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Please share any comments your organization has on the implementation details of the Extended Day-Ahead Market (EDAM), including but not limited to Congestion Revenue Rights (CRRs), Resource Adequacy treatment, and Intertie implementation.
The Energy Authority (TEA) offers the following summary comments and observations regarding CAISO’s EDAM Intertie Scheduling implementation plans shared on August 21 and November 5-6. TEA expects to submit additional detailed comments and questions following the November 12 and 14 meetings and potentially amend aspects of its comments as more information is shared in those meetings and there is more time to assess the impacts of CAISO’s planned implementation components.
Summary Comments
Despite good intentions, the implementation decisions CAISO has been signaling since late August 2025 regarding intertie scheduling and CRR management under its “GAP-Tie” design have already begun destabilizing the EDAM go-live effort and disrupting critical Western forward financial and physical power, transmission, and RA markets. Continuing on the current GAP-Tie focused implementation path, with all the associated changes to CRR and Import RA functionality, in fact risks undermining much of the expected efficiency and reliability gains driving the combined EDAM and DAME efforts. These are not small changes and in no way would Western markets experience “business as usual” if they are implemented. Given the broader market environment in which the GAP-Tie functionality would live, it is unlikely it will achieve the goals CAISO outlined. Rather, it would likely just trade one set of modeling inaccuracies for another as entities become forced into attempting to work around the model to contain the price risk it introduces. Moreover, Western market participants, the EDAM Entities, and WEIM BAs and TSPs, as well as the CAISO itself, are unprepared for these elective and untested changes, and there is not time for them to "catch up" in the seven short months leading to go-live. CAISO therefore should set aside the proposed GAP-Tie functionality definitively and communicate to the market that it and the associated changes will not be a part of the EDAM or CRR markets at least through 2027. Doing so as quickly as possible will allow the 2026 Annual CRR Auction to proceed without further delay. It will also allow attention to be refocused on resolving intertie scheduling and pricing seams and other EDAM and DAME functionality issues stakeholders have already identified through MarketSim to support successful EDAM go-live on May 1, 2026.
Acknowledging Staff and Stakeholder Engagement
The significant effort of CAISO staff and leadership on this project, including George Angeledis, James Lynn, and Khaled Abdul-Rahman, among many others, is commendable. EDAM is an entirely new and untested market concept and DAME is introducing entirely new market products and constraints. Developing solutions for interconnected systems and processes given the resource and other constraints the May 1, 2026, go-live timeline demands is difficult enough on its own. Asking CAISO staff to do all of that without triggering seams issues with CAISO’s existing CRR, intertie, and RA markets, as well as the adjacent bilateral markets its LSEs rely on for critical supply and demand, all while troubleshooting onboarding issues in the non-CAISO EDAM areas, moves the bar even higher. CAISO staff have been stepping up to the challenge across the board. Even though course-correction is needed here, the effort that went into the plan is not wasted. The engagement it has driven among the broader CAISO stakeholder community around EDAM and DAME implementation progress and go-live expectations is a solid payoff for the effort invested and will help smooth the process from here. Likewise, CAISO’s pivoting to provide this immediate opportunity for comments and its organizing of additional meetings this week is exactly what was needed to keep that engagement high moving forward.
Assessing Proposed GAP-Tie Functionality
CAISO’s rationale for its proposed movement to a GAP-Tie or “resource specific” bidding structure is well-reasoned and well-intentioned, and not a surprise – it is a goal the CAISO has been pursuing since 2013 when it shelved its Full Network Model Phase 2 initiative following extensive stakeholder and MSC pushback. Experience in Eastern organized markets supports CAISO’s premise that moving to a resource-specific bidding framework in the DA market would improve the accuracy of models and overall improve the efficiency of markets, particularly as a foundation on which to build market-to-market seams enhancements. Carrying the concept through into the CRR market is a logical piece of that puzzle as well.
That said, it is no more appropriate and no less risky to attempt to shoehorn this functionality today into a market landscape that remains grounded in contract-path, bilateral-forward contracting than it was a dozen years ago. All the issues raised back then are still with us – the individual BAs and TSPs, the ownership alignment and contracting between generation and load outside the CAISO BAA, and the disconnect between the hedging available through CAISO’s CRR market and the physical-rights based hedging achieved in the rest of the West. Beyond that, there is not sufficient time to test the assumptions embedded in the proposed functionality, nor is there time to adapt EDAM Entity and others’ tariffs and business practices to deal with the carry-on effect of the changes. Moreover, adequate consideration has not been given to the unintended consequences and ripple effects these changes would have into other markets that themselves have orders of magnitude more value transacting in them than even the DA market. Combined, these points only further drive home that this is not functionality that should be pursued as part of the combined EDAM and DAME go-live for May 1, 2026, or left as a potential near-term change that could impact 2027 markets without advanced notice.
Instead, the GAP-Tie functionality should be considered going forward as a long-term target, likely after developing durable congestion revenue allocation solutions for the growing EDAM footprint. The GAP-Tie functionality work should have a timeline that recognizes the need for EDAM to mature and reach scale before solutions that rely on the absence of internal market seams can be approached.
Departure from EDAM Final Proposal, Consequences for EDAM Go-Live
While it is arguable whether CAISO has or could attain tariff authority to enact the GAP-Tie functionality, there is no question that its plans are a departure from both the EDAM model it developed with stakeholders in 2021-23 and the description of how the EDAM would work embedded in the PacifiCorp and Portland General EDAM Entity Tariffs recently approved by FERC. There also is no question whether CAISO’s EDAM Intertie scheduling vision would disrupt EDAM Entity onboarding efforts, causing them to initiate new Tariff and BP revision processes while deep into the MarketSim phase, upend WEIM Entity expectations and agreements, encourage early exit from the WEIM by entities committed to Markets+, and generally inject chaos into CAISO’s CRR and Import RA markets.
Opportunity Cost of Pursuing GAP-Tie Functionality
EDAM Entity and SC onboarding efforts since June 2025, combined with ongoing assessments of the transactional, price formation, hedging, and other seams EDAM creates with CAISO’s existing markets and forward financial and physical generation and transmission markets, have uncovered multiple teething issues that have not been adequately addressed in EDAM and DAME go-live planning to date. Pursuing the GAP-Tie functionality leaves less staff and stakeholder time to address these issues, which include:
- Intra-change transaction barriers that overly complicate EDAM LSEs’ ability to contract with on-system counterparties for RSE-eligible supply prior to the RSE-showing deadline;
- Ongoing uncertainty regarding day-one EDAM transfer paths;
- Lack of clarity regarding interchange pricing and congestion exposure under more complex transaction scenarios;
- Inability for entities to acquire Firm transmission to meet market requirements and be given the opportunity to hedge congestion risk; and
- Inability for NT customers to use the full quantity of rights they are billed for to receive a congestion hedge.
These and other issues fall somewhere between implementation concerns and policy concerns and may be drivers for Tariff clarifications at either/both the CAISO and/or EDAM Entity level. They should be scoped by stakeholders, discussed openly, and dealt with as soon as possible to promote a stable and successful EDAM go-live on May 1, 2026.
Distraction from EDAM’s and DAME’s Core Objectives
The primary goal of EDAM is to execute hourly unit commitment on a day-ahead basis informed by a centralized, automated view of available generation and transmission alongside wide-area forecasted demand and VERs to enhance the ability for the existing WEIM to find an optimal real-time solution without having to unwind an inefficient day-ahead plan. The primary goal of DAME is to adjust or add market components that support the EDAM concept and enhance its efficiency and reliability. At a high level, these are the game plans for EDAM and DAME the Board and GB signed off on. Neither body approved nor intended for EDAM or DAME to overhaul CAISO’s non-EDAM intertie markets or add undue complication to them, or to make unnecessary changes to or otherwise disrupt its CRR or RA markets. In fact, both cautioned that the CAISO should keep the scope of EDAM and DAME tight and prevent “perfect from being the enemy of good” to avoid delaying achieving a stable implementation as soon as possible. CAISO should be focused on doing everything it can to ensure the core objectives of EDAM and DAME are met, including promoting the continuance of the liquid bilateral power markets that exist at its and the external EDAM Entities’ borders.
CAISO Should Maintain Its Existing Intertie Scheduling Conventions
The trade-offs and risks simply are not worth bearing for the limited model accuracy improvements that may or may not be achieved under the GAP-Tie methodology. Based on the discussion and its knowledge of power flows in the West, it is questionable whether any of the CAISO’s stated objectives[1] below are achievable with their GAP-Tie design in the context of EDAM and WEIM operations:
- Significant improvement in power flow and market solution accuracy
- Increased accuracy in congestion management and LMP calculation
- Improved alignment with actual power flow (reduced phantom congestion)
- Reduced need for conforming transmission limits in the market
- Improved alignment with EIM BAA intertie schedules in WEIM
Improving accuracy and alignment between the CRR model and DA model, and between DA and RT, to a level worth pursuing with these changes would require controlling variables and asserting top-down control in the market that CAISO is not capable of or authorized to do under the EDAM design. Without having that control, the accuracy and alignment may in fact be worse than if they were not implemented. When that outcome is combined with the other negative impacts to the CRR and RA markets, implementing this functionality would very likely be a net loss for participants.
Overriding the Voluntary Nature of the WEIM
CAISO’s GAP-Tie methodology and associated intertie scheduling conventions appear to undermine the voluntary nature of the WEIM. As affirmed by FERC, entities with load, generation, or transmission in a WEIM BAA have the right to have only limited interaction with the WEIM. Through base scheduling their resources and continuing to use their contract-path and network transmission rights to support transfers, they are exposed only to imbalance-based charges and certain uplift and offsets allocations that their BAs and TSPs choose to pass on to them. The model presented by the CAISO, however, implies that WEIM will transition to being an involuntary market at EDAM go-live for any entity wishing to deliver energy to an EDAM BAA, whether the CAISO’s or another. As presented, it appears bilateral transfers from a WEIM area to an EDAM area would have a lower priority than in-market optimized transfers and would be exposed to hurdle rates. Moreover, it appears entities holding transmission rights between WEIM areas and EDAM areas would have to register those rights and use them exclusively within the CAISO markets as a comingled set of transfer resources. While these and other aspects of the proposal undoubtedly pull the WEIM and EDAM areas into tighter dependence on each other and may achieve some dispatch and transfer efficiencies, they do so at the cost of disrupting forward contracting and adding significant process burdens for all involved – generators, loads, and the BA/TSPs. If this was to be part of the EDAM implementation effort, it should have been discussed in 2022-23, or stakeholdered as a separate initiative once conceived as an implementation solution. It was not, and forcing this change on the entire WEIM community with just seven months to triage, test, and implement associated changes on non-CAISO systems is simply unworkable.
Disconnect in Understanding of Existing Markets
Aspects of CAISO’s implementation plan appear to reveal a disconnect in CAISO’s understanding of the breadth and depth of forward and spot bilateral financial and physical markets in the West, and how those markets are leveraged to maintain reliability and reduce rate-increase pressure.
Considerations for firm energy and/or renewables-attributes transactions generally include relying on some of the following:
- Using forward index-based, trading hub price discovery to inform deal pricing and risk management;
- Investing in forward physical or financial transmission rights to mitigate or benefit from physical delivery risk and financial exposure;
- Leveraging common transaction elements to ensure entities can move in and out of positions and trade products without making every agreement and buy/sell location, attributes, expectations, and quantity custom;
- Understanding applicable market rules over the term of the contract to mitigate compliance and dry-hole risk, and the risk of having to litigate or renegotiate existing provisions; and
- Relying on inter-regional trade to make the most of assets and spread weather and outage risks to a broader area.
It would be good for CAISO and stakeholders to engage with each other around these cross-market fundamentals and dependencies so greater understanding can be gained around what is likely to happen if, for example, a change is made to markets that undermines the integrity and liquidity of index-based trading hub activity.
Assessing the Feasibility of Proposed Functionality
CAISO should give stakeholders an opportunity to present and stress-test sample transactions, assumptions, and data-dependencies against CAISO’s implementation model for EDAM and DAME. This testing needs to include an assessment of the feasibility of completing all the necessary steps in various new processes within the time available and the cost of doing so. For example, during the November 5 meeting, TEA’s preschedule activity for the next operating day included engaging with twenty-two Western BAs and their TSPs to approve the tags required to effect its DA transactions and fulfill its CAISO market awards. TEA would welcome transitioning this activity to full RTO operations; however, that's not what is on the table for 2026-27, and the practical impacts of living between a bilateral and a fully-organized world need to be accounted for in EDAM implementation.
Known-Unknowns if the GAP-Tie Functionality is Pursued
If CAISO decides to move forward with its GAP-Tie functionality, more information needs to be shared with stakeholders and more time needs to be taken to troubleshoot and test various scenarios and concepts. At a minimum, CAISO needs to improve its data availability around the changes as soon as possible, and should ensure that all data is available to all market participants. CAISO should publish the intended GAP-Tie mapping and show any on-/off-peak or seasonal differences in defense of that mapping as the two slides included in the November 5-6 presentation are not detailed enough to give stakeholders confidence in CAISO’s choices. CAISO also should clarify whether the GAP-Tie mapping relative to existing intertie points and 2026 annual award positions will be 1:1 or in some way spread across nodes in some instances. Further, CAISO should attempt to quantify the impact to underfunding that these model changes will deliver and be prepared to follow up on that in ongoing CRR Enhancements reporting and future work. And CAISO should discuss the bidding rules and impacts associated with bidding at a G-GAP vs. D-GAP vs. C-GAP as compared to a resource-specific bid in a WEIM or EDAM area, and whether and how certain bids may or may not be subject to mitigation and off-system sales (i.e., DNR) FERC rules where others may not, as well as whether entities would be right to include lost basis value in their bids or sunk transmission costs as a cost component. Included in that should be an explanation of whether GAP-Tie bids are limited to only those entities that hold transmission rights to a CAISO or EDAM BAA, or to wheel through an EDAM BAA, prior to the market run. CAISO should also discuss whether the model for PacifiCorp and Portland General’s intertie transactions will cause pricing anomalies where the D-GAP may electrically overlap or share facilities with a modeled internal constraint on an EDAM system.
These are just a handful of the many questions that come to mind when considering the myriad of impacts moving to a GAP-Tie methodology for transactions that today are effected using the simple contract-path, one-part price-quantity pair bid conventions that have been in place for at least 15 years and that are foundational to power contracts, risk management, hedging, and other market activities related to moving power in to and out of the CAISO BAA.
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About TEA:
The Energy Authority is a nation-wide, non-profit, public-power owned provider of wholesale energy market services. In the West, TEA has partnered with load serving entities inside the CAISO BAA and those in external EDAM and WEIM BAAs to leverage CAISO’s markets to return value to their end-use consumers from their investments in generation and transmission assets. TEA has also partnered with the same to leverage the two SPP markets, RTO-Expansion and Markets+, which are going live in 2026 and 2027 respectively. Given the geographical diversity of its clients, TEA is to an extent on every side of every market design issue. TEA’s participation in these efforts is focused, therefore, not on biasing market outcomes in the direction of supply vs. demand interests, or influencing entities’ organized market decisions, but on CAISO and SPP developing practical solutions that enhance DA and RT market efficiency without undermining other aspects of the complex near- and long-term energy markets its customers engage with to meet their load-service and least-cost planning goals.
[1] https://stakeholdercenter.caiso.com/InitiativeDocuments/Presentation-Extended-Day-Ahead-Market-Implementation-Workshop-Nov-5-6-2025.pdf - at p.10
