets in the context of making transmission available to the EDAM as described in section II.B.1 of the EDAM straw proposal.

Please see DMM's complete set of comments in the attached PDF below.

7. TRANSMISSION COMMITMENT: Please provide your organization’s perspective on Bucket 2 transmission and whether it should be made available to the EDAM only through a voluntary framework or through a more general rule that transmission unscheduled by 10am of the day ahead is automatically made available to the EDAM for optimization as described in the straw proposal.
Consider the implications of transmission customers retaining the ability to exercise those transmission rights between the day ahead and real time markets and the potential implications on redispatch.

Please see DMM's complete set of comments in the attached PDF below.

8. TRANSMISSION COMMITMENT: Please provide your organization’s perspective on the compensation options for bucket 3 transmission described in the EDAM straw proposal.
More specifically, consider whether Bucket 3 transmission rates should be reflected in the market optimization through a direct hurdle rate or should the reduced transmission revenues be addressed outside of the market optimization through after the fact cost recovery.

Please see DMM's complete set of comments in the attached PDF below.

9. TRANSMISSION COMMITMENT: Please provide your organization's comments on the concept of Bucket 3 transmission costs being recovered outside of the market optimization, should the ISO through the EDAM process work toward a design for transmission revenue recovery, based on one of the options described (3A, 3B, 3C), in order to keep the EDAM entity whole as a result of EDAM participation.
Some questions to consider: are there additional variations to the described options; what should be the recoverable lost transmission revenues; how should the lost transmission revenues be allocated (or a transactional basis, across load in EDAM or to each EDAM entity to allocate to its customers); how do the described options impact bidding incentive in the EDAM market.

Please see DMM's complete set of comments in the attached PDF below.

10. TRANSMISSION COMMITMENT: Please provide your organization’s comments on any other aspects of the transmission commitment in EDAM topic.

Please see DMM's complete set of comments in the attached PDF below.

11. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the process for conducting the EDAM RSE as described in section II.B.2 of the EDAM straw proposal.
This includes comments on the ability to conduct advisory RSE tests prior to the binding run, the timing of the RSE, the new tool, inputs, and other elements.

Please see DMM's complete set of comments in the attached PDF below.

12. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposed treatment of WSPP Schedule C and like firm energy contracts within the EDAM RSE.
These arrangements are commonly relied upon across the west, including the ISO. The ISO proposed that these count toward the RSE by being self-scheduled and that these arrangements reduce the RSE obligation. Consider providing comments on whether these should be allowed to count in their current form (limited knowledge of source of supply or transmission quality); whether the market is expected to evolve toward providing more specific source information; how these firm energy contracts should be modeled (whether sourcing from adjoining BAA or another method); any additional considerations.

Please see DMM's complete set of comments in the attached PDF below.

13. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s perspective on the ISO proposal, and associated reliance, on day ahead intertie bids (not associated with resource adequacy).
Some questions to consider: should these arrangements count toward the RSE; should these be monitored for performance and delivery; should additional criteria be imposed, such as an attestation, on these to provide an added level of confidence in performance.

Please see DMM's complete set of comments in the attached PDF below.

14. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the treatment of demand response and its different types and functions for purposes of passing the RSE.

Please see DMM's complete set of comments in the attached PDF below.

15. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposed EDAM RSE failure consequences approach under which transfers would be allowed under an RSE failure at a penalty price.
Please comment on what an appropriate penalty price would be.

Please see DMM's complete set of comments in the attached PDF below.

16. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposed EDAM RSE failure consequences approach which distinguishes the consequences depending upon whether the failure occurred under “normal conditions” as compared to “stressed system conditions.”
Please include consideration of potential different frameworks, how “stressed system conditions” can be defined; and any other perspectives on the structure of failure consequences and their impact on developing a robust RSE.

Please see DMM's complete set of comments in the attached PDF below.

17. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the concept of a pooled WEIM RSE for entities passing the EDAM RSE, as described in the straw proposal and stakeholder meeting.

Please see DMM's complete set of comments in the attached PDF below.

18. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provider your organization’s comments on any other elements of the EDAM RSE not raised by the questions above.

Please see DMM's complete set of comments in the attached PDF below.

19. INTEGRATED FORWARD MARKET (IFM) AND RESIDUAL UNIT COMMITMENT (RUC): Please provide your organization’s comments on considerations related to the IFM and RUC as part of EDAM.
This includes consideration of the role of the RUC process as a critical component of the EDAM and the proposal that all supply offered into IFM is also offered in the RUC.

Please see DMM's complete set of comments in the attached PDF below.

20. INTEGRATED FORWARD MARKET (IFM) AND RESIDUAL UNIT COMMITMENT (RUC): Please provide your organization’s comments on the role of the imbalance reserve market product, currently being developed in the Day-Ahead Market Enhancements initiative, in the EDAM.

Please see DMM's complete set of comments in the attached PDF below.

21. MARKET POWER MITIGATION (MPM): Please provide your organization’s comments on the proposal to extend the WEIM market power mitigation framework to the EDAM and the further evaluation of potential market power mitigation enhancements within the Price Formation Enhancements initiative.

Please see DMM's complete set of comments in the attached PDF below.

22. CONVERGENCE BIDDING: Please provide your organization’s comments on the proposal for a transition period under which convergence bidding is only a market feature in the ISO BAA and not available in other EDAM BAAs at the onset of the EDAM.

Please see DMM's complete set of comments in the attached PDF below.

23. CONVERGENCE BIDDING: Please include any additional comments on the topic of convergence bidding within EDAM.

Please see DMM's complete set of comments in the attached PDF below.

24. EXTERNAL RESOURCE PARTICIPATION: Please provide your organization’s comments on the ISO initial leaning toward extending the WEIM framework of external resource participation to the EDAM.
Under this framework the ISO would continue to allow source specific and non-source specific supply (intertie bids) to be economically offered into the ISO BAA. Non-ISO EDAM entities would continue to support source specific supply (pseudo-ties and dynamics), the self-scheduling of supply under contract, but intertie bidding would not be allowed at the intertie of the EDAM BAA.

Please see DMM's complete set of comments in the attached PDF below.

25. EXTERNAL RESOURCE PARTICIPATION: Please include any additional comments on the topic of external resource ability to participate in the EDAM.

Please see DMM's complete set of comments in the attached PDF below.

26. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s overall comments, including potential suggested enhancements, on the resource specific approach to GHG accounting as described in section II.E of the EDAM straw proposal.

Please see DMM's complete set of comments in the attached PDF below.

27. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the resource specific’s approach use of the RSE solution as the counterfactual for measuring secondary dispatch.

Please see DMM's complete set of comments in the attached PDF below.

28. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the resource specific approach’s measures to limit secondary dispatch.

Please see DMM's complete set of comments in the attached PDF below.

29. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s overall comments, including potential suggested enhancements, on the zonal approach to GHG accounting as described in section II.E of the EDAM straw proposal.

Please see DMM's complete set of comments in the attached PDF below.

30. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the design of the hurdle rate for the zonal approach.

Please see DMM's complete set of comments in the attached PDF below.

31. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the treatment of resources outside the GHG regulation area as internal to a GHG regulation area on a long-term or short-term basis, using the GHG pseudo tie functionality, in the zonal approach.

Please see DMM's complete set of comments in the attached PDF below.

32. GREENHOUSE GAS ACCOUNTING: Please provide any additional comments on the GHG topic that were not captured by the questions above.

Please see DMM's complete set of comments in the attached PDF below.

33. TRANSFER REVENUE ALLOCATION: Please provide your organization’s comments on the proposed transfer revenue allocation approach as described in section II.D.1 of the straw proposal and any other aspects of the transfer revenue allocation discussion topic.

Please see DMM's complete set of comments in the attached PDF below.

34. SETTLEMENTS: Please provide your organization’s comments on settlements aspects of the EDAM described thus far, recognizing these will develop as the design evolves, as discussed in section II.D.2 of the EDAM straw proposal.

Please see DMM's complete set of comments in the attached PDF below.

35. EDAM TECHNICAL WORKSHOPS: Please provide your organization’s comments on the upcoming EDAM technical workshops. Which key components of the straw proposal should be further discussed in EDAM technical workshops.
Please be as specific as you as possible.

Please see DMM's complete set of comments in the attached PDF below.

36. GENERAL COMMENTS: Please provide your organization’s comments on any other elements or aspects of the EDAM straw proposal.

Please see DMM's complete set of comments in the attached PDF below.

California Municipal Utilities Association (CMUA)
Submitted 06/16/2022, 05:00 pm

Submitted on behalf of
California Municipal Utilities Association (CMUA)

Contact

Tony Braun (braun@braunlegal.com)

1. EDAM VOLUNTARY MODEL: Please provide your organization’s comments on the proposed structure of the EDAM voluntary participation model as described in section II.A.1 of the EDAM straw proposal.

CMUA finds the voluntary participation model acceptable so long as its application does not unnecessarily interfere with effective optimization in the applicable market intervals.  For example, given that EDAM is a “halfway house” between a full Day Two Regional Transmission Organization market design, and the bilateral market and even the EIM, and the fact that most potential “EDAM Entities” remain vertically integrated utilities that operate Balancing Authorities and maintain reliability responsbilities, it is reasonable to provide for easier entry and exit into the market itself.  CMUA members would be concerned if the concept of voluntariness transferred into operational timeframes.  For example, CMUA supports the concept that a prospective EDAM Entity could only submit Day Ahead bids into the EDAM, rather than pick and choose EDAM versus traditional Intertie bidding.  Once a voluntary EDAM election is made, an EDAM Entity must settle all of its transactions in the EDAM.

2. EDAM FEES: Please provide your organization’s comments on the proposed framework of the EDAM fee structure as described in section II.A.2 of the EDAM straw proposal.

CMUA has no position on this issue at this time.  However, we are keenly interested in specificity on this issue.  Contribution to CAISO fixed costs is likely an important benefit component to load serving entities in the CAISO BAA footprint, since a Day Ahead optimization and associated benefits already exists for the CAISO.  On similar issues, such as RC and EIM charges, the CAISO has been able to provide a great deal of empirical support for its fee attribution based on internal cost accounting, and we would expect that would make this issue somewhat easier to reconcile.

3. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on the concept of market transfers (occurring through the EDAM and WEIM) having equal priority to load to the extent an individual EDAM BAA faces severe emergency conditions as discussed in section II.A.3 of the EDAM straw proposal.

CMUA has no formal position on this issue at this time.  We have members both within and outside the CAISO, and the mechanics of this are complex and need further explication.  We recognize that in order for the market to realize the hoped-for benefits, it must be able to commit units and accomplish transfers.  Yet all entities, both inside and outside of CAISO, appear to support the traditional concept of native load priority.  This issue seems tied closely to the “Wheel Through”, with perhaps important differences given that the EDAM will optimize over the footprint and the Wheel Through resevations, if any, may be outside the EDAM optimization.  We look forward to continuing dialogue on this issue throught the Working Group and formal stakeholder processes.

4. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on whether the failure of the day ahead resource sufficiency evaluation should have a bearing on the level of priority afforded to market transfers (EDAM and WEIM) souring from an EDAM BAA facing emergency conditions and sinking in the EDAM BAA that failed the resource sufficiency evaluation.

The grid continues to face issues, such as those raised by NV Energy in the context of the WEIM Resource Sufficiency Evalution, which illustrate the shortcomings of a “market separation” or “market freezing” concept.  However, there are critical details to be worked through.  We have general philosophical support for approaches to move away from a market freezing or separation, and toward financial penalties.  However, much work is needed to work through this matter and balance the mutual desire to enhance reliability, and allow market functions to solve grid issues, while not unduly encouraging habitual “leaning” on DA or RT market operations as a substitute for sound procurement policy. CMUA would be concerned if the end result of the prioritization would be to expose the supplying BAA to emergency conditions as a consequence of supplying energy to a BAA that had failed the EDAM RSE.  We look forward to understanding how application of these tests would work in practice.  Further, we observe that the RSE issues have become appropriately more nuanced since the early conversations centered around bright line concepts of “leaning” and “no leaning.”

5. CONFIDENCE IN MARKET TRANSFERS: Please provide any additional comments on the topic of confidence in market transfers (occurring through the EDAM and WEIM).

CMUA is generally supportive of the concept that EDAM transfers need to be highly reliable.  We look forward to continued work on the mechanics of what this means and how to balance the optimization function of the CAISO which is unavoidable for load serving entities within the CAISO footprint, with the fact that EDAM Entities will retain their individual Balancing Authority Areas and associated reliability obligations.  As the concepts are considered through the EIM timeframes, it would not seem to make sense to commit resources on a load equivalent priority in the EDAM RSE, and then require a rerun of a RSE in WEIM only to freeze transfers in the EIM, unless there was a significantly changed operational circumstance.

6. TRANSMISSION COMMITMENT: Please provide your organization’s comments on the overall framework of transmission buckets in the context of making transmission available to the EDAM as described in section II.B.1 of the EDAM straw proposal.

CMUA generally concurs that the “bucket” framework is workable, but key elements of how transmission is made available require closer consideration.  In any event, the “bucket” framework has been discussed now for nearly three years, and it is impractical to start from scratch on any alternative structures. 

7. TRANSMISSION COMMITMENT: Please provide your organization’s perspective on Bucket 2 transmission and whether it should be made available to the EDAM only through a voluntary framework or through a more general rule that transmission unscheduled by 10am of the day ahead is automatically made available to the EDAM for optimization as described in the straw proposal.
Consider the implications of transmission customers retaining the ability to exercise those transmission rights between the day ahead and real time markets and the potential implications on redispatch.

CMUA members are transmission customers.  How Existing Transmission Contracts and Transmissioner Ownership Rights were handled at CAISO Start-up was a key issues for CMUA members.  Indeed, some ETCs and TORs remain.  There are many parallels with our experience during this process, and CMUA supports the proposition that pre-exisiting commitments should be honored. 

We have also learned that market efficiency is highly correlated to the available transfer capability over which the optimization occurs.  Thus, we generally support providing the transmission right-holder the opportunity to fully utilize its pre-existing rights, but providing a mechanism for the market to utilize unscheduled rights by a time certain.  We believe this comports with generally applicable rules under the FERC pro forma Open Access Transmission Tariff.

We also support the ability of the transmission customer to fully utilize pre-existing rights up through real time, and thus the question of allocation of redispatch costs should be a primary focus of upcoming work. 

Finally, CMUA notes that we are no experts on the transmission tariffs, systems, or arrangements in other parts of the West, and there may be need to accommodate particular circumstances.

8. TRANSMISSION COMMITMENT: Please provide your organization’s perspective on the compensation options for bucket 3 transmission described in the EDAM straw proposal.
More specifically, consider whether Bucket 3 transmission rates should be reflected in the market optimization through a direct hurdle rate or should the reduced transmission revenues be addressed outside of the market optimization through after the fact cost recovery.

CMUA generally supports the latter approach.  We do not generally support a significant hurdle rate that would interfere with the optimization.  The hurdle rate concept also seems to be made even more problematic due to the significant cost disparity between transmission provider rates in the possible EDAM footprint.  We urge the CAISO to tackle this issue by understanding the scope of current wheeling revenues from OATT sales, the potential for lost revenue, the magnitude of any potential uplift, and the role of overall market benefits to be factored into this calculation.

9. TRANSMISSION COMMITMENT: Please provide your organization's comments on the concept of Bucket 3 transmission costs being recovered outside of the market optimization, should the ISO through the EDAM process work toward a design for transmission revenue recovery, based on one of the options described (3A, 3B, 3C), in order to keep the EDAM entity whole as a result of EDAM participation.
Some questions to consider: are there additional variations to the described options; what should be the recoverable lost transmission revenues; how should the lost transmission revenues be allocated (or a transactional basis, across load in EDAM or to each EDAM entity to allocate to its customers); how do the described options impact bidding incentive in the EDAM market.

CMUA’s views on these questions are captured above. 

10. TRANSMISSION COMMITMENT: Please provide your organization’s comments on any other aspects of the transmission commitment in EDAM topic.

CMUA has no further comments. 

11. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the process for conducting the EDAM RSE as described in section II.B.2 of the EDAM straw proposal.
This includes comments on the ability to conduct advisory RSE tests prior to the binding run, the timing of the RSE, the new tool, inputs, and other elements.

CMUA supports in concept the EDAM RSE proposals described in the Straw Proposal.  We have no current objections to the concept of an advisory run.

12. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposed treatment of WSPP Schedule C and like firm energy contracts within the EDAM RSE.
These arrangements are commonly relied upon across the west, including the ISO. The ISO proposed that these count toward the RSE by being self-scheduled and that these arrangements reduce the RSE obligation. Consider providing comments on whether these should be allowed to count in their current form (limited knowledge of source of supply or transmission quality); whether the market is expected to evolve toward providing more specific source information; how these firm energy contracts should be modeled (whether sourcing from adjoining BAA or another method); any additional considerations.

WSPP Schedule C contracts should count.  They are widely relied upon in the West, and CMUA members report that they are highly reliable. 

We are willing to consider augmentations to the RSE rules to increase confidence in the transactions, but would like a more robust empirical showing as to why such steps are needed to ensure reliable system operation.  We would benefit from the views of the CAISO Department of Market Monitoring (DMM) and/or the Govering Body Market Expert (GBME), including data showing any concerns that these contracts are not backed by physical supply and inclusive of operating reserves.  CMUA members are leery of imposing new bilateral contracting rules at the onset that could be costly and disruptive.

13. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s perspective on the ISO proposal, and associated reliance, on day ahead intertie bids (not associated with resource adequacy).
Some questions to consider: should these arrangements count toward the RSE; should these be monitored for performance and delivery; should additional criteria be imposed, such as an attestation, on these to provide an added level of confidence in performance.

CMUA members are located within and outside the CAISO BAA.  Neither groups of CMUA members are governed by the RA eligibility rules promulgated by the CPUC and as such need further information as to the extent of this problem.  Generally speaking, we support the concept that the RSE should be fulfilled through known and committed supply.  We would like to understand more regarding the mandatorily-offerred RA fleet (which includes imports) and the sufficiency to meet an EDAM RSE, and whether this issue of non-RA Intertie Bids is related to inadequate underlying RA obligations or changed circumstances between the EDAM and WEIM runs.  We look forward to further discussion. 

14. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the treatment of demand response and its different types and functions for purposes of passing the RSE.

Demand Response that is known and verifiable should be able to count toward the RSE

15. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposed EDAM RSE failure consequences approach under which transfers would be allowed under an RSE failure at a penalty price.
Please comment on what an appropriate penalty price would be.

CMUA members generally support the concept of moving toward a penalty price mechanism if the grid can support the additional transfers.  Additional discussion is warranted on whether habitual “leaning” requires a different approach.  We have no current position on an appropriate penalty price. 

16. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposed EDAM RSE failure consequences approach which distinguishes the consequences depending upon whether the failure occurred under “normal conditions” as compared to “stressed system conditions.”
Please include consideration of potential different frameworks, how “stressed system conditions” can be defined; and any other perspectives on the structure of failure consequences and their impact on developing a robust RSE.

CMUA has stated its views on this general topic above.  When transfers can occur, they should occur.  However, differentiating “normal” and “stressed” may be difficult in legal application, which could cause uncertainty.  We look forward to continued discussion on this matter. 

17. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the concept of a pooled WEIM RSE for entities passing the EDAM RSE, as described in the straw proposal and stakeholder meeting.

CMUA sees no need for individual tests for WEIM if EDAM tests are passed.

18. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provider your organization’s comments on any other elements of the EDAM RSE not raised by the questions above.

CMUA has no further comments. 

19. INTEGRATED FORWARD MARKET (IFM) AND RESIDUAL UNIT COMMITMENT (RUC): Please provide your organization’s comments on considerations related to the IFM and RUC as part of EDAM.
This includes consideration of the role of the RUC process as a critical component of the EDAM and the proposal that all supply offered into IFM is also offered in the RUC.

CMUA is not highly familiar with the operation of other BAAs.  We note that having the most robust pool of resources in the optimization should maximize benefits.  We agree that any supply used to meet the RSE has indicated its availability and should have the requirement to offer into the IFM process.  We don’t fully understand the intersection of this requirement with the ongoing reliability obligations of potential EDAM Entities that continue to operate their own BAAs and have reliability obligations.  We look forward to continued discussion.

20. INTEGRATED FORWARD MARKET (IFM) AND RESIDUAL UNIT COMMITMENT (RUC): Please provide your organization’s comments on the role of the imbalance reserve market product, currently being developed in the Day-Ahead Market Enhancements initiative, in the EDAM.

CMUA has no comments on this issue.

21. MARKET POWER MITIGATION (MPM): Please provide your organization’s comments on the proposal to extend the WEIM market power mitigation framework to the EDAM and the further evaluation of potential market power mitigation enhancements within the Price Formation Enhancements initiative.

CMUA believes market power, price formation, and scarcity pricing are best dealt with in the ongoing parallel process and are not EDAM-specific or dependent.

22. CONVERGENCE BIDDING: Please provide your organization’s comments on the proposal for a transition period under which convergence bidding is only a market feature in the ISO BAA and not available in other EDAM BAAs at the onset of the EDAM.

CMUA generally supports simplicity of an initial EDAM implementation, and sees no compelling need to include convergence bidding in the original design.

23. CONVERGENCE BIDDING: Please include any additional comments on the topic of convergence bidding within EDAM.

CMUA has no futher comments.

24. EXTERNAL RESOURCE PARTICIPATION: Please provide your organization’s comments on the ISO initial leaning toward extending the WEIM framework of external resource participation to the EDAM.
Under this framework the ISO would continue to allow source specific and non-source specific supply (intertie bids) to be economically offered into the ISO BAA. Non-ISO EDAM entities would continue to support source specific supply (pseudo-ties and dynamics), the self-scheduling of supply under contract, but intertie bidding would not be allowed at the intertie of the EDAM BAA.

CMUA has no firm position on this matter, other than to note, as we have done above, that simplicity in the initial roll-out of EDAM seems prudent, and Intertie Bids at EDAM boundaries seems complex and would introduce the need for new systems for both the CAISO and EDAM Entities.

25. EXTERNAL RESOURCE PARTICIPATION: Please include any additional comments on the topic of external resource ability to participate in the EDAM.

CMUA has no further comments.

26. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s overall comments, including potential suggested enhancements, on the resource specific approach to GHG accounting as described in section II.E of the EDAM straw proposal.

As California entities, CMUA members must already account for all GHG for their own resources as well as certain imports.  Therefore, the resource specific approach would be technically acceptable and workable as a first step while state-by-state policies in the West continue to evolve.  However, key details remain that require further discussion.  For example, new GHG concepts for different CA accounting of GHG emissions were introduced at the EDAM Workshop by the Los Angeles Department of Water & Power, a CMUA member, and CMUA urges consideration of these concepts going forward.

27. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the resource specific’s approach use of the RSE solution as the counterfactual for measuring secondary dispatch.

At this juncture, CMUA has no concerns with this conceptual approach but notes that many of the key issues on secondary dispatch for California load serving entities were the impact on state cap and trade program rules.  The treatment of this issue by CARB will shape our ultimate position on this matter.

28. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the resource specific approach’s measures to limit secondary dispatch.

CMUA has no final position on this matter and continues to work through the details with its members.

29. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s overall comments, including potential suggested enhancements, on the zonal approach to GHG accounting as described in section II.E of the EDAM straw proposal.

CMUA members must already account for GHG costs in their generation and imports.  We do not therefore have the same set of challenges faced in non-GHG zones, or in other GHG-compliance zones where state compliance obligations may differ.  We are concerned the Zonal approach may delay EDAM due to systems development, and look forward to continued discussion.

30. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the design of the hurdle rate for the zonal approach.

CMUA has no further comments.

31. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the treatment of resources outside the GHG regulation area as internal to a GHG regulation area on a long-term or short-term basis, using the GHG pseudo tie functionality, in the zonal approach.

CMUA has no position on the use of the GHG pseudo-tie.

32. GREENHOUSE GAS ACCOUNTING: Please provide any additional comments on the GHG topic that were not captured by the questions above.

CMUA has no futher comments.

33. TRANSFER REVENUE ALLOCATION: Please provide your organization’s comments on the proposed transfer revenue allocation approach as described in section II.D.1 of the straw proposal and any other aspects of the transfer revenue allocation discussion topic.

CMUA does not believe EDAM should be the mechanism to redirect non-EDAM CRR revenues.

34. SETTLEMENTS: Please provide your organization’s comments on settlements aspects of the EDAM described thus far, recognizing these will develop as the design evolves, as discussed in section II.D.2 of the EDAM straw proposal.

CMUA has no position on this issue at this time.

35. EDAM TECHNICAL WORKSHOPS: Please provide your organization’s comments on the upcoming EDAM technical workshops. Which key components of the straw proposal should be further discussed in EDAM technical workshops.
Please be as specific as you as possible.
  • “Bucket 2” Timing, Release, Redispatch, and Cost Allocation
  • “Bucket 3” Revenue Assessment, Quantifying Lost Revenues, Associated Benefits, and Uplift Amounts.
  • Confidence in EDAM Transfers, including he tinterplay of resources with the IFM and RUC, and assocated priorities of transfers.
  • RSE eligibility rules surrounding WSPP contracts and empirical showings regarding any concerns non-resource specific arrangements may pose to reliability. 
  • Firming up of the GHG approach.
36. GENERAL COMMENTS: Please provide your organization’s comments on any other elements or aspects of the EDAM straw proposal.

As noted above, CMUA believes the direction of the EDAM design in the Straw Proposal is overall positive, and looks forward to continued work to resolve open issues.

CMUA members in have raised an additional issue that merits attention, that is a linked but broader issue than EDAM.  CMUA members report that the broader regional activity in the market, and the redispatch directed through the WEIM, has heightened awareness of gas/electric market alignment needs, and the fact that the changing needs of the electric system are stressing traditional gas transportation and supply practices.  Greater variation in disatpch is causing increased reliance on gas imbalance markets, and creating challenges related to bidding practices of certain generators to reflect these gas market risks.  CMUA urges greater emphasis on these issues, either in EDAM or in an separate stakeholder initiative.

California Public Utilities Commission - Public Advocates Office
Submitted 06/16/2022, 04:59 pm

Contact

Kanya Dorland (kanya.dorland@cpuc.ca.gov)

1. EDAM VOLUNTARY MODEL: Please provide your organization’s comments on the proposed structure of the EDAM voluntary participation model as described in section II.A.1 of the EDAM straw proposal.

 Cal Advocates does not have comments on this issue at this time.  

2. EDAM FEES: Please provide your organization’s comments on the proposed framework of the EDAM fee structure as described in section II.A.2 of the EDAM straw proposal.

 Cal Advocates does not have comments on this issue at this time.  

3. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on the concept of market transfers (occurring through the EDAM and WEIM) having equal priority to load to the extent an individual EDAM BAA faces severe emergency conditions as discussed in section II.A.3 of the EDAM straw proposal.

Cal Advocates has some concerns regarding the timing of this proposal policy. 

Cal Advocates is a participant in CAISO’s External Load Forward Scheduling Rights Process initiative now referred to as the Transmission Service and Market Scheduling Priorities initiative and has been anticipating the development of CAISO’s transmission reservation policy for establishing scheduling priorities on CAISO transmission as well as the inputs/process for calculating native load needs on the CAISO grid.  Cal Advocates understands that other balancing areas in the west provide firm rights for wheel-through transactions only to transmission that has been determined to be in excess of what may be needed to meet the balancing area’s native load and other existing firm uses.[1]  The CAISO does not currently provide similar firm transmission rights to external entities or set-aside transmission capacity to serve native load per its Tariff.

Pursuant to FERC’s March 15, 2022 decision accepting CAISO tariff revisions, CAISO has an approved interim policy for allocating transmission capacity on a pro rata basis in instances where the hour ahead scheduling process cannot fully accommodate CAISO forecasted demand and priority wheel through transactions.[2]  This interim policy is in place until June 1, 2024, or until a long-term solution can be developed.[3]  Cal Advocates supports the development of a transmission reservation policy for the CAISO controlled grid to allow external load serving entities the opportunity to reserve transmission capacity in advance for wheel-through or export transactions prior to the approval of the EDAM market design. This is important because the Department of Market Monitoring (DMM) and the major California load serving entities (LSEs) noted that the CAISO may not have excess transmission capacity to support wheel-through transactions during extreme summer peak demand conditions.[4],[5]  To address this issue, California LSEs request that wheel-through or export transactions pay for either the transmission upgrade costs for the needed transmission capacity or the wheeling access charges for the length of required service and needed transmission capacity.[6]  Cal Advocates supports this approach.  Given that a CAISO transmission reservation policy has not been developed, CAISO should provide details on how the EDAM proposal will address transmission fees for wheel-through and export transmission transactions to make CAISO ratepayers whole in respect to all transmission costs obligations. 

 


[1] Comments on Transmission Service and Market Scheduling Priorities Initiative Phase 1 Draft Final Proposal,

Department of Market Monitoring, January 11, 2022, p. 2.

[2] Federal Energy Regulatory Commission Order Accepting Tariff Revisions, ER22-906-000, March 15, 2022, (FERC ER22-906-000) p. 8.

[3] FERC ER 22-906-000, p. 12.

[4] Comments of Pacific Gas and Electric Company Before Federal Energy Regulatory Commission, ER21-1790, May 19, 2021, p. 4.

[5] Motion to intervene and Comments of the Department of Market Monitoring of the California System Operator Corporation, ER21-1790, May 19, 2021, p. 10.

[6] Joint LSE Presentation, California Community Choice Associates, Pacific Gas and Electric Company, Southern California Edison, San Diego Gas and Electric Company, and Six Cities, External Load Forward Scheduling Rights Process Workshop presentation, July 13, 2021, p. 6.

4. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on whether the failure of the day ahead resource sufficiency evaluation should have a bearing on the level of priority afforded to market transfers (EDAM and WEIM) souring from an EDAM BAA facing emergency conditions and sinking in the EDAM BAA that failed the resource sufficiency evaluation.

 Cal Advocates has no comment on this topic at this time.  

5. CONFIDENCE IN MARKET TRANSFERS: Please provide any additional comments on the topic of confidence in market transfers (occurring through the EDAM and WEIM).

 Cal Advocates has no comment on this topic at this time.  

6. TRANSMISSION COMMITMENT: Please provide your organization’s comments on the overall framework of transmission buckets in the context of making transmission available to the EDAM as described in section II.B.1 of the EDAM straw proposal.

Cal Advocates supports further consideration of an EDAM market design that optimizes available transmission capacity while keeping EDAM participants whole with respect to all transmission cost obligations. 

As mentioned in response to question 3, Cal Advocates is concerned that the EDAM proposal does not consider that the CAISO may not have excess transmission capacity to serve wheel-through transfers during stressed or emergency conditions such as during peak summer demand.  The  EDAM proposal also does not propose a fee to be collected from entities requesting wheel through and export transfers during peak conditions.

CAISO should provide details on how California ratepayers would be made whole for accommodating wheel-through and export transactions during peak conditions.  Cal Advocates is concerned that moving forward with EDAM market design development without establishing a transmission reservation policy and fees for wheel-through transactions could result in California ratepayers bearing the costs of EDAM activity that is not consistent with cost causation principles.  Therefore, Cal Advocates recommends the CAISO complete its study on the approach, process and inputs for calculating native load needs on the CAISO controlled grid and determine the transmission reservation policy and fee for entities requesting wheel-through and export transactions during peak summer conditions. These CAISO policies are needed in order to ensure that California ratepayers are made whole for all transmission cost obligations.

7. TRANSMISSION COMMITMENT: Please provide your organization’s perspective on Bucket 2 transmission and whether it should be made available to the EDAM only through a voluntary framework or through a more general rule that transmission unscheduled by 10am of the day ahead is automatically made available to the EDAM for optimization as described in the straw proposal.
Consider the implications of transmission customers retaining the ability to exercise those transmission rights between the day ahead and real time markets and the potential implications on redispatch.

Cal Advocates does not have comments on this issue at this time.  

8. TRANSMISSION COMMITMENT: Please provide your organization’s perspective on the compensation options for bucket 3 transmission described in the EDAM straw proposal.
More specifically, consider whether Bucket 3 transmission rates should be reflected in the market optimization through a direct hurdle rate or should the reduced transmission revenues be addressed outside of the market optimization through after the fact cost recovery.

Cal Advocates does not have comments on this issue at this time.  

9. TRANSMISSION COMMITMENT: Please provide your organization's comments on the concept of Bucket 3 transmission costs being recovered outside of the market optimization, should the ISO through the EDAM process work toward a design for transmission revenue recovery, based on one of the options described (3A, 3B, 3C), in order to keep the EDAM entity whole as a result of EDAM participation.
Some questions to consider: are there additional variations to the described options; what should be the recoverable lost transmission revenues; how should the lost transmission revenues be allocated (or a transactional basis, across load in EDAM or to each EDAM entity to allocate to its customers); how do the described options impact bidding incentive in the EDAM market.

Cal Advocates does not have comments on this issue at this time.  

10. TRANSMISSION COMMITMENT: Please provide your organization’s comments on any other aspects of the transmission commitment in EDAM topic.

Cal Advocates does not have comments on this issue at this time.  

11. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the process for conducting the EDAM RSE as described in section II.B.2 of the EDAM straw proposal.
This includes comments on the ability to conduct advisory RSE tests prior to the binding run, the timing of the RSE, the new tool, inputs, and other elements.

Cal Advocates does not have comments on this issue at this time.  

12. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposed treatment of WSPP Schedule C and like firm energy contracts within the EDAM RSE.
These arrangements are commonly relied upon across the west, including the ISO. The ISO proposed that these count toward the RSE by being self-scheduled and that these arrangements reduce the RSE obligation. Consider providing comments on whether these should be allowed to count in their current form (limited knowledge of source of supply or transmission quality); whether the market is expected to evolve toward providing more specific source information; how these firm energy contracts should be modeled (whether sourcing from adjoining BAA or another method); any additional considerations.

Cal Advocates does not have comments on this issue at this time.  

13. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s perspective on the ISO proposal, and associated reliance, on day ahead intertie bids (not associated with resource adequacy).
Some questions to consider: should these arrangements count toward the RSE; should these be monitored for performance and delivery; should additional criteria be imposed, such as an attestation, on these to provide an added level of confidence in performance.

Cal Advocates does not have comments on this issue at this time.  

14. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the treatment of demand response and its different types and functions for purposes of passing the RSE.

Cal Advocates does not have comments on this issue at this time.  

15. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposed EDAM RSE failure consequences approach under which transfers would be allowed under an RSE failure at a penalty price.
Please comment on what an appropriate penalty price would be.

Cal Advocates does not have comments on this issue at this time.  

16. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposed EDAM RSE failure consequences approach which distinguishes the consequences depending upon whether the failure occurred under “normal conditions” as compared to “stressed system conditions.”
Please include consideration of potential different frameworks, how “stressed system conditions” can be defined; and any other perspectives on the structure of failure consequences and their impact on developing a robust RSE.

Cal Advocates does not have comments on this issue at this time.  

17. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the concept of a pooled WEIM RSE for entities passing the EDAM RSE, as described in the straw proposal and stakeholder meeting.

Cal Advocates does not have comments on this issue at this time.  

18. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provider your organization’s comments on any other elements of the EDAM RSE not raised by the questions above.

Cal Advocates does not have comments on this issue at this time.  

19. INTEGRATED FORWARD MARKET (IFM) AND RESIDUAL UNIT COMMITMENT (RUC): Please provide your organization’s comments on considerations related to the IFM and RUC as part of EDAM.
This includes consideration of the role of the RUC process as a critical component of the EDAM and the proposal that all supply offered into IFM is also offered in the RUC.

Cal Advocates does not have comments on this issue at this time.  

20. INTEGRATED FORWARD MARKET (IFM) AND RESIDUAL UNIT COMMITMENT (RUC): Please provide your organization’s comments on the role of the imbalance reserve market product, currently being developed in the Day-Ahead Market Enhancements initiative, in the EDAM.

Cal Advocates does not have comments on this issue at this time.  

21. MARKET POWER MITIGATION (MPM): Please provide your organization’s comments on the proposal to extend the WEIM market power mitigation framework to the EDAM and the further evaluation of potential market power mitigation enhancements within the Price Formation Enhancements initiative.

Cal Advocates does not have comments on this issue at this time.  

22. CONVERGENCE BIDDING: Please provide your organization’s comments on the proposal for a transition period under which convergence bidding is only a market feature in the ISO BAA and not available in other EDAM BAAs at the onset of the EDAM.

Cal Advocates does not have comments on this issue at this time.  

23. CONVERGENCE BIDDING: Please include any additional comments on the topic of convergence bidding within EDAM.

Cal Advocates does not have comments on this issue at this time.  

24. EXTERNAL RESOURCE PARTICIPATION: Please provide your organization’s comments on the ISO initial leaning toward extending the WEIM framework of external resource participation to the EDAM.
Under this framework the ISO would continue to allow source specific and non-source specific supply (intertie bids) to be economically offered into the ISO BAA. Non-ISO EDAM entities would continue to support source specific supply (pseudo-ties and dynamics), the self-scheduling of supply under contract, but intertie bidding would not be allowed at the intertie of the EDAM BAA.

Cal Advocates does not have comments on this issue at this time.  

25. EXTERNAL RESOURCE PARTICIPATION: Please include any additional comments on the topic of external resource ability to participate in the EDAM.

Cal Advocates does not have comments on this issue at this time.  

26. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s overall comments, including potential suggested enhancements, on the resource specific approach to GHG accounting as described in section II.E of the EDAM straw proposal.

Cal Advocates does not have comments on this issue at this time.  

27. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the resource specific’s approach use of the RSE solution as the counterfactual for measuring secondary dispatch.

Cal Advocates does not have comments on this issue at this time.  

28. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the resource specific approach’s measures to limit secondary dispatch.

Cal Advocates does not have comments on this issue at this time.  

29. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s overall comments, including potential suggested enhancements, on the zonal approach to GHG accounting as described in section II.E of the EDAM straw proposal.

Cal Advocates does not have comments on this issue at this time.  

30. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the design of the hurdle rate for the zonal approach.

Cal Advocates does not have comments on this issue at this time.  

31. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the treatment of resources outside the GHG regulation area as internal to a GHG regulation area on a long-term or short-term basis, using the GHG pseudo tie functionality, in the zonal approach.

Cal Advocates does not have comments on this issue at this time.  

32. GREENHOUSE GAS ACCOUNTING: Please provide any additional comments on the GHG topic that were not captured by the questions above.

Cal Advocates does not have comments on this issue at this time.  

33. TRANSFER REVENUE ALLOCATION: Please provide your organization’s comments on the proposed transfer revenue allocation approach as described in section II.D.1 of the straw proposal and any other aspects of the transfer revenue allocation discussion topic.

Cal Advocates does not have comments on this issue at this time.  

34. SETTLEMENTS: Please provide your organization’s comments on settlements aspects of the EDAM described thus far, recognizing these will develop as the design evolves, as discussed in section II.D.2 of the EDAM straw proposal.

Cal Advocates does not have comments on this issue at this time.  

35. EDAM TECHNICAL WORKSHOPS: Please provide your organization’s comments on the upcoming EDAM technical workshops. Which key components of the straw proposal should be further discussed in EDAM technical workshops.
Please be as specific as you as possible.

Cal Advocates does not have comments on this issue at this time.  

36. GENERAL COMMENTS: Please provide your organization’s comments on any other elements or aspects of the EDAM straw proposal.

Cal Advocates does not have comments on this issue at this time.  

EDF-Renewables
Submitted 06/16/2022, 07:50 pm

Submitted on behalf of
EDF-Renewables

Contact

Raeann Quadro (rquadro@gridwell.com)

1. EDAM VOLUNTARY MODEL: Please provide your organization’s comments on the proposed structure of the EDAM voluntary participation model as described in section II.A.1 of the EDAM straw proposal.

EDF-R supports EDAM being a voluntary model.  

2. EDAM FEES: Please provide your organization’s comments on the proposed framework of the EDAM fee structure as described in section II.A.2 of the EDAM straw proposal.
3. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on the concept of market transfers (occurring through the EDAM and WEIM) having equal priority to load to the extent an individual EDAM BAA faces severe emergency conditions as discussed in section II.A.3 of the EDAM straw proposal.

EDF-R acknowledges CAISO’s description in the straw proposal: 

“Affording export transfers a lower priority than load (meaning that export transfers are curtailed ahead of load) would erode the confidence and dependability of the transfers, while affording market transfers higher priority than load that may unduly impact individual BAA system reliability.” 

CAISO’s proposal to afford equal priority to EDAM transfers and load during emergency conditions appears to strike an equitable balance between reliability and ensuring confidence in EDAM transfers. However, we heard at least one entity express at the meeting that they are reluctant to “hardcode” in any emergency solutions, preferring to depend on coordination between entities. EDF-R encourages the CAISO to facilitate more discussion on this topic.  

4. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on whether the failure of the day ahead resource sufficiency evaluation should have a bearing on the level of priority afforded to market transfers (EDAM and WEIM) souring from an EDAM BAA facing emergency conditions and sinking in the EDAM BAA that failed the resource sufficiency evaluation.

The question, said in other words are: 

  • Should BAAs facing emergency conditions get priority import? 

  • Should BAAs facing emergency conditions be able to prioritize their own internal load? 

In addition to responses in question #3, EDF-R notes that the answer to this question may lay more in the EDAM philosophy than in the mathematical outcomes (which could likely be achieved under either framework in most circumstances.)  

https://www.caiso.com/Documents/EDAM-Common-Design-Principles-Concepts.pdf  

5. CONFIDENCE IN MARKET TRANSFERS: Please provide any additional comments on the topic of confidence in market transfers (occurring through the EDAM and WEIM).
6. TRANSMISSION COMMITMENT: Please provide your organization’s comments on the overall framework of transmission buckets in the context of making transmission available to the EDAM as described in section II.B.1 of the EDAM straw proposal.

With respect to the question on Bucket 2 transmission, “should Bucket 2 transmission to include unscheduled firm (or conditional firm) transmission rights by 10 a.m. of day prior to flow” EDF-R supports the philosophy of maximizing market optimization opportunities in the EDAM. However, the complexity of implementing this solution will be dependent on participating entities own market systems. Specifically, is 10 a.m. the prior day a workable cutoff time? Business processes can be changed, but if the 10 a.m. cutoff requires a potential EIM entity to make system changes the labor ask is another one entirely, and the change could have ripple effects in participating entities systems. EDF-R encourages the CAISO to facilitate more discussion on this topic, including requesting specific details on the 10 a.m. cutoff.  

7. TRANSMISSION COMMITMENT: Please provide your organization’s perspective on Bucket 2 transmission and whether it should be made available to the EDAM only through a voluntary framework or through a more general rule that transmission unscheduled by 10am of the day ahead is automatically made available to the EDAM for optimization as described in the straw proposal.
Consider the implications of transmission customers retaining the ability to exercise those transmission rights between the day ahead and real time markets and the potential implications on redispatch.

It is difficult to assess the impacts of the proposed EDAM transmission commitment in this context without understanding the transmission requirements for generators/loads within participating entities BAAs. EDF-R encourages the CAISO to facilitate more discussion on this topic. 

8. TRANSMISSION COMMITMENT: Please provide your organization’s perspective on the compensation options for bucket 3 transmission described in the EDAM straw proposal.
More specifically, consider whether Bucket 3 transmission rates should be reflected in the market optimization through a direct hurdle rate or should the reduced transmission revenues be addressed outside of the market optimization through after the fact cost recovery.

EDF-R supports the philosophy of maximizing market optimization opportunities in the EDAM, which would not be best accomplished via Approach 1 – a published tariff rate. EDF-R also supports economically incentivizing participation. Thus, EDF-R is inclined to Approach 3, and encourages the CAISO to facilitate more discussion on options A, B, and C. 

9. TRANSMISSION COMMITMENT: Please provide your organization's comments on the concept of Bucket 3 transmission costs being recovered outside of the market optimization, should the ISO through the EDAM process work toward a design for transmission revenue recovery, based on one of the options described (3A, 3B, 3C), in order to keep the EDAM entity whole as a result of EDAM participation.
Some questions to consider: are there additional variations to the described options; what should be the recoverable lost transmission revenues; how should the lost transmission revenues be allocated (or a transactional basis, across load in EDAM or to each EDAM entity to allocate to its customers); how do the described options impact bidding incentive in the EDAM market.

As noted in response to questions #6 and #8, at this time EDF-R is leaning towards “Approach 3” for Bucket 3 transmission in EDAM and encourages the CAISO to facilitate more discussion on options A, B, and C. 

10. TRANSMISSION COMMITMENT: Please provide your organization’s comments on any other aspects of the transmission commitment in EDAM topic.
11. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the process for conducting the EDAM RSE as described in section II.B.2 of the EDAM straw proposal.
This includes comments on the ability to conduct advisory RSE tests prior to the binding run, the timing of the RSE, the new tool, inputs, and other elements.
12. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposed treatment of WSPP Schedule C and like firm energy contracts within the EDAM RSE.
These arrangements are commonly relied upon across the west, including the ISO. The ISO proposed that these count toward the RSE by being self-scheduled and that these arrangements reduce the RSE obligation. Consider providing comments on whether these should be allowed to count in their current form (limited knowledge of source of supply or transmission quality); whether the market is expected to evolve toward providing more specific source information; how these firm energy contracts should be modeled (whether sourcing from adjoining BAA or another method); any additional considerations.
13. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s perspective on the ISO proposal, and associated reliance, on day ahead intertie bids (not associated with resource adequacy).
Some questions to consider: should these arrangements count toward the RSE; should these be monitored for performance and delivery; should additional criteria be imposed, such as an attestation, on these to provide an added level of confidence in performance.
14. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the treatment of demand response and its different types and functions for purposes of passing the RSE.
15. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposed EDAM RSE failure consequences approach under which transfers would be allowed under an RSE failure at a penalty price.
Please comment on what an appropriate penalty price would be.
16. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposed EDAM RSE failure consequences approach which distinguishes the consequences depending upon whether the failure occurred under “normal conditions” as compared to “stressed system conditions.”
Please include consideration of potential different frameworks, how “stressed system conditions” can be defined; and any other perspectives on the structure of failure consequences and their impact on developing a robust RSE.
17. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the concept of a pooled WEIM RSE for entities passing the EDAM RSE, as described in the straw proposal and stakeholder meeting.
18. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provider your organization’s comments on any other elements of the EDAM RSE not raised by the questions above.
19. INTEGRATED FORWARD MARKET (IFM) AND RESIDUAL UNIT COMMITMENT (RUC): Please provide your organization’s comments on considerations related to the IFM and RUC as part of EDAM.
This includes consideration of the role of the RUC process as a critical component of the EDAM and the proposal that all supply offered into IFM is also offered in the RUC.
20. INTEGRATED FORWARD MARKET (IFM) AND RESIDUAL UNIT COMMITMENT (RUC): Please provide your organization’s comments on the role of the imbalance reserve market product, currently being developed in the Day-Ahead Market Enhancements initiative, in the EDAM.
21. MARKET POWER MITIGATION (MPM): Please provide your organization’s comments on the proposal to extend the WEIM market power mitigation framework to the EDAM and the further evaluation of potential market power mitigation enhancements within the Price Formation Enhancements initiative.

EDF-R encourages CAISO to root Market Power Mitigation discussions in one particular space and silo conversations there. The market power mitigation discussion seems to come up in many stakeholder forums (Price Formation Enhancements, 2021 Summer Readiness, and System market power mitigation – 2020 to name only the most recent.) Consideration of market power Mitigation is important but the conversation should not be allowed to distract from the focus of the EDAM initiative. Given the lack of stakeholder consensus on the topic in the aforementioned initiatives, it seems that silo-ing the topic to the Price Formation Enhancements initiative allows the topic to receive the time and focused attention it needs.   

EDF-R is supportive of a competitive market that allows for appropriate price formation while protecting against market power. EDF-R shares stakeholder concerns that the costs of implementing system market power mitigation mechanism may not outweigh the benefits and rather deter much needed supply from being offered into the market during periods when it’s needed the most.?EDF-R suggests that the CAISO proceed with the market power mitigation discussion in a Phase 2 of the Price Formation Initiative after a robust scarcity pricing mechanism is implemented. Market power discissions will be warranted at that time if there is evidence that system market power can be exercised in the EDAM/ day-ahead market. 

22. CONVERGENCE BIDDING: Please provide your organization’s comments on the proposal for a transition period under which convergence bidding is only a market feature in the ISO BAA and not available in other EDAM BAAs at the onset of the EDAM.
23. CONVERGENCE BIDDING: Please include any additional comments on the topic of convergence bidding within EDAM.
24. EXTERNAL RESOURCE PARTICIPATION: Please provide your organization’s comments on the ISO initial leaning toward extending the WEIM framework of external resource participation to the EDAM.
Under this framework the ISO would continue to allow source specific and non-source specific supply (intertie bids) to be economically offered into the ISO BAA. Non-ISO EDAM entities would continue to support source specific supply (pseudo-ties and dynamics), the self-scheduling of supply under contract, but intertie bidding would not be allowed at the intertie of the EDAM BAA.

EDF-R encourages the CAISO to facilitate more discussion on this topic. EDF-R would like to first better understand the concerns of EIM entities with economic intertie bidding that led to the current design whereby only self-schedules at EIM BAA intertie locations can be submitted. This will then allow us to discuss if the same concerns exist once you move into a day-ahead timeframe.  

25. EXTERNAL RESOURCE PARTICIPATION: Please include any additional comments on the topic of external resource ability to participate in the EDAM.
26. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s overall comments, including potential suggested enhancements, on the resource specific approach to GHG accounting as described in section II.E of the EDAM straw proposal.

EDF-R’s comments contain recommendations to specifically discuss the following topics: 

  • CAISO’s proposal to afford equal priority to EDAM transfers and load during emergency conditions  

  • Bucket 2 transmission to include unscheduled firm (or conditional firm) transmission rights by 10am of day prior to flow 

  • Transmission requirements for generators/loads within participating entities BAAs 

  • Transmission commitment Approach 3, and encourages the CAISO to facilitate more discussion on options A, B, and C. 

  • More discussion of external resource participation? 

? In each topic a better set of objective data would be helpful to inform our stakeholder review. CAISO may have this data internally already, but if not, a potential next step could be to survey potential participants on these items and collect data in a format that would allow for make apples to apples comparisons, and understand where “hard stop” items may exist that would preclude an entities participation. For example, “Is the configuration of your current market system compatible with a release of unscheduled firm (or conditional firm) transmission rights by 10am of day prior to flow? Are your business practices?”  

27. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the resource specific’s approach use of the RSE solution as the counterfactual for measuring secondary dispatch.
28. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the resource specific approach’s measures to limit secondary dispatch.
29. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s overall comments, including potential suggested enhancements, on the zonal approach to GHG accounting as described in section II.E of the EDAM straw proposal.
30. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the design of the hurdle rate for the zonal approach.
31. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the treatment of resources outside the GHG regulation area as internal to a GHG regulation area on a long-term or short-term basis, using the GHG pseudo tie functionality, in the zonal approach.
32. GREENHOUSE GAS ACCOUNTING: Please provide any additional comments on the GHG topic that were not captured by the questions above.
33. TRANSFER REVENUE ALLOCATION: Please provide your organization’s comments on the proposed transfer revenue allocation approach as described in section II.D.1 of the straw proposal and any other aspects of the transfer revenue allocation discussion topic.
34. SETTLEMENTS: Please provide your organization’s comments on settlements aspects of the EDAM described thus far, recognizing these will develop as the design evolves, as discussed in section II.D.2 of the EDAM straw proposal.
35. EDAM TECHNICAL WORKSHOPS: Please provide your organization’s comments on the upcoming EDAM technical workshops. Which key components of the straw proposal should be further discussed in EDAM technical workshops.
Please be as specific as you as possible.
36. GENERAL COMMENTS: Please provide your organization’s comments on any other elements or aspects of the EDAM straw proposal.

Idaho Power Company
Submitted 06/16/2022, 02:08 pm

Contact

Kathy Anderson (kanderson2@idahopower.com)

1. EDAM VOLUNTARY MODEL: Please provide your organization’s comments on the proposed structure of the EDAM voluntary participation model as described in section II.A.1 of the EDAM straw proposal.

Idaho Power is supportive of maintaining the voluntary participation model that exists in EIM into the EDAM. This is important because participating entities retain all regulatory and reliability responsibilities with each BAA.

2. EDAM FEES: Please provide your organization’s comments on the proposed framework of the EDAM fee structure as described in section II.A.2 of the EDAM straw proposal.

Idaho Power generally supports entities involved in EDAM should pay their share of the implementation and administration fees. With regards to the deposit required for the implementation fees, will interest be paid on the deposit while held by the ISO and if so, at what interest rate will that be? In addition, how will the cost to implement each entity be determined? Under what cost sharing methodology?  More information is needed for Idaho Power to fully comment on the fee structure.

3. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on the concept of market transfers (occurring through the EDAM and WEIM) having equal priority to load to the extent an individual EDAM BAA faces severe emergency conditions as discussed in section II.A.3 of the EDAM straw proposal.

Idaho Power agrees that market transfers must be confidently relied upon if resources within a BAA are decommitted and load is planned to be served by market transfers from other areas. The supply must be real and available. However, Idaho Power has concerns with what happens in tight supply and emergency conditions, especially given some of the proposed resource sufficiency elements of the proposal.

Idaho Power also believes that all entities, including CAISO, should have the same requirements regarding advanced procurement and showing of resources related to resource sufficiency tests.  All tests should be applied equally to all participants in the market with no special exemptions for CAISO as exist in the EIM today. 

Idaho Power does not believe all participants must be on the same resource adequacy program; however, resource procurement and resource showing under such programs should be comparable for all entities and incent similar long-term investments decisions. Resource sufficiency evaluations should include owned or contracted physical supply which is also not transmission constrained.

4. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on whether the failure of the day ahead resource sufficiency evaluation should have a bearing on the level of priority afforded to market transfers (EDAM and WEIM) souring from an EDAM BAA facing emergency conditions and sinking in the EDAM BAA that failed the resource sufficiency evaluation.

Failure consequences need to exist to discourage entities from leaning on the capacity of another area to avoid procurement of adequate resources to pass the test in the day ahead. If an entity failed the resource sufficiency evaluation and fails to procure enough resources after the failure to cure the deficiency before real time, any transfers from sufficient areas that then become energy deficient should be subject to a reduction of transfers. If an entity fails to procure its share of adequate resources day ahead and it results in any shortages in the overall market, the put load in that BAA should be at risk of load shed before shedding load in any other BAA that passes resource sufficiency tests.

The straw proposal indicates that if there is a risk of load shed in a BAA, export EDAM transfers would be afforded equal priority to load and thus may be curtailed or reduced on a pro-rata basis with load. Idaho Power has concerns with this approach if the BAA that is short failed the resource sufficiency tests. Cutting of EDAM transfers can push a reliability issue further than just the initial BAA experiencing the problem as the BAAs receiving the export energy may not have the ability to replace the energy awarded in the day ahead for reliable load service.

If a BAA failed the EDAM resource sufficiency tests (and failed to resolve that with additional bi-lateral purchases between EDAM and WEIM) and all available bids have been exhausted, that BAA should be 100% responsible for shedding load without cutting any exports from its area that the day ahead solution provided. Shedding load is the risk that the BAA is taking by not adequately procuring enough resource before the EDAM market to be sufficient.

5. CONFIDENCE IN MARKET TRANSFERS: Please provide any additional comments on the topic of confidence in market transfers (occurring through the EDAM and WEIM).

As market participants, we need to be confident that sufficient resources are available to provide for the entire footprint and transfers will not be pulled away in real time after long-start resources have been decommitted. This is key to ensuring reliability in all the balancing authorities. Idaho Power believes more discussion needs to occur regarding how to ensure all balancing authorities are on a level playing field regarding resource sufficiency tests and procurement of resources counting towards that test.

If all entities pass a fair and equitable test, then even in stressed conditions, all loads should be able to be served (unless significant loss of generation or transmission occurs).

 

6. TRANSMISSION COMMITMENT: Please provide your organization’s comments on the overall framework of transmission buckets in the context of making transmission available to the EDAM as described in section II.B.1 of the EDAM straw proposal.

The goal of the market is to maximize transmission available in the market.  With increased transfer capacity between BAAs, the market can provide greater economic and reliability benefits. Idaho Power supports CAISO’s attempt to obtain as much transmission as it can while attempting to avoid significant cost shifts in transmission costs.

7. TRANSMISSION COMMITMENT: Please provide your organization’s perspective on Bucket 2 transmission and whether it should be made available to the EDAM only through a voluntary framework or through a more general rule that transmission unscheduled by 10am of the day ahead is automatically made available to the EDAM for optimization as described in the straw proposal.
Consider the implications of transmission customers retaining the ability to exercise those transmission rights between the day ahead and real time markets and the potential implications on redispatch.

Transmission unscheduled by 10:00 could be available and utilized by the market. However, this will also create a situation where less non-firm transmission and ultimately revenue will be available to the transmission customers and transmission provider. This needs to be considered.

Should that customer elect to use the rights after 10:00, that customer could be charged for impact of that transaction in the market. CAISO should further explore the options of providing a share of congestion revenue to the bucket 2 firm transmission customer even if the transmission was not voluntarily donated to offset the costs that customer would see should they elect to use the rights after the 10:00 day ahead timeline.

Consideration needs to be given to TSP’s who need to retain reliability margin in its system and allow exceptions to the market usage for reserve sharing and emergency energy procurement by a BAA to retain reliability.

More conversation is needed around this transmission bucket.

8. TRANSMISSION COMMITMENT: Please provide your organization’s perspective on the compensation options for bucket 3 transmission described in the EDAM straw proposal.
More specifically, consider whether Bucket 3 transmission rates should be reflected in the market optimization through a direct hurdle rate or should the reduced transmission revenues be addressed outside of the market optimization through after the fact cost recovery.

IInitially, Idaho Power was in favor of a hurdle rate at the border of each TSP to recover the transmission costs of usage by the market. However, upon further review, Idaho Power believes that hurdle rates are not the only mechanism that can be used to recover the costs of transmission used by the market and in fact should be avoided because such hurdles decrease the best optimal economic solution. TSPs need to be compensated for the transmission utilized by the market just as they are compensated for usage under the OATT by other transmission customers. Idaho Power would support continued evaluation of out-of-market opportunities to recover these costs.

9. TRANSMISSION COMMITMENT: Please provide your organization's comments on the concept of Bucket 3 transmission costs being recovered outside of the market optimization, should the ISO through the EDAM process work toward a design for transmission revenue recovery, based on one of the options described (3A, 3B, 3C), in order to keep the EDAM entity whole as a result of EDAM participation.
Some questions to consider: are there additional variations to the described options; what should be the recoverable lost transmission revenues; how should the lost transmission revenues be allocated (or a transactional basis, across load in EDAM or to each EDAM entity to allocate to its customers); how do the described options impact bidding incentive in the EDAM market.

Idaho Power supports the concept of out of market charges to compensate transmission providers for transmission that is utilized by the market (and thus is no longer available under OATT sales). Idaho Power would like to continue discussion with CAISO on the best option to do this and needs more time to fully understand the impact of the 3 options offered.

With regard to recoverable lost transmission revenue, given that transmission should be procured ahead of time for resource adaquacy and resource sufficiency, the potential lost revenue comes from the short-term firm and non-firm transmission service types. In addition, given the timelines, it seems that daily and hourly duration products are at risk of no longer being available based on the market usage. Idaho Power would agree that those are the service durations at risk of lost revenue and not all short-term firm and non-firm revenue.

Idaho Power would be interested in seeing what that volumetric price would be given to all the providers.

Idaho Power also believes all customers (not just load service customers) should pay for the transmission system. This includes generators and power marketers looking to utilize the market. Additional conversation is needed to ensure a cost shift doesn’t occur where only loads are paying the costs of the usage.  Idaho Power would not support a reciprocity approach in a day ahead market.

10. TRANSMISSION COMMITMENT: Please provide your organization’s comments on any other aspects of the transmission commitment in EDAM topic.

As stated above, Idaho Power believes that all customers (not just load service customers) should pay for the transmission system to minimize cost-shifting among market participants.

11. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the process for conducting the EDAM RSE as described in section II.B.2 of the EDAM straw proposal.
This includes comments on the ability to conduct advisory RSE tests prior to the binding run, the timing of the RSE, the new tool, inputs, and other elements.

Idaho Power appreciates the ability to conduct an advisory RSE test prior to the binding run. This provides every BAA the opportunity to procure additional resources to ensure the entire footprint has sufficient resources to avoid a reliability issue. Idaho Power is unsure how CAISO will “prove” that every BAA is sufficient without some sort of “base schedule type” showing. Idaho Power does NOT believe bids alone into a BAA reflect sufficiency and does not support any BAA having the ability to count non-contractual bids into its resource sufficiency test. Idaho Power believes ONLY contracted or owned resources should count in a BAA and that contract should ensure there is a physical delivery of a resource backing that contract.

 

12. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposed treatment of WSPP Schedule C and like firm energy contracts within the EDAM RSE.
These arrangements are commonly relied upon across the west, including the ISO. The ISO proposed that these count toward the RSE by being self-scheduled and that these arrangements reduce the RSE obligation. Consider providing comments on whether these should be allowed to count in their current form (limited knowledge of source of supply or transmission quality); whether the market is expected to evolve toward providing more specific source information; how these firm energy contracts should be modeled (whether sourcing from adjoining BAA or another method); any additional considerations.

WSPP Schedule C resources are bi-lateral contracts that occur ahead of time between two parties. These are relied upon in the west to purchase power. These should be counted towards a resource sufficiency test. If purchased ahead of time, most of the information is known and if known, should be made available to the market. All these should be required to have an e-tag in place by 3:00 PPT day ahead or should be removed from that BAA’s resource sufficiency evaluation for WEIM. The BAA would then be responsible for finding replacement energy for the EIM. 

 

13. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s perspective on the ISO proposal, and associated reliance, on day ahead intertie bids (not associated with resource adequacy).
Some questions to consider: should these arrangements count toward the RSE; should these be monitored for performance and delivery; should additional criteria be imposed, such as an attestation, on these to provide an added level of confidence in performance.

Idaho Power does not support the use of non-RA contracted inter-tie bids to be considered towards the RSE for any BAA including the CAISO. Non-RA resource bids are non-contractual arrangements often with the source of energy unknown. Idaho Power believes that allowing these gives CAISO the ability to pass the RS test based on unknown supply. Idaho Power believes that only supply that has been contracted prior to the RSE should count towards the RS test. There is no situation where Idaho Power could support inter-tie bids which are not backed by contracted supply to the LSE in that BAA counting towards any BAA’s RSE.

14. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the treatment of demand response and its different types and functions for purposes of passing the RSE.

Idaho Power's has regulatory approved demand response (DR) programs that do not fit into the CAISO model. Idaho Power relies on these resources to reduce load within the defined parameters of each DR program. Idaho Power would support the market recognizing these resources as a reduction to the load obligation in the day ahead forecast. In addition, Idaho Power would also support, and in fact would need, the ability to adjust its plans to deploy these programs if real time conditions change (i.e. VERs are higher than expected, real time load is lower than EDAM forecast, additional resources contracted to load in that BAA become available or are purchased outside of the market). The program, however, should NOT incent an entity to not deploy a scheduled DR program based solely on the economics of the WEIM. The decision should be based on conditions in that BAA specifically.

Idaho Power supports to limit the volume of load that can be bid into the EDAM to the load forecast minus the demand response adjustments and agrees that this will help prevent manipulation from an EDAM RSE. However, Idaho Power does request that the flexibility requested above be allowed based on conditions in that BAA to cancel the DR in real time for certain conditions provided it does NOT result in the manipulation explained in the straw proposal.

15. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposed EDAM RSE failure consequences approach under which transfers would be allowed under an RSE failure at a penalty price.
Please comment on what an appropriate penalty price would be.

Idaho Power believes that there should be a consequence of failure even in non-stressed conditions. Some BAAs are winter peaking and may not experience the stressed conditions that many see in the summer. That does not mean they should not procure sufficient resources to pass the tests during the peak on their system. We would suggest that the penalty for failure of the RS occur regardless of stressed conditions or not to ensure BAAs are procuring adequate resources to match their participation needs.

If sufficient supply exists, Idaho Power would support an administrative penalty price for failure but would like to have more discussion to ensure this doesn’t incent a BAA to persistently fail and burden others to serve the load needs. The charge needs to ensure that it is sufficiently high enough to incent the BAA to cure the failure prior to EIM and not lean on others and put the reliability of the market and others at risk.

If the market does not have sufficient supply, Idaho Power would support limiting transfers upon an EDAM failure. The entity then can go bi-laterally contract for additional supply to meet its needs without impacting the rest of the market. Unlike EIM, there is sufficient time in day ahead for additional supply or mitigation plans to occur before it impacts reliability in real time.

16. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposed EDAM RSE failure consequences approach which distinguishes the consequences depending upon whether the failure occurred under “normal conditions” as compared to “stressed system conditions.”
Please include consideration of potential different frameworks, how “stressed system conditions” can be defined; and any other perspectives on the structure of failure consequences and their impact on developing a robust RSE.

Idaho Power does not believe that the failure consequences should be different depending on normal or stressed system conditions. As stated above, some entities are winter peaking and stressed conditions may occur less frequently than the summer peaking entities. All entities, regardless of conditions, should come to the market with sufficient resources regardless of stressed conditions.

 

17. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the concept of a pooled WEIM RSE for entities passing the EDAM RSE, as described in the straw proposal and stakeholder meeting.

Idaho Power generally supports the pooled WEIM RSE concept but would like additional discussions around how to ensure a BAA that passes the RSE in EDAM continues to ensure adequate supply to the overall market in EIM.

 

18. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provider your organization’s comments on any other elements of the EDAM RSE not raised by the questions above.

The RSE needs to be fair and equitable for all entities. Idaho Power cannot support an RSE test that has inequity issues as the current proposal has. Procurement should occur before the market run to ensure enough physical resources exist to pass the RSE and counting inter-tie bids that have no contractual relationship to load in a BA in the RSE is not appropriate or equitable. Other BA’s have procured physical supply ahead of the day ahead to pass RSE and ensure adequate supply is available for load service.

In addition, while every entity participating may not need to be in the same Resource Adequacy program, the programs should be compatible and incent the same level of investments in the longer-term horizon. If not, there will be a liquidity shift where resources long-term are more expensive than the short-term horizon and those with a program that does not incent that long-term investment will lean on the capacity procured or built by others in another program. This would be an unacceptable outcome.

19. INTEGRATED FORWARD MARKET (IFM) AND RESIDUAL UNIT COMMITMENT (RUC): Please provide your organization’s comments on considerations related to the IFM and RUC as part of EDAM.
This includes consideration of the role of the RUC process as a critical component of the EDAM and the proposal that all supply offered into IFM is also offered in the RUC.

Idaho Power agrees that all supply offered into the IFM must also be required to be offered into the RUC. However, Idaho Power continues to have concerns about how resources committed in the RUC from one area to another will be treated should emergency conditions arise, especially if resource sufficiency evaluations are not equitable.

Idaho Power has concerns with non-specific supply being awarded RUC at the ISO inter-ties. Again, this could lead to RUC awards for resources in which no physical generation is available to supply the award. As this is reliability awards to ensure enough physical capacity exists to serve load in the footprint, it seems like only VERIFIED physical generation resources should be granted RUC awards. Idaho Power believes more conversation is required around RUC in the market

20. INTEGRATED FORWARD MARKET (IFM) AND RESIDUAL UNIT COMMITMENT (RUC): Please provide your organization’s comments on the role of the imbalance reserve market product, currently being developed in the Day-Ahead Market Enhancements initiative, in the EDAM.

Idaho Power is generally supportive of the imbalance reserve market product but cannot adequately comment at this time. Idaho Power is reviewing the DAME enhancement initiative proposal further to gain a better understanding of the impact of the product.

21. MARKET POWER MITIGATION (MPM): Please provide your organization’s comments on the proposal to extend the WEIM market power mitigation framework to the EDAM and the further evaluation of potential market power mitigation enhancements within the Price Formation Enhancements initiative.

Idaho Power supports moving discussions regarding potential market power mitigation enhancements to the Price Formation Enhancements initiative with the understanding that the Price Formation Enhancements initiative MUST be concluded before an EDAM commitment can be made. In addition, Idaho Power would want to ensure that any market power mitigation is truly based on market power and not an artificial evaluation that will do nothing but suppress prices. Given the wider footprint and market participation, market power should be less prevalent than when the EIM first started so mitigation should rarely occur. 

22. CONVERGENCE BIDDING: Please provide your organization’s comments on the proposal for a transition period under which convergence bidding is only a market feature in the ISO BAA and not available in other EDAM BAAs at the onset of the EDAM.

Idaho Power is supportive of a transition period for Convergence Bidding (aka Virtual Bidding) to allow time for joining entities to become familiar with the process. However, Idaho Power is uncertain how RUC will work for all BAAs if convergence (or virtual) bidding only occurs at the CAISO BAA. Idaho Power would like to discuss this further in technical conferences or with CAISO staff.

23. CONVERGENCE BIDDING: Please include any additional comments on the topic of convergence bidding within EDAM.

No additional comments at this time.

24. EXTERNAL RESOURCE PARTICIPATION: Please provide your organization’s comments on the ISO initial leaning toward extending the WEIM framework of external resource participation to the EDAM.
Under this framework the ISO would continue to allow source specific and non-source specific supply (intertie bids) to be economically offered into the ISO BAA. Non-ISO EDAM entities would continue to support source specific supply (pseudo-ties and dynamics), the self-scheduling of supply under contract, but intertie bidding would not be allowed at the intertie of the EDAM BAA.

Idaho Power agrees that external resource participation from non-specific sources (inter-tie bids) should not be allowed at non-ISO EDAM entity borders. Idaho Power has concerns with the actual deliverability of non-specific source bids which can hinder the reliability of its BAA. Idaho Power is also concerned that inter-tie bids at its border will incent free ridership of the transmission systems by external resources which today require a purchase of OATT rights to serve the desired load. Allowing external resources to participate at non-ISO borders may disincentivize the expansion of EDAM by creating a situation where BAAs may consider inter-tie bidding as a viable option to getting benefits rather than joining EDAM depending on the footprint of the expanded market.

Idaho Power recognizes that the ISO today allows inter-tie bids, however, we will reiterate our objection to allowing these bids to count towards the RSE for the ISO BA except for bids submitted from contracted RA supply which have been reflected in the RA showings to the ISO.

25. EXTERNAL RESOURCE PARTICIPATION: Please include any additional comments on the topic of external resource ability to participate in the EDAM.

No additional comments at this time.

26. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s overall comments, including potential suggested enhancements, on the resource specific approach to GHG accounting as described in section II.E of the EDAM straw proposal.

Both the resource specific and zonal approaches look to balance the cost of carbon and market optimization. Both approaches and have positive and negative impacts to market participants. Idaho Power appreciates the effort resource specific approach makes in trying to capture the cost of each resource’s carbon impact and could support this approach in EDAM with some modifications from the existing EIM approach. First, more resources than market imports into a GHG area should not be deemed delivered to that area. Second, a balancing authority that is not exporting should not be deemed to have delivered any energy to a GHG area. Third, the market should NOT disincentivize prior to market transmission procurement for resources looking to purposefully serve load in the GHG area by allowing bids alone to determine deliverability. By this we mean that if a resource and load have a contractual agreement to serve a specific load to obtain the green attributes of the resource, transmission MUST be acquired ahead of time for that resource and load to obtain the benefit of the clean resource claim. There should be a way for loads and resources to prove this before the market run. We are concerned that a deeming approach that occurs in the EIM may create a situation where long-term transmission currently required to reach CAISO’s border is no longer purchased because a resource outside of CAISO can now just be deemed in the day-ahead to serve that load simply because it now sits in the expanded EDAM footprint. The market design should NOT create the ability for this cost shift.

27. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the resource specific’s approach use of the RSE solution as the counterfactual for measuring secondary dispatch.

Idaho Power believes that for this approach to work, secondary dispatch issues need to be evaluated correctly and undue burden should not be placed on non-GHG area resources and loads to prove secondary dispatch. While the approach seems reasonable, Idaho Power would like more discussion to ensure the measures are correctly identifying what is needed.

28. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the resource specific approach’s measures to limit secondary dispatch.

The approach appears reasonable, but Idaho Power would welcome more discussion.

29. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s overall comments, including potential suggested enhancements, on the zonal approach to GHG accounting as described in section II.E of the EDAM straw proposal.

Idaho Power appreciates the simplicity of the zonal approach, however, has concerns regarding the equitable treatment in the market by clean resources outside of the GHG zone. We are concerned that clean resources outside a zone may not be dispatched up due to the hurdle rate that is assumed for all resources outside the zone. This can create a situation where carbon emitting resources inside the zone are actually dispatched prior to clean resources outside the zone which appears to defeat the purpose of carbon pricing policies. We believe more discussion is needed around how to ensure the best economic dispatch when considering carbon emission rates.  Idaho Power also wants to ensure that resources which contract to serve a load in a GHG zone and not relying on market dispatch continue to be required to purchase transmission and prove the ability to access that specific zonal load.

30. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the design of the hurdle rate for the zonal approach.

The calculation of Hurdle Rate, even in the “dynamic” scenario, seems to be too static and inflexible and may not be adaptive enough or able to meet the true flexibility needed to operate efficiently. Idaho Power is concerned with the hurdle rate approach especially during periods of oversupply in all zones and how resources would be equitably treated.

31. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the treatment of resources outside the GHG regulation area as internal to a GHG regulation area on a long-term or short-term basis, using the GHG pseudo tie functionality, in the zonal approach.

If a resource is contractually obligated to serve specific loads in the GHG zone, pseudo-tie functionality should be allowed. However, I would caution allowing this as a mechanism to simply obtain a higher resource price by claiming the ability to serve a load when no load service contractual agreement exists, and no transmission has been obtained.

32. GREENHOUSE GAS ACCOUNTING: Please provide any additional comments on the GHG topic that were not captured by the questions above.

Idaho Power cautions CAISO to think through the issues of both approaches to ensure that the principles the GHG programs are being met while not cost shifting costs of either compliance or transmission to other customers. In addition, programs should strive to treat same fuel resources similarly in the market. However, we also recognize that even after the EDAM market is created and running, continued evolution will occur in the GHG area as state policy develops and market experience is gained. 

33. TRANSFER REVENUE ALLOCATION: Please provide your organization’s comments on the proposed transfer revenue allocation approach as described in section II.D.1 of the straw proposal and any other aspects of the transfer revenue allocation discussion topic.

 Idaho Power would like to continue to discuss and review examples of different scenarios for transfer revenue before a position can be taken.

34. SETTLEMENTS: Please provide your organization’s comments on settlements aspects of the EDAM described thus far, recognizing these will develop as the design evolves, as discussed in section II.D.2 of the EDAM straw proposal.

 Idaho Power looks forward to participating in future technical groups related to Day Ahead Settlements, Convergence bidding, Transfer Revenue, Imbalance Reserves, Reliability Capacity, and Flexible Ramp Settlement concepts as discussed in the EDAM Straw Proposal Stakeholder Meeting.

Idaho Power cautions the ISO to be  mindful as they develop neutrality settlement concepts related to energy, congestion and losses, and ensure they engage settlement subject matter experts currently participating in the WEIM. In the WEIM, significant design and implementation issues were uncovered related to neutrality calculations as more participants entered the market. We encourage CAISO to have a clear stakeholder process around these concepts and ensure that participants understand the proposed components of the calculations so that they can be clearly vetted and tested by settlement subject matter experts. In addition, while offset accounts may be necessary, cost causation principals need to be clearly understood to ensure that measured demand allocations are appropriate. 

35. EDAM TECHNICAL WORKSHOPS: Please provide your organization’s comments on the upcoming EDAM technical workshops. Which key components of the straw proposal should be further discussed in EDAM technical workshops.
Please be as specific as you as possible.

 Idaho Power believes that more technical conferences and conversations around transmission revenue compensation are warranted. Specifically, if the CAISO moves to a more inclusive all transmission in approach, how will a volumetric charge be determined to ensure transmission service providers are adequately compensated for the transmission the market is using that could lead to lost OATT revenue due to less short-term firm and non-firm transmission being available for purchase after day ahead.

In addition, Idaho Power believes we need further conversation regarding the treatment of GHGs. Idaho Power will not support a design in which clean resources are disadvantaged from serving a GHG load simply because of location of the resource. While we understand the zonal approach attempts to carve out the ability for non-zonal resources to serve load in the GHG zone, it does so by forcing the resource to declare before the market run that it is intending to serve load in that zone. That is not appropriate because clean resources owned by entities outside the zone may have excess that can be used in the zone but cannot be declared as strictly available for that load as it decreases the ability for the owing entity to pass RSE. Idaho Power is also concerned that to create a GHG accounting mechanism in the market, cost shift of transmission could occur. No GHG market policy should create a disincentive to no longer obtain transmission ahead of time to serve loads in a GHG area.

Idaho Power also believes more discussion around the penalties of RSE failure need to occur.

While we are appreciative of the work that has been put into the proposal so far, Idaho Power believes there are details that require further discussion and solutions.  We look forward to additional technical workshops on the RSE, transmission compensation, and GHG areas to name a few.

36. GENERAL COMMENTS: Please provide your organization’s comments on any other elements or aspects of the EDAM straw proposal.

The development of a workable EDAM design requires consideration of two fundamental challenges. First, the EDAM footprint would be composed of individual BAAs each responsible for their own reliability obligations, as well participants possibly committed to meeting one of two different resource adequacy programs: those entities subject to the California RA program, and those entities that voluntarily join the Western Resource Adequacy Program (WRAP). Second, the EDAM market would operate simultaneously alongside the existing OATT framework and contract-path scheduling approaches that are used outside of the CAISO BAA.

The EDAM design must be carefully considered with these challenges in mind, including developing solutions to address key questions such as:

  1. How will EDAM ensure sufficient supply is made available (and committed) to support reliability across the footprint?
  1. How can EDAM participants be assured that each EDAM BAA is required to contribute an equitable share of supply?
  1. How can EDAM participants communicate - and EDAM market operations honor high-priority commitments of capacity and energy that have been arranged outside of EDAM, including commitments made between WRAP members within and to and from the EDAM footprint?
  2. How will EDAM determine curtailments in periods when supply is insufficient to meet the needs of the broader footprint in a manner that avoids negatively impacting the reliability of those BAAs or RA program members that have invested in the resources and transmission to meet a higher reliability standard than other participants?  

Idaho Power looks forward to additional conversations and workshops on how to address these challenges. 

Joint Commenters
Submitted 06/16/2022, 04:20 pm

Submitted on behalf of
Western Resource Advocates, Clean Energy Buyers Association, Interwest Energy Alliance, Northwest Energy Coalition, Renewable Northwest, Sustainable FERC Project, and Western Grid Group

Contact

NANCY KELLY (nkelly@westernresources.org)

1. EDAM VOLUNTARY MODEL: Please provide your organization’s comments on the proposed structure of the EDAM voluntary participation model as described in section II.A.1 of the EDAM straw proposal.

Joint Commenters support the voluntary model proposed. We support the details of CAISO’s proposal, including voluntary entry of any Western Energy Imbalance Market (“WEIM”) participant and the ability to exit with 6 months’ notice.  We support the four transitional measures that provide safety to individual EDAM entities and to the market overall.  Finally, we agree that resources located in an EDAM BAA should participate in the market either through self-schedules or economic bids.

2. EDAM FEES: Please provide your organization’s comments on the proposed framework of the EDAM fee structure as described in section II.A.2 of the EDAM straw proposal.

Joint Commenters support CAISO’s approach to determining EDAM fees.  We agree with assessing implementation fees consistent with costs, and we appreciate that CAISO expects these fees to be lower than to implement the WEIM.  Assessing administrative fees using existing volumetric charges appears reasonable.  We appreciate that the increase in volumes will lower the rate charged per unit.

3. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on the concept of market transfers (occurring through the EDAM and WEIM) having equal priority to load to the extent an individual EDAM BAA faces severe emergency conditions as discussed in section II.A.3 of the EDAM straw proposal.

We support CAISO’s proposal to address the issue that arose from the emergency conditions of the summer of 2020.  In emergency conditions when there is a risk of load loss within a BAA, instead of cutting exports ahead of load, CAISO proposes that export EDAM transfers would receive equal priority and be “curtailed or reduced on a pro-rata basis with load subject to operator coordination and the application of good utility practice.”  We agree that equal treatment of exports and load is a necessary design element.         

4. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on whether the failure of the day ahead resource sufficiency evaluation should have a bearing on the level of priority afforded to market transfers (EDAM and WEIM) souring from an EDAM BAA facing emergency conditions and sinking in the EDAM BAA that failed the resource sufficiency evaluation.

During the RSE Working Group discussions, how to treat transfers to a BAA that failed the RSE was discussed with two points of view expressed.  Some felt that transfers to such a BAA should be given lower priority, and some felt that reducing transfers to a failing BAA should be considered “double jeopardy” since a failing BA would already be subject to financial consequences. 

Our interest is in assuring a well-functioning market in both normal and emergency conditions, and we believe that allowing transfers provides the highest level of reliability while providing efficient outcomes. We, therefore, agree with the second point of view, and we support CAISO’s proposal to not apply a different level of priority to transfers to a BAA that fails the RSE. 

 

5. CONFIDENCE IN MARKET TRANSFERS: Please provide any additional comments on the topic of confidence in market transfers (occurring through the EDAM and WEIM).

Joint Commenters agree with the ISO that in normal conditions, a well-designed EDAM with a robust Resource Sufficiency Evaluation (“RSE”), an optimized market solution that respects resource and network constraints, and imbalance reserve products that adequately address uncertainty will instill confidence that generation will be sufficient to meet demand. 

We agree that if an entity loses generation or transmission, it is the BAA’s responsibility to deploy contingency reserves. 

Finally, we agree that reoptimizing schedules and market awards helps reduce the need for out-of-market actions enhancing reliability over the status quo. 

6. TRANSMISSION COMMITMENT: Please provide your organization’s comments on the overall framework of transmission buckets in the context of making transmission available to the EDAM as described in section II.B.1 of the EDAM straw proposal.

Joint Commenters support the overall framework of the transmission buckets as described in the EDAM Straw Proposal, while acknowledging that many details are left to be determined. As a general principle, we support inclusion of maximum amounts of hurdle-free transmission to facilitate automated and optimized dispatch of renewable resources.  We recognize that the inclusion of hurdle-free transmission in the EDAM optimization will require addressing transmission revenue concerns of Transmission Providers and Transmission Rights Holders.

7. TRANSMISSION COMMITMENT: Please provide your organization’s perspective on Bucket 2 transmission and whether it should be made available to the EDAM only through a voluntary framework or through a more general rule that transmission unscheduled by 10am of the day ahead is automatically made available to the EDAM for optimization as described in the straw proposal.
Consider the implications of transmission customers retaining the ability to exercise those transmission rights between the day ahead and real time markets and the potential implications on redispatch.

As a mechanism to facilitate maximum amounts of transmission in the market, Joint Commenters support automatic inclusion within the EDAM optimization of transmission rights that are unscheduled by 10:00 AM.  We further recognize that there are important considerations and details that need to be worked out to achieve the necessary level of support to succeed. Careful thought must be given to concerns of those who own transmission rights that would be automatically provisioned to EDAM under this proposal as well as potential implications for redispatch in the real-time market.

Given the importance of getting these details right, both to achieve consensus and to address the potential implications of redispatch, we request CAISO focus an upcoming EDAM technical workshop on this topic.

8. TRANSMISSION COMMITMENT: Please provide your organization’s perspective on the compensation options for bucket 3 transmission described in the EDAM straw proposal.
More specifically, consider whether Bucket 3 transmission rates should be reflected in the market optimization through a direct hurdle rate or should the reduced transmission revenues be addressed outside of the market optimization through after the fact cost recovery.

Joint Commenters support inclusion of as much hurdle-free transmission in the EDAM optimization as is feasible to maximize the benefits of market optimization.  Thus we generally oppose the use of a hurdle rate for Bucket 3 transmission (Approach 1), since hurdle rates lead to suboptimal outcomes, which could be further exacerbated by rate pancaking.  While a reciprocity approach (Approach 2) avoids a hurdle rate, it seems unlikely to result in sufficient cost recovery for transmission used by the market to garner support from potential EDAM entities.  Therefore, Joint Commenters greatly appreciate CAISO’s efforts to think more creatively about how to compensate Bucket 3 transmission.

Generally, we support applying some version of an uplift charge for the recovery of Bucket 3 transmission costs (Approach 3). Further elaboration on our questions and suggestions for Approach 3 are included in our response to question #9.

9. TRANSMISSION COMMITMENT: Please provide your organization's comments on the concept of Bucket 3 transmission costs being recovered outside of the market optimization, should the ISO through the EDAM process work toward a design for transmission revenue recovery, based on one of the options described (3A, 3B, 3C), in order to keep the EDAM entity whole as a result of EDAM participation.
Some questions to consider: are there additional variations to the described options; what should be the recoverable lost transmission revenues; how should the lost transmission revenues be allocated (or a transactional basis, across load in EDAM or to each EDAM entity to allocate to its customers); how do the described options impact bidding incentive in the EDAM market.

At this time, Joint Commenters do not favor any specific option for the treatment of Bucket 3 transmission outside of broad support for an uplift charge (Approach 3) and general opposition to the use of a hurdle rate.  We request that CAISO host a technical workshop to further discuss the details of Approaches 3A, 3B, and 3C and to determine if there are other variations that stakeholders might propose. We also encourage CAISO to begin collecting, and making publicly available, data on transmission use and revenues that would fall into the three transmission categories from potential EDAM entities to accurately and transparently disclose both how transmission is being used currently and the magnitude of revenues that may need to be collected under Bucket 3.

As CAISO and stakeholders begin to further evaluate transmission cost recovery options, Joint Commenters suggests two principals be considered for Bucket 3 transmission: (1) the practicality of administration and effectiveness of uplift revenues; and (2) the tractability of revenue compensation. Additionally, as technical workshops are held, we encourage CAISO to consider whether some blend of Approaches 3A, 3B, and 3C may provide the most support for the uplift allocation concept. Although, at this time, we do not have any specific recommendations on which version of Approach 3 to use, nor on how the approaches might be blended, we look forward to participating in additional workshops and discussions on this topic.  

Finally, and as we discuss further in our response to question #10 directly below, Joint Commenters view EDAM as an incremental and intermediate step towards further market integration under an RTO. As CAISO considers how to best recover Bucket 3 transmission costs, we recommend CAISO consider whether the transmission cost recovery mechanism put in place could be designed to scale down over time. As generation continues to transition toward more clean energy and a greater share of market dispatch, transmission use will also evolve.  Resource transition and more efficient transmission use will impact costs.  Anticipating these future trends, while not without its challenges, will be better than assuming that future use will be the same as present use.  We believe this approach could help put the region on a glide-path towards addressing some of the transmission use and cost shifts that may occur with an RTO, and Joint Commenters encourage CAISO to explore this concept.

 

10. TRANSMISSION COMMITMENT: Please provide your organization’s comments on any other aspects of the transmission commitment in EDAM topic.

Because Joint Commenters view EDAM as an intermediate step toward an RTO, we support a forward-looking approach to transmission commitment and compensation that provides effective incentives to encourage participants on a path towards greater transmission commitment to the market and with less reliance on collecting transmission revenues from transmission provided to the market.

To help support those objectives, no matter the approach CAISO adopts to compensate Bucket 3 transmission, we recommend that CAISO partner with stakeholders to consider how revenues could be phased out over time to ease transition to an RTO. This could entail scaling down the percentage of lost revenue that is collected for Bucket 3 year-over-year. We suggest additional discussions on this topic during forthcoming technical workshops, as other stakeholders may have creative ideas that would further advance the EDAM market design as a larger step towards full market integration.

11. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the process for conducting the EDAM RSE as described in section II.B.2 of the EDAM straw proposal.
This includes comments on the ability to conduct advisory RSE tests prior to the binding run, the timing of the RSE, the new tool, inputs, and other elements.

Joint Commenters generally support the Resource Sufficiency Evaluation as proposed, including the ability to conduct advisory RSE tests prior to the binding run and timing of the RSE.  In addition, we pose questions and offer recommendations.

RSE Requirements - Load Forecast

CAISO proposes to provide a load forecast for each EDAM BAA or to allow the BAA to submit an independent load forecast.  It requests feedback on whether there is a need for a mechanism to incentivize accurate forecasts.  Joint Commenters support the proposal with the condition that independent load forecasts are shown to be at least as consistently accurate as CAISO forecasts.  Further, we think that a reporting mechanism may be preferable to an incentive mechanism. 

To determine whether an independent, BA-provided, forecast is as accurate as CAISO’s, we recommend that CAISO develop load forecasts for all EDAM entities. The accuracy of CAISO’s forecasts and the EDAM entities’ independent forecasts should be assessed and compared quarterly.  The size of the average forecast errors and any directional bias would be made publicly available.  If an EDAM entity’s forecast error is shown to be significantly larger than CAISO’s forecast error, or if it is shown to be biased downward, the entity could be given a quarter to correct its forecasts.  After a quarter, if magnitudes of forecast errors remained large or biased, this entity’s forecasts could be replaced with CAISO’s forecasts for a set period of time before the entity was again allowed to submit independent forecasts.

Finally, to assure accuracy and maintain confidence in the load forecasts used for the RSE, we further recommend that the Department of Market Monitoring be engaged in a post-mortem review of this comparative assessment of the CAISO produced forecasts versus those provided by EDAM participants.

CAISO asks if an incentive mechanism is necessary, but provides no detail regarding how it envisions an incentive mechanism working or how it would be funded. 

We recommend that CAISO develop two detailed mechanisms to encourage accurate forecasts: (1) flesh out the analysis and reporting approach we suggest, and (2) provide detail regarding how an incentive mechanism could work and how it could be funded.  These detailed mechanisms could be shared with stakeholders and input sought through a technical workshop.

RSE Requirements - Imbalance Reserves

Joint Commenters agree that each participating BAA should demonstrate sufficient supply and flexibility to cover upward and downward uncertainty requirements up to a 95% confidence level.

RSE Requirement - Flexibility Requirement

Joint Commenters agree that an EDAM entity’s ability to meet its ramping requirements across a 24-hour schedule is a necessary component of being resource sufficient.  We support testing whether an EDAM BAA has a feasible schedule across all 24 hours.

RSE Requirement - Ancillary Service Requirements

Each EDAM BAA retains its reliability requirements and will self-provide ancillary services.  We support the RSE validating whether the EDAM BAA has self-provided sufficient capacity.  We further support CAISO’s proposal that if ancillary service requirements are satisfied through a reserve sharing group, transmission must be made available to ensure delivery of the reserve capacity.

RSE Requirement - Reliability Capacity Bidding

CAISO proposes that all entities submitting a day-ahead energy bid into the Integrated Forward Market (“IFM”) also submit a bid for a matching quantity of reliability capacity in the Residual Unit Commitment (RUC) process.  We support this requirement to assure sufficient physical capacity in the real time market.

RSE Inputs - Resource Specific including Variable Energy Resources

Joint Commenters support CAISO’s proposed treatment of natural gas resources, hydro resources, variable energy resources (“VERs”), and storage resources in the RSE. 

With regard to VERs, we agree that modeling energy and imbalance reserve bids for all VERs up to their variable energy forecast is needed to ensure that fossil generation is not over committed in the day-ahead market. Further, if the Resource Specific approach to GHG compliance is implemented, the RSE will serve as the counterfactual for assessing attribution.  Attribution to a GHG zone would be limited to the difference between the resources upper economic limit and the RSE schedule.  If bids are too low, the attribution will be too high, increasing compliance leakage.

We further agree, that akin to all other resources, VERs should submit RUC availability bids to assure sufficient capacity is made available to RUC and that sufficient physical capacity is available in the real-time market.  

Finally, we recommend that VER forecast errors be tracked and reported.  This will provide help and incentives to learn from errors to achieve better forecasts over time. 

12. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposed treatment of WSPP Schedule C and like firm energy contracts within the EDAM RSE.
These arrangements are commonly relied upon across the west, including the ISO. The ISO proposed that these count toward the RSE by being self-scheduled and that these arrangements reduce the RSE obligation. Consider providing comments on whether these should be allowed to count in their current form (limited knowledge of source of supply or transmission quality); whether the market is expected to evolve toward providing more specific source information; how these firm energy contracts should be modeled (whether sourcing from adjoining BAA or another method); any additional considerations.

Joint Commenters support including firm energy contracts whose source is unknown at the time the RSE runs as an RSE resource, since WSPP Schedule C contracts are widely used today, are considered dependable, and generally include liquidated damage provisions or other performance incentives.  However, without knowledge of the contract source, in the near-term, before business practices can adapt, modeling these contracts does present an issue. 

CAISO proposes the contract be modeled as a self-schedule from an adjacent BAA. This proposal appears fraught with problems, and could discourage participation in the EDAM as a result.  While we do not have a solution to offer, we think there may be further avenues of exploration.  As part of a future technical workshop, we raise the following considerations:

  • Would it be worthwhile to explore with entities that rely on these contracts whether parties with whom they do business generally source their supply from known resources?  If so, could an entity identify a “typical” source based on the party with whom they contracted?  While not ideal, this may be more accurate than the CAISO proposal and therefore lead to less redispatch and congestion in real time.
  • Would it be worthwhile to consider moving the market optimization later in the day to better align with E-tagging practices as well as natural gas scheduling arrangements?  It would no longer be a 24-hour-ahead market, and many practices would have to change, but it might resolve certain issues.

If a Western Day-Ahead market is developed, we would hope to see modifications in contract requirements.

While we recognize that the firmness of transmission is an issue, we support counting pseudo-tied resources and dynamically scheduled resources in an EDAM entity’s RSE, since these resources are used by entities to meet their loads.

13. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s perspective on the ISO proposal, and associated reliance, on day ahead intertie bids (not associated with resource adequacy).
Some questions to consider: should these arrangements count toward the RSE; should these be monitored for performance and delivery; should additional criteria be imposed, such as an attestation, on these to provide an added level of confidence in performance.

Joint Commenters support intertie bids counting toward the RSE, at least in the initial binding run at 10:00.  However, during the May 24-25th CAISO Stakeholder Workshop, Powerex identified reliability concerns with CAISO accepting bids at its interties without known sources for the bid-in supply.  Powerex represented that sellers may wait to purchase the supplies they had bid until after their bid is accepted.  While this is not a problem in normal conditions, when supplies are tight, the bid-in supply may not show up, creating reliability concerns.   They suggested that bids be reconciled with E-tags after E-tagging is complete at 3:00 p.m.  If a source has not been identified by 3:00 PM, CAISO should cure ahead of the real-time market. 

We are intrigued by this suggestion and believe it warrants further exploration, with possible extension to WSPP contracts. We urge CAISO to host a technical workshop to better develop ideas around these concepts.

 

14. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the treatment of demand response and its different types and functions for purposes of passing the RSE.

Demand Response (DR) is a significant source of carbon-free energy that has yet to be well tapped.  Joint Commenters support all efforts to further its development, and we appreciate CAISO offering a method to potential EDAM participants to use their current programs in the EDAM, even when their programs do not have in place the metering and telemetry requirements of CAISO’s current load program.

We support allowing EDAM entities to represent their load modification programs as a decrement to load in the day-ahead market.  Joint Commenters further agree that the potential for manipulation should be discouraged.  An entity should not regularly submit a decremented load forecast in the day-ahead market, and, then, instead of calling on their demand programs in real-time, lean on excess supply in the real-time market.

However, we also recognize that conditions can change between day-ahead and real-time that can alleviate the need to call upon these programs, and we encourage CAISO and potential EDAM entities to develop criteria that allow entities to hold back a resource if calling upon it is no longer warranted.  

In addition to working with parties to develop criteria, we recommend CAISO implement tracking and reporting protocols for load decremented programs and track use of these programs in the day-ahead and real-time markets.  If utilities submit decremented loads, do they call upon their demand response programs in real time? If not, do changed conditions or relative economics as between supply options and demand response warrant the change in plan?  In this way, poor behavior of any one or two bad actors could be exposed and corrected without detriment to the market.  More generally, the current EDAM initiative provides an opportunity to develop an open-ended approach that does not penalize DR providers bringing to market what has real value.

To address manipulation, CAISO proposes limiting the volume of load that can be bid into the EDAM to the load forecast minus the demand response adjustment.  While limiting the size of the decrement to the size of the demand response programs appears reasonable, as discussed above, we recommend this approach be supplemented with tracking and disclosure. 

As the energy transition to a zero-carbon economy continues forward, flexible load will become an ever more significant resource.  We encourage CAISO to consider ways to incent BAs to bid in greater load flexibility.  In addition to providing load reductions, flexible load could be shifted away from periods of tight supply toward periods of abundant supply to absorb variable energy resources when in excess.  What is needed is a strong price signal to redirect load.  We encourage CAISO to hold a workshop to consider how to further develop this valuable resource. 

15. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposed EDAM RSE failure consequences approach under which transfers would be allowed under an RSE failure at a penalty price.
Please comment on what an appropriate penalty price would be.

Joint Commenters support imposing a financial penalty in place of discontinuing transfers to an entity failing the RSE in the hours the entity fails.  Further, we support financial penalties varying with system conditions. 

Under normal conditions transfers could be allowed at “market prices,” at least initially, particularly because the cure may be needed for only an hour or two over a twenty-four-hour period, and this should have little impact on price formation.  However, if one or more large entities were to consistently fail the RSE, this could put upward pressure on EDAM prices, harming all participants.  Therefore, if an entity persistently fails the RSE, we agree that an after-the-fact administrative penalty should be applied.  The penalty should be large enough to discourage leaning on the EDAM.  Conceptually, the penalty could escalate with repeated incidents of failure.

Under stressed conditions, we support use of the CAISO bid cap as a hurdle rate in the market optimization.  Under these conditions the consequence of RSE failure should be large enough to strongly incent entities to have sufficient supply procured through the bilateral market, and it appears that the bid cap could provide that incentive. 

16. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposed EDAM RSE failure consequences approach which distinguishes the consequences depending upon whether the failure occurred under “normal conditions” as compared to “stressed system conditions.”
Please include consideration of potential different frameworks, how “stressed system conditions” can be defined; and any other perspectives on the structure of failure consequences and their impact on developing a robust RSE.

Because the Western Interconnection is summer peaking, CAISO proposes to define stressed conditions as hours ending 16-22, June-September.  This seems to be a reasonable approach that has the appeal of providing consistent parameters with known costs of RSE failure.  Assuming that the hurdle rate approach is adopted and is set at the CAISO bid cap, entities know that failure will result in a hurdle of either $1,000/MWh or $2000/MWh.  We believe clear rules with significant penalties are helpful in incenting RSE compliance. 

The alternative is to define stressed conditions some other way.  However, this could lead to ambiguity, and ambiguity could lead to contention.

CAISO asks whether a hurdle rate should be imposed during winter peaking hours.  Because the system as a whole has sufficient energy to meet the winter peak, Joint Commenters do not support imposing a hurdle rate during winter peaking hours.  While symmetry in approach is appealing from the perspective of equity, imposing a hurdle rate during winter peaking conditions does not lead to an efficient optimization, which is our primary concern. 

We think an administrative penalty on entities that fail the RSE in winter peaking conditions could be a better approach.  To achieve equity, the consequence of failing the RSE during winter peaking hours could be an administrative penalty that is generally equivalent to the imposition of a CAISO bid-cap hurdle, but without affecting the optimization.

17. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the concept of a pooled WEIM RSE for entities passing the EDAM RSE, as described in the straw proposal and stakeholder meeting.

Joint Commenters support testing the EDAM footprint for WEIM resource sufficiency considering all day-ahead energy, imbalance reserves, and reliability capacity awards to allow each BAA the economic and reliability benefits of a combined footprint. This pooled approach is consistent with the basic notion of expanded markets, that coordinated, joint approaches to providing energy is more efficient than each entity on its own.  This will lead to a more efficient optimization.  Reliability is maintained through the imbalance reserve and reliability capacity awards.   

18. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provider your organization’s comments on any other elements of the EDAM RSE not raised by the questions above.

Resource Adequacy

Resource adequacy and approaches to maintain reliability are under increased scrutiny as weather extremes, wildfires, and changing generation technology challenge current approaches.  More options, more flexibility, and more in depth assessment of circumstances that challenge reliability as well as ways to meet challenges are needed.  We hope that CAISO and all parties will join us in acknowledging challenges and changes now under discussion, particularly within the Energy Systems Integration Group (www.esig.energy), with the goal of anticipating the future as work on EDAM progresses.  We want to minimize barriers to needed and constructive changes while maximizing options and potentials for future reforms.

WRAP and the RSE

We further request that as part of a technical workshop, CAISO and potential EDAM entities currently participating the in the Western Resource Adequacy Program (WRAP) educate non-WRAP participants on how WRAP and CAISO will incorporate the WRAP’s operational program into the RSE.  How will WRAP resources that are held back and subsequently shared be counted in the EDAM RSE?  Will coordination require the WRAP administrator to coordinate with CAISO?  Is the counting of WRAP resources in the RSE addressed by allowing trading of “bid-range”?  Education will be greatly appreciated.

19. INTEGRATED FORWARD MARKET (IFM) AND RESIDUAL UNIT COMMITMENT (RUC): Please provide your organization’s comments on considerations related to the IFM and RUC as part of EDAM.
This includes consideration of the role of the RUC process as a critical component of the EDAM and the proposal that all supply offered into IFM is also offered in the RUC.

Joint Commenters support the proposal to extend RUC to the EDAM.  We agree that because RUC is a critical component of the IFM, extending it to the EDAM is necessary to maintain reliability.  We support the requirement that all resources offering energy bids into the IFM must submit bids for reliability capacity in the RUC at the same quantity as their energy bids plus ancillary services. 

20. INTEGRATED FORWARD MARKET (IFM) AND RESIDUAL UNIT COMMITMENT (RUC): Please provide your organization’s comments on the role of the imbalance reserve market product, currently being developed in the Day-Ahead Market Enhancements initiative, in the EDAM.

Joint Commenters support the proposal to procure imbalance reserves based on economic bids from across the EDAM footprint.  

21. MARKET POWER MITIGATION (MPM): Please provide your organization’s comments on the proposal to extend the WEIM market power mitigation framework to the EDAM and the further evaluation of potential market power mitigation enhancements within the Price Formation Enhancements initiative.

We support the proposal as described, and we support addressing the issue in the Price Formation Enhancements initiative.  

22. CONVERGENCE BIDDING: Please provide your organization’s comments on the proposal for a transition period under which convergence bidding is only a market feature in the ISO BAA and not available in other EDAM BAAs at the onset of the EDAM.

In order to avoid unintended financial consequences on the part of new market participants, CAISO proposes to provide a transition period of at least a year before revisiting convergence bidding for the EDAM as a whole, while maintaining convergence bidding within the ISO BAA as is done today.  Further, without convergence bidding for the EDAM, CAISO states it would need to consider interim bidding requirements to maintain appropriate market incentives.

Joint Commenters do not have enough information to provide meaningful input.  Without more information regarding these alternative requirements and their potential for unintended consequences, we don’t have enough information to understand their implications and compare these implications to those of convergence bidding.

Further, as explained in the Straw Proposal, virtual bidding provides virtual supply to offset the tendency of VER schedulers to bid less than their forecasts.  We would like to understand if and how interim bidding requirements would compensate for this under-bidding tendency so that fossil fuel resources are not over committed.  

As part of a technical workshop on convergence bidding, please provide detail regarding these interim bidding requirements and assess the potential benefits and risks associated with them. 

23. CONVERGENCE BIDDING: Please include any additional comments on the topic of convergence bidding within EDAM.

No additional comment.  

24. EXTERNAL RESOURCE PARTICIPATION: Please provide your organization’s comments on the ISO initial leaning toward extending the WEIM framework of external resource participation to the EDAM.
Under this framework the ISO would continue to allow source specific and non-source specific supply (intertie bids) to be economically offered into the ISO BAA. Non-ISO EDAM entities would continue to support source specific supply (pseudo-ties and dynamics), the self-scheduling of supply under contract, but intertie bidding would not be allowed at the intertie of the EDAM BAA.

In general, Joint Commenters support this approach.  We agree that non-ISO EDAM entities should support source specific resources through pseudo-ties and dynamic scheduling while self-scheduling supply under contract, but not allowing intertie bidding at the intertie of the EDAM BAA.  Not allowing economic bidding at the EDAM entities intertie appears to be a critical concern of potential EDAM entities, and allowing economic intertie bidding would most certainly discourage participation.

Under normal conditions, we support economic intertie bidding at the ISO boundary.  This encourages participation of VERs not under contract that need only arrange transmission to the CAISO border.  However, to the extent that schedulers are bidding supply they don’t yet have under contract, this practice challenges reliability when the system is stressed. 

We therefore encourage CAISO to consider some method of reconciling bids with E-tags, as Powerex proposed during the May meetings, to support reliability and build confidence in market transfers.  We request that this be discussed in an upcoming technical workshop.

 

25. EXTERNAL RESOURCE PARTICIPATION: Please include any additional comments on the topic of external resource ability to participate in the EDAM.

Given time and experience, EDAM entities may be more willing to consider economic bidding at their interties, particularly if there is a method in place to enhance the likelihood that resources will show up as bid, protecting reliability, and if transmission revenue recovery is assisted through some type of uplift.  Joint Commenters suggest CAISO consider revisiting the topic of economic intertie bidding after the EDAM is successfully implemented.

26. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s overall comments, including potential suggested enhancements, on the resource specific approach to GHG accounting as described in section II.E of the EDAM straw proposal.

Joint Commenters do not oppose further development of the Resource Specific approach.  We appreciate the enhancements CAISO proposes to reduce secondary dispatch.  We acknowledge that this approach has the benefit of being well-developed and therefore likely relatively easily implemented.  Further, by creating market rules that allow for an energy-bid for dispatch of resources to serve load outside a GHG regulation area and an energy bid + GHG bid adder to serve load within a GHG regulation area, the market optimization treats the appropriate regulation areas fairly.  Our primary concern with this approach is whether it sufficiently limits compliance leakage.

27. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the resource specific’s approach use of the RSE solution as the counterfactual for measuring secondary dispatch.

Two approaches to set a baseline have been proposed: (1) use of the RSE, and (2) an optimized baseline schedule.  To the extent that the RSE uses the VER forecast rather than VER bids, Joint Commenters do not oppose use of the RSE as a baseline.  However, we would like further information regarding the development of an “optimized” baseline.  We recommend both approaches be examined in detail in a technical workshop to develop consensus around the preferred approach.

28. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the resource specific approach’s measures to limit secondary dispatch.

Joint Commenters appreciate the enhancements CAISO proposes to reduce secondary dispatch.  We agree that limiting resource specific attribution to the difference between a base schedule, either the RSE or an optimized schedule, and the resources’ upper economic limits, is a necessary first step in minimizing leakage.  We further appreciate the additional step of limiting attribution to resources in a specific BAA to a pro-rata share of net exports, or an attribution of zero for resources in an importing BAA.  These are important steps to limit leakage.  That said, how fully the approach limits leakage and how it compares with the Zonal Approach in minimizing leakage is not yet established and is a significant consideration for us. We encourage CAISO to develop and share examples during a technical workshop.

29. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s overall comments, including potential suggested enhancements, on the zonal approach to GHG accounting as described in section II.E of the EDAM straw proposal.

Joint Commenters support further development of the Zonal approach, primarily because it appears superior in pricing environmental externalities and in limiting compliance leakage.  The extent of possible leakage is dependent on the hurdle rate used for the market optimization, and this rate can be adjusted upward if necessary.  In addition, the Zonal approach captures the needed geographic diversity among EDAM participants critical to effectively leveraging diversity benefits of clean energy resources from across the West.

We see two issues with the Zonal approach: first, determination of the hurdle rate, and, second, implementation.  We discuss determination of the hurdle rate directly below. 

With regard to implementation, we encourage CAISO to provide a timeline with needed determinations.  We recognize that because regulatory approvals may be required, if this approach is to move forward, it may need to be implemented at a later date. We would like to better understand time requirements in developing this approach.

30. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the design of the hurdle rate for the zonal approach.

Joint Commenters support calculating a hurdle rate by multiplying an allowance price by an emissions rate.  However, multiple methods to determine an emissions rate are available.  Approaches could include: a static emissions rate; a predefined rate that varies with hours and seasons to reflect the changing underlying resource mix; a dynamically determined rate based on a baseline run; or a marginal rate based on resources serving demand over the course of a given interval.

Ideally, the hurdle rate would reflect the state’s allowance price and the emissions rate prevailing in an hour.  However, we recognize that there may be a tradeoff between administrative simplicity and developing the ideal emissions rate.  We recommend CAISO explore ways it could accurately model an hourly emissions rate for use in setting a GHG hurdle rate and share the approach during a technical workshop   

We also recommend a future workshop on GHG accounting to include environmental and utility economic regulators from key states to identify opportunities and options for better coordination or linking of the GHG programs in different states.

 

31. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the treatment of resources outside the GHG regulation area as internal to a GHG regulation area on a long-term or short-term basis, using the GHG pseudo tie functionality, in the zonal approach.

Joint Commenters support using the pseudo tie functionality for Path 1.  We would like to further discuss accommodation of Path 2 through a technical workshop.

32. GREENHOUSE GAS ACCOUNTING: Please provide any additional comments on the GHG topic that were not captured by the questions above.

Joint Commenters appreciate CAISO’s efforts to engage stakeholders in exploring and formulating GHG accounting approaches that align with Western states’ policies.  We acknowledge that the primary issue for this initiative is how best to internalize carbon prices in the day-ahead-market optimization.  Two methods have been proposed, and a third approach was suggested during the May 24-25th meetings. 

Our interest is two-fold: (1) ensuring that the selected method reduces compliance leakage by limiting or eliminating secondary dispatch to the fullest extent possible, and (2) furthering the development of a comprehensive tracking mechanism for the Western Interconnection, since some states have in place emissions reductions policies that do not include a carbon price, and developing a method to assist these states in ensuring compliance will not only meet their objectives, but appears to be necessary to move market development forward. We therefore encourage CAISO to invest in its reporting ability so that this functionality can be aligned with post market functions.  Further, we encourage CAISO to work with WREGIS to develop a comprehensive tracking and reporting mechanism that covers all generating units operating in the Western Interconnection.

Finally, we encourage CAISO to collaborate with LADWP to further develop the load-based approach to GHG accounting suggested during the May meetings.

Minimizing Leakage

As discussed above, limiting or eliminating leakage, and thereby minimizing carbon emissions, is our primary concern.  We recommend CAISO host a technical workshop specifically addressing leakage and provide examples of how each approach, Resource Specific and Zonal, minimizes leakage.  This would help stakeholders in providing effective feedback to CAISO.

Comprehensive Tracking and Reporting

We recommend that WREGIS be invited to present information regarding how its functionality could align with post-market reporting for either GHG accounting approach. This could help to ensure a West-wide, centralized reporting of not only existing REC information but also “add-on” GHG attributes associated with day-ahead market transactions in the EDAM footprint.

Load Based Accounting

At the May 24-25th Workshop, LADWP proposed developing a “load-based” accounting approach. We are intrigued by the proposal as it seems to offer a method to limit secondary dispatch, provide GHG accounting transparency, and is consistent with the impact on the atmosphere.  We recommend that LADWP be invited to present their concept so that it may be further developed and ultimately compared with the Resource Specific and Zonal approaches.

33. TRANSFER REVENUE ALLOCATION: Please provide your organization’s comments on the proposed transfer revenue allocation approach as described in section II.D.1 of the straw proposal and any other aspects of the transfer revenue allocation discussion topic.

No comment.

34. SETTLEMENTS: Please provide your organization’s comments on settlements aspects of the EDAM described thus far, recognizing these will develop as the design evolves, as discussed in section II.D.2 of the EDAM straw proposal.

No comment.

35. EDAM TECHNICAL WORKSHOPS: Please provide your organization’s comments on the upcoming EDAM technical workshops. Which key components of the straw proposal should be further discussed in EDAM technical workshops.
Please be as specific as you as possible.

We recommend technical workshops focus on the key issues but also employ a thematic approach that identifies “common” market design elements that have implications across key areas – RSE, Transmission availability and access, and GHG accounting. For example, RSE determination, role of BAAs and demand forecasts, and transmission access determination, have overlapping impacts.

36. GENERAL COMMENTS: Please provide your organization’s comments on any other elements or aspects of the EDAM straw proposal.

Western Resource Advocates, Clean Energy Buyers Association, Interwest Energy Alliance, Northwest Energy Coalition, Renewable Northwest, Sustainable FERC Project, and Western Grid Group (Joint Commenters) appreciate the opportunity to respond to the Extended Day-Ahead Market Straw Proposal issued by the California Independent System Operator (CAISO) on April 28, 2022.  WRA, NWEC, RNW, Sustainable FERC, and WGG are public interest organizations that advance policies to further a low-carbon grid and reduce harmful emissions from fossil-fuel generation.  We are joined by CEBA and Interwest.  CEBA is a membership organization of commercial and industrial sectors, non-profit organizations, energy providers, and service providers with a vision for how markets can be organized and governed to provide maximum benefit to customers.  Interwest is a nonprofit trade association bringing together the nation’s leading solar, wind, geothermal and storage developers with the nongovernmental environmental community to expand renewable energy throughout the Intermountain West.  Together, we support the development of a successful, well-designed Enhanced Day-Ahead Market (EDAM) to efficiently and reliably commit units in the day-ahead timeframe, thereby cutting emissions and lowering costs.  Addressing the climate crisis will require greatly enhanced Balancing Authority (BA) coordination, and a successful EDAM is a significant step with the ultimate goal a fully integrated, transparent, and accessible Regional Transmission Organization (RTO) with meaningfully representative governance.

Joint commenters appreciate all of CAISO’s efforts to extend its Day-Ahead Market to others in the West as quickly as is possible.  Studies have repeatedly demonstrated that enhanced BA coordination cuts costs, improves reliability, and reduces emissions.  Conversely, maintaining the status quo results in relative inefficiency and waste and in unnecessary accumulating emissions. Given the need to address the ever-growing climate crisis, we urge haste while supporting deliberate and well-considered market design. 

Because we seek a successful, broadly-supported, inclusive, and transparent EDAM,  we support design elements that: (1) maximize market optimization; (2) encourage maximum participation by existing and new EIM entities; (3) encourage the maximum participation of transmission and generation; (4) garner the support of transmission customers and independent power producers; (5) promote transparency and accessibility; (6) promote the full participation of all resources, including demand response and storage; and (7) safeguard reliability.  Finally, with regard to greenhouse gas (“GHG”) compliance, we support options that reduce compliance leakage by limiting or eliminating secondary dispatch and provide transparent reporting of post-dispatch GHG emissions.

Los Angeles Department of Water and Power
Submitted 06/15/2022, 11:03 pm

Submitted on behalf of
Los Angeles Department of Water and Power

Contact

Stuart Kelly (skelly@utilicast.com)

1. EDAM VOLUNTARY MODEL: Please provide your organization’s comments on the proposed structure of the EDAM voluntary participation model as described in section II.A.1 of the EDAM straw proposal.

LADWP appreciates the proposed voluntary aspect of EDAM and the addition of transitional measures similar to the WEIM design, particularly the adoption of expedited market rules or procedures in response to unintended consequences. LADWP supports a notice period with no exit fees as appropriate in conjunction with the transitional measures that will be made available. With that said, LADWP requests more information regarding the thinking behind a 6-month notice period as opposed to a 3-month notice period.

Additionally, we believe it is important to have transitional pricing in place following the implementation. Given the volume of transactions in EDAM to mitigate risk during the transitional phase, LADWP requests that the transitional measures and pricing, be in place for 12-months as opposed to the proposed 6-month period. One or two issues identified in LADWP’s EIM transition took longer than 6-months to resolve, as they were not all identified immediately at go-live.

2. EDAM FEES: Please provide your organization’s comments on the proposed framework of the EDAM fee structure as described in section II.A.2 of the EDAM straw proposal.

At a high level, the proposed fee construct appears appropriate. LADWP supports the proposed approach to implementation costs, and requests a credit back to the entity to the extent implementation costs are less than forecasted.

For EDAM administrative fees, LADWP takes no exception to the use of volumetric charges using the existing Market Service charge, and the WEIM System Operations charge. However, LADWP asks that ISO provide forecasts (or a forecast range) of the proposed fees for inclusion in financial studies. As the straw proposal indicates, these fees will vary based on the number of participants. Please provide an analysis of the fees under a low, medium and high participation scenario.

3. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on the concept of market transfers (occurring through the EDAM and WEIM) having equal priority to load to the extent an individual EDAM BAA faces severe emergency conditions as discussed in section II.A.3 of the EDAM straw proposal.

LADWP agrees that confidence in market transfers is critical and a threshold issue. LADWP supports giving Exports equal priority to Load, and any curtailment should be on a pro-rata basis.

LADWP does not support a construct where Exports are a lower priority than Load as it would cause an unacceptable reliability risk to LADWP customers, and an asymmetrical outcome. EDAM design needs to be built upon sound reliability principles, and LADWP needs to have confidence in Exports from ISO.

4. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on whether the failure of the day ahead resource sufficiency evaluation should have a bearing on the level of priority afforded to market transfers (EDAM and WEIM) souring from an EDAM BAA facing emergency conditions and sinking in the EDAM BAA that failed the resource sufficiency evaluation.

LADWP believes more discussion is needed on this particular topic, specifically, clarity is needed on the failure consequences of the RSE test before this question can be answered.

It would be helpful to outline in more detail how this concept would work in practice. The design should consider how differing priority levels will actually be implemented by a BAA facing emergency conditions, and to ensure such an approach doesn’t compound an operational problem in real-time.

5. CONFIDENCE IN MARKET TRANSFERS: Please provide any additional comments on the topic of confidence in market transfers (occurring through the EDAM and WEIM).

LADWP believes market transfers need to be supported with firm or conditional firm transmission and prohibited from being resold in the bilateral market during EDAM market clearing or rescheduled if it has been used in the EDAM market solution.

6. TRANSMISSION COMMITMENT: Please provide your organization’s comments on the overall framework of transmission buckets in the context of making transmission available to the EDAM as described in section II.B.1 of the EDAM straw proposal.

One of the lessons learned from WEIM is that Transmission availability underpins the success of any expanded market initiative, without it, unacceptable and detrimental impacts to customers are likely to result.

LADWP appreciates the framing of the buckets given to the Transmission Commitment discussion. LADWP believes that making the maximum amount of transmission available to the market by 10am day-ahead will be critical to EDAM’s success.

Furthermore, unscheduled transmission made available to the market and used by the market should not be available for sale post EDAM market clearing, even if accommodated through redispatch as proposed in the straw proposal. Furthermore, a hurdle rate approach will lead to inefficient market solutions, therefore other approaches to revenue recovery need to be considered.

As such, instead of requiring unscheduled Bucket 2 rights to be made available to the market, we think Bucket 2 rights should be made available to the market on a voluntary basis with a reliance placed on the economic benefits of making unscheduled transmission available to the market.

However, unsold Bucket 3 rights should be made available to the market hurdle free and any unused transmission after EDAM clearing should be handed back to the Entity for potential sale. LADWP is open to discussing out-of-the market solutions for revenue recovery, but believes a zonal TAC for wheeling may offer a potential alternative for Bucket 3 revenue recovery.

All transmission rights irrespective of Buckets need to be considered firms rights and not recallable if used by the market, and have equal priority to Load if EDAM is to work.

Moreover, whether and how non-OATT transmission products (e.g. ETC rights holders etc.) are accommodated in the market needs to be discussed. Each transmission provider participating in the market needs flexibility to manage these non-OATT transmission products outside of the market assuming both the transmission provider and customer are not able to negotiate modifications.

Lastly, we want to make sure the proposed approaches do not result in unintended consequences on the NITs process or pseudo tied resources.

7. TRANSMISSION COMMITMENT: Please provide your organization’s perspective on Bucket 2 transmission and whether it should be made available to the EDAM only through a voluntary framework or through a more general rule that transmission unscheduled by 10am of the day ahead is automatically made available to the EDAM for optimization as described in the straw proposal.
Consider the implications of transmission customers retaining the ability to exercise those transmission rights between the day ahead and real time markets and the potential implications on redispatch.

Although a more general rule for Bucket 2 transmission where unscheduled transmission is automatically made available to the market by 10am, and precluded from being scheduled-on after EDAM clearing, will produce more optimal results. We do not believe this approach aligns with the voluntary nature of the market nor does it result in a balanced outcome for customers.

However, we believe the economic benefit compared to no compensation for unused rights will quickly entice right holders to voluntarily make unscheduled transmission available by 10am, even if the rights cannot be recalled. This approach will most likely strike the correct balance, and prevent an erosion of long-term OATT rights, a reduction in revenue needed for long-term transmission investment, and minimize the potential cost shifts between customer groups.

Further discussion is needed on how unscheduled rights are made available to the market by 10am. LADWP expects the ISO to have a role in that coordination, and it is not simply “a rights holder…. coordinating with the EDAM entity”.

8. TRANSMISSION COMMITMENT: Please provide your organization’s perspective on the compensation options for bucket 3 transmission described in the EDAM straw proposal.
More specifically, consider whether Bucket 3 transmission rates should be reflected in the market optimization through a direct hurdle rate or should the reduced transmission revenues be addressed outside of the market optimization through after the fact cost recovery.

Regarding the three approaches contemplated in the straw proposal:

Approach 1: Bucket 3 transmission rates should not be reflected in the market at the published tariff rates to avoid rate pancaking and inefficient optimization

Approach 2: Approach 2 could drive cost shifts and revenue shortfalls, which is not tenable for LADWP’s retail customers, who will bear the brunt of any shortfall. Bucket 3 also cannot be offered for free as it creates an incentive to avoid the bilateral market and rely on hurdle free transmission in the spot market.

Approach 3: LADWP appreciates the proposal of recovering Bucket 3 “out of the market”. This approach provides a starting point for further discussion. With that said, the implementation of this approach will be extremely challenging at best. Additionally, we have concerns regarding price formation and distorted dispatch results with Approach 3.

9. TRANSMISSION COMMITMENT: Please provide your organization's comments on the concept of Bucket 3 transmission costs being recovered outside of the market optimization, should the ISO through the EDAM process work toward a design for transmission revenue recovery, based on one of the options described (3A, 3B, 3C), in order to keep the EDAM entity whole as a result of EDAM participation.
Some questions to consider: are there additional variations to the described options; what should be the recoverable lost transmission revenues; how should the lost transmission revenues be allocated (or a transactional basis, across load in EDAM or to each EDAM entity to allocate to its customers); how do the described options impact bidding incentive in the EDAM market.

As indicated above in question 8, LADWP appreciates the proposal of recovering Bucket 3 “out of the market”, this approach provides a starting point for further discussion. However, implementation of such an approach will be extremely challenging at best. Additionally, we have concerns regarding price formation and distorted dispatch results with this approach.

As such, we lean toward a zonal TAC for wheeling that is transparent and aims to prevent a shift from the OATT to Spot market. Moreover, such an approach aids economic decision-making when comparing the spot to the bilateral market. LADWP looks forward to a much more detailed dialogue on this topic with data from the respective entities.

10. TRANSMISSION COMMITMENT: Please provide your organization’s comments on any other aspects of the transmission commitment in EDAM topic.

No further comments at this time.

11. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the process for conducting the EDAM RSE as described in section II.B.2 of the EDAM straw proposal.
This includes comments on the ability to conduct advisory RSE tests prior to the binding run, the timing of the RSE, the new tool, inputs, and other elements.

LADWP generally agrees with the construct outlined in the straw proposal, but would like to see more discussion around gas nominations, load forecasting and WSPP schedule C contracts.

EDAM will have significant transfers, but those transfers will not be known until 1pm at the earliest. Gas nominations are typically traded prior to that timeframe, and absent any change in market timelines or forecast of transfers an Entity will likely constrain its gas resource to mitigate risk rather than offer that resource to the market. LADWP appreciates the tools that are offered for use limited resources, but would like to have more discussion regarding gas nominations and net transfer forecasts. Additionally, LADWP would like to see Day+2 and Day+3 forecasts being made available to EDAM entities and having ISO look at the data in those forecasts to see if the data is robust.

Additionally, we would like to have more discussion on WSPP Schedule C contracts to see if there is a way to get source, sync and transmission information before 10am. Many entities have to obtain that information well in advance of their weekend set-up.

LADWP believes that there is a need to incentivize self-supplied Load Forecasts. In terms of ISO generated Load forecasts, LADWP believes these forecasts should be within a certain tolerance when comparing the 9am day-ahead forecast to the actual Load, and certainly no more than +/- 3%, otherwise entities are artificially punished with the level of imbalance reserve they will have to carry.

12. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposed treatment of WSPP Schedule C and like firm energy contracts within the EDAM RSE.
These arrangements are commonly relied upon across the west, including the ISO. The ISO proposed that these count toward the RSE by being self-scheduled and that these arrangements reduce the RSE obligation. Consider providing comments on whether these should be allowed to count in their current form (limited knowledge of source of supply or transmission quality); whether the market is expected to evolve toward providing more specific source information; how these firm energy contracts should be modeled (whether sourcing from adjoining BAA or another method); any additional considerations.

LADWP believes WSPP schedule C and like firm energy contracts should be counted in the RSE. At a minimum, the source should be known and identified prior to inclusion in the RSE. We recognize that this challenges the current paradigm, however, utilities are faced with this challenge today as they set-up for the weekend.

We are concerned about the workarounds that are employed to accommodate the lack of source/sync or transmission and its impact on congestion and pricing.

13. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s perspective on the ISO proposal, and associated reliance, on day ahead intertie bids (not associated with resource adequacy).
Some questions to consider: should these arrangements count toward the RSE; should these be monitored for performance and delivery; should additional criteria be imposed, such as an attestation, on these to provide an added level of confidence in performance.

LADWP recognizes the importance of inter-tie bids. However, we do not believe that they should be included in the RSE without the source of generation being known and there is some mechanism employed to ensure transmission has been secured even if that mechanism is after the market closes, but prior to the STUC run.

14. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the treatment of demand response and its different types and functions for purposes of passing the RSE.

LADWP agrees that demand response programs that do not align with the existing market model requirements should be allowed to be represented in the market through demand forecast adjustments.

Furthermore, we support limiting the volume of load bid into the EDAM to the load forecast minus the demand response adjustment. Lastly, we encourage ISO to include reporting requirements accessible by the DMM that demonstrate these adjustments are getting used appropriately.

15. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposed EDAM RSE failure consequences approach under which transfers would be allowed under an RSE failure at a penalty price.
Please comment on what an appropriate penalty price would be.

LADWP believes completely removing the ability to freeze transfers in the event the RSE is not passed by an EDAM entity is fundamentally flawed, incenting the wrong behavior and may potentially compromise reliability.

At a minimum, there needs to be a back stop where an EDAM entity will have its transfers frozen should it fail the RSE beyond a certain number of times – details TBD.

16. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposed EDAM RSE failure consequences approach which distinguishes the consequences depending upon whether the failure occurred under “normal conditions” as compared to “stressed system conditions.”
Please include consideration of potential different frameworks, how “stressed system conditions” can be defined; and any other perspectives on the structure of failure consequences and their impact on developing a robust RSE.

LADWP believes the consequences of failure cannot be limited to certain times of the year. The consequences should be applicable year-round as the opportunity to cure is more available during normal conditions, so an entity is less likely to be impacted by the failure consequence. This approach will undermine reliability in the system and incent the wrong behavior when it comes to long term investment decisions.

17. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the concept of a pooled WEIM RSE for entities passing the EDAM RSE, as described in the straw proposal and stakeholder meeting.

LADWP recognizes the benefits that come from the pooled WEIM RSE. However, does it make sense to introduce this concept at the outset of the market or wait until after EDAM go-live, once everything is proven to be stable, to then determine a date for diversity benefit implementation?

18. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provider your organization’s comments on any other elements of the EDAM RSE not raised by the questions above.

No further comments at this time

19. INTEGRATED FORWARD MARKET (IFM) AND RESIDUAL UNIT COMMITMENT (RUC): Please provide your organization’s comments on considerations related to the IFM and RUC as part of EDAM.
This includes consideration of the role of the RUC process as a critical component of the EDAM and the proposal that all supply offered into IFM is also offered in the RUC.

This includes consideration of the role of the RUC process as a critical component of the EDAM and the proposal that all supply offered into IFM is also offered in the RUC.

LADWP believes the RUC to be a critical component of the EDAM and believes both the IFM and the RUC should be applicable to EDAM participants.

20. INTEGRATED FORWARD MARKET (IFM) AND RESIDUAL UNIT COMMITMENT (RUC): Please provide your organization’s comments on the role of the imbalance reserve market product, currently being developed in the Day-Ahead Market Enhancements initiative, in the EDAM.

LADWP supports the imbalance reserve product, and the procurement of the product being part of EDAM. We further support the move to quantile regression.

LADWP recognizes the diversity benefit, and the unlikelihood of the highest level of uncertainty materializing simultaneously in all BAAs at the same time. With that said, consideration should be given to not applying the diversity at go-live and instead waiting for a demonstrated period of stability prior to capturing the diversity benefit.

21. MARKET POWER MITIGATION (MPM): Please provide your organization’s comments on the proposal to extend the WEIM market power mitigation framework to the EDAM and the further evaluation of potential market power mitigation enhancements within the Price Formation Enhancements initiative.

Market Power Mitigation should be discussed in conjunction with Price Formation and be taken out of the EDAM design discussions.

22. CONVERGENCE BIDDING: Please provide your organization’s comments on the proposal for a transition period under which convergence bidding is only a market feature in the ISO BAA and not available in other EDAM BAAs at the onset of the EDAM.

LADWP fully supports a transition period under which convergence bidding is only a market feature in the ISO BAA.

23. CONVERGENCE BIDDING: Please include any additional comments on the topic of convergence bidding within EDAM.

 No further comments at this time.

24. EXTERNAL RESOURCE PARTICIPATION: Please provide your organization’s comments on the ISO initial leaning toward extending the WEIM framework of external resource participation to the EDAM.
Under this framework the ISO would continue to allow source specific and non-source specific supply (intertie bids) to be economically offered into the ISO BAA. Non-ISO EDAM entities would continue to support source specific supply (pseudo-ties and dynamics), the self-scheduling of supply under contract, but intertie bidding would not be allowed at the intertie of the EDAM BAA.

LADWP can only support ISO’s framework if all ISO inter-tie bids are source specific. We also support not allowing intertie bidding at the intertie of an EDAM BAA, because of free ridership concerns. We would also ask for further conversation regarding self-schedules to see if an approach can be derived where there is a “perfect hedge”, but settlement for any energy deviation.

25. EXTERNAL RESOURCE PARTICIPATION: Please include any additional comments on the topic of external resource ability to participate in the EDAM.

No further comments at this time.

26. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s overall comments, including potential suggested enhancements, on the resource specific approach to GHG accounting as described in section II.E of the EDAM straw proposal.

LADWP would like to propose a hybrid of Resource Specific and the Zonal approach for unspecified imports into a GHG zone, which could accommodate the enhancements outlined in the resource specific approach.

27. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the resource specific’s approach use of the RSE solution as the counterfactual for measuring secondary dispatch.

The RSE provides a counterfactual for measuring secondary dispatch and although it does not include transmission constraints, the optimized result is comparable with most utilities’ optimization software. LADWP is concerned that an increased reliance on marginal cost of GHG may potentially cause a cost shift when compared to the bilateral market and would want to make sure that is not the case.

28. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the resource specific approach’s measures to limit secondary dispatch.

LADWP supports efforts to limit secondary dispatch with this approach. LADWP proposes that emissions from all dispatched generating resources should be captured in the GHG accounting. Capturing emissions from all dispatched resources including secondary dispatch will eliminate leakage.

29. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s overall comments, including potential suggested enhancements, on the zonal approach to GHG accounting as described in section II.E of the EDAM straw proposal.

LADWP does not support the hurdle rate concept within the Zonal approach, and has concerns that the hurdle rate concept will get rejected by FERC, and delay EDAMAs such, an alternative that leverages the Resource Specific approach while stopping deeming, removing PRSCs in non-GHG zones from any GHG obligations, and shifting the obligations to Load should be considered. 

30. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the design of the hurdle rate for the zonal approach.

LADWP believes the hurdle rate is discriminatory, and will preclude zero emitting resources from being dispatched into GHG zones when they are economical. Furthermore, it is impracticable to calculate a hurdle rate ahead of time that would be reflective of real time market emissions and allow for accurate settlement.

31. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the treatment of resources outside the GHG regulation area as internal to a GHG regulation area on a long-term or short-term basis, using the GHG pseudo tie functionality, in the zonal approach.

LADWP believes the GHG pseudo-tie concept is a workable concept. The Specified-source approach absent the GHG pseudo-tie concept will create a cost shift as all renewables that are specified will receive GHG payment even although they are zero emitting.

32. GREENHOUSE GAS ACCOUNTING: Please provide any additional comments on the GHG topic that were not captured by the questions above.

LADWP’s proposes a shift to Load Based Accounting that would leverage the Resource Specific approach and shares some similarities with the Zonal approach. A presentation describing LADWP’s proposal will be circulated separately. The key elements are as follows:

  • LADWP’s proposal combines resource specific treatment and a market-inserted GHG bid adder for purposes of optimizing dispatch in an environmentally responsible manner. It differs from the Zonal approach in that it does not use a hurdle rate.
  • Per FERC’s requirement, LADWP’s proposal allows participating resources in a non-GHG zone to elect to serve demand in a GHG zone.
  • In contrast to both the Resource Specific and the Zonal approaches, LADWP’s proposal eliminates deeming of unspecified imports to a GHG zone. Instead, a market average GHG emission rate calculated after-the-fact based on dispatched generating resources would be applied to market energy imported into a GHG zone. This approach will accurately account for GHG emissions instead of using a fixed default emission factor.
  • LADWP’s proposed approach would fully account for secondary dispatch, therefore no emission leakage.
  • Resource specific enhancements can still be implemented with LADWP’s proposal.
  • Load would be responsible for complying with GHG related requirements for any unspecified net import of market energy into a GHG zone.
  • Similar to the Zonal approach, Participating Resource Scheduling Coordinators (PRSCs) in non-GHG zones would no longer be burdened by GHG reporting and compliance requirements.
33. TRANSFER REVENUE ALLOCATION: Please provide your organization’s comments on the proposed transfer revenue allocation approach as described in section II.D.1 of the straw proposal and any other aspects of the transfer revenue allocation discussion topic.

LADWP would like to spend more time discussing and going through examples of transfer allocation. Additionally, LADWP would like the treatment of the PDCI and IPPDC to be explicitly addressed in the straw proposal.

34. SETTLEMENTS: Please provide your organization’s comments on settlements aspects of the EDAM described thus far, recognizing these will develop as the design evolves, as discussed in section II.D.2 of the EDAM straw proposal.

Similar to #33 LADWP would like further discussion and examples.

35. EDAM TECHNICAL WORKSHOPS: Please provide your organization’s comments on the upcoming EDAM technical workshops. Which key components of the straw proposal should be further discussed in EDAM technical workshops.
Please be as specific as you as possible.
  1. Bucket 3 compensation
  2. Bucket 2 unscheduled rights
  3. RSE failure consequences
  4. WSPP Schedule C source, sync and transmission information available to the market
  5. Non-source specific inter-tie bidding at ISO boundary
  6. LADWP’s GHG Accounting Proposal
  7. Priority of Exports to Load
  8. Projections of EDAM fees
  9. Gas nominations
  10. Extension of transitionary measures to a 12-month period
  11. ISO Load forecast accuracy targets of +/- 3% comparing day-ahead to actual
  12. Application of diversity benefit at go-live
  13. GHG treatment of specified resources
36. GENERAL COMMENTS: Please provide your organization’s comments on any other elements or aspects of the EDAM straw proposal.

No further comments at this time.

Middle River Power, LLC
Submitted 06/16/2022, 04:52 pm

Contact

Brian Theaker (btheaker@mrpgenco.com)

1. EDAM VOLUNTARY MODEL: Please provide your organization’s comments on the proposed structure of the EDAM voluntary participation model as described in section II.A.1 of the EDAM straw proposal.
2. EDAM FEES: Please provide your organization’s comments on the proposed framework of the EDAM fee structure as described in section II.A.2 of the EDAM straw proposal.
3. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on the concept of market transfers (occurring through the EDAM and WEIM) having equal priority to load to the extent an individual EDAM BAA faces severe emergency conditions as discussed in section II.A.3 of the EDAM straw proposal.
4. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on whether the failure of the day ahead resource sufficiency evaluation should have a bearing on the level of priority afforded to market transfers (EDAM and WEIM) souring from an EDAM BAA facing emergency conditions and sinking in the EDAM BAA that failed the resource sufficiency evaluation.
5. CONFIDENCE IN MARKET TRANSFERS: Please provide any additional comments on the topic of confidence in market transfers (occurring through the EDAM and WEIM).
6. TRANSMISSION COMMITMENT: Please provide your organization’s comments on the overall framework of transmission buckets in the context of making transmission available to the EDAM as described in section II.B.1 of the EDAM straw proposal.
7. TRANSMISSION COMMITMENT: Please provide your organization’s perspective on Bucket 2 transmission and whether it should be made available to the EDAM only through a voluntary framework or through a more general rule that transmission unscheduled by 10am of the day ahead is automatically made available to the EDAM for optimization as described in the straw proposal.
Consider the implications of transmission customers retaining the ability to exercise those transmission rights between the day ahead and real time markets and the potential implications on redispatch.
8. TRANSMISSION COMMITMENT: Please provide your organization’s perspective on the compensation options for bucket 3 transmission described in the EDAM straw proposal.
More specifically, consider whether Bucket 3 transmission rates should be reflected in the market optimization through a direct hurdle rate or should the reduced transmission revenues be addressed outside of the market optimization through after the fact cost recovery.
9. TRANSMISSION COMMITMENT: Please provide your organization's comments on the concept of Bucket 3 transmission costs being recovered outside of the market optimization, should the ISO through the EDAM process work toward a design for transmission revenue recovery, based on one of the options described (3A, 3B, 3C), in order to keep the EDAM entity whole as a result of EDAM participation.
Some questions to consider: are there additional variations to the described options; what should be the recoverable lost transmission revenues; how should the lost transmission revenues be allocated (or a transactional basis, across load in EDAM or to each EDAM entity to allocate to its customers); how do the described options impact bidding incentive in the EDAM market.
10. TRANSMISSION COMMITMENT: Please provide your organization’s comments on any other aspects of the transmission commitment in EDAM topic.
11. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the process for conducting the EDAM RSE as described in section II.B.2 of the EDAM straw proposal.
This includes comments on the ability to conduct advisory RSE tests prior to the binding run, the timing of the RSE, the new tool, inputs, and other elements.
12. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposed treatment of WSPP Schedule C and like firm energy contracts within the EDAM RSE.
These arrangements are commonly relied upon across the west, including the ISO. The ISO proposed that these count toward the RSE by being self-scheduled and that these arrangements reduce the RSE obligation. Consider providing comments on whether these should be allowed to count in their current form (limited knowledge of source of supply or transmission quality); whether the market is expected to evolve toward providing more specific source information; how these firm energy contracts should be modeled (whether sourcing from adjoining BAA or another method); any additional considerations.

California’s Resource Adequacy (“RA”) program is intended to provide the CAISO with the operational capability needed to maintain reliability.  The RA capacity providing that capability is required to offer into the CAISO’s spot energy and ancillary services markets; those markets are the mechanism by which RA capacity is operationalized.  Thus there is a strong, critical interaction between RA programs and the CAISO’s energy and ancillary service markets, which will include the Extended Day-Ahead Market. 

While non-resource-specific WSPP Schedule C contracts may have demonstrated a reasonable degree of dependability in the past, during a time in which there was a significant surplus of duration-unlimited capacity available in the Western Interconnection, it may be unwise to rely upon non-resource-specific contracts to dependably support reliability in today’s capacity-constrained system that now relies on a totally different resource mix..  In MRP's view, the CAISO’s position on the suitability of WSPP Schedule C contracts for the RSE does not seem to align with the CAISO’s relatively recent position in the California Public Utilities Commission’s RA proceedings on the need to specify import RA sources.   Moreover, not identifying actual generation sources will complicate the CAISO’s congestion management.  The topic warrants additional discussion. 

13. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s perspective on the ISO proposal, and associated reliance, on day ahead intertie bids (not associated with resource adequacy).
Some questions to consider: should these arrangements count toward the RSE; should these be monitored for performance and delivery; should additional criteria be imposed, such as an attestation, on these to provide an added level of confidence in performance.
14. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the treatment of demand response and its different types and functions for purposes of passing the RSE.
15. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposed EDAM RSE failure consequences approach under which transfers would be allowed under an RSE failure at a penalty price.
Please comment on what an appropriate penalty price would be.
16. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposed EDAM RSE failure consequences approach which distinguishes the consequences depending upon whether the failure occurred under “normal conditions” as compared to “stressed system conditions.”
Please include consideration of potential different frameworks, how “stressed system conditions” can be defined; and any other perspectives on the structure of failure consequences and their impact on developing a robust RSE.

MRP questions whether the RSE test, or the consequences of failing to pass the RSE test, should be completely different under “normal” or “stressed” conditions as a matter of policy.  The CAISO should not make the RSE test or the consequences for failing the RSE test completely different simply because system conditions are less stresed on one day than another.  Instead, the failure consequences should be similar; if the consequences are financial, those consequences should appropriately reflect the amount of system stress.  MRP notes that normal conditions can quickly become stressed system conditions due to unintended or unanticipated events.  Finally, MRP notes that one of the challenges of having different consequences based on whether conditions are “normal” or “stressed” is that doing do will require the CAISO to define very carefully and precisely what constitutes “normal” and “stressed” conditions. 

17. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the concept of a pooled WEIM RSE for entities passing the EDAM RSE, as described in the straw proposal and stakeholder meeting.
18. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provider your organization’s comments on any other elements of the EDAM RSE not raised by the questions above.
19. INTEGRATED FORWARD MARKET (IFM) AND RESIDUAL UNIT COMMITMENT (RUC): Please provide your organization’s comments on considerations related to the IFM and RUC as part of EDAM.
This includes consideration of the role of the RUC process as a critical component of the EDAM and the proposal that all supply offered into IFM is also offered in the RUC.
20. INTEGRATED FORWARD MARKET (IFM) AND RESIDUAL UNIT COMMITMENT (RUC): Please provide your organization’s comments on the role of the imbalance reserve market product, currently being developed in the Day-Ahead Market Enhancements initiative, in the EDAM.
21. MARKET POWER MITIGATION (MPM): Please provide your organization’s comments on the proposal to extend the WEIM market power mitigation framework to the EDAM and the further evaluation of potential market power mitigation enhancements within the Price Formation Enhancements initiative.
22. CONVERGENCE BIDDING: Please provide your organization’s comments on the proposal for a transition period under which convergence bidding is only a market feature in the ISO BAA and not available in other EDAM BAAs at the onset of the EDAM.

The CAISO’s efforts to straddle the fence by asserting that convergence bidding is an essential feature of a two-settlement market while also proposing to leave it out of Day 1 EDAM operations are not convincing.  The CAISO should implement convergence bidding footprint-wide on Day 1 of EDAM operations or make a compelling case as to why leaving out a key component of two-settlement markets is necessary, just and reasonable, and not unduly discriminatory.   MRP does not believe the CAISO has yet made such a case.  

23. CONVERGENCE BIDDING: Please include any additional comments on the topic of convergence bidding within EDAM.
24. EXTERNAL RESOURCE PARTICIPATION: Please provide your organization’s comments on the ISO initial leaning toward extending the WEIM framework of external resource participation to the EDAM.
Under this framework the ISO would continue to allow source specific and non-source specific supply (intertie bids) to be economically offered into the ISO BAA. Non-ISO EDAM entities would continue to support source specific supply (pseudo-ties and dynamics), the self-scheduling of supply under contract, but intertie bidding would not be allowed at the intertie of the EDAM BAA.
25. EXTERNAL RESOURCE PARTICIPATION: Please include any additional comments on the topic of external resource ability to participate in the EDAM.
26. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s overall comments, including potential suggested enhancements, on the resource specific approach to GHG accounting as described in section II.E of the EDAM straw proposal.
27. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the resource specific’s approach use of the RSE solution as the counterfactual for measuring secondary dispatch.
28. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the resource specific approach’s measures to limit secondary dispatch.
29. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s overall comments, including potential suggested enhancements, on the zonal approach to GHG accounting as described in section II.E of the EDAM straw proposal.
30. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the design of the hurdle rate for the zonal approach.
31. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the treatment of resources outside the GHG regulation area as internal to a GHG regulation area on a long-term or short-term basis, using the GHG pseudo tie functionality, in the zonal approach.
32. GREENHOUSE GAS ACCOUNTING: Please provide any additional comments on the GHG topic that were not captured by the questions above.
33. TRANSFER REVENUE ALLOCATION: Please provide your organization’s comments on the proposed transfer revenue allocation approach as described in section II.D.1 of the straw proposal and any other aspects of the transfer revenue allocation discussion topic.
34. SETTLEMENTS: Please provide your organization’s comments on settlements aspects of the EDAM described thus far, recognizing these will develop as the design evolves, as discussed in section II.D.2 of the EDAM straw proposal.
35. EDAM TECHNICAL WORKSHOPS: Please provide your organization’s comments on the upcoming EDAM technical workshops. Which key components of the straw proposal should be further discussed in EDAM technical workshops.
Please be as specific as you as possible.

As noted in these comments, MRP suggests holding additional technical workshops on convergence bidding and on how WSPP Schedule C contracts will factor into the RSE. 

MRP notes that the CAISO will discuss market power mitigation on a Balancing Authority Area level in the price formation initiative and looks forward to that discussion. 

MRP also suggests the CAISO further consider (1) external resource participation;(2) GHG accounting; and (3) transmission allocation/transfer revenue in separate technical workshops.

36. GENERAL COMMENTS: Please provide your organization’s comments on any other elements or aspects of the EDAM straw proposal.

NIPPC
Submitted 06/16/2022, 02:47 pm

Submitted on behalf of
NIPPC

Contact

Henry Tilghman (hrt@tilghmanassociates.com)

1. EDAM VOLUNTARY MODEL: Please provide your organization’s comments on the proposed structure of the EDAM voluntary participation model as described in section II.A.1 of the EDAM straw proposal.
2. EDAM FEES: Please provide your organization’s comments on the proposed framework of the EDAM fee structure as described in section II.A.2 of the EDAM straw proposal.
3. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on the concept of market transfers (occurring through the EDAM and WEIM) having equal priority to load to the extent an individual EDAM BAA faces severe emergency conditions as discussed in section II.A.3 of the EDAM straw proposal.
4. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on whether the failure of the day ahead resource sufficiency evaluation should have a bearing on the level of priority afforded to market transfers (EDAM and WEIM) souring from an EDAM BAA facing emergency conditions and sinking in the EDAM BAA that failed the resource sufficiency evaluation.
5. CONFIDENCE IN MARKET TRANSFERS: Please provide any additional comments on the topic of confidence in market transfers (occurring through the EDAM and WEIM).
6. TRANSMISSION COMMITMENT: Please provide your organization’s comments on the overall framework of transmission buckets in the context of making transmission available to the EDAM as described in section II.B.1 of the EDAM straw proposal.

NIPPC Requests that Future Straw Proposals Related to EDAM Include More Detail

 

NIPPC appreciates the CAISO’s efforts to develop an overall structure for a day ahead market for the footprint of its Energy Imbalance Market. NIPPC understands the logic of outlining the broad framework of a market before addressing specific details. But further details are still needed. NIPPC’s members continue to have questions about how market participants who are not also transmission owners (or Balancing Authorities with load) would actually transact in the EDAM. These specific questions encompass how non-Transmission Owners would actually transact in the market, including scheduling mechanisms, exercise of transmission rights and bilateral market options while the EDAM processes are running (10am to 1pm), and other implications for ongoing bilateral transactions occurring outside of and parallel to EDAM.

 

NIPPC encourages the CAISO to provide significantly more detail in future iterations of the straw proposal regarding the specific details of how the EDAM will work – not only for transmission owners but for all market participants. To this end, NIPPC encourages the CAISO to consider holding a technical workshop to explore examples of transactions and scheduling processes for forward transactions, EDAM transactions, and hourly transactions after the close of EDAM. 

7. TRANSMISSION COMMITMENT: Please provide your organization’s perspective on Bucket 2 transmission and whether it should be made available to the EDAM only through a voluntary framework or through a more general rule that transmission unscheduled by 10am of the day ahead is automatically made available to the EDAM for optimization as described in the straw proposal.
Consider the implications of transmission customers retaining the ability to exercise those transmission rights between the day ahead and real time markets and the potential implications on redispatch.

OATT Long Term Firm Transmission Service provides certainty to both transmission customers and transmission providers

 

Today, NIPPC members and other marketers control large portfolios of transmission rights to ensure that they have access to markets for their energy. Much of this transmission is secured under Long Term Firm Point to Point Transmission Service. The attributes of Long Term Firm Point to Point Service meet the needs of transmission customers and the loads they serve. The “Firm” attribute assures both the buyer and the seller that the schedule will not be curtailed except under specific conditions. The “Long Term” attribute guarantees the transmission customer access to its desired market now and into the future. OATT providers also benefit from the sale of Long Term service. In order to ensure long term access to their markets, transmission customers execute transmission service agreements for terms of at least five years – and in many cases longer. These long term commitments to take transmission service benefit OATT transmission providers by giving greater them certainty of cost recovery when setting rates for their transmission revenue requirements. 

In many cases, particularly on BPA’s transmission system, long term transmission right holders also have the ability to redirect their transmission from one potential market to another on a short term basis. This additional flexibility makes the long term transmission right even more valuable to customers.

The EDAM straw proposal will likely lead to changes in the existing paradigm for the cost recovery of transmission revenue requirements for OATT providers. Under the CAISO’s EDAM straw proposal, customers’ Long Term Firm Point to Point rights will likely become less valuable. As those rights become less valuable, existing customers will likely forego renewing those rights. Over time and as Long Term Point to Point contracts contribute less to the cost of the transmission system, OATT transmission providers will shift cost recovery to other transmission products. 

Why does NIPPC believe that under EDAM’s straw proposal long term firm transmission rights will become less valuable? 

 

Currently, transmission customers who want reliable access to a market (or markets) hold long term firm point to point transmission rights. This service assures them they will have access to their preferred market at all times of the day and at all times of the year in the absence of some contingency. On BPA’s system, these rights have the added value of being relatively easy to redirect to other markets as needed. Under the EDAM straw proposal, however, the value of long-term firm point to point service will change.

The EDAM straw proposal identifies three “buckets” of transmission. Bucket 1 consists of transmission rights that support an EDAM Entity’s Resource Sufficiency Evaluation metric. The primary burden of designating Bucket 1 transmission is the EDAM entity (or the balancing area with the load service obligation). NIPPC recognizes that transmission customers who market energy and capacity resources may retain their Long-Term Firm Point to Point rights if they can consistently and reliably package their transmission rights as part of their ability to deliver resource adequacy attributes to customers in different balancing areas. But the burden of designating Bucket 1 transmission rights is on the load; NIPPC suggests that loads will prefer to hold the transmission rights needed for Bucket 1 transmission on neighbors’ systems in their own name in order to expand their options for resource sufficiency products.

If a marketer is unable to package its generation and transmission into a product that satisfies Bucket 1, the sole remaining option is Bucket 2. Under the straw prop