Comments on Revised Straw Proposal

Extended day-ahead market

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Comment period
Aug 31, 05:00 pm - Sep 26, 05:00 pm
Submitting organizations
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ACP-California
Submitted 09/26/2022, 03:21 pm

Submitted on behalf of
ACP-California

Contact

Caitlin Liotiris (ccollins@energystrat.com)

1. GENERAL COMMENTS: Please provide a summary of your organization’s comments on the Extended Day-Ahead Market revised straw proposal:

The need for increased coordination across the West is both great and urgent, as the grid undergoes significant changes that increase the necessity of sharing regional diversity of load and resources. To meet this need, it is imperative that EDAM move forward in as timely a fashion as possible to provide the necessary “next step” in Western coordination. ACP-California strongly supports the expansion of organized wholesale markets in the West, including EDAM. We express our deep appreciation to the CAISO team for the significant work that has been put into EDAM’s development so far, including tackling complex issues related to the interaction of the Open Access Transmission Tariff (OATT) and CAISO frameworks. In these comments on the EDAM Revised Straw Proposal, we offer comments and request additional information in several areas, primarily focused on the impact to third-parties that own transmission rights and ensuring that, within EDAM, the value of those transmission rights can be maintained. Maintaining the value of existing transmission rights is important under the incremental EDAM framework, which does not fully transition to an RTO, and this issue is vital to Transmission Customers and Transfer Providers alike. We therefore urge follow-up workshops and discussions on this topic in order to keep the EDAM proposal on schedule.

ACP-California appreciates CAISO’s coordination and collaboration with stakeholders in developing the EDAM Revised Straw Proposal. However, we remain concerned about the uncertainty and impacts of EDAM in a number of areas. ACP-California requests additional discussion and market design improvements in several key areas:

  1. EDAM must provide appropriate protections for Transmission Customers within EDAM in order to help retain the value of transmission rights within and across the EDAM footprint. At present, the proposed market design not meet this need. A variety of additional discussions are necessary and several solutions should be explored in more detail:
    1. EDAM should ensure that Transmission Customers who donate their transmission for use by EDAM (including through Bucket 2, Pathway 2) have, to the greatest extent possible, direct settlement relationships with CAISO. This will incent more transmission to be provisioned in this manner, increasing EDAM’s benefits. The settlement for Transmission Customer that provide transmission in this way should include direct allocation from CAISO of both congestion and transfer revenue. This will reduce the substantial uncertainty that presently exists regarding allocations of congestion revenue by EDAM Entities and will increase the benefits of provisioning transmission in this manner.
    2. EDAM should ensure that Transmission Customers who do not donate their transmission for use to EDAM are kept whole if there is an uplift that results from scheduling on their transmission between day-ahead and real-time. At present, there is no assurance this type of scheduling will receive the appropriate uplift allocations, which may devalue transmission rights in EDAM areas. CAISO should convene a technical workshop to develop the appropriate mechanisms to keep Transmission Customers whole when they schedule on rights that were not donated to EDAM between day-ahead and real-time.
      1. Given the current uncertainty and potential that this issue will not be adequately addressed at initial go-live of EDAM, CAISO should consider the development of an “opt-out” option. This option would enable Transmission Customers to opt-out of providing their transmission to EDAM. Ideally, an “opt-out” provision would allow Transmission Customers to continue to operate under the status quo, which CAISO’s proposed “Bucket 2, Pathway 1” self-scheduling option does not appear to provide, given that it does not offer a clear pathway for Transmission Customers to be kept whole for schedule changes between day-ahead and real-time.
  2. CAISO should condense Bucket 1 and Bucket 2 transmission into a single bucket and focus additional discussions on the three pathways that transmission could be provisioned under this new bucket (while continuing forward with the general framework for Bucket 3).
  3. Additional discussions are required on how resources can demonstrate delivery within and through EDAM. Demonstration of delivery of a specific resource to load within EDAM will continue to be necessary under the EDAM construct for a variety of reasons, including delivery requirements under the California RPS. CAISO should work with stakeholders to provide specific examples and explicit mechanisms to illustrate how resources within EDAM BAAs might be able to demonstrate delivery.

While it is not a perfect market design, given the urgency of the need for greater regional collaboration, we support the expedited design of EDAM and encourage CAISO to move forward with seeking Board and EIM Governing Body approval of design elements where it has significant consensus at the end of 2022. As part of that approval, CAISO could leave some design elements outstanding, where necessary. For those outstanding elements, CAISO should commit to further exploration of details and issues through the ongoing tariff process and a continued stakeholder initiative. Key areas that CAISO could commit to further work include: 1) appropriate mechanisms to retain the value of transmission under EDAM; and 2) development of a solution for demonstrating delivery of resources to load to meet various rules and regulations (including the delivery requirements of the California RPS). This type of an extended process may enable EDAM to continue to move towards implementation, while allowing for more time for evaluation of elements of the proposal where there significant stakeholder questions and concerns remain.

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 EDAM market design.

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

ACP-California supports the expansion of Western organized wholesale markets, with a hope that the incremental market development represented by EDAM will continue, ultimately culminating with a Western RTO. 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. 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 Revised Straw Proposal. However, we note that the voluntary participation option, at present, only applies at the BAA level which may be problematic if critical issues are not addressed. In this section, ACP-California also points out the importance of the concept of “Base Scheduling” for documentation purposes and the need for more certainty on how resources can demonstrate delivery of a specific resource to a specific load under EDAM.

The Revised Straw Proposal would generally require complete EDAM participation for all generation, load and transmission within an EDAM BAA. This construct should maximize EDAM’s benefits and move the West closer to a fully flow-based transmission paradigm, which are goals ACP-California supports. However, many of the critical components of the market design will be left to individual EDAM Entities to implement, including congestion revenue allocation, charge code allocations, and potential requirements for loads/generators under the new EDAM construct. The provisions of EDAM Entity tariffs may have substantial implications for the loads, generators and Transmission Customers in these BAAs, who will not have a choice of whether or not to participate in this “Voluntary” market. Given this dynamic, we urge CAISO to include as many elements of the EDAM market design in the CAISO tariff as possible. And, as ACP-California has discussed in the governance discussions, we support a role for the EDAM Governing Body in reviewing EDAM Entity tariffs to ensure they are consistent with the overall market design.

Additionally, while not ideal for market optimization and a transition to flow-based transmission, given the current uncertainty of the impact of EDAM on Transmission Customers, it may be necessary to explore the development of a pathway Transmission Customers within an EDAM BAA to determine whether or not they wish to participate in EDAM or if they would like to “opt out.” This would extend the “voluntary” nature of the program to not only BAAs, but also to certain customers within EDAM BAAs. Exploration of this voluntary option should include additional optionality, above and beyond the “self-scheduling of supply with existing transmission rights” that CAISO describes in the Revised Straw Proposal and should enable those opting out to use their transmission rights in day-ahead and real-time without EDAM settlement implications. 

Finally, with respect to the concept of Base Scheduling and demonstrating/documenting delivery of resources, additional discussions and examples are necessary. Within EDAM, because BAAs are not being consolidated, delivery of specific resources to specific loads/BAAs will be necessary. Notably, within EDAM renewable resources located outside of California that deliver to California LSEs under Portfolio Content Category (PCC) #1 of the California RPS will continue to require demonstration of their delivery to CAISO. To date in the EDAM discussions, we have not heard of a clear mechanism for resources whose BAA elects to join EDAM to demonstrate their delivery to CAISO. We also continue to request clarification on how dynamic schedules and pseudo-ties delivering to CAISO today would demonstrate such delivery if their host BAA, or an intermediary BAA, is part of EDAM. It is imperative that there is a clear pathway for demonstrating delivery of resources to CAISO within EDAM in order to meet requirements of existing contracts and regulatory requirements.

Similarly, ACP-California supports additional discussions on the concept of Base Scheduling for documentation purposes within EDAM, as there will continue to be a need for demonstration of delivery of resources under EDAM and the concept of Base Scheduling (which should be distinct from self-scheduling) deserves further exploration. In any event, CAISO should provide assurances that necessary documentation frameworks will be designed within EDAM, whether they are called “Base Schedules” or something else, the functionality of documenting delivery of resources to specific BAAs will continue to be important under the EDAM framework.

3. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on the topic of confidence in market transfers design as discussed in section II.A.2 of the EDAM revised straw proposal. In particular, please provide comments regarding the different design elements supporting confidence in transfers including the application of the market parameters preventing the propagation of shortfalls and the associated outcomes illustrated in the examples.

ACP-California does not have specific comments on “Confidence in Market Transfers” at this time, but notes the importance of providing confidence in transfers in ensuring that EDAM benefits are maximized and expresses our appreciation for CAISO’s efforts on this topic to date.  

4. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on the topic of equal priority between market transfers and load in edge reliability scenarios, as effectuated in the operational timeframe, informed by operator discretion and good utility practice, as discussed in section II.A.2 of the EDAM revised straw proposal.

ACP-California does not have substantive comments on “Confidence in Market Transfers” at this time. As stated above, confidence in transfers is critical to ensuring that EDAM benefits are maximized. Generally, equal priority between market transfers and load in edge reliability scenarios should help enhance confidence in EDAM transfers.  

5. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on the proposal and effectuation of lower priority market transfers sinking in an EDAM BAA that has failed the day ahead RSE or otherwise is not part of the WEIM RSE pool as discussed in section II.A.2.d of the EDAM revised straw proposal.

ACP-California does not have substantive comments on this topic at this time.

6. TRANSMISSION COMMITMENT: Please provide your organization’s comments on the overall framework of transmission commitment in EDAM, including the framing of how transmission is made available through the concept of the transmission “buckets” as described in section II.B.1 of the EDAM revised straw proposal.

Initially, within the EDAM proposal, the three-bucket framework for transmission provision appeared logical and reasonable. However, under the current proposal for the “buckets” of transmission commitment, the differentiation of Bucket 1 and Bucket 2 now appears unnecessary. The distinction only appears to serves to distinguish between “who” is donating transmission and creates unnecessary and problematic differences in requirements for provisioning transmission to the market for EDAM Entities themselves and for other/third-party Transmission Customers. Whether transmission is provisioned for use by an EDAM Entity (via Bucket 1) or by another Transmission Customer (via Bucket 2, Pathway 2), there should be comparable treatment, including the same deadlines for submitting that transmission availability to CAISO. Unfortunately, as currently designed, there are very different requirements, including a much earlier submission deadline for Transmission Customers wishing to provide their transmission for use by EDAM. This creates the potential for inequities and the shifting of risks between different types of market participants. ACP-California agrees with other stakeholders that have suggested “condensing” Buckets 1 and 2 into a single bucket. Transmission in this new, combined bucket could use one of the three pathways described under the current Bucket 2 proposal in order to become available to EDAM. This would ensure comparable treatment and uniform deadlines regardless of whether the transmission is given by an EDAM Entity itself or by a transmission customer.

More specific comments around Bucket 2 and the utilization of transmission rights between the day-ahead and real-time are provided in response to the subsequent questions on transmission commitment.

7. TRANSMISSION COMMITMENT: Please provide your organization’s perspective on Bucket 2 transmission and the pathways for how transmission customers can exercise their transmission rights, whether secured under the OATT or under legacy arrangements, or how otherwise those transmission rights are made available to the market as described in section II.B.1 of the revised straw proposal.

As discussed above, absent a clear justification for not doing so, CAISO should condense Buckets 1 and 2 into a single bucket and hold additional discussions on the three pathways for transmission to become available to EDAM under this new, combined bucket.

Under the current proposal for Bucket 2, Pathway 1 provides an option for self-scheduling of transmission rights in EDAM, such that the transmission rights are not available for EDAM optimization. However, unless an entity is able to perfectly follow its day-ahead self-schedule, it will remain subject to settlements for real-time deviations under the EDAM framework. We urge CAISO to hold additional discussions on how Transmission Customers within EDAM can rely on their transmission rights to keep them whole not only when used in day-ahead but also when modifications to those schedules are made in real-time. Without these assurances, the value of holding transmission rights (including long-term rights) in EDAM will be greatly diminished which will, ultimately, serve to create transmission cost shifts that the EDAM market design has not been structured to recover. We urge CAISO to work with stakeholders to develop an allocation mechanism that keeps Transmission Customers whole when exercising their transmission rights between day-ahead and real-time. Additionally, it may be necessary, at least initially in EDAM, to develop an option for those with eligible transmission rights to “opt-out” of market participation entirely and avoid settlement under EDAM. We support further exploration of an opt out option.

Bucket 2, Pathway 2 provides an option for Transmission Customers that are not LSEs themselves (and thus not subject to the RSE) to provide their transmission rights for use in EDAM. ACP-California appreciates that CAISO has provided, under this option, eligibility for direct transfer revenue settlement from the ISO. This provides additional certainty to Transmission Customers and reduces the risks of this transfer revenue not getting properly allocated to the customer by the EDAM Entity. We support expansion of the direct settlement with CAISO to include not only transfer revenue but also congestion revenue. This would increase the attractiveness of this option for Transmission Customers by providing a much more direct risk mitigation tool for Transmission Customers within EDAM than is available with suballocation of congestion revenues from EDAM Entities (which are uncertain and could vary by EDAM Entity). ACP-California also supports CAISO’s efforts to allow Bucket 2, Pathway 2 to be shaped on an hourly basis across a 24-hour horizon, as mentioned in the Revised Straw Proposal.

Bucket 2, Pathway 3 serves to provision unscheduled and undonated firm/conditional firm transmission rights to EDAM for use. This will help to increase the transmission capacity available for EDAM optimization. CAISO indicates that under Pathway 3, transmission rights holders may schedule on their transmission between day-ahead and real-time but would be subject to congestion costs (which would be allocated by the EDAM Entities) and the transmission rights would become a lower priority. While ACP-California applauds CAISO for seeking to maximize the transmission capacity available to EDAM in order to increase the benefits provided by the market, this proposal raises a number of concerns, including the potential to devalue longer-term transmission rights within EDAM BAAs. 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.” To help mitigate impacts on the value of transmission rights within EDAM, ACP-California recommends that CAISO work with stakeholders to seek to develop a solution. Solutions might include a make-whole payment to Transmission Customers who elect to exercise their transmission rights in real-time. Additionally, (as discussed above under Bucket 2, pathway 1) another option that should be explored is allowing entities to “opt-out” of provisioning their transmission to EDAM. It is notable that an option to opt out could help mitigate concerns around the Bucket 2, Pathway 3 proposal, by providing an alternative option for those who seek to retain use of their transmission rights in day-ahead and in real-time. Over time, this opt-out provision could be slowly phased out or, ideally, market participants will realize the value of market participation and will not choose to utilize the “opt-out” option after gaining experience with EDAM. But it would provide increased optionality that may be necessary to garner additional support for EDAM. To address concerns with Bucket 2, Pathway 3, ACP-California recommends continued exploration of make-whole payments, opt-out provisions and other solutions through the ongoing EDAM stakeholder process.

8. TRANSMISSION COMMITMENT: Please provide your organization’s perspective on how ISO transmission is made available to the EDAM under the transmission commitment design.

At this time, ACP-California does not have specific comments on how ISO transmission is made available to EDAM. But we look forward to continued discussion on transmission commitment overall.

9. TRANSMISSION COMMITMENT: Please provide your organization's comments on the transmission revenue requirement (TRR) recovery framework design which is intended to allow for recovery of certain transmission revenues to keep the transmission provider whole from a historical TRR perspective in the EDAM as described in section II.B.1 of the revised straw proposal.
Consider comments on the three different proposed components of the EDAM recoverable TRR and the proposed methods of allocating the TRR shortfall, along with other elements of the design.

ACP-California generally supports the structure for TRR revenue requirement included in the Revised Straw Proposal. And we commend CAISO for working towards a proposal that does not require hurdle rates in the market optimization in order to address these transmission compensation issues. We also commend CAISO for development of a proposal that might help reduce the volume of costs recovered under this mechanism over time, helping move along a “glide path” to an RTO framework for transmission compensation. While ACP-California does not have a position on the proposed compensation for “net wheel-through” entities, we support continued discussions on this topic.

With respect to collecting the TRR shortfall, ACP-California recommends these costs be recovered from load, rather than from load and supply. Allocation of these costs to supply-side resources creates inherent uncertainty for supply-side resource which will likely need to seek to recover these costs through energy bids. This has the potential to decrease the efficiency of EDAM and, in the end, load will bear the costs in the form of higher bids from all supply-side resources. It would therefore be more straightforward and efficient to recover the costs directly from load.

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

As discussed in the responses to prior questions, ACP-California recommends the following modification to transmission commitment in EDAM:

  1. Enhancements to the EDAM proposal must be made to provide appropriate protections for Transmission Customers within EDAM in order to help retain the value of transmission rights within and across the EDAM footprint. At present, the proposed market design not meet this need. A variety of additional discussions are necessary and several solutions should be explored in more detail, including:
    1. EDAM should ensure that Transmission Customers who donate their transmission for use by EDAM (such as through Bucket 2, Pathway 2) have, to the greatest extent possible, direct settlement relationships with CAISO. This should include direct allocation from CAISO of both congestion and transfer revenue.
    2. EDAM should ensure that Transmission Customers who do not donate their transmission for use to EDAM are kept whole if there is an uplift that results from scheduling on their transmission between day-ahead and real-time.
      1. Given the current uncertainty and potential that this issue will not be adequately addressed at initial go-live of EDAM, CAISO should consider the development of an “opt-out” option for transmission customers to opt-out of providing their transmission to EDAM.
  2. CAISO should condense Bucket 1 and Bucket 2 transmission into a single bucket (with three pathways). This will ensure equitable treatment and uniform requirements for transmission commitment for EDAM Entities and other transmission rights holders.

As we have noted, 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.” We believe additional stakeholder discussion and workshops are necessary to ensure the EDAM design achieves this goal.  

11. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the design of the proposed application that will be used to conduct the EDAM RSE as described in section II.B.2 of the EDAM revised straw proposal.
This includes comments on the ability to conduct advisory RSE tests prior to the binding run, the timing of the RSE, test inputs, test obligation, the decision not to include transmission constraints within the EDAM RSE as well as any other relevant elements.

ACP-California does not have substantive comments on this topic at this time.   

12. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposed treatment of firm energy contracts where the source/transmission may not be known in advance of the market run (i.e. WSPP Schedule-C supply contracts) within the EDAM RSE.
Consider comments on if the proposed requirement for the submission of day-ahead e-tags, the potential to be removed from the pooled WEIM RSE, as well as monitoring to provide a sufficient level of confidence in these types of supply arrangements. Additionally, consider the proposed modeling of these arrangements as “bucket 1” transfers, along with the potential pricing impacts in the source BAA and the potential to utilize BAA-to-BAA transmission between the source and sink BAA.

ACP-California does not have substantive comments on this topic at this time.   

13. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s perspective on the ISO proposal for counting in the EDAM RSE import bids made at the CAISO BAA boarder with a non-EDAM BAA.

ACP-California does not have substantive comments on this topic 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.

ACP-California does not have substantive comments on this topic at this time.   

15. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposal to make available advisory D+2 market results (day ahead + 2 market run) to help inform gas procurement and manage gas resource participation in the day ahead market.
Consider commenting on any additional potential enhancements or changes to this market run which could increase its accuracy.

ACP-California does not have substantive comments on this topic at this time. However, to increase transparency, CAISO should ensure that all market participants (not just EDAM Entities) have access to any advisory runs that are performed as part of EDAM.  

16. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on whether the proposal to cure resource insufficiencies through the EDAM market at an administrative surcharge provides incentive to cure shortfalls prior to participating in the EDAM.
Please comment on the proposed requirement to cure through the market, the block surcharge, as well as the potential to credit against the surcharge any market energy prices. In addition, please comment on the proposed revenue allocation, and CAISO BAA specific sub-allocation for this surcharge.

ACP-California does not have substantive comments on this topic at this time.

17. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposal to stand up an hourly bid-range trading platform.

ACP-California does not have substantive comments on this topic at this time.

18. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the utilization of a pooled WEIM RSE for entities passing the EDAM RSE, as described in the revised straw proposal.
Please comment on the criteria for exclusion from the pooled WEIM RSE, the proposal to withhold a configurable quantity of imbalance reserves to be utilized for benefit of the EDAM footprint, and the preferred approach for the pooled WEIM RSE following a potential failure of the pool in the WEIM.

ACP-California does not have substantive comments on this topic at this time.

19. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on two introduced mechanisms for consideration that further allow a BAA to manage its resources: (1) mechanisms to manage supply in excess of RSE, and (2) consideration of a net EDAM transfer export limit constraint as described in the revised straw proposal.
Please consider commenting on the value and need for these mechanisms for individual BAAs along with other design elements that should be considered in enhancing or modifying these mechanisms to address the issues described.

ACP-California does not have substantive comments on this topic at this time. However, we note that to the extent a net EDAM transfer export limit constraint is utilized, the provisions for use and implementation of these limits should be transparent, including public posting of any limits in a timely manner.   

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

ACP-California does not have substantive comments at this time.  

21. INTEGRATED FORWARD MARKET (IFM) AND RESIDUAL UNIT COMMITMENT (RUC): Please provide your organization’s comments on the IFM and RUC design as described in sections II.C.2 and II.C.3 of the EDAM revised straw proposal.

ACP-California does not have substantive comments at this time.  

22. 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 continued evaluation of potential market power mitigation enhancements within the Price Formation Enhancements initiative, which is currently ongoing, as described in section II.C.4 of the EDAM revised straw proposal.

ACP-California does not have substantive comments at this time.  

23. CONVERGENCE BIDDING: Please provide your organization’s comments on the proposal on convergence bidding in the EDAM and the associated transition period approach being proposed as described in section II.C.5 of the EDAM revised straw proposal.

ACP-California has some concerns with having some portions of the market utilize convergence bidding while others do not (at least initially), as currently proposed. However, we recognize the potential benefits to EDAM Entities from the use of a transition period to implement convergence bidding. ACP-California appreciates that CAISO will be monitoring for impacts and unintended consequences from the lack of convergence bidding in EDAM Entities at the beginning of their participation. We would encourage a regular report (perhaps quarterly) from CAISO and DMM on this topic as the market begin operations. 

24. EXTERNAL RESOURCE PARTICIPATION: Please provide your organization’s comments on the proposal for external resource participation in the EDAM, as described in section II.C.6 of the EDAM revised straw proposal.

Allowing for greater 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 more expansive external resource participation than currently proposed raises a set of questions and design challenges that may be difficult to address prior to the initial go-live of the market. Thus, ACP-California will not oppose an EDAM market design that, initially, excludes several types of external resource participation as long as this issue is revisited, in-earnest, at a date-certain after EDAM implementation.

We also request that CAISO clarify that non-source specific, non-contracted supply could self-schedule through the EDAM market if it has transmission rights to do so. Table 9 of the Revised Straw Proposal indicates that non-source specific, non-contracted supply cannot economically bid or self-schedule in EDAM. However, entities that have transmission rights through EDAM should be able to self-schedule through the market to deliver their output outside of EDAM and we recommend Table 9 be modified to make that clear in order to better provide for the continuation of OATT rights under EDAM.

ACP-California continues to request that CAISO clearly document that dynamically transferred resources (dynamic schedules and pseudo ties) from within 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). We also request additional discussions on how non-dynamic resources can demonstrate delivery to CAISO in order to meet delivery requirements of the California RPS. At present, under the EDAM Revised Straw Proposal, it appears as though the only option for resources to deliver 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 resources from within or through EDAM to CAISO, then we encourage CAISO to explore other options, including the development of a “Base Schedule” for documentation purposes that could demonstrate a resource was scheduled specifically to serve a designated load within EDAM.

25. 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.C.7 of the EDAM revised straw proposal.

ACP-California does not offer specific comments on GHG accounting within EDAM. We note that it will be important for CAISO to remain agile in addressing GHG accounting, such that it can align the market solution with the requirements of state regulators and address any seams that may arise. We encourage ongoing discussions on the GHG solution as the market moves towards operations and on a regular basis once it has been stood up.

26. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the use of the GHG Reference Pass as the GHG counterfactual.

ACP-California does not offer specific comments on the GHG counterfactual run, except to reiterate its importance in approximating how resources would be used to serve native load. The goal of the GHG counterfactual should be to approximate this and not to precisely determine a counterfactual dispatch solution.

27. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the attribution data reported as a part of the resource specific approach, and if or what additional information would provide transparency.

ACP-California does not offer specific comments at this time, but supports efforts to increase transparency around GHG attribution and accounting. 

28. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s overall comments, including potential suggested enhancements, on the zonal proposal.

ACP-California does not offer specific comments at this time, but supports continuing discussions on the merits of a zonal GHG approach. 

29. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s overall comments, including potential suggested enhancements, on the LADWP proposal.

ACP-California does not offer specific comments at this time.

30. GREENHOUSE GAS ACCOUNTING: Please provide any other feedback on GHG accounting not captured by the questions above.

ACP-California does not have any additional comments at this time. 

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

ACP-California continues to request:

  1. To the extent possible, CAISO should create more options for direct transfer/congestion revenue allocation from CAISO to generators/transmission customers/load, including implementing direct transfer and congestion revenue allocation for Bucket 2, Pathway 2. 
  2. That there be additional discussion on allocation of congestion/transfer revenues from BAAs/Transmission Providers to their own customers and development of a “standard” approach to this type of suballocation to provide additional certainty to customer and consistency across the EDAM footprint.

We appreciate that CAISO has provided one option for transmission customers (who are not BAAs/Transmission Service Providers) to directly be allocated transfer revenue from CAISO. That option, which is currently provided under Bucket 2, Pathway 2, is a notable improvement in the EDAM Revised Straw Proposal. CAISO should work to expand the direct settlement options to include congestion revenue as this will provide greater certainty and transparency for customers

32. SETTLEMENTS: Please provide your organization’s comments on the settlements design described in section II.D.2 of the EDAM straw proposal.
Consider comments on the different aspects of settlement allocation among the different settlement components.

ACP-California supports additional discussion, as EDAM’s design process continues, on creating more direct settlement relationships between CAISO and third-party load, generators, and Transmission Customers. Direct settlement relationships with CAISO will increase the consistency of the market and provide additional transparency to load, generation, and transmission within EDAM BAAs.

Additionally, to the extent there will be EDAM Entity settlements and suballocations to load and generation customers with EDAM BAAs, we continue to support standardization and consistency in these settlements. CAISO should commit to working with stakeholders to develop a template or standardized plan to help ease the burden on loads and generators that transact across multiple EDAM BAAs.

33. EDAM FEES FRAMEWORK: Please provide your organization’s comments on the EDAM fees framework, particularly the implementation fee and administrative fee framework, as described in section II.D.3 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. The anticipated implementation fee also appears to be very reasonable for potential EDAM Entities. Thus, ACP-California generally supports the approach CAISO has proposed for the EDAM fee structure. 

34. GENERAL COMMENTS: Please provide your organization’s comments on the decisional classification for the EDAM initiative as described in section III.B of the EDAM revised straw proposal.

ACP-California supports the decisional classification that the entire EDAM initiative falls under Joint Authority of the Western EIM Governing Body and the CAISO Board, given the importance of this initiative to CAISO and the broader West.

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

The need for increased coordination across the West is both great and urgent, as the grid undergoes significant changes that increase the necessity of sharing regional diversity of load and resources. To meet this need, it is imperative that EDAM move forward in as timely a fashion as possible in order to provide a “next step” in Western coordination. EDAM will not be perfect when initially stood up; no market has ever been. EDAM will need to undergo improvements and evolutions over time, hopefully evolving to a full RTO. While EDAM will not be perfect, there are a number of areas of improvement that are outlined in these comments which ACP-California hopes can be implemented by CAISO and can better provide for optionality to generators/transmission customers and also ensure more equitable treatment of different types of participants. We look forward to continuing to work with CAISO and other stakeholders as the EDAM design advances.

We also encourage CAISO to coordinate closely with the Western Resource Adequacy Program (WRAP) to better understand what EDAM market design modifications might be necessary for program interoperability. Ultimately, it is paramount to ensure that EDAM and WRAP can jointly operate and that WRAP participants are not hindered from participating in EDAM, by ensuring that they can meet the requirements of that program concurrently with EDAM.

Finally, ACP-California reiterates 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 key benefit 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 will be much greater and would inherently include additional structures to incent the development and construction of clean energy resources to meet corporate or other clean energy goals (through virtual PPAs), 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 now.

ACP-California sincerely appreciates the CAISO team’s efforts to create a market design that will help the West take a significant step in increased regional cooperation. We look forward to continuing to work with CAISO on this important proposal.

Arizona Public Service
Submitted 09/26/2022, 04:42 pm

Contact

Tyler Moore (Tyler.Moore@aps.com)

1. GENERAL COMMENTS: Please provide a summary of your organization’s comments on the Extended Day-Ahead Market revised straw proposal:

APS appreciates the opportunity to comment on the EDAM revised straw proposal and the extensive work put into the proposal by CAISO and informed by stakeholders. We provide detailed areas of support, dissent, and need for clarification in the forthcoming responses to the CAISO’s numbered questions. However, we want to clearly outline several previously communicated areas of importance to APS upfront.

  1. Governance –The current structure is not sufficient for APS to commit to EDAM and may be an impediment to addressing market design issues in the short and long term.  To have an equitable organized Day Ahead market, governance must be free of undue influence by one state. APS recognizes the passing of ACR 188 and looks forward to the report on regionalization benefits that could be unlocked if the governance structure is modified.  
  2. Resource Adequacy – APS believes that a common RA structure for all participating entities (including CA/CAISO) is needed to have a well-functioning DA market. The current design presumes different RA requirements will apply to different participants, including different definitions of what “counts” as an RA resource. A daily RSE requirement does not resolve this problem, because as we have seen in the WEIM entities can pass the RSE while being deficient and in Energy Emergencies.
  3. Transmission Wheel Through – APS requires resolution on this existing issue that respects the forward procurement of resources and transmission done by non-CA entities in a fair and equitable manner to that of CA entities utilizing the CAISO transmission system. APS would like to see transmission service procured in the proposal TSMSP Phase 2 proposal being commensurate with firm point to point OATT service priority.
  4. Price formation – APS acknowledges that a separate track is ongoing on this subject but is concerned with the lack of momentum in developing a straw proposal. APS believes this is an essential aspect of the market design. 

 

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

APS generally supports the voluntary participation framework proposed and appreciates the incorporation of transitionary measures included in the revised straw proposal. APS would like to better understand the transitionary measure of market disruption of an EDAM participant initiated by CAISO, and if an EDAM entity could initiate a market disengagement. This is something that has been developed in WEIM that has served entities well to coordinate disengaging from the market during events like IT outages or other planned events that impact WEIM entity’s ability to communicate to market applications or transmit data for market functions. These planned events being well coordinated to other impacted entities has shown to be a best practice to limit impacts to the market and other participants.

3. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on the topic of confidence in market transfers design as discussed in section II.A.2 of the EDAM revised straw proposal. In particular, please provide comments regarding the different design elements supporting confidence in transfers including the application of the market parameters preventing the propagation of shortfalls and the associated outcomes illustrated in the examples.

APS supports the constraint with the additional elements presented in the stakeholder meeting around also limiting the amount of imbalance reserves and reliability reserves to the constraint to avoid awards of capacity to address uncertainty resulting in a deficiency to an entity in real-time as presented in the example scenario within the proposal.  

4. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on the topic of equal priority between market transfers and load in edge reliability scenarios, as effectuated in the operational timeframe, informed by operator discretion and good utility practice, as discussed in section II.A.2 of the EDAM revised straw proposal.

APS believes that leaving operator discretion to make decisions in haste is problematic and is interested in specific protocols and tools to help differentiate the various priorities and operator expectations to facilitate the priorities in real-time.  

5. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on the proposal and effectuation of lower priority market transfers sinking in an EDAM BAA that has failed the day ahead RSE or otherwise is not part of the WEIM RSE pool as discussed in section II.A.2.d of the EDAM revised straw proposal.

APS believes a middle ground of the lower priority may be needed, where the lower priority is contained to amount of failure. If the market can cure the deficiency through the administrative charge, then the entity could be of equal priority coming out of day ahead. On the other hand, if the footprint cannot cure the deficiency this is signaling a stressed system condition and the priority level of transfers that are delivered to this entity should be lower priority up to the amount of failure. If the entity remains deficient into real-time, then the EDAM entities need to have visibility to any transfers that are of lower priority to facilitate any necessary curtailments should they not be able to maintain reliability in the footprint. This element is very important and should be considered for a focused workshop on the topic. The CAISO should be held to the RSE standard that is equitable to other entities, ensuring that they can’t inaccurately pass during stressed conditions, and have access to higher priority EDAM transfers while EDAM entities are relegated to lower priority when similarly situated.

6. TRANSMISSION COMMITMENT: Please provide your organization’s comments on the overall framework of transmission commitment in EDAM, including the framing of how transmission is made available through the concept of the transmission “buckets” as described in section II.B.1 of the EDAM revised straw proposal.

APS is indifferent in the discontinuation of the bucket terminology and is not certain if conversion to another phrasing would be beneficial or detrimental. APS does support a mapping of ways that transmission is made available to the buckets may be helpful, as something that is bucket 2 to one entity may be bucket 1 to another entity depending on who the transmission customer is on certain segments on the full path from source to sink. We believe that this has caused some confusion and may be improved if the way transmission is made available to the market and who holds the rights is mapped to a bucket for reference. While the way transmission is made available as described by NVE could be helpful for transmission service providers to reference for their purposes.  

 

APS seeks clarity around if bucket 1 transfer revenue is distributed through the EDAM entity or directly to the transmission customer. The language included in the proposal is unclear on what is the responsibility of the transmission provider to allocate, versus what is distributed between the CAISO and the transmission customer directly.    

7. TRANSMISSION COMMITMENT: Please provide your organization’s perspective on Bucket 2 transmission and the pathways for how transmission customers can exercise their transmission rights, whether secured under the OATT or under legacy arrangements, or how otherwise those transmission rights are made available to the market as described in section II.B.1 of the revised straw proposal.

APS is concerned about bucket 2 - pathway 3. Particularly, how to identify the customers that utilized the transmission after they did not schedule for proper sub-allocation by TSP’s. APS also believes there are issues around transmission priority in the market through Pathway 3, because it is comparable to what would be released as non-firm today but gets firm priority in EDAM. If an entity wants to schedule their long-term firm rights after the Day Ahead Market run, there is no way to deal with the priority level difference between market schedules and OATT rights, if a curtailment is needed.

 

APS believes that the release of transmission by customers in Bucket 2 – Pathway 2 at 6AM is too early in the day for customers to know and evaluate all potential uses of transmission before determining they can make their rights available to the market for usage. Is there a benefit to EDAM participants to have this election made before the market deadline of 10AM? If not, APS would prefer giving transmission customers up to the market deadline of 10AM for this pathway.  

8. TRANSMISSION COMMITMENT: Please provide your organization’s perspective on how ISO transmission is made available to the EDAM under the transmission commitment design.

APS has no further comment. 

9. TRANSMISSION COMMITMENT: Please provide your organization's comments on the transmission revenue requirement (TRR) recovery framework design which is intended to allow for recovery of certain transmission revenues to keep the transmission provider whole from a historical TRR perspective in the EDAM as described in section II.B.1 of the revised straw proposal.
Consider comments on the three different proposed components of the EDAM recoverable TRR and the proposed methods of allocating the TRR shortfall, along with other elements of the design.

APS recognizes absent a hurdle rate that there is a need for TSPs to recover short-term transmission revenue that is no longer procured under the TSPs OATT, but rather is utilized by EDAM. APS believes that the review period of only two years may be too short, and lead to uncertainty about foregone transmission revenues from the sale of short-term products if the policy was to change shortly into EDAM operation. APS requests that there be a longer period before review to have more certainty and experience around the mechanism and make necessary improvements further into the operation of EDAM.

 

APS supports incorporating new build transmission into the TRR recovery methodology as this transmission in certain cases would result in additional sales of short-term transmission by way of increased TTC or new paths to connect POR/POD that are utilized by transmission customers.

 

APS supports the concept of wheel-through-revenue being included net of import/exports that is facilitated by intermediary transmission systems. This concept would capture some OATT sales that are currently conducted bilaterally between counterparties in the day ahead and real-time.

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

APS has no further comment. 

11. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the design of the proposed application that will be used to conduct the EDAM RSE as described in section II.B.2 of the EDAM revised straw proposal.
This includes comments on the ability to conduct advisory RSE tests prior to the binding run, the timing of the RSE, test inputs, test obligation, the decision not to include transmission constraints within the EDAM RSE as well as any other relevant elements.

APS believes that the EDAM entity should not be required to show transmission demonstration as part of the ancillary services obligations that each entity retains as a balancing authority area. It is unclear what the market operator would do with this information, as an EDAM entity can adjust the transmission made available to the market for any necessary reserve sharing program deployments that may be represented by TRM, CBM, or otherwise utilized by the balancing authority area to maintain compliance with their obligations to reserve sharing groups.   

12. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposed treatment of firm energy contracts where the source/transmission may not be known in advance of the market run (i.e. WSPP Schedule-C supply contracts) within the EDAM RSE.
Consider comments on if the proposed requirement for the submission of day-ahead e-tags, the potential to be removed from the pooled WEIM RSE, as well as monitoring to provide a sufficient level of confidence in these types of supply arrangements. Additionally, consider the proposed modeling of these arrangements as “bucket 1” transfers, along with the potential pricing impacts in the source BAA and the potential to utilize BAA-to-BAA transmission between the source and sink BAA.

APS believes that WSPP schedule C (and equivalent contracts) that have a specific resource and BAA and firm transmission need an avenue to be credited and seen by the market in terms of RSE and the market solution. This is so that BAAs relying on these contracts are given credit and/or debit for the supply forward contracted for in the RSE. Then in the operational sense they are considered in terms of balancing supply with load and interchange in the BAA. In stressed conditions, contracts that don’t have identified specific resources and firm transmission may not deliver, therefore, should not be counted toward the RSE.  For this reason, APS supports the requirement of tag creation three hours after publication of market results and supports the monitoring of the usage of these types of supply contracts and how often they are not e-tagged.

 

Intertie bids at the CAISO border that are under contract to an CAISO LSE or otherwise have a contract under the CAISO tariff will be eligible for the CAISO resource sufficiency evaluation and be subject to the tagging requirements. Moreover, if it is the expectation that the tag shows the transmission legs demonstrating that the resource has firm transmission, then that must be applied across the board to intertie bids at the CAISO border as well.   

13. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s perspective on the ISO proposal for counting in the EDAM RSE import bids made at the CAISO BAA boarder with a non-EDAM BAA.

APS supports inter tie bids that support contracted supply by LSE’s inside of CAISO. APS is concerned about incongruence between supply made available at inter-ties to CAISO counting in RSE with no transmission firmness requirement and the requirement of EDAM BAAs needing high priority transmission service if wheeling through CAISO to count as RSE. It is evident that inter-tie bidders can wait till before the STUC run to tag these awards which could be done on lower priority transmission service external to the CAISO. APS recommends equitable treatment be given to these similar transactions sinking to CAISO or EDAM BAAs and would prefer that firm transmission be utilized on external systems to the CAISO.

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.

APS supports the ability to reflect demand response that doesn’t conform to current CAISO modeling within the demand forecast like the WEIM. APS would like recognition that EDAM entities outside of CAISO may have programs that are like RDRR and shouldn’t be required to dispatch the resources if such a program exists with real-time requirements for deployment. APS also supports continued ability to represent unique demand response programs across the West into the broader market through increased modeling capabilities and requirement modifications.

15. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposal to make available advisory D+2 market results (day ahead + 2 market run) to help inform gas procurement and manage gas resource participation in the day ahead market.
Consider commenting on any additional potential enhancements or changes to this market run which could increase its accuracy.

APS appreciates the CAISO listening to stakeholder concerns surrounding gas management in the EDAM. APS believes that challenges surrounding gas pipeline constraints may be unique and different than current CAISO DAM participants face as the pipelines supplying a large amount of gas generation outside of California may have less flexibility from storage and tighter operating capacities that lead to more frequent utilization of strained or critical operating conditions that expose gas shippers to financial or physical penalties for deviations from scheduled takes.  

 

APS believes the D+2 will have limitations that will impact its effectiveness to inform gas procurement by entities. Those limitations include the misalignment from day ahead market runs over weekends and when gas is procured. For example, gas procurement for Monday is done on Friday, this would require a D+3 non-binding market run to understand the full weekend schedules required. While on holiday weekends this could be even longer extending into D+4 to cover Tuesday gas procurement. There is also an inherent issue regarding the quality of inputs to the market run impact the results, it is hard to estimate the accuracy and thus the usefulness of this tool for gas procurement. APS would like to understand how expected transmission availability would be made available in this market run; a reasonable approach may be to take the most recent limits made available to the EDAM in the prior day.  

 

APS also would like to better understand tools available in the current market that could be leveraged in EDAM for entities. These tools include nomogram, energy limited resources, and aggregate power plant capabilities. Each of which appear to have limitations to be utilized by participants, the nomogram is difficult to implement with multiple BAAs, energy limited resources can’t be placed on multiple resources, and aggregation must be connected to same Pnode in the market. APS would like to request that the reference level request be revised to include the gas day hours which do not coincide with a calendar day. Market participants procure gas based on the gas day and need to be able to reflect the updated price for the full gas day in which the price is relevant. The applicable gas day timelines are from HE8-HE7 Pacific. APS supports item 6.1.23 submitted in the Annual Policy Catalog by NVE to evaluate the ability to include opportunity cost in the DEB and would request it be placed on the upcoming roadmap. This initiative could be expanded to also include modeling tools to reflect growing gas constraints by market participants.

16. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on whether the proposal to cure resource insufficiencies through the EDAM market at an administrative surcharge provides incentive to cure shortfalls prior to participating in the EDAM.
Please comment on the proposed requirement to cure through the market, the block surcharge, as well as the potential to credit against the surcharge any market energy prices. In addition, please comment on the proposed revenue allocation, and CAISO BAA specific sub-allocation for this surcharge.

 APS supports a principle that the administrative charge disincentivize the failure of RSE for economic reasons. APS is concerned utilizing bilateral market prices may not be sustainable as that market may become illiquid or under-utilized as the West moves to more centralized market constructs. APS would like CAISO to consider the merits of a fixed surcharge that could be based on energy price caps or capacity costs be captured but is generally supportive of utilizing bilateral trading hubs in the short run.

17. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposal to stand up an hourly bid-range trading platform.

APS supports the creation of an hourly bid-range trading platform to facilitate passing of the RSE ahead of the EDAM run. This functionality will be essential to have optimization within the footprint that avoids large block purchases bilaterally that would be fixed interchange that cannot be optimized. APS looks forward to further development of this concept to facilitate market efficiencies within the EDAM.

18. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the utilization of a pooled WEIM RSE for entities passing the EDAM RSE, as described in the revised straw proposal.
Please comment on the criteria for exclusion from the pooled WEIM RSE, the proposal to withhold a configurable quantity of imbalance reserves to be utilized for benefit of the EDAM footprint, and the preferred approach for the pooled WEIM RSE following a potential failure of the pool in the WEIM.

APS has no comment at this time. 

19. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on two introduced mechanisms for consideration that further allow a BAA to manage its resources: (1) mechanisms to manage supply in excess of RSE, and (2) consideration of a net EDAM transfer export limit constraint as described in the revised straw proposal.
Please consider commenting on the value and need for these mechanisms for individual BAAs along with other design elements that should be considered in enhancing or modifying these mechanisms to address the issues described.

APS does not oppose the ability for entities to hold back supply above the RSE and supports the net EDAM transfer export limit with additional design elements proposed in the workshop to manage a sufficient BAA being exported to a deficient position through energy and capacity products.  

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

APS has no further comments

21. INTEGRATED FORWARD MARKET (IFM) AND RESIDUAL UNIT COMMITMENT (RUC): Please provide your organization’s comments on the IFM and RUC design as described in sections II.C.2 and II.C.3 of the EDAM revised straw proposal.

 APS has no comment at this time.

22. 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 continued evaluation of potential market power mitigation enhancements within the Price Formation Enhancements initiative, which is currently ongoing, as described in section II.C.4 of the EDAM revised straw proposal.

APS appreciates the price formation enhancement and is engaged in that forum as it pertains to market power mitigation within EDAM. APS believes that a significant consideration and potential adoption of conduct and impact tests for market power mitigation. APS requests that CAISO continue to make progress in the initiative by way of a straw proposal being created.

23. CONVERGENCE BIDDING: Please provide your organization’s comments on the proposal on convergence bidding in the EDAM and the associated transition period approach being proposed as described in section II.C.5 of the EDAM revised straw proposal.

APS would support the evaluation of convergence bidding activation in EDAM entity areas after EDAM launch but does not oppose a planned transition at this point understanding that stakeholders can provide input to the transition plan after operational experience is achevied in the EDAM, including any modifications to convergence bidding that would be justified for convergence bidding across the EDAM footprint. APS does not oppose the transition period for convergence bidding proposed by CAISO and believes that any market design flaws that could be problematic and exploited by convergence bidding should be addressed expeditiously by the CAISO in the early onset of EDAM.

24. EXTERNAL RESOURCE PARTICIPATION: Please provide your organization’s comments on the proposal for external resource participation in the EDAM, as described in section II.C.6 of the EDAM revised straw proposal.

APS supports the proposal of external resource participation to be done through dynamic schedules and pseudo-ties like is done in WEIM today. APS has performed a considerable amount of work to implement pseudo ties for resources located outside of the BAA under this framework.

25. 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.C.7 of the EDAM revised straw proposal.

APS has no further comment at this time. 

26. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the use of the GHG Reference Pass as the GHG counterfactual.

APS is concerned surrounding the ability to deem generation that is not incremental to reference level pass amounts to serving CAISO load in the resource-specific approach. Deeming of energy from resources that do not increase output above the reference level pass, or worse decrements energy output can impact the accuracy of marginal congestion cost and erode the environmental benefits intended by the GHG program.

27. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the attribution data reported as a part of the resource specific approach, and if or what additional information would provide transparency.

APS has no further comment at this time. 

28. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s overall comments, including potential suggested enhancements, on the zonal proposal.

APS has no further comment at this time. 

29. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s overall comments, including potential suggested enhancements, on the LADWP proposal.

APS has no further comment at this time. 

30. GREENHOUSE GAS ACCOUNTING: Please provide any other feedback on GHG accounting not captured by the questions above.

APS has no further comment at this time. 

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

APS has no further comment at this time. 

32. SETTLEMENTS: Please provide your organization’s comments on the settlements design described in section II.D.2 of the EDAM straw proposal.
Consider comments on the different aspects of settlement allocation among the different settlement components.

APS has no further comment at this time but looks forward to more detailed workshops and documentation of settlements when the policy framework is solidified. 

33. EDAM FEES FRAMEWORK: Please provide your organization’s comments on the EDAM fees framework, particularly the implementation fee and administrative fee framework, as described in section II.D.3 of the EDAM straw proposal.

APS believes the framework for EDAM fees based on implementation and administrative fees in the WEIM is a reasonable approach.

34. GENERAL COMMENTS: Please provide your organization’s comments on the decisional classification for the EDAM initiative as described in section III.B of the EDAM revised straw proposal.

APS is supportive that EDAM needs to go to both boards for approval as a joint authority item and appreciates the Board of Governors extending authority to the Governing Body for this important policy development for current WEIM Entities.  

 

APS requests that the scope of delegation of joint authority presented in the Governance Review Committee’s Phase 3 Straw Proposal be expanded beyond the “apply to” test and broadened to apply to all aspects of day-ahead and real-time market rules.

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

An important element to the success of EDAM and the larger Western Interconnect is the ability to participate in WRAP and not interfere with the ability of WRAP participants to benefit from the WRAP program. APS sees this coordination among WPP, SPP, and CAISO as an aspect where all three entities need to address the program in a fair and equitable manner. The CAISO should assume that there is a need to address WRAP participants that are within EDAM, withing Markets +, and outside of both EDAM and Markets +. There are various elements that need to be considered in this coordination including energy schedule priorities, timelines, RSE requirements, WRAP holdback requirements, and likely others.

 

APS appreciates the draft tariff framework publication but was unable to provide comments at this time and will look to do so in the future during the draft tariff language meetings.

 

BANC
Submitted 09/26/2022, 06:13 pm

Submitted on behalf of
Balancing Authority of Northern California (BANC)

Contact

Kevin Smith (kevin@westernenergylaw.com)

1. GENERAL COMMENTS: Please provide a summary of your organization’s comments on the Extended Day-Ahead Market revised straw proposal:

BANC appreciates the refinements and details contained in the Revised Straw Proposal (Straw Proposal).  It is vastly improved and provides far greater clarity around several key issues. It is a good foundation to further develop the EDAM proposal and BANC commends CAISO staff for the significant efforts it expended in this latest version.

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

BANC supports the voluntary participation model, as described in section II.A.1.

BANC does believe that the CAISO should consider a longer period, perhaps up to six months, as opposed to three months, for day-ahead price correction.

As for Resource Participation, because this is not an RTO market, resources need to continue to purchase OATT transmission for any transactions they intend to export from an EDAM entity BAA, if there is no RA or RS transmission obligation.  EDAM cannot encourage or facilitate an opportunity for free-riders on the transmission system of the EDAM entity or transmission providers within the EDAM entity footprint (note: not all EDAM entities are transmission service providers (TSP)).

3. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on the topic of confidence in market transfers design as discussed in section II.A.2 of the EDAM revised straw proposal. In particular, please provide comments regarding the different design elements supporting confidence in transfers including the application of the market parameters preventing the propagation of shortfalls and the associated outcomes illustrated in the examples.

This topic is inextricably linked to the Resource Sufficiency Evaluation (RSE).  As such, we provide some general comments here and offer more detailed comments on market priority in the RSE section, below.

First, BANC agrees with the overall concept of equal priority for all EDAM transfers, including edge cases.  

For this to work, however, all EDAM entities need to have confidence both in the market solution and the market operator’s actions.  As the CAISO correctly notes:

Establishing confidence in market transfers is a critical design component of the overall EDAM framework.  Load serving entities and BAAs rely on bilateral procurement of supply and transmission to deliver supply reliably to serve load.  In the EDAM, these same load serving entities and BAAs will make resources and transmission available to the market, which will derive an optimal solution for serving load across the EDAM footprint by optimally scheduling transfers between EDAM BAAs.  The EDAM design should build collective confidence in transfers emerging out of the market and enhance the capability of the EDAM entity and the market to respond to stressed system conditions. Straw Proposal at 14.

EDAM entities are being asked to trust the market solution, which is some instances my involve de-committing their own internal resources and relying on the EDAM transfers to reliably serve their load.  This involves two key elements: 1) confidence in the market solution and the resources behind that solution, and 2) trust that in certain edge case scenarios, EDAM entities are being treated on a fair and non-discriminatory basis by the market operator. 

With respect to the first element, “confidence in the market solution and the resources behind that solution,” the CAISO has set forth several elements to establish this confidence.  These are: the RSE, robust transmission availability, Imbalance Reserves and market parameters preventing propagation of shortfalls (i.e., the ability to isolate a supply shortfall in one BAA so as to not propagate that shortfall to another BAA).  While each of these elements are essential and need to function collectively, the foundation is the RSE.  This will be addressed further in the sections below.  It suffices to say that for the other elements, BANC certainly supports the development of an Imbalance Reserve product to cover real time uncertainty, supports a transmission design that encourages the maximum release of transmission to facilitate EDAM transfers and agrees with the CAISO’s use of market parameters to prevent the shifting of supply shortfalls and potentially causing cascading outages. 

On the second element, “trust that during certain edge case scenarios, EDAM entities are being treated on a fair and non-discriminatory basis by the market operator,” providing data and transparency around market operator actions taken during these edge case scenarios is essential.  BANC believes that since the events around August 2020, the CAISO and the Department of Market Monitoring have made significant progress in the area of transparency and analysis.  Moreover, there was significant cooperation and communication among the CAISO and EIM entities during the recent September 2022 heatwave.  BANC believes that continuing on this path to provide market participant with transparent analysis around both data and operator actions is essential.  Moreover, while recognizing that, as an organized market, the CAISO and EDAM entities have diverse operational design characteristics, the CAISO should strive to ensure there is a level playing field among all EDAM BAAs.  This is particularly important around the area of the RSE.

4. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on the topic of equal priority between market transfers and load in edge reliability scenarios, as effectuated in the operational timeframe, informed by operator discretion and good utility practice, as discussed in section II.A.2 of the EDAM revised straw proposal.

As noted above, BANC supports the concept of equal priority among all EDAM transfers and load under all scenarios, including edge cases.  While BANC has had some experience with this concept of obtaining equal priority to CAISO load through its exporting of non-RA resources (PT Exports) from the CAISO BAA, there is something of an art rather than an exact science in the actual application of curtailment priority under certain scenarios, such as during edge cases.  In such instances, there will often have to be some level of operator discretion.  For this reason, the CAISO needs to make as much of the process and decisional tree as transparent as possible.  Moreover, this is where an EDAM entity is being asked to trust that any decisions involving how this equal priority is implemented by the Market Operator is being done in without bias and in order to obtain the optimal solution to address the particular edge case scenario.  In other words, EDAM entities need to trust that such decisions are being made without bias either for or against CAISO load.  To ensure transparency and consistency, all of these extreme actions should possibly be reviewed to determine whether they were indeed carried out in accordance with good utility practice and on a non-discriminatory basis.

5. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on the proposal and effectuation of lower priority market transfers sinking in an EDAM BAA that has failed the day ahead RSE or otherwise is not part of the WEIM RSE pool as discussed in section II.A.2.d of the EDAM revised straw proposal.

See BANC response to Question 16, below.

6. TRANSMISSION COMMITMENT: Please provide your organization’s comments on the overall framework of transmission commitment in EDAM, including the framing of how transmission is made available through the concept of the transmission “buckets” as described in section II.B.1 of the EDAM revised straw proposal.

BANC supports the bucket framework in Straw Proposal as a general convention for describing the various market uses of transmission, both by the TSP and by transmission customers.  Buckets allow a more focused discussion around transmission uses and how transmission might be made available to the EDAM.

7. TRANSMISSION COMMITMENT: Please provide your organization’s perspective on Bucket 2 transmission and the pathways for how transmission customers can exercise their transmission rights, whether secured under the OATT or under legacy arrangements, or how otherwise those transmission rights are made available to the market as described in section II.B.1 of the revised straw proposal.

BANC supports the general approach the CAISO has outlined for the treatment of transmission customer rights, both under an OATT and pre-OATT paradigm.  More specifically, for OATT transmission, BANC agrees with the outlined “Pathways” 1 through 3, with the following clarifications:

Pathway 1: Any transfer revenues would accrue to the transmission provider.  The intent is to use these revenues to mitigate any cost exposures to the transmission customer in exercising its OATT rights. The transmission provider is best positioned to determine how to utilize transfer revenues on behalf of its customers under its OATT.

Pathway 2: It should be absolutely clear that if a transmission customer exchanges its firm point-to-point rights for transfer revenues directly from the CAISO, its rights are gone for duration of the exchange.  This doesn’t preclude market participation, but the rights are forfeited for this time.

Some discussion has arisen regarding the 6 am deadline to inform the CAISO of an intent by the transmission customer to exchange its rights.  Since this is largely an issue of CAISO timelines required to process such a request in advance of the day ahead market, BANC only notes that it should be as close to the 10 am close of the day ahead market as practicable.  To be more specific, we think an hour prior to the close of the day ahead market (9 a.m.) would seem appropriate.

Pathway 3: BANC supports the use in the optimization of OATT rights that remain unscheduled at 10 am, noting that such rights can continue to be exercised through redispatch.  However, such redispatch costs may result in additional costs to maintain that schedule, which may or may not be offset by transfer revenues.  Moreover, under certain circumstances (which should be rare), there could be an infeasibility resulting in a schedule being below the full point-to-point right.  Today, firm rights are subject to derates as well.  At least in the case of foreseen edge days, the customer would be better-served by scheduling its rights by the 10 am close of the day market to protect its rights.

BANC supports different treatment for pre-OATT (legacy) agreements, which may require a carve out in the optimization or that could possibly participate in “Pathway 2” if both the transmission provider and the customer agree.  In such cases, the customer would also interface directly with the CAISO to perform such an exchange.

8. TRANSMISSION COMMITMENT: Please provide your organization’s perspective on how ISO transmission is made available to the EDAM under the transmission commitment design.

BANC supports the CAISO’s transmission availability model.  Because the CAISO does not have the same transmission reservation system aligned with the traditional OATT framework, the primary concern is one of under-collecting revenues due to lost wheeling charges.  BANC believes the TRR framework put forward in the Straw Proposal to allow each transmission owner/provider to recover lost TRRs should create a level playing field between the CAISO and the other EDAM entities/transmission providers.

9. TRANSMISSION COMMITMENT: Please provide your organization's comments on the transmission revenue requirement (TRR) recovery framework design which is intended to allow for recovery of certain transmission revenues to keep the transmission provider whole from a historical TRR perspective in the EDAM as described in section II.B.1 of the revised straw proposal.
Consider comments on the three different proposed components of the EDAM recoverable TRR and the proposed methods of allocating the TRR shortfall, along with other elements of the design.

BANC supports a model that allows a transmission provider to recover lost short term transmission revenues under the assumption that the implementation of EDAM will result in lost short-term firm and non-firm transmission sales.  For example, under existing OATTs, short term non-firm transmission is sold based on firm transmission being unscheduled.  If the firm customer reclaims its rights, the non-firm customer is bumped, but the revenues from the sale of non-firm is retained as a revenue credit.  These non-firm sales, which for some EDAM entities/transmission providers is a significant source of annual revenue, will be directly displaced by EDAM.

BANC supports the categories of qualified transmission as described, both firm and non-firm, on pages 35-36 of the Straw Proposal. More specifically:

Non-Firm Products

  • Hourly non-firm point-to-point
  • Daily non-firm point-to-point
  • Weekly non-firm point-to-point

Firm Products

  • Hourly firm point to point (if product is offered by the transmission provider)
  • Daily firm point-to-point
  • Weekly firm point-to-point

BANC further Supports the following:

  • Developing a percentage attributable to Lost TRR (LTRR) is essential and maintaining that percentage for some fixed period to allow data to be collected and reviewed by the CAISO and EDAM entities.
  • CAISO’s proposal for BAA-specific rates to ensure that the individual EDAM entity’s/transmission provider’s customers are not paying for their own LTRR (cost shifting).
  • The ability of an entity proposing new transmission to recover the same LTRR percentage for the new facilities.
  • Compensation for lost wheeling revenues, net of Imports/Exports, to be set at the entities filed and approved non-firm hourly point-to-point rate to prevent free riding at the expense of an intermediate EDAM BAA.
  • Application of the rate developed and charged (outside of the market) on a volumetric basis should be applied to Gross Demand.  This, however, must be balanced by a requirement in the (non-CAISO) EDAM entity BAAs that any merchant generation (which is not a Designated Network Resource) continue to pay its share of transmission costs to the EDAM entity BAA border to preserve the funding of long-term OATT rights – no free riders.  Unlike the CAISO BAA, which allows generators to simply put in market bids without regard to transmission reservations, the EDAM entities will be retaining their underlying OATT structures and do not have socialized transmission funding mechanisms, like the transmission (or wheeling) access charge.  Long term point-to-point rights are therefore still needed to move energy from a generator bus to an intertie (unless going to serve NITS customers).  This cost recovery needs to be maintained.  This cost recovery is addressed through either a generator being a Designated Network Resource (in which case transmission is paid by the NITS customer) or the generator will be required to pay for firm point-to-point transmission service to the EDAM entity border.  Failure of having transmission either as part of a NITS or purchasing firm point-to-point transmission to the border of the EDAM entity BAA could result in the potential application of an Unreserved Use Penalty by the transmission provider.  One option is that the CAISO require any Participating Resource Scheduling Coordinator in EDAM to show each Participating Resource has transmission to the EDAM entity BAA border to be eligible to provide market bids.
  • An annual true up of estimated LTRR with actual TRR recovery. Any over or under collections should be applied to the subsequent year’s recovery.
  • Ongoing oversight and monitoring process which allows CAISO and the EDAM entities to actively monitor and address any unintended consequences of the LTRR recovery mechanism and to discuss possible adjustments to the methodology.
10. TRANSMISSION COMMITMENT: Please provide your organization’s comments on any other aspects of the transmission commitment in EDAM topic.

To preserve the OATT structure and encourage investment in transmission, all users of the system must pay the cost for the use.  There cannot be unintended free riders created through EDAM. 

11. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the design of the proposed application that will be used to conduct the EDAM RSE as described in section II.B.2 of the EDAM revised straw proposal.
This includes comments on the ability to conduct advisory RSE tests prior to the binding run, the timing of the RSE, test inputs, test obligation, the decision not to include transmission constraints within the EDAM RSE as well as any other relevant elements.

BANC supports the general framework of the EDAM RSE proposed, including the ability to conduct advisory runs at 6:00 a.m. and 9:00 a.m. prior to the binding RSE run at 10:00 a.m.. 

BANC shares some of the same concerns raised by stakeholders around deliverability, since the RSE, as proposed, is not a full network model optimization and therefore does not consider transmission constraints in its assessment.  While we recognize that the computational timelines do not allow a full optimization to test constraints for RS deliveries, this raises some obvious concerns around actual deliverability of resource sufficiency resources under actual market conditions. While BANC can perhaps support a simplified approach at start up, we are greatly concerned that this approach may prove problematic.  Thus, in addition to careful monitoring, we believe there should be further thought in advance for a Plan B, if this does in fact pose reliability risks once EDAM is implemented.  If significant deliverability issues arise, resulting in reliability risks, it might take too long to develop a solution on the fly. 

12. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposed treatment of firm energy contracts where the source/transmission may not be known in advance of the market run (i.e. WSPP Schedule-C supply contracts) within the EDAM RSE.
Consider comments on if the proposed requirement for the submission of day-ahead e-tags, the potential to be removed from the pooled WEIM RSE, as well as monitoring to provide a sufficient level of confidence in these types of supply arrangements. Additionally, consider the proposed modeling of these arrangements as “bucket 1” transfers, along with the potential pricing impacts in the source BAA and the potential to utilize BAA-to-BAA transmission between the source and sink BAA.

E-Tags

BANC fully supports the requirement that all RS resources submit a valid e-tag no later than 3 hours after the close of the day ahead market at 10:00 a.m..  To the extent this is infeasible, this must be completed no later than the STUC horizon to remain in the EDAM RS Pool.  This is essential to demonstrate that RS resources are tied to actual physical supply obligations.  As noted by the CAISO, failing to provide “e-tags prior to the conclusion of the WEIM RSE” should be part of the existing reporting and monitoring conducted by the Department of Market Monitoring.  In addition, any patterns or repeated problems with particular resource/supplier should be investigated.  If specific RS resources are routinely untagged, there should be implications, including removal from the pool of RS resources being relied upon by the EDAM entity BAA to pass the RSE.

WSPP Schedule C

BANC fully supports counting WSPP Schedule C supply contracts for RSE counting purposes.  However, there are a couple of conditions: 1) the supply must be tagged in accordance with the tagging requirements to count; and 2) It cannot be non-source specific if it originates in the CAISO BAA and is to be exported to an EDAM entity BAA. 

On this latter point, the CAISO has rules around export priority.  To obtain PT status for an export (firm as internal CAISO Demand), there must be physical capacity in the CAISO BAA not also committed to an RA obligation for an internal CAISO LSE (i.e., it must be “non-RA”).  This arrangement allows the exporting BAA to point to the un-committed non-RA capacity in support of its export.  As such, it receives a scheduling and curtailment priority equal to CAISO Demand.  A non-specified source from the CAISO cannot be firm, so any contracts with an unspecified CAISO source (e.g., NP 15 EZ Gen Hub), even if they are so-called firm, cannot obtain PT priority (it is LPT) and are therefore lower priority export and subject curtailment ahead of a PT export. Securing a PT export is costly and a challenge to those needing to export from the CAISO.  If used for RSE, unlike EDAM transfers which will not pay the Wheeling Access Charge (WAC), the PT export used to pass the RSE will in fact pay the full WAC, which is akin to purchasing OATT transmission to ensure firm delivery.   These factors set these arrangements apart from a simple supply agreement for export from the CAISO BAA without any associated resource.  Such arrangements are not afforded high priority and susceptible to uneconomic adjustment under strained system conditions.  For BANC, unsupported exports from the CAISO do not qualify for RA counting purposes.

13. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s perspective on the ISO proposal for counting in the EDAM RSE import bids made at the CAISO BAA boarder with a non-EDAM BAA.

BANC supports the counting by the CAISO of import bids from a non-EDAM BAA at its border provided the bids are associated with a supply contract and fall under the specific criteria set forth in the Straw Proposal, which support the Seller’s obligation to deliver to the CAISO BAA.  These include:

  • Intertie bids associated with a resource adequacy contract.
  • Intertie bids associated with a forward contract, but not otherwise shown as part of a resource adequacy supply plan.
  • Intertie bids originating from resources that are pseudo tied with the ISO BAA – these resources have their output telemetered into the ISO and deemed produced in the ISO BAA under the terms of a contract with the ISO under the tariff.
  • Intertie bids originating from dynamically scheduled resources into the ISO BAA – these resources provide telemetered readings of their intertie schedules and have an agreement with the ISO (with scheduling coordinator and host balancing authority area) under the tariff that sets out operating requirements.
  • Intertie bids originating from a non-dynamic resource –specific system resource – these are source specific external resources that have an executed agreement with the ISO that sets out performance and operating requirements.  In practice, these resources have a contractual relationship with ISO LSEs so they also can be considered as contracted supply.  Id. at 50.

As is the case with other RSE supply, all associated tagging requirements would also need to be met.  This also needs to be pared with what the CAISO describes as a commitment to “continue to monitor deliveries from these supply resources and evaluate enhancements to address any identified concerns.” Id. at 51.  BANC adds that the monitoring and evaluation of these deliveries should be transparent to stakeholders and potentially added to the existing market reporting the Department of Market Monitoring already conducts for the WEIM. 

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.

BANC supports bone fide demand response programs as a tool to pass the RSE.  Currently those participating in WEIM reflect this in a reduction to BAA load.  This should be allowed in EDAM.  Such flexibility is needed to allow for valid demand response programs that are not currently able to offer supply bids into the market.  BANC expects that, as the market evolves, more transparent structures will be adopted by EDAM BAAs.

15. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposal to make available advisory D+2 market results (day ahead + 2 market run) to help inform gas procurement and manage gas resource participation in the day ahead market.
Consider commenting on any additional potential enhancements or changes to this market run which could increase its accuracy.

BANC supports the CAISO proposal to make advisory D+2 market results to inform gas procurement.  While this may be far from a perfect solution, this is a step in the right direction.

16. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on whether the proposal to cure resource insufficiencies through the EDAM market at an administrative surcharge provides incentive to cure shortfalls prior to participating in the EDAM.
Please comment on the proposed requirement to cure through the market, the block surcharge, as well as the potential to credit against the surcharge any market energy prices. In addition, please comment on the proposed revenue allocation, and CAISO BAA specific sub-allocation for this surcharge.

BANC recognizes that this, perhaps, is one of the most foundation elements of the entire EDAM.  As noted above in the questions on “Confidence in EDAM Transfers,” the market will live or die on whether participants can ultimately rely on the market solution to be sound both in terms of economics and reliability.  But reliability trumps economics every time, and this is where the RSE is fundamental.  The conundrum is balancing solutions that both discourage leaning on the market, while not forging a penalty structure that is so draconian it is either patently unreasonable or, worse, undermines the reliability objective for which it stands.

While BANC and other entities have contemplated stiff penalties and even blocked transfers for failure, we are trying to find a more balanced and proportional penalty structure.  For example, should an entity that is one MW short of meeting its RSE be hammered with a 16-hour block energy penalty or should there be some form of reasonable deviation element to account for magnitude.  Therefore, we believe the CAISO should consider a tiered approach to RSE failure.

For example, the first tier could be tied to a minor RSE shortfall, established at some reasonable tolerance band (e.g., within a small percentage of the uncertainty requirement, a small percentage of Day Ahead load forecast, a MW cap, or a combination thereof).  For Tier 1, the market cures, the failing entity stays in the RSE pool and there are no administrative penalties.

For the next tier, which would be a RS shortfall in excess of the first tier, there would be an ability for the market to cure at an administrative penaly price, up to some cap.  This would also allow the entity to remain a member of the RSE pool and not test separately for the WEIM RSE, unless the cap was exceeded.  The level of the administrative penalty requires further discussion, but one bookend could be the level proposed by the CAISO (an indexed 16-hour block price), but there may need to be some consideration of mitigating this amount by crediting some portion back for hours in which the failure did not occur.  The price would be assessed only for those shortfalls in excess of the Tier 1 tolerance band.

For the third tier, which occurs if the second tier cap was exceeded, the failing EDAM entity must pay the administrative penalty for any portion that is cured by the market and is out of the RSE pool. The failing entity must also separately test in the WEIM RSE. We would like further discussion, however, as to whether transfers to the failed EDAM entity BAA can be considered lower priority (for the amount not cured by the market).  This lower priority, rather than being administered in the operational horizon and the practical challenges of operators administering lower priority, would be have to be effectuated through the real time market (WEIM).  We do have concerns about the practical application of this, and we would want to work through some examples.

In addition to considering a tiered approach, there must be some safeguard in place to address serial leaning.  We cannot have a pattern of leaning for any tier, even the first tier.  This also raises the concept of robust oversight and reporting.  We do not want to see a diminution to reliability as an unintended consequence of such a process.

17. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposal to stand up an hourly bid-range trading platform.

While the details are still not fully clear, BANC supports the concept of having the ability to trade bid range among EDAM BAAs.  There is no reason not to explore platforms that will enable entities to cure occasional deficiencies in additional to traditional bilateral markets, which are potentially more tailored to the actual deficiency, for example, than purchasing a 16-hour block purchase. Moreover, as organized markets continue to expand, traditional bilateral markets may continue to contract, leaving fewer options to cure.

18. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the utilization of a pooled WEIM RSE for entities passing the EDAM RSE, as described in the revised straw proposal.
Please comment on the criteria for exclusion from the pooled WEIM RSE, the proposal to withhold a configurable quantity of imbalance reserves to be utilized for benefit of the EDAM footprint, and the preferred approach for the pooled WEIM RSE following a potential failure of the pool in the WEIM.

BANC supports a pooled WEIM RSE for the benefit of the EDAM entities which pass the EDAM RSE.  It may be appropriate to withhold the full allocation of the diversity benefit, at least for some initial period, to allow the CAISO and other BAAs to gain confidence in market.   

19. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on two introduced mechanisms for consideration that further allow a BAA to manage its resources: (1) mechanisms to manage supply in excess of RSE, and (2) consideration of a net EDAM transfer export limit constraint as described in the revised straw proposal.
Please consider commenting on the value and need for these mechanisms for individual BAAs along with other design elements that should be considered in enhancing or modifying these mechanisms to address the issues described.

BANC is not opposed to the concept of allowing both EDAM entities and CAISO LSEs to retain some amount of capacity in excess of what is needed to pass the RSE.  However, while we recognize the apparent incongruence created by initially limiting this ability to the EDAM entities and not having a similar mechanism for the CAISO LSEs, it is of note that the CAISO LSEs are not BAAs and do not have the ultimate responsibility for meeting BAA reliability obligations.  Indeed, the genesis of this concept has always been rooted in the BAA’s retained reliability obligations.  It was also always expected by the EDAM BAAs that this practice would likely be relaxed after gaining confidence in the new market.  It is therefore expected that over time, such a practice would be the exception, not the norm.  If the EDAM market is properly functioning and reliable, as the CAISO also noted, it would be in every entity’s interest to put all available capacity into the market.  Assuming the market does in fact perform properly, this issue should therefore largely self-correct out of economic self-interest.

As to which mechanism, direct identification or a net EDAM export transfer limit, BANC would like to better understand the pros and cons of each.  From a BAA perspective, it would seem more logical to maintain control over resource selection.  This is also consistent with the original concept put forward by the BAAs – i.e., the BAA’s decision to maintain a reserve unit or fleet in excess of that needed to pass RSE, depending on system conditions.  In terms of simplicity and consistency, however, the export transfer limit seems easier to implement.  In any event, we would like further discussion on both of these options.

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

BANC has no further comments at this time. 

21. INTEGRATED FORWARD MARKET (IFM) AND RESIDUAL UNIT COMMITMENT (RUC): Please provide your organization’s comments on the IFM and RUC design as described in sections II.C.2 and II.C.3 of the EDAM revised straw proposal.

BANC support the concept addressed in the Straw Proposal that:

[A]ll resources offering energy bids in the IFM must submit bids for reliability capacity in the RUC at the same quantity as their energy bid plus ancillary service self-provision.  This ensures all resources shown in the EDAM RSE are fully available for use in RUC, including excess supply that participants offered above their RSE requirements.  Id. at 63.

In addition, BANC also supports the ability of an EDAM entity to hold back supply in excess of its RSE resources to address any internal BAA reliability obligations or concerns.  Under a fully functioning market, and once confidence in EDAM transfers are established, such hold backs would be expected to be infrequent. Indeed, it is in the economic interest of the EDAM entity to offer as much surplus capacity as possible.  Nevertheless, each EDAM BAA will need to determine how to best balance the economic and reliability risks of its own BAA as they become more familiar and comfortable with the performance of the EDAM.

22. 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 continued evaluation of potential market power mitigation enhancements within the Price Formation Enhancements initiative, which is currently ongoing, as described in section II.C.4 of the EDAM revised straw proposal.

BANC generally supports extending the MPM framework to the EDAM and retaining the ongoing assessment of potential market power mitigation enhancements within the Price Formation Enhancements initiative.

23. CONVERGENCE BIDDING: Please provide your organization’s comments on the proposal on convergence bidding in the EDAM and the associated transition period approach being proposed as described in section II.C.5 of the EDAM revised straw proposal.

While BANC does not support requiring EDAM entities to facilitate convergence bidding at start up, we have some concerns regarding the potential unintended consequences caused by the asymmetry between the CAISO allowing convergence bidding in its footprint and EDAM entities not allowing convergence bidding.   Nevertheless, EDAM participation will be a significant implementation challenge, and we fully support allowing the option to select a transition period. Equally important will be the CAISO’s monitoring of the impacts of this asymmetry and regular reporting.

Should an EDAM entity facilitate virtual bidding and there is a reliability concern, the CAISO notes it can suspend it inside its own BAA.  The CAISO further notes that should an EDAM entity recommend suspending convergence bidding in their BAA, “[t]he CAISO will evaluate the request and make the ultimate decision.” Id. at 67.  BANC questions how the CAISO can assert itself in another BAA’ reliability obligation?  While we understand the need to coordinate such an action, the BAA alone is responsible for its own reliability and cannot have such a decision reside with the CAISO.  BANC believes this concept needs to be properly modified to ensure proper lines of BAA accountability are maintained.

24. EXTERNAL RESOURCE PARTICIPATION: Please provide your organization’s comments on the proposal for external resource participation in the EDAM, as described in section II.C.6 of the EDAM revised straw proposal.

BANC agrees that external resource participation (intertie bidding) at the EDAM entity boundary should not be a day one feature for a variety of reasons, including potential risks to EDAM entity BAA reliability and free riding on the EDAM BAA transmission system.  These concerns are noted by the CAISO:

Stakeholders, particularly WEIM entities, support extending the WEIM framework for external resource participation to the EDAM out of concern that allowing non-contracted, non-source-specific resources to submit economic bids at their interties in the day-ahead timeframe might adversely affect reliability by displacing internal generation incapable of commitment in real-time horizon if the external supply ultimately is not delivered.  In tight system conditions this would create operational uncertainty, which these stakeholders believe outweighs any benefit of increasing the potential pool of economic supply.  Furthermore, we are concerned about potential free riding on the EDAM entity’s transmission system.  This could occur if economic bids from non-source specific, non-contracted, supply at their interties flowed without first acquiring transmission rights under the EDAM entity OATT.  Id. at 68. 

BANC supports the concept of revisiting this issue after some reasonable period of operational experience and after a careful assessment of the potential issues and proposed solutions to address these reliability and free rider concerns.

25. 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.C.7 of the EDAM revised straw proposal.

BANC supports the extension of the WEIM approach to GHG, noting the CAISO’s expressed intent to continue to evolve the approach in accordance with regulatory changes — e.g., the LADWP hybrid approach.  In summary, BANC views the CAISO approach as a rational starting point to avoid delay in EDAM start-up.

26. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the use of the GHG Reference Pass as the GHG counterfactual.

BANC has no additional comments at this time.

27. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the attribution data reported as a part of the resource specific approach, and if or what additional information would provide transparency.

BANC has no additional comments at this time.

28. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s overall comments, including potential suggested enhancements, on the zonal proposal.

BANC has no additional comments at this time.

29. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s overall comments, including potential suggested enhancements, on the LADWP proposal.

BANC has no additional comments at this time.

30. GREENHOUSE GAS ACCOUNTING: Please provide any other feedback on GHG accounting not captured by the questions above.

BANC has no additional comments at this time.

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

BANC generally agrees with the allocation structure of transfer revenues between the EDAM entities – e.g., 50/50 on a shared path.  However, this issue continues to challenge many of the WEIM entities considering EDAM.  These concerns are simply rooted in a lack of clarity around the dichotomy between ETSR constraints resulting in price separation reflected in marginal energy costs and ITC constraints reflected price separation in marginal congestion costs and how this impacts revenue allocations between BAAs.  While CAISO has made attempts to further explain the “why” around this, significant confusion exists nonetheless. We urge the CAISO to clear a path for a simple and elementary discussion and explanation.  Whether we agree with the policy or not, we need to be able to fully understand and articulate the “why” around this dichotomy.

32. SETTLEMENTS: Please provide your organization’s comments on the settlements design described in section II.D.2 of the EDAM straw proposal.
Consider comments on the different aspects of settlement allocation among the different settlement components.

BANC has no comments at this time.

33. EDAM FEES FRAMEWORK: Please provide your organization’s comments on the EDAM fees framework, particularly the implementation fee and administrative fee framework, as described in section II.D.3 of the EDAM straw proposal.

BANC has no comments on the fee structure and understands that the GMC, which will be a significant element of the cost structure, will require a better understanding of which WEIM entities are opting to join the EDAM.  That noted, having all of the estimated fees as soon as practicable will be essential in completing any cost-benefit assessment for EDAM participation. 

34. GENERAL COMMENTS: Please provide your organization’s comments on the decisional classification for the EDAM initiative as described in section III.B of the EDAM revised straw proposal.

BANC agrees with the decisional classification of joint authority.

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

BANC has no comments at this time.

Bonneville Power Administration
Submitted 09/26/2022, 04:31 pm

Contact

Andy Meyers (apmeyers@bpa.gov)

1. GENERAL COMMENTS: Please provide a summary of your organization’s comments on the Extended Day-Ahead Market revised straw proposal:

Bonneville would like to thank the CAISO for their continued collaboration and dialogue with stakeholders as the EDAM market design continues to evolve.
Bonneville is largely supportive of the market design and framework that CAISO shared in its EDAM revised straw proposal. Bonneville continues to have concerns as the EDAM market design develops. Regarding transmission commitment and transmission revenue recovery, our comments today are similar to those filed during the first evaluation of EDAM straw proposal in June of 2022 and we suggest continuing conversations on this topic. Bonneville supports the CAISO’s proposed equal treatment for load and EDAM exports recognizing that it provides faith in the reliability of EDAM transfers. Bonneville generally supports the proposal’s framework for Resource Sufficiency. We appreciate that the design provides market entities with advisory and on demand evaluation. We support the CAISO’s choice to include WSPP schedule C transactions in EDAM RSE evaluation but we encourage the CAISO to consider all alternatives around circumstances where source specificity and transmission remain unavailable by 10:00 AM. We encourage CAISO to consider our comments surrounding market power mitigation and we support the transitional approach to the adoption of convergence bidding. We seek some clarification on external resource participation and we generally support a zonal greenhouse gas accounting framework rather than the proposed resource specific framework.
As Bonneville continues to evaluate all day-ahead market opportunities, we believe that there is an increased likelihood that multiple day-ahead market initiatives will be successfully implemented in WECC. Bonneville is uniquely situated in WECC in that we have preference loads in eight adjacent BAAs. As such, our evolving belief is that some Bonneville loads may be outside any organized market, some Bonneville loads may be inside an organized market in which Bonneville is not a participant but where it has loads, and some Bonneville loads may be in an organized market if Bonneville makes a decision to participate. A potential outcome as just described highlights the fact that Bonneville will need to be informed of all market rules and structures in order to ensure we appropriately serve our loads throughout the Northwest. Bonneville believes that “seams” between markets will be an increasingly important topic as all day-ahead market initiatives continue to advance and mature. Seams issues may include differences in transmission operating rules, power market design, scheduling practices, settlement practices, resource adequacy programs (e.g. the Western Resource Adequacy Program), etc. Bonneville suggests that the CAISO and other market initiatives be open to discussions to identify and address “seams” issues as soon as practical.
Bonneville recognizes that the EDAM initiative is not solely rooted in just the market design but is also affected by several parallel stakeholder initiatives. Bonneville intends to continue to participate in the stakeholder conversations of governance, resource sufficiency evaluation, price formation, and Day Ahead Markets Enhancements in parallel with our continued engagement in EDAM.

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

Bonneville 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.


Bonneville appreciates that the CAISO clarified that all resources located in an EDAM BAA would be participating resources and that such resources would receive settlement statements from the CAISO. While it was not clearly stated in the proposal, this does imply that each resource would have a contractual relationship with the CAISO. Bonneville requests that CAISO clarify whether independent generators will have a direct relationship with CAISO for settlement purposes.

3. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on the topic of confidence in market transfers design as discussed in section II.A.2 of the EDAM revised straw proposal. In particular, please provide comments regarding the different design elements supporting confidence in transfers including the application of the market parameters preventing the propagation of shortfalls and the associated outcomes illustrated in the examples.

We understand that developing a market framework in which market participants have confidence in EDAM transfers is important to successfully establishing a day-ahead market. As such, the CAISO proposes to apply equal priority to EDAM exports and loads and to relax the power balance constraint for a BAA experiencing a shortfall. Bonneville supports the proposal as it helps to provide a framework and design where market participants can have much needed faith and reliability in EDAM transfers. The CAISO notes five design elements (Resource Sufficiency, Market Optimization through IFM & RUC, Robust Transmission availability, Imbalance Reserves, and Market Parameters preventing propagation of shortfall) which have significant importance in affecting the confidence in EDAM transfers. Bonneville agrees with CAISO of the importance of each of these elements in relation to the overall market design. Establishing confidence in market transfers begins with ensuring each EDAM BAA is successfully prepared to serve load and meet uncertainty in their respective BAA. Bonneville would like to specifically comment on the design element of Market parameters preventing propagation of shortfalls. Bonneville supports the CAISO's proposed approach of limiting relaxation of the power balance constraint to only the BAA experiencing a shortfall. It is important to Bonneville that the market design restricts and isolates shortfalls to the BAA experiencing them. Relaxing the power balance constraint across the footprint would result in unacceptable higher costs outside of the BAA experiencing the shortfall.
Bonneville does seek clarification from CAISO on reliability actions on etags. It is Bonneville’s assumption that each respective BAA will be responsible for taking all the reliability action on in and out of market etags but we would like CAISO to confirm that position.

4. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on the topic of equal priority between market transfers and load in edge reliability scenarios, as effectuated in the operational timeframe, informed by operator discretion and good utility practice, as discussed in section II.A.2 of the EDAM revised straw proposal.

Bonneville supports the CAISO's proposal of equal priority for loads and transfers. In edge case circumstances the role of reliability continues to rest with each individual BAA who should utilize their operational tools to manage the shortfall and maintain grid reliability. If loads and exports were not afforded equal priority, and a BAA elected to curtail EDAM exports, it could potentially cause a cascading shortfall to other market participants.

5. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on the proposal and effectuation of lower priority market transfers sinking in an EDAM BAA that has failed the day ahead RSE or otherwise is not part of the WEIM RSE pool as discussed in section II.A.2.d of the EDAM revised straw proposal.

In the revised proposal CAISO suggests applying a lower priority to exports for any BAA that fails to meet the RS evaluation. This approach seems logical and we support the idea of a source BAA being in control of whether or not to afford the lower priority transfer equal priority as load. This design will allow the BAAs to coordinate and communicate through the stressed conditions. Applying this approach where transfers to RSE-failing BAA's risk earlier curtailment should incent BAA's to come to the market sufficient or seek out-of- market transactions to backstop lower priority transactions during stressed conditions.

6. TRANSMISSION COMMITMENT: Please provide your organization’s comments on the overall framework of transmission commitment in EDAM, including the framing of how transmission is made available through the concept of the transmission “buckets” as described in section II.B.1 of the EDAM revised straw proposal.

Bonneville continues to have concerns that we shared in June 2022.
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 in order 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 utilized to support transfers of those contracts in the market optimization, thus enabling 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, Bonneville prefers to 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. Acknowledging this is not always the case, Bonneville suggests the CAISO work with stakeholders to determine a reasonable solution on how to include these contracts while mitigating the concerns outlined above. Our response to this issue is elaborated on in 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. Section 1235 of the Energy Policy Act of 20053 prohibits the Federal Energy Regulatory Commission from forcing any electric utility or person in the Pacific Northwest to convert firm transmission rights to financial rights for Transmission contracts that were in place as of 2005. Bonneville requests that CAISO and stakeholders further analyze the implications of this provision and develop an understanding on the implications for entities in the Pacific Northwest who may wish to participate in a day-ahead market.
In addition to these concerns, the proposal for bucket 3 transmission donation suggests that all 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 PTP transmission beyond their bucket 1 needs, given that 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

7. TRANSMISSION COMMITMENT: Please provide your organization’s perspective on Bucket 2 transmission and the pathways for how transmission customers can exercise their transmission rights, whether secured under the OATT or under legacy arrangements, or how otherwise those transmission rights are made available to the market as described in section II.B.1 of the revised straw proposal.

As Bonneville stated in their response to comments in June 2022 and in response #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 utilize 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 in order to use those rights. For the proposal to assume that buckets 1 and 2 transmission are available for market optimization, it seemingly requires 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 agreeing to make their transmission available to the market in exchange for the potential of receiving congestion revenues, Bonneville strongly suggests the CAISO work with entities whose firm transmission rights are protected by the Energy Policy Act of 2005 to develop an option for meaningful non-participation.

8. TRANSMISSION COMMITMENT: Please provide your organization’s perspective on how ISO transmission is made available to the EDAM under the transmission commitment design.

The straw proposal appears to offer a similar framework for the how CAISO makes transmission available to the EDAM market when compared to the framework by which transmission contract holders in an EDAM BAA and the EDAM BAA make transmission available to the EDAM. The primary difference appears to be in bucket 2 transmission. CAISO proposes that legacy transmission rights holders will not have unscheduled transmission donated to the market due to their ability to use this legacy transmission up and in to Real Time.
Bonneville understands that CAISO has established specific rights associated with legacy transmission. It may be useful to Bonneville and other stakeholders if the CAISO quantified the aggregate amount of legacy transmission.
If CAISO is capable of designing a process by which some unscheduled transmission is not made available to the market they may want to consider whether similar functionality should be offered to stakeholders outside the ISO BAA. Bonneville realizes that CAISO is concerned about withholding transmission from the market and the impacts that this behavior could have on the market results. This concern should be balanced against stakeholders needs to set aside unscheduled transmission from market utilization. Further discussion with stakeholders on this topic may be warranted before finalizing the market design.

9. TRANSMISSION COMMITMENT: Please provide your organization's comments on the transmission revenue requirement (TRR) recovery framework design which is intended to allow for recovery of certain transmission revenues to keep the transmission provider whole from a historical TRR perspective in the EDAM as described in section II.B.1 of the revised straw proposal.
Consider comments on the three different proposed components of the EDAM recoverable TRR and the proposed methods of allocating the TRR shortfall, along with other elements of the design.

Bonneville shared our concerns in the June 2022 comments and continues to be concerned that transmission used by the market must be compensated at a rate which adequately covers the costs of actual or forecast transmission. Bonneville’s governing statutes require Bonneville to set rates to recover its costs in a formal administrative hearing and to equitably allocate the cost of the Federal transmission system between Federal and non-Federal power utilizing such system, and requires Commission approval of the cost recovery component of its rates. Therefore, Bonneville emphasizes that bucket 3 transmission rates should also be developed based on cost-causation.
Bonneville appreciates the consideration in the updated straw proposal of a true up, however, Bonneville has concerns with the updated version on what is being considered in the transmission revenue requirement. As part of the OATT construct, sales to the transmission provider’s marketing arm are recoverable costs and therefore should be considered in the calculation of the transmission revenue requirement.

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

Bonneville encourages CAISO to model transmission and transfers that reflects actual system operations. CAISO’s proposal for transmission availability and transfer revenue does not adequately reflect how potential EDAM entities operate in the Pacific Northwest. This disconnect creates a significant burden for transmission providers and balancing authorities while creating the potential for seams and inaccurate price signals.

11. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the design of the proposed application that will be used to conduct the EDAM RSE as described in section II.B.2 of the EDAM revised straw proposal.
This includes comments on the ability to conduct advisory RSE tests prior to the binding run, the timing of the RSE, test inputs, test obligation, the decision not to include transmission constraints within the EDAM RSE as well as any other relevant elements.

Planning and balancing supply and load starts before the day-ahead timeframe. Entities need transparent Resource Adequacy requirements with a clearly defined planning reserve margin requirements before the day-ahead timeframe. These requirements aid in transitioning into the day-ahead timeframe and lay the groundwork for meeting Resource Sufficiency Evaluation.
Bonneville agrees with the proposal for a 6am and 9am advisory run to be provided by the CAISO for each EDAM participant. Given forecasts are locked on the day before trading, Bonneville suggests that it may be beneficial for the first advisory run provided by the CAISO to run at 5am rather than 6am. This earlier time would be in alignment with the bilateral market trading which begins around 5am. Additionally, we support the CAISO initiative to make available on-demand RSE testing software for use by participants.
Bonneville acknowledges the difficulty and complexity associated with ensuring resource delivery for RSE; however, we encourage CAISO to take any reasonable design action that would confirm the likelihood of deliverability, short of creating a proxy DAM run. This may include a demonstration of transmission rights prior to the binding RSE run. The proposed approach of monitoring whether capacity is undeliverable could result in a useful measurement, but may not provide market participants with adequate assurances if it does not include demonstration of transmission..

12. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposed treatment of firm energy contracts where the source/transmission may not be known in advance of the market run (i.e. WSPP Schedule-C supply contracts) within the EDAM RSE.
Consider comments on if the proposed requirement for the submission of day-ahead e-tags, the potential to be removed from the pooled WEIM RSE, as well as monitoring to provide a sufficient level of confidence in these types of supply arrangements. Additionally, consider the proposed modeling of these arrangements as “bucket 1” transfers, along with the potential pricing impacts in the source BAA and the potential to utilize BAA-to-BAA transmission between the source and sink BAA.

Bonneville agrees and supports the fact that WSPP Schedule-C contracts are reliable and dependable tools for bilateral energy trading.
CAISO proposes that non-source-specific contracts be tagged three hours after DAM close, and Bonneville recognizes the challenges in tagging prior to the market run. However, in absence of a more thorough forward showing of a load service plan, a more comprehensive and proactive approach to ensuring deliverability should also consider some sort of transmission identification before the market run. This can be as basic as demonstrating a long or short-term transmission reservation. The proposal leans too heavily on reactive measures and Bonneville suggests that the addition of proactive measures may better accomplish shared objectives. DMM monitoring and reporting is essential, but it should not be relied on solely to enforce tagging requirements where proactive measures could supplement the proposal and provide better information for the market run.
Bonneville supports the proposed requirement that the source BAA be specified prior to the IFM process and that transmission should be demonstrated at the transfer point from non-EDAM BAAs. Allowing e-tags to be submitted (or capacity schedules replaced) prior to the STUC, without penalty, seems to ignore the RSE requirement. Bonneville believes an RSE failure should be incurred if a valid e-tag is not submitted prior to 3 hours after the day ahead market results are released.

13. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s perspective on the ISO proposal for counting in the EDAM RSE import bids made at the CAISO BAA boarder with a non-EDAM BAA.

Bonneville believes the conditions under which EDAM RSE import bids from non-EDAM BAAs count towards RSE must be equivalent for both the CAISO BAA and a participant EDAM BAA. Load in a BA might be served by external resources. All load should have the ability to supply their RS requirement on an equal basis regardless of the location of their resource. All resources that meet the equivalent technical and commercial requirements should count towards passing the RS test regardless of whether they are in an EDAM BAA or a non-EDAM BAA.
14.

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.

Bonneville reiterates concerns from prior comments that “emergency” demand response should not be included for RSE. Bonneville does not believe it appropriate to include “emergency” demand response in RSE as it appears to be a product and tool for operators to utilize in emergency grid conditions, rather than a tool and product for use in the base scheduling time horizons to adequately prepare for participating in the EIM. Bonneville questions whether the inclusion of “emergency” demand response allows entities to lean on the market for supply at lower cost. We do not believe the demand forecast adjustment is a sufficient deterrent to prevent this behavior. Bonneville continues to support inclusion of non-emergency demand response for RSE.

15. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposal to make available advisory D+2 market results (day ahead + 2 market run) to help inform gas procurement and manage gas resource participation in the day ahead market.
Consider commenting on any additional potential enhancements or changes to this market run which could increase its accuracy.

Bonneville has no comments at this time.

16. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on whether the proposal to cure resource insufficiencies through the EDAM market at an administrative surcharge provides incentive to cure shortfalls prior to participating in the EDAM.
Please comment on the proposed requirement to cure through the market, the block surcharge, as well as the potential to credit against the surcharge any market energy prices. In addition, please comment on the proposed revenue allocation, and CAISO BAA specific sub-allocation for this surcharge.

Bonneville has concerns with the proposal to charge an administrative surcharge and instead believes that an entity should be required to demonstrate resource sufficiency in order to participate. The proposal of a surcharge does not address Bonneville’s concern regarding insufficient resources and leaning on others.
Further, basing the administrative surcharge on a bilateral 16-hour block may not adequately capture hourly price volatility within that 16-hour period. If this approach is adopted, CAISO should consider hourly shaping factors that more accurately estimate the value of energy during peak hours. It appears the proposed approach disproportionately penalizes those who fail few hours versus those who fail many hours. The failing EDAM BAA should not be indifferent between the bilateral market or the EDAM, should it fail in all peak hours. The surcharge should be reasonably higher than the bilateral price, demonstrating that the full cost of utilizing the unscheduled EDAM capacity is more costly than the bilateral market.
Allocating revenues to EDAM exporters appears on the surface to appropriately reward BAAs, but we question whether development of a counterfactual would be a better way to compensate BAAs that take action to cure deficiencies. The mere ability to cure deficiency is inferior to actions that resolve deficiency. For example, every entity that demonstrates surplus could share in a portion (ratio TBD) of the penalty funds collected.

17. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposal to stand up an hourly bid-range trading platform.

Bonneville supports the development of a bid range trading platform. Allowing trading activity the opportunity to cure deficiencies that may otherwise result in out-of-market actions appears to have no downside, especially since administrative actions remain an option should deficiencies persist.
Bonneville does not believe CAISO should administer this new market platform, but rather leverage existing trade platforms or encourage an independent 3rd party provider to fulfil this need to ensure market neutrality.

18. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the utilization of a pooled WEIM RSE for entities passing the EDAM RSE, as described in the revised straw proposal.
Please comment on the criteria for exclusion from the pooled WEIM RSE, the proposal to withhold a configurable quantity of imbalance reserves to be utilized for benefit of the EDAM footprint, and the preferred approach for the pooled WEIM RSE following a potential failure of the pool in the WEIM.

Bonneville supports utilization of a pooled WEIM RSE as it is expected to more accurately reflect the capabilities of various electrically similar regions. We encourage CAISO to target failure consequences specifically to offending entities within each pool. We appreciate any assurances CAISO can provide that failure consequences will be attributed to appropriate entities.

19. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on two introduced mechanisms for consideration that further allow a BAA to manage its resources: (1) mechanisms to manage supply in excess of RSE, and (2) consideration of a net EDAM transfer export limit constraint as described in the revised straw proposal.
Please consider commenting on the value and need for these mechanisms for individual BAAs along with other design elements that should be considered in enhancing or modifying these mechanisms to address the issues described.

Bonneville supports the ability of all market participants to deploy surplus capability based on their risk preferences. The mechanism to introduce any surplus into the market should be primarily incentive-driven. Should some participants desire additional mechanisms to assist in managing their surplus energy, such mechanisms should be available to all EDAM participants. Bonneville strongly urges the CAISO to monitor the development of such mechanisms for unintended consequences.
Bonneville has no preference between the two proposed excess supply management mechanisms or the possibility to implement both mechanisms.

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

Bonneville has no additional comments.

21. INTEGRATED FORWARD MARKET (IFM) AND RESIDUAL UNIT COMMITMENT (RUC): Please provide your organization’s comments on the IFM and RUC design as described in sections II.C.2 and II.C.3 of the EDAM revised straw proposal.

Bonneville does not have any specific comments on the IFM and RUC design discussed in the EDAM straw proposal. We acknowledge that CAISO intends not to co-optimize IFM and RUC.
We recognize that IFM and RUC continue to be central components to CAISO’s DAME initiative. We understand that CAISO will be publishing a fourth version of the DAME straw proposal in early October. Bonneville intends to submit comments in response to the upcoming revised proposal. We encourage CAISO to reference Bonneville’s prior comments on the DAME initiative

22. 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 continued evaluation of potential market power mitigation enhancements within the Price Formation Enhancements initiative, which is currently ongoing, as described in section II.C.4 of the EDAM revised straw proposal.

Bonneville is indifferent regarding which initiative houses market power mitigation enhancement discussions. We do, however, feel strongly regarding the outcome and general philosophy demonstrated by CAISO during these discussions. CAISO’s approach of mitigating bids based on the mere potential of market power serves as a disincentive for supply to participate in multiple energy-related products.
Bonneville reiterates our concern that over-mitigation endangers our ability to reliably meet load obligations without over-reliance on market purchases. We request, again, the ability for entities to have their bids removed from the market run rather than be mitigated resulting in sub-optimal system dispatch

23. CONVERGENCE BIDDING: Please provide your organization’s comments on the proposal on convergence bidding in the EDAM and the associated transition period approach being proposed as described in section II.C.5 of the EDAM revised straw proposal.

Bonneville supports CAISO’s cautious approach toward implementing convergence bidding in EDAM. We recognize the important role convergence bidding plays in organized energy markets, and we believe the transition period is appropriate to ensure that market participants understand its nuances.
We support the CAISO’s interest in closely monitoring the effects of implementation across the EDAM footprint, especially that relationship between the ISO BAA (with convergence bidding) and those EDAM BAAs without convergence bidding. Bonneville requests an explanation of why convergence bidding is not allowed at intertie locations between EDAM BAAs, and between EDAM and non-EDAM BAAs.

24. EXTERNAL RESOURCE PARTICIPATION: Please provide your organization’s comments on the proposal for external resource participation in the EDAM, as described in section II.C.6 of the EDAM revised straw proposal.

Bonneville continues to advocate for external resource participation from known resources that have a contractual relationship with the EDAM BAA. The revised proposal states that the WEIM external resources policy will be carried forward into EDAM and rehashes the concern about reliability from unknown resources. The table on page 68 indicates that known external resources will be able to self-schedule into an EDAM BAA, which appears to be different than what is described in the text above the table. The proposal further contradicts itself in the first paragraph on page 69, stating:
Similarly, source specific supply that is otherwise not pseudo-tied or dynamically scheduled, but is owned or under contract to serve load within the EDAM BAA, can be self-scheduled or economically bid at EDAM external interties because these resources have a contractual relationship with the EDAM entity or another LSE within the EDAM BAA. (emphasis added)
This explanation is distinctly different from carrying the WEIM external resource policy forward into EDAM. Bonneville requests clarification from the CAISO regarding these contradictions within the proposal. Bonneville supports the interpretation in the quote above and strongly believes that known resources with a contractual relationship with the EDAM or an LSE located inside the EDAM BAA should be able to self-schedule and economically bid resources that are imported into the EDAM BAA. If this interpretation is not correct, CAISO should pursue effective means of external resource participation. Bonneville has a statutory obligation to serve public utility districts, cooperatives, and municipalities in the Pacific Northwest and many of these customers are located in BAAs that will potentially be in the EDAM. Bonneville holds long-term transmission contracts with almost all of the potential EDAM participants in the Northwest and schedules power to its load-following customers continuously. These transactions are currently a significant part of the potential EDAM everyday business and thus do not present any reliability concerns if they are allowed to self-schedule and economically bid in the EDAM. In addition, with long-term transmission contracts in place, there would be no shortfall of transmission revenue or free ridership associated with allowing these known resources to self-schedule or economically bid in the EDAM.
In addition to having the load service obligation in these potential EDAM participants BAAs, most of the potential EDAM participants are Bonneville’s trading partners in the bilateral market. Prohibiting known resources with transmission contracts from self-scheduling and economically bidding into the EDAM BAAs could squelch this trading activity and may have a detrimental impact on the amount of supply available to the EDAM participants. Similar to the start of the WEIM, some BAAs will take longer to join EDAM than others, and some may join another day-ahead market altogether. Bonneville believes that allowing known external resources with contractual relationships with the EDAM participant or LSEs within the EDAM participant BAA to self-schedule and economically bid into the EDAM is absolutely necessary and must be a day one feature of the EDAM.

25. 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.C.7 of the EDAM revised straw proposal.

While Bonneville believes that the zonal approach has advantages that make it a more durable, long-term solution, Bonneville understands that the CAISO is proposing to adopt the resource-specific approach at the outset of EDAM. Bonneville believes some of the positive aspects of the zonal approach can be utilized in the resource-specific approach to improve accounting of GHG emissions attributed to states with GHG programs like California and Washington. Bonneville urges the CAISO to not wait until state air regulators update their rules to further explore adoption of some of these aspects of the zonal approach.
GHG accounting in market design needs to be addressed in a joint/parallel process with state air regulators, where updates to state programs are made in conjunction with market design, both recognizing the limitations of each other. The CAISO is in a position to facilitate this process with the California Air Resource Board (CARB) and Washington Department of Ecology (Ecology). Bonneville is concerned that if the CAISO waits for CARB and Ecology to update their rules to enable a zonal approach, that update may not happen and could lack the benefit of coordination with regulators.
Specifically, Bonneville encourages the CAISO to work with CARB to ensure the measures to mitigate the potential for secondary dispatch under the resource specific approach meet CARB’s criteria for sufficiently minimizing leakage. Absent this, Bonneville is concerned that CARB may apply the same outstanding emissions calculation as used in the EIM to the EDAM as well. If state air regulators treat EDAM imports into their state as unspecified that is likely to be a major deterrent to EDAM participation for entities with load in a state with a GHG pricing program.

26. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the use of the GHG Reference Pass as the GHG counterfactual.

Bonneville generally supports this approach as a sensible solution for establishing a baseline. However, Bonneville believes additional constraints should be included to limit the deeming of resources to their incremental dispatch. Bonneville believes it is inappropriate to deem a zero carbon resource to a state with a GHG program when those resources are meeting a BAA’s native load. Thus, the amounts deemed to meet load in a state with a GHG program should be limited to the amount that is surplus of what is needed to meet a BAA’s native load.
In addition, there may be other appropriate considerations that would enable a resource to be deemed to a state with a GHG program, such as if the resource is contractually committed to load in that state. Bonneville supports further exploration of how to incorporate these limitations into the market design or through out-of-market solutions coordinated with state air regulators.

Lastly, Bonneville requests the CAISO explain how the GHG Reference Pass and GHG counterfactual will work for BAAs like Bonneville where its footprint spans multiple states, including states with GHG programs such as Washington and states without GHG programs.

27. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the attribution data reported as a part of the resource specific approach, and if or what additional information would provide transparency.

Bonneville supports the CAISO making available data on the GHG Reference Pass and other relevant information to understand how the amount deemed to the GHG area was calculated. Bonneville also requests the CAISO make available data related to the calculation of the GHG boundary for a BAA that has some, but not all, of its area located in a GHG regulation area.

28. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s overall comments, including potential suggested enhancements, on the zonal proposal.

While Bonneville supports continued development of the zonal approach as a long-term solution for GHG accounting in EDAM, Bonneville believes aspects of the zonal approach can already be used to improve GHG accounting for the resource-specific approach (see question 26 above). Bonneville urges the CAISO to not wait for CARB to make changes to the cap-and-trade program in order to explore how to incorporate aspects of the zonal approach into the market design or pursue a more holistic shift to the zonal approach. Rather, Bonneville urges the CAISO to facilitate a collaborative process with CARB (and Washington Department of Ecology) to consider how this can be done.

29. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s overall comments, including potential suggested enhancements, on the LADWP proposal.

Bonneville appreciates LADWP developing alternative solutions. Should the CAISO pursue LADWP’s proposal in the future, Bonneville would like to better understand if and how the method compensates clean generation that is deemed to meet load in a GHG area. Appropriate price signals and compensation for clean generation is important for incentivizing clean generation and achieving long-term reduction of GHG emissions.

30. GREENHOUSE GAS ACCOUNTING: Please provide any other feedback on GHG accounting not captured by the questions above.

There are two other areas that Bonneville requests the CAISO spend more time developing:
1) Geographical boundaries (i.e., how to identify imports to a state with a GHG program for BAAs with a footprint in multiple states that includes a GHG zone).This issue exists regardless of GHG accounting approach and for both the EIM and EDAM. Bonneville submitted comments to the CAISO on September 6, 2022 regarding the CAISO’s initiative for WEIM upgrades for Washington’s cap-and-invest program. Bonneville refers the CAISO to those comments and does not repeat them here. Bonneville requests the CAISO work directly with impacted BAAs such as Bonneville to determine an appropriate method for identifying Washington load in Bonneville’s BAA.
2) Attribution methodology for identifying what resources are deemed to what GHG area. Bonneville repeats its previous request for the CAISO to explain and provide examples of how the market will determine which resources are deemed as delivered to each GHG area (e.g. California and Washington). While Bonneville understands this will generally be done on a least-cost basis, the CAISO needs to better explain how this will work in practice.
Finally, Bonneville does not currently have a position on enhancements the CAISO indicates it may be able to make in the future, such as the ideas discussed on page 81 of the CAISO’s Revised Straw Proposal regarding tracking of emission intensity and/or data sharing of GHG attributions with WREGIS. Bonneville requests that if the CAISO pursues such further enhancements, it would be done through a separate stakeholder process at that time.

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

Bonneville continues to support transfer and congestion revenues allocation methodologies which result in distributing revenues to the entity making transmission available to the market. Our previous comments submitted in June 2022 supported compensation to the entity that makes transmission available to the market and is used by the market. Further, we suggest that the CAISO consider implementing a simple consistent uniform process for allocation and sub-allocation of transfer and congestion revenues based on load cost ratio.

32. SETTLEMENTS: Please provide your organization’s comments on the settlements design described in section II.D.2 of the EDAM straw proposal.
Consider comments on the different aspects of settlement allocation among the different settlement components.

Bonneville appreciates that the CAISO identified the numerous settlement categories and described the intended calculation of each category identified in the straw proposal. It is clear that settlement will continue to remain a complex and complicated feature of the market. Bonneville does not have any explicit feedback at this time. We did observe the importance of the DAME stakeholder initiative’s impact to a number of settlements categories. We feel that stakeholders can gain better clarity and understanding of the impacts between the DAME and EDAM proposals if the CAISO were to describe, cite, or link to settlement materials being developed for DAME in the EDAM proposal.
Additionally, stakeholders could improve upon their understanding of settlements in EDAM (and changes in EIM settlements), if CAISO were to develop detailed settlement examples for each category discussed in the straw proposal. Further, Bonneville suggests that time at a future stakeholder workshop be devoted to review and discuss the settlement categories and examples.

33. EDAM FEES FRAMEWORK: Please provide your organization’s comments on the EDAM fees framework, particularly the implementation fee and administrative fee framework, as described in section II.D.3 of the EDAM straw proposal.

Bonneville appreciates the CAISO’s specificity of expected EDAM onboarding costs to be approximately $1,200,000 per entity. This figure appears reasonable and in line with cost experienced by entities when joining the EIM market. Bonneville requests that the CAISO commit to providing an updated estimate of the start-up costs at the time of signing the Implementation Agreement based on the known complexity of the joining entity. We accept the proposed requirement of an initial deposit followed by incremental deposits. We appreciate the CAISO’s clarification that once a party transitions to EDAM they will only pay the EDAM administrative fee and will no longer pay the EIM administrative fee. We would appreciate it if CAISO could clarify if market participants who remain in EIM and do not join EDAM would see an increased administrative fee as EDAM entities would stop paying the EIM administrative fee and only pay the EDAM administrative fee.

34. GENERAL COMMENTS: Please provide your organization’s comments on the decisional classification for the EDAM initiative as described in section III.B of the EDAM revised straw proposal.

Bonneville appreciates the CAISO’s recognition that the EDAM initiative, and its accompanying adjustments to the EIM, affects a broad set of stakeholders. Bonneville believes that it is important to consider a decision paradigm which affords both the CAISO Board of Governors and the EIM Governing body joint decisional authority. Bonneville supports the May 11th proposal and thanks the CAISO for enhancing the EDAM decision framework

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

Development of a day-ahead market is a significant undertaking and Bonneville appreciates the CAISO’s consideration of all stakeholder responses as the next iteration of the market design is developed. As we discussed in our response to question 1, “seams” are likely to become an increasingly important issue as market development continues. We believe that CAISO should strive for thorough coordination with neighboring systems and developing markets. Bonneville would like to point to the Coordinated Transmission Agreement (CTA) as an example of the type of coordination that should occur with neighboring systems.
If there are any aspects of our response that you would like to discuss please don’t hesitate to reach out to us. We look forward to reviewing and responding to the next iteration of the EDAM market design.

California Air Resources Board
Submitted 09/12/2022, 09:09 am

Contact

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

1. GENERAL COMMENTS: Please provide a summary of your organization’s comments on the Extended Day-Ahead Market revised straw proposal:

See response in question 25, greenhouse gas accounting, and letter attached.

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

See response in question 25, greenhouse gas accounting, and letter attached.

3. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on the topic of confidence in market transfers design as discussed in section II.A.2 of the EDAM revised straw proposal. In particular, please provide comments regarding the different design elements supporting confidence in transfers including the application of the market parameters preventing the propagation of shortfalls and the associated outcomes illustrated in the examples.

See response in question 25, greenhouse gas accounting, and letter attached.

4. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on the topic of equal priority between market transfers and load in edge reliability scenarios, as effectuated in the operational timeframe, informed by operator discretion and good utility practice, as discussed in section II.A.2 of the EDAM revised straw proposal.

See response in question 25, greenhouse gas accounting, and letter attached.

5. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on the proposal and effectuation of lower priority market transfers sinking in an EDAM BAA that has failed the day ahead RSE or otherwise is not part of the WEIM RSE pool as discussed in section II.A.2.d of the EDAM revised straw proposal.

See response in question 25, greenhouse gas accounting, and letter attached.

6. TRANSMISSION COMMITMENT: Please provide your organization’s comments on the overall framework of transmission commitment in EDAM, including the framing of how transmission is made available through the concept of the transmission “buckets” as described in section II.B.1 of the EDAM revised straw proposal.

See response in question 25, greenhouse gas accounting, and letter attached.

7. TRANSMISSION COMMITMENT: Please provide your organization’s perspective on Bucket 2 transmission and the pathways for how transmission customers can exercise their transmission rights, whether secured under the OATT or under legacy arrangements, or how otherwise those transmission rights are made available to the market as described in section II.B.1 of the revised straw proposal.

See response in question 25, greenhouse gas accounting, and letter attached.

8. TRANSMISSION COMMITMENT: Please provide your organization’s perspective on how ISO transmission is made available to the EDAM under the transmission commitment design.

See response in question 25, greenhouse gas accounting, and letter attached.

9. TRANSMISSION COMMITMENT: Please provide your organization's comments on the transmission revenue requirement (TRR) recovery framework design which is intended to allow for recovery of certain transmission revenues to keep the transmission provider whole from a historical TRR perspective in the EDAM as described in section II.B.1 of the revised straw proposal.
Consider comments on the three different proposed components of the EDAM recoverable TRR and the proposed methods of allocating the TRR shortfall, along with other elements of the design.

See response in question 25, greenhouse gas accounting, and letter attached.

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

See response in question 25, greenhouse gas accounting, and letter attached.

11. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the design of the proposed application that will be used to conduct the EDAM RSE as described in section II.B.2 of the EDAM revised straw proposal.
This includes comments on the ability to conduct advisory RSE tests prior to the binding run, the timing of the RSE, test inputs, test obligation, the decision not to include transmission constraints within the EDAM RSE as well as any other relevant elements.

See response in question 25, greenhouse gas accounting, and letter attached.

12. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposed treatment of firm energy contracts where the source/transmission may not be known in advance of the market run (i.e. WSPP Schedule-C supply contracts) within the EDAM RSE.
Consider comments on if the proposed requirement for the submission of day-ahead e-tags, the potential to be removed from the pooled WEIM RSE, as well as monitoring to provide a sufficient level of confidence in these types of supply arrangements. Additionally, consider the proposed modeling of these arrangements as “bucket 1” transfers, along with the potential pricing impacts in the source BAA and the potential to utilize BAA-to-BAA transmission between the source and sink BAA.

See response in question 25, greenhouse gas accounting, and letter attached.

13. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s perspective on the ISO proposal for counting in the EDAM RSE import bids made at the CAISO BAA boarder with a non-EDAM BAA.

See response in question 25, greenhouse gas accounting, and letter 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.

See response in question 25, greenhouse gas accounting, and letter attached.

15. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposal to make available advisory D+2 market results (day ahead + 2 market run) to help inform gas procurement and manage gas resource participation in the day ahead market.
Consider commenting on any additional potential enhancements or changes to this market run which could increase its accuracy.

See response in question 25, greenhouse gas accounting, and letter attached.

16. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on whether the proposal to cure resource insufficiencies through the EDAM market at an administrative surcharge provides incentive to cure shortfalls prior to participating in the EDAM.
Please comment on the proposed requirement to cure through the market, the block surcharge, as well as the potential to credit against the surcharge any market energy prices. In addition, please comment on the proposed revenue allocation, and CAISO BAA specific sub-allocation for this surcharge.

See response in question 25, greenhouse gas accounting, and letter attached.

17. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposal to stand up an hourly bid-range trading platform.

See response in question 25, greenhouse gas accounting, and letter attached.

18. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the utilization of a pooled WEIM RSE for entities passing the EDAM RSE, as described in the revised straw proposal.
Please comment on the criteria for exclusion from the pooled WEIM RSE, the proposal to withhold a configurable quantity of imbalance reserves to be utilized for benefit of the EDAM footprint, and the preferred approach for the pooled WEIM RSE following a potential failure of the pool in the WEIM.

See response in question 25, greenhouse gas accounting, and letter attached.

19. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on two introduced mechanisms for consideration that further allow a BAA to manage its resources: (1) mechanisms to manage supply in excess of RSE, and (2) consideration of a net EDAM transfer export limit constraint as described in the revised straw proposal.
Please consider commenting on the value and need for these mechanisms for individual BAAs along with other design elements that should be considered in enhancing or modifying these mechanisms to address the issues described.

See response in question 25, greenhouse gas accounting, and letter attached.

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

See response in question 25, greenhouse gas accounting, and letter attached.

21. INTEGRATED FORWARD MARKET (IFM) AND RESIDUAL UNIT COMMITMENT (RUC): Please provide your organization’s comments on the IFM and RUC design as described in sections II.C.2 and II.C.3 of the EDAM revised straw proposal.

See response in question 25, greenhouse gas accounting, and letter attached.

22. 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 continued evaluation of potential market power mitigation enhancements within the Price Formation Enhancements initiative, which is currently ongoing, as described in section II.C.4 of the EDAM revised straw proposal.

See response in question 25, greenhouse gas accounting, and letter attached.

23. CONVERGENCE BIDDING: Please provide your organization’s comments on the proposal on convergence bidding in the EDAM and the associated transition period approach being proposed as described in section II.C.5 of the EDAM revised straw proposal.

See response in question 25, greenhouse gas accounting, and letter attached.

24. EXTERNAL RESOURCE PARTICIPATION: Please provide your organization’s comments on the proposal for external resource participation in the EDAM, as described in section II.C.6 of the EDAM revised straw proposal.

See response in question 25, greenhouse gas accounting, and letter attached.

25. 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.C.7 of the EDAM revised straw proposal.

Dear Mr. Mainzer:

The California Air Resources Board (CARB) appreciates the opportunity to submit comments on the Revised Extended Day-Ahead Market (EDAM) Straw Proposal released by the California Independent System Operator (CAISO) on August 16, 2022. As indicated in our letter on June 14, 2022, a clean, reliable, and affordable electricity grid is critical to the state’s transition away from fossil fuel combustion across the economy, and CARB supports CAISO’s efforts to develop an accounting framework for greenhouse gas (GHG) emissions in EDAM that meets CARB’s legal and regulatory requirements. In effort to continue our ongoing coordination, we have several comments on the GHG accounting proposals in the Revised EDAM Straw Proposal (Revised Proposal).

CARB’s understanding is that the EDAM GHG design is not seeking to reshape GHG accounting or GHG reduction policy objectives at the state or federal level, nor are they seeking to change state or federal laws. Rather, we understand this effort aims to ensure accurate accounting of GHG emission costs incurred by sellers of power, to reflect those costs in the least-cost dispatch, and to facilitate CARB’s and other states’ required GHG reporting. The Revised Proposal indicates that CAISO intends to adopt the Resource-Specific Approach at the outset of EDAM. Given this, CARB intends to focus solely on the Resource-Specific Approach going forward.

CARB is assessing the Resource-Specific Approach in the context of legal constraints and regulatory requirements. Under Assembly Bill (AB 32), CARB must account for all GHG emissions from the generation of electricity delivered to and consumed in California, whether that electricity is generated in-state or imported. The Regulation for Mandatory Reporting of GHG Emissions (MRR) establishes requirements for the accurate reporting GHG emissions and for third-party verification of reported data. Broadly, CARB is evaluating (1) whether the proposal meets AB 32 requirements and MRR reporting and accuracy requirements, (2) the robustness of the GHG reference run and export constraints, and (3) whether GHG attribution (deeming) would be a sufficient basis for specified source reporting under MRR. CARB must assess these issues considering California’s emission reduction goals, the large amount of MWh expected to be transacted in EDAM, the need to implement consistent reporting requirements for all specified sources of imported electricity, and requirements under AB 32 to minimize emissions leakage.

CARB appreciates that the Revised Proposal contains additional information on how the Resource-Specific Approach may reduce leakage. However, as described in the Revised Proposal, the information available today on how leakage may be minimized is limited; CAISO is only able to provide an approximate indication of the possible impacts of the proposed constraints. Given these limitations, and the large amount of MWh that is expected to be transacted in the EDAM, CARB must ensure that it has appropriate tools to calculate and address the remaining emissions leakage that is not addressed by the EDAM algorithm itself. CARB’s understanding is that all EDAM transactions will be settled in the WEIM. As is our normal practice, CARB continues to monitor and evaluate the effectiveness of the existing mechanisms in the Cap-and-Trade Program related to addressing leakage in the context of the WEIM. Any changes to CARB’s regulations will occur in a future rulemaking, which will be noticed publicly.

CARB appreciates the additional information in the Revised Proposal regarding what data will be made available to reporters and CARB under the Resource-Specific Approach. CARB must ensure that the data available to entities that must report pursuant to MRR can serve as the basis for enforceable compliance obligations under the Cap-and-Trade Program. Specifically, MRR requires that reporting entities have access to accurate data used to calculate their total emissions for electricity imported from outside California. Data made available from CAISO to EDAM participants for the purposes of emissions reporting to CARB, including the MWh quantities imported via EDAM and the source of those MWh for specified source reporting, must be made available to reporters, must be auditable by verifiers to MRR standards, and must meet MRR standards of accuracy, transparency, and verifiability. CARB looks forward to working with CAISO to ensure that these standards continue to be met.

The Revised Proposal includes two other approaches to GHG accounting in the EDAM: a “Zonal Approach” and the “Los Angeles Department of Water and Power (LADWP) Approach.” CARB’s assessment is that, as with the Resource-Specific Approach, these two approaches will also require changes to CARB’s regulations. The full scope of the amendments required for the EDAM cannot be determined until there is a final proposal. However, both the Zonal Approach and the LADWP Approach appear to require changes to CARB’s point of regulation for electricity imports, the First Jurisdictional Deliverer (FJD). As such, the requirements and concerns raised in our June 14 letter related to possible deviations from the FJD framework continue to apply. In particular, the possibility of a load-based point of regulation that would shift responsibility for imports from the FJD to in-state load-serving entities raises concerns for CARB regarding (1) how the carbon price signal can be acted on by the proposed regulated entities, (2) compatibility with the source-based point of regulation for other sectors in the Cap-and-Trade Program, and (3) compatibility with Intergovernmental Panel on Climate Change GHG accounting methods. CARB is also concerned that a load-based point of regulation may result in inconsistent treatment of different types of imported electricity transactions as well as inconsistent treatment between electricity importers and in-state generators. This is because a load-based point of regulation necessitates placing the responsibility for reporting imported electricity and associated GHG emissions on an entity other than the importer of that electricity, which may not provide the same level of accuracy and verification as the reporting for other imports and in-state generators. The Zonal Approach and LADWP Approach also raise feasibility and implementation questions related to reporting and verification under MRR and compliance in the Cap-and-Trade Program. These may be significant hurdles. In addition, the potential impacts of these alternate proposals on emissions leakage and on the accuracy of California’s GHG emissions reporting are unclear. CARB appreciates the ideas raised in both alternate approaches and are evaluating the Resource-Specific Approach with these ideas in mind.

CARB is committed to continuing to work with CAISO and stakeholders on an EDAM design that meets our legal and regulatory requirements while ensuring the availability of clean, reliable, and affordable electricity.

Sincerely,

 

Rajinder Sahota, Deputy Executive Officer, Climate Change and Research

26. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the use of the GHG Reference Pass as the GHG counterfactual.

See response in question 25, greenhouse gas accounting, and letter attached.

27. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the attribution data reported as a part of the resource specific approach, and if or what additional information would provide transparency.

See response in question 25, greenhouse gas accounting, and letter attached.

28. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s overall comments, including potential suggested enhancements, on the zonal proposal.

See response in question 25, greenhouse gas accounting, and letter attached.

29. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s overall comments, including potential suggested enhancements, on the LADWP proposal.

See response in question 25, greenhouse gas accounting, and letter attached.

30. GREENHOUSE GAS ACCOUNTING: Please provide any other feedback on GHG accounting not captured by the questions above.

See response in question 25, greenhouse gas accounting, and letter attached.

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

See response in question 25, greenhouse gas accounting, and letter attached.

32. SETTLEMENTS: Please provide your organization’s comments on the settlements design described in section II.D.2 of the EDAM straw proposal.
Consider comments on the different aspects of settlement allocation among the different settlement components.

See response in question 25, greenhouse gas accounting, and letter attached.

33. EDAM FEES FRAMEWORK: Please provide your organization’s comments on the EDAM fees framework, particularly the implementation fee and administrative fee framework, as described in section II.D.3 of the EDAM straw proposal.

See response in question 25, greenhouse gas accounting, and letter attached.

34. GENERAL COMMENTS: Please provide your organization’s comments on the decisional classification for the EDAM initiative as described in section III.B of the EDAM revised straw proposal.

See response in question 25, greenhouse gas accounting, and letter attached.

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

See response in question 25, greenhouse gas accounting, and letter attached.

California Community Choice Association
Submitted 10/04/2022, 03:27 pm

Contact

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

1. GENERAL COMMENTS: Please provide a summary of your organization’s comments on the Extended Day-Ahead Market revised straw proposal:

The California Community Choice Association (CalCCA) appreciates the extensive work by the California Independent System Operator Corporation (CAISO) and stakeholders on the Extended Day-Ahead Market (EDAM) Revised Straw Proposal and the opportunity to comment on the proposal. In summary:

  • CalCCA remains concerned about the impacts the imbalance reserve product proposed in the Day-Ahead Market Enhancements (DAME) initiative will have on the California resource adequacy (RA) program;
  • CalCCA supports a voluntary EDAM participation model in which all resources within the EDAM balancing authority area (BAA) participate in the market through economic bids or self-schedules;
  • CalCCA generally supports EDAM transfers receiving equal priority to load but asks for further consideration around the situation where an economic import into CAISO supports an EDAM transfer out of CAISO;
  • CalCCA does not oppose the proposal to give BAA operators the discretion to assign lower priority to EDAM transfers into a BAA that failed the day-ahead resource sufficiency evaluation (RSE) so long as it is reserved for emergency situations and so long as EDAM BAAs and/or their load serving entities (LSEs) have opportunities to cure the RSE deficiency first;
  • CalCCA generally supports the concept of transmission “buckets” as a way to frame the discussion around the treatment of different types of transmission;
  • CalCCA supports the CAISO’s proposal to automatically make bucket 2 transmission not scheduled by 10:00 a.m. available to the EDAM for optimization through the market;
  • The CAISO should not make costs associated with new transmission build eligible for transmission revenue recovery;
  • CalCCA supports the RSE framework that would conduct the binding EDAM RSE at 10:00 a.m. prior to running the day-ahead market with the ability to conduct advisory runs prior to the binding run;
  • CalCCA supports the proposal to not include transmission constraints within the EDAM RSE and monitor the results of the EDAM RSE at the onset of EDAM; 
  • CalCCA supports the ability to count WSPP Schedule-C contracts and import bids at the CAISO BAA border in the RSE;
  • The curing process to resolve an RSE shortfall in the CAISO BAA requires further development given the BAA is not the LSE and multiple LSEs are contributing towards meeting the resource sufficiency evaluation;
  • CalCCA supports including BAAs that pass the day-ahead RSE or cure a day-ahead RSE insufficiency by the short-term unit commitment (STUC) horizon in the pooled Western Energy Imbalance Market (WEIM) RSE;
  • Of the two mechanisms proposed to manage supply in excess of the RSE, CalCCA prefers mechanism two (the net EDAM transfer export limit constraint);
  • CalCCA supports the development of system market power mitigation for the CAISO BAA; and

CalCCA supports the resource-specific approach for green-house gas (GHG) accounting in EDAM. Any future modifications to the resource-specific approach for EDAM, or any deviations from the resource-specific approach, will require California Air Resources Board (CARB) acceptance.

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

CalCCA supports a voluntary EDAM participation model, in which EDAM entities may voluntarily enter and exit EDAM with a six-month notice period and no exit fees. CalCCA also supports the clarification in the proposal that all resources within the EDAM BAA will participate in the market through economic bids or self-scheduling, rather than through base scheduling, given the cost-shifting that would occur should base scheduling extend to EDAM.

3. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on the topic of confidence in market transfers design as discussed in section II.A.2 of the EDAM revised straw proposal. In particular, please provide comments regarding the different design elements supporting confidence in transfers including the application of the market parameters preventing the propagation of shortfalls and the associated outcomes illustrated in the examples.

CalCCA generally supports the CAISO’s proposal to give EDAM transfers equal priority to load. To encourage robust EDAM participation, all EDAM BAAs must have confidence that EDAM transfers can be relied upon, even under stressed system conditions. However, CalCCA requests additional clarity around how the EDAM initiative and the Transmission Services and Market Scheduling Priorities initiative will interact and how the market would treat EDAM transfers out of the CAISO BAA if that EDAM transfer is supported by an economic import into the CAISO. Cutting the import and not the EDAM transfer could have adverse impacts on California reliability that must be considered.

4. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on the topic of equal priority between market transfers and load in edge reliability scenarios, as effectuated in the operational timeframe, informed by operator discretion and good utility practice, as discussed in section II.A.2 of the EDAM revised straw proposal.

CalCCA has no additional comments on this topic.

5. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on the proposal and effectuation of lower priority market transfers sinking in an EDAM BAA that has failed the day ahead RSE or otherwise is not part of the WEIM RSE pool as discussed in section II.A.2.d of the EDAM revised straw proposal.

The CAISO proposes source EDAM BAAs have operational discretion to assign lower priority to market transfers sinking into an EDAM BAA that has failed the day-ahead RSE if there is an infeasibility and the source EDAM BAA has already exercised its other operational tools. CalCCA does not oppose this proposal so long as it is reserved for emergency situations and so long as EDAM BAAs and/or their LSEs have opportunities to cure the RSE deficiency first. If the EDAM BAA or its LSEs cure the RSE deficiency, then it should not be subject to a lower priority.

6. TRANSMISSION COMMITMENT: Please provide your organization’s comments on the overall framework of transmission commitment in EDAM, including the framing of how transmission is made available through the concept of the transmission “buckets” as described in section II.B.1 of the EDAM revised straw proposal.

CalCCA generally supports the concept of transmission “buckets” as a way to frame the discussion around the treatment of different types of transmission and how they are treated with respect to compensation, who is making the transmission available, and cost recovery.

7. TRANSMISSION COMMITMENT: Please provide your organization’s perspective on Bucket 2 transmission and the pathways for how transmission customers can exercise their transmission rights, whether secured under the OATT or under legacy arrangements, or how otherwise those transmission rights are made available to the market as described in section II.B.1 of the revised straw proposal.

CalCCA supports the CAISO’s proposal to automatically make bucket 2 transmission not scheduled by 10:00 a.m. available to the EDAM for optimization through the market. CalCCA shares parties’ concerns outlined in the paper around allowing the voluntary release of transmission. Allowing transmission rights holders to voluntarily make transmission available could diminish EDAM benefits by restricting the amount of transmission available to the market and could result in withholding of transmission in the event a small number of entities hold the rights to a majority of the transmission. Automatically releasing unscheduled transmission will ensure EDAM BAAs unlock the full economic benefits of day-ahead market participation.

8. TRANSMISSION COMMITMENT: Please provide your organization’s perspective on how ISO transmission is made available to the EDAM under the transmission commitment design.

CalCCA has no additional comments at this time.

9. TRANSMISSION COMMITMENT: Please provide your organization's comments on the transmission revenue requirement (TRR) recovery framework design which is intended to allow for recovery of certain transmission revenues to keep the transmission provider whole from a historical TRR perspective in the EDAM as described in section II.B.1 of the revised straw proposal.
Consider comments on the three different proposed components of the EDAM recoverable TRR and the proposed methods of allocating the TRR shortfall, along with other elements of the design.

CalCCA is concerned with the CAISO’s proposal to make costs associated with new transmission build eligible for transmission revenue recovery, particularly given the way the CAISO proposes to allocate the uplift charges used to cover the transmission revenue recovery payments. The CAISO proposes to allocate costs through uplifts assessed either to gross load across the footprint or to demand plus supply across the footprint. This methodology does not consider, however, the extent to which the EDAM BAAs paying for the transmission revenue recovery benefit from the new transmission build. As the BAA with the most load, CAISO’s LSEs are at the greatest risk of paying the majority of uplift charges for new transmission that it does not benefit from or benefits from less than other EDAM BAAs. Under a future EDAM, entities should factor in the impacts an EDAM will have on forecasted transmission revenues when making decisions around new transmission build. A transmission revenue recovery payment is not necessary under an EDAM construct.

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

CalCCA has no additional comments at this time.

11. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the design of the proposed application that will be used to conduct the EDAM RSE as described in section II.B.2 of the EDAM revised straw proposal.
This includes comments on the ability to conduct advisory RSE tests prior to the binding run, the timing of the RSE, test inputs, test obligation, the decision not to include transmission constraints within the EDAM RSE as well as any other relevant elements.

CalCCA supports the proposal to conduct the binding EDAM RSE at 10:00 a.m. prior to running the day-ahead market with the ability to conduct advisory runs prior to the binding run. As described in section 16 below, a process is needed to determine how the CAISO BAA and/or its LSEs will resolve deficiencies identified in the advisory runs prior to the binding run or in the binding run.

CalCCA supports the proposal to not include transmission constraints within the EDAM RSE and monitor the results of the EDAM RSE at the onset of EDAM given the additional complexities modeling transmission elements would introduce to the RSE.

12. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposed treatment of firm energy contracts where the source/transmission may not be known in advance of the market run (i.e. WSPP Schedule-C supply contracts) within the EDAM RSE.
Consider comments on if the proposed requirement for the submission of day-ahead e-tags, the potential to be removed from the pooled WEIM RSE, as well as monitoring to provide a sufficient level of confidence in these types of supply arrangements. Additionally, consider the proposed modeling of these arrangements as “bucket 1” transfers, along with the potential pricing impacts in the source BAA and the potential to utilize BAA-to-BAA transmission between the source and sink BAA.

CalCCA supports the ability to count WSPP Schedule-C contracts and import bids at the CAISO BAA border in the RSE. The CAISO’s proposal to require day-ahead e-tags three hours following the day-ahead market results with the opportunity to cure by the STUC horizon if there is no e-tag is reasonable. However, the CAISO should clarify that, if an import resource fails to tag by 3 hours following the day-ahead market or by the STUC horizon, the BAA will not fail the RSE if it has sufficient capacity from bids from other resources to pass the RSE

13. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s perspective on the ISO proposal for counting in the EDAM RSE import bids made at the CAISO BAA boarder with a non-EDAM BAA.

See response in Section 12.

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.

CalCCA has no comments at this time.

15. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposal to make available advisory D+2 market results (day ahead + 2 market run) to help inform gas procurement and manage gas resource participation in the day ahead market.
Consider commenting on any additional potential enhancements or changes to this market run which could increase its accuracy.

CalCCA has no comments at this time.

16. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on whether the proposal to cure resource insufficiencies through the EDAM market at an administrative surcharge provides incentive to cure shortfalls prior to participating in the EDAM.
Please comment on the proposed requirement to cure through the market, the block surcharge, as well as the potential to credit against the surcharge any market energy prices. In addition, please comment on the proposed revenue allocation, and CAISO BAA specific sub-allocation for this surcharge.

It is important that EDAM BAAs and LSEs have ample opportunities to cure RSE insufficiencies, whether through the EDAM market or outside of the EDAM market. The ability to run advisory RSE runs before the binding run would allow BAAs and LSEs to identify and resolve potential RSE insufficiencies in advance of the need to use the EDAM market to cure. In the event RSE failure occurs, BAAs could cure through the EDAM market, cure outside of EDAM until the STUC run, or forego curing and, therefore, forego inclusion in the WEIM RSE pool.

The process of curing upon a shortfall in the CAISO BAA, however, requires further development given the BAA is not the LSE and multiple LSEs are contributing towards meeting the resource sufficiency evaluation. This clarity is relevant to the CAISO BAA because for the CAISO BAA, the is not also the LSE and multiple LSEs are doing advanced procurement to meet the RSE requirements.

The CAISO proposes to allocate costs of curing RSE insufficiencies through EDAM first to LSEs whose failure to meet RA obligations led to the RSE failure and then to all LSEs pro-rata. CalCCA supports allocating curing costs to LSEs that contribute to the RSE failure. This approach is consistent with cost causation principles in that LSEs that cause the costs to be incurred bear the responsibility of paying for those costs. Additional clarity is needed with respect to the opportunities to cure, however, so that LSEs can make decisions around how to resolve RSE insufficiencies in the event they will be identified as causing the failure.

The following questions need to be further considered regarding the curing process for the CAISO BAA:

  • What defines an RA failure causing an RSE insufficiency?
    • Different LRAs have different RA requirements
    • Would this assessment rely on monthly RA showings data or daily RA availability data (e.g., outages and substitutions)?
  • When would the LSE know that it is the cause of the RSE failure?
    • LSEs should be informed after the advisory runs that they need to cure before the binding run in order to pass the RSE
  • What options are available to the LSE that is causing the deficiency to cure in advance of curing through EDAM at the admin charge?
  • How would the CAISO BAA make the choice to cure (through EDAM at the admin charge) versus foregoing participation in the pooled WEIM RSE?
17. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposal to stand up an hourly bid-range trading platform.

CalCCA has no comments at this time.

18. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the utilization of a pooled WEIM RSE for entities passing the EDAM RSE, as described in the revised straw proposal.
Please comment on the criteria for exclusion from the pooled WEIM RSE, the proposal to withhold a configurable quantity of imbalance reserves to be utilized for benefit of the EDAM footprint, and the preferred approach for the pooled WEIM RSE following a potential failure of the pool in the WEIM.

CalCCA supports BAAs that pass the day-ahead RSE or cure a day-ahead RSE insufficiency by the STUC horizon being a part of the pooled WIEM RSE.

19. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on two introduced mechanisms for consideration that further allow a BAA to manage its resources: (1) mechanisms to manage supply in excess of RSE, and (2) consideration of a net EDAM transfer export limit constraint as described in the revised straw proposal.
Please consider commenting on the value and need for these mechanisms for individual BAAs along with other design elements that should be considered in enhancing or modifying these mechanisms to address the issues described.

CalCCA thanks the CAISO for including this topic in the revised straw proposal. It is critically important that resource adequacy resources can be retained to serve native load through real-time.

Of the two mechanisms, CalCCA prefers mechanism two (the net EDAM transfer export limit constraint). Mechanism one (reserving day-ahead supply in excess of RSE requirements) appears to be too blunt of an instrument that could result in a large portion of capacity not used for the RSE being held out of the market. Ideally, resource adequacy resources would not be held out of the market. Instead, they would be prioritized to serve native load, with the ability to be scheduled outside of the native BAA if there is excess. The net EDAM export constraint more closely reaches this objective. To enhance this proposal, the CAISO should allow for a constraint on the amount of firm EDAM export transfers and allow any amount of non-firm EDAM exports. Additional discussion is needed from the CAISO BAA perspective to determine when to use the net export limit and where to set the limit, given the number of LSEs and LRAs in California.

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

CalCCA has no additional comments at this time.

21. INTEGRATED FORWARD MARKET (IFM) AND RESIDUAL UNIT COMMITMENT (RUC): Please provide your organization’s comments on the IFM and RUC design as described in sections II.C.2 and II.C.3 of the EDAM revised straw proposal.

CalCCA remains concerned about the impacts the imbalance reserve product proposed in the DAME initiative will have on the California RA program. CalCCA’s concerns are twofold:

  1. Costs: Today’s RUC framework requires RA resources to bid zero dollars into RUC. This is because RA contracts already factor in the costs of RA resources being available to serve CAISO load through real-time. Allowing RA resources to bid and be paid above zero dollars for imbalance reserves will result in LSEs paying twice for the same capacity.
  2. Reliability: Removing the real-time must-offer obligation for California RA will potentially threaten California reliability by absolving RA resources of their obligations to serve California load if they do not receive a day-ahead award.

Given these concerns, CalCCA recommends the CAISO continue discussions with stakeholders within the DAME initiative and this initiative to address these concerns. Additionally, 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.[1]

 


[1]             CalCCA comments to the Day-Ahead Market Enhancements Third Revised Straw Proposal (May 19, 2022): https://stakeholdercenter.caiso.com/Comments/AllComments/372995fa-30ec-4166-9bbc-f92619b8014f#org-89f71fc4-56dc-4bf0-b7c5-7e74d31dc79e

22. 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 continued evaluation of potential market power mitigation enhancements within the Price Formation Enhancements initiative, which is currently ongoing, as described in section II.C.4 of the EDAM revised straw proposal.

CalCCA supports the development of system market power mitigation for the CAISO BAA. The CAISO has appropriately scoped the evaluation of market power mitigation enhancements within the Price Formation Enhancements initiative.

23. CONVERGENCE BIDDING: Please provide your organization’s comments on the proposal on convergence bidding in the EDAM and the associated transition period approach being proposed as described in section II.C.5 of the EDAM revised straw proposal.

CalCCA has no comment at this time.

24. EXTERNAL RESOURCE PARTICIPATION: Please provide your organization’s comments on the proposal for external resource participation in the EDAM, as described in section II.C.6 of the EDAM revised straw proposal.

CalCCA has no comment at this time.

25. 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.C.7 of the EDAM revised straw proposal.

CalCCA supports the resource-specific approach for GHG accounting in EDAM, as opposed to the zonal approach or LADWP approach. The resource-specific approach has worked for years in the WEIM, allowing the market to optimize resources based on GHG costs reflected in their bids. Importantly, the CARB has accepted the resource-specific approach. Any future modifications to the resource-specific approach for EDAM, or any deviations from the resource-specific approach, will similarly need CARB to accept them.

CalCCA is concerned, however, that the proposal to address “secondary dispatch” would limit the ability for external resources to sell to California. CalCCA encourages the CAISO to reconsider this proposal and identify ways such that secondary dispatch can be quantified and account for secondary dispatches appropriately within the applicable GHG regulations, rather than mitigating secondary dispatch by limiting transfers into a GHG area. Limiting transfers into a GHG region at the outset stops secondary dispatch emissions but could instead place the GHG region at a reliability risk if it cannot import resources into its area. This approach is too restrictive and should be reconsidered such that reliability and emissions are both addressed.

26. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the use of the GHG Reference Pass as the GHG counterfactual.

CalCCA has no additional comments at this time.

27. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the attribution data reported as a part of the resource specific approach, and if or what additional information would provide transparency.

CalCCA has no additional comments at this time.

28. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s overall comments, including potential suggested enhancements, on the zonal proposal.

CalCCA has no additional comments at this time.

29. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s overall comments, including potential suggested enhancements, on the LADWP proposal.

CalCCA has no additional comments at this time.

30. GREENHOUSE GAS ACCOUNTING: Please provide any other feedback on GHG accounting not captured by the questions above.

CalCCA has no additional comments at this time.

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

CalCCA has no additional comments at this time.

32. SETTLEMENTS: Please provide your organization’s comments on the settlements design described in section II.D.2 of the EDAM straw proposal.
Consider comments on the different aspects of settlement allocation among the different settlement components.

CalCCA has no additional comments at this time.

33. EDAM FEES FRAMEWORK: Please provide your organization’s comments on the EDAM fees framework, particularly the implementation fee and administrative fee framework, as described in section II.D.3 of the EDAM straw proposal.

CalCCA has no additional comments at this time.

34. GENERAL COMMENTS: Please provide your organization’s comments on the decisional classification for the EDAM initiative as described in section III.B of the EDAM revised straw proposal.

CalCCA supports extending the joint authority model proposed in the WEIM Governance Review Committee’s (GRC) EDAM Governance Straw Proposal to the EDAM initiative, as opposed to applying joint authority to the entire EDAM initiative. This approach would extend the joint authority model used for the WEIM currently and categorize proposed policy changes under an “apply to” test. CalCCA recommends the CAISO apply the joint authority model’s “apply to” test structure to each element of EDAM to ensure the appropriate classification is applied to each element.

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

CalCCA has no additional comments at this time.

California Department of Water Resources
Submitted 09/26/2022, 02:20 pm

Contact

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

1. GENERAL COMMENTS: Please provide a summary of your organization’s comments on the Extended Day-Ahead Market revised straw proposal:

CDWR overall supports the EDAM initiative. In general, CDWR expects that the EDAM will lower costs though better coordination and optimization of the day-ahead market. Along with lower costs the overall West will benefit from increased system reliability.

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

CDWR agrees that the participation model should be voluntary with a 6-month entrance and exit period.

3. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on the topic of confidence in market transfers design as discussed in section II.A.2 of the EDAM revised straw proposal. In particular, please provide comments regarding the different design elements supporting confidence in transfers including the application of the market parameters preventing the propagation of shortfalls and the associated outcomes illustrated in the examples.

No comment.

4. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on the topic of equal priority between market transfers and load in edge reliability scenarios, as effectuated in the operational timeframe, informed by operator discretion and good utility practice, as discussed in section II.A.2 of the EDAM revised 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).

5. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on the proposal and effectuation of lower priority market transfers sinking in an EDAM BAA that has failed the day ahead RSE or otherwise is not part of the WEIM RSE pool as discussed in section II.A.2.d of the EDAM revised straw proposal.

No comment.

6. TRANSMISSION COMMITMENT: Please provide your organization’s comments on the overall framework of transmission commitment in EDAM, including the framing of how transmission is made available through the concept of the transmission “buckets” as described in section II.B.1 of the EDAM revised straw proposal.

No comment.

7. TRANSMISSION COMMITMENT: Please provide your organization’s perspective on Bucket 2 transmission and the pathways for how transmission customers can exercise their transmission rights, whether secured under the OATT or under legacy arrangements, or how otherwise those transmission rights are made available to the market as described in section II.B.1 of the revised straw proposal.

No comment.

8. TRANSMISSION COMMITMENT: Please provide your organization’s perspective on how ISO transmission is made available to the EDAM under the transmission commitment design.

No comment.

9. TRANSMISSION COMMITMENT: Please provide your organization's comments on the transmission revenue requirement (TRR) recovery framework design which is intended to allow for recovery of certain transmission revenues to keep the transmission provider whole from a historical TRR perspective in the EDAM as described in section II.B.1 of the revised straw proposal.
Consider comments on the three different proposed components of the EDAM recoverable TRR and the proposed methods of allocating the TRR shortfall, along with other elements of the design.

No comment.

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

No comment.

11. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the design of the proposed application that will be used to conduct the EDAM RSE as described in section II.B.2 of the EDAM revised straw proposal.
This includes comments on the ability to conduct advisory RSE tests prior to the binding run, the timing of the RSE, test inputs, test obligation, the decision not to include transmission constraints within the EDAM RSE as well as any other relevant 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 firm energy contracts where the source/transmission may not be known in advance of the market run (i.e. WSPP Schedule-C supply contracts) within the EDAM RSE.
Consider comments on if the proposed requirement for the submission of day-ahead e-tags, the potential to be removed from the pooled WEIM RSE, as well as monitoring to provide a sufficient level of confidence in these types of supply arrangements. Additionally, consider the proposed modeling of these arrangements as “bucket 1” transfers, along with the potential pricing impacts in the source BAA and the potential to utilize BAA-to-BAA transmission between the source and sink BAA.

No comment.

13. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s perspective on the ISO proposal for counting in the EDAM RSE import bids made at the CAISO BAA boarder with a non-EDAM BAA.

No 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.

No comment.

15. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposal to make available advisory D+2 market results (day ahead + 2 market run) to help inform gas procurement and manage gas resource participation in the day ahead market.
Consider commenting on any additional potential enhancements or changes to this market run which could increase its accuracy.

No comment.

16. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on whether the proposal to cure resource insufficiencies through the EDAM market at an administrative surcharge provides incentive to cure shortfalls prior to participating in the EDAM.
Please comment on the proposed requirement to cure through the market, the block surcharge, as well as the potential to credit against the surcharge any market energy prices. In addition, please comment on the proposed revenue allocation, and CAISO BAA specific sub-allocation for this surcharge.

CAISO proposes to allocate surcharge to RA deficient LSEs. In this case an RA deficient LSE would not have RA capacity available in the day ahead market timeframe. That LSE could have no deficiency in the monthly showing. With the existing provisions, a substitution by the resource can take place for the unavailable RA capacity. If substitution is provided by the LSE or the resource owner, then the LSE would not be RA deficient. Please clarify, in this scenario, the surcharge would not apply to the LSE. In addition, if substitution is not provided and if Resource Adequacy Availability Incentive Mechanism (RAAIM) is applied to the resource, will the LSE be subject to the surcharge? If so, it would be a double penalty, one for the resource and the other for the LSE. Double penalty for the same cause is not justified. If surcharge applies to other hours beyond the RAAIM hours, how that will impact the settlement should be considered. A significant amount of use limited resources is providing RA for a limited number of hours and if the surcharge applies to hours when they are not available will the LSE be allocated the surcharge?

17. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposal to stand up an hourly bid-range trading platform.

No comment.

18. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the utilization of a pooled WEIM RSE for entities passing the EDAM RSE, as described in the revised straw proposal.
Please comment on the criteria for exclusion from the pooled WEIM RSE, the proposal to withhold a configurable quantity of imbalance reserves to be utilized for benefit of the EDAM footprint, and the preferred approach for the pooled WEIM RSE following a potential failure of the pool in the WEIM.

No comment.

19. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on two introduced mechanisms for consideration that further allow a BAA to manage its resources: (1) mechanisms to manage supply in excess of RSE, and (2) consideration of a net EDAM transfer export limit constraint as described in the revised straw proposal.
Please consider commenting on the value and need for these mechanisms for individual BAAs along with other design elements that should be considered in enhancing or modifying these mechanisms to address the issues described.

The proposal will allow LSEs to indicate if the RA capacity offered can be reserved for reliability needs provided the aggregate RA capacity exceeds BAA RSE needs. It is essential that such an option should be only voluntary. The reserved capacity would be diverted from IFM and can be subject to exceptional dispatch. In that case what would be the impact on RAAIM estimation which is based on IFM availability?

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

No comment.

21. INTEGRATED FORWARD MARKET (IFM) AND RESIDUAL UNIT COMMITMENT (RUC): Please provide your organization’s comments on the IFM and RUC design as described in sections II.C.2 and II.C.3 of the EDAM revised straw proposal.

No comment.

22. 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 continued evaluation of potential market power mitigation enhancements within the Price Formation Enhancements initiative, which is currently ongoing, as described in section II.C.4 of the EDAM revised straw proposal.

No comment.

23. CONVERGENCE BIDDING: Please provide your organization’s comments on the proposal on convergence bidding in the EDAM and the associated transition period approach being proposed as described in section II.C.5 of the EDAM revised straw proposal.

No comment.

24. EXTERNAL RESOURCE PARTICIPATION: Please provide your organization’s comments on the proposal for external resource participation in the EDAM, as described in section II.C.6 of the EDAM revised straw proposal.

No comment.

25. 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.C.7 of the EDAM revised straw proposal.

No comment.

26. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the use of the GHG Reference Pass as the GHG counterfactual.

No comment.

27. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the attribution data reported as a part of the resource specific approach, and if or what additional information would provide transparency.

No comment.

28. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s overall comments, including potential suggested enhancements, on the zonal proposal.

No comment.

29. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s overall comments, including potential suggested enhancements, on the LADWP proposal.

No comment.

30. GREENHOUSE GAS ACCOUNTING: Please provide any other feedback on GHG accounting not captured by the questions above.

No comment.

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

No comment.

32. SETTLEMENTS: Please provide your organization’s comments on the settlements design described in section II.D.2 of the EDAM straw proposal.
Consider comments on the different aspects of settlement allocation among the different settlement components.

No comment.

33. EDAM FEES FRAMEWORK: Please provide your organization’s comments on the EDAM fees framework, particularly the implementation fee and administrative fee framework, as described in section II.D.3 of the EDAM straw proposal.

No comment.

34. GENERAL COMMENTS: Please provide your organization’s comments on the decisional classification for the EDAM initiative as described in section III.B of the EDAM revised straw proposal.

No comment.

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

No comment.

California Efficiency + Demand Management Council
Submitted 09/26/2022, 04:14 pm

Submitted on behalf of
California Efficiency + Demand Management Council

Contact

Luke Tougas (l.tougas@cleanenergyregresearch.com)

1. GENERAL COMMENTS: Please provide a summary of your organization’s comments on the Extended Day-Ahead Market revised straw proposal:

The Council provides limited comments focusing on the treatment of demand response (DR) within the context of the Resource Sufficiency Evaluation (RSE). The Council supports the Revised Straw Proposal’s use of non-aligned (i.e., non-market integrated) DR to reduce EDAM Balancing Authority Area (BAA) demand forecasts. However, the CAISO should further allow for EDAM BAAs to utilize Reliability Demand Response Resources (RDRRs) as it would allow itself to use them (i.e., to modify the CAISO EDAM and RUC forecast). In addition, in anticipation of a potential future Proxy Demand Resource (PDR)-equivalent product for EDAM BAAs, the CAISO should explicitly allow for these products to be used as supply resources in the RSE subject to a Must Offer Obligation, while continuing to allow non-aligned DR to reduce the demand forecast linked to a commitment to dispatch it during specified hours.

The Council also expresses support for adjusting the decisional classification of the EDAM initiative to fall under the joint authority of the WEIM Governing Body in addition to the CAISO Board of Governors. 

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

The Council reserves comment.

3. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on the topic of confidence in market transfers design as discussed in section II.A.2 of the EDAM revised straw proposal. In particular, please provide comments regarding the different design elements supporting confidence in transfers including the application of the market parameters preventing the propagation of shortfalls and the associated outcomes illustrated in the examples.

The Council reserves comment.

4. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on the topic of equal priority between market transfers and load in edge reliability scenarios, as effectuated in the operational timeframe, informed by operator discretion and good utility practice, as discussed in section II.A.2 of the EDAM revised straw proposal.

The Council reserves comment.

5. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on the proposal and effectuation of lower priority market transfers sinking in an EDAM BAA that has failed the day ahead RSE or otherwise is not part of the WEIM RSE pool as discussed in section II.A.2.d of the EDAM revised straw proposal.

The Council reserves comment.

6. TRANSMISSION COMMITMENT: Please provide your organization’s comments on the overall framework of transmission commitment in EDAM, including the framing of how transmission is made available through the concept of the transmission “buckets” as described in section II.B.1 of the EDAM revised straw proposal.

The Council reserves comment.

7. TRANSMISSION COMMITMENT: Please provide your organization’s perspective on Bucket 2 transmission and the pathways for how transmission customers can exercise their transmission rights, whether secured under the OATT or under legacy arrangements, or how otherwise those transmission rights are made available to the market as described in section II.B.1 of the revised straw proposal.

The Council reserves comment.

8. TRANSMISSION COMMITMENT: Please provide your organization’s perspective on how ISO transmission is made available to the EDAM under the transmission commitment design.

The Council reserves comment.

9. TRANSMISSION COMMITMENT: Please provide your organization's comments on the transmission revenue requirement (TRR) recovery framework design which is intended to allow for recovery of certain transmission revenues to keep the transmission provider whole from a historical TRR perspective in the EDAM as described in section II.B.1 of the revised straw proposal.
Consider comments on the three different proposed components of the EDAM recoverable TRR and the proposed methods of allocating the TRR shortfall, along with other elements of the design.

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 design of the proposed application that will be used to conduct the EDAM RSE as described in section II.B.2 of the EDAM revised straw proposal.
This includes comments on the ability to conduct advisory RSE tests prior to the binding run, the timing of the RSE, test inputs, test obligation, the decision not to include transmission constraints within the EDAM RSE as well as any other relevant elements.

The Council reserves comment.

12. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposed treatment of firm energy contracts where the source/transmission may not be known in advance of the market run (i.e. WSPP Schedule-C supply contracts) within the EDAM RSE.
Consider comments on if the proposed requirement for the submission of day-ahead e-tags, the potential to be removed from the pooled WEIM RSE, as well as monitoring to provide a sufficient level of confidence in these types of supply arrangements. Additionally, consider the proposed modeling of these arrangements as “bucket 1” transfers, along with the potential pricing impacts in the source BAA and the potential to utilize BAA-to-BAA transmission between the source and sink BAA.

The Council reserves comment.

13. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s perspective on the ISO proposal for counting in the EDAM RSE import bids made at the CAISO BAA boarder with a non-EDAM BAA.

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 recommends that the Revised Straw Proposal be adjusted or clarified with regard to how certain DR programs and resources would be accounted for in the RSE. The CAISO alludes to its Proxy Demand Resource (PDR) and Reliability Demand Response Resource (RDRR) DR models and notes that EDAM entities may have their own separate DR programs that do not align with the PDR and RDRR models. The CAISO proposes to allow EDAM BAAs to reduce their demand forecast commensurate with the expected real-time dispatch of these “non-aligned” programs. The CAISO then appears to propose that RDRRs located within the CAISO BAA can be used to bridge the gap between any “potential inability for the ISO BAA to meet its next day obligations” by modifying its forecast in the EDAM and RUC.

The Council provides feedback on two specific areas. They are:

  1. It appears that the CAISO proposes that RDRRs located within the CAISO BAA can be used to bridge any gap in the EDAM RSE by modifying its EDAM and RUC forecast. If this is the case, this capability should be provided to other EDAM BAAs as well. WEIM entities may already create and utilize RDRRs, so the Council recommends that EDAM entities be eligible to do so as well.
  2. The CAISO should plan for a future in which EDAM entities are deploying supply-side DR programs comparable to PDRs, in addition to RDRRs. Though the CAISO currently does not offer such a PDR-equivalent product for EDAM entities outside of the CAISO BAA, it should plan for this eventuality and reflect this in the EDAM proposal. In such a case, PDR-equivalent products should be eligible to be shown as supply resources, not modifications to an EDAM entity’s load forecast.  As such, they would be subject to a Must Offer Obligation consistent with the hours in which they would be claimed in an RSE but would not be subject to the requirement that they be dispatched unless needed, contrary to how the CAISO currently proposes for load management programs in the Revised Straw Proposal.
15. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposal to make available advisory D+2 market results (day ahead + 2 market run) to help inform gas procurement and manage gas resource participation in the day ahead market.
Consider commenting on any additional potential enhancements or changes to this market run which could increase its accuracy.

The Council reserves comment.

16. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on whether the proposal to cure resource insufficiencies through the EDAM market at an administrative surcharge provides incentive to cure shortfalls prior to participating in the EDAM.
Please comment on the proposed requirement to cure through the market, the block surcharge, as well as the potential to credit against the surcharge any market energy prices. In addition, please comment on the proposed revenue allocation, and CAISO BAA specific sub-allocation for this surcharge.

The Council reserves comment.

17. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposal to stand up an hourly bid-range trading platform.

The Council reserves comment.

18. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the utilization of a pooled WEIM RSE for entities passing the EDAM RSE, as described in the revised straw proposal.
Please comment on the criteria for exclusion from the pooled WEIM RSE, the proposal to withhold a configurable quantity of imbalance reserves to be utilized for benefit of the EDAM footprint, and the preferred approach for the pooled WEIM RSE following a potential failure of the pool in the WEIM.

The Council reserves comment.

19. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on two introduced mechanisms for consideration that further allow a BAA to manage its resources: (1) mechanisms to manage supply in excess of RSE, and (2) consideration of a net EDAM transfer export limit constraint as described in the revised straw proposal.
Please consider commenting on the value and need for these mechanisms for individual BAAs along with other design elements that should be considered in enhancing or modifying these mechanisms to address the issues described.

The Council reserves comment.

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

The Council reserves comment.

21. INTEGRATED FORWARD MARKET (IFM) AND RESIDUAL UNIT COMMITMENT (RUC): Please provide your organization’s comments on the IFM and RUC design as described in sections II.C.2 and II.C.3 of the EDAM revised straw proposal.

The Council reserves comment.

22. 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 continued evaluation of potential market power mitigation enhancements within the Price Formation Enhancements initiative, which is currently ongoing, as described in section II.C.4 of the EDAM revised straw proposal.

The Council reserves comment.

23. CONVERGENCE BIDDING: Please provide your organization’s comments on the proposal on convergence bidding in the EDAM and the associated transition period approach being proposed as described in section II.C.5 of the EDAM revised straw proposal.

The Council reserves comment.

24. EXTERNAL RESOURCE PARTICIPATION: Please provide your organization’s comments on the proposal for external resource participation in the EDAM, as described in section II.C.6 of the EDAM revised straw proposal.

The Council reserves comment.

25. 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.C.7 of the EDAM revised straw proposal.

The Council reserves comment.

26. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the use of the GHG Reference Pass as the GHG counterfactual.

The Council reserves comment.

27. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the attribution data reported as a part of the resource specific approach, and if or what additional information would provide transparency.

The Council reserves comment.

28. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s overall comments, including potential suggested enhancements, on the zonal proposal.

The Council reserves comment.

29. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s overall comments, including potential suggested enhancements, on the LADWP proposal.

The Council reserves comment.

30. GREENHOUSE GAS ACCOUNTING: Please provide any other feedback on GHG accounting not captured by the questions above.

The Council reserves comment.

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

The Council reserves comment.

32. SETTLEMENTS: Please provide your organization’s comments on the settlements design described in section II.D.2 of the EDAM straw proposal.
Consider comments on the different aspects of settlement allocation among the different settlement components.

The Council reserves comment.

33. EDAM FEES FRAMEWORK: Please provide your organization’s comments on the EDAM fees framework, particularly the implementation fee and administrative fee framework, as described in section II.D.3 of the EDAM straw proposal.

The Council reserves comment.

34. GENERAL COMMENTS: Please provide your organization’s comments on the decisional classification for the EDAM initiative as described in section III.B of the EDAM revised straw proposal.

The Council supports adjusting the decisional classification of the EDAM initiative to fall under the joint authority of the WEIM Governing Body in addition to the CAISO Board of Governors. This is a logical and appropriate step given that the EDAM will directly impact the participation of the entities represented by the WEIM Governing Body in the CAISO market.  As such, they should have an oversight role comparable to the CAISO Board of Governors.

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

N/A

Center for Resource Solutions (CRS)
Submitted 09/26/2022, 11:36 am

Contact

Todd Jones (todd.jones@resource-solutions.org)

1. GENERAL COMMENTS: Please provide a summary of your organization’s comments on the Extended Day-Ahead Market revised straw proposal:

Our comments and recommendations address Greenhouse Gas (GHG) Accounting and Reporting and subsections on Compliance and Reporting. Please see comments of Center for Resource Solutions on the EDAM Revised Straw Proposal attached.

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

Our comments are limited to the section on GHG Accounting and Reporting and subsections on Compliance and Reporting. 

3. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on the topic of confidence in market transfers design as discussed in section II.A.2 of the EDAM revised straw proposal. In particular, please provide comments regarding the different design elements supporting confidence in transfers including the application of the market parameters preventing the propagation of shortfalls and the associated outcomes illustrated in the examples.

Our comments are limited to the section on GHG Accounting and Reporting and subsections on Compliance and Reporting. 

4. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on the topic of equal priority between market transfers and load in edge reliability scenarios, as effectuated in the operational timeframe, informed by operator discretion and good utility practice, as discussed in section II.A.2 of the EDAM revised straw proposal.

Our comments are limited to the section on GHG Accounting and Reporting and subsections on Compliance and Reporting. 

5. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on the proposal and effectuation of lower priority market transfers sinking in an EDAM BAA that has failed the day ahead RSE or otherwise is not part of the WEIM RSE pool as discussed in section II.A.2.d of the EDAM revised straw proposal.

Our comments are limited to the section on GHG Accounting and Reporting and subsections on Compliance and Reporting. 

6. TRANSMISSION COMMITMENT: Please provide your organization’s comments on the overall framework of transmission commitment in EDAM, including the framing of how transmission is made available through the concept of the transmission “buckets” as described in section II.B.1 of the EDAM revised straw proposal.

Our comments are limited to the section on GHG Accounting and Reporting and subsections on Compliance and Reporting. 

7. TRANSMISSION COMMITMENT: Please provide your organization’s perspective on Bucket 2 transmission and the pathways for how transmission customers can exercise their transmission rights, whether secured under the OATT or under legacy arrangements, or how otherwise those transmission rights are made available to the market as described in section II.B.1 of the revised straw proposal.

Our comments are limited to the section on GHG Accounting and Reporting and subsections on Compliance and Reporting. 

8. TRANSMISSION COMMITMENT: Please provide your organization’s perspective on how ISO transmission is made available to the EDAM under the transmission commitment design.

Our comments are limited to the section on GHG Accounting and Reporting and subsections on Compliance and Reporting. 

9. TRANSMISSION COMMITMENT: Please provide your organization's comments on the transmission revenue requirement (TRR) recovery framework design which is intended to allow for recovery of certain transmission revenues to keep the transmission provider whole from a historical TRR perspective in the EDAM as described in section II.B.1 of the revised straw proposal.
Consider comments on the three different proposed components of the EDAM recoverable TRR and the proposed methods of allocating the TRR shortfall, along with other elements of the design.

Our comments are limited to the section on GHG Accounting and Reporting and subsections on Compliance and Reporting. 

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

Our comments are limited to the section on GHG Accounting and Reporting and subsections on Compliance and Reporting. 

11. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the design of the proposed application that will be used to conduct the EDAM RSE as described in section II.B.2 of the EDAM revised straw proposal.
This includes comments on the ability to conduct advisory RSE tests prior to the binding run, the timing of the RSE, test inputs, test obligation, the decision not to include transmission constraints within the EDAM RSE as well as any other relevant elements.

Our comments are limited to the section on GHG Accounting and Reporting and subsections on Compliance and Reporting. 

12. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposed treatment of firm energy contracts where the source/transmission may not be known in advance of the market run (i.e. WSPP Schedule-C supply contracts) within the EDAM RSE.
Consider comments on if the proposed requirement for the submission of day-ahead e-tags, the potential to be removed from the pooled WEIM RSE, as well as monitoring to provide a sufficient level of confidence in these types of supply arrangements. Additionally, consider the proposed modeling of these arrangements as “bucket 1” transfers, along with the potential pricing impacts in the source BAA and the potential to utilize BAA-to-BAA transmission between the source and sink BAA.

Our comments are limited to the section on GHG Accounting and Reporting and subsections on Compliance and Reporting. 

13. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s perspective on the ISO proposal for counting in the EDAM RSE import bids made at the CAISO BAA boarder with a non-EDAM BAA.

Our comments are limited to the section on GHG Accounting and Reporting and subsections on Compliance and Reporting. 

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.

Our comments are limited to the section on GHG Accounting and Reporting and subsections on Compliance and Reporting. 

15. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposal to make available advisory D+2 market results (day ahead + 2 market run) to help inform gas procurement and manage gas resource participation in the day ahead market.
Consider commenting on any additional potential enhancements or changes to this market run which could increase its accuracy.

Our comments are limited to the section on GHG Accounting and Reporting and subsections on Compliance and Reporting. 

16. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on whether the proposal to cure resource insufficiencies through the EDAM market at an administrative surcharge provides incentive to cure shortfalls prior to participating in the EDAM.
Please comment on the proposed requirement to cure through the market, the block surcharge, as well as the potential to credit against the surcharge any market energy prices. In addition, please comment on the proposed revenue allocation, and CAISO BAA specific sub-allocation for this surcharge.

Our comments are limited to the section on GHG Accounting and Reporting and subsections on Compliance and Reporting. 

17. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposal to stand up an hourly bid-range trading platform.

Our comments are limited to the section on GHG Accounting and Reporting and subsections on Compliance and Reporting. 

18. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the utilization of a pooled WEIM RSE for entities passing the EDAM RSE, as described in the revised straw proposal.
Please comment on the criteria for exclusion from the pooled WEIM RSE, the proposal to withhold a configurable quantity of imbalance reserves to be utilized for benefit of the EDAM footprint, and the preferred approach for the pooled WEIM RSE following a potential failure of the pool in the WEIM.

Our comments are limited to the section on GHG Accounting and Reporting and subsections on Compliance and Reporting. 

19. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on two introduced mechanisms for consideration that further allow a BAA to manage its resources: (1) mechanisms to manage supply in excess of RSE, and (2) consideration of a net EDAM transfer export limit constraint as described in the revised straw proposal.
Please consider commenting on the value and need for these mechanisms for individual BAAs along with other design elements that should be considered in enhancing or modifying these mechanisms to address the issues described.

Our comments are limited to the section on GHG Accounting and Reporting and subsections on Compliance and Reporting. 

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

Our comments are limited to the section on GHG Accounting and Reporting and subsections on Compliance and Reporting. 

21. INTEGRATED FORWARD MARKET (IFM) AND RESIDUAL UNIT COMMITMENT (RUC): Please provide your organization’s comments on the IFM and RUC design as described in sections II.C.2 and II.C.3 of the EDAM revised straw proposal.

Our comments are limited to the section on GHG Accounting and Reporting and subsections on Compliance and Reporting. 

22. 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 continued evaluation of potential market power mitigation enhancements within the Price Formation Enhancements initiative, which is currently ongoing, as described in section II.C.4 of the EDAM revised straw proposal.

Our comments are limited to the section on GHG Accounting and Reporting and subsections on Compliance and Reporting. 

23. CONVERGENCE BIDDING: Please provide your organization’s comments on the proposal on convergence bidding in the EDAM and the associated transition period approach being proposed as described in section II.C.5 of the EDAM revised straw proposal.

Our comments are limited to the section on GHG Accounting and Reporting and subsections on Compliance and Reporting. 

24. EXTERNAL RESOURCE PARTICIPATION: Please provide your organization’s comments on the proposal for external resource participation in the EDAM, as described in section II.C.6 of the EDAM revised straw proposal.

Our comments are limited to the section on GHG Accounting and Reporting and subsections on Compliance and Reporting. 

25. 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.C.7 of the EDAM revised straw proposal.

Please see our comments attached.

26. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the use of the GHG Reference Pass as the GHG counterfactual.

We do not provide specific comment on the use of the GHG Reference Pass as the GHG counterfactual.

27. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the attribution data reported as a part of the resource specific approach, and if or what additional information would provide transparency.

Please see our comments attached.

28. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s overall comments, including potential suggested enhancements, on the zonal proposal.

Please see our comments attached.

29. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s overall comments, including potential suggested enhancements, on the LADWP proposal.

Please see our comments attached.

30. GREENHOUSE GAS ACCOUNTING: Please provide any other feedback on GHG accounting not captured by the questions above.

Please see our comments attached.

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

Our comments are limited to the section on GHG Accounting and Reporting and subsections on Compliance and Reporting. 

32. SETTLEMENTS: Please provide your organization’s comments on the settlements design described in section II.D.2 of the EDAM straw proposal.
Consider comments on the different aspects of settlement allocation among the different settlement components.

Our comments are limited to the section on GHG Accounting and Reporting and subsections on Compliance and Reporting. 

33. EDAM FEES FRAMEWORK: Please provide your organization’s comments on the EDAM fees framework, particularly the implementation fee and administrative fee framework, as described in section II.D.3 of the EDAM straw proposal.

Our comments are limited to the section on GHG Accounting and Reporting and subsections on Compliance and Reporting. 

34. GENERAL COMMENTS: Please provide your organization’s comments on the decisional classification for the EDAM initiative as described in section III.B of the EDAM revised straw proposal.

Our comments are limited to the section on GHG Accounting and Reporting and subsections on Compliance and Reporting. 

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

Please see our comments attached.

CPUC - Cal Advocates
Submitted 09/26/2022, 04:01 pm

Contact

Edmond Yi (edmond.yi@cpuc.ca.gov)

1. GENERAL COMMENTS: Please provide a summary of your organization’s comments on the Extended Day-Ahead Market revised straw proposal:

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

2. EDAM PARTICIPATION MODEL: Please provide your organization’s comments on the proposed structure of the EDAM participation model as described in section II.A.1 of the EDAM revised 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 topic of confidence in market transfers design as discussed in section II.A.2 of the EDAM revised straw proposal. In particular, please provide comments regarding the different design elements supporting confidence in transfers including the application of the market parameters preventing the propagation of shortfalls and the associated outcomes illustrated in the examples.

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

4. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on the topic of equal priority between market transfers and load in edge reliability scenarios, as effectuated in the operational timeframe, informed by operator discretion and good utility practice, as discussed in section II.A.2 of the EDAM revised straw proposal.

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

5. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on the proposal and effectuation of lower priority market transfers sinking in an EDAM BAA that has failed the day ahead RSE or otherwise is not part of the WEIM RSE pool as discussed in section II.A.2.d of the EDAM revised straw proposal.

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

6. TRANSMISSION COMMITMENT: Please provide your organization’s comments on the overall framework of transmission commitment in EDAM, including the framing of how transmission is made available through the concept of the transmission “buckets” as described in section II.B.1 of the EDAM revised straw proposal.

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

7. TRANSMISSION COMMITMENT: Please provide your organization’s perspective on Bucket 2 transmission and the pathways for how transmission customers can exercise their transmission rights, whether secured under the OATT or under legacy arrangements, or how otherwise those transmission rights are made available to the market as described in section II.B.1 of the revised straw proposal.

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

8. TRANSMISSION COMMITMENT: Please provide your organization’s perspective on how ISO transmission is made available to the EDAM under the transmission commitment design.

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

9. TRANSMISSION COMMITMENT: Please provide your organization's comments on the transmission revenue requirement (TRR) recovery framework design which is intended to allow for recovery of certain transmission revenues to keep the transmission provider whole from a historical TRR perspective in the EDAM as described in section II.B.1 of the revised straw proposal.
Consider comments on the three different proposed components of the EDAM recoverable TRR and the proposed methods of allocating the TRR shortfall, along with other elements of the design.

Cal Advocates agrees with the intent of the proposed Extended Day Ahead Market (EDAM) transmission revenue requirement (TRR) recovery framework design.  The intent is to reimburse EDAM participants for any foregone revenue from short-term transmission sales and wheeling access charges (WAC) due to EDAM participation.[1]  Cal Advocates supports recovery of historical CAISO WAC through the EDAM TRR, as it will protect California ratepayers from the loss of WAC revenue due to transmission commitment to the EDAM.

Cal Advocates supports the CAISO’s proposal to account for actual transmission revenues in the eligible transmission products and only allow for the recovery of the EDAM TRR shortfall from all BAAs except the one recovering the revenues.[2]  The CAISO also requests stakeholder feedback on a bound to the EDAM TRR based on the energy ratio of EDAM transfers versus the total exports from a Balancing Authority Area (BAA).[3]  While Cal Advocates observes that a high level of transmission usage in the EDAM may render this bound on the recovery of the EDAM TRR shortfall unnecessary, we support the implementation of this bound as a structural safeguard against cost shifting to the EDAM.

 

Review of EDAM TRR Recovery Framework, Sunset Date, and Data Transparency

The CAISO should publish annual reports showing the breakdown of the monthly EDAM TRR recovered by EDAM participant, as well as the category under which the TRR was recovered (Component 1, Component 2, Component 3), and post them publicly.  These reports should be published and archived on the CAISO website for transparency and public accountability, allowing EDAM stakeholders to engage on any concerning trends in cost recovery through the EDAM.[4]

Cal Advocates recommends a sunset date for the EDAM TRR of five years after the start of the EDAM.  By this time the CAISO should evaluate the EDAM TRR framework using historical data and propose modifications to the EDAM TRR framework necessary to address any cost shifts or structural inequities discovered during the first years of EDAM operations.   If the review of historical, real-world data shows the existing EDAM TRR framework functions as intended and results in fair cost recovery across EDAM participants, the existing framework should be extended for another five years.  Setting a sunset date will require action by the CAISO to thoroughly reevaluate the EDAM TRR framework using real-world data and protect all EDAM-served load, including California ratepayers, from cost shifts resulting from the EDAM TRR structure.   Additionally, as discussed below, Cal Advocates recommends modifications to the TRR recovery framework design to make EDAM participants whole for planned or in-progress transmission investments that will support EDAM activity.

 

Modification to EDAM TRR Framework for Transmission Investments Underway

The EDAM proposal recommends a review and update of EDAM participants’ recoverable TRR after the first two-years of participating in the EDAM.[5]

Cal Advocates suggests an annual evaluation of the EDAM recoverable TRR for the first three years of participation in the EDAM, and a final evaluation after five years.  This evaluation schedule will account for transmission investments that were approved and underway prior to the EDAM.[6] An annual evaluation also will confirm, based on evaluation of patterns in transmission usage, if an EDAM participant’s loss of TRR revenue is due to EDAM activity. 

 

Modification to EDAM TRR Framework for Anticipated New Transmission Investments

The proposed EDAM TRR reimbursement framework would allow recovery of a certain percentage of the TRR for new transmission facility upgrades that increase the transfer capacity between EDAM BAAs.  The percentage of new transmission facility costs recovered in the TRR would be based on the “ratio of the non-firm and short-term firm point to point revenue requirement, associated with third party sales on the new upgrade.”[7]  Cal Advocates requests the CAISO provide additional detail on how it will determine that a new transmission facility increases EDAM transfer activity.  Cal Advocates recommends that a description of this determination and the resulting increase in EDAM transfer capability should be published along with the recovered revenue for each project eligible for EDAM TRR as part of annual EDAM TRR publication recommended by Cal Advocates above. Publication of this determination will create transparency around the transmission facilities that are receiving uplift through the EDAM TRR and allow all EDAM stakeholders to verify that the transmission facilities included in the EDAM TRR are in fact providing an increase in transfer capability between EDAM BAAs.  

Finally, CAISO staff indicated during the September 8, 2022 EDAM Stakeholder meeting that interregional projects will be excluded from EDAM-recoverable TRR.[8]  Cal Advocates recommends that interregional projects be defined as follows:

An interregional transmission project (ITP) is a proposed new transmission project that is publicly recognized – by the project sponsor, state regulators, or public utility transmission providers - as benefiting two or more Planning Regions.

This revised definition of an ITP[9] remove several existing barriers[10],[11] that prevent consistent, transparent, and meaningful benefits analyses of ITPs.  Moreover, this definition would not require the approval of any proposed projects, nor would it result in the allocation of costs for an ITP to any specific planning region.  

Cal Advocates further recommends these projects be eligible to receive partial cost recovery through the EDAM TRR framework.  Cal Advocates observes that commitment of the transmission capacity of an interregional project to the EDAM may also result in the same loss of short-term transmission revenues as projects that are approved by individual BAAs.  Appropriately defined interregional transmission projects can increase the transfer capacity between BAAs and may be built for that specific purpose, and thus should be eligible for the same cost recovery as regionally approved projects.  This will protect ratepayers in regions approving interregional projects by allowing fair cost recovery for projects that increase transfer capacity between BAAs.

 


[1] EDAM Revised Straw Proposal, p. 34.

[2] EDAM Revised Straw Proposal, p. 37, 39.

[3] EDAM Revised Straw Proposal, p. 38.

[4] The CAISO posts similar transmission revenue requirement breakdowns for CAISO participating transmission owners (PTOs) in its publication of the CAISO High Voltage Transmission Access Charge (HV TAC).   These publications are available at: http://www.caiso.com/Pages/documentsbygroup.aspx?GroupID=570D3E00-5AB5-408D-9142-5AA547D419A8

However, unlike the HV TAC publications, which only go as far back as 2017, Cal Advocates recommends the archived annual EDAM TRR reports be kept accessible until the termination of EDAM.

[5] EDAM Revised Straw Proposal, p. 37.

[6] Without the EDAM in place, the CAISO is considering multiple new transmission builds and capacity increases that likely assume a certain percentage of cost recovery from other BAAs through WAC or other short-term transmission sales.  These projects may be approved by the time EDAM is implemented but may not be constructed and included in the CAISO TRR until a few years after the EDAM starts.

[7] EDAM Revised Straw Proposal, p. 38.

[8] EDAM Stakeholder Meeting, September 8, 2022.  Accessed on September 20, 2022, at https://www.youtube.com/watch?v=ZjTRlTX2Q_Q. Timestamp 1:03:11 of recording.

[9] Each of the three Transmission Planning Regions in the Western states – the California Independent System Operator (CAISO), WestConnect, and NorthernGrid – defines an ITP as “A proposed new transmission project that would directly interconnect electrically to existing or planning transmission facilities in two or more Planning Regions and that is submitted into the regional transmission planning processes of all such Planning Regions.” This definition is used in the CAISO’s Open Access Transmission Tariff (Appendix A, available at http://www.caiso.com/Documents/Conformed-Tariff-as-of-Jun17-2022.pdf)

[10] The current definition of an ITP requires, in part, that the developer of the potential ITP submit the project to the regional transmission planning process of each transmission planning region.  This requirement presents two hurdles to the consideration of the benefits that an ITP could provide to each region: 1) the developer may simply decline to submit the project and 2) certain regions require that the region first identify a regional need that the ITP can fill before the ITP can be submitted and considered. 

[11] The latter part of the current ITP definition - that a project “interconnect electrically to existing or planned transmission facilities in two or more Planning Regions” – can also preclude a benefits analysis. This part of the definition ignores the nature of the modern transmission network, in which a transmission project may benefit a region it is not directly connected to.

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 design of the proposed application that will be used to conduct the EDAM RSE as described in section II.B.2 of the EDAM revised straw proposal.
This includes comments on the ability to conduct advisory RSE tests prior to the binding run, the timing of the RSE, test inputs, test obligation, the decision not to include transmission constraints within the EDAM RSE as well as any other relevant 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 firm energy contracts where the source/transmission may not be known in advance of the market run (i.e. WSPP Schedule-C supply contracts) within the EDAM RSE.
Consider comments on if the proposed requirement for the submission of day-ahead e-tags, the potential to be removed from the pooled WEIM RSE, as well as monitoring to provide a sufficient level of confidence in these types of supply arrangements. Additionally, consider the proposed modeling of these arrangements as “bucket 1” transfers, along with the potential pricing impacts in the source BAA and the potential to utilize BAA-to-BAA transmission between the source and sink BAA.

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 for counting in the EDAM RSE import bids made at the CAISO BAA boarder with a non-EDAM BAA.

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 proposal to make available advisory D+2 market results (day ahead + 2 market run) to help inform gas procurement and manage gas resource participation in the day ahead market.
Consider commenting on any additional potential enhancements or changes to this market run which could increase its accuracy.

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 whether the proposal to cure resource insufficiencies through the EDAM market at an administrative surcharge provides incentive to cure shortfalls prior to participating in the EDAM.
Please comment on the proposed requirement to cure through the market, the block surcharge, as well as the potential to credit against the surcharge any market energy prices. In addition, please comment on the proposed revenue allocation, and CAISO BAA specific sub-allocation for this surcharge.

The RSE process will be run daily to ensure the supply offered by each EDAM BAA is sufficient to meet its forecasted energy demand and capacity needs.[1]  If an EDAM BAA fails to show enough supply and/or capacity to pass the RSE, it will face a surcharge and may not be able to participate in the EDAM Integrated Forward Market (IFM) run for that day if the IFM cannot resolve the deficiency itself.[2]  The EDAM BAA may be able to still participate in the Western Energy Imbalance Market (WEIM) if it is able to cure its deficiency shortly after the IFM completes.[3]  An EDAM BAA may cure its RSE deficiency by securing additional supply or trading off part of its RSE requirement to another EDAM BAA with surplus supply.

It is unclear if the proposed design of the RSE penalty and curing opportunities would support EDAM operations if multiple EDAM BAAs fail the RSE evaluation and the IFM as a whole cannot secure sufficient total supply to meet total demand.  Such scenarios may be rare now but may become more frequent as climate change worsens, given the August and September 2020 events[4] and the September 2022 heat wave which all greatly surpassed forecasted weather-driven demand.[5]  In the next draft proposal, the CAISO should present an extreme edge case scenario with multiple BAAs failing to pass the RSE.  Such a scenario would show how EDAM IFM trading and prices, including power balance constraint relaxations, would affect clearing prices and how BAAs may meet their demand if unable to participate in the IFM.[6]

The EDAM’s current design allows EDAM BAAs to trade an amount of their RSE requirements.  RSE requirement trading would help BAAs to clear their deficiencies but may be of limited use when multiple BAAs are unable to pass the RSE.  The value of supply trading in such a scenario could lead to very high trade prices because deficient BAAs would bid against one another to pass the RSE and gain access to EDAM market products.  The EDAM Proposal states that the price of RSE requirement trading would be based on “prices agreed upon by both parties” but also that it would be a “[pre-set] price.”[7]  The price of trading RSE requirements cannot be determined at this stage of development because the value of access to the EDAM IFM and RSE requirement trading is unclear.  Rather, in the next draft proposal, the CAISO should identify how the RSE requirement trade price would be set before a reliability crisis occurs and whether the CAISO would set a price or if BAAs will bilaterally establish pre-set prices with each other.

 


[1] EDAM Revised Straw Proposal, p. 44-45.

[2] EDAM Revised Straw Proposal, p. 52.

[3] The EDAM IFM will still run for those BAAs who did pass the RSE.  EDAM Revised Straw Proposal, p. 53.

[4] The CAISO determined the August 2020 heat wave was a 1-in-30-year weather event, and a second in September 2020 was a 1-in-70-year weather event. CAISO, Final Root Cause Analysis, January 13, 2021, p. 40.

[5] On September 6, 2022, CAISO peak load reached 52,061 MW (https://www.caiso.com/documents/californiaisopeakloadhistory.pdf) which significantly exceeds the California Energy Commission’s (CEC) CAISO coincident 1-in-20 forecasted peak demand of 50,367 MW.  CEC, CED 2021 Mid Baseline Forecast – LSE and BA Tables Mid Demand Case Feb22, Form 1.5e. Accessed September 16, 2022, at: https://efiling.energy.ca.gov/GetDocument.aspx?tn=241383&DocumentContentId=75340

[6] The current draft proposal includes an edge case at the WEIM, but this does not demonstrate the impacts of multiple BAA failures to meet the RSE requirement at the EDAM IFM.  EDAM Revised Straw Proposal, p. 21.

[7] EDAM Revised Straw Proposal, p. 51.

17. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposal to stand up an hourly bid-range trading platform.

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

18. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the utilization of a pooled WEIM RSE for entities passing the EDAM RSE, as described in the revised straw proposal.
Please comment on the criteria for exclusion from the pooled WEIM RSE, the proposal to withhold a configurable quantity of imbalance reserves to be utilized for benefit of the EDAM footprint, and the preferred approach for the pooled WEIM RSE following a potential failure of the pool in the WEIM.

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

19. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on two introduced mechanisms for consideration that further allow a BAA to manage its resources: (1) mechanisms to manage supply in excess of RSE, and (2) consideration of a net EDAM transfer export limit constraint as described in the revised straw proposal.
Please consider commenting on the value and need for these mechanisms for individual BAAs along with other design elements that should be considered in enhancing or modifying these mechanisms to address the issues described.

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

20. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide 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.  

21. INTEGRATED FORWARD MARKET (IFM) AND RESIDUAL UNIT COMMITMENT (RUC): Please provide your organization’s comments on the IFM and RUC design as described in sections II.C.2 and II.C.3 of the EDAM revised straw proposal.

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

22. 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 continued evaluation of potential market power mitigation enhancements within the Price Formation Enhancements initiative, which is currently ongoing, as described in section II.C.4 of the EDAM revised straw proposal.

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

23. CONVERGENCE BIDDING: Please provide your organization’s comments on the proposal on convergence bidding in the EDAM and the associated transition period approach being proposed as described in section II.C.5 of the EDAM revised straw proposal.

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

24. EXTERNAL RESOURCE PARTICIPATION: Please provide your organization’s comments on the proposal for external resource participation in the EDAM, as described in section II.C.6 of the EDAM revised straw proposal.

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

25. 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.C.7 of the EDAM revised straw proposal.

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

26. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the use of the GHG Reference Pass as the GHG counterfactual.

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

27. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the attribution data reported as a part of the resource specific approach, and if or what additional information would provide transparency.

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

28. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s overall comments, including potential suggested enhancements, on the zonal proposal.

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 LADWP proposal.

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

30. GREENHOUSE GAS ACCOUNTING: Please provide any other feedback on GHG accounting not captured by the questions above.

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

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

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

32. SETTLEMENTS: Please provide your organization’s comments on the settlements design described in section II.D.2 of the EDAM straw proposal.
Consider comments on the different aspects of settlement allocation among the different settlement components.

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

33. EDAM FEES FRAMEWORK: Please provide your organization’s comments on the EDAM fees framework, particularly the implementation fee and administrative fee framework, as described in section II.D.3 of the EDAM straw proposal.

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

34. GENERAL COMMENTS: Please provide your organization’s comments on the decisional classification for the EDAM initiative as described in section III.B of the EDAM revised straw proposal.

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

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

The CAISO intends to add two new capacity products, Imbalance Reserves (IR) and Reliability Capacity (RC), that will be transacted at the EDAM and WEIM.[1]  IR would be an IFM capacity product that provides “flexible capacity to cover real-time ramping needs that are not covered by hourly day-ahead market schedules and to cover uncertainty in the net load forecast between day-ahead and real-time markets.”[2]  RC will be used in the EDAM “to ensure physical supply is committed to cover differences in cleared physical supply and each BAA’s net load forecast.”[3]  RC will be procured through the Residual Unit Commitment (RUC) process which the CAISO presently uses to procure capacity that functions similarly to RC.[4]  Awards of IR and RC would oblige a resource to respond to upward and downward dispatches in the Real-Time Market (RTM) processes.  Neither of these products are currently included in CAISO markets but both would create obligations for awarded resources to be ready to dispatch in real-time in the same manner as the Must Offer Obligations of the CPUC’s Resource Adequacy (RA) program.

IR and RC have been under ongoing development in the Day-Ahead Market Enhancements (DAME) initiative.  In the DAME initiative, Cal Advocates raised concerns that payments to resource owners for IR and RC would be duplicative of and in addition to contracted RA payments.[5]  Both IR and RC would provide services which the RA program already obliges RA resources to offer to the CAISO, namely requirements to offer bids to the RUC and to be subject to out-of-market commitments ordered by the CAISO.[6]  RA resources are required to offer RUC bids at $0/MWh and are not paid premiums to be available for dispatch if they are not awarded energy bids in the Day-Ahead Market (DAM).  The CAISO has not yet provided estimates of the cost or volumes of IR and RC.

RA contract rates account for the generator’s costs of having RA obligations, such as RUC and RTM bidding requirements.  Because IR and RC are designed to be bid at and paid a non-zero clearing price, those payments would be duplicative of the RA contract’s payments to provide the same services to the CAISO.  Re-negotiation of RA contracts would allow those contracts to be re-valued with respect to IR and RC payments, but the expected revenue from IR and RC is currently not known and parties are not typically required to conduct contract re-negotiations under such circumstances. 

Cal Advocates recognizes the DAME initiative is the appropriate venue for further development of IR and RC products. However, the CAISO should also consider this issue in EDAM because avoiding duplicative costs to the CPUC ratepayers who ultimately fund the CPUC’s RA program is a sufficient reason to delay EDAM’s implementation.  The CAISO recently recognized this double-payment issue and opened stakeholder discussions ahead of an October DAME proposal.[7]  The CAISO, in the DAME initiative, offered two options for discussion: expand inter-Scheduling Coordinator (inter-SC) trade functions to allow IR and RC revenue to flow back to the contract-holding Load Serving Entity (LSE) or claw-back IR and RC payments through the settlement process.  Cal Advocates appreciates the CAISO’s effort to develop solutions and looks forward to providing feedback on the next DAME proposal.  The EDAM and DAME initiatives should coordinate to ensure IR and RC products do not result in duplicative costs for CPUC ratepayers.

 


[1] EDAM Revised Straw Proposal, p. 7.

[2] CAISO, DAME Third Revised Straw Proposal, April 27, 2022, p. 5, 21.

[3] CAISO, DAME Third Revised Straw Proposal, April 27, 2022, p. 19, 21.

[4] CAISO, DAME Third Revised Straw Proposal, April 27, 2022, p. 19, 21.

[5] DAME, Comments of the Public Advocates Office on the Third Revised Straw Proposal, May 19, 2022.  Available at: https://stakeholdercenter.caiso.com/Comments/AllComments/372995fa-30ec-4166-9bbc-f92619b8014f#org-de6910be-09c8-46da-acbe-40b199b248df

[6] RA resources are required to provide those services as a part of the RA Must Offer Obligation.  See CAISO Tariff 40.6.1 and 40.6.2.

[7] DAME, Stakeholder Workshop, September 14, 2022, p. 8.  Available at: http://www.caiso.com/InitiativeDocuments/Presentation-Day-AheadMarketEnhancements-Sep14-2022.pdf

Idaho Power Company
Submitted 09/26/2022, 04:18 pm

Contact

Kathy Anderson (kanderson2@idahopower.com)

1. GENERAL COMMENTS: Please provide a summary of your organization’s comments on the Extended Day-Ahead Market revised straw proposal:

See attached comments

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

See attached comments

3. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on the topic of confidence in market transfers design as discussed in section II.A.2 of the EDAM revised straw proposal. In particular, please provide comments regarding the different design elements supporting confidence in transfers including the application of the market parameters preventing the propagation of shortfalls and the associated outcomes illustrated in the examples.

See attached comments

4. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on the topic of equal priority between market transfers and load in edge reliability scenarios, as effectuated in the operational timeframe, informed by operator discretion and good utility practice, as discussed in section II.A.2 of the EDAM revised straw proposal.

See attached comments

5. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on the proposal and effectuation of lower priority market transfers sinking in an EDAM BAA that has failed the day ahead RSE or otherwise is not part of the WEIM RSE pool as discussed in section II.A.2.d of the EDAM revised straw proposal.

See attached comments

6. TRANSMISSION COMMITMENT: Please provide your organization’s comments on the overall framework of transmission commitment in EDAM, including the framing of how transmission is made available through the concept of the transmission “buckets” as described in section II.B.1 of the EDAM revised straw proposal.

See attached comments

7. TRANSMISSION COMMITMENT: Please provide your organization’s perspective on Bucket 2 transmission and the pathways for how transmission customers can exercise their transmission rights, whether secured under the OATT or under legacy arrangements, or how otherwise those transmission rights are made available to the market as described in section II.B.1 of the revised straw proposal.

See attached comments

8. TRANSMISSION COMMITMENT: Please provide your organization’s perspective on how ISO transmission is made available to the EDAM under the transmission commitment design.

See attached comments

9. TRANSMISSION COMMITMENT: Please provide your organization's comments on the transmission revenue requirement (TRR) recovery framework design which is intended to allow for recovery of certain transmission revenues to keep the transmission provider whole from a historical TRR perspective in the EDAM as described in section II.B.1 of the revised straw proposal.
Consider comments on the three different proposed components of the EDAM recoverable TRR and the proposed methods of allocating the TRR shortfall, along with other elements of the design.

See attached comments

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

See attached comments

11. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the design of the proposed application that will be used to conduct the EDAM RSE as described in section II.B.2 of the EDAM revised straw proposal.
This includes comments on the ability to conduct advisory RSE tests prior to the binding run, the timing of the RSE, test inputs, test obligation, the decision not to include transmission constraints within the EDAM RSE as well as any other relevant elements.

See attached comments

12. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposed treatment of firm energy contracts where the source/transmission may not be known in advance of the market run (i.e. WSPP Schedule-C supply contracts) within the EDAM RSE.
Consider comments on if the proposed requirement for the submission of day-ahead e-tags, the potential to be removed from the pooled WEIM RSE, as well as monitoring to provide a sufficient level of confidence in these types of supply arrangements. Additionally, consider the proposed modeling of these arrangements as “bucket 1” transfers, along with the potential pricing impacts in the source BAA and the potential to utilize BAA-to-BAA transmission between the source and sink BAA.

See attached comments

13. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s perspective on the ISO proposal for counting in the EDAM RSE import bids made at the CAISO BAA boarder with a non-EDAM BAA.

See attached comments

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.

See attached comments

15. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposal to make available advisory D+2 market results (day ahead + 2 market run) to help inform gas procurement and manage gas resource participation in the day ahead market.
Consider commenting on any additional potential enhancements or changes to this market run which could increase its accuracy.

See attached comments

16. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on whether the proposal to cure resource insufficiencies through the EDAM market at an administrative surcharge provides incentive to cure shortfalls prior to participating in the EDAM.
Please comment on the proposed requirement to cure through the market, the block surcharge, as well as the potential to credit against the surcharge any market energy prices. In addition, please comment on the proposed revenue allocation, and CAISO BAA specific sub-allocation for this surcharge.

See attached comments

17. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposal to stand up an hourly bid-range trading platform.

See attached comments

18. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the utilization of a pooled WEIM RSE for entities passing the EDAM RSE, as described in the revised straw proposal.
Please comment on the criteria for exclusion from the pooled WEIM RSE, the proposal to withhold a configurable quantity of imbalance reserves to be utilized for benefit of the EDAM footprint, and the preferred approach for the pooled WEIM RSE following a potential failure of the pool in the WEIM.

See attached comments

19. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on two introduced mechanisms for consideration that further allow a BAA to manage its resources: (1) mechanisms to manage supply in excess of RSE, and (2) consideration of a net EDAM transfer export limit constraint as described in the revised straw proposal.
Please consider commenting on the value and need for these mechanisms for individual BAAs along with other design elements that should be considered in enhancing or modifying these mechanisms to address the issues described.

See attached comments

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

See attached comments

21. INTEGRATED FORWARD MARKET (IFM) AND RESIDUAL UNIT COMMITMENT (RUC): Please provide your organization’s comments on the IFM and RUC design as described in sections II.C.2 and II.C.3 of the EDAM revised straw proposal.

See attached comments

22. 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 continued evaluation of potential market power mitigation enhancements within the Price Formation Enhancements initiative, which is currently ongoing, as described in section II.C.4 of the EDAM revised straw proposal.

See attached comments

23. CONVERGENCE BIDDING: Please provide your organization’s comments on the proposal on convergence bidding in the EDAM and the associated transition period approach being proposed as described in section II.C.5 of the EDAM revised straw proposal.

See attached comments

24. EXTERNAL RESOURCE PARTICIPATION: Please provide your organization’s comments on the proposal for external resource participation in the EDAM, as described in section II.C.6 of the EDAM revised straw proposal.

See attached comments

25. 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.C.7 of the EDAM revised straw proposal.

See attached comments

26. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the use of the GHG Reference Pass as the GHG counterfactual.

See attached comments

27. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the attribution data reported as a part of the resource specific approach, and if or what additional information would provide transparency.

See attached comments

28. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s overall comments, including potential suggested enhancements, on the zonal proposal.

See attached comments

29. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s overall comments, including potential suggested enhancements, on the LADWP proposal.

See attached comments

30. GREENHOUSE GAS ACCOUNTING: Please provide any other feedback on GHG accounting not captured by the questions above.

See attached comments

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

See attached comments

32. SETTLEMENTS: Please provide your organization’s comments on the settlements design described in section II.D.2 of the EDAM straw proposal.
Consider comments on the different aspects of settlement allocation among the different settlement components.

See attached comments

33. EDAM FEES FRAMEWORK: Please provide your organization’s comments on the EDAM fees framework, particularly the implementation fee and administrative fee framework, as described in section II.D.3 of the EDAM straw proposal.

See attached comments

34. GENERAL COMMENTS: Please provide your organization’s comments on the decisional classification for the EDAM initiative as described in section III.B of the EDAM revised straw proposal.

See attached comments

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

See attached comments

Joint Commenters
Submitted 09/27/2022, 05:00 am

Submitted on behalf of
Clean Energy Buyers Association (Transmission section)

Contact

Vijay Satyal (vijay.satyal@westernresources.org)

1. GENERAL COMMENTS: Please provide a summary of your organization’s comments on the Extended Day-Ahead Market revised straw proposal:

 Western Resource Advocates (WRA) and Clean Energy Buyers Association (CEBA) submit these comments on transmission related aspects and WRA offers additional comments on greenhouse gas related aspects of EDAM. Therefore, we are identified as Joint Commenters as appropriate. We support the EDAM framework that maximizes use of transmission assets to the fullest and incentivizes clean energy generation and use with transparency in reporting GHG emissions. Western Resource Advocates (WRA) and Clean Energy Buyers Association (CEBA) submit these comments on transmission related aspects and WRA offers additional comments on greenhouse gas related aspects of EDAM. Therefore, we are identified as Joint Commenters as appropriate. We support the EDAM framework that maximizes use of transmission assets to the fullest and incentivizes clean energy generation and use with transparency in reporting GHG emissions. WRA supports all GHG acounting approaches but recommends CAISO staff partner with EDAM prospective entities to test out the zonal approach over next year or two.

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

Joint Commenters do not have any comments at this time.  

3. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on the topic of confidence in market transfers design as discussed in section II.A.2 of the EDAM revised straw proposal. In particular, please provide comments regarding the different design elements supporting confidence in transfers including the application of the market parameters preventing the propagation of shortfalls and the associated outcomes illustrated in the examples.

Joint Commenters do not have any comments at this time.  

4. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on the topic of equal priority between market transfers and load in edge reliability scenarios, as effectuated in the operational timeframe, informed by operator discretion and good utility practice, as discussed in section II.A.2 of the EDAM revised straw proposal.

Joint Commenters do not have any comments at this time.  

5. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on the proposal and effectuation of lower priority market transfers sinking in an EDAM BAA that has failed the day ahead RSE or otherwise is not part of the WEIM RSE pool as discussed in section II.A.2.d of the EDAM revised straw proposal.

Joint Commenters do not have any comments at this time.  

6. TRANSMISSION COMMITMENT: Please provide your organization’s comments on the overall framework of transmission commitment in EDAM, including the framing of how transmission is made available through the concept of the transmission “buckets” as described in section II.B.1 of the EDAM revised straw proposal.

Joint Commenters support the overall framework of the transmission “buckets” for transmission commitment as described in the EDAM Revised Straw Proposal, while acknowledging that there have been questions on the functional differentiation between Bucket 1 and Bucket 2. As a principle, Joint Commenters support the use of a simple and clear framework that maximizes the amount of transmission made available to the market to facilitate the optimized dispatch of renewable resources. We also maintain that any transmission commitment framework in EDAM should address the transmission revenue concerns and create equitable treatment for all entities donating transmission to the market.

Given the importance of getting these details right, both to achieve consensus and address the potential risks to market participants, we request CAISO focus further discussion on the treatment of transmission under Buckets 1 and 2 to provide additional clarification on any questions stakeholders may have. 

In addition, Joint Commenters recommend the Department of Market Monitoring (DMM) be required to review the efficiency of the bucket framework and provide a report after 3, 6, 9, and 12 months of operation. In creating that report, DMM should discuss the impacts of the buckets with Transmission Providers and Transmission Customers in order to recommend improvements to the transmission provision structure in EDAM.

7. TRANSMISSION COMMITMENT: Please provide your organization’s perspective on Bucket 2 transmission and the pathways for how transmission customers can exercise their transmission rights, whether secured under the OATT or under legacy arrangements, or how otherwise those transmission rights are made available to the market as described in section II.B.1 of the revised straw proposal.

Broadly, Joint Commenters support the proposal for Bucket 2 transmission as we believe it strikes a good balance between making as much transmission available to EDAM and providing transmission customers options for the use of that transmission in the day-ahead timeframe. Joint Commenters supports the maximum amount of transmission being made available to the market, and the Bucket 2 transmission proposal to include all transmission rights that are not scheduled by the time of the day-ahead market.

However, while the three options, or “pathways”, that CAISO lays out provide some initial answers to the concerns of those who own the transmission rights that would be automatically provisioned to EDAM, there are still questions in regards to the details of how these pathways for using transmission rights would function. Due to the potential implications, this proposal may have on the value of transmission rights within EDAM BAAs, we suggest additional discussions on this topic to ensure that the Bucket 2 transmission proposal garners maximum support.

8. TRANSMISSION COMMITMENT: Please provide your organization’s perspective on how ISO transmission is made available to the EDAM under the transmission commitment design.

Joint Commenters do not have any comments at this time.  

9. TRANSMISSION COMMITMENT: Please provide your organization's comments on the transmission revenue requirement (TRR) recovery framework design which is intended to allow for recovery of certain transmission revenues to keep the transmission provider whole from a historical TRR perspective in the EDAM as described in section II.B.1 of the revised straw proposal.
Consider comments on the three different proposed components of the EDAM recoverable TRR and the proposed methods of allocating the TRR shortfall, along with other elements of the design.

With respect to the TRR recovery framework outlined in the Revised Straw Proposal, Joint Commenters generally support the proposal to allow transmission providers to recover their historical revenue requirement and reiterate our opposition to the use of a hurdle rate to address transmission compensation concerns.

Joint Commenters appreciate CAISO’s continued efforts to create a forward-looking transmission commitment and compensation framework. However, the TRR proposal also includes the ability for new transmission upgrades to get a proportional percentage recovery, with the potential of further incentivizing transmission builds that increase transfer capability between EDAM BAAs. Joint Commenters want to flag this aspect of the TRR design, especially as it relates to the magnitude of revenues that must be collected through the recovery framework. While this may be important in the short-term, we believe over time participants will become more confident upgrading and committing greater transmission the market without relying on this framework to collect revenue. Our view is that EDAM is an incremental step towards an RTO and avoiding dependency on this revenue recovery framework is essential to ensuring a clear glide path from the EDAM to a full RTO in the West.

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

Joint Commenters do not have any comments at this time.

11. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the design of the proposed application that will be used to conduct the EDAM RSE as described in section II.B.2 of the EDAM revised straw proposal.
This includes comments on the ability to conduct advisory RSE tests prior to the binding run, the timing of the RSE, test inputs, test obligation, the decision not to include transmission constraints within the EDAM RSE as well as any other relevant elements.

Joint Commenters do not have any comments at this time.

12. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposed treatment of firm energy contracts where the source/transmission may not be known in advance of the market run (i.e. WSPP Schedule-C supply contracts) within the EDAM RSE.
Consider comments on if the proposed requirement for the submission of day-ahead e-tags, the potential to be removed from the pooled WEIM RSE, as well as monitoring to provide a sufficient level of confidence in these types of supply arrangements. Additionally, consider the proposed modeling of these arrangements as “bucket 1” transfers, along with the potential pricing impacts in the source BAA and the potential to utilize BAA-to-BAA transmission between the source and sink BAA.

Joint Commenters do not have any comments at this time.

13. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s perspective on the ISO proposal for counting in the EDAM RSE import bids made at the CAISO BAA boarder with a non-EDAM BAA.

Joint Commenters do not have any comments 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.

Joint Commenters do not have any comments at this time.

15. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposal to make available advisory D+2 market results (day ahead + 2 market run) to help inform gas procurement and manage gas resource participation in the day ahead market.
Consider commenting on any additional potential enhancements or changes to this market run which could increase its accuracy.

Joint Commenters do not have any comments at this time.

16. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on whether the proposal to cure resource insufficiencies through the EDAM market at an administrative surcharge provides incentive to cure shortfalls prior to participating in the EDAM.
Please comment on the proposed requirement to cure through the market, the block surcharge, as well as the potential to credit against the surcharge any market energy prices. In addition, please comment on the proposed revenue allocation, and CAISO BAA specific sub-allocation for this surcharge.

Joint Commenters do not have any comments at this time.

17. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposal to stand up an hourly bid-range trading platform.

Joint Commenters do not have any comments at this time.

18. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the utilization of a pooled WEIM RSE for entities passing the EDAM RSE, as described in the revised straw proposal.
Please comment on the criteria for exclusion from the pooled WEIM RSE, the proposal to withhold a configurable quantity of imbalance reserves to be utilized for benefit of the EDAM footprint, and the preferred approach for the pooled WEIM RSE following a potential failure of the pool in the WEIM.

Joint Commenters do not have any comments at this time.

19. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on two introduced mechanisms for consideration that further allow a BAA to manage its resources: (1) mechanisms to manage supply in excess of RSE, and (2) consideration of a net EDAM transfer export limit constraint as described in the revised straw proposal.
Please consider commenting on the value and need for these mechanisms for individual BAAs along with other design elements that should be considered in enhancing or modifying these mechanisms to address the issues described.

Joint Commenters do not have any comments at this time.

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

Joint Commenters do not have any comments at this time.

21. INTEGRATED FORWARD MARKET (IFM) AND RESIDUAL UNIT COMMITMENT (RUC): Please provide your organization’s comments on the IFM and RUC design as described in sections II.C.2 and II.C.3 of the EDAM revised straw proposal.

Joint Commenters do not have any comments at this time.

22. 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 continued evaluation of potential market power mitigation enhancements within the Price Formation Enhancements initiative, which is currently ongoing, as described in section II.C.4 of the EDAM revised straw proposal.

Joint Commenters do not have any comments at this time.

23. CONVERGENCE BIDDING: Please provide your organization’s comments on the proposal on convergence bidding in the EDAM and the associated transition period approach being proposed as described in section II.C.5 of the EDAM revised straw proposal.

Joint Commenters do not have any comments at this time.

24. EXTERNAL RESOURCE PARTICIPATION: Please provide your organization’s comments on the proposal for external resource participation in the EDAM, as described in section II.C.6 of the EDAM revised straw proposal.

Joint Commenters do not have any comments at this time.

25. 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.C.7 of the EDAM revised straw proposal.

WRA appreciates Table 10 that compares the GHG approaches (Resource specific, Zonal and LADWP hybrid) that lays out the nuances and differences. WRA is generally fine with any approach as long as it addresses issues of leakage and need for consistency in market performance to reflect GHG reduction or incentivizing clean energy generation. In recent past, Powerex has made it clear that the current WEIM approach to scheduling resources results in possibly, actual dispatch of energy resources that is not often clean energy resources. WRA is concerned with that reality. WRA also recommends reporting and compliance to consider WREGIS as an option as after all, Markets+ (SPP initiative) and EDAM (CAISO initiative) will be providing day-ahead market offerings in the West that would impact states and utilities. WRA also recognizes the use of geographic boundaries over BAAs. WRA is concerned about the lack of creative ways to use e-tags when the concerned WEIM participants have proficiency and familiarity with use of e-tags.

WRA is concerned about the issue raised by Powerex especially, of the current WEIM approach “resource specific” to scheduling resources that results in “deemed” delivered that doesn’t result in actual dispatch of clean energy resources, if they’re also lower costs. WRA is not clear in understanding the “first jurisdictional” deliverer definition that would involve a “resource scheduling coordinator” in lieu of the WEIM entity. Overall, WRA recommends CAISO staff partner with participating entities in EDAM to test out the EDAM structure through all 3 approaches and especially, the “resource specific” and “zonal.” WRA finally, also recommends CAISO staff to initiate conversations with WREGIS to explore ways for them to be a reporting entity for all EDAM transactions and related GHG post-dispatch emissions profile. WREIGS is ideally suited to be a reporting entity that can help the states’ follow up and get access to a one-stop inventory of post-dispatch emissions information for states’ compliance.

26. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the use of the GHG Reference Pass as the GHG counterfactual.

WRA has no objections to the proposed counterfactual approach in regards to the “resource specific” approach and identified on Pages 76-77.

27. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the attribution data reported as a part of the resource specific approach, and if or what additional information would provide transparency.

WRA recognizes the CAISO staff proposal to start with the resource-specific approach as it’s known and implementable. However, WRA recommends transparency in reporting to factor in the EDM RSE test approved schedules for EDAM Entities and explicitly report net export levels of BAAs transacting (export or importation) in GHG regulation areas. WRA strongly recommends that CAISO align with the Department of Market Monitoring (DMM) to ensure WEIM and EDAM transfers are tracked and reported on a quarterly basis. WRA endorses the CAISO staff approach to also provide emissions intensity information for in-state generation and total MW of BAA-level transfers. This is especially critical in light of scalability and CAISO staff willingness to expand the framework.

28. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s overall comments, including potential suggested enhancements, on the zonal proposal.

WRA at the outset, supports the zonal approach as well in terms of the concept, the use of “toll” and also the settlement process as paid out on Page 85.. It is intuitive and recognizes the explicit role of GHG regulation areas and recognize that the determination of the appropriate level of “toll” will be critical, in regards to the transfers. We support the informational requirements for a GHG pseudo-tie. WRA is concerned with the “static” nature of the “pre-defined” toll rate that air-regulators would identify, when we know that energy transfers vary in price by each hour, of a day that reflects grid conditions. WRA has no concerns with the “methodology” used to determine the toll rate (Page 83).The toll rate needs to be dynamic to reflect differing energy transfers and availability of transmission asset or congestion levels. August 2022 heat storm events demonstrated that energy transfers had significant changes in economic value based on the transmission path and time/day of transfers of clean energy resources. WRA recognizes the concerns CAISO staff raise about “dynamic tolling” however, we are preventing a solution to be developed in fear of it’s failure at the outset. Therefore, WRA recommends a simultaneous development and testing of the “zonal approach” in partnership with select WEIM Entities that are also going to participate in the EDAM. WRA also supports CAISO staff proposal to adapt to Oregon or other states’ carbon reduction requirements through carbon intensity related constraints. It is unclear why, CAISO staff would NOT be able to introduce a constraint to meet state requirements for resources subject to the toll.

29. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s overall comments, including potential suggested enhancements, on the LADWP proposal.

WRA supports the LADWP proposal that extends the CAISO staff proposal and extends the resource-specific approach. WRA strongly supports the load-based accounting approach as it would include GHG bid adders into the ISO optimization process. WRA supports the proposed method for accounting for carbon costs. WRA endorses the LADWP approach for the LSEs rather than the ISO, to be responsible for GHG emission reporting and compliance but only for California and Washington. We feel, as a centralized market operator, it’s within CAISO duties to be able to provide emission reporting service or coordinate with WREGIS for reporting the relevant information.

30. GREENHOUSE GAS ACCOUNTING: Please provide any other feedback on GHG accounting not captured by the questions above.

 The proposal ignores the role and value of WREGIS for reporting and compliance assistance. WRA requests it be discussed explicitly in future stakeholder meetings.

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

Joint Commenters do not have any comments at this time.

32. SETTLEMENTS: Please provide your organization’s comments on the settlements design described in section II.D.2 of the EDAM straw proposal.
Consider comments on the different aspects of settlement allocation among the different settlement components.

 The proposal ignores the role and value of WREGIS for reporting and compliance assistance. WRA requests it be discussed explicitly in future stakeholder meetings.

33. EDAM FEES FRAMEWORK: Please provide your organization’s comments on the EDAM fees framework, particularly the implementation fee and administrative fee framework, as described in section II.D.3 of the EDAM straw proposal.

Joint Commenters do not have any comments at this time.

34. GENERAL COMMENTS: Please provide your organization’s comments on the decisional classification for the EDAM initiative as described in section III.B of the EDAM revised straw proposal.

Joint Commenters do not have any comments at this time.

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

Joint Commenters do not have any comments at this time.

K&L Gates LLP
Submitted 09/26/2022, 05:32 pm

Contact

Ruta K. Skucas (ruta.skucas@klgates.com) Maeve C. Tibbetts (maeve.tibbetts@klgates.com) 

1. GENERAL COMMENTS: Please provide a summary of your organization’s comments on the Extended Day-Ahead Market revised straw proposal:

Please see attached file.

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

N/A

3. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on the topic of confidence in market transfers design as discussed in section II.A.2 of the EDAM revised straw proposal. In particular, please provide comments regarding the different design elements supporting confidence in transfers including the application of the market parameters preventing the propagation of shortfalls and the associated outcomes illustrated in the examples.

N/A

4. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on the topic of equal priority between market transfers and load in edge reliability scenarios, as effectuated in the operational timeframe, informed by operator discretion and good utility practice, as discussed in section II.A.2 of the EDAM revised straw proposal.

N/A

5. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on the proposal and effectuation of lower priority market transfers sinking in an EDAM BAA that has failed the day ahead RSE or otherwise is not part of the WEIM RSE pool as discussed in section II.A.2.d of the EDAM revised straw proposal.

N/A

6. TRANSMISSION COMMITMENT: Please provide your organization’s comments on the overall framework of transmission commitment in EDAM, including the framing of how transmission is made available through the concept of the transmission “buckets” as described in section II.B.1 of the EDAM revised straw proposal.

N/A

7. TRANSMISSION COMMITMENT: Please provide your organization’s perspective on Bucket 2 transmission and the pathways for how transmission customers can exercise their transmission rights, whether secured under the OATT or under legacy arrangements, or how otherwise those transmission rights are made available to the market as described in section II.B.1 of the revised straw proposal.

N/A

8. TRANSMISSION COMMITMENT: Please provide your organization’s perspective on how ISO transmission is made available to the EDAM under the transmission commitment design.

N/A

9. TRANSMISSION COMMITMENT: Please provide your organization's comments on the transmission revenue requirement (TRR) recovery framework design which is intended to allow for recovery of certain transmission revenues to keep the transmission provider whole from a historical TRR perspective in the EDAM as described in section II.B.1 of the revised straw proposal.
Consider comments on the three different proposed components of the EDAM recoverable TRR and the proposed methods of allocating the TRR shortfall, along with other elements of the design.

N/A

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

N/A

11. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the design of the proposed application that will be used to conduct the EDAM RSE as described in section II.B.2 of the EDAM revised straw proposal.
This includes comments on the ability to conduct advisory RSE tests prior to the binding run, the timing of the RSE, test inputs, test obligation, the decision not to include transmission constraints within the EDAM RSE as well as any other relevant elements.

N/A

12. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposed treatment of firm energy contracts where the source/transmission may not be known in advance of the market run (i.e. WSPP Schedule-C supply contracts) within the EDAM RSE.
Consider comments on if the proposed requirement for the submission of day-ahead e-tags, the potential to be removed from the pooled WEIM RSE, as well as monitoring to provide a sufficient level of confidence in these types of supply arrangements. Additionally, consider the proposed modeling of these arrangements as “bucket 1” transfers, along with the potential pricing impacts in the source BAA and the potential to utilize BAA-to-BAA transmission between the source and sink BAA.

N/A

13. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s perspective on the ISO proposal for counting in the EDAM RSE import bids made at the CAISO BAA boarder with a non-EDAM BAA.

N/A

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.

N/A

15. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposal to make available advisory D+2 market results (day ahead + 2 market run) to help inform gas procurement and manage gas resource participation in the day ahead market.
Consider commenting on any additional potential enhancements or changes to this market run which could increase its accuracy.

N/A

16. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on whether the proposal to cure resource insufficiencies through the EDAM market at an administrative surcharge provides incentive to cure shortfalls prior to participating in the EDAM.
Please comment on the proposed requirement to cure through the market, the block surcharge, as well as the potential to credit against the surcharge any market energy prices. In addition, please comment on the proposed revenue allocation, and CAISO BAA specific sub-allocation for this surcharge.

N/A

17. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposal to stand up an hourly bid-range trading platform.

N/A

18. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the utilization of a pooled WEIM RSE for entities passing the EDAM RSE, as described in the revised straw proposal.
Please comment on the criteria for exclusion from the pooled WEIM RSE, the proposal to withhold a configurable quantity of imbalance reserves to be utilized for benefit of the EDAM footprint, and the preferred approach for the pooled WEIM RSE following a potential failure of the pool in the WEIM.

N/A

19. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on two introduced mechanisms for consideration that further allow a BAA to manage its resources: (1) mechanisms to manage supply in excess of RSE, and (2) consideration of a net EDAM transfer export limit constraint as described in the revised straw proposal.
Please consider commenting on the value and need for these mechanisms for individual BAAs along with other design elements that should be considered in enhancing or modifying these mechanisms to address the issues described.

N/A

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

N/A

21. INTEGRATED FORWARD MARKET (IFM) AND RESIDUAL UNIT COMMITMENT (RUC): Please provide your organization’s comments on the IFM and RUC design as described in sections II.C.2 and II.C.3 of the EDAM revised straw proposal.

N/A

22. 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 continued evaluation of potential market power mitigation enhancements within the Price Formation Enhancements initiative, which is currently ongoing, as described in section II.C.4 of the EDAM revised straw proposal.

N/A

23. CONVERGENCE BIDDING: Please provide your organization’s comments on the proposal on convergence bidding in the EDAM and the associated transition period approach being proposed as described in section II.C.5 of the EDAM revised straw proposal.

Please see attached file.

24. EXTERNAL RESOURCE PARTICIPATION: Please provide your organization’s comments on the proposal for external resource participation in the EDAM, as described in section II.C.6 of the EDAM revised straw proposal.

N/A

25. 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.C.7 of the EDAM revised straw proposal.

N/A

26. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the use of the GHG Reference Pass as the GHG counterfactual.

N/A

27. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the attribution data reported as a part of the resource specific approach, and if or what additional information would provide transparency.

N/A

28. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s overall comments, including potential suggested enhancements, on the zonal proposal.

N/A

29. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s overall comments, including potential suggested enhancements, on the LADWP proposal.

N/A

30. GREENHOUSE GAS ACCOUNTING: Please provide any other feedback on GHG accounting not captured by the questions above.

N/A

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

N/A

32. SETTLEMENTS: Please provide your organization’s comments on the settlements design described in section II.D.2 of the EDAM straw proposal.
Consider comments on the different aspects of settlement allocation among the different settlement components.

N/A

33. EDAM FEES FRAMEWORK: Please provide your organization’s comments on the EDAM fees framework, particularly the implementation fee and administrative fee framework, as described in section II.D.3 of the EDAM straw proposal.

N/A

34. GENERAL COMMENTS: Please provide your organization’s comments on the decisional classification for the EDAM initiative as described in section III.B of the EDAM revised straw proposal.

N/A

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

N/A

Kathleen Staks, Western Freedom
Submitted 09/26/2022, 02:30 pm

Submitted on behalf of
Western Freedom

Contact

Kathleen Staks (kstaks@westernfreedom.org)

1. GENERAL COMMENTS: Please provide a summary of your organization’s comments on the Extended Day-Ahead Market revised straw proposal:

Western Freedom is pleased to submit these comments on the proposed EDAM market design. As an initial matter, Western Freedom is not taking a position about which entity should run region-wide markets over what footprint. As those questions are sorted out by various states, utilities, and other stakeholders, we believe that EDAM improves upon EIM and therefore should be pursued on a parallel track. 

About Western Freedom

Western Freedom is a non-profit entity with the mission of enabling the delivery of low-cost electricity and energy freedom to the West through an efficient and integrated grid system. Western Freedom is focused on developing and executing a campaign to support the development of a western regional transmission organization (“RTO”) on behalf of a coalition of large energy customers across the region. Western Freedom is focused on eleven western states including Arizona, California, Colorado, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington, and Wyoming. 

General Comments

We strongly support the development of organized markets in the West, and urge CAISO to design EDAM such that it can be seamlessly expanded into a West-wide RTO. 

The development of a day-ahead market for the West should create value and efficiencies for all customers, including:

  • Reducing friction for generators to serve load. 

  • Enabling greater access to the lowest-cost resources and the cleanest resources, for those utilities and retail customers that have climate goals. 

  • Emissions accounting for customers and states to confidently track progress towards their goals.

  • Energy system oversight to ensure efficiency and equity. This should include transparent, equitable and independent governance, aligned with principles from western regulators detailed in Multi-state Electric Organization Principles, and effective market monitoring.

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

II.A - Threshold Issues

Western Freedom supports onboarding measures that encourage maximum participation in the EDAM while protecting market performance.

Western Freedom supports economic bidding and self-scheduling instead of base scheduling to prevent cost-shifting and ensure the lowest cost resources are deployed first.

3. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on the topic of confidence in market transfers design as discussed in section II.A.2 of the EDAM revised straw proposal. In particular, please provide comments regarding the different design elements supporting confidence in transfers including the application of the market parameters preventing the propagation of shortfalls and the associated outcomes illustrated in the examples.

No comments.

4. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on the topic of equal priority between market transfers and load in edge reliability scenarios, as effectuated in the operational timeframe, informed by operator discretion and good utility practice, as discussed in section II.A.2 of the EDAM revised straw proposal.

No comment.

5. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on the proposal and effectuation of lower priority market transfers sinking in an EDAM BAA that has failed the day ahead RSE or otherwise is not part of the WEIM RSE pool as discussed in section II.A.2.d of the EDAM revised straw proposal.

No comment.

6. TRANSMISSION COMMITMENT: Please provide your organization’s comments on the overall framework of transmission commitment in EDAM, including the framing of how transmission is made available through the concept of the transmission “buckets” as described in section II.B.1 of the EDAM revised straw proposal.

Western Freedom supports transmission rights not scheduled in the day-ahead market to be available for EDAM transfers, and for unsold transmission to be made available to the market hurdle-free. These are the kinds of friction-reducing market services that will lead to customer savings.

It is fair for transmission owners to be able to recover foregone transmission revenues based on EDAM participation. Market designs that protect participants from losing value by joining the EDAM should maximize participation, and therefore customer savings.

In the longer term, substantial additional customer savings should come from moving away from physical transmission rights to allow flow-based scheduling. We support incremental progress towards that goal through EDAM as long as the transition is steady and deliberate.

Western Freedom is concerned that the transmission commitment process may be opaque. We believe that a market monitor should investigate the operation of this system for inefficiencies, the potential for market power to disrupt optimal transmission commitment, and opportunities for greater transparency. The market monitor should produce a report evaluating options and potential further value to be achieved through further design changes.

7. TRANSMISSION COMMITMENT: Please provide your organization’s perspective on Bucket 2 transmission and the pathways for how transmission customers can exercise their transmission rights, whether secured under the OATT or under legacy arrangements, or how otherwise those transmission rights are made available to the market as described in section II.B.1 of the revised straw proposal.

No comment.

8. TRANSMISSION COMMITMENT: Please provide your organization’s perspective on how ISO transmission is made available to the EDAM under the transmission commitment design.

No comment.

9. TRANSMISSION COMMITMENT: Please provide your organization's comments on the transmission revenue requirement (TRR) recovery framework design which is intended to allow for recovery of certain transmission revenues to keep the transmission provider whole from a historical TRR perspective in the EDAM as described in section II.B.1 of the revised straw proposal.
Consider comments on the three different proposed components of the EDAM recoverable TRR and the proposed methods of allocating the TRR shortfall, along with other elements of the design.

No comment.

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

No comment.

11. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the design of the proposed application that will be used to conduct the EDAM RSE as described in section II.B.2 of the EDAM revised straw proposal.
This includes comments on the ability to conduct advisory RSE tests prior to the binding run, the timing of the RSE, test inputs, test obligation, the decision not to include transmission constraints within the EDAM RSE as well as any other relevant elements.

Western Freedom supports requirements that prevent participants from leaning on the system, but at the same time enable the efficiencies of regional coordination. 

CAISO should work on the seamless handoff between long-term RA (WRAP and CPUC) and the EDAM RSE test. Further explanation of the intersection (or isolation) of these processes would be of interest, as well as an evaluation of customer benefits that come from various approaches. We recognize that the significant consumer cost savings that come from regional resource adequacy constructs are not being included in EDAM, and encourage evaluation of the missing value and pursuit of a wider regional resource adequacy program.

We ask CAISO to evaluate whether resources used for RSE should have a must-offer obligation and whether that would improve market operations.

12. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposed treatment of firm energy contracts where the source/transmission may not be known in advance of the market run (i.e. WSPP Schedule-C supply contracts) within the EDAM RSE.
Consider comments on if the proposed requirement for the submission of day-ahead e-tags, the potential to be removed from the pooled WEIM RSE, as well as monitoring to provide a sufficient level of confidence in these types of supply arrangements. Additionally, consider the proposed modeling of these arrangements as “bucket 1” transfers, along with the potential pricing impacts in the source BAA and the potential to utilize BAA-to-BAA transmission between the source and sink BAA.

No comment.

13. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s perspective on the ISO proposal for counting in the EDAM RSE import bids made at the CAISO BAA boarder with a non-EDAM BAA.

No 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.

Customer demand response programs should also be integrated into day-ahead markets. Western Freedom would like to see more details on demand response integration and hopes that EDAM will be responsive to innovation in load flexibility paradigms as electrification accelerates.

15. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposal to make available advisory D+2 market results (day ahead + 2 market run) to help inform gas procurement and manage gas resource participation in the day ahead market.
Consider commenting on any additional potential enhancements or changes to this market run which could increase its accuracy.

No comment.

16. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on whether the proposal to cure resource insufficiencies through the EDAM market at an administrative surcharge provides incentive to cure shortfalls prior to participating in the EDAM.
Please comment on the proposed requirement to cure through the market, the block surcharge, as well as the potential to credit against the surcharge any market energy prices. In addition, please comment on the proposed revenue allocation, and CAISO BAA specific sub-allocation for this surcharge.

No comment.

17. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposal to stand up an hourly bid-range trading platform.

 No comment.

18. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the utilization of a pooled WEIM RSE for entities passing the EDAM RSE, as described in the revised straw proposal.
Please comment on the criteria for exclusion from the pooled WEIM RSE, the proposal to withhold a configurable quantity of imbalance reserves to be utilized for benefit of the EDAM footprint, and the preferred approach for the pooled WEIM RSE following a potential failure of the pool in the WEIM.

No comment.

19. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on two introduced mechanisms for consideration that further allow a BAA to manage its resources: (1) mechanisms to manage supply in excess of RSE, and (2) consideration of a net EDAM transfer export limit constraint as described in the revised straw proposal.
Please consider commenting on the value and need for these mechanisms for individual BAAs along with other design elements that should be considered in enhancing or modifying these mechanisms to address the issues described.

No comment.

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

No comment.

21. INTEGRATED FORWARD MARKET (IFM) AND RESIDUAL UNIT COMMITMENT (RUC): Please provide your organization’s comments on the IFM and RUC design as described in sections II.C.2 and II.C.3 of the EDAM revised straw proposal.

No comment.

22. 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 continued evaluation of potential market power mitigation enhancements within the Price Formation Enhancements initiative, which is currently ongoing, as described in section II.C.4 of the EDAM revised straw proposal.

Western Freedom supports the inclusion of generation market power mitigation. The approach in the Revised Straw Proposal makes sense based on the reported success in the WEIM framework. In addition, we support broader market monitoring.

CAISO should ensure that there is a market monitor (MM) overseeing EDAM, and the MM should evaluate physical and economic withholding. If there are EDAM-specific issues that CAISO’s Market Surveillance Committee does not currently monitor, their scope should be expanded or another MM should be engaged.

23. CONVERGENCE BIDDING: Please provide your organization’s comments on the proposal on convergence bidding in the EDAM and the associated transition period approach being proposed as described in section II.C.5 of the EDAM revised straw proposal.

We support convergence bidding since it increases market efficiency. CAISO should do all it can to ensure the lowest possible customer rates while maintaining reliability and ensuring that all resources are appropriately valued.

24. EXTERNAL RESOURCE PARTICIPATION: Please provide your organization’s comments on the proposal for external resource participation in the EDAM, as described in section II.C.6 of the EDAM revised straw proposal.

Western Freedom supports CAISO’s proposed External Resource Participation model as an interim step before future improvements can be made. 

25. 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.C.7 of the EDAM revised straw proposal.

Western Freedom believes EDAM could do more to help customers meet their climate goals. Customers need visibility into GHG impacts of energy on an hourly basis and by location to meet their ESG goals, and CAISO should ensure that it reports on the emissions of the resource mix that is committed to serving load in the day-ahead market.

We support GHG accounting methodologies that lead to appropriate dispatch of resources, incentivizing clean energy and serving load in line with state policy.

However, our customer coalition supports EDAM implementation as expeditiously as possible by expanding the WEIM approach for GHG accounting as an initial methodology. We appreciate CAISO’s commitment to continue work to refine GHG accounting methodologies in response to changing needs. Western Freedom urges CAISO to engage customers on their GHG accounting needs.

26. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the use of the GHG Reference Pass as the GHG counterfactual.

No comment.

27. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the attribution data reported as a part of the resource specific approach, and if or what additional information would provide transparency.

No comment.

28. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s overall comments, including potential suggested enhancements, on the zonal proposal.

No comment.

29. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s overall comments, including potential suggested enhancements, on the LADWP proposal.

No comment.

30. GREENHOUSE GAS ACCOUNTING: Please provide any other feedback on GHG accounting not captured by the questions above.

No comment.

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

Western Freedom supports mechanisms that hold utilities harmless from the transition to EDAM, in order to minimize barriers to participation. 

32. SETTLEMENTS: Please provide your organization’s comments on the settlements design described in section II.D.2 of the EDAM straw proposal.
Consider comments on the different aspects of settlement allocation among the different settlement components.

Western Freedom supports the 15-minute settlement periods. Frequent resettlement is better for system balancing and enables more variable resource integration.

33. EDAM FEES FRAMEWORK: Please provide your organization’s comments on the EDAM fees framework, particularly the implementation fee and administrative fee framework, as described in section II.D.3 of the EDAM straw proposal.

Western Freedom supports CAISO’s goal to limit the cost of the EDAM program and keep onboarding fees as low as possible. We agree that having more participants in EDAM will benefit more customers, and increase benefits to all customers.

34. GENERAL COMMENTS: Please provide your organization’s comments on the decisional classification for the EDAM initiative as described in section III.B of the EDAM revised straw proposal.

Western Freedom supports the joint authority approach for the time being, as longer-term RTO formation is being considered. The Multi-State Electric Organization Principles (https://gridstrategiesllc-my.sharepoint.com/:b:/p/jselker/EYxHoFpGaWpItF14DoS13qsBzOE-qIiDiSLvl2QdVKNXMQ?e=t3rE9t) created by Western energy regulators should be guidelines for CAISO.

While broad regional representation in governance will support equitable market operations, we caution against any design decisions that put responsibilities close to policy-making into EDAM governance. EDAM governance should be focused on accommodating state policy and must not overwrite it or inhibit state goals.

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

Western Freedom appreciates the opportunity to review the CAISO’s revised straw proposal, as well as CAISO’s continued engagement with stakeholders throughout the EDAM design process.

LADWP
Submitted 09/26/2022, 11:34 pm

Submitted on behalf of
LADWP

Contact

Stuart Kelly (skelly@utilicast.com)

1. GENERAL COMMENTS: Please provide a summary of your organization’s comments on the Extended Day-Ahead Market revised straw proposal:

See attachment

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

See attachment

3. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on the topic of confidence in market transfers design as discussed in section II.A.2 of the EDAM revised straw proposal. In particular, please provide comments regarding the different design elements supporting confidence in transfers including the application of the market parameters preventing the propagation of shortfalls and the associated outcomes illustrated in the examples.

See attachment

4. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on the topic of equal priority between market transfers and load in edge reliability scenarios, as effectuated in the operational timeframe, informed by operator discretion and good utility practice, as discussed in section II.A.2 of the EDAM revised straw proposal.

See attachment

5. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on the proposal and effectuation of lower priority market transfers sinking in an EDAM BAA that has failed the day ahead RSE or otherwise is not part of the WEIM RSE pool as discussed in section II.A.2.d of the EDAM revised straw proposal.

See attachment

6. TRANSMISSION COMMITMENT: Please provide your organization’s comments on the overall framework of transmission commitment in EDAM, including the framing of how transmission is made available through the concept of the transmission “buckets” as described in section II.B.1 of the EDAM revised straw proposal.

See attachment

7. TRANSMISSION COMMITMENT: Please provide your organization’s perspective on Bucket 2 transmission and the pathways for how transmission customers can exercise their transmission rights, whether secured under the OATT or under legacy arrangements, or how otherwise those transmission rights are made available to the market as described in section II.B.1 of the revised straw proposal.

See attachment

8. TRANSMISSION COMMITMENT: Please provide your organization’s perspective on how ISO transmission is made available to the EDAM under the transmission commitment design.

See attachment

9. TRANSMISSION COMMITMENT: Please provide your organization's comments on the transmission revenue requirement (TRR) recovery framework design which is intended to allow for recovery of certain transmission revenues to keep the transmission provider whole from a historical TRR perspective in the EDAM as described in section II.B.1 of the revised straw proposal.
Consider comments on the three different proposed components of the EDAM recoverable TRR and the proposed methods of allocating the TRR shortfall, along with other elements of the design.

See attachment

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

See attachment

11. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the design of the proposed application that will be used to conduct the EDAM RSE as described in section II.B.2 of the EDAM revised straw proposal.
This includes comments on the ability to conduct advisory RSE tests prior to the binding run, the timing of the RSE, test inputs, test obligation, the decision not to include transmission constraints within the EDAM RSE as well as any other relevant elements.

See attachment

12. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposed treatment of firm energy contracts where the source/transmission may not be known in advance of the market run (i.e. WSPP Schedule-C supply contracts) within the EDAM RSE.
Consider comments on if the proposed requirement for the submission of day-ahead e-tags, the potential to be removed from the pooled WEIM RSE, as well as monitoring to provide a sufficient level of confidence in these types of supply arrangements. Additionally, consider the proposed modeling of these arrangements as “bucket 1” transfers, along with the potential pricing impacts in the source BAA and the potential to utilize BAA-to-BAA transmission between the source and sink BAA.

See attachment

13. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s perspective on the ISO proposal for counting in the EDAM RSE import bids made at the CAISO BAA boarder with a non-EDAM BAA.

See attachment

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.

See attachment

15. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposal to make available advisory D+2 market results (day ahead + 2 market run) to help inform gas procurement and manage gas resource participation in the day ahead market.
Consider commenting on any additional potential enhancements or changes to this market run which could increase its accuracy.

See attachment

16. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on whether the proposal to cure resource insufficiencies through the EDAM market at an administrative surcharge provides incentive to cure shortfalls prior to participating in the EDAM.
Please comment on the proposed requirement to cure through the market, the block surcharge, as well as the potential to credit against the surcharge any market energy prices. In addition, please comment on the proposed revenue allocation, and CAISO BAA specific sub-allocation for this surcharge.

See attachment

17. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposal to stand up an hourly bid-range trading platform.

See attachment

18. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the utilization of a pooled WEIM RSE for entities passing the EDAM RSE, as described in the revised straw proposal.
Please comment on the criteria for exclusion from the pooled WEIM RSE, the proposal to withhold a configurable quantity of imbalance reserves to be utilized for benefit of the EDAM footprint, and the preferred approach for the pooled WEIM RSE following a potential failure of the pool in the WEIM.

See attachment

19. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on two introduced mechanisms for consideration that further allow a BAA to manage its resources: (1) mechanisms to manage supply in excess of RSE, and (2) consideration of a net EDAM transfer export limit constraint as described in the revised straw proposal.
Please consider commenting on the value and need for these mechanisms for individual BAAs along with other design elements that should be considered in enhancing or modifying these mechanisms to address the issues described.

See attachment

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

See attachment

21. INTEGRATED FORWARD MARKET (IFM) AND RESIDUAL UNIT COMMITMENT (RUC): Please provide your organization’s comments on the IFM and RUC design as described in sections II.C.2 and II.C.3 of the EDAM revised straw proposal.

See attachment

22. 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 continued evaluation of potential market power mitigation enhancements within the Price Formation Enhancements initiative, which is currently ongoing, as described in section II.C.4 of the EDAM revised straw proposal.

See attachment

23. CONVERGENCE BIDDING: Please provide your organization’s comments on the proposal on convergence bidding in the EDAM and the associated transition period approach being proposed as described in section II.C.5 of the EDAM revised straw proposal.

See attachment

24. EXTERNAL RESOURCE PARTICIPATION: Please provide your organization’s comments on the proposal for external resource participation in the EDAM, as described in section II.C.6 of the EDAM revised straw proposal.

See attachment

25. 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.C.7 of the EDAM revised straw proposal.

See attachment

26. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the use of the GHG Reference Pass as the GHG counterfactual.

See attachment

27. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the attribution data reported as a part of the resource specific approach, and if or what additional information would provide transparency.

See attachment

28. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s overall comments, including potential suggested enhancements, on the zonal proposal.

See attachment

29. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s overall comments, including potential suggested enhancements, on the LADWP proposal.

See attachment

30. GREENHOUSE GAS ACCOUNTING: Please provide any other feedback on GHG accounting not captured by the questions above.

See attachment

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

See attachment

32. SETTLEMENTS: Please provide your organization’s comments on the settlements design described in section II.D.2 of the EDAM straw proposal.
Consider comments on the different aspects of settlement allocation among the different settlement components.

See attachment

33. EDAM FEES FRAMEWORK: Please provide your organization’s comments on the EDAM fees framework, particularly the implementation fee and administrative fee framework, as described in section II.D.3 of the EDAM straw proposal.

See attachment

34. GENERAL COMMENTS: Please provide your organization’s comments on the decisional classification for the EDAM initiative as described in section III.B of the EDAM revised straw proposal.

See attachment

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

See attachment

Middle River Power, LLC
Submitted 09/26/2022, 04:31 pm

Contact

Brian Theaker (btheaker@mrpgenco.com)

1. GENERAL COMMENTS: Please provide a summary of your organization’s comments on the Extended Day-Ahead Market revised straw proposal:

Middle River Power LLC ("MRP") appreciates the considerable effort the CAISO has expended to work through very complicated but fundamental issues such as transmission allocation, resource sufficiency, greenhouse gas accounting, and revenue and cost allocation.  MRP also appreciates that the CAISO has engaged market participants in a very thoughtful, detailed and deliberate process on these complicated topics.  Nevertheless, at this point in the process, MRP’s perception is that the EDAM design is not only very complicated but also includes significant accommodations (as will be discussed in MRP’s sparse comments below) that may dilute EDAM’s effectiveness and introduce loopholes that can be exploited to the financial and reliability detriment of the EDAM participants.

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

No comment.

3. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on the topic of confidence in market transfers design as discussed in section II.A.2 of the EDAM revised straw proposal. In particular, please provide comments regarding the different design elements supporting confidence in transfers including the application of the market parameters preventing the propagation of shortfalls and the associated outcomes illustrated in the examples.

No comment.

4. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on the topic of equal priority between market transfers and load in edge reliability scenarios, as effectuated in the operational timeframe, informed by operator discretion and good utility practice, as discussed in section II.A.2 of the EDAM revised straw proposal.

No comment.

5. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on the proposal and effectuation of lower priority market transfers sinking in an EDAM BAA that has failed the day ahead RSE or otherwise is not part of the WEIM RSE pool as discussed in section II.A.2.d of the EDAM revised straw proposal.

As noted below, MRP is not certain that giving certain transfers lower market priority or not allowing a EDAM BAA that has failed the RSE to participate in pooling benefits will prove a sufficient incentive – or deterrent – to promote the behavior that will make EDAM participation reliable and effective. 

6. TRANSMISSION COMMITMENT: Please provide your organization’s comments on the overall framework of transmission commitment in EDAM, including the framing of how transmission is made available through the concept of the transmission “buckets” as described in section II.B.1 of the EDAM revised straw proposal.

No comment.

7. TRANSMISSION COMMITMENT: Please provide your organization’s perspective on Bucket 2 transmission and the pathways for how transmission customers can exercise their transmission rights, whether secured under the OATT or under legacy arrangements, or how otherwise those transmission rights are made available to the market as described in section II.B.1 of the revised straw proposal.

No comment.

8. TRANSMISSION COMMITMENT: Please provide your organization’s perspective on how ISO transmission is made available to the EDAM under the transmission commitment design.

No comment.

9. TRANSMISSION COMMITMENT: Please provide your organization's comments on the transmission revenue requirement (TRR) recovery framework design which is intended to allow for recovery of certain transmission revenues to keep the transmission provider whole from a historical TRR perspective in the EDAM as described in section II.B.1 of the revised straw proposal.
Consider comments on the three different proposed components of the EDAM recoverable TRR and the proposed methods of allocating the TRR shortfall, along with other elements of the design.

No comment.

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

No comment.

11. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the design of the proposed application that will be used to conduct the EDAM RSE as described in section II.B.2 of the EDAM revised straw proposal.
This includes comments on the ability to conduct advisory RSE tests prior to the binding run, the timing of the RSE, test inputs, test obligation, the decision not to include transmission constraints within the EDAM RSE as well as any other relevant elements.

Not including transmission constraints in the RSE is an accommodation that dilutes the reliability and effectiveness of the RSE. It is an accommodation that assumes that all resources contributing to the RSE – a test that is intended to ensure that BAAs provide resources adequate to meet their load and reserve obligations – are, de facto, fully deliverable to that BAA, when that may or may not be true.  This accommodation colors the RSE as a “feel good” exercise that does not ensure that the resources serving load and meeting reserve obligations within that BAA are deliverable within that BAA.  Moreover, recent experience suggests that assuming deliverability may not lead to optimal outcomes.  Not ensuring that the flexible ramping product was deliverable led to the CAISO procuring large amounts of this product that could not, in reality, function as intended.   Given the purpose of the RSE – to ensure adequacy – MRP cannot support not including transmission constraints in the RSE.   

12. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposed treatment of firm energy contracts where the source/transmission may not be known in advance of the market run (i.e. WSPP Schedule-C supply contracts) within the EDAM RSE.
Consider comments on if the proposed requirement for the submission of day-ahead e-tags, the potential to be removed from the pooled WEIM RSE, as well as monitoring to provide a sufficient level of confidence in these types of supply arrangements. Additionally, consider the proposed modeling of these arrangements as “bucket 1” transfers, along with the potential pricing impacts in the source BAA and the potential to utilize BAA-to-BAA transmission between the source and sink BAA.

MRP supports the proposal to require, within three hours of receiving DA awards, e-tags for non-resource-specific supply schedules.  Still, MRP questions whether the proposed consequences – namely, the BAA failing to e-tag those schedules would not be allowed to participate in sharing the uncertainty requirement or imbalance reserves procured to meet the shared uncertainty requirement, but the market transfers to and from the failed BAA would still be supported by the optimization - will prove to be a sufficient incentive for market participants to submit DA e-tags.  While the CAISO notes that DMM will report monthly on these untagged volumes, MRP recommends the CAISO consider developing actionable penalties or triggers based on such reporting to ensure that these untagged imports are not speculative spot market supply, as such outcomes would be completely inconsistent with the purpose of the RSE. 

13. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s perspective on the ISO proposal for counting in the EDAM RSE import bids made at the CAISO BAA boarder with a non-EDAM BAA.

No 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.

No comment.

15. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposal to make available advisory D+2 market results (day ahead + 2 market run) to help inform gas procurement and manage gas resource participation in the day ahead market.
Consider commenting on any additional potential enhancements or changes to this market run which could increase its accuracy.

No comment.

16. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on whether the proposal to cure resource insufficiencies through the EDAM market at an administrative surcharge provides incentive to cure shortfalls prior to participating in the EDAM.
Please comment on the proposed requirement to cure through the market, the block surcharge, as well as the potential to credit against the surcharge any market energy prices. In addition, please comment on the proposed revenue allocation, and CAISO BAA specific sub-allocation for this surcharge.

No comment.

17. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposal to stand up an hourly bid-range trading platform.

No comment.

18. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the utilization of a pooled WEIM RSE for entities passing the EDAM RSE, as described in the revised straw proposal.
Please comment on the criteria for exclusion from the pooled WEIM RSE, the proposal to withhold a configurable quantity of imbalance reserves to be utilized for benefit of the EDAM footprint, and the preferred approach for the pooled WEIM RSE following a potential failure of the pool in the WEIM.

No comment.

19. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on two introduced mechanisms for consideration that further allow a BAA to manage its resources: (1) mechanisms to manage supply in excess of RSE, and (2) consideration of a net EDAM transfer export limit constraint as described in the revised straw proposal.
Please consider commenting on the value and need for these mechanisms for individual BAAs along with other design elements that should be considered in enhancing or modifying these mechanisms to address the issues described.

Allowing LSEs to withhold RA capacity that is "excess to the need" raises the question of how the CAISO and/or LSE will determine what is “excess”.  Moreover, RA supply could be deemed excess under conditions that may not the conditions that ultimately materialize, e.g., if the DA load forecast is significantly lower that the load that materializes. 

Additionally, MRP requests the CAISO clarify its definition of “withholding RA capacity from the market”.  The RA program is intended to meet a 1-in-2 load forecast but the CAISO’s IFM and RUC must meet actual load which may be great than the RA program. Permissible withholding should be carefully discussed.  MRP would also appreciate a discussion of how the RA program would work in conjunction with EDAM after DAME is implemented.  It is not yet clear how the EDAM proposal aligns with, or doesn’t align with, California’s RA programs.    

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

No comment.

21. INTEGRATED FORWARD MARKET (IFM) AND RESIDUAL UNIT COMMITMENT (RUC): Please provide your organization’s comments on the IFM and RUC design as described in sections II.C.2 and II.C.3 of the EDAM revised straw proposal.

No comment.

22. 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 continued evaluation of potential market power mitigation enhancements within the Price Formation Enhancements initiative, which is currently ongoing, as described in section II.C.4 of the EDAM revised straw proposal.

No comment.

23. CONVERGENCE BIDDING: Please provide your organization’s comments on the proposal on convergence bidding in the EDAM and the associated transition period approach being proposed as described in section II.C.5 of the EDAM revised straw proposal.

MRP remains concerned that the CAISO continues to propose that convergence bidding, which the CAISO describes as “…a fundamental feature of day-ahead markets”[1] be delayed at least one, and possibly two, years after EDAM implementation.  The CAISO continues to improperly stigmatize this standard feature of two-settlement markets – like it did when it reflexively and unfortunately suspended convergence bidding in August 2020 - while purportedly professing to recognize convergence bidding’s benefits.  MRP respectfully urges the CAISO to articulate a compelling reason for not allowing convergence bidding upon EDAM implementation – a more compelling reason than the asserted need for market participants who are voluntarily joining EDAM to gain experience with this best practice before allowing it to be activated.    

 


[1] Revised Straw Proposal at p age 65. 

24. EXTERNAL RESOURCE PARTICIPATION: Please provide your organization’s comments on the proposal for external resource participation in the EDAM, as described in section II.C.6 of the EDAM revised straw proposal.

No comment.

25. 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.C.7 of the EDAM revised straw proposal.

No comment.

26. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the use of the GHG Reference Pass as the GHG counterfactual.

No comment.

27. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the attribution data reported as a part of the resource specific approach, and if or what additional information would provide transparency.

No comment.

28. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s overall comments, including potential suggested enhancements, on the zonal proposal.

No comment.

29. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s overall comments, including potential suggested enhancements, on the LADWP proposal.

No comment.

30. GREENHOUSE GAS ACCOUNTING: Please provide any other feedback on GHG accounting not captured by the questions above.

No comment.

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

No comment.

32. SETTLEMENTS: Please provide your organization’s comments on the settlements design described in section II.D.2 of the EDAM straw proposal.
Consider comments on the different aspects of settlement allocation among the different settlement components.

No comment.

33. EDAM FEES FRAMEWORK: Please provide your organization’s comments on the EDAM fees framework, particularly the implementation fee and administrative fee framework, as described in section II.D.3 of the EDAM straw proposal.

No comment.

34. GENERAL COMMENTS: Please provide your organization’s comments on the decisional classification for the EDAM initiative as described in section III.B of the EDAM revised straw proposal.

No comment.

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

No comment.

NIPPC
Submitted 09/26/2022, 10:07 am

Contact

Henry Tilghman (hrt@tilghmanassociates.com)

1. GENERAL COMMENTS: Please provide a summary of your organization’s comments on the Extended Day-Ahead Market revised straw proposal:

NIPPC is supportive, as a general matter, of efforts in the West, including EDAM, to expand regional organized competitive markets. But the evolutionary path of market development that Western transmission providers outside of California have elected over the past decade comes with its share of warts. NIPPC remains open to the proposition that a day-ahead market would at least not worsen the position of competitive generators who operate dispatchable and intermittent resources, developers of new resources, and competitive marketers across the Western Interconnection. But that value proposition is not evident. Across their business lines domestically and internationally, companies in the competitive segment of the power sector have deeper experience with day-ahead markets and regional transmission organizations (RTOs) than any of the transmission providers in the West outside of California. While not panaceas, centralized regional markets and independent system operators unlock the benefits of competition for consumers and overall system efficiency, especially in a context of increasing intermittent generation, better than bilateral markets. But EDAM (and any other market that leaves more fundamental transmission reform for another day or year or decade) is neither fish nor fowl: preserving dozens of separate transmission tariffs, balancing authorities, and associated points of friction in a contract-path-based system will shrink liquidity in the bilateral markets for energy and transmission, without providing independent generators with a system that resolves the challenges of delivering power regionally, upgrading the bulk power system, and interconnecting new projects. 

NIPPC therefore has concerns with the overall approach of a (potentially) West-wide day ahead market. As one of the panelists noted in the recent workshops, CAISO is creating a “half-way house” – a market model that optimizes day ahead dispatch of resources without being a full RTO. While CAISO and stakeholders are working diligently to minimize unintended consequences of a new, untested market concept, panelists acknowledge that after this market goes live, future adjustments will likely still be required. NIPPC cautions that moving away from the existing bilateral market to this proposed non-RTO day ahead market will inevitably lead to a period of increased uncertainty as buyers and sellers of capacity and energy adapt to the new paradigm. Given the length of the transition period contemplated in the straw proposal, this adaptation will likely take several years. NIPPC suggests that the CAISO and all stakeholders may want to consider once more whether it might be more prudent to pursue a full RTO model (acknowledging the related need for legislative reform of CAISO governance). Absent that reconsideration, competitive generators and marketers are left with a perhaps slim hope that the awkward fitting of EDAM on the OATT framework and existing bilateral markets remains supportive of competition and that experience in EDAM will, in fact, lead transmission providers to becoming comfortable more quickly with deeper reforms that include surrendering some control over how transmission is planned, paid for, and operated.

NIPPC also notes that in many of the specific proposals, there is an implicit assumption that all of the generation capacity in an EDAM BAA is owned or controlled by the EDAM BAA.  It is not. Some of the BAAs anticipating joining EDAM have significant independently owned generation located in their BAA; this independent generation is in direct competition with generation owned by the host BAA. Proposals consistently overlook the possibility that the generation resource which is providing a benefit to the market is not actually owned by the EDAM BAA yet provide that revenues or other benefits accrue to the EDAM BAA. NIPPC encourages the CAISO to revise its proposals to ensure that the market compensates resources which actually provide services, and does not simply compensate the BAA which hosts those generation resources.

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

NIPPC supports broad participation in the market. Accordingly, one of NIPPC’s concerns with the proposed participation model relates to the requirement that in order participate in EDAM, a BA must be a participant in the EIM. This requirement leads to concerns that participation in the WEIM is limited to BAs with load. NIPPC members include owners of resources located in gen-only balancing areas.  NIPPC notes with approval that Avangrid – a gen-only BA – has begun the process of joining the WEIM but that its membership in the WEIM is still pending.  NIPPC also notes that the implementation agreement between CAISO and Avangrid contains specific provisions related to Avangrid’s status as a generation only BA. Other generation BAs may not be identical to Avangrid especially with respect to whether a gen-only BA is indirectly subject to FERC’s Standards of Conduct. So long as other gen-only BAs have a reasonable path to become WEIM participants – which then makes them eligible to join EDAM – then NIPPC has no concerns with that element of the participation model. NIPPC requests that future versions of the EDAM straw proposal briefly describe the eligibility requirements for participation in the WEIM with citations to the CAISO tariff or other documents setting forth the WEIM eligibility requirements.

NIPPC’s other concern with the participation model is that it requires all generation resources in the EDAM BA to participate in the market.  While participation is voluntary for BAs, once a generator’s host BA decides to join the EDAM, all of the generation within the BA will be forced to participate in EDAM with significant implications for transmission rights and exposure to EDAM prices in the course of its business. While generators may have tools to mitigate their exposure to EDAM pricing (such as “contracts for differences”), the proposed treatment of Bucket 2 transmission potentially jeopardizes the priority of customers’ transmission rights (discussed in more detail below).  

3. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on the topic of confidence in market transfers design as discussed in section II.A.2 of the EDAM revised straw proposal. In particular, please provide comments regarding the different design elements supporting confidence in transfers including the application of the market parameters preventing the propagation of shortfalls and the associated outcomes illustrated in the examples.

No comments

4. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on the topic of equal priority between market transfers and load in edge reliability scenarios, as effectuated in the operational timeframe, informed by operator discretion and good utility practice, as discussed in section II.A.2 of the EDAM revised straw proposal.

NIPPC supports the equal priority between market transfers and load in edge reliability scenarios. There should be no differentiation. What one BA sees as a mere market transfer may represent the delivery of a capacity resource that another BA is relying on to serve its own load.

5. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on the proposal and effectuation of lower priority market transfers sinking in an EDAM BAA that has failed the day ahead RSE or otherwise is not part of the WEIM RSE pool as discussed in section II.A.2.d of the EDAM revised straw proposal.

No comments

6. TRANSMISSION COMMITMENT: Please provide your organization’s comments on the overall framework of transmission commitment in EDAM, including the framing of how transmission is made available through the concept of the transmission “buckets” as described in section II.B.1 of the EDAM revised straw proposal.

NIPPC remains disappointed in the mechanism to compensate transmission customers who donate transmission under Bucket 2. As proposed, the EDAM would allow market dispatch transmission rights that customers did not utilize prior to the Day Ahead market run. If a transmission customer subsequently schedules those transmission rights in real time, the EDAM proposal would allocate the redispatch costs - of unknown magnitude - to that transmission customer. Furthermore, these real time schedules would be allowed only when the EDAM could accommodate them; assigning real time schedules a lower priority than Day Ahead schedules regardless of the priority of the transmission customer’s service under the OATT.

The current proposal also continues to provide transmission customers only transfer revenues (to the extent they may accrue) as recompense for transmission they donate and for which they paid the full tariff rate.  Transmission owners, however, under this proposal will receive a market payment to make them whole for their historic transmission revenue recovery (TRR) to account for potentially forgone short-term firm and non-firm transmission sales under their OATT.  NIPPC suggests this may be discriminatory in that a transmission provider is able to recover guaranteed revenue from the market for hypothetical future sales of transmission based on historical sales, while transmission customers are able to recover only potential transfer revenues from transmission rights that they currently hold. 

NIPPC recognizes that paying a hurdle rate for a transmission donation may not be the most efficient market mechanism. But failing to compensate a transmission customer for the market’s use of transmission rights that they have paid for (while making whole transmission providers for their foregone sales of that same service) is discriminatory and inconsistent with FERC’s open access principles. NIPPC suggests that the path to fully compensating transmission providers for their foregone transmission sales and providing access to all of the transmission grid is to move to a full RTO model, rather than providing only one party (transmission providers) with such compensation. As noted above, CAISO, for reasons that NIPPC understands well, is developing a “halfway house” superimposing a day ahead market on top of OATT transmission service. CAISO and stakeholders must accept that honoring OATT rights is just as important in this hybrid as market efficiency. Again, if stakeholders want a fully efficient market, they should pursue an RTO. In pursuing this hybrid, stakeholders must acknowledge that in relying on OATT transmission rights, the market dispatches will not be as efficient as they would be in an RTO.

Regarding Bucket 3, EDAM’s design fails to recognize that the West’s real-time bilateral market exists, is operating today, and regularly utilizes firm available transfer capability (ATC) after 10:00 of the pre-schedule day.  The description of Bucket 3 at page 32 is fundamentally flawed by presuming that this ATC must remain unused, and therefore, EDAM can impose a stop to firm sales between 10:00 and 13:00 to vacuum up all the ATC it requires.  This is in direct conflict with FERC’s Open Access principles.

7. TRANSMISSION COMMITMENT: Please provide your organization’s perspective on Bucket 2 transmission and the pathways for how transmission customers can exercise their transmission rights, whether secured under the OATT or under legacy arrangements, or how otherwise those transmission rights are made available to the market as described in section II.B.1 of the revised straw proposal.

NIPPC remains disappointed in the mechanism to compensate transmission customers who donate transmission under Bucket 2. As proposed, the EDAM would allow market dispatch transmission rights that customers did not utilize prior to the Day Ahead market run. If a transmission customer subsequently schedules those transmission rights in real time, the EDAM proposal would allocate the redispatch costs - of unknown magnitude - to that transmission customer. Furthermore, these real time schedules would be allowed only when the EDAM could accommodate them; assigning real time schedules a lower priority than Day Ahead schedules regardless of the priority of the transmission customer’s service under the OATT.

The current proposal continues to provide transmission customers only transfer revenues (to the extent they accrue) as recompense for transmission they donate and for which they paid the full tariff rate.  Transmission owners, however, under this proposal now receive a market payment to make them whole for their historic transmission revenue recovery (TRR) to account for potentially forgone short-term firm and non-firm transmission sales under their OATT.  NIPPC suggests this may be discriminatory in that a transmission provider is able to recover guaranteed revenue from the market for hypothetical future sales of transmission based on historical sales, while transmission customers are able to recover only potential transfer revenues from transmission rights that they currently hold.

NIPPC recognizes that paying a hurdle rate for a transmission donation may not be the most efficient market mechanism. But failing to compensate a transmission customer for the market’s use of transmission rights that they have paid for (while making whole transmission providers for their foregone sales of that same service) is discriminatory and inconsistent with FERC’s open access principles. NIPPC suggests that the path to fully compensating transmission providers for their foregone transmission sales and providing access to all of the transmission grid is to move to a full RTO model, rather than providing only one party (transmission providers) with such compensation. As noted above, CAISO, for reasons that NIPPC understands well, is developing a “halfway house” superimposing a day ahead market on top of OATT transmission service. CAISO and stakeholders must accept that honoring OATT rights is just as important in this hybrid as market efficiency. Again if stakeholders want a fully efficient market, they should pursue an RTO. In pursuing this hybrid, stakeholders must acknowledge that in relying on OATT transmission rights, the market dispatches may not be as efficient as they would in an RTO.

NIPPC also objects to Bucket 2 – Pathway 3.  The EDAM proposal would impose significant consequences on customers who do not schedule their transmission rights by the time of the day ahead market run at 10:00 a.m..  Currently, however, transmission customers’ OATT-based service allows them to submit schedules for their transmission reservations up to minutes prior to the operating hour. While the pro forma OATT would arguably enable the CAISO’s proposal, currently transmission providers in the non-RTO West do not include or enforce the cited provision of the OATT. Instead, transmission customers routinely use their existing transmission rights to enter new transactions and submit the related schedules right up to the WECC scheduling deadline. While the EDAM is potentially more “efficient” than this bilateral market, CAISO must acknowledge that transmission customers currently enjoy the right to schedule on their transmission service reservations after the close of pre-schedule. NIPPC encourages the CAISO to revise its EDAM proposal to preserve the existing flexibility that transmission customers have in using their OATT rights. NIPPC recognizes that the EDAM proposal permits transmission customers to schedule on their transmission rights after the day ahead market run – but only at the risk of additional uplift charges.  Furthermore, the straw proposal suggests that customers who submit schedules after the day ahead market run would have a lower priority than a day ahead schedule even if the customer’s transmission service has a 7F curtailment priority.  In short, NIPPC objects to the proposed Bucket 2 – Pathway 3 because of the changes it requires to customers’ existing transmission service. First, the straw proposal allows automatic market use of transmission customers’ existing transmission rights and then penalizes those customers financially for exercising their rights (when the customer schedules their capacity in real-time and is allocated uplift costs). 

In response to stakeholders who are concerned about the potential for customers to withhold transmission leading to congestion, inefficiencies and adverse price impacts, NIPPC notes that this risk of “withholding” – or failing to enter into a bilateral transaction to use those transmission rights, already exists in the current bilateral market paradigm. If that type of withholding is not occurring now, it is unlikely that adopting EDAM will provide any new incentive to withhold transmission. As noted above, if stakeholders wish to utilize all of the transmission network to support market transfers, then CAISO and stakeholders should shift their efforts to pursue an RTO. The benefits of a market should not accrue only to load at the risk of failing to compensate generators for the full value of their transmission rights.

Consider the following example: A load in an EDAM BAA (BA1) contracts with a generator in another EDAM BAA (BA2) to meet its resource adequacy requirements. The generator secures one year of short-term firm transmission to service this contract. When the load forecast is high enough, the load and generator self-schedule the resource under bucket 1. But for much of the time, the resource is not required under bucket 1 and the transmission would be available under bucket 2. In this case a different generator in BA2 could be dispatched for a different load in BA1 without any requirement to compensate the transmission rights holders for their use (short of contributing to a market wide uplift to compensate the transmission provider for foregone revenues from the sale of short-term firm service). 

As noted above, the Participation Model requires that all generation resources (and loads) within a BA that joins EDAM are now automatically subject to the EDAM rules (the voluntary nature of the EDAM applies only to the BA). If a transmission customer schedules its transmission rights after the Day Ahead market run, the customer is exposed to uplift or redispatch costs of unknown magnitude (assuming it is even allowed to submit the schedule). On the other hand, if the transmission customer voluntarily donates its transmission if may receive transfer or congestion revenues, but only if the host BA allows it; the EDAM straw proposal allows its member BAs the flexibility to specify the allocation of congestion revenues in its individual OATT. There is no assurance that the host BA will actually provide any congestion revenues to customers who donate transmission.

NIPPC recommends modifying the straw proposal to allow transmission customers to hold their transmission rights out of the market optimization for the Day Ahead market. While giving transmission customers this option may limit the efficiency of the market dispatch, it is the only way to ensure that transmission customers who do not wish to participate in EDAM are able to avoid  exposure to the EDAM pricing and retain the value of their transmission rights. NIPPC is concerned that a market design that allows EDAM to limit or abrogate transmission customers’ existing transmission rights and to withhold transmission capacity from the bilateral market will result in rates that are not just and reasonable for customers who choose not to participate in the EDAM.

8. TRANSMISSION COMMITMENT: Please provide your organization’s perspective on how ISO transmission is made available to the EDAM under the transmission commitment design.

No comments

9. TRANSMISSION COMMITMENT: Please provide your organization's comments on the transmission revenue requirement (TRR) recovery framework design which is intended to allow for recovery of certain transmission revenues to keep the transmission provider whole from a historical TRR perspective in the EDAM as described in section II.B.1 of the revised straw proposal.
Consider comments on the three different proposed components of the EDAM recoverable TRR and the proposed methods of allocating the TRR shortfall, along with other elements of the design.

NIPPC objects to elements of the transmission revenue requirement recovery framework. As noted above NIPPC objects to a mechanism that compensates transmission providers for the full value of their foregone revenues from sales of short-term firm (weekly, daily, and hourly) and non-firm transmission service while not fully compensating transmission customers for the market’s use of customers’ transmission rights under Bucket 2.

NIPPC also objects to the proposal to recover TRR for new transmission construction. NIPPC recognizes the benefits of new transmission facilities that increase the transfer capability between balancing areas. NIPPC also notes, however, that the decision to build large new transmission facilities is complicated. Regardless of the specific regulatory approvals required, a major consideration is whether the facilities will be fully – or nearly fully – subscribed for long-term firm use to ensure sufficient additional revenues to mitigate the risk of upward rate pressure on existing customers. In some cases, a transmission provider may even require the transmission customers who seek to use those upgrades to pay an incremental rate – above the transmission providers’ current rates – in order to avoid increasing transmission rates for customers who do not use those facilities. In these cases, an additional TRR paid to the transmission would be a windfall to the transmission provider, who did not rely on those forecast revenues to make its investment in the new facilities. NIPPC might look more favorably on a model where any TRR revenues for new facilities were paid directly to the long-term firm customers who subscribed to service on those facilities instead of paid to the transmission owner.

NIPPC also has concerns regarding the proposed recovery of transmission costs associated with EDAM wheel-through volumes net of imports/exports. NIPPC does not object to the development of a mechanism to compensate a transmission owner who finds WEIM transactions wheeling across its system. NIPPC also does not object to the mechanism to calculate the payment to the EDAM entity (volume of net wheels, net of EDAM transfer imports/exports at the EDAM entity’s non-firm hourly point to point rate). But the proposal is silent on who pays this compensation to the EDAM entity and how the cost of that compensation is collected from the market as a whole or from the EDAM entities that specifically benefit from those transfers. Please provide more detail on who will be responsible for paying the various components of TRR and how those costs will be collected.

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

NIPPC also objects to Bucket 3. In Bucket 3, the market takes all unsold transmission capacity from the bilateral market, as if it is useless after the day ahead market run.  Currently there is a functioning real-time bilateral market.  While much of the West may choose to join EDAM, participation is wholly voluntary.  There may well be balancing areas that would prefer not to join. The proposed Bucket 3, however, would scoop up all of the remaining unscheduled transmission across the EDAM footprint and reserve it for use by the EDAM – whether it was needed for market dispatches or not. There would be no mechanism for non-participants in EDAM to reserve new transmission service for bilateral transactions after EDAM’s day ahead market run. Essentially, it is the EDAM market that is hoarding transmission service, withholding it from the bilateral market, but compensating the transmission provider only when it is used.

11. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the design of the proposed application that will be used to conduct the EDAM RSE as described in section II.B.2 of the EDAM revised straw proposal.
This includes comments on the ability to conduct advisory RSE tests prior to the binding run, the timing of the RSE, test inputs, test obligation, the decision not to include transmission constraints within the EDAM RSE as well as any other relevant elements.

No comments

12. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposed treatment of firm energy contracts where the source/transmission may not be known in advance of the market run (i.e. WSPP Schedule-C supply contracts) within the EDAM RSE.
Consider comments on if the proposed requirement for the submission of day-ahead e-tags, the potential to be removed from the pooled WEIM RSE, as well as monitoring to provide a sufficient level of confidence in these types of supply arrangements. Additionally, consider the proposed modeling of these arrangements as “bucket 1” transfers, along with the potential pricing impacts in the source BAA and the potential to utilize BAA-to-BAA transmission between the source and sink BAA.

NIPPC supports the proposal to fully count WSPP Schedule-C supply contracts in the EDAM RSE. These contracts are widely used and considered reliable throughout the West. While NIPPC acknowledges the concerns of stakeholders that resources may be double-counted, NIPPC notes that these contracts have long formed the backbone of the bilateral energy market in the non-RTO West and are still used by loads in CAISO for resource sufficiency. NIPPC agrees that the proposals around the scheduling and tagging of non-resource specific contracts will be sufficient to ensure that the resources will be available to the market.

13. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s perspective on the ISO proposal for counting in the EDAM RSE import bids made at the CAISO BAA boarder with a non-EDAM BAA.

No comments

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

15. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposal to make available advisory D+2 market results (day ahead + 2 market run) to help inform gas procurement and manage gas resource participation in the day ahead market.
Consider commenting on any additional potential enhancements or changes to this market run which could increase its accuracy.

No comments

16. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on whether the proposal to cure resource insufficiencies through the EDAM market at an administrative surcharge provides incentive to cure shortfalls prior to participating in the EDAM.
Please comment on the proposed requirement to cure through the market, the block surcharge, as well as the potential to credit against the surcharge any market energy prices. In addition, please comment on the proposed revenue allocation, and CAISO BAA specific sub-allocation for this surcharge.

NIPPC seeks more information regarding which entities will receive an allocation of surcharge revenue. The proposal seems to allocate surcharge revenues to “net-EDAM” exporters and entities that procure imbalance reserves beyond their obligation. It does not seem appropriate to allocate those revenues to EDAM participants (as transmission owners) or to entities that procure imbalance reserves beyond their obligation. CAISO seems to assume that all the generation resources in an EDAM BA are owned by that BA; they are not.*  NIPPC suggests it would be appropriate to award those surcharge revenues to the generation resources which actually supplied the capacity and flexibility and which ultimately cured the supply deficiency. These additional surcharge revenues would compensate those resources for being ready to provide reliability capacity without an obligation to do so. NIPPC suggests that there is no basis for awarding surcharge revenues to the BAs where the resources that actually provided the service happen to be located.  

*In addition to the proposal to allocate the administrative surcharge to a BAA, in the discussion of “Priority of Transfers to EDAM BAA not passing the RSE” at page 23, the proposal assumes that an EDAM is resource sufficient because of investments the EDAM BAA made to pass the RSE, overlooking the possibility that independent power made those investments in the BAA.  Especially because under the proposed participation model those independent resources have no way to opt out of the EDAM or force the host BA to compensate those resources for the benefits they provide.  Throughout the discussion of the RSE, resources under the control of the BA are not differentiated from independent resources.  

17. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposal to stand up an hourly bid-range trading platform.

NIPPC supports the proposal.

18. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the utilization of a pooled WEIM RSE for entities passing the EDAM RSE, as described in the revised straw proposal.
Please comment on the criteria for exclusion from the pooled WEIM RSE, the proposal to withhold a configurable quantity of imbalance reserves to be utilized for benefit of the EDAM footprint, and the preferred approach for the pooled WEIM RSE following a potential failure of the pool in the WEIM.

NIPPC supports the proposed hybrid diversity benefit and pooled WEIM RSE as it appears to strike an appropriate balance. NIPPC recognizes that this mechanism could be reconsidered once the EDAM footprint has more experience with how the mechanism functions.  NIPPC prefers the option where the pooled EDAM footprint remains responsible for curing shortfalls in the WEIM RSE. NIPPC does not support the option to dissolve the EDAM footprint following failure of the WEIM RSE.

19. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on two introduced mechanisms for consideration that further allow a BAA to manage its resources: (1) mechanisms to manage supply in excess of RSE, and (2) consideration of a net EDAM transfer export limit constraint as described in the revised straw proposal.
Please consider commenting on the value and need for these mechanisms for individual BAAs along with other design elements that should be considered in enhancing or modifying these mechanisms to address the issues described.

No comments

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

The straw proposal lays out two options to allow EDAM entities the ability to retain capacity above what is needed to pass the RSE for reliability management purposes.  Again, CAISO assumes that all generation in an EDAM BA is the BA's own – and not owned by the EDAM BA’s competitors. NIPPC supports only the option for LSEs to identify capacity to hold back from market dispatch.  NIPPC does not support the option that would allow an EDAM entity to impose a limit on the amount of EDAM exports in the day-ahead market. The export transfer limit would allow an EDAM entity the ability to strand generation (which it might not own) inside its own BA, potentially increasing revenues from its own generation at the expense of its competitors (especially if the generation resources under its control were cheaper than independent generation in its BA). If LSEs seek to hold back generation under their control to address reliability concerns, that is their decision; but EDAM entities should not be able to limit market access of other generation in their BA. If an EDAM entity needs to hold capacity back for reliability purposes then it should do so, but not through a mechanism that blocks other generation from the market.

21. INTEGRATED FORWARD MARKET (IFM) AND RESIDUAL UNIT COMMITMENT (RUC): Please provide your organization’s comments on the IFM and RUC design as described in sections II.C.2 and II.C.3 of the EDAM revised straw proposal.

NIPPC supports the concept of an imbalance reserve product but is concerned with the specific proposal. In NIPPC’s experience, capacity for imbalance reserves is procured on a forward basis; imbalance reserves are not procured on a day-ahead basis. The calculation of a geographic diversity benefit for the EDAM footprint that allows EDAM BAAs to reduce their obligation to set aside imbalance reserves simply gives those EDAM BAAs the opportunity to bid into the market some of the capacity they would have set aside for imbalance reserves. These additional revenues from energy sales do not reduce the quantity of capacity that those BAAs use as the basis for the balancing reserve rates in their tariffs. The geographic diversity benefit that should reduce the costs of imbalance reserves across the footprint is simply a windfall for the host EDAM BAA. NIPPC encourages the CAISO to develop a formula which would calculate the geographic diversity benefit for the footprint on a forward-looking basis thereby allowing EDAM BAAs to reduce the quantity of imbalance reserves in the tariff rate calculations that transmission customers must pay.

22. 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 continued evaluation of potential market power mitigation enhancements within the Price Formation Enhancements initiative, which is currently ongoing, as described in section II.C.4 of the EDAM revised straw proposal.

NIPPC supports the proposal to extend the WEIM market power mitigation framework to the EDAM. 

23. CONVERGENCE BIDDING: Please provide your organization’s comments on the proposal on convergence bidding in the EDAM and the associated transition period approach being proposed as described in section II.C.5 of the EDAM revised straw proposal.

 NIPPC supports the proposal on convergence bidding including the proposed transition.

24. EXTERNAL RESOURCE PARTICIPATION: Please provide your organization’s comments on the proposal for external resource participation in the EDAM, as described in section II.C.6 of the EDAM revised straw proposal.

NIPPC supports the proposal so long as external resources are allowed to self-schedule into the market at EDAM footprint interties. The resources located in generation-only balancing areas must have a reasonable opportunity to participate in the market. Ideally, those gen-only BAAs would be allowed to join EIM/EDAM; if not, then allowing that capacity to reach customers through a pseudo-tie, dynamic schedule or self-schedule is essential.

25. 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.C.7 of the EDAM revised straw proposal.

No comments

26. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the use of the GHG Reference Pass as the GHG counterfactual.

No comments

27. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the attribution data reported as a part of the resource specific approach, and if or what additional information would provide transparency.

No comments

28. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s overall comments, including potential suggested enhancements, on the zonal proposal.

No comments

29. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s overall comments, including potential suggested enhancements, on the LADWP proposal.

No comments

30. GREENHOUSE GAS ACCOUNTING: Please provide any other feedback on GHG accounting not captured by the questions above.

No comments

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

In response to other topics, NIPPC has expressed concerns with the mechanism to compensate customers with Bucket 2 transmission. NIPPC would be more confident in EDAM mechanisms which allocated transfer revenue or congestion revenue to the generation that actually provided the benefit, not simply to the host EDAM BAA for those generators. With regard to the proposal to extend the transfer revenue distribution framework to imbalance energy transfer revenue, the proposal suggests that it recognizes the shared value that results when two EDAM entities bring transmission to the transfer location; this ignores the potential that it is not the EDAM entity bringing transmission, but bucket 2 transmission donated by the EDAM entity’s customer. Sharing the mutual benefit with the two EDAM BAAs does nothing to compensate the transmission customer who enabled those benefits.  

32. SETTLEMENTS: Please provide your organization’s comments on the settlements design described in section II.D.2 of the EDAM straw proposal.
Consider comments on the different aspects of settlement allocation among the different settlement components.

No comments

33. EDAM FEES FRAMEWORK: Please provide your organization’s comments on the EDAM fees framework, particularly the implementation fee and administrative fee framework, as described in section II.D.3 of the EDAM straw proposal.

No comments

34. GENERAL COMMENTS: Please provide your organization’s comments on the decisional classification for the EDAM initiative as described in section III.B of the EDAM revised straw proposal.

 NIPPC supports the proposal that the EDAM initiative fall under the joint authority of the WEIM Governing Body and the CAISO Board of Governors.

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

No additional comments

Northern California Power Agency
Submitted 09/26/2022, 08:07 pm

Contact

Michael Whitney (mike.whitney@ncpa.com)

1. GENERAL COMMENTS: Please provide a summary of your organization’s comments on the Extended Day-Ahead Market revised straw proposal:

Please see comments below. 

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

NCPA supports voluntary EDAM entry (with an integration fee), and voluntary EDAM exit, provided that such EDAM entity provides six months’ advanced notice of its request to exit (without fees).

3. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on the topic of confidence in market transfers design as discussed in section II.A.2 of the EDAM revised straw proposal. In particular, please provide comments regarding the different design elements supporting confidence in transfers including the application of the market parameters preventing the propagation of shortfalls and the associated outcomes illustrated in the examples.

NCPA understands the importance of having confidence in market transfers, but NCPA also believes that native load should have priority over market transfers during severe emergency conditions.  Presuming an EDAM BAA has met its RSE, in a situation where a market transfer is not maintained due to severe emergency conditions, the receiving EDAM BAA should have the ability to redispatch the resources it demonstrated as part of the RSE to replace lost transfers.

4. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on the topic of equal priority between market transfers and load in edge reliability scenarios, as effectuated in the operational timeframe, informed by operator discretion and good utility practice, as discussed in section II.A.2 of the EDAM revised straw proposal.

Please see NCPA’s response to question 3.

5. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on the proposal and effectuation of lower priority market transfers sinking in an EDAM BAA that has failed the day ahead RSE or otherwise is not part of the WEIM RSE pool as discussed in section II.A.2.d of the EDAM revised straw proposal.

Please see NCPA’s response to question 3.

6. TRANSMISSION COMMITMENT: Please provide your organization’s comments on the overall framework of transmission commitment in EDAM, including the framing of how transmission is made available through the concept of the transmission “buckets” as described in section II.B.1 of the EDAM revised straw proposal.

NCPA generally supports the framework of the transmission buckets concept as proposed.

7. TRANSMISSION COMMITMENT: Please provide your organization’s perspective on Bucket 2 transmission and the pathways for how transmission customers can exercise their transmission rights, whether secured under the OATT or under legacy arrangements, or how otherwise those transmission rights are made available to the market as described in section II.B.1 of the revised straw proposal.

NCPA generally supports the Pathways compromise, but more specifically supports Pathways 1 and 2 in order to ensure that as much transmission is available in the Day Ahead Market to maximize market optimization as well as mitigate need for Real Time Market uplifts.

8. TRANSMISSION COMMITMENT: Please provide your organization’s perspective on how ISO transmission is made available to the EDAM under the transmission commitment design.

This aspect of the initiative must be in alignment with the Transmission Services and Market Scheduling Priorities initiative. Please refer to NCPA’s comments therein.

9. TRANSMISSION COMMITMENT: Please provide your organization's comments on the transmission revenue requirement (TRR) recovery framework design which is intended to allow for recovery of certain transmission revenues to keep the transmission provider whole from a historical TRR perspective in the EDAM as described in section II.B.1 of the revised straw proposal.
Consider comments on the three different proposed components of the EDAM recoverable TRR and the proposed methods of allocating the TRR shortfall, along with other elements of the design.

NCPA does not currently support the TRR recovery framework as proposed. The historical TRR perspective as it pertains to revenue received from bilateral sales will likely cease to exist in full at some point after EDAM implementation. CAISO’s bilateral markets became much less liquid almost immediately after MRTU was implemented in April 2009. The Western real time bilateral market became less liquid as more participants joined the WEIM. The Western day ahead bilateral market will likely become less liquid soon after EDAM implementation. Therefore, the bilateral opportunities to sell transmission will likely be reduced under EDAM, and it is likely that a transmission operators’ primary opportunity for revenue may become Transfer Revenues. Notwithstanding the aforementioned, NCPA understand the need to encourage as much participation from Transmission Operators as possible, and one way to do that is lower risk associated with EDAM participation. NCPA proposes to allow Transmission Operators to recover estimated lost bilateral market revenues averaged over three (3) years prior to BAA EDAM participation for three years after EDAM implementation. This will incentivize early adoption if the only chance to recover estimated historical lost revenues occurs in the first three years.

 

NCPA proposes the following TRR recovery concept: rolling year average less transfer revenues equals TRR recovery allocated to gross metered demand.

 

NCPA does not currently support recovery of New Transmission Build Revenue Requirements or recovery of Transmission Costs Associated with EDAM Wheeling through Volumes Net of Imports/Exports.

 

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

No comment at this time.

11. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the design of the proposed application that will be used to conduct the EDAM RSE as described in section II.B.2 of the EDAM revised straw proposal.
This includes comments on the ability to conduct advisory RSE tests prior to the binding run, the timing of the RSE, test inputs, test obligation, the decision not to include transmission constraints within the EDAM RSE as well as any other relevant elements.

NCPA generally supports the Revised Straw Proposal RSE elements.

12. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposed treatment of firm energy contracts where the source/transmission may not be known in advance of the market run (i.e. WSPP Schedule-C supply contracts) within the EDAM RSE.
Consider comments on if the proposed requirement for the submission of day-ahead e-tags, the potential to be removed from the pooled WEIM RSE, as well as monitoring to provide a sufficient level of confidence in these types of supply arrangements. Additionally, consider the proposed modeling of these arrangements as “bucket 1” transfers, along with the potential pricing impacts in the source BAA and the potential to utilize BAA-to-BAA transmission between the source and sink BAA.

No comment at this time.

13. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s perspective on the ISO proposal for counting in the EDAM RSE import bids made at the CAISO BAA boarder with a non-EDAM BAA.

No comment 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.

No comment at this time.

15. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposal to make available advisory D+2 market results (day ahead + 2 market run) to help inform gas procurement and manage gas resource participation in the day ahead market.
Consider commenting on any additional potential enhancements or changes to this market run which could increase its accuracy.

NCPA generally supports this concept, but NCPA would like to learn more about how this concept may impact the EDAM implementation schedule.

16. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on whether the proposal to cure resource insufficiencies through the EDAM market at an administrative surcharge provides incentive to cure shortfalls prior to participating in the EDAM.
Please comment on the proposed requirement to cure through the market, the block surcharge, as well as the potential to credit against the surcharge any market energy prices. In addition, please comment on the proposed revenue allocation, and CAISO BAA specific sub-allocation for this surcharge.

NCPA does not believe immediate penalties should be enforced in the event an EDAM entity fails the RSE during normal / non-stressed market conditions (subject to a persistence check).  Based on the principle of “no leaning”, NCPA believes that an EDAM entity that fails the RSE during a stressed system condition should be temporarily suspended from participating in the EDAM.  As an alternative, if an EDAM entity that fails the RSE during a stressed system condition is allowed to continue participating in the EDAM, that entity should be subject to certain penalties for such failure.  NCPA believes any penalties enforced should be charged after-the-fact, and not incorporated into the market optimization or price formation.

 

Regarding the definition of what constitutes a “stressed system condition”, NCPA believes such should be defined as the host EDAM BAA declaring Restricted Maintenance Operations, Flex Alert, Transmission Emergency, and or EEA watch, 1, 2, or 3.

17. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposal to stand up an hourly bid-range trading platform.

No comment at this time.

18. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the utilization of a pooled WEIM RSE for entities passing the EDAM RSE, as described in the revised straw proposal.
Please comment on the criteria for exclusion from the pooled WEIM RSE, the proposal to withhold a configurable quantity of imbalance reserves to be utilized for benefit of the EDAM footprint, and the preferred approach for the pooled WEIM RSE following a potential failure of the pool in the WEIM.

No comment at this time.

19. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on two introduced mechanisms for consideration that further allow a BAA to manage its resources: (1) mechanisms to manage supply in excess of RSE, and (2) consideration of a net EDAM transfer export limit constraint as described in the revised straw proposal.
Please consider commenting on the value and need for these mechanisms for individual BAAs along with other design elements that should be considered in enhancing or modifying these mechanisms to address the issues described.

No comment at this time.

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

No comment at this time.

21. INTEGRATED FORWARD MARKET (IFM) AND RESIDUAL UNIT COMMITMENT (RUC): Please provide your organization’s comments on the IFM and RUC design as described in sections II.C.2 and II.C.3 of the EDAM revised straw proposal.

No comment at this time.

22. 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 continued evaluation of potential market power mitigation enhancements within the Price Formation Enhancements initiative, which is currently ongoing, as described in section II.C.4 of the EDAM revised straw proposal.

No comment at this time.

23. CONVERGENCE BIDDING: Please provide your organization’s comments on the proposal on convergence bidding in the EDAM and the associated transition period approach being proposed as described in section II.C.5 of the EDAM revised straw proposal.

No comment at this time.

24. EXTERNAL RESOURCE PARTICIPATION: Please provide your organization’s comments on the proposal for external resource participation in the EDAM, as described in section II.C.6 of the EDAM revised straw proposal.

No comment at this time.

25. 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.C.7 of the EDAM revised straw proposal.

No comment at this time.

26. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the use of the GHG Reference Pass as the GHG counterfactual.

No comment at this time.

27. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s feedback on the attribution data reported as a part of the resource specific approach, and if or what additional information would provide transparency.

No comment at this time.

28. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s overall comments, including potential suggested enhancements, on the zonal proposal.

No comment at this time.

29. GREENHOUSE GAS ACCOUNTING: Please provide your organization’s overall comments, including potential suggested enhancements, on the LADWP proposal.

No comment at this time.

30. GREENHOUSE GAS ACCOUNTING: Please provide any other feedback on GHG accounting not captured by the questions above.

No comment at this time.

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

NCPA generally supports 50/50 allocation of transfer revenues resulting from binding transmission constraints between two EDAM entities. NCPA supports allocating 100% of congestion revenues to the BAA that resolves the congestion.

32. SETTLEMENTS: Please provide your organization’s comments on the settlements design described in section II.D.2 of the EDAM straw proposal.
Consider comments on the different aspects of settlement allocation among the different settlement components.

No comment at this time.

33. EDAM FEES FRAMEWORK: Please provide your organization’s comments on the EDAM fees framework, particularly the implementation fee and administrative fee framework, as described in section II.D.3 of the EDAM straw proposal.

No comment at this time.

34. GENERAL COMMENTS: Please provide your organization’s comments on the decisional classification for the EDAM initiative as described in section III.B of the EDAM revised straw proposal.

No comment at this time.

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

No comment at this time.

NV Energy
Submitted 09/26/2022, 02:17 pm

Contact

Kiley Moore (kiley.moore@nvenergy.com)

1. GENERAL COMMENTS: Please provide a summary of your organization’s comments on the Extended Day-Ahead Market revised straw proposal:

NV Energy appreciates the chance to provide comments on the Revised Straw Proposal. The document is a significant improvement from the April 28th Straw Proposal and represents a tremendous amount of work by CAISO Staff and stakeholders. With the myriad of other initiatives proceeding in parallel, NV Energy does not have time to provide detailed comments on all issues. We will try to highlight certain key areas and hope that these comments are of assistance in finalizing the EDAM design as reflected in the next iteration – the Draft Final Straw Proposal.

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

The CAISO notes that in the EIM, resources can elect to be participating or non-participating.  In contrast,

 

in the EDAM, all resources within the associated BAA will participate in the market – both day-ahead and real-time – by submitting either economic bids or self-schedules. The EDAM will not support base scheduling of resources as in the WEIM today and all resources will be settled through the market.

These couple of sentences highlight a profound shift in responsibilities and potential contractual relationships between the EIM and EDAM. Currently, Section 1 of Attachment P of the NV Energy OATT states,

 

This Attachment P shall work in concert with the provisions of the [CAISO] Tariff implementing the EIM to support operation of the EIM. To the extent that this Attachment P is inconsistent with a provision in the remainder of this Tariff with regard to the NV Energy EIM Entity’s administration of the EIM, this Attachment P shall prevail. 

 

This Attachment P governs the relationship between the NV Energy EIM Entity and all Transmission Customers and Interconnection Customers subject to this Tariff. This Attachment P does not establish privity between Transmission Customers and the [CAISO] or make a Transmission Customer subject to the [CAISO] Tariff. Any Transmission Customer duties and obligations related to the EIM are those identified in this Tariff, unless the Transmission Customer voluntarily elects to participate directly in the EIM as an NV Energy EIM Participating Resource. In that case, the Transmission Customer shall also be subject to the [CAISO] Tariff provisions for EIM Participating Resources and EIM Participating Resource Scheduling Coordinators.

NV Energy understands that the other EIM Entities have a similar provision in their tariffs. As the CAISO recognizes in the Revised Straw Proposal, a non-participating EIM resource is one that has elected not to participate in the market. Such a resource does not execute an agreement with the CAISO and is not registered as available to the real-time market. The EIM Entity submits a base schedule that includes the non-participating resource so the real-time market can account for the resource in various aspects of EIM operation, including the overall market optimization and dispatch and considering the resource’s supply in the resource sufficiency evaluation (RSE). These base schedules for non-participating resources are not directly settled through the market. Rather the non-participating resources are settled for imbalances under the OATT for any deviations from their balanced generation and load schedules submitted at T-57.

This structure was developed, in part, due to a strong desire on the part of the OATT customers not to become CAISO scheduling coordinators. The CAISO must clarify if there is to be a shift in paradigms such that all OATT customers will need to enter into CAISO EDAM Participating Resource Agreements, EDAM Scheduling Coordinator Agreements and CAISO metering agreements.

During a recent stakeholder meeting, NV Energy inquired as to the metering and telemetry requirements that will be required of these new participating resources. The CAISO should clarify the contractual, metering, and telemetry requirements that will be expected of current OATT customers.

Additionally, it will be important to address the issue of sub-allocation of EDAM responsibilities to third-party OATT customers. The Imbalance reserve obligation and RSE will need to be allocated between the OATT transmission provider’s native load customers and third-party Network Integration Transmission Service customers and point-to-point customers. While this can be done as part of the OATT revision process by the “first movers” who may participate in a new EDAM market, this can lead to implementation delays if the relationship with OATT customers is not addressed up front in a feasible manner in the CAISO market timelines. 

3. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on the topic of confidence in market transfers design as discussed in section II.A.2 of the EDAM revised straw proposal. In particular, please provide comments regarding the different design elements supporting confidence in transfers including the application of the market parameters preventing the propagation of shortfalls and the associated outcomes illustrated in the examples.

The CAISO proposes that each EDAM BAA meet an RSE to have sufficient supply to meet demand, ancillary services, and uncertainty requirements. Additionally, CAISO proposes to hold separate market optimization runs for the IFM and RUC process where the bids that are supplied in the IFM will also be required to offer in the RUC. The market design will achieve additional confidence and attempt to reduce resource redispatch through the transmission availability proposal to utilize all transmission in day ahead and real time. Moreover, the market will contain parameters that prevent a BAA from propagating shortfalls to other BAAs by preventing exports from a BAA experiencing a power balance constraint. CAISO’s final proposal to instill confidence in the market transfers is to include a day ahead imbalance reserve product that would procure nearly all uncertainty that occurs from the day ahead timeframe into the real-time fifteen-minute market. NV Energy supports all of the high-level proposed concepts to instill confidence in market transfers except the proposal for an imbalance reserve product. NV Energy is skeptical that this product is necessary in the day ahead market when it is essentially procuring capacity, i.e. changing the unit commitment level, while also being misaligned with the flexible ramping product design in real time. If the uncertainty products differ in design from day ahead to real time, then NV Energy is concerned that load is procuring capacity in day ahead that will later be decommitted in STUC.

To be clear, NV Energy is not advocating for the imbalance reserve design to change the current flexible ramping product. There are additional issues with the imbalance reserve product that need to be resolved before NV Energy would be able to support this product. Instead, NV Energy believes that the flexible ramping product design should be extended to the day ahead if it is determined that it is necessary to procure all uncertainty in the day ahead market. Additionally, NV Energy proposes that CAISO consider enhancements to STUC to provide more confidence in the market overall. Stated more clearly, we should be working back from the real time market flexible ramping product rather than designing an entirely new misaligned product that may provide little to no benefit to load. Finally, NV Energy is concerned about the timing of the CAISO’s Day-Ahead Initiative and its relationship to EDAM. To have such a controversial proposal be a foundational element of EDAM presents a significant risk to the EDAM design and timeline.

For additional detail into the additional issues regarding the imbalance reserve product NV Energy submitted comments on CAISO’s Third Revised Straw?Proposal for the Day-Ahead Market Enhancements on May 20, 2022. In those comments, NV?Energy noted:

  • CAISO has not stated specific reasons why the imbalance reserve product increases the benefits for all EDAM Entities or why it is necessary to include in the market design for EDAM given that the proposed EDAM market design incorporates an RSE that has the same requirements of the imbalance reserve in order for an entity to participate in the Day-Ahead Market. Therefore, it is unclear why it’s necessary to award this capacity when other markets have created must offer obligation rules that carry into real-time. 
  • NV Energy cannot support the level of uncertainty that CAISO has proposed to procure for this product. CAISO has proposed to procure the full imbalance reserve requirement with a biddable product rather than utilize a demand curve which would procure imbalance reserves based on the probability the capacity is needed in real-time. CAISO’s approach could have a significant impact on the day-ahead and real-time prices and may result in over-procurement of capacity for a large portion of the year.
  • CAISO has not provided any data analysis to stakeholders regarding the impact of this product to market participants and to market prices. An analysis of the quantity and cost of the imbalance reserve product will likely be an important factor in any EDAM participation decision.
  • For potential EIM Entities with a significant number of third-party OATT customers, the imbalance reserve requirement would need to be proportionally sub-allocated. In effect, the CAISO would be creating a new product that would be an addition to the existing OATT ancillary service reserve requirements. It is important to consider how this product would be sub-allocated and how an EIM Entity transmission customer could supply their share.?
4. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on the topic of equal priority between market transfers and load in edge reliability scenarios, as effectuated in the operational timeframe, informed by operator discretion and good utility practice, as discussed in section II.A.2 of the EDAM revised straw proposal.

NV Energy continues to review and comment on the CAISO’s transmission service and market scheduling priorities (“Wheel through”) initiative to promote an outcome that holds California transmission to an equal standard as other entities in the West. CAISO has proposed that wheel throughs of sufficient duration, with market contracts, and prepayment will qualify for transfers that are equal to California load. It is unclear by the proposal how curtailments will be made. For example, if a CAISO LSE is short energy because it failed the RSE, will all California intertie transfers be cut pro rata? Under NV Energy’s OATT, if either native load or a network customer is short on energy, that specific customer will have its transmission reduction plan initiated, the other interchange customers will not be curtailed for one entity’s shortage. Another question is whether curtailments will be path specific when there is a reduction of transfer capacity on a path. Under NV Energy’s OATT, if an event occurs that is limited to a specific intertie, all transfers on that specific path/intertie that is reducing transfer capacity will be curtailed pro rata. NV Energy would request that the CAISO provide a table that outlines the various scenarios of curtailment and curtailment priorities to gain a better understanding of CAISO’s proposal. Only when the wheel through issue is resolved along with the continuation of EDAM market design will NV Energy be able to have confidence in market transfers. It would be useful for the CAISO to include a table that outlines curtailment priorities for all market scenarios so that stakeholders can see what is being proposed.

5. CONFIDENCE IN MARKET TRANSFERS: Please provide your organization’s comments on the proposal and effectuation of lower priority market transfers sinking in an EDAM BAA that has failed the day ahead RSE or otherwise is not part of the WEIM RSE pool as discussed in section II.A.2.d of the EDAM revised straw proposal.

NV Energy supports the constraints in EDAM that support a BAA first meeting its own requirements before it will export energy or capacity to other BAAs. However, CAISO also proposes that: (1) if an EDAM Entity fails the RSE but is able to cure the failure through a monetary penalty and (2) that if another EDAM Entity enters an EEA, the EDAM Entity who was short in the RSE will have its transfers cut to alleviate the EEA condition for the other EDAM Entity. NV Energy does not support this outcome. If an EDAM Entity bids more energy into the market than is required for the RSE, those transfers and energy bids should be deemed firm. CAISO allows the right for an EDAM Entity to hold back resources in excess of the RSE, so if the EDAM Entity bids more than is required, that it can be considered a willing market sale and the purchase at the high penalty price should deem the purchaser compliant with the RSE.

Only in the extreme “edge” case where there is insufficient supply should: (1) the purchase penalty not be applied and (2) the transfers be limited to ensure the shortfall is not exported to an EDAM Entity who passed the RSE.

6. TRANSMISSION COMMITMENT: Please provide your organization’s comments on the overall framework of transmission commitment in EDAM, including the framing of how transmission is made available through the concept of the transmission “buckets” as described in section II.B.1 of the EDAM revised straw proposal.

To date, EDAM transmission has been referred to as a series of “buckets” that could be utilized in a series of “pathways”. These nomenclatures may no longer serve a purpose and possibly should be dropped. NV Energy understands the breakdown of transmission as follows:

  1. Self-Scheduled transmission associated with the RSE. This would be schedules from both NITS and point-to-point customers to loads and exports. Examples would include a generator in Nevada exporting to California on firm point-to-point transmission or a NITS customer with import rights moving their WSPP Schedule C purchase from the Nevada border to their network load. This has been called Bucket 1 transmission.
  1. Self-Scheduled transmission not associated with the RSE. Another form of Self-Schedule transmission could be point-to-point transmission service that is reserved long term that doesn’t support a specific resource for an EDAM Entity’s RSE. This type of transmission usually supports bilateral daily transactions that may be out of the Market.  This has been called Bucket 2 transmission.
  1. Transmission associated with “bid range”. This is a significant change from OATT practice. NV Energy could sell the capacity from a gas unit to an external EDAM Entity along with the point-to-point export rights. Rather than self-schedule the resource, the purchaser would bid it into the EDAM and receive credit towards its own RSE obligation. This will allow the unit to be dispatched if needed, but to be displaced if a less expensive source of supply is identified in the market optimization to serve that load. While not discussed as often as the self-schedules, this would also have been part of the old Bucket 1.
  1. Assignment to CAISO. The CAISO proposes that a customer with a firm point-to-point reservation of a month or longer duration could make that transmission available to the CAISO (similar to the assignment process under the OATT) in exchange for potential congestion rent payments. Hopefully, this is a clearer articulation of what has been Bucket 2.
  1. Firm Available Transfer Capability – this is transmission capacity that has not been sold. This has been called Bucket 3 transmission.
  1. Unscheduled transmission (non-firm ATC) – this is transmission that has been set aside or reserved for both NITS and point-to-point customers but was not scheduled by 10 am day-ahead. For example, a NITS customer may have a peak forecast for the year of 50 MW, which requires NV Energy to hold that amount for a potential schedule, but the actual load that day is only 30 MW. CAISO’s proposal is that the 20 MW would be released to use in the optimization. If the customer comes back between day-ahead and real-time and increases the schedule to 35 MW, CAISO’s optimization software would redispatch to accommodate the additional demand.
  1. Transmission associated with Transmission Reserve Margins. NV Energy utilizes a TRM, to meet its obligations under the Western Power Pool Reserve Sharing Agreement. A total TRM of 375 MW is allocated 175 MW to the Sierra Pacific northern system and 200 MW to the Nevada Power southern system.

NV Energy can support the CAISO’s proposal to make transmission associated with (1) to (6) available to the market. NV Energy would propose that transmission associated with TRM not be included in EDAM to ensure there is transmission capacity available to meet system emergencies. Absent further developments to co-optimize ancillary services or to consolidate Balancing Authority functions, NV Energy must be able to access external supply to prevent or respond to system emergencies. While the focus has been on the interties, all of the EDAM Entity’s internal network would also be part of the optimization.

Transmission associated with pre-OATT existing contracts or point to point transmission service agreements that are not used as a part of an EDAM Entity’s RSE could be included or “carved out” depending on the underlying contract rights. If carved out, the transmission could be assigned a Contract Reference Number similar to the Transmission Rights and Curtailment Instruction process under Section 16 of the CAISO Tariff.

7. TRANSMISSION COMMITMENT: Please provide your organization’s perspective on Bucket 2 transmission and the pathways for how transmission customers can exercise their transmission rights, whether secured under the OATT or under legacy arrangements, or how otherwise those transmission rights are made available to the market as described in section II.B.1 of the revised straw proposal.

CAISO has proposed three pathways for firm point-to-point transmission service of a month or longer duration: (1) self-schedule by 10 AM and use the previously-reserved transmission service, (2) assign the transmission capacity to the CAISO for EDAM use in exchange for potential congestion rent payments, or (3) the transmission will be released to the market to support optimized transfers if the transmission is not scheduled by 10 am.  If the point-to-point customer utilizes their OATT rights to schedule after the 10 am market deadline, the market will redispatch to accommodate the transfer, if feasible, however the schedule will have a lower priority. NV Energy can support this approach, provided point-to-point transmission of less than a month in duration and network customers are not eligible for direct assignment to CAISO.

NV Energy supports the requirement of firm transmission to be of one month or longer. The requirement for the transmission reservation to be a month or longer helps EDAM Entities have access to daily and weekly transmission to meet RSE requirements, without the transmission being “taken” from the bilateral market by an entity seeking to increase congestion costs. Under NV Energy’s OATT, a network customer cannot assign unused transmission to another customer. The transmission is specifically used to serve its load, no more, no less, if unused it is released as non-firm capacity for the Transmission Provider to sell.  If later scheduled by a network customer after the non-firm transmission was sold, the non-firm transmission reservation would be curtailed.

NV Energy would use congestion rent payments to hold our existing customers harmless as much as possible while allowing the market to optimize low-cost transfers.

8. TRANSMISSION COMMITMENT: Please provide your organization’s perspective on how ISO transmission is made available to the EDAM under the transmission commitment design.

Please see response to question 6.

9. TRANSMISSION COMMITMENT: Please provide your organization's comments on the transmission revenue requirement (TRR) recovery framework design which is intended to allow for recovery of certain transmission revenues to keep the transmission provider whole from a historical TRR perspective in the EDAM as described in section II.B.1 of the revised straw proposal.
Consider comments on the three different proposed components of the EDAM recoverable TRR and the proposed methods of allocating the TRR shortfall, along with other elements of the design.

In the Revised Straw Proposal, the CAISO moves away from charging the market at the OATT rate for any use of firm (unsold) ATC (also referred to as Bucket 3). While the firm ATC would be available to the market hurdle-free, the CAISO proposes a mechanism to keep participating transmission providers whole to their current rate structures by accounting for potential foregone revenues from short term firm and short term non-firm transmission sales resulting from their participation in the EDAM. In addition, CAISO proposes to establish a ratio of an EDAM Entity’s short-term firm and non-firm point to point transmission service revenue requirement and apply the ratio of revenue requirement on approved new transmission builds that increase transfer capability between EDAM BAAs and revenues for wheeling-through volumes for EDAM BAAs that exceed the total imports and exports from the EDAM Entity BAA. NV Energy supports these revenue protections.

  1. Transmission Revenue Credit Shortfall Recovery

Under the OATT today, network and firm point to point transmission that is unscheduled by noon is automatically released as non-firm transmission for sale by the transmission provider. These non-firm sales act as a credit to all OATT customers to keep rates just and reasonable. In the EDAM, this transmission capability is to be made available to the market. As EDAM expands, former transmission customers (for example the merchant of another EDAM Entity that does not have a direct intertie with CAISO) may simply bid at their locations rather than secure non-firm transmission to the CAISO border. Thus, the transmission provider may experience reduced non-firm transmission sales.

CAISO proposes to offer a form of revenue protection, at least for the first several years of EDAM participation. The proposal is that the EDAM recoverable revenues be those associated with historical transmission sales to third parties (not sales to the EDAM Entity’s merchant function) and cover the following products: (1) hourly non-firm and firm point-to-point; (2) daily non-firm and firm point-to-point; and (3) weekly non-firm and firm point-to-point. Each EDAM BAA transmission provider would calculate their EDAM recoverable TRR based on the transmission provider’s average FERC-approved (or applicable regulatory authority approved) transmission revenue requirement for non-firm and short-term firm point to point transmission services for the most recent three years. CAISO states that three years represents a reasonable time-period that should provide a more stable and reasonable representation of revenue requirement associated with the transmission products eligible for recovery through the EDAM. NV Energy can support the three-year average approach.

CAISO also proposes to review and update the EDAM recoverable TRR after two-years of participating in the EDAM. This period is too short, especially when combined with a three-year average that would incorporate the revenue credit reductions from two years of EDAM participation. NV Energy would suggest a minimum four-year period prior to any update to ensure predictability of EDAM-related transmission revenues for a transitional period. It may be appropriate to phase out the EDAM recoverable TRR over time, but two years is not reasonable.

The EDAM recoverable TRR represents the utmost upper bound of transmission revenue recovery associated with the transmission products identified. For purposes of establishing an initial rate, NV Energy would propose using 50%. This recovery level would be added to the transmission providers sales of short-term firm and non-firm products to determine any shortfall or over-recovery which would be applied to the following year’s target level.

  1. Percentage of New Transmission Build

EDAM customers get the benefit of the newly constructed transmission but are not making the contribution typically seen as a revenue credit under the OATT. In other words, the reduction in typical revenue credits would apply both to existing and new transmission facilities. To prevent this outcome and to avoid creating a situation where an EDAM Entity would not join until after a new line has been placed in service and developed a history of revenue credits, CAISO proposes an amount of new transmission upgrade revenue requirement would be recoverable to the EDAM based on the historical ratio of the non-firm and short-term firm point to point revenue requirement, associated with third-party sales on the new upgrade, to the total EDAM entity TRR.

For example, if NV Energy’s ratio of short-term firm and non-firm transmission revenue is approximately 5% of the Company’s overall transmission revenue requirement, that same 5% would be applied to the increased transmission revenue requirement associated with the Greenlink West and Greenlink North lines expected to come into service at the end of 2026 and 2028, respectively.

The CAISO’s proposal appropriately recognizes the value of these regional transmission system upgrades as well as keeping transmission provider’s whole. These high voltage facilities will bring additional transfer capabilities providing great market benefits.

  1. Wheeling Through Volumes In Excess of Net Imports Plus Exports

The third component that is eligible for transmission revenue recovery through the EDAM is associated with wheeling volumes through an EDAM Entity’s transmission system in excess of the total net imports/exports transfers of the EDAM entity.

Item 6.1.45 in the CAISO Policy Initiatives Catalogue is as follows:

This initiative would evaluate wheel-through transactions occurring throughout the WEIM area. A wheel through is a transaction in which a WEIM Entity facilitates a transfer without sourcing or sinking energy. When a wheel through occurs, the entity “in the middle” receives no direct financial benefit even though they facilitated the transfer. This initiative will also investigate the need for compensation when net wheeling occurs. This initiative was originally considered in 2017 but it was determined at the time that all WEIM Entities currently benefit more than they facilitate wheels. Therefore, because all entities receive direct financial benefit from the WEIM (in comparison to net wheeling), an ex-post settlement or hurdle rate to compensate for wheels was not favorable. This item will remain in the catalog and can be revisited if it is prioritized and deemed necessary. Wheeling data will be published quarterly in the WEIM Quarterly Benefits Report

The quarterly benefit reports have shown that certain EIM Entities have experienced months where wheels through have greatly exceeded the sum of imports and exports. This scenario could occur in the EDAM as well. As noted in the Revised Straw Proposal, wheeling through the EDAM entity system creates benefits for other EDAM BAAs but not for that middle entity. In those instances, the excess wheels through the system should be considered foregone transmission revenue for the EDAM Entity.

CAISO’s proposal is that in those periods where this net difference occurs, the EDAM Entity be compensated for the excess transmission use supporting net wheels through its system. The volume of net wheels through the EDAM entity transmission system, net of EDAM transfer imports and exports, would be compensated at the EDAM Entity’s filed and approved hourly point to point transmission rate.

NV Energy strongly supports this aspect of the Revised Straw Proposal. As shown in the tables below, applying this concept to the monthly EIM volumes, NV Energy would have added $2,250,496 for 2020, $1,191,441 for 2021 and $634,920 for the first 6 months of 2022.

EIM Transfers From, To, and Through NV Energy

From the CAISO Benefit Reports

2020 (Total = $2,250,496)

 

Jan

Feb

March

April

May

June

Oct

Nov

Wheel-Through

114,600

142,277

128,805

240,921

288,375

202,302

147,858

136,099

Import

37,207

25,773

26,500

41,601

90,764

41,719

33,930

79,183

Export

60,510

88,845

98,705

86,773

54,775

75,679

68,963

32,892

Wheel-Through less total import and export

16,883

27,659

3,600

112,547

142,836

84,904

44,965

24,024

 

 

 

 

 

 

 

 

 

NVE Non-firm rate

$4.92

$4.92

$4.92

$4.92

$4.92

$4.92

$4.92

$4.92

 

 

 

 

 

 

 

 

 

Net Wheel Through X Non-firm rate

$83,064

$136,082

$17,712

$553,731

$702,753

$417,728

$221,228

$118,198

 

2021 (Total= $1,191,441)

 

Jan

Feb

March

May

Sep

Oct

Nov

Dec

Wheel-Through (MWh)

147,621

214,638

167,054

138,716

175,577

131,593

114,634

133,784

Import

54,807

59,503

49,331

88,338

81,502

73,373

53,896

81,764

Export

69,470

42,591

59,497

40,133

68,565

51,791

55,859

51,034

Wheel-Through less total import and export

23,344

112,544

58,226

10,245

25,510

6,429

4,879

986

 

 

 

 

 

 

 

 

 

NVE Non-firm rate

$4.92

$4.92

$4.92

$4.92

$4.92

$4.92

$4.92

$4.92

 

 

 

 

 

 

 

 

 

Net Wheel Through X Non-firm rate

$114,852

$553,716

$286,472

$50,405

$125,509

$31,631

$24,005

$4,851

 

2022 ($634,920 through June)

 

 

Jan

Feb

March

April

May

June

Wheel-Through

123,661

128,992

212,265

84,004

138,445

108,608

Import

59,702

54,254

65,802

82,111

103,585

87,414

Export

50,033

45,735

60,343

55,128

59,358

68,899

Wheel-Through less total import and export

13,926

29,003

86,120

-53,235

-24,498

-18,512

 

 

 

 

 

 

 

NVE Non-firm rate

$4.92

$4.92

$4.92

$4.92

$4.92

$4.92

 

 

 

 

 

 

 

Net Wheel Through X Non-firm rate

$68,516

$142,694

$423,710

$0

$0

$0

 

  1. True-Up

CAISO’s proposal offers two options for addressing any surplus or shortfall for the EDAM TRR: (1) a year end true-up where the surpluses and shortfalls are settled; or (2) carrying over the shortfall or surplus into the following year’s calculation of the forecasted TRR requirement, which would affect the BAA specific rate calculated. NV Energy would recommend Option 2 as more consistent with the true-up mechanisms employed under formula rates.

  1. Allocation

With regard to allocation of the EDAM TRR uplift rate, the CAISO proposes two options: (1) to gross load across the footprint or (2) to demand plus supply across the footprint. NV Energy strongly supports Option 2 – assessing the charge to demand plus supply. Option 1 poses a significant free ridership problem of generation crossing the transmission providers’ transmission system with no corresponding contribution to the transmission cost recovery. Also, historically NV Energy has seen the short-term non-firm and firm transmission revenues that this rate would be seeking to recover has been a mix of requests from both generation and load. NV Energy finds it appropriate to apply the uplift to both generation and demand.  NV Energy does not oppose the proposal that in allocating this uplift charge, the CAISO would not allocate to an EDAM Entity its own TRR revenue shortfall so its metered demand does not have to pay for its TRR cost recovery.

In the next iteration of the Straw Proposal, the CAISO should provide additional detail on how the CAISO lost transmission revenues will be determined.

  1. Use of EDAM Transfer Revenues to Reduce Amount of TRR recovery

During the stakeholder discussions, a question was raised as to whether EDAM Transfer Revenues associated with firm ATC should be used to reduce the EDAM TRR, prior to assessing an uplift to other EDAM-participating BAAs. NV Energy could support using the EDAM Transfer revenues in this manner after the Transmission Providers’ OATT customers have been held harmless from EDAM-related transfer and congestion charges.

Today, OATT customers have the ability to modify their schedules between 10 am and T-57 without exposure to congestion costs. In order not to financially harm OATT customers, they must be protected from congestion and transfer charges arising from their permissible schedule changes to the extent possible. If there is a surplus of EDAM Transfer and congestion payments to the transmission provider after these hold harmless costs have been netted, that excess could be used to reduce the EDAM TRR as these costs should be considered in a manner similar to other short-term firm and non-firm transmission revenue credits.

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

  Missing from the Revised Straw Proposal is any discussion of the interrelationship between EDAM and OATT non-firm transmission service. Today, non-firm transmission plays a vital role in:

  1. Providing transmission paths for reliability and economic procurement where the paths is fully utilized but is often not fully scheduled;
  2. Supporting off-system sales from Designated Network Resources when firm transmission is not available; and
  3. To provide for short-term hourly sales when the smallest firm product under some OATTs (including NV Energy’s tariff) is a daily product.

Non firm transmission can be reserved in advance of the day-ahead timeframe or intraday to respond to contingency events or bilateral sales opportunities. A key component of non-firm transmission is price certainty. If the transmission service cannot be accommodated it is curtailed. There is no exposure to uncertain congestion costs.

The Revised Straw proposal does not address this issue. Will non-firm transmission be addressed as a curtailment priority as done today or will the CAISO’s optimization engine redispatch to accommodate non-firm schedules, in effect converting them to a form of conditional firm product? The Draft Final Proposal should explain how non-firm transmission can continue to be used, how it will be scheduled, when it can be offered, and what price exposure would there be to congestion costs.

11. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the design of the proposed application that will be used to conduct the EDAM RSE as described in section II.B.2 of the EDAM revised straw proposal.
This includes comments on the ability to conduct advisory RSE tests prior to the binding run, the timing of the RSE, test inputs, test obligation, the decision not to include transmission constraints within the EDAM RSE as well as any other relevant elements.

In comments submitted on September 16, 2022, on the WEIM Resource Sufficiency Evaluation Enhancements Phase 2 Revised Draft Final Proposal, the Department of Market Monitoring states:

 

If the 97.5% threshold is not actually a meaningful uncertainty target, stakeholders may want to consider a more straightforward uncertainty adder. This is because the uncertainty adder produced by the quantile regression method is likely to fluctuate significantly interval by interval and could be very difficult for balancing areas to reproduce or predict in advance. A simpler adder, such as a fixed percentage of each interval’s net load, could result in much more transparent and easily predictable RSE test requirements, as well as significantly smoother transitions between RSE test requirements throughout the day. A simple percentage of load adder, such as a planning reserve margin, has a long history of being successfully utilized in the electricity industry for setting standards for forward procurement of capacity to meet uncertainty needs. It could be worth considering for the WEIM (and EDAM) as well.

NV Energy supports this reserve margin approach as a means of simplifying and enhancing the predictability of the EDAM RSE and the Imbalance Reserve product. It is important to remember that the EDAM RSE will need to be allocated not only to the EDAM Entity’s native load, but also must be sub-allocated to third party customers. This means the RSE must be predictable and know with enough certainty to enable these OATT customers to meet their respective targets.  A reserve margin would operate similar to an average system loss factor under the OATT today enabling appropriate attribution.

12. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposed treatment of firm energy contracts where the source/transmission may not be known in advance of the market run (i.e. WSPP Schedule-C supply contracts) within the EDAM RSE.
Consider comments on if the proposed requirement for the submission of day-ahead e-tags, the potential to be removed from the pooled WEIM RSE, as well as monitoring to provide a sufficient level of confidence in these types of supply arrangements. Additionally, consider the proposed modeling of these arrangements as “bucket 1” transfers, along with the potential pricing impacts in the source BAA and the potential to utilize BAA-to-BAA transmission between the source and sink BAA.

WSPP Schedule C contracts will count toward the EDAM RSE. Recognizing that the source and transmission may be unknown when the day-ahead market run is executed, CAISO has introduced a tagging requirement to provide greater confidence in these arrangements. Intertie bids at the CAISO border that are under contract to an CAISO LSE or otherwise have a contract under the CAISO tariff will be eligible for the CAISO RSE and be subject to the same tagging requirement.

NV Energy seeks clarity as to the tagging requirement. Specifically, is it a timing requirement, a quality requirement, or both. If a timing requirement, the expectation is the transaction would be tagged by 3 pm. Only in unusual circumstances would the tagging be done after that timeframe. NV Energy seeks confirmation that the transmission arrangements associated with WSPP Schedule C agreements that are commonly utilized in the Western market today will be unchanged by EDAM. NV Energy also seeks confirmation that external resource-specific purchases must have firm or conditional firm transmission to the border of the EDAM Balancing Authority Area claiming the resource for RSE purposes. In other words, for a CAISO LSE to count a Nevada geothermal for their RSE that resource will continue to be required to purchase firm point-to-point transmission service under the NV Energy OATT to the Nevada border with California. Any other outcome would mean a significant loss of transmission revenue and jeopardize any EDAM value proposition.

For contracts that require wheeling through the CAISO system, NV Energy understands that the approach would be similar to that utilized for transmission across other systems a WSPP Schedule C transaction would count towards meeting the RSE if it was delivered across California using either HPT or LPT transmission but a resource specific arrangement would require HPT transmission through California. These requirements must be clear for Entities to be able to plan to meet their RSE obligations and to have collective confidence in transfers.

13. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s perspective on the ISO proposal for counting in the EDAM RSE import bids made at the CAISO BAA boarder with a non-EDAM BAA.

 No 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.

 No Comment.

15. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposal to make available advisory D+2 market results (day ahead + 2 market run) to help inform gas procurement and manage gas resource participation in the day ahead market.
Consider commenting on any additional potential enhancements or changes to this market run which could increase its accuracy.

The EDAM Straw proposal briefly mentions the issue of the different market timelines of the gas and CAISO Day-Ahead markets. Gas trading and power trading occur simultaneously in the current construct. This means the majority of day-ahead trading is completed between 5-7 am. After this time, the liquidity in the gas markets is drastically reduced. However, the results in the Day Ahead Market are posted at or after 1:00 PM.

CAISO has proposed to publish the Day Ahead preliminary results two days prior to the actual binding Day Ahead run as a solution to the gas and market timing misalignment issue. However, the preliminary market results are only reflective of the binding Day Ahead market awards if the inputs are fairly known prior to these market runs. Given the proposed uncertainty requirement within the RSE test and the resources needed in order to meet the uncertainty, there is the strong possibility that EDAM will significantly increase the redispatch of NV Energy’s system in comparison to the changes seen today from the EIM base schedules. Thus, the Company’s gas burn projections could be drastically shifted on the pipelines. This would require a true up of our gas nominations in the intraday markets which could come with significant negative financial impacts. CAISO states they expect market participants to meet the day-ahead and real-time schedules and that the current CAISO Day-Ahead Market participants have already “successfully navigated” this issue. NV Energy does not believe that the CAISO market participants are similarly situated with gas resources and the balancing pipeline requirements like some of the Desert Southwest Entities. Therefore, NV Energy supports conducting additional workshops on this issue. These should include not only existing gas generators in CAISO, but also representatives from the pertinent pipelines to review how a potential EDAM would affect current operations and to develop protections in the EDAM design against costs attributable to this re-optimization. This is a significant concern for NV Energy that could erode EDAM benefits when the company must purchase additional gas on one pipeline and sell gas on another. In NV Energy’s view, the most optimal outcome from a gas workshop would be to either better understand the gas nomogram tool if applicable to EIM, for CAISO to gain a better understanding of the gas management issues of the Desert Southwest, and/or potential additional pricing or constraint tools that could be utilized for gas management.

16. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on whether the proposal to cure resource insufficiencies through the EDAM market at an administrative surcharge provides incentive to cure shortfalls prior to participating in the EDAM.
Please comment on the proposed requirement to cure through the market, the block surcharge, as well as the potential to credit against the surcharge any market energy prices. In addition, please comment on the proposed revenue allocation, and CAISO BAA specific sub-allocation for this surcharge.

NV Energy understands that EDAM RSE failures are determined based upon an individual Balancing Authority test where the bid-in fleet goes through an optimization to measure if there is enough bid-in energy to meet forecasted demand plus imbalance reserve. If there is a flexible ramping or imbalance reserve shortage that MW amount reflects the quantity of the failure. One challenge or concern with this test is that the Balancing Authority will be losing information on how much surplus is available for the individual participants BAA, which is an issue with the amount of redispatch that could occur with the internal resources. As currently proposed, the test will just tell the EDAM Entity if we are short. NV Energy proposes that the CAISO also report the surplus results for the RSE because the surplus can provide a gauge of how short the system is along with possibly understanding which Balancing Authorities have available capacity to trade.

NV Energy further understands that under the current policy proposal if there is a failure, no matter how large it is that it will be resolved by using the 16-hour block price at the maximum price for a bilateral trading hub. Additionally, if there is a failure in any hour then the EDAM Entity has failed the test for the whole day. NV Energy is still concerned with the proposed 16 hour block purchase as a financial penalty for failing an hour of the RSE. There is a strong possibility that the uncertainty may not materialize in Real Time. Currently within the EIM, there are BAAs that fail the RSE without any infeasibilities occurring. Therefore, NV Energy does not support a punitive financial penalty when a BAA fails the Day Ahead RSE within the uncertainty amount.

NV Energy offers the following comments with respect to the creation of penalty failure bands:

  • Types of failures in the market:
    1.  Forecast error (MAPE) – No penalty
    2.  Day Ahead Uncertainty - % of LMP
    3.  WEIM Uncertainty for each hour – 50% price cap
    4. Forecasted Load – Price cap

NV Energy does not support a penalty price for an organized market that is developed from using a trading hub price from the bilateral market. Stakeholders and CAISO should consider a price that uses a percent of the Day Ahead LMP, in order to avoid the consequences resulting in inaccurate assumptions about the liquidity of the bilateral market following the construction of a Day Ahead Market and the Western Resource Adequacy Program. To be clear, NV Energy does support the use of financial penalties if a BAA fails a RSE but does not support the current proposed design of this penalty.

17. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the proposal to stand up an hourly bid-range trading platform.

CAISO has proposed an hourly bid-range trading platform that would allow participants to trade RSE requirements prior to the RSE test. This functionality can provide a more efficient market outcome as entities could avoid large block purchases bilaterally that would be fixed interchange not optimized. NV Energy supports an hourly bid-range trading platform designed to help participants pass the RSE tests.

18. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your organization’s comments on the utilization of a pooled WEIM RSE for entities passing the EDAM RSE, as described in the revised straw proposal.
Please comment on the criteria for exclusion from the pooled WEIM RSE, the proposal to withhold a configurable quantity of imbalance reserves to be utilized for benefit of the EDAM footprint, and the preferred approach for the pooled WEIM RSE following a potential failure of the pool in the WEIM.

 No Comment.

19. DAY-AHEAD RESOURCE SUFFICIENCY EVALUATION (RSE): Please provide your