Alliance for Retail Energy Markets
Submitted 05/17/2024, 02:57 pm
1.
Provide a summary of your organization’s overall comments on the April 29-30 RAMPD Hybrid Stakeholder Working Group and Updated Discussion Paper & Draft Recommendation Plan:
The Alliance for Retail Energy Markets (AReM) continues to advocate for the CAISO to include in the scope of Track 3 differences between resource adequacy (RA) rules used by the CAISO and California Public Utilities Commission (CPUC). AReM encourages the CPUC and CAISO to increase coordination to prevent the occurrence of last August when AReM members were assessed cost responsibility for a capacity procurement mechanism (CPM) event despite being compliant with CPUC RA rules due to the CPUC’s and CAISO’s different treatment of demand response (DR) resources.
AReM also provides some additional comments on issues related to consistency between the CPUC and CAISO RA programs, including: (a) use of the 0.1 loss of load expectation (LOLE) standard (b) resource counting standards, especially as it relates to energy sufficiency, and (c) LOLE modeling assumptions. In all cases, AReM encourages the CAISO and CPUC to increase coordination to reduce potential for conflicting RA standards and modeling results.
AReM also provides some limited feedback on the Track 5 table of stakeholder suggestions, encouraging CAISO to provide more clarity on what within that table may still be in scope of the other Tracks.
2.
Provide your organization’s feedback on the ISO’s April 29th presentation on backstop and the backstop panel discussion:
AReM thanks the CAISO for the panel discussion. AReM presented its concerns regarding the August CPM event and AReM members desire not to have a recurrence of the discrepancy in resource counting which caused a difference between the CPUC and CAISO in determining whether LSEs sufficiently procured RA-qualified capacity. AReM continues to support including reconciliation of CPUC and CAISO standards for DR counting rules in the scope of the policy development process to prevent the CAISO from allocating CPM costs to LSEs deemed sufficient on RA procurement by the CPUC.
During the presentation, AReM briefly discussed potential solutions to the problem, whether changing the CPM cost allocation rules or CAISO obtaining proper “visibility” into DR programs to count the capacity. AReM does not take a position on the best solution at this time, only that the CPUC and CAISO discrepancy in resource counting be included in scope for resolution through the policy development process.
The panel also discussed using a 0.1 LOLE standard for purposes of calculating backstop procurement need. AReM has supported using the 0.1 LOLE standard to determine RA requirements in comments to the CPUC. AReM does not object to the use of a 0.1 LOLE standard, but AReM is concerned this proposal risks creating further discrepancy between local regulatory authority (LRA) and CAISO RA standards. AReM’s position is that it is not appropriate for an LRA to determine a load-serving entity (LSE) has procured an adequate amount of RA-qualified capacity only to have the CAISO determine otherwise and assign backstop procurement costs to that LSE. Even if LRAs and CAISO are aligned and both use a 0.1 LOLE standard, there are still risks of discrepancies if different modeling tools and assumptions are used to evaluate compliance with a 0.1 LOLE. If CAISO is concerned about any LRA’s RA standards, AReM recommends CAISO collaborate directly with that LRA so the standards can be updated instead of forcing LSEs to meet conflicting standards. CAISO indicated at the workshop that LRAs are all committed to providing adequate RA, which should facilitate dialogue on resource sufficiency.
The panel also had some discussion of technical standards for RA, namely the use of slice-of-day (SOD) and effective load carrying capability (ELCC) standards. AReM is concerned by the prospect of CAISO and the CPUC using different standards. If the CAISO has technical concerns about the SOD standard, which the CPUC has adopted and CAISO has not, those concerns should be communicated to the CPUC and other stakeholders so they can be discussed and potentially remedied.
3.
Provide your organization’s comments on the April 29th Projected EDAM RSE Shortfalls discussion:
AReM has no comments at this time.
4.
Provide your organization’s feedback on the proposed Track 1: Modeling and Default Standards as reflected in the Updated Discussion Paper & Draft Recommendation Plan:
Do you have suggested recommendations on the scope of the track, problem statement, process, interdependencies or general recommendations on the path forward?
AReM does not object to the Track 1 discussion language or object to CAISO moving forward on this topic. However, AReM is concerned about the data sources CAISO may use in its modeling efforts. CAISO has asked AReM members and other LSEs to directly provide data on their procurement and integrated resource plans (IRP). This survey, at least for the midterm and long-term timeframes, largely replicates surveys the CPUC already conducts. AReM is concerned that CAISO will end up replicating a process of aggregating LSE portfolios that the CPUC staff already performs in creating the preferred system portfolio in the IRP proceeding. If the CAISO uses different data aggregation or other different assumptions in performing LOLE studies compared to the CPUC staff, instead of adding transparency with its modeling, it may just add confusion as to why its results are different than the CPUC’s. Therefore, AReM recommends the CAISO coordinate its LOLE modeling with CPUC efforts as much as possible to avoid this outcome.
5.
Provide your organization’s feedback on the proposed Track 2: Outage and Substitution and RAAIM Reform as reflected in the Updated Discussion Paper & Draft Recommendation Plan:
Do you have suggested recommendations on the scope of the track, problem statement, process, interdependencies or general recommendations on the path forward?
AReM does not object to the Track 2 discussion language or object to CAISO moving forward on this topic.
6.
Please provide your organization’s feedback on the problem statement for Track 3: Backstop Mechanisms, and assessment on if it is ready to move forward to the policy development process. Do you agree that certain parts or all of the problem statement is ready to move forward for policy development? If not, please describe which elements of the problem statement is incomplete or inaccurate, and provide your suggested edits and additional information, changes and/or analysis required to move forward.
Problem statement details: (1) The ISO lacks visibility into the contract and availability status of resources not shown as RA, preventing the ISO from efficiently and reliably running its current CPM processes; (2) Stakeholder feedback is that there is a lack visibility into the ISO’s CPM decision making processes; (3) In the current tight RA market, the ISO’s Capacity Procurement Mechanism may not be producing all of its intended results particularly given the frequent lack of bids into its Competitive Solicitation Processes; (4) As the reliability needs evolve (e.g. to address changing needs for battery storage) the ISO’s CPM process may need to evolve to obtain specific attributes necessary for reliability.
AReM’s only concern is that there is no explicit reference to the discrepancy between CPUC and CAISO resource counting for DR program credits and the issue of CPM cost allocation to CPUC-compliant LSEs. AReM mentioned this at the workshop, and it was suggested that the DR credits that CAISO currently does not count in determining CPM cost allocation could fall under “resources not shown as RA.” It was also suggested that “resources not shown as RA” should be further defined. Several categories of such resources were mentioned, including capacity held in reserve for resource substitution and capacity not under contact as RA. AReM agrees with the recommendation that the term “resources not shown as RA” be better defined, and further recommends that the CAISO consider adding explicit reference to DR resource credits recognized as RA by the CPUC but not shown on CAISO supply plans. This will signal that eliminating this discrepancy will be officially in scope for the policy development phase.
Alternatively, the issue of CPM cost allocation to LRA-compliant LSEs could be separately added to the problem statement as item number 5. AReM provides the following suggested language: “Currently, CPM costs may be allocated to LSEs that are compliant with LRA RA requirements. This occurred during the CPM event last August due to the difference in treatment of DR resources by the CPUC and the ISO.”
AReM does not have a particular preference as to how the CAISO wishes to identify the issue of the resource counting discrepancy, but recommends it be included in the scope of Track 3 as an identified problem that should be resolved.
7.
Please provide your organization’s feedback on the problem statement for Track 4: Day Ahead Sufficiency in EDAM for the ISO BAA and assessment on if it is ready to move forward to the policy development process. Do you agree that the problem statement is ready to move forward for policy development? If not, please describe why the problem statement is incomplete or inaccurate, and provide your suggested edits and additional information and analysis required to move forward:
Problem statement details: While CAISO proposes to utilize its existing exceptional dispatch authority to resolve reliability concerns highlighted by potential capacity shortages identified by the RSE, stakeholders have expressed concern that: (1) The option to exceptionally dispatch resources might not be available during critical periods; (2) The cost allocation should be reexamined to align better with cost causation, if feasible.
AReM does not object to the Track 4 discussion language or object to CAISO moving forward on this topic.
8.
Provide your organization’s comments on remaining topics for Future Working Groups, including flex RA, energy sufficiency, deliverability, and interoperability with existing and emerging RA programs:
As mentioned above under item number 2, AReM is concerned about the current inconsistency in treatment of energy sufficiency standards. The CPUC is in the process of implementing its SOD standard that explicitly requires procurement of excess RA capacity to support battery charging. The CAISO has no such energy sufficiency standard and is now proposing development of such a standard be deferred to a future working group. This deferral ensures that the current inconsistency in RA standards will persist. Though AReM understands issue prioritization is necessary, AReM recommends that CAISO share any technical concerns with the SOD framework expeditiously with the CPUC and its stakeholders or else clarify that it has no such concerns at this time.
9.
Provide your organization’s feedback on the Track 5 table of stakeholder suggestions in the Updated Discussion Paper & Draft Recommendation Plan (pgs. 17-18). Are there any that you believe should be incorporated into one of the existing proposed tracks for policy development or that deserves its own policy development process?
AReM notes that many of these suggestions are policy development proposals that could be considered as part of the policy development phase of Tracks 1 through 4. For instance, the suggestion of pools for substitution capacity could be considered under Track 2. AReM recommends that CAISO clarify which suggestions will be considered under Tracks 1 to 4, if any, in the final version of the problem statement discussion. AReM also does not recommend the CAISO adopt any policy proposals without further discussion by stakeholders in the policy development phase of the working group, as competing proposals should be requested and fully considered.
10.
Please provide any additional comments not captured above:
AReM has no additional comments at this time.
California Community Choice Association
Submitted 05/17/2024, 03:54 pm
1.
Provide a summary of your organization’s overall comments on the April 29-30 RAMPD Hybrid Stakeholder Working Group and Updated Discussion Paper & Draft Recommendation Plan:
- Recommendation Plan:
The California Community Choice Association (CalCCA) appreciates the opportunity to comment on the April 29-30, 2024, Resource Adequacy Modeling and Program Design (RAMPD) Working Group (WG) and the Updated Discussion Paper and Draft Recommendation Plan (Discussion Paper). These comments recommend that the California Independent System Operator Corporation (CAISO) move forward with the policy development phase for track 1, track 2, and track 3. These comments also provide recommendations on the backstop and Extended Day-Ahead Market (EDAM) resource sufficiency evaluation (RSE) issues discussed in the working groups. In summary:
- The process for defining the Capacity Procurement Mechanism (CPM) Soft Offer Cap (SOC) works as intended, covering going-forward fixed costs of the marginal resources on the system and mitigating market power.
- The CAISO should not revise the CPM SOC to be reflective of bi-lateral prices, as bi-lateral prices currently do not reflect cost, they reflect scarcity.
- The CAISO’s current cost allocation mechanism generally works well and as intended by allocating costs first to entities that caused the need for backstop before allocating costs broadly to all load-serving entities (LSE).
- Any examination of using a different proxy unit as the basis for the CPM SOC, should consider the following: (1) thermal units are still the most likely units to receive CPMs, (2) the costs of alternative proxy units are likely not higher than the costs of thermal units, and (3) generators have the option to demonstrate higher costs to bid a higher CPM price.
- If the CAISO is going to consider an assessment for energy sufficiency, and if there is a need to procure for lack of energy sufficiency, then the CAISO would also need to examine how to allocate backstop costs in a manner that reflects causation.
- The CAISO should consider if there is a need to develop an EDAM RSE failure cure mechanism that allows for the procurement of capacity that more closely matches the need.
- Any evaluation of allocating RSE failure costs consistent with cost causation must recognize that LSE Resource Adequacy (RA) positions are not the only cause of RSE shortfalls.
- The CAISO should not move forward with stakeholder suggestions to move to 100 percent annual showings or to include planned outages into RA requirements.
2.
Provide your organization’s feedback on the ISO’s April 29th presentation on backstop and the backstop panel discussion:
CalCCA appreciates the opportunity to participate in the robust panel discussion on the CAISO’s backstop mechanism and reiterates its responses to the panel questions here:
- What challenges (if any) have you observed with the CAISO’s current backstop processes?
During the WG, the CAISO indicated that one challenge with the current CPM process is that the CAISO only has access to shown RA capacity and competitive solicitation process (CSP)
offers as CPM capacity, and its access to CPM capacity has declined over the last five years due to a decline in CSP offers. This challenge is not a function of the way the CAISO’s current backstop processes are designed but rather a function of the current lack of capacity that has RA market prices unprecedentedly high. In a market with prices going through the roof, it is likely that generators can sell their capacity to LSEs at much higher prices than the CPM SOC because LSEs are competing for scarce supply to meet their compliance obligations. This does not signal a need to change the current CPM process as it relates to the SOC. The process for defining the SOC works as intended, covering going-forward fixed costs of the marginal resources on the system and mitigating market power.[1] It is not intended to be competitive with bi-lateral market prices, which currently reflect market scarcity rather than resources’ costs.
- Do the current mechanisms (including cost allocation) work well 1. in incenting LSEs to procure sufficient capacity to meet the LRA and CAISO requirements and 2. Allowing the CAISO to obtain needed capacity (in a reasonably efficient manner) when and where needed?
Apart from the issue CalCCA has flagged previously around the treatment of allocated DR credits,[2] the CAISO’s current cost allocation mechanism works well and as intended by allocating costs first to entities that caused the need for backstop before allocating costs broadly to all LSEs. The risk of CPM cost allocation is not the primary incentive for ensuring LSEs procure sufficient capacity to meet RA requirements. It is the Local Regulatory Authority (LRA) requirements, and the penalties associated with missing those requirements that are the primary drivers for LSEs procuring sufficient capacity. The California Public Utilities Commission (CPUC) penalties are extremely stringent, with financial penalties of up to $26.64 per megawatt-hour and non-financial penalties that prohibit some LSEs from expanding. CPM cost allocation based on causation adds to these incentives but is not, and need not, be the primary driver of LSEs meeting their compliance obligations.
As described in response to question 1, high RA capacity prices mean that resources are unlikely to be available as a CPM. However, if there is insufficient capacity at the current high market prices, it is unlikely the CAISO would have a better chance at obtaining capacity than LSEs would. Resources would generally prefer to sell to LSEs at high market prices than wait for a CPM offer.
- Some have suggested in past CPM discussions raising the soft offer cap either, 1. to reflect the opportunity costs to sell outside of the CAISO, or 2. to reflect the costs of a different proxy unit (e.g. the all-in cost of combined solar plus storage). What impact would such an increase in the soft offer cap have on the bilateral market?
Any examination of using a different proxy resource to calculate the CPM SOC should consider the following:
- The CPM SOC has generally been set to impact the likely unit to receive the CPM serving to ensure that they can recover expected costs. Historical data and regulatory requirements suggest that CPM capacity is likely to continue to be gas resources. 66 percent of CPMs since 2019 have come from gas units and no CPMs have come from hybrid resources. Because most renewable and hybrid resources are under contract for Integrated Resource Plan and Renewable Portfolio Standard regulatory requirements, and therefore also contracted for RA, it would not be expected for non-thermal resources to be regularly available for CPM.
- The California Energy Commission report establishing the cap includes, (1) insurance; (2) ad valorem taxes; and (3) fixed operations and maintenance (O&M). It is difficult to imagine that those costs for another resource type are much different than the value used for the current SOC. In fact, it seems reasonable to assume that the fixed O&M for a hybrid may very well be lower. Studies on the fixed O&M are split on how they treat battery degradation with some ascribing it to fixed O&M while others ascribe all of it to variable O&M. It is worth noting that the CAISO process for developing default energy bids for battery storage does include battery degradation as part of its calculation supporting that at least some of the cost is variable O&M.
- Finally, the cap is a soft offer cap. Therefore, if a generator has a cost that it can demonstrate is higher than the SOC, that generator can ask the Federal Energy Regulatory Commission (FERC) to allow it to bid into the CSP at a price sufficient to cover its cost. To date, the CAISO has not published information that confirms any generator has made such a request to the FERC.
As discussed in the sections above, the bilateral capacity market is in turmoil. RA market prices currently do not appear to be based on cost but rather on whatever buyers will pay. Under these conditions, sellers will search for any available opportunity cost signal and, therefore, what price they can offer. Changes to the CAISO SOC will provide such a signal. Because markets should function competitively, and the SOC is a market power mitigation mechanism, the CAISO should set the CPM SOC to reflect cost, as it does in energy markets with default energy bids. The soft-offer cap already does this and provides an opportunity to get a higher payment if a higher cost can be proven at the FERC.
- How should we consider the evolving resource mix (with an increased reliance on storage in particular) impacting our backstop processes? For example, should the CAISO BA’s have an assessment for energy sufficiency?
The CPUC’s RA program has already taken steps to consider the evolving resource mix through its slice-of-day (SOD) framework. Once implemented, LSEs will need to provide 24 hourly showings for each month. This should ensure CPUC-jurisdictional LSEs bring enough RA capacity to ensure energy sufficiency. If the CAISO is going to consider an assessment for energy sufficiency, and if there is a need to procure for lack of energy sufficiency, then the CAISO would also need to examine how to allocate backstop costs in a manner that reflects causation.
[1] The CAISO lists these as the two objectives of the soft offer cap in the Discussion Paper at 12-13. CalCCA agrees with these objectives.
[2] CalCCA Working Group Comments (Jan. 30, 2024): https://stakeholdercenter.caiso.com/Comments/AllComments/97779f5e-e0a7-4b0f-ad97-855c6cc08ead#org-fe78f059-eae0-4c19-ad57-f3767aa36546.
3.
Provide your organization’s comments on the April 29th Projected EDAM RSE Shortfalls discussion:
The CAISO proposes to use its existing exceptional dispatch authority to address potential EDAM RSE shortfalls. The challenge with using exceptional dispatch CPMs is that the minimum CPM term does not align with the likely term of an RSE failure. The minimum term for an exceptional dispatch CPM is 30 days, while RSE failures may be as short as an hour. Other Balancing Authorities can and will be able to make capacity procurement on shorter intervals to meet RSE failures. While the CAISO would like to cure RSE failures in California, it should not place the LSEs in California at a competitive disadvantage. When the CAISO has the potential to procure CPM capacity for a 30-day term to solve a one-hour RSE shortfall, it is unclear if using CPM is more cost-effective than not curing the RSE shortfall. The CAISO should consider if there is a need to develop a mechanism that allows for the procurement of capacity that more closely matches the need.
Regarding the allocation of RSE failure costs, any evaluation of whether costs can be allocated consistent with cost causation must recognize that LSE RA positions are not the only cause of RSE shortfalls. Many factors can contribute to an RSE failure, some of which may not be related to RA positions. For example, if an RA resource goes on outage and does not provide substitution, it is a resource availability problem rather than an LSE RA position problem. If an RSE failure is caused by short RA positions, the CAISO would need to first evaluate each LRA program before allocating costs to individual LSEs since the types of capacity and their ability to meet hourly needs can differ. Many complex questions must be considered to adopt a cost allocation methodology consistent with cost causation.
4.
Provide your organization’s feedback on the proposed Track 1: Modeling and Default Standards as reflected in the Updated Discussion Paper & Draft Recommendation Plan:
Do you have suggested recommendations on the scope of the track, problem statement, process, interdependencies or general recommendations on the path forward?
This problem statement is ready to move forward to policy development. The CAISO should consider the issues described in its December 20, 2023, comments,[1] when it considers this issue in the policy development phase.
[1] https://stakeholdercenter.caiso.com/Comments/AllComments/1aafa171-55d2-4e71-869e-f2b78a0718c9.
6.
Please provide your organization’s feedback on the problem statement for Track 3: Backstop Mechanisms, and assessment on if it is ready to move forward to the policy development process. Do you agree that certain parts or all of the problem statement is ready to move forward for policy development? If not, please describe which elements of the problem statement is incomplete or inaccurate, and provide your suggested edits and additional information, changes and/or analysis required to move forward.
Problem statement details: (1) The ISO lacks visibility into the contract and availability status of resources not shown as RA, preventing the ISO from efficiently and reliably running its current CPM processes; (2) Stakeholder feedback is that there is a lack visibility into the ISO’s CPM decision making processes; (3) In the current tight RA market, the ISO’s Capacity Procurement Mechanism may not be producing all of its intended results particularly given the frequent lack of bids into its Competitive Solicitation Processes; (4) As the reliability needs evolve (e.g. to address changing needs for battery storage) the ISO’s CPM process may need to evolve to obtain specific attributes necessary for reliability.
This problem statement is ready to move forward to policy development. The CAISO should consider the comments in section 2 when it considers this issue in the policy development phase.
7.
Please provide your organization’s feedback on the problem statement for Track 4: Day Ahead Sufficiency in EDAM for the ISO BAA and assessment on if it is ready to move forward to the policy development process. Do you agree that the problem statement is ready to move forward for policy development? If not, please describe why the problem statement is incomplete or inaccurate, and provide your suggested edits and additional information and analysis required to move forward:
Problem statement details: While CAISO proposes to utilize its existing exceptional dispatch authority to resolve reliability concerns highlighted by potential capacity shortages identified by the RSE, stakeholders have expressed concern that: (1) The option to exceptionally dispatch resources might not be available during critical periods; (2) The cost allocation should be reexamined to align better with cost causation, if feasible.
This problem statement is ready to move forward to policy development. The CAISO should consider the issues raised in section 3 when it considers this issue in the policy development phase.
8.
Provide your organization’s comments on remaining topics for Future Working Groups, including flex RA, energy sufficiency, deliverability, and interoperability with existing and emerging RA programs:
CalCCA has no comments at this time but will provide comments when the CAISO brings these topics to the working group.
9.
Provide your organization’s feedback on the Track 5 table of stakeholder suggestions in the Updated Discussion Paper & Draft Recommendation Plan (pgs. 17-18). Are there any that you believe should be incorporated into one of the existing proposed tracks for policy development or that deserves its own policy development process?
For the reasons described in its March 27, 2024, comments,[1] the CAISO should not move forward with stakeholder suggestions to move to 100 percent annual showings or to include planned outages into RA requirements.
The CAISO should also take caution when evaluating stakeholder suggestions for the CAISO to backstop if it has not met a 0.1 loss of load expectation. LRAs set their RA requirements to meet planning standards. If the CAISO sets a different target than the LRA, LSEs would be subject to two different requirements. Additionally, because each LRA’s RA program is different, the CAISO would need to assess each LRA’s contribution to reliability before allocating backstop costs to LSEs. LRAs should be responsible for ensuring their programs are set up to meet planning standards.
[1] https://stakeholdercenter.caiso.com/Comments/AllComments/a79881e1-374a-4d13-aa17-cbbf7e631b3a#org-6b240e6d-295e-4f19-9bf2-280896d7b4a4.
10.
Please provide any additional comments not captured above:
CalCCA has no additional comments at this time.
California Department of Water Resources
Submitted 05/17/2024, 10:30 am
1.
Provide a summary of your organization’s overall comments on the April 29-30 RAMPD Hybrid Stakeholder Working Group and Updated Discussion Paper & Draft Recommendation Plan:
The RAMPD working group primarily focused in the three key areas: principles, problem statements, and the prioritization of the issues. Outcome of the several meetings and discussions resulted in a better defined principles, problem statements, and the prioritization including defined 5 tracks[1] for path forward. It appears that the first four tracks will pave the way for policy development stage. For the 5th track, as ISO has pointed out, further refinement maybe needed prior to the policy development recommendation stage.
California Department of Water Resources State Water Project (CDWR-SWP) is a unique Load Serving Entity (LSE) for Resource Adequacy (RA) purposes, with its load driven by hydrology (not by temperature). The SWP has unique operational characteristics that differ from traditional LSEs. As noted in prior CDWR comments, CDWR plans its system to the 15% Planning Reserve Margin (PRM) established by its Local Regulatory Authority (LRA) and uses LRA-established resource counting criteria that reflect the reliability value that CDWR’s curtailable pumping loads and flexible hydroelectric system provide to the CAISO grid. The CAISO should continue to respect LRA authority to establish PRMs and counting criteria, especially in the absence of any evidence that LRA-established criteria have caused any problem on the grid. CDWR has provided its feedback on its contributions to CAISO RA. CDWR looks forward to engaging in upcoming stakeholder process stages.
[1] Track 1—Modelling, Default PRM, Default Counting, UCAP and Ambient Derates; Track 2—Outage Substitution and RAAIM Reform; Track 3—Backstop Mechanisms; Track 4—EDAM RSE and Track 5—Issues for Further Refinement and Discussion.
2.
Provide your organization’s feedback on the ISO’s April 29th presentation on backstop and the backstop panel discussion:
No comment.
3.
Provide your organization’s comments on the April 29th Projected EDAM RSE Shortfalls discussion:
No comment.
4.
Provide your organization’s feedback on the proposed Track 1: Modeling and Default Standards as reflected in the Updated Discussion Paper & Draft Recommendation Plan:
Do you have suggested recommendations on the scope of the track, problem statement, process, interdependencies or general recommendations on the path forward?
See response to question 1.
5.
Provide your organization’s feedback on the proposed Track 2: Outage and Substitution and RAAIM Reform as reflected in the Updated Discussion Paper & Draft Recommendation Plan:
Do you have suggested recommendations on the scope of the track, problem statement, process, interdependencies or general recommendations on the path forward?
CDWR-SWP appreciates Track 2’s recognition of the difficulty of scheduling outages and locating substitute capacity and reiterates its recommendation of allowing outage substitution of less than a day.
6.
Please provide your organization’s feedback on the problem statement for Track 3: Backstop Mechanisms, and assessment on if it is ready to move forward to the policy development process. Do you agree that certain parts or all of the problem statement is ready to move forward for policy development? If not, please describe which elements of the problem statement is incomplete or inaccurate, and provide your suggested edits and additional information, changes and/or analysis required to move forward.
Problem statement details: (1) The ISO lacks visibility into the contract and availability status of resources not shown as RA, preventing the ISO from efficiently and reliably running its current CPM processes; (2) Stakeholder feedback is that there is a lack visibility into the ISO’s CPM decision making processes; (3) In the current tight RA market, the ISO’s Capacity Procurement Mechanism may not be producing all of its intended results particularly given the frequent lack of bids into its Competitive Solicitation Processes; (4) As the reliability needs evolve (e.g. to address changing needs for battery storage) the ISO’s CPM process may need to evolve to obtain specific attributes necessary for reliability.
The track 3 is well organized as proposed.
7.
Please provide your organization’s feedback on the problem statement for Track 4: Day Ahead Sufficiency in EDAM for the ISO BAA and assessment on if it is ready to move forward to the policy development process. Do you agree that the problem statement is ready to move forward for policy development? If not, please describe why the problem statement is incomplete or inaccurate, and provide your suggested edits and additional information and analysis required to move forward:
Problem statement details: While CAISO proposes to utilize its existing exceptional dispatch authority to resolve reliability concerns highlighted by potential capacity shortages identified by the RSE, stakeholders have expressed concern that: (1) The option to exceptionally dispatch resources might not be available during critical periods; (2) The cost allocation should be reexamined to align better with cost causation, if feasible.
The track 4 is well organized as proposed.
8.
Provide your organization’s comments on remaining topics for Future Working Groups, including flex RA, energy sufficiency, deliverability, and interoperability with existing and emerging RA programs:
Further refinement of these topics maybe needed.
9.
Provide your organization’s feedback on the Track 5 table of stakeholder suggestions in the Updated Discussion Paper & Draft Recommendation Plan (pgs. 17-18). Are there any that you believe should be incorporated into one of the existing proposed tracks for policy development or that deserves its own policy development process?
a) CDWR opposes the proposal that LSEs would make an annual only 100% RA showing. Water delivery is the CDWR’s primary objective which depends on hydrology and water demand. CDWR also does not have electric retail customer demand following traditional utility demand patterns The need to move water depends on hydrology—where it rains, how much it rains, how fast the snow melts and where water is needed to meet the purposes of CDWR’s mission. Most of this cannot be forecast with certainty a year in advance as hydrology experiences significant swings from year to year and month to month. Any forecast of demand and hydro generation (which are coupled in the CDWR water delivery system) in an annual time frame will not be indicative of the real-time water operation predicted in the annual forecast. Therefore, it is necessary for CDWR to update its water operation forecast almost on a monthly basis which ultimately impacts the monthly resource adequacy. CDWR believes monthly updates to water operation yields realistic RA needs which ultimately helps grid reliability. Having annual RA showing requirements at certain level (%) and ability to make changes to the annual RA showings should provide flexibility and realistic availability of resources (This is more pronounced for LSE load like DWR’s that is dependent on hydrology rather than temperature).
b) Further data analyzes on pros and cons of the other proposals would be helpful.
10.
Please provide any additional comments not captured above:
a) On the appendix A, Table 3, additional analysis items are requested. It should be clarified if the requested analyses will be available and when.
b) On the modeling data request, the consistency between the ISO modeling data request and the LSE’s filing for CEC’s Integrate Energy Policy Report (IEPR) Resource Plan should be clarified. CEC’s IEPR Resource plans also include short term, medium term, and the long term plans.
California Municipal Utilities Association
Submitted 05/17/2024, 04:24 pm
Submitted on behalf of
California Municipal Utilities Association
1.
Provide a summary of your organization’s overall comments on the April 29-30 RAMPD Hybrid Stakeholder Working Group and Updated Discussion Paper & Draft Recommendation Plan:
CMUA provides these limited comments to provide feedback on the proposed Track 1: Modeling and Default Standards as reflected in the Updated Discussion Paper. As detailed in the response to Question 4 below, CMUA requests that CAISO avoid policy solutions in establishing Problem Statements specifically with regards to the statement that the CAISO’s default planning reserve margin (PRM) and default counting rules should meet at least a 0.1 loss of load expectation (LOLE). Additionally, CMUA appreciates the CAISO’s continued recognition of local regulatory authority (LRA) jurisdictional authority to set their own PRM and counting standards.
2.
Provide your organization’s feedback on the ISO’s April 29th presentation on backstop and the backstop panel discussion:
No comments at this time.
3.
Provide your organization’s comments on the April 29th Projected EDAM RSE Shortfalls discussion:
No comments at this time.
4.
Provide your organization’s feedback on the proposed Track 1: Modeling and Default Standards as reflected in the Updated Discussion Paper & Draft Recommendation Plan:
Do you have suggested recommendations on the scope of the track, problem statement, process, interdependencies or general recommendations on the path forward?
CMUA understands that the issues presented in Track 1 are meant to represent proposed problem statements and recommendations for policy development. As such, CMUA recommends that the CAISO avoid problem statements that pre-suppose policy solutions that would be better placed in the policy development process.
Specifically, CMUA suggests the following revisions to the third bulleted sub-issue under Track 1 of the Discussion Paper:
- The CAISO’s default PRM should be assessed in light of changes in the resources mix used to supply RA capacity and evolving reliability needs within the CAISO BAA.
The CAISO’s default PRM and default counting rules should meet at least a 0.1 LOLE at the ISO BAA level.
CMUA agrees with previous stakeholder comments that establishing the CAISO’s default PRM and counting rules to meet a 0.1 LOLE at this stage in the working group process is premature. First, the CAISO has yet to present an analysis on the practical implications of a 0.1 LOLE default PRM. Second, once the practical implications are known, it is important that the CAISO consider whether the additional capacity is actually available for the LRAs to meet that default standard. Once these studies have been completed, CMUA believes the issue of what standards the CAISO’s default PRM should meet is a policy question that should be discussed in the policy development process of this initiative.
Additionally, CMUA appreciates the CAISO’s continued recognition and respect of the LRA’s jurisdictional authority to set their own PRM and counting rules. As noted in the Discussion Paper, many LRAs rely on the CAISO’s default PRM and counting rules to set requirements for their LSEs.[1] To the extent there are concern from stakeholders of LRAs is not establishing their own PRM, those LRAs would be subject to any updated CAISO default PRM. However, those LRAs that have an adopted PRM and counting rules best understand the resources and needs in their jurisdiction.
[1] Discussion Paper at 6.
5.
Provide your organization’s feedback on the proposed Track 2: Outage and Substitution and RAAIM Reform as reflected in the Updated Discussion Paper & Draft Recommendation Plan:
Do you have suggested recommendations on the scope of the track, problem statement, process, interdependencies or general recommendations on the path forward?
No comments at this time.
6.
Please provide your organization’s feedback on the problem statement for Track 3: Backstop Mechanisms, and assessment on if it is ready to move forward to the policy development process. Do you agree that certain parts or all of the problem statement is ready to move forward for policy development? If not, please describe which elements of the problem statement is incomplete or inaccurate, and provide your suggested edits and additional information, changes and/or analysis required to move forward.
Problem statement details: (1) The ISO lacks visibility into the contract and availability status of resources not shown as RA, preventing the ISO from efficiently and reliably running its current CPM processes; (2) Stakeholder feedback is that there is a lack visibility into the ISO’s CPM decision making processes; (3) In the current tight RA market, the ISO’s Capacity Procurement Mechanism may not be producing all of its intended results particularly given the frequent lack of bids into its Competitive Solicitation Processes; (4) As the reliability needs evolve (e.g. to address changing needs for battery storage) the ISO’s CPM process may need to evolve to obtain specific attributes necessary for reliability.
No comments at this time.
7.
Please provide your organization’s feedback on the problem statement for Track 4: Day Ahead Sufficiency in EDAM for the ISO BAA and assessment on if it is ready to move forward to the policy development process. Do you agree that the problem statement is ready to move forward for policy development? If not, please describe why the problem statement is incomplete or inaccurate, and provide your suggested edits and additional information and analysis required to move forward:
Problem statement details: While CAISO proposes to utilize its existing exceptional dispatch authority to resolve reliability concerns highlighted by potential capacity shortages identified by the RSE, stakeholders have expressed concern that: (1) The option to exceptionally dispatch resources might not be available during critical periods; (2) The cost allocation should be reexamined to align better with cost causation, if feasible.
No comments at this time.
8.
Provide your organization’s comments on remaining topics for Future Working Groups, including flex RA, energy sufficiency, deliverability, and interoperability with existing and emerging RA programs:
No comments at this time.
9.
Provide your organization’s feedback on the Track 5 table of stakeholder suggestions in the Updated Discussion Paper & Draft Recommendation Plan (pgs. 17-18). Are there any that you believe should be incorporated into one of the existing proposed tracks for policy development or that deserves its own policy development process?
No comments at this time.
10.
Please provide any additional comments not captured above:
No comments at this time.
California Public Utilities Commission - Public Advocates Office
Submitted 05/17/2024, 03:11 pm
1.
Provide a summary of your organization’s overall comments on the April 29-30 RAMPD Hybrid Stakeholder Working Group and Updated Discussion Paper & Draft Recommendation Plan:
The Public Advocates Office at the California Public Utilities Commission (Cal Advocates) is the state-appointed independent ratepayer advocate at the California Public Utilities Commission (CPUC). Our goal is to ensure that California ratepayers have affordable, safe, and reliable utility services while advancing the state’s environmental goals. Our efforts to protect ratepayers include energy, water, and communications regulation advocacy.
Cal Advocates provides the following responses and recommendations on the April 29-30, 2024, RA Modeling and Program Design (RAMPD) Working Groups and April 29, 2024 Discussion Paper:
- The California Independent System Operator (CAISO) should not establish a backstop mechanism to procure capacity based on a CAISO reliability standard;
- The CAISO should explore solutions other than the use of exceptional dispatch to solve Resource Sufficiency Evaluation (RSE) shortfalls;
- The CAISO should consider Rollback of Planned Outage Substitution Obligation (POSO) rules in Track 2;
- Track 3 solutions should be guided by the Capacity Procurement Mechanism (CPM) Soft Offer Cap’s purpose to address market power potential and avoid distorting the RA market;
- The CAISO should reevaluate Flexible RA needs in subsequent working groups; and
- Implementation of 100% RA annual showings could lead to jurisdictional conflicts with local regulatory authorities (LRAs) and would reduce load-serving entity (LSE) procurement flexibility.
2.
Provide your organization’s feedback on the ISO’s April 29th presentation on backstop and the backstop panel discussion:
In discussing potential backstop reform, the CAISO has suggested performing a stochastic simulation to determine how the LRA-shown RA fleet would support grid reliability.[1] Cal Advocates is concerned that the CAISO may perform backstop procurement if the results of that study are below what the CAISO deems to be sufficient for reliability. That approach can apply an RA standard above and beyond the RA requirements determined by LRAs.[2] Middle River Power’s (MRP) suggestion to enable the CAISO to backstop capacity in an amount to meet a CAISO-established 0.1 Loss of Load Expectation (LOLE) standard creates the same concern.[3]
The CAISO should respect LRA jurisdiction over the operation of RA programs. Any Capacity Procurement Mechanism (CPM) designation based on RA showings[4] should not result in CAISO backstop to a capacity level beyond the aggregated RA requirements of the LRAs. A backstop that meets an additional reliability level determined by the CAISO would effectively override and invalidate the RA programs of LRAs. Thus, LRAs in compliance with their own established RA requirements would be faced with additional procurement charges based on CAISO-determined reliability needs. Additionally, the Federal Energy Regulatory Commission (FERC) recognizes states’ role to develop and maintain RA programs and acknowledges the CAISO’s “deference to the RA programs of [LRAs]” in the development of CAISO’s Tariff.[5] Ultimately, the CPUC can establish, implement, and enforce its RA requirements.[6]
The CAISO should not establish a monthly portfolio test that would cause RA backstop procurement based on a determination that LRAs have not met a CAISO reliability standard.
[1] CAISO, Resource Adequacy Modeling and Program Design Working Group, April 29-30, 2024 (April WG Slides) at 20-21. Available at: https://www.caiso.com/InitiativeDocuments/Presentation-ResourceAdequacyModeling-ProgramDesign-Apr29-30-2024.pdf.
[2] April WG Slides at 20-21.
[3] The CAISO noted that MRP’s suggestion was opposed by Six Cities (April WG Slides at 18). MRP’s suggestion was also opposed by Cal Advocates previously. Cal Advocates, Comments on Working Group Meeting of December 6, 2023, December 20, 2023 at Section 6. Available at: https://stakeholdercenter.caiso.com/Comments/AllComments/1aafa171-55d2-4e71-869e-f2b78a0718c9#org-dfdc1571-e19b-4e94-8e48-7d1298e06ceb.
[4] The CAISO Tariff enables CPM designations based on deficient LRA showings, but also for unexpected and significant events. April WG Slides at 15.
[5] 116 FERC ¶ 61,274, Order Conditionally Accepting the California Independent System Operator’s Electric Tariff Filing to Reflect Market Redesign and Technology Upgrade, September 21, 2006 (FERC MRTU Order) at paragraphs 1117, 1118, and 1153. Available at: http://www.caiso.com/Documents/September21_2006OrderConditionallyAccepting2_9_06MRTUfilinginDocketNos_ER06-615-000andER02-1656-027_etal_.pdf.
[6] California Public Utilities Code Sections 380(a) and 380(e).
3.
Provide your organization’s comments on the April 29th Projected EDAM RSE Shortfalls discussion:
The CAISO proposes to use its exceptional dispatch authority to address potential RSE shortfalls.[1] An exceptional dispatch of an RA resource may be limited to hourly intervals. This is suitable to cure an RSE shortfall since the RSE has hourly capacity targets in the day-ahead and real-time markets. However, the exceptional dispatch of a non-RA resource would be for a backstop delivery term of no less than one month.[2] Using a month-long CPM to cure a single hour or limited RSE shortfall would create unreasonable ratepayer costs. In addition to evaluating the impacts and efficiency of exceptional dispatches,[3] the CAISO should consider alternative means to cure RSE shortfalls with non-RA resources.
[1] April WG Slides at 34.
[2] CAISO, Resource Adequacy Working Group: Updated Discussion Paper & Draft Recommendation Plan, April 29, 2024 (Discussion Paper) at 15. Available at: https://www.caiso.com/InitiativeDocuments/DiscussionPaper-ResourceAdequacyModeling-ProgramDesign-Apr29-2024.pdf.
[3] Discussion Paper at 15.
4.
Provide your organization’s feedback on the proposed Track 1: Modeling and Default Standards as reflected in the Updated Discussion Paper & Draft Recommendation Plan:
Do you have suggested recommendations on the scope of the track, problem statement, process, interdependencies or general recommendations on the path forward?
Cal Advocates has no response to this question at this time.
5.
Provide your organization’s feedback on the proposed Track 2: Outage and Substitution and RAAIM Reform as reflected in the Updated Discussion Paper & Draft Recommendation Plan:
Do you have suggested recommendations on the scope of the track, problem statement, process, interdependencies or general recommendations on the path forward?
Cal Advocates continues to recommend[1] that the CAISO consider the feasibility and benefits of rolling back the 2021 POSO rules as a potential solution to address the Track 2 Problem Statement.[2] The POSO rules require substitution for every planned outage. This substantially increases the need to procure substitute RA capacity. Prior to POSO, the CAISO would evaluate system reliability conditions and approve planned outages without substitution on a case-by-case basis.[3] Thus, a rollback of the POSO rules could efficiently address the challenges related to procurement of substitute RA. The CAISO should evaluate such a rollback as an option in this initiative.
[1] Cal Advocates made this recommendation at a previous working group. Comments on Working Group Meeting of March 13, 2024: Public Advocates Office, March 27, 2024 at Section 6. Available at: https://stakeholdercenter.caiso.com/Comments/AllComments/a79881e1-374a-4d13-aa17-cbbf7e631b3a#org-aae696bf-1f5d-4356-b1cd-f864e295bc13.
[2] Discussion Paper at 9.
[3] CAISO, Tariff Amendment to Implement the Resource Adequacy Enhancements Phase 1 Initiative – Summer 2021 Provisions, March 29, 2021 at 4. Available at: https://www.caiso.com/Documents/Mar29-2021-Tariff-Amendment-ResourceAdequacyRAEnhancements-ER21-1551.pdf.
6.
Please provide your organization’s feedback on the problem statement for Track 3: Backstop Mechanisms, and assessment on if it is ready to move forward to the policy development process. Do you agree that certain parts or all of the problem statement is ready to move forward for policy development? If not, please describe which elements of the problem statement is incomplete or inaccurate, and provide your suggested edits and additional information, changes and/or analysis required to move forward.
Problem statement details: (1) The ISO lacks visibility into the contract and availability status of resources not shown as RA, preventing the ISO from efficiently and reliably running its current CPM processes; (2) Stakeholder feedback is that there is a lack visibility into the ISO’s CPM decision making processes; (3) In the current tight RA market, the ISO’s Capacity Procurement Mechanism may not be producing all of its intended results particularly given the frequent lack of bids into its Competitive Solicitation Processes; (4) As the reliability needs evolve (e.g. to address changing needs for battery storage) the ISO’s CPM process may need to evolve to obtain specific attributes necessary for reliability.
The Track 3 Problem Statement is ready to move forward to the policy development process.
7.
Please provide your organization’s feedback on the problem statement for Track 4: Day Ahead Sufficiency in EDAM for the ISO BAA and assessment on if it is ready to move forward to the policy development process. Do you agree that the problem statement is ready to move forward for policy development? If not, please describe why the problem statement is incomplete or inaccurate, and provide your suggested edits and additional information and analysis required to move forward:
Problem statement details: While CAISO proposes to utilize its existing exceptional dispatch authority to resolve reliability concerns highlighted by potential capacity shortages identified by the RSE, stakeholders have expressed concern that: (1) The option to exceptionally dispatch resources might not be available during critical periods; (2) The cost allocation should be reexamined to align better with cost causation, if feasible.
Please see Cal Advocates’ response to question 5.
8.
Provide your organization’s comments on remaining topics for Future Working Groups, including flex RA, energy sufficiency, deliverability, and interoperability with existing and emerging RA programs:
The working groups should prioritize re-evaluating flexible RA needs. Cal Advocates previously provided the following comments on this topic, which we continue to support:[1]
Cal Advocates supports prioritizing an assessment of Flexible RA as the third priority in this initiative. The CAISO resource portfolio has added significant solar and storage in recent years. While solar resources can increase Flexible RA requirements,[2] storage resources are exceptionally suited to respond quickly to Flexible RA needs and ancillary services.[3] As the CAISO notes, the need for a Flexible RA product has not been recently evaluated.[4] An evaluation of the Flexible RA program is prudent now, given the current and future resource portfolio of high solar and storage resources. The lack of a market premium for Flexible RA attributes suggests that the market is fully competitive and does not require a separate categorical designation to attract supply.[5] However, LSEs recover RA procurement costs from ratepayers, including any Flexible RA costs, and the CAISO assessments require time and personnel costs. Lastly, it is unclear if state-of-charge operations and other recent energy storage market refinements’ interactions with effective flexible capacity (EFC) assumptions have been evaluated.[6] EFC impacts affected by existing and any planned-for market operations governing the dispatch of storage resources should be included in the Flexible RA evaluation [in] this initiative.[7]
[1] Cal Advocates, Comments on Working Group Meeting of January 16, 2024, January 30, 2024 at Section 7. Available at: https://stakeholdercenter.caiso.com/Comments/AllComments/97779f5e-e0a7-4b0f-ad97-855c6cc08ead#org-d38a86af-fb94-48de-aa28-3f8bf842398c.
[2] Solar and wind resource output have direct effects on Flexible RA requirements. CAISO, Final Flexible Capacity Needs Assessment for 2024, May 16, 2023 at 23-24, and 27. Available at: https://www.caiso.com/InitiativeDocuments/Final-2024-Flexible-Capacity-Needs-Assessment-v2.pdf.
[3] CAISO, Special Report on Battery Storage, July 7, 2023 at 3. Available at: https://www.caiso.com/Documents/2022-Special-Report-on-Battery-Storage-Jul-7-2023.pdf.
[4] CAISO, Resource Adequacy Modeling and Program Design Working Group, January 16, 2023 (January 16 Working Group Slides) at 44. Available at: https://www.caiso.com/InitiativeDocuments/Presentation-ResourceAdequacyModeling-ProgramDesignWorkingGroup-Jan162024.pdf.
[5] CPUC, 2021 Resource Adequacy Report, April 2023 at 33. Available at https://www.cpuc.ca.gov/-/media/cpuc-website/divisions/energy-division/documents/resource-adequacy-homepage/2021_ra_report_040523.pdf.
[6] “Current data suggests EFC accreditations do not match the EFC provided.” January 16 Working Group Slides at 44.
[7] The CAISO’s Energy Storage Enhancements included additional market operational limits to preserve some level of charge in energy storage resources (the State of Charge). For more information, see CAISO, Energy Storage Enhancements Final Proposal, October 27, 2022 at 3-5. Available at: http://www.caiso.com/InitiativeDocuments/FinalProposal-EnergyStorageEnhancements.pdf.
9.
Provide your organization’s feedback on the Track 5 table of stakeholder suggestions in the Updated Discussion Paper & Draft Recommendation Plan (pgs. 17-18). Are there any that you believe should be incorporated into one of the existing proposed tracks for policy development or that deserves its own policy development process?
Cal Advocates reiterates its opposition to the CAISO moving to 100% annual showings for RA requirements.[1] Such a change would generate fundamental jurisdictional conflicts for the LRAs that maintain RA programs in the CAISO balancing area. Such a change would likewise erode procurement flexibility benefits for LSEs. For example, if the CPUC’s RA program required 100% year-ahead showings for all months, LSEs would lose the flexibility to meet the last 10% of their RA requirements through procurement up to the compliance month showing deadline. A 100% showing requirement on a year-ahead basis may also prevent LSEs from showing new resources on their RA plans. This is because new resources may not be eligible for RA at the time of the year-ahead compliance showing.[2]
[1] Cal Advocates, Comments on Working Group Meeting of March 13, 2024, March 27, 2024 at Section 4. Available at: https://stakeholdercenter.caiso.com/Comments/AllComments/a79881e1-374a-4d13-aa17-cbbf7e631b3a#org-aae696bf-1f5d-4356-b1cd-f864e295bc13.
[2] The CAISO requires new resources to have met their Commercial Operation Date or Commercial Operation for Markets, as well as receive their NQC rating, in order to be eligible for CAISO RA supply plans. CAISO, Comments of the California Independent System Operator Corporation on Track 1 Proposals, March 8, 2024 at 9; filed in CPUC Rulemaking (R.) 23-10-011, Order Instituting Rulemaking to Oversee the Resource Adequacy Program, Consider Program Reforms and Refinements, and Establish Forward Resource Adequacy Procurement Obligations. Available at: https://docs.cpuc.ca.gov/PublishedDocs/Efile/G000/M526/K922/526922075.PDF.
10.
Please provide any additional comments not captured above:
Cal Advocates provides no additional comments.
Middle River Power, LLC
Submitted 05/17/2024, 03:10 pm
1.
Provide a summary of your organization’s overall comments on the April 29-30 RAMPD Hybrid Stakeholder Working Group and Updated Discussion Paper & Draft Recommendation Plan:
Middle River Power LLC ("MRP") appreciates the CAISO holding a two-day in-person working group meeting to facilitate substantive discussions. MRP encourages the CAISO to continue to hold in-person meetings.
MRP strongly supports the CAISO’s efforts to develop the capability to perform stochastic Loss of Load Expectation (LOLE) analysis to assess the adequacy of the Resource Adequacy (RA) fleet in the near- and mid-term. MRP is concerned that the information the CAISO is requesting from Load-Serving Entities (LSEs) for this analysis – projections of how they intend to meet their RA requirements in the future rather than identifying what capacity they have already secured – will yield study results that do not provide a meaningful picture of how reliable the system really is. Instead, MRP urges the CAISO to first begin by conducting LOLE analysis on the RA fleets shown in previous years to show, as a first step, whether the implemented RA requirements meet a 0.1 LOLE metric. MRP also respectfully urges the CAISO to consider the monthly design of the RA program in its analysis and not simply assume that capacity that is contracted for some months has been contracted for all months.
With regards to the Resource Adequacy Substitute Capacity (RASC) and Resource Adequacy Availability Incentive Mechanism (RAAIM) processes, MRP supports reconsideration of both these processes. MRP requests the CAISO consider developing a pool of substitute capacity that generators can access daily to ensure they can take the planned outages needed to maintain their units without undue work to secure substitute capacity, or to cover forced outages.
Finally, MRP is unclear of the relationship between this RA-focused work group and efforts to redesign the Resource Sufficiency Evaluation. MRP recommends the CAISO discuss this issue within the currently on-going Day Ahead Sufficiency initiative. MRP respectfully urges the CAISO to prioritize the RA working groups and the work in this initiative on other matters, e.g. LOLE analysis, CPM backstop, and RASC instead.
2.
Provide your organization’s feedback on the ISO’s April 29th presentation on backstop and the backstop panel discussion:
MRP appreciated the discussion but was somewhat taken aback to hear from other market participants that they should not be expected to plan their system adequacy to the long-standing 0.1 LOLE metric. If the CAISO believes that LSEs within its footprint should not be required to achieve adequacy to this level of reliability, MRP urges the CAISO to immediately begin a discussion of this issue in this initiative.
3.
Provide your organization’s comments on the April 29th Projected EDAM RSE Shortfalls discussion:
As noted above, MRP is not yet clear of the nexus between this initiative and the EDAM RSE. MRP recommends the CAISO discuss this issue within the currently on-going Day Ahead Sufficiency initiative.
4.
Provide your organization’s feedback on the proposed Track 1: Modeling and Default Standards as reflected in the Updated Discussion Paper & Draft Recommendation Plan:
Do you have suggested recommendations on the scope of the track, problem statement, process, interdependencies or general recommendations on the path forward?
MRP supports the Track 1 effort to study “system-wide sufficiency of the CAISO BAA in light of the contracted RA fleet.”[1] Based on the discussion during the April 29th and 30th working group meetings, MRP believes the CAISO should hold a meeting with stakeholders prior to starting that study to review model inputs and assumptions.
MRP also offers these recommendations on the study.
First, MRP suggests a stakeholder discussion on the reliability metric that the study should target, e.g. a 1-in-10-year LOLE. MRP supports targeting a 1-in-10 year or lower LOLE reliability standard as the CAISO does for its summer reliability studies. During the discussion at the April 29th and 30th meetings, it was interesting to hear other stakeholders question whether the CAISO should target a 1-in-10 LOLE. That discussion suggests a further discussion as to what reliability metric the CAISO should target for its analysis is warranted.
Second, MRP does not believe that the CAISO’s Load-Serving Entity (LSE) survey is seeking the data needed to properly support this study effort. For example:
- While the year-ahead LOLE analysis very much depends on the shown RA portfolio, the current RA program does not require LSEs to be fully procured by the year-ahead showing date. This creates uncertainty as to the CAISO can know exactly which resources ultimately will be under contract and shown. This uncertainty makes it difficult, if not impossible, to provide meaningful inputs/assumptions for the CAISO to run its LOLE analysis. This is why MRP recommends the CAISO first analyze the shown RA fleet for prior years, e.g. 2022 and 2023, to show how reliable the RA program was when studied against the California Energy Commission’s (CEC’s) load forecast + Planning Reserve Margin (PRM) for those years.
- MRP does not believe asking LSEs to make assumptions about their potential future contracts to fill the data gap when responding to the LSE survey is appropriate. This could create situations in which multiple LSEs rely on the same capacity from the same resource because the CAISO asked LSEs to extend their current capacity contracts into future years while other LSEs already have actual capacity contracts for the same capacity.
- Additionally, LSEs currently do not know their coincident load forecasts for future years. The CAISO is requesting LSEs to make best estimates about such load forecasts, which can result in using a non-coincident peak load, thereby resulting in a higher reliability need than would be required by the RA program.
- Finally, it’s unclear if the CAISO provides LSEs with the opportunity to show capacity allocated through the CPUC’s Cost Allocation Mechanism (CAM).
As such, MRP believes the CAISO’s LOLE study results will be flawed because the inputs and assumptions derived from the LSE survey will be flawed. Instead, MRP recommends the CAISO first perform a look-back LOLE study for 2022 and 2023. MRP only supports a look-forward year-ahead LOLE study that is based on actual contracted capacity, not projections or estimates of contracted capacity.
For the mid-term LOLE study, MRP believes this study can inform market participants as to the expected future default PRM. MRP recommends the CAISO request LSE contracted capacity information and then aggregate that capacity. Additional capacity should be added monthly to meet load until a 0.1 LOLE reliability is achieved. It is unnecessary for LSEs to submit September peak load forecasts for the mid-term study because the CAISO can use the CEC’s adopted Integrated Energy Policy Report (IEPR) load forecast as it aggregates the contracted capacity data. MRP also recommends the CAISO fill in any needed capacity with other existing capacity while also prioritizing the state’s decarbonization goals, i.e. select renewable and low-carbon-intensive technologies before selecting more carbon intensive technologies. This will help ensure that the study results conservatively estimate the reliability performance of the assumed portfolio, because adding more carbon-intensive (i.e., fewer use- and energy-limited resources) will serve to improve system reliability. MRP believes the CAISO should focus on the look-back and mid-term LOLE analyses prior to undertaking a long-term LOLE study.
Third, based on the format of the LSE survey, MRP is concerned that the CAISO will be making similar mistakes that have plagued CPUC LOLE studies. The CAISO is requesting annualized contract data with a focus on September of each year. This assumes a resource is contracted for the entire year. Given both the monthly RA program design and LSEs’ goals to minimize their overall monthly procurement, it would be improper to assume that all resources are procured for all months of the year. Such an assumption would also lead to using an annualized portfolio and developing a single PRM that’s focused to serve the peak load month rather than optimized to ensure 0.1 LOLE across all months of the year.
As noted above, MRP suggests the CAISO hold a stakeholder discussion of the CAISO’s study methodology prior to undertaking any LOLE analysis.
[1] Discussion Paper at pege 5
5.
Provide your organization’s feedback on the proposed Track 2: Outage and Substitution and RAAIM Reform as reflected in the Updated Discussion Paper & Draft Recommendation Plan:
Do you have suggested recommendations on the scope of the track, problem statement, process, interdependencies or general recommendations on the path forward?
MRP strongly supports redesigning the RAAIM and the RASC processes. The outage substitution process redesign may make RAAIM unnecessary. During workshops, and through previous comments, MRP highlighted different options to address the problems with the RASC process.
MRP recommends the CAISO create and operate a substitution capacity pool in which RA capacity on outage will pay for daily substitute capacity as needed for both planned and forced outages. MRP has not worked through all the details of how such a substitution would operate but offers some initial thoughts here. The substitute capacity price should be administratively set, with the same price used both to buy and sell capacity, to minimize the incentive for capacity to be withheld from the substitution pool. Another way to create an incentive for market participants to rely on the substitution pool would be to impose a rule that suppliers may denote capacity to be used for self-supply substitution, but that capacity may also be used by other capacity on the grid on outage. If self-supply capacity is used and no longer available, then the CAISO can use other capacity in the pool and charge the administratively-set price to the resource owner. Because there is a single administratively-set price to sell to the pool and to buy from the pool, suppliers should be indifferent as to whether their capacity is used in the substitution pool or by another resource. The revenue received by the self-supply capacity will be offset by the cost of other replacement capacity at the same price and the generator will ultimately be unaffected. Other details of how a substitute capacity pool can be worked out during the policy development phase.
6.
Please provide your organization’s feedback on the problem statement for Track 3: Backstop Mechanisms, and assessment on if it is ready to move forward to the policy development process. Do you agree that certain parts or all of the problem statement is ready to move forward for policy development? If not, please describe which elements of the problem statement is incomplete or inaccurate, and provide your suggested edits and additional information, changes and/or analysis required to move forward.
Problem statement details: (1) The ISO lacks visibility into the contract and availability status of resources not shown as RA, preventing the ISO from efficiently and reliably running its current CPM processes; (2) Stakeholder feedback is that there is a lack visibility into the ISO’s CPM decision making processes; (3) In the current tight RA market, the ISO’s Capacity Procurement Mechanism may not be producing all of its intended results particularly given the frequent lack of bids into its Competitive Solicitation Processes; (4) As the reliability needs evolve (e.g. to address changing needs for battery storage) the ISO’s CPM process may need to evolve to obtain specific attributes necessary for reliability.
MRP proposes the following revisions to the CAISO problem statements:
- The CAISO lacks the ability to backstop procure on a year-ahead and month-ahead basis to ensure capacity has been secured to meet the 0.1 LOLE reliability standard.
- The CAISO’s current CPM process may not provide sufficient incentives for non-RA capacity to offer into the Competitive Solicitation Process.
- The CAISO lacks visibility of non-RA capacity and why such capacity does not offer into the CSP.
- Stakeholders lack visibility and transparency into the CAISO’s CPM decision making processes.
- As the supply mix evolves, the CAISO’s CPM process may need to evolve to obtain specific attributes necessary for reliability.
The first problem statement is integrally tied to Track 1 because of the importance of establishing the 0.1 LOLE reliability metric. The CAISO wishes to perform year-ahead LOLE analysis to understand how well the contracted RA capacity will support the target reliability standard. If the portfolio does not meet the target reliability standard, MRP submits that the CAISO should be allowed to backstop procure capacity to ensure the target reliability standard is met. Without such ability, then the CAISO may only be able to manage the grid to the levels of reliability chosen by various LRAs. These choices have resulted in lower PRMs[1] and the adoption of non-binding “effective” PRMs[2] to which the CAISO is unable to engage in backstop procurement. This hampers CAISO’s ability to ensure reliability.
Problem statement 2 is intended to modify the CPM process to develop a better market structure which attracts non-RA capacity to offer into the CAISO’s CSP. As noted in MRP’s outage pool discussion in Track 2, the RA framework and product definitions should not create barriers which promotes withholding non-RA capacity for potential outage substitutions. Further, additional modifications to the duration and price shape of the CPM that better reflect the monthly RA program design should be discussed.
MRP believes more discussion is required for problem statement 3 before this issue proceeds into the policy development phase. It’s currently unclear whether the “specific attributes necessary for reliability” are intended to be covered under the RA program. Another issue that has not been fully discussed in whether the CAISO should CPM other capacity to ensure energy storage resources are charged ahead of the operating month or if this charging need can be met through the daily energy markets.
[1] Decision 23-06-029, Finding of Fact 4.
[2] Decision 23-06-029, Finding of Fact 5.
7.
Please provide your organization’s feedback on the problem statement for Track 4: Day Ahead Sufficiency in EDAM for the ISO BAA and assessment on if it is ready to move forward to the policy development process. Do you agree that the problem statement is ready to move forward for policy development? If not, please describe why the problem statement is incomplete or inaccurate, and provide your suggested edits and additional information and analysis required to move forward:
Problem statement details: While CAISO proposes to utilize its existing exceptional dispatch authority to resolve reliability concerns highlighted by potential capacity shortages identified by the RSE, stakeholders have expressed concern that: (1) The option to exceptionally dispatch resources might not be available during critical periods; (2) The cost allocation should be reexamined to align better with cost causation, if feasible.
MRP does not believe this track is ready to move forward to the policy development process. The CAISO notes that it has existing tariff authority to take action when entities fail the RSE.[1] However, the CAISO also notes that a new policy development initiative would include the potential development of new capacity products to cure projected next-day capacity shortfalls.[2] MRP is also uncertain whether this is an RA program issue because the RSE formula includes all energy bids, including those of non-RA capacity[3]. If the RSE deficiency still exists after considering all RA capacity and non-RA capacity offers, then this doesn’t mean that the deficiency is due to lack of insufficient RA capacity offers. While MRP understands the intent of securing additional energy offers to meet the RSE, it’s unclear whether the optimal solution is to CPM such capacity through exceptional dispatch. MRP supports additional discussion to better develop the problem statement before moving to the policy development stage.
[1] April 29, 2024 Resource Adequacy Working Group Updated Discussion Paper & Draft Recommendation Plan (“Discussion Paper”) at page 16.
[2] Id.
[3] CAISO Tariff, Section 29.34.
8.
Provide your organization’s comments on remaining topics for Future Working Groups, including flex RA, energy sufficiency, deliverability, and interoperability with existing and emerging RA programs:
MRP strongly recommends discussing the interoperability of existing and emerging RA programs in the future. The CPUC’s Slice of Day (SOD) RA program is expected to start in 2025, and the SOD PRM may be different than the PRM that is used for the current RA program. This difference by itself may cause the CAISO to assume RA requirements have been met but which may not yield in a portfolio that achieves the target reliability standard. To that extent, the CAISO should start a discussion to understand how to integrate this explicit change into its program to avoid artificially concluding that LSE RA showings are sufficient. This issue should be taken up on a separate and expedited track.
9.
Provide your organization’s feedback on the Track 5 table of stakeholder suggestions in the Updated Discussion Paper & Draft Recommendation Plan (pgs. 17-18). Are there any that you believe should be incorporated into one of the existing proposed tracks for policy development or that deserves its own policy development process?
Yes, several topics should be included in Tracks 1 through 3. MRP has provided its views of such topics in its comments above.
10.
Please provide any additional comments not captured above:
MRP has no additional comments.
Northern California Power Agency
Submitted 05/16/2024, 03:45 pm
1.
Provide a summary of your organization’s overall comments on the April 29-30 RAMPD Hybrid Stakeholder Working Group and Updated Discussion Paper & Draft Recommendation Plan:
- NCPA continues to strongly support the current policy whereby LRAs retain the jurisdictional authority to establish and set the PRM and resource QC counting conventions for their respective LSEs. CAISO should continue to respect the jurisdictional rights of LRAs to establish standards for their LSEs, especially in the absence of any evidence that the current system has created material reliability concerns.
- NCPA is not yet convinced that a 0.1 LOLE study methodology is appropriate for establishing a default PRM. Over time, many variations of the study methodology have been discussed (producing variable results), and NCPA believes it is important to establish a study methodology that produces stable planning standard targets to support efficient commercial transactions.
- NCPA believes that less time and effort should be committed to discussing concerns with use of the CPM to cure RA deficiency at future workshops; historically, CPM has rarely been needed and used to cure RA deficiency, so NCPA believes this topic should be assigned a lower priority in future discussions.
- EDAM was designed to enable efficient economic displacement across the WECC. EDAM is not intended to be a guarantor of RA sufficiency for any BAA, beyond ensuring that BAAs participating in the EDAM at any point in time are not leaning on others.
- NCPA supports the addition of the following outage types:
- “Planned Medium Notice Opportunity RA Outages” whereby SCs could submit requests between T-30 and T-7 days for discretionary outages limited to five days or less in duration without a substitution obligation.
- “Advanced notice forced outages” where a generator knows in advance of the forced outage window that vital repairs must be made to ensure the unit stays operational for future critical periods. This type of outage would allow SCs to signal CAISO when a particular planned outage is necessary to preserve the unit.
- NCPA opposes the proposal to require LSEs to show 100% of RA Capacity one year in advance and to eliminate the monthly showings. The monthly updates provide an important opportunity to fine tune portfolios and address any gaps in the most economical way for ratepayers.
2.
Provide your organization’s feedback on the ISO’s April 29th presentation on backstop and the backstop panel discussion:
CAISO and merchant generators have stated that CPM is a critical tool that is used to support grid reliability. While NCPA agrees that CPM is an important tool that can be used by CAISO to support reliable operations of the grid, historically CPM has been rarely used to cure individual/collective deficiency. As such, NCPA believes the previous focus placed on this topic is overstated and is distracting stakeholder discussions focused on other more important issues. As such, due to the historical low utilization of the CPM to cure RA deficiencies, NCPA believes this topic should be assigned a lower priority in future workshop discussions.
3.
Provide your organization’s comments on the April 29th Projected EDAM RSE Shortfalls discussion:
A core principle of EDAM is that all BAAs come to the market fully resourced with sufficient capacity, transmission, and flexibility to serve their individual loads. The continued emphasis on EDAM as a reliability service is inappropriate because EDAM is an economic displacement program. Only a full RTO could offer the reliability elements that parties are trying to introduce into EDAM. Under the existing paradigm, if an EDAM participant does not have sufficient resources through usual market processes on a given day, then it should not participate in EDAM for that day. NCPA does not support using out of market mechanisms such as exceptional dispatch to cure EDAM RSE deficiencies at any cost. Such out of market activities could come at a great expense to ratepayers. Out of market actions could also result in leaning if CAISO EDs resources belonging to resource sufficient LSEs in order to offset deficient LSEs. Stakeholders should discuss when and how much of an RSE shortfall would necessitate CAISO action through Exceptional Dispatch.
4.
Provide your organization’s feedback on the proposed Track 1: Modeling and Default Standards as reflected in the Updated Discussion Paper & Draft Recommendation Plan:
Do you have suggested recommendations on the scope of the track, problem statement, process, interdependencies or general recommendations on the path forward?
Ultimately, LRAs are responsible for setting PRMs and counting rules, using methodologies that meet their needs. Although some stakeholders have asserted that a 0.1 LOLE standard was used to determine the original 15% CAISO default PRM, NCPA’s understanding is that 15% was a negotiated value that covers the 6% NERC/WECC operating reserve standard, 5% outages, and 4% demand variability. If UCAP were implemented, then NCPA would expect the outage reserve to decrease. When the Flexible Ramping Product is implemented in 2026, NCPA would expect the demand variability reserve to decrease.
NCPA encourages CAISO to perform and study medium and long-term RA assessments for informational and discussion purposes only. NCPA suggests, however, that CAISO utilize the portfolios submitted in the TPP to inform such studies, and resort to survey results only where such portfolios do not exist.
5.
Provide your organization’s feedback on the proposed Track 2: Outage and Substitution and RAAIM Reform as reflected in the Updated Discussion Paper & Draft Recommendation Plan:
Do you have suggested recommendations on the scope of the track, problem statement, process, interdependencies or general recommendations on the path forward?
NCPA was one of the entities that disputed PRR 1122. NCPA remains convinced that submitting a forced outage request that is substantially similar to a previously rejected planned outage request (a “planned-to-forced” outage) is not, without more, a violation of the CAISO Tariff or FERC’s market rules.[1] The fact that some planned-to-forced outages could be unlawful does not render all planned-to-forced outages unlawful. In fact, most planned-to-forced outages are necessary actions to perform necessary maintenance to preserve the availability of the unit. As soon as SCs become aware of a GO/GOP’s plans to take a unit offline, the SC is required to report the outage to CAISO even if it is prior to the forced outage period. But resources should not be penalized for reporting outages needed for vital plant maintenance just because they know about them before the forced outage time frame. However, when such a maintenance outage is requested in the planned outage time frame, and the generator cannot fulfil a subsequent substitution obligation, the CAISO will automatically reject the outage without consulting with the SC first. When that happens, the SC has no alternative other than to resubmit the same outage as a forced outage. The current system lacks a means for generators to communicate to CAISO that certain planned outages are “do or die,” thus forcing everyone into the dance of planned-to-forced outages.
NCPA shares Vistra’s concerns that planned to forced outage limitations imposed by CAISO do not adequately address scenarios involving urgent outages required to address vital maintenance needs that would help keep a plant online in future critical periods. NCPA supports the concept of an advanced notice forced outage, where a generator knows in advance of the forced outage window that vital repairs must be made to ensure the unit stays operational for future critical periods. It makes more sense to notify CAISO of such necessary outages in advance, rather than to implement planned-to-forced outages and risk FERC referrals for outages that are demonstrably necessary.
NCPA also suggests creating “Planned Medium Notice Opportunity RA Outages” whereby SCs could submit requests between T-30 and T-7 days for discretionary outages limited to five days or less in duration without a substitution obligation. CAISO would have discretion to approve or deny such outages based on system conditions similar to the Forced Short Notice Opportunity RA Outages. This would open up additional opportunities for generators to perform short-term maintenance when it is prudent to do so.
Any adjustment to the RAAIM price must be anchored to the cost of new entry of gas resource principles of the CPM soft offer cap. For example, instead of the RAAIM price being set at 60% of the CPM soft offer cap, perhaps the RAAIM price should be set at 80%, or 100%, etc. It should not be linked to current extreme prices or excessively punitive CPUC penalty prices. So long as capacity is in short supply and interconnection queues remain clogged, raising prices only penalizes LSEs without creating new capacity. Moreover, many LSEs are not CPUC-jurisdictional.
[1] NCPAStakeholderBrief-PRR1122-Jan272020.pdf (caiso.com)
6.
Please provide your organization’s feedback on the problem statement for Track 3: Backstop Mechanisms, and assessment on if it is ready to move forward to the policy development process. Do you agree that certain parts or all of the problem statement is ready to move forward for policy development? If not, please describe which elements of the problem statement is incomplete or inaccurate, and provide your suggested edits and additional information, changes and/or analysis required to move forward.
Problem statement details: (1) The ISO lacks visibility into the contract and availability status of resources not shown as RA, preventing the ISO from efficiently and reliably running its current CPM processes; (2) Stakeholder feedback is that there is a lack visibility into the ISO’s CPM decision making processes; (3) In the current tight RA market, the ISO’s Capacity Procurement Mechanism may not be producing all of its intended results particularly given the frequent lack of bids into its Competitive Solicitation Processes; (4) As the reliability needs evolve (e.g. to address changing needs for battery storage) the ISO’s CPM process may need to evolve to obtain specific attributes necessary for reliability.
Please refer to item 2 comments.
7.
Please provide your organization’s feedback on the problem statement for Track 4: Day Ahead Sufficiency in EDAM for the ISO BAA and assessment on if it is ready to move forward to the policy development process. Do you agree that the problem statement is ready to move forward for policy development? If not, please describe why the problem statement is incomplete or inaccurate, and provide your suggested edits and additional information and analysis required to move forward:
Problem statement details: While CAISO proposes to utilize its existing exceptional dispatch authority to resolve reliability concerns highlighted by potential capacity shortages identified by the RSE, stakeholders have expressed concern that: (1) The option to exceptionally dispatch resources might not be available during critical periods; (2) The cost allocation should be reexamined to align better with cost causation, if feasible.
Please see comments for item 3.
8.
Provide your organization’s comments on remaining topics for Future Working Groups, including flex RA, energy sufficiency, deliverability, and interoperability with existing and emerging RA programs:
NCPA looks forward to continuing to discuss remaining topics for future Working Groups.
9.
Provide your organization’s feedback on the Track 5 table of stakeholder suggestions in the Updated Discussion Paper & Draft Recommendation Plan (pgs. 17-18). Are there any that you believe should be incorporated into one of the existing proposed tracks for policy development or that deserves its own policy development process?
No.
10.
Please provide any additional comments not captured above:
Pacific Gas & Electric
Submitted 05/17/2024, 03:22 pm
1.
Provide a summary of your organization’s overall comments on the April 29-30 RAMPD Hybrid Stakeholder Working Group and Updated Discussion Paper & Draft Recommendation Plan:
PG&E’s comments can be summarized as follows:
2.
Provide your organization’s feedback on the ISO’s April 29th presentation on backstop and the backstop panel discussion:
PG&E seeks clarification on the apparent scarcity of bids in CAISO’s Competitive Solicitation Processes and wants to understand the reasons behind the lack of non-RA visibility, particularly in months when offers were made through the CSP but did not result in a CPM designation.
PG&E appreciates CAISO’s presentation on backstop mechanics and requests clarity on the following:
-
The Capacity Procurement Mechanisms report (California ISO - Reports and bulletins (caiso.com)) indicates that CAISO issued CPM designation in September and in November 2023. For the remaining months of 2023, when offers were made through the CSP, should we infer that there was no need for CPM, or are there other reasons?
3.
Provide your organization’s comments on the April 29th Projected EDAM RSE Shortfalls discussion:
PG&E recommends examining the cost allocation associated with the potential use of Exceptional Dispatch (ED) to address EDAM RSE shortfalls within the Day-Ahead Sufficiency initiative. For consistency, PG&E suggests that solutions for addressing EDAM RSE shortfalls and cost allocation should be considered together within the Day-Ahead Sufficiency initiative.
4.
Provide your organization’s feedback on the proposed Track 1: Modeling and Default Standards as reflected in the Updated Discussion Paper & Draft Recommendation Plan:
Do you have suggested recommendations on the scope of the track, problem statement, process, interdependencies or general recommendations on the path forward?
PG&E opposes CAISO’s suggestion to advance Track 1 to policy phase without calculating a system PRM to assess reliability.
PG&E recommends calculating a system PRM for the entire CAISO BAA utilizing LRA requirements and constituent LSE loads for the 2022 and 2023 RA showings. This data is crucial for evaluating the effectiveness of these values in meeting load and system operating requirements. Additionally, CAISO should provide a detailed description of any underlying assumptions and reliability criteria supporting system PRM values different from the default value that operators would accept without initiating procurement actions. This data could also reveal any monthly or seasonal PRM variations for 2022 and 2023. CAISO should clarify the year for revising the default PRM and whether it will be calculated yearly or seasonally.
While PG&E supports CAISO’s goal of improving transparency through analysis in assessing the RA fleet without implying procurement actions, focusing on modeling RA resources in the year-ahead analysis could skew the estimate of the actual LOLE and exaggerate the likelihood of supply shortages.
5.
Provide your organization’s feedback on the proposed Track 2: Outage and Substitution and RAAIM Reform as reflected in the Updated Discussion Paper & Draft Recommendation Plan:
Do you have suggested recommendations on the scope of the track, problem statement, process, interdependencies or general recommendations on the path forward?
PG&E recommends revising the Track 2 problem statement and performing the needed analysis to identify the root cause of the observed high forced outage rate.
PG&E suggests the following change to the proposed problem statement:
The analysis would help determine if there are issues with forced outage definitions timing associated with forced outages, or planned forced migration related to substitution rules. Additionally, the analysis can be improved by quantifying forced outages in MW, categorizing them based on the nature of work, identifying outages as RAAIM exempt or penalized, and determining the MW capacity of forced outages originally designated as planned outages. PG&E suggests CAISO update the analysis in March comments.
6.
Please provide your organization’s feedback on the problem statement for Track 3: Backstop Mechanisms, and assessment on if it is ready to move forward to the policy development process. Do you agree that certain parts or all of the problem statement is ready to move forward for policy development? If not, please describe which elements of the problem statement is incomplete or inaccurate, and provide your suggested edits and additional information, changes and/or analysis required to move forward.
Problem statement details: (1) The ISO lacks visibility into the contract and availability status of resources not shown as RA, preventing the ISO from efficiently and reliably running its current CPM processes; (2) Stakeholder feedback is that there is a lack visibility into the ISO’s CPM decision making processes; (3) In the current tight RA market, the ISO’s Capacity Procurement Mechanism may not be producing all of its intended results particularly given the frequent lack of bids into its Competitive Solicitation Processes; (4) As the reliability needs evolve (e.g. to address changing needs for battery storage) the ISO’s CPM process may need to evolve to obtain specific attributes necessary for reliability.
See response to question 2.
7.
Please provide your organization’s feedback on the problem statement for Track 4: Day Ahead Sufficiency in EDAM for the ISO BAA and assessment on if it is ready to move forward to the policy development process. Do you agree that the problem statement is ready to move forward for policy development? If not, please describe why the problem statement is incomplete or inaccurate, and provide your suggested edits and additional information and analysis required to move forward:
Problem statement details: While CAISO proposes to utilize its existing exceptional dispatch authority to resolve reliability concerns highlighted by potential capacity shortages identified by the RSE, stakeholders have expressed concern that: (1) The option to exceptionally dispatch resources might not be available during critical periods; (2) The cost allocation should be reexamined to align better with cost causation, if feasible.
PG&E recommends examining the cost allocation of potential use of Exceptional Dispatch (ED) to address EDAM RSE shortfalls in the Day-Ahead Sufficiency initiative. For consistency, PG&E suggests that solutions for addressing EDAM RSE shortfalls and cost allocation should be addressed together in the Day-Ahead Sufficiency initiative.
8.
Provide your organization’s comments on remaining topics for Future Working Groups, including flex RA, energy sufficiency, deliverability, and interoperability with existing and emerging RA programs:
PG&E supports further exploration of the topics listed in Track 5 of the discussion paper through a dedicated working group.
Regarding flex RA, PG&E suggests that CAISO conducts a comprehensive assessment of the effectiveness of the three flex categories to understand the necessity and the impact of each category. This analysis is crucial given the use of battery storage across all three Flex RA categories.
Concerning deliverability, PG&E recommends further discussion on the CAISO’s enhanced deliverability methodology enhancements. This dialogue should aim to assess the influence of the enhanced methodology on the deliverability of existing resources, potential effects on the number of congested hours, and a possible quantification of these impacts.
9.
Provide your organization’s feedback on the Track 5 table of stakeholder suggestions in the Updated Discussion Paper & Draft Recommendation Plan (pgs. 17-18). Are there any that you believe should be incorporated into one of the existing proposed tracks for policy development or that deserves its own policy development process?
PG&E welcomes stakeholder suggestions and provides feedback in the table below (added a column with PG&E's comments) specifying in which track the proposals should be further discussed.
|
Theme
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Stakeholder suggestion
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PG&E’s comments
|
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Showings
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Six Cities suggested changing the monthly RA showing process to allow different RA values for internal RA resources for different days of the month, while still being subject to the sum of the monthly requirement
|
This might result in complex RA compliance filing for LSEs and MOO compliance for SCs.
|
|
Showings
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MRP suggested the ISO move to 100% annual showings. This was opposed by Six Cities, and Cal Advocates.
|
There are certain prerequisites, such as addressing outage substitution rules, and there might still be a need for monthly showings adjustments. However, we support exploring and further discussing the topic and its implications.
|
|
Requirements/ Showings
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Six Cities suggested recognizing load reducing capacity for in-front-of-the-meter battery resources in an LSE’s forecasted monthly peak load. This would be based on the 4-hour continuous energy output of the battery.
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To clarify, are these resources located in front of the meter both deliverable and participating in the market? This aspect should be further discussed depending on how it is modeled.
|
|
Requirements/ Showings
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Six Cities suggested allowing locally developed projects to meet some percent of RA needs without deliverability. These projects would still need to meet MOO and telemetry requirements and could be capped (e.g., 15-20% of RA need, not to exceed load in a given area).
|
See above.
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|
Modeling
|
CEBA and MRP suggested conducting backcast analysis to see if the ISO has met a 0.1 LOLE
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Please clarify how to conduct such analysis and the assumptions that would be made in the analysis.
|
|
RA Requirements, UCAP
|
MRP suggested Including estimated planned outages into RA requirements and allow CAISO to approve/deny outages based on planned outage buffer.
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Should be discussed in Track 2 (entire framework with counting rules and MOO).
|
|
Resource Accreditation
|
MRP suggested the ISO should consider unit testing to set QC values
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We understand that this is done through Pmax annual testing. Does MRP suggest considering a seasonal approach instead?
|
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Outage and Availability
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BAMx suggested two paths forward for batteries: - If technology is not a challenge, either 1.) Develop a RTM 5 min interval look-ahead window beyond the current 65 min or 2.) Run an hourly market multiple times within the delivery day, instead of running a single DAM. - If technology is a challenge, revisit MOO for Flex RA BESS to allow them to economically bid or self-schedule consistent with their DAM awards, subject to availability of co-located gen.
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Point 2, running an hourly market multiple times, requires discussion beyond the RA WG. It should be discussed in Track 5 WG, particularly in connection with flex RA within the context of DAME implementation.
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Outage and Substitution
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MRP suggested that SCs be able to submit outages and substitutions well in advance and allow for up until T-8 to deny outage if not enough substitution is provided.
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These topics should be addressed in Track 2, focusing on outages.
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Outage and Substitution
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Both MRP and the City of Anaheim suggested pools for substitute capacity. The City of Anaheim suggested a voluntary pool of “conditional RA” availability. MRP suggested building a centralized market just for substitution capacity on a daily basis
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These topics should be addressed in Track 2, focusing on outages.
To assess this potential solution, CAISO is advised to examine the RASC data.
Additionally, there should be discussions regarding which entity should oversee the operation of the “pool”.
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Backstop
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MRP and Terra Gen suggested the ISO backstop if the ISO has not met a 0.1 LOLE.
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This topic should be discussed in Track 3, under the CPM/backstop.
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Planning
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WAPA suggested the ISO explore a capacity market.
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The timeframe for how far forward WAPA suggested remains unclear.
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Hybrid resources
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Terra-Gen suggests the ISO address hybrid resource interaction with the RA MOO, AS, Flex RA, RAAIM, and the use of outage cards and dynamic limits for signaling unavailability to the ISO and operators
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We support the consistent clarification of rules for hybrid resources.
|
10.
Please provide any additional comments not captured above:
PG&E recommends that CAISO provides stakeholders with an indicative timeline of the next steps.
Six Cities
Submitted 05/17/2024, 04:16 pm
Submitted on behalf of
Cities of Anaheim, Azusa, Banning, Colton, Pasadena, and Riverside, California
1.
Provide a summary of your organization’s overall comments on the April 29-30 RAMPD Hybrid Stakeholder Working Group and Updated Discussion Paper & Draft Recommendation Plan:
In general, the Six Cities support the overall approaches to Tracks 1 and 2 as outlined by the CAISO in the Discussion Paper, subject to certain comments and clarifications as discussed below. The Six Cities do not oppose the topics slated for Track 3, although do not believe that these represent high priorities compared to the Track 1 and 2 topics. With respect to Track 4, the Six Cities believe additional clarification is needed regarding the scope of issues to be considered within this initiative. With respect to the Six Cities’ proposals addressed in Track 5, two of those proposals (including the proposal to reflect daily variances in shown resource adequacy (“RA”) values for resources and the concept of an RA pool) belong in Track 2, while two of the proposals (related to revision of the deliverability requirements for some resources) would likely benefit from additional working groups.
2.
Provide your organization’s feedback on the ISO’s April 29th presentation on backstop and the backstop panel discussion:
The Six Cities have the following comments and observations regarding the stakeholder discussion on April 29th regarding the CAISO’s backstop authority and the Capacity Procurement Mechanism (“CPM”):
- Contrary to some stakeholders, the Six Cities do not support adoption of “mandatory” backstopping under the CPM process, nor do they support requirements to backstop against a CAISO-determined minimum Planning Reserve Margin (“PRM”) based upon a 0.1 loss of load expectation (“LOLE”) assessment. The CAISO should continue to exercise discretion to engage in backstop procurement only when necessary. It is not helpful given tight capacity market conditions for the CAISO to engage in backstop procurement of resources that are not required to address an identifiable reliability issue.
- The Six Cities do support requests for enhanced transparency in how the CAISO decides to exercise its CPM authority.
- While further discussion is needed, there appears to be merit in the California Energy Storage Alliance (“CESA”) proposal to enable the CAISO to consider the availability of resources that come online between T-30 and T-1 in considering the availability of resources and the need for backstop procurement.
- The Six Cities agree with comments by the Alliance for Retail Energy Markets during the panel discussion recommending that this initiative include discussion of the CAISO’s crediting rules, including what resources or programs can be reflected as credits and the implications of including credits on RA submittals.
3.
Provide your organization’s comments on the April 29th Projected EDAM RSE Shortfalls discussion:
Please refer to the Six Cities’ comments on Track 4, addressed in response to question no. 7. At this time, the Six Cities are concerned that there is overlap and a lack of clear differentiation between the Resource Sufficiency Evaluation (“RSE”)-related topics assigned to the Day Ahead Sufficiency initiative and this initiative. The Six Cities support a further working group discussion focused on the approach to RSE-related topics in each initiative.
4.
Provide your organization’s feedback on the proposed Track 1: Modeling and Default Standards as reflected in the Updated Discussion Paper & Draft Recommendation Plan:
Do you have suggested recommendations on the scope of the track, problem statement, process, interdependencies or general recommendations on the path forward?
The Six Cities join other stakeholders in requesting that the CAISO perform a “backcast” or historic analysis of the PRM level that was achieved through the RA fleet in 2022 and 2023. The Six Cities are concerned that the modeling effort proposed by the CAISO, based on load-serving entity (“LSE”) survey responses, will be of limited value in the mid-term and long-term time periods, due to the need for estimation of resources not yet under contract or in service. Instead, assessing reliability based on the resources that were actually made available to the CAISO in recent years may provide a more accurate snapshot of the CAISO’s level of reliability.
While the Six Cities do not oppose consideration of updates to the default PRM in this initiative, the Six Cities are opposed to establishing a “mandatory minimum” PRM level. The CAISO’s RA program has always acknowledged the discretion of local regulatory authorities (“LRAs”) to set the PRM for the LSEs that they regulate, and, while there continues to be much unsupported speculation in this initiative about LSEs that do not use PRM levels that match the policy decisions of the California Public Utilities Commission (“CPUC”), there is no evidence that LSEs using PRMs of less than 15%, as the CAISO has stated several do, amount to a material amount of load in the CAISO such that LRA authority over this issue needs to be curtailed or revoked.
The dividing line between the topic of UCAP and the other topics the CAISO proposes to consider as part of Track 1 is unclear. It appears that the intent is for the CAISO to consider UCAP development in “collaboration” with the CPUC, which is likewise considering this topic. While the Six Cities support consideration and discussion of UCAP methodologies for determination of RA resource counting, the Six Cities also reiterate that changes to default counting rules also need to be developed in coordination with other LRAs. Thus, UCAP-related discussions regarding potential implementation within the CAISO should not take place solely within a CPUC process, but should occur as a part of this initiative. If this represents the CAISO’s intent, then the Six Cities agree with including UCAP in Track 1.
5.
Provide your organization’s feedback on the proposed Track 2: Outage and Substitution and RAAIM Reform as reflected in the Updated Discussion Paper & Draft Recommendation Plan:
Do you have suggested recommendations on the scope of the track, problem statement, process, interdependencies or general recommendations on the path forward?
The Six Cities generally concur in the scoping of Track 2 and request that two of the Six Cities’ proposals that are currently assigned to Track 5 of this initiative be moved into consideration with Track 2 topics, which is where they fit best within the framework of problem statements that the CAISO has developed. These include:
- Daily Distribution of Capacity Among Internal RA Resources: The Six Cities recommend modification of the monthly RA showing process to allow different RA values for internal RA resources for different days of the month, subject to the sum of the RA values for each day satisfying the monthly RA requirement for the LSE submitting the showing. As an example, for a resource eligible to provide RA capacity of 100 MW, the Six Cities propose that an LSE be permitted to include variable amounts of capacity from the resource (not to exceed 100 MW) for different days in a monthly showing, provided that the sum of the capacity values for all resources shown by the LSE for a given day equals or exceeds the LSE’s monthly requirement. It is the Six Cities’ understanding that such variable showings currently are permitted for import resources, and the Cities request that the CAISO extend the ability to submit different RA values for a resource for days within a month to include not only import RA resources but also RA resources located within the CAISO balancing authority area (“BAA”).
- Establishment of Listings for “Conditional RA” Availability, a/k/a “RA Pooling”: The Six Cities also suggest consideration of RA design revisions to expand availability of resources that are under contract to provide RA but are not included in the contracting LSE’s month-ahead RA showing for a particular month. A possible approach could be development of an additional tab in the monthly RA supply plan worksheet on which LSEs could identify, on a voluntary basis, RA supply capacity under contract but not needed to meet the submitting LSE’s RA requirements for a particular month. The voluntary listing of such “Conditional RA” could identify availability on a daily basis. It also could be subject to rescission by the listing LSE within the month if that LSE needed the capacity to substitute for another resource included in the monthly showing, so long as no other LSE had already procured the “Conditional RA” for the same time period.
The Six Cities propose that compensation for Conditional RA made available by a selling LSE be based on the CPM soft offer cap, for which the purchasing LSE would be entitled only to RA attributes of any Conditional RA transferred. The selling LSE, or supplier under contract, would take on the must-offer obligation (“MOO”) for any transferred Conditional RA capacity, would retain rights to set bid prices for the capacity within the parameters of CAISO bidding rules, and would receive and retain payments for energy dispatched from the Conditional RA capacity. By setting the compensation for Conditional RA at the CPM soft offer cap, the selling LSE would receive additional revenue for capacity that remained in excess of its requirements throughout the month and also would offset potential obligations to pay the CAISO for CPM capacity if an unanticipated need for transferred capacity arose after a transfer.
In addition the Six Cities suggest that LSEs be permitted to include RA contracted import supply without a Maximum Import Capability (“MIC”) allocation under the additional RA supply tab. If there is unused import capability available at the appropriate branch group, then CAISO can treat such an import RA contract similarly to Conditional RA described above. The offering LSE would take on the MOO of any Conditional RA transferred, would retain rights to bid within CAISO bidding rules, and receive payments for energy dispatched. Compensation based on the CPM soft offer cap can still be used, and if necessary, a portion of the payment could be allocated to the LSE holding the unused MIC allocation at the relevant branch group.
6.
Please provide your organization’s feedback on the problem statement for Track 3: Backstop Mechanisms, and assessment on if it is ready to move forward to the policy development process. Do you agree that certain parts or all of the problem statement is ready to move forward for policy development? If not, please describe which elements of the problem statement is incomplete or inaccurate, and provide your suggested edits and additional information, changes and/or analysis required to move forward.
Problem statement details: (1) The ISO lacks visibility into the contract and availability status of resources not shown as RA, preventing the ISO from efficiently and reliably running its current CPM processes; (2) Stakeholder feedback is that there is a lack visibility into the ISO’s CPM decision making processes; (3) In the current tight RA market, the ISO’s Capacity Procurement Mechanism may not be producing all of its intended results particularly given the frequent lack of bids into its Competitive Solicitation Processes; (4) As the reliability needs evolve (e.g. to address changing needs for battery storage) the ISO’s CPM process may need to evolve to obtain specific attributes necessary for reliability.
The Six Cities do not oppose consideration of backstopping mechanisms in Track 3 of this initiative. From a timing perspective, it would be preferable to dedicate resources to the Tracks 1 and 2 phases and getting these tracks well underway before starting on this track. In general, the Six Cities do not oppose providing greater visibility into the CAISO’s CPM procurement determinations, but the Six Cities do oppose changing the CAISO’s current process to make CPM designations mandatory in all instances where an LSE does not procure RA capacity to the level set by its LRA. Instead, the CAISO should continue to exercise discretion in the use of its CPM authority and only procure backstop resources if there is a finding of an actual reliability need. Doing otherwise in the current procurement environment will be counterproductive and will exacerbate scarcity in RA supply. The Six Cities certainly do not support backstopping to 0.1 LOLE requirement as suggested by Middle River Power. (See Discussion Paper at 14.)
One area that may benefit from further discussion is the CAISO’s assertion that its lack of visibility into non-RA resources impairs the effectiveness of the CPM. Is it the CAISO’s view that not knowing which non-RA resources may be dedicated to other BAs undermines its ability to understand why these resources are not participating in the CPM solicitation processes?
Finally, the Six Cities do not necessarily oppose consideration of changes to the CPM soft offer cap, such as by changing the type of reference resource that is used to set the compensation level, but do not believe that the need for changes to the cap is well established and do not consider potentially changing the cap a high priority. Since resources always have the option of seeking FERC authorization if their going forward fixed costs are higher than the cap, it is not clear what benefits an increase in the cap would produce.
7.
Please provide your organization’s feedback on the problem statement for Track 4: Day Ahead Sufficiency in EDAM for the ISO BAA and assessment on if it is ready to move forward to the policy development process. Do you agree that the problem statement is ready to move forward for policy development? If not, please describe why the problem statement is incomplete or inaccurate, and provide your suggested edits and additional information and analysis required to move forward:
Problem statement details: While CAISO proposes to utilize its existing exceptional dispatch authority to resolve reliability concerns highlighted by potential capacity shortages identified by the RSE, stakeholders have expressed concern that: (1) The option to exceptionally dispatch resources might not be available during critical periods; (2) The cost allocation should be reexamined to align better with cost causation, if feasible.
The Six Cities note that the Problem Statement overlaps with topics that are under discussion in the Day Ahead Sufficiency initiative. The Straw Proposal in the Day Ahead Sufficiency initiative explains that this initiative (i.e., the RA Modeling and Program Design initiative) will consider two issues, including (1) allocation of failure surcharges and revenues associated with failures of the Resource Sufficiency Evaluation; and (2) development of a new product and process to cure any shortfalls in meeting the Resource Sufficiency Evaluation by the CAISO. (See Straw Proposal – Day Ahead Sufficiency initiative, at 3 n.1.) These issues are not the same as reflected in the problem statement for Track 4. It may be beneficial to hold a working group discussion addressing how best to reconcile the issues included in the Day Ahead Sufficiency initiative versus this initiative so that the CAISO and stakeholders can use their time efficiently in each stakeholder process.
8.
Provide your organization’s comments on remaining topics for Future Working Groups, including flex RA, energy sufficiency, deliverability, and interoperability with existing and emerging RA programs:
The Six Cities support a working group meeting addressing issues related to RA deliverability and MIC requirements. While the Six Cities acknowledge the CAISO’s recent work on deliverability issues in the Generation Deliverability Methodology Review initiative, that initiative included consideration of changes to the CAISO’s deliverability methodology. It did not encompass consideration of revising or changing the qualification requirements for RA resources, which is more appropriately considered in the scope of this initiative. The Six Cities have proposed consideration of two proposals, which are currently included in the Discussion Paper’s overview of Track 5, that relate to deliverability requirements:
- Recognition of Load Reducing Capability of In-Front-of-Meter Local Battery Resources: Revise CAISO RA showings to permit in-front-of-the-meter local battery resources to offset monthly peak load, based on the four-hour continuous energy output of the batteries. This may entail consideration of the CAISO’s rules for RA credits on annual and monthly showings.
- Recognition of Locally Developed Projects to Satisfy RA Requirements: As an alternative or potentially in addition to the load forecast adjustment for local, in-front-of-the-meter battery storage facilities described above, the Six Cities suggest exploration of a concept that would allow an LSE to meet some percent of its RA needs (for example, 15% to 20%, but not to exceed minimum load in a defined local area) using locally developed projects within its own service territory without requiring such projects to have received full or partial capacity deliverability status.
Under both proposals 1 and 2 above, with appropriate telemetry, such resources could be visible to CAISO system operators, and specialized must-offer bidding rules could be considered if necessary to ensure that such applicable resources would be operating when needed to support system reliability. Conceptually, these resources would reduce load on the system, like demand response or behind-the-meter installations, but would be more visible and responsive to system needs.
Related to the topic of deliverability, a third possibility could include considering an expansion of the CAISO’s rules for Distributed Generation (“DG”) Deliverability. Currently, the CAISO allocates DG Deliverability status to resources that apply and where DG Deliverability is available, but will not expand or consider modifications to the grid to accommodate more DG Deliverability. This can impair the ability of the LSEs such as the Cities to quickly and efficiently deploy new resources within their service territories that are eligible to provide RA services.
Finally, the Six Cities are strongly supportive of reconsidering the CAISO’s existing rules for determining MIC, as outlined in the proposal for a new stakeholder initiative that the Six Cities supported along with the California Community Choice Association and Shell Energy North America. The requirement that all import RA resources be accompanied by a MIC allocation can prevent CAISO entities from entering into new contracts with external parties for import RA resources. In addition to considering approaches to ensuring that MIC is made available at interties where there is high demand, measures to mitigate underutilization of allocated MIC, and longer term MIC allocations, the Six Cities have long supported a change in the process of determining MIC to a methodology that is forward looking, rather than historical. A workshop in this initiative could provide an opportunity to discuss alternatives to the current MIC process to enable greater access to import RA resources together with related rules around RA deliverability.
At this time, the Six Cities would also support a working group focused on issues related to the flexible RA program, including how the flexible RA program may need to evolve in light of other market design changes, such as the implementation of new products in the EDAM.
9.
Provide your organization’s feedback on the Track 5 table of stakeholder suggestions in the Updated Discussion Paper & Draft Recommendation Plan (pgs. 17-18). Are there any that you believe should be incorporated into one of the existing proposed tracks for policy development or that deserves its own policy development process?
The Six Cities’ proposal to change the monthly RA showing process to permit different RA values for internal RA resources for different days of the month, as is allowed now for import RA, belongs with Track 2 issues as discussed above. This topic addresses not only showing requirements, but also fits with the Track 2 issues of outage substitution and RAAIM reform, because it would address the CAISO’s stated concern about disincentives to show all RA resources to the CAISO. The CAISO’s current prohibition on varying monthly RA values for resources prevents LSEs from including resources on RA plans when they are only available for a partial month. This is the first of the Six Cities’ three proposals on page 17 of the Discussion Paper.
The Six Cities are supportive of working group meetings pertaining to deliverability-related topics, with the objective of considering the development of problem statements that could then be transitioned to policy development. This approach addresses the second and third Track 5 proposals by the Six Cities on page 17 of the Discussion Paper.
The City of Anaheim’s proposal for a pool of substitute resources, should be explored with related outage and substitution topics under Track 2. This proposal is described on page 18 of the Discussion Paper.
10.
Please provide any additional comments not captured above:
The Six Cities provide the following additional comments:
- There is merit in the suggestion by CalCCA during the working group process that review of the counting rules for hydroelectric resources is warranted to ensure that these resources and the RA that they can provide are accurately valued.
- The Six Cities continue to oppose annual RA showings of 100% of procurement by LSEs.
Vistra Corp.
Submitted 05/17/2024, 03:51 pm
1.
Provide a summary of your organization’s overall comments on the April 29-30 RAMPD Hybrid Stakeholder Working Group and Updated Discussion Paper & Draft Recommendation Plan:
See Vistra’s comments below.
2.
Provide your organization’s feedback on the ISO’s April 29th presentation on backstop and the backstop panel discussion:
Vistra incorporates by reference our previous comments[1] requesting the following changes.
Changes to the Derivation and/or Structure of the Soft Offer Cap:
- Establish more granular soft offer cap by for example dividing the annual $/kw-year going forward costs by 60 days instead of by 12 months to recognize the fact the monthly or intra-month Competitive Solicitation Processes (CSP) would need to cover those annual costs across an up to 60 day period instead of 12 months.
- Address illiquidity of the CSP in instances when there is a credible risk of potential shortages, both system or local, and in light of competition with California RA introduced by the Western RA program competing by considering replacing the soft offer cap’s “20% adder” with a bilateral market opportunity costs to allow attracting CSP offers from resources that can offer into both California RA and Western RA programs, for example imports.
Changes to the FERC formula rate for cost recovery filing for costs above the soft offer cap: Allow for the bilateral market opportunity cost of receiving CPM versus being contracted by the Resource Adequacy (RA) market to be sought in a FERC cost recovery filing by allowing a seller to support bilateral opportunity cost above the soft offer cap.
[1] Vistra Comments on CPM Enhancements workshop, June 2, 2023, https://stakeholdercenter.caiso.com/Comments/AllComments/4390f01d-9c4e-4c63-9daa-d673ec50df45#org-90c3fd04-f0f8-47aa-bbf6-9df642df47a6. Vistra Comments on CPM Enhancements Straw Proposal, July 25, 2023, https://stakeholdercenter.caiso.com/Comments/AllComments/0dfd3c97-7450-46af-8537-706c332e8695#org-4400f419-d515-47c3-9586-ff6244102e7d.
3.
Provide your organization’s comments on the April 29th Projected EDAM RSE Shortfalls discussion:
Resource Sufficiency Evaluation is to evaluate whether there are sufficient market-participating resources bid-in to integrated forward market to mitigate economic leaning within the integrated-forward market solution. It would be extremely inappropriate to include Strategic Reliability Reserves or other resources (e.g., Reliability Demand Response Resources) that have not submitted a bid into the IFM in the day ahead RSE evaluation, and Vistra cannot support that direction as it would undermine RSE and allow leaning on other EDAM areas without having to pay the financial surcharge to do so. If the CAISO does not have sufficient bid-in supply to meet its day-ahead RSE requirements, then it should pay the financial surcharge for the benefit of relying on other EDAM areas to solve its internal areas’ needs. Vistra is skeptical CAISO will have frequent issues passing the day-ahead RSE given stakeholders expectations that the California supply will surpass CAISO BAA’s requirements where California load interests seem mainly focused on need to limit net exports rather than concerns with day-ahead RSE failures. Additionally, if the CAISO identifies it has insufficient bid-in supply to meet its day-ahead RSE prior to the binding RSE the appropriate action would be for the CAISO to decide to offer a CPM designation to a RA eligible resource if the CAISO expects the issue will persist, or otherwise accept the RSE failure surcharge for the benefit of using EDAM to meet its areas’ needs in the IFM.
4.
Provide your organization’s feedback on the proposed Track 1: Modeling and Default Standards as reflected in the Updated Discussion Paper & Draft Recommendation Plan:
Do you have suggested recommendations on the scope of the track, problem statement, process, interdependencies or general recommendations on the path forward?
It is critical the market knows across the BAA what level of reliability risks CAISO BAA is forecasting assuming all deliverable capacity that could be contracted or could be assigned a Capacity Procurement Mechanism designation and a reasonable import assumption. CAISO should promote this new annual probabilistic modeling to a stakeholder effort to develop vetted Inputs & Assumptions. Ideally, CAISO should strive to publish its first assessment prior to the 2025 RA year.
Vistra respectfully asks the CAISO to include in modeling requests from stakeholders a request for forward-looking probabilistic assessments for planning year 1, planning year 5, and when a long-term study is performed planning year 10 cases.
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Timeframe
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Question
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Sufficiency Analysis of?
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What are we looking for?
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Planning Year 1
(Year Ahead)
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What is the expected reliability level of the deliverable fleet across the entire BAA plus reasonable import assumption?
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Deliverable capacity internal to the CAISO BAA provided by the TPP portfolios, and should be the same resources included in the Local Capacity Technical study plus the system resources and reasonable import assumption. Planning Year 10 should provide sensitivity using the high gas retirement sensitivity case.
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What level of reliability would be expected based on the forecasted demand needs compared to the forecasted generation availability across 8,760? How many days in 10 years is there a risk of loss of load event, and what is the magnitude of that Expected Unserved Energy?
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Planning Year 5
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Planning Year 10
(long-term study)
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Vistra encourages the CAISO to separate from Track 1 the default qualifying capacity rules and default planning reserve margins. There are few resources in the CAISO BAA fleet that rely on the default qualifying capacity rules, and there are few Local Regulatory Agencies that rely on the default planning reserve margins and as such this item would not be harmed from waiting for the modeling results before proposing changes to default rules. Modeling I&A and results will be informative to any proposed changes to default qualifying capacity or PRM values.
5.
Provide your organization’s feedback on the proposed Track 2: Outage and Substitution and RAAIM Reform as reflected in the Updated Discussion Paper & Draft Recommendation Plan:
Do you have suggested recommendations on the scope of the track, problem statement, process, interdependencies or general recommendations on the path forward?
Vistra supports the entirety of proposed outage and substitution problem statements. Vistra was previously informed by CAISO that inflexible outage substitution rules are due to the LRA’s PRM not being robust enough to cover unanticipated outages, and as such the LRA PRM should be reformed to include requirements to secure substitution capacity for outages that cannot be planned of the monthly showing where substitution is unavailable. CPUC modeling does not reflect changes to thermal availability due to planned to forced outage conversions because these outages are not reported as forced outages to Generator Availability Data System (GADS). Vistra requests the CAISO collaborate with CPUC and other LRA to ensure the data is provided to the LRA on at least an aggregate basis for a pool-wide assumption that can be used by LRA’s in their reliability studies to identify a reserve margin requirement that will allow CAISO to adopt more flexible planned outage substitution procedures for advanced notice forced outages occurring between T-45 to T-8.
On RAAIM reform, Vistra believes the best incentives for availability are improving the price formation within the CAISO’s day-ahead or real-time markets. Suppliers are incentivized to offer into the CAISO’s market if there are strong market signals from scarcity pricing that will penalize suppliers in a meaningful way if they trip or have an outage in real-time and are forced to buy back at strong scarcity price signals. At this time, we deprioritize RAAIM reforms over scarcity improvements because we believe scarcity improvements better achieve the desired outcomes.
6.
Please provide your organization’s feedback on the problem statement for Track 3: Backstop Mechanisms, and assessment on if it is ready to move forward to the policy development process. Do you agree that certain parts or all of the problem statement is ready to move forward for policy development? If not, please describe which elements of the problem statement is incomplete or inaccurate, and provide your suggested edits and additional information, changes and/or analysis required to move forward.
Problem statement details: (1) The ISO lacks visibility into the contract and availability status of resources not shown as RA, preventing the ISO from efficiently and reliably running its current CPM processes; (2) Stakeholder feedback is that there is a lack visibility into the ISO’s CPM decision making processes; (3) In the current tight RA market, the ISO’s Capacity Procurement Mechanism may not be producing all of its intended results particularly given the frequent lack of bids into its Competitive Solicitation Processes; (4) As the reliability needs evolve (e.g. to address changing needs for battery storage) the ISO’s CPM process may need to evolve to obtain specific attributes necessary for reliability.
We respectfully request CAISO advance the CPM process improvements on the soft offer cap derivation or FERC cost-recovery formula to a policy effort. See above Vistra’s response to #2 for desired scope for moving CPM improvements into a policy effort.
On problem statement #1, the CAISO has visibility into the available internal resources with full capacity deliverability as well as their Net Qualifying Capacity. The CAISO may not have visibility into whether they are under contract in all months or not, but that does not change the status of reliability. If the CAISO receives insufficient RA offers but has the deliverable resource available that is the purpose of the CPM backstop process. If the resource was not included in the annual or monthly plan but was still paid by the LSE for its RA contract in that month, CPM process improvements can address it. The CAISO could adopt a rule so that the SC when notified of its CPM designation can accept the CPM designation but must waive payment if it is already compensated.
On problem statement #2, Vistra agrees there is a lack of transparency in the decision making, but we find this to be a lower level issue than the structural CPM issues that need to be refined and believe this can be addressed without a stakeholder process through providing additional transparency in reports or published data.
On problem statement #4, there is insufficient clarity and CAISO should continue discussion in the working group. This discussion should not delay promoting the structural issues to a policy phase for proposing solutions to the offer cap and FERC formula rate (#3) and rules against double payment of CPM for a month where the seller has already been compensated for that capacity (#1). It is likely the CAISO will not be able to forecast specific attributes until closer to the operating day where ED CPM will remain the appropriate tool. Under Exceptional Dispatch CPM rules, we believe CAISO has authority to issue an incremental exceptional dispatch to eligible RA capacity for charging storage.
7.
Please provide your organization’s feedback on the problem statement for Track 4: Day Ahead Sufficiency in EDAM for the ISO BAA and assessment on if it is ready to move forward to the policy development process. Do you agree that the problem statement is ready to move forward for policy development? If not, please describe why the problem statement is incomplete or inaccurate, and provide your suggested edits and additional information and analysis required to move forward:
Problem statement details: While CAISO proposes to utilize its existing exceptional dispatch authority to resolve reliability concerns highlighted by potential capacity shortages identified by the RSE, stakeholders have expressed concern that: (1) The option to exceptionally dispatch resources might not be available during critical periods; (2) The cost allocation should be reexamined to align better with cost causation, if feasible.
See above Vistra’s response to #3. Additionally on #1 problem statement, the CAISO would have this ability if there are enough deliverable capacity plus reasonable import assumption to meet its needs. This is why it is important to publish a forward-looking annual reliability assessment. If this study indicates an unreasonable level of reliability, then the concern with not being able to issue CPM will be ripe for a stakeholder discussion. Until the CAISO provides a forward-looking annual reliability study the concern in #1 is speculative.
8.
Provide your organization’s comments on remaining topics for Future Working Groups, including flex RA, energy sufficiency, deliverability, and interoperability with existing and emerging RA programs:
On this list, the two that seem relevant for further discussion are deliverability and interactions with emerging RA programs (Western RA program).
On deliverability, CAISO will need to review its deliverability methodology. Vistra anticipates CAISO will initiate that process when needed.
On WRAP interoperability, CAISO cannot proposed changes to align WRAP with California RA programs. CAISO administers California RA program to ensure its markets do not undermine those programs. Similarly, CAISO rules should ensure day-ahead or real-time markets do not undermine the commitments arranged between WRAP participants that opt into EDAM and WEIM participation.
9.
Provide your organization’s feedback on the Track 5 table of stakeholder suggestions in the Updated Discussion Paper & Draft Recommendation Plan (pgs. 17-18). Are there any that you believe should be incorporated into one of the existing proposed tracks for policy development or that deserves its own policy development process?
In Energy Storage Enhancements and in the 2024 policy roadmap, Vistra requested CAISO refine outage management rules for storage, co-located, and hybrid resources that we submitted into the 2024 Policy Catalogue and Roadmap process. In the discussion paper, CAISO summarized Terragen’s request address hybrid resource interaction with the RA MOO, AS, Flex RA, RAAIM, and the use of outage cards and dynamic limits for signaling unavailability to the ISO and operators. Vistra believes this element is similar scope to the outage clarification for these new technologies that we have been seeking. Vistra requests the outage and availability rules for new technologies is picked up as soon as possible by CAISO either through advancing these two scopes into a new policy effort out of this working group or out of the 2024 policy roadmap effort.
10.
Please provide any additional comments not captured above:
None currently.
