Comments on Update paper

1. Please provide your organizations comments on concerns regarding the current deliverability assessment methodology.

AES Clean Energy appreciates the CAISO for reevaluating the current deliverability assessment methodology.  AES Clean Energy provides insight into the challenges we identify under the current methodology with the primary objective of identifying the challenges that require urgent solutions, while remaining flexible and collaborative in the way those challenges are solved.  The three primary challenges that current deliverability methodologies create are: (1) uncertainty that energy contracted for under a PPA will be delivered; (2) network upgrades and corresponding high costs, that exceed actual load needs; and (3) over-weight application of low probability events to day-to-day deliverability assignments. 

1. Uncertainty of deliverability impedes PPA execution.  AES Clean Energy understands the CAISO’s assertion that deliverability assessment is done to ensure that all energy determined deliverable could be simultaneously injected into the system, even if such an event would be inconsistent with typical operations.  AES Clean Energy also understands that the generation capacity in the interconnection queue exceeds the forecasted load.  However, AES Clean Energy believes that consumer demand for desirable projects should help accelerate the future of our energy system and an objective of deliverability analysis should be to match and appropriately upgrade network capacity to projects that have consumer interest in the delivery of capacity to load.  This is not to say that energy delivery becomes more important than reliability. Instead, interconnection and deliverability should focus on matching supply with demand, while careful planning and operations can continue to ensure reliability. 

2. Network upgrades exceed actual load needs.  AES Clean Energy shares concerns with the industry that the studied deliverability capacity often exceeds the local load within the study area.  While AES Clean Energy understands that the amount of capacity within the interconnection queue exceeds the forecasted load, using the deliverability capacity that is greater than the load within a study area often results in inaccurate network upgrades requirements since not all studied capacity will interconnect and serve load within the study region.  This issue is especially apparent during Phase 1 of the interconnection studies.  The CAISO should consider an alternate methodology to ensure that the studied deliverability capacity doesn’t exceed load within the study area to provide more accurate network upgrade results.   

3. Over-weight application of low probability events.  AES Clean Energy shares industry concerns that applying conservative N-2 system dispatch assumptions to all aspects of the deliverability assessment is not consistent with operating standards or realization of an efficient grid.  AES Clean Energy understands that NERC Standard TPL-001 dictates the study of N-2 contingencies under low probability extreme events.  While N-2 conditions are studied in the current deliverability methodology, it is AES Clean Energy’s understanding that besides a few select paths, the CAISO doesn’t monitor and redispatch N-2 contingencies in real time operations in its security-controlled dispatch.  Therefore, AES Clean Energy believes that the deliverability methodology should match the way generation is dispatched.  
    
   AES Clean Energy believes that the CAISO can meet its requirement to conduct N-2 contingency studies, but then apply those results with nuance.  For example, CAISO can apply a probability assessment to the outcomes and appropriately calibrate, tier, or apply remedial strategies up until a point of operationally relevant reliability.   
    
   Therefore, AES Clean Energy recommends the CAISO to reevaluate the need for applying N-2 contingencies broadly within the deliverability methodology.   

2. Please provide your organizations comments on concerns regarding the timeliness and availability of deliverability.

AES Clean Energy applauds the CAISO for acknowledging the issues of timeliness and availability of deliverability.  AES Clean Energy appreciates the CAISO for considering alternative ways for resources to receive Full Capacity Deliverability Status and be able to move forward to commercial operation.  We, therefore, propose possible approaches that advance (1) timely use of grid deliverability and (2) equitable allocation of network upgrade costs.  We also encourage the CAISO to conduct proactive, multi-year planning that would facilitate interconnection of new resources. 

AES Clean Energy supports CAISO identifying an interim solution for projects to obtain deliverability.  At this time, projects have seven years to reach commercial operation and therefore “hold onto their deliverability allocation”.¹  CAISO should create incentives for projects that have deliverability but aren’t ready to continue to commercial operation to exit the queue and transfer their deliverability to projects are ready to meet their proposed commercial operation date.  For example, CAISO could refund study and security deposits back to projects that voluntarily exit the queue and/or allow these projects to be expedited upon reentering the queue.  This can allow projects that are more ready, such as projects with a PPA, land, and/or permits to receive deliverability in a timelier manner. CAISO should also re-evaluate their deliverability transfer rules to look for opportunities to make it easier for projects to sell/transfer their assigned deliverability to nearby ready projects.  

AES Clean Energy notes that cost continues to be the biggest burden for projects to receive deliverability, which is related to time and availability.  From AES Clean Energy’s experiences, projects are allocated cost shares that are incredibly expensive.  Developers often cannot pay for the Delivery Network Upgrades (DNUs) and these upgrades continue to be reidentified in future studies.  In the short term, AES Clean Energy recommends the CAISO to work with developers to identify methods to more equitably allocate the cost of the identified DNUs according to shared benefit.  Two proactive options include: 1) leveraging the annual transmission planning process with the transmission owners to buildout DNUs that have been identified at least twice in prior interconnection studies for inclusion in the annual transmission planning process (TPP) or 2) create a separate process that identifies the beneficiaries of the transmission upgrades and allocate shared cost based on the beneficiaries to allow more cost sharing amongst developers.   

In the long term, AES Clean Energy recommends the CAISO to conduct proactive multi-year planning and construct DNUs that could facilitate the interconnection of new resources. For example, CAISO can consider a similar study/process to the MISO/SPP Joint Interconnection Queue (JTIQ) process that is proactively planning to build 345 kV lines along the MISO-SPP seams to enable new generator interconnections.² CAISO can take similar principles from the JTIQ study to identify transmission lines that are repeatedly selected but are not built out in the interconnection process. A subscription model can then be used for parties to build out these repeatedly-identified transmission lines with cost shared between load and generators.  Proactive transmission planning will ensure deliverability can be obtained in timely, available, and cost-effective manner. 

¹ BPM for GIDAP, Section 5.5 

² For more information on MISO-SPP's JTIQ process: MISO-SPP Joint Targeted Interconnection Queue Study (misoenergy.org) 

3. Please provide your organizations comments on the path forward outlined in the update paper.

AES Clean Energy supports the path forward outlined in the update paper. AES Clean Energy applauds the CAISO for reviewing the current deliverability methodology to ensure deliverability requirements strike a balance between reliability and cost. Moreover, AES Clean Energy highly supports the CAISO to implement a transitional relief to provide deliverability to resources in a timely manner.   

However, the second track currently states that the CAISO will continue to incorporate any changes to inputs and assumptions that develop organically, particularly for offshore wind.³   AES Clean Energy recommends the CAISO to continue to revisit dispatch assumptions for all resources in light of the current resource adequacy reforms, and not just for offshore wind resources.  Stakeholders should continue to be engaged as the CAISO reevaluates the dispatch assumptions and propose changes to inputs and assumptions. 

³ Update Paper, p. 8 

4. Please provide your organizations comments on the proposed next steps.

AES Clean Energy supports the CAISO in initiating a stakeholder process by the end of Q1 in 2023 to review the current deliverability assessment methodology and to develop transitional relief strategies for projects to receive deliverability in a timely manner.  The CAISO should consider stakeholder comments on the Update Paper when developing the scope of the stakeholder initiative. 

5. Please provide any additional comments you have on the deliverability challenges.

AES Clean Energy has no further comments at this time. 

1. Please provide your organizations comments on concerns regarding the current deliverability assessment methodology.

The Bay Area Municipal Transmission group (BAMx)^[1] appreciates the opportunity to comment on the CAISO's Generator Deliverability Challenges Update Paper ("Update Paper," hereafter) issued on December 12, 2022. BAMx applauds the CAISO's willingness to revisit some of the elements of the current deliverability methodology to address the concerns regarding generator access to deliverability for Resource Adequacy (RA) purposes.

BAMx is extremely concerned about the scale and cost of network upgrades to provide additional deliverability to the interconnecting generation needed to meet the State's policy goals. Per CAISO's preliminary policy-driven assessment presented during its November 17, 2022 stakeholder meetings, the delivery network upgrades could range anywhere from $6 billion to $12 billion, excluding those potentially needed in the PG&E area.[2] We are concerned that some of these large transmission costs associated with making the interconnecting generating resources fully deliverable using the CAISO Deliverability Assessment Methodology (DAM) might not be necessary for achieving the State's goals for providing reliable electric service while cost-effectively meeting Renewable Portfolio Standard (RPS) requirements and generator Power Purchase Agreement (PPA) RA requirements.

Although significant progress has been made in improving the feedback loop between the CPUC Integrated Resource Planning (IRP) and CAISO Transmission Planning Process (TPP), the deliverability assessments have failed to provide accurate market signals for the generation project developers. Otherwise viable generation projects have been deemed undeliverable, becoming unviable in the competitive market due to a lack of RA credit. Most importantly, expensive transmission upgrades have been deemed necessary by the CAISO to make projects "deliverable," and have initially burdened the particular generators, but ultimately the cost of those upgrades is borne by ratepayers. The CAISO should not sanction a transmission planning and generation interconnection and deliverability allocation process (GIDAP) whose underlying theme seems to be "deliverability at any cost." The CAISO has an obligation to ensure just and reasonable transmission rates. Deliverability at any cost is not consistent with this obligation. BAMx believes that changes in the CAISO deliverability assessment methodology (described below) can be implemented that would allow significantly more renewable resources to be interconnected quickly, with fewer required transmission upgrades, without compromising the CAISO's ability to meet reliability requirements.

We look forward to working with the CAISO and other stakeholders to ensure a reliable and economical transmission infrastructure.

Dispatch assumptions…and, in particular, simultaneous dispatch of resources in resource basins

BAMx agrees with the CAISO that multiple resource adequacy resources could potentially be needed simultaneously to provide capacity under stressed system conditions.[3] However, the assumptions about the level of generation for FCDS resources during both the High System Need (HSN) and Secondary System Need (SSN) periods should realistically represent their expected levels of operation and should not necessarily assume simultaneous operation at their "qualifying capacity" level, as assumed in the CAISO's deliverability assessment methodology. Therefore, BAMx is supportive of revisiting the current methodology elements that require FCDS resources in the same area to be simultaneously called upon to serve local load or export from the resource area. 

The need for a High System Need and Secondary System Need scenarios that were developed in 2019 replacing the former single peak load scenario.

The SSN scenario represents when the capacity shortage risk will increase if the intermittent generation, while producing at a significant output level, is not deliverable. In other words, the SSN represents the hours when solar resources contribute to the system reliability. It is critical, however, to be sure that assumptions for co-located storage resource charging and discharging align with market expectations to avoid overstating the loading on the area delivery network. In both the generation interconnection study and the TPP policy study, there is often a significant over-supply during the high load consumption hours. Therefore, generation from some small local pockets not being deliverable is not likely to affect the overall system reliability than generation not deliverable in a larger area. BAMx understands that the SSN assessment focuses on the area delivery constraints. In many cases, adequate battery storage resources are, or will be, co-located with the solar resources in generation pockets to absorb the excess solar generation for charging purposes and will be discharged at appropriate hours without overloading available transmission.

BAMx appreciated CAISO's review of the deliverability study dispatch assumptions in mid-2022, leading to a reduction in the dispatch assumptions for the storage study amount for the SSN study. However, the storage discharge may need to be further reduced based upon their typical operation during HE15 ~ 17 in the summer months at levels significantly lower than 80% of their full capacity. If the expected storage discharging behavior is properly modeled, the SSN assessment should not identify more area delivery network upgrades (ADNU) than the High System Needs (HSN) assessment. As the Update Paper indicates, "in all but the SCE metro study area, the SSN was less binding than the HSN study," per the draft 2022-2023 transmission planning analysis shared with stakeholders on November 17, 2022.[4] BAMx is not opposed to studying the SSN scenario as part of the deliverability assessment. However, when it triggers ADNUs that are not identified in the HSN study, like in the case of the SCE metro area in the 2022-2023 transmission planning analysis, it should be flagged to see whether the appropriate dispatch of battery storage has been modeled in the generation pockets to avoid unneeded and excessive ADNUs.

Consideration of N-2 and Extreme Events

BAMx urges the CAISO to make a clear distinction between the need to follow NERC Transmission Planning Standard TPL-001 for reliability assessment versus CAISO's policy assessment that is performed for resource adequacy purposes. Any facility overload, voltage limit violations, or system collapse that would prevent the CAISO from serving load reliably in compliance with the NERC Planning Standard would be unacceptable. However, applying the higher level contingencies, such as N-2 and extreme events, for all generator deliverability assessments is overly conservative, because it does not consider the locational diversity of resources available to meet the TPL-001 standard. This is especially true where transmission linkages/contingencies to the broader system are few, generation pockets are small, and/or where constraint-mitigating redispatch outside of the load pocket is not being modeled. In addition, the CAISO TPP reliability modeling considers 1-in-5 peak Loads and upward-stressed dispatch, for a system that has a substantial planning reserve margin. If the planning reserve margin does not result in sufficient resources to reliably serve load without requiring every FCDS generator to be fully deliverable for all N-2 contingencies, the planning reserve margin could be increased, and/or the locational diversity of resources could be reevaluated in the IRP process.

Given the large amount of new capacity (~70GW) that is envisioned in the CPUC's draft portfolios for the 2023-2024 transmission plan, it is critical to consider whether every MW of generator seeking FCDS needs to be fully deliverable under extreme conditions in order for CAISO to meet the TPL-001 standard with the aggregate resources available to it. BAMx, therefore, encourages the CAISO to apply a three-prong approach to avoid potentially unneeded and excessive network upgrades that would be triggered by a large amount of FCDS generation in the upcoming years.

First, only apply the higher level contingencies, such as N-2 and extreme events at the end of the process when assessing the aggregate ability to meet the TPL-001 standards. That is, for the GIDAP and TPP deliverability assessments of specific generation pockets only apply N-1 contingencies, and then determine in the TPP reliability assessment whether there are any resultant TPL standard violations (including N-2) that cannot be adequately mitigated. We believe that taking this approach, in conjunction with the steps below, is likely to eliminate the need for at least some of the transmission upgrades exclusively driven by higher-level contingencies, as shown in Table 1.

Table 1: Constraints Based on P7 (N-2) Contingencies Driving Major Transmission Upgrades: Preliminary 2022-2023 TPP Policy Assessment

BAMx believes that the deliverability assessment methodology needs to provide consistent treatment under both GIDAP and TPP so that ratepayers are not burdened with extra costs that would be missed under the relaxation of deliverability assessment methodology if it is only made in the GIDAP.[5] BAMx believes that generation-dropping RAS will continue to be an effective solution to address the potential deliverability issues triggered under low-probability events, in conjunction with the broader resource and locational diversity captured via the IRP-TPP process feedback loop.

Second, any revisions to the deliverability assessment methodology, like the relaxation of higher-level contingencies, should be accompanied by a practical economic assessment to address potentially increasing levels of generation curtailments due to congestion. It is important to note that curtailment is not a resource adequacy (RA) issue for which the deliverability assessment is designed, but rather an economic and/or policy issue. Any potential curtailment increase can be addressed by identifying needed policy and economic-driven transmission upgrades in the TPP. BAMx believes that the existing Transmission Economic Assessment Methodology (TEAM) provides a reasonable framework for that to be studied thoroughly, leading to transmission upgrades if they are economically justified.

Third,  the impact of overlapping transmission outages should be evaluated in the overall Loss of Load Expectation (LOLE) studies and, if necessary, the Planning Reserve Margin requirements may need to be increased. This should be done at the system level, rather than imposing it on individual resources seeking FCDS as part of the deliverability assessment methodology. This approach will balance the concerns about having sufficient RA resources to simultaneously provide needed capacity under stressed system conditions against the cost-effectiveness and timeliness of network upgrades. 

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

[2] Policy-driven Deliverability Assessment Preliminary Results, Nebiyu Yimer, Amanda Wong, Meng Zhang, Lyubov Kravchuk, Lindsey Thomas, 2022-2023 Transmission Planning Process Stakeholder Meeting, November 17, 2022, pp.14-108.

[3] Update Paper, p.4.

[4] Update Paper, p.5.

[5] Update Paper, p.6.

2. Please provide your organizations comments on concerns regarding the timeliness and availability of deliverability.

BAMx believes that if CAISO takes the steps recommended above, many of the resources in the queue would be able to be interconnected much more quickly, with fewer required transmission upgrades, without compromising the CAISO's ability to meet reliability requirements.

3. Please provide your organizations comments on the path forward outlined in the update paper.

We are aware that the CAISO has limited resources and needs to prioritize its efforts accordingly. BAMx strongly supports the CAISO's proposed review of the methodology by the end of Q1 2023 to ensure the deliverability requirements strike the appropriate balance between reliability and cost containment and that the reliability requirements are not unduly burdensome. BAMx hopes that the CAISO will keep an open mind to the specific concerns and potential solutions that BAMx has suggested in its response the Item #1 above, and is willing to work with CAISO and stakeholders to make the required changes to the deliverability assessment methodology used in the GIDAP and TPP.

4. Please provide your organizations comments on the proposed next steps.

See BAMx's response to items #1 and # 3 above. BAMx supports the CAISO proposal to prepare issue papers regarding items discussed in the Update Paper to initiate stakeholder processes on these topics by the end of Q1 2023.

5. Please provide any additional comments you have on the deliverability challenges.

 No comments at this time. 

1. Please provide your organizations comments on concerns regarding the current deliverability assessment methodology.

The California Community Choice Association (CalCCA) supports the California Independent System Operator (CAISO) conducting a review of its deliverability study methodology. In its review, the CAISO must assess the impacts of any identified changes to the methodology to ensure such changes will accurately provide resources with deliverability without unnecessarily disadvantaging available resources and without compromising the level of reliability planned for through the Resource Adequacy (RA) program. These impacts must be known before committing to any deliverability study methodology changes. For example, the California Public Utilities Commission (Commission) is in the process of transitioning its RA program to one that considers capacity needs during the peak hour to one that considers capacity needs during all 24 hours of the day. A review of the deliverability assessment methodology should include an assessment of whether or not it is necessary to modify the deliverability study methodology to align with this new framework, and if so, what the impacts of such modifications would be on the total amount of deliverability available.  

2. Please provide your organizations comments on concerns regarding the timeliness and availability of deliverability.

Timeliness and availability of deliverability is critical in advancing new resource procurement. Integrated Resource Plan (IRP) and RA procurement orders require load serving entities (LSEs) to meet their obligations with fully deliverable resources. If the CAISO’s deliverability study finds that a project is not fully deliverable on the existing transmission system and interconnection facilities, transmission system upgrades and/or network upgrades must take place to make the project deliverable. Such upgrades may take many years, and community choice aggregators (CCAs) often depend on an investor-owned utility’s (IOU’s) timing and ability to make those upgrades. CCAs have identified delays in online dates due to both interconnection queue delays and IOU interconnection and transmission upgrade delays. Therefore, the CAISO’s primary focus should be on how to get the necessary transmission system and network upgrades completed to quickly expand the amount of deliverability available.

The CAISO suggests that it is interested in exploring if some “transitional relief” could be necessary to avoid network upgrade schedules or requirements interfering with contracting and new resource procurement.[1] CalCCA proposed a transitional mechanism in the Commission’s IRP proceeding (Rulemaking 20-05-003), in which the Commission would allow projects that have not yet been studied for deliverability, or that are waiting for transmission or interconnection upgrades to be completed to become fully deliverable, to count towards an LSEs’ Mid-term Reliability (MTR) obligation on a temporary basis. This proposal would expand the pool of resources eligible to meet the MTR procurement obligations. LSEs that use such projects to meet their MTR compliance obligations would: (1) still be required to meet their RA obligations with deliverable resources; and (2) need to commit to having their resources go through the deliverability study process and obtain deliverability. If, after the project goes through the deliverability study process, the study finds the project is not fully deliverable, LSEs will need to commit to having the network upgrades completed to make the project fully deliverable, or to procuring different resources with sufficient deliverable capacity to meet their MTR compliance obligation.[2]

CalCCA’s proposed transitional mechanism, or other transitional mechanisms, must be considered given the quick pace of procurement orders and the lengthy transmission and network upgrade process timeline. Such transitional mechanisms pose a risk that resources procured to meet procurement orders do not immediately meet the full technical requirements required to obtain deliverability. Therefore, the CAISO’s primary focus of this effort should be on how to accelerate transmission and network upgrades that are identified to make new resources deliverable.

[1]             Deliverability Challenges, An ISO Update (Dec.12, 2022), at 8.

[2]             California Community Choice Association’s Comments on Section 2 of the Administrative Law Judge’s Ruling Seeking Comments on Potential Near-Term Actions to Encourage Additional Procurement, R.20-05-003 (Sept. 26, 2022), at 10-12: https://docs.cpuc.ca.gov/PublishedDocs/Efile/G000/M497/K247/497247449.PDF.

3. Please provide your organizations comments on the path forward outlined in the update paper.

CalCCA supports the proposed path forward, including reviewing the deliverability study methodology and initiating a stakeholder discussion on the timeliness and availability of deliverability.

4. Please provide your organizations comments on the proposed next steps.

CalCCA supports the proposed next steps.

5. Please provide any additional comments you have on the deliverability challenges.

CalCCA has no additional comments at this time.

1. Please provide your organizations comments on concerns regarding the current deliverability assessment methodology.

CESA thanks the ISO for publishing the Update Paper and for its intent to open a new stakeholder initiative on generator deliverability challenges in Q1 2023.

Given the potential to unlock greater levels of deliverability on the existing system in support of near- and mid-term reliability needs, CESA greatly appreciates the ISO in reassessing the current deliverability assessment methodology. In the Update Paper, the ISO frames the potential modifications highlighted by stakeholders as “soften[ing] the current technical requirements,”[1] but CESA believes that these considerations are not intended to reduce reliability of the grid or counteract the intended purpose of Resource Adequacy (RA) resources to be reliable and “deliverable” during times of system stress. Rather, any modifications to the deliverability assessment methodology proposed and advocated by CESA are intended to adhere to this intended purpose while more reasonably and realistically assessing how resources such as battery energy storage are dispatchable, energy limited, and complementary to other resources, such as solar and other variable energy resources (VERs).

With this in mind, CESA agrees with the ISO’s three main areas for potential modification as identified in the Update Paper. At this stage, we offer some preliminary reactions to the ISO’s discussion of these potential modifications in the Update Paper but generally look forward to diving deeper into these issues during the stakeholder initiative.

First, regarding dispatch assumptions, CESA believes it is worthwhile for the ISO and stakeholders to have technical discussions on the reasonable dispatch assumptions for various resource types during periods of system stress. During the limited stakeholder process in June 2022 when the ISO proposed and adopted modifications to energy storage dispatch assumptions, the ISO explained how it used the Summer Resources Assessment and selected July 9, 28, and 29 in 2021 to determine the dispatch levels of energy storage resources on “stressed” days, based on days with the highest minimum unloaded capacity margin. While this approach is logical in theory, CESA has some concerns with the “incidental” nature of storage dispatch on days when “resource supply was scarce” as a means to deterministically set the level of storage dispatch in generator deliverability assessments. In doing so, the ISO is modeling energy storage resources as always dispatching at such levels during times of reliability need, when there may be a number of complicating factors that led to the observed levels of dispatch during the selected or sample days, such as dynamic market conditions (e.g., bidding and scheduling of resources, including imports).

Second, regarding the need for the SSN scenario, the Update Paper details how generator deliverability assessments need to evolve to one that looks at more than a single peak load, to which CESA wholeheartedly agrees. The ISO also details how the SSN was the binding constraint in a majority of assessments, more so than the High System Need (HSN) scenario.[2] However, CESA wonders whether the fact that the SSN constraint is a binding constraint in many cases can be attributed to the very problem of deterministic simultaneous dispatch levels for energy storage and VERs (i.e., solar) during the SSN period, based on observed levels during selected days. Since solar and energy storage resources have complementary contributions to reliability, as evidenced by effective load carrying capability (“ELCC”) studies in California and elsewhere, CESA is unclear on why the ISO has the SSN scenario and has structured it in a way where renewables serving load during this period cannot conflict with other resources, especially with energy storage resources mostly charging from solar during the SSN period. CESA raises the question to the ISO on whether any curtailment test for solar resources in the SSN period should be a scenario in the off-peak deliverability (OPD) test and whether this should be addressed through the Transmission Planning Process (TPP), which can assess the need for economic transmission projects.

Furthermore, given the energy-limited nature of the vast majority of energy storage resources deployed today (i.e., four hours of duration at maximum output), CESA is again unclear on the reasonableness of the assumptions to assess energy storage dispatch at high levels during the SSN period, when the HSN study spans a four-hour period during the most stressed grid conditions. Most of all, short of running a stochastic production cost model to capture the dispatchability and complementary nature of energy storage and other generation resources, the current deterministic approach and assumptions should be revisited to more realistically reflect their operations during stressed system conditions, which can be accomplished without jeopardizing reliability or deliverability of RA resources. In comparison, it is CESA’s understanding that other ISO/RTOs do not incorporate the SSN scenario test into their generator deliverability assessment methodology. To that end, CESA wonders how other ISO/RTOs’ generator deliverability assessment methodologies can be used to enhance that of the CAISO’s, and more reasonably assess energy storage dispatch.

Third, regarding the N-2 operating condition, CESA believes that this assumption for the generator deliverability assessments warrant reconsideration. While recognizing the impact of facility overloads or voltage limit violations due to N-2 contingencies, CESA wishes to discuss with the ISO on whether the N-2 operating condition should be addressed in the generator interconnection and deliverability studies as opposed to the TPP – a point that was touched upon in the TPP but could benefit from a broader discussion on the merits of addressing them elsewhere. In addition, in our understanding, no other ISO or RTO uses the SSN scenario in interconnection studies. PJM and MISO appear use the N-1 contingency since they follow NERC's TPL-004 standard, even though they may be working on an updated standard (TPL-005), which suggest using the N-2 contingency. Overall, it may be helpful to assess the rationale and basis for their approaches in contrast to that of the California ISO.

Notwithstanding our points above, CESA is open to a healthy, technical discussion on each of the matters above. Where reasonable and justifiable and informed by data and analysis, CESA hopes that the ISO will be open to modifications. The launch of a new stakeholder initiative is a step in the right direction, and we look forward to the discussion and collaboration.

[1] Update Paper at 3.

[2] Update Paper at 5.

2. Please provide your organizations comments on concerns regarding the timeliness and availability of deliverability.

CESA supports the inclusion of the timing and availability of deliverability as a scoping issue in this initiative. Beyond the discussion on the generator deliverability assessment methodology itself, there may be other incremental fixes to the way that deliverability is allocated, which could address the current issues around the lack of existing deliverability leading to the abandonment of projects in the queue, even though they may be cost-effective and needed for near- or mid-term reliability. As the ISO discussed at length in the 2021 Interconnection Process Enhancements (IPE) Initiative, more work is needed on how to align procurement timelines with generator interconnection (e.g., locations, available Transmission Plan Deliverability [TPD]) and transmission planning. The same issue is highlighted in the Update Paper, where the ISO focuses on how some yet-to-be-defined “transitional relief” could be contemplated to not overly limit new resource procurement due to unexpected new requirements or delays in deliverability network upgrades.[1]

CESA agrees and looks forward to developing ideas and proposals on this matter in the stakeholder initiative. First, the timing of TPD affidavits in December and allocations in March/April can present challenges to the procurement process if load-serving entities (LSEs) conduct competitive solicitations at a time prior to allocated or retained TPD amounts or if the California Public Utilities Commission (CPUC) transmits portfolios and directs procurement in a similarly mismatched manner. Second, to facilitate procurement and contracting activities, the ISO should consider the potential pros and cons of allocating more TPD than actually available on the system – i.e., a form of “shadow” or “conditional” TPD – in order to allow potential project development to move forward and to facilitate transactions with LSEs, who will likely not find such project bids as conforming and thus will not shortlist them for further negotiations and contract execution. Ultimately, the ISO would still “finalize” TPD allocations in accordance with the actual transmission capacity available on the bulk electric system, but a shadow or conditional TPD availability in excess of actual TPD availability could go a long way to aligning procurement and generator interconnection activities. Such an approach could also address the ISO’s concerns with the timing and availability of deliverability as new or delays to deliverability network upgrades are identified.

In sum, we reiterate our support for the consideration of this scoping issue for the aforementioned reasons.

[1] Update Paper at 8.

3. Please provide your organizations comments on the path forward outlined in the update paper.

CESA greatly appreciates the ISO’s intent to open a new stakeholder initiative on generator deliverability challenges in Q1 2023, especially as the state is in urgent need of deliverable capacity in the near- and mid-term periods. A stakeholder initiative is timely and necessary in order to ensure that the current generator deliverability methodology appropriately assesses generation and energy storage resources in a way that makes them deliverable and at the same time recognizes the dispatchability and complementary nature of the current and future RA fleet. If modifications are found to be warranted as a result of this stakeholder initiative, the ISO will be able to unlock significant amount of otherwise abandoned projects with deliverable capacity. In doing so, existing transmission capacity can be maximized while ensuring all resources that are allocated TPD are able to provide their deliverable amounts.

To illustrate the direct impact on actual energy storage projects, CESA asked for members’ input on any future projects that may or may not receive deliverability under the current ISO deliverability assessment methodology. While project information was kept anonymous for the survey conducted, and represents a small sample size of projects, CESA found that approximately 1.8 GW of energy storage projects that would be at risk of or will not receive deliverability status due to the current deliverability assessment methodology used by the ISO. Most of these projects are or were expected to be in operation within the next few years; however, given the current highly conservative assumptions for energy storage dispatch, some projects will not be able to secure deliverability and will be deemed not commercially viable. Many more projects may be in a similar situation, on the order of several more GW of capacity, which could otherwise be procured to meet the state’s urgent reliability challenges.

Overall, CESA supports the three tracks outlined in the Update Paper. When launching the first track on the deliverability assessment methodology, CESA encourages the ISO to invite stakeholder presentations on the topics. As a standalone stakeholder initiative, CESA also assumes that the usual ISO process will be followed (i.e., Issue Paper, Straw Proposal, Final Proposal, workshops or stakeholder calls in between), unlike the one-off “miscellaneous” stakeholder call held for a limited modification to storage dispatch assumptions as done in June 2022. Given the technical nature of the methodology, CESA hopes that more extensive discussion will be held.  

4. Please provide your organizations comments on the proposed next steps.

CESA supports the next steps identified in the Update Paper, along with the rough timelines. However, CESA noticed the tentative nature of a new IPE Initiative. The ISO may be deferring to the Generator Interconnection Procedures Notice of Proposed Rulemaking (NOPR) (RM22-14) to play out and await a Final Rule, but CESA still sees merits in launching a new IPE Initiative, especially if signs point to another “supercluster” with Queue Cluster (QC) 15 opening in April 2023. The queue backlogs and the prolonged QC periods may not be tenable to support mid-term procurement needs, such that interim steps may be needed. In reviewing the comments submitted in response to the NOPR, CESA has concerns about the unclear timeline of a Federal Energy Regulatory Commission (FERC) Final Rule in RM22-14, considering the complexity and scope of issues being considered.

5. Please provide any additional comments you have on the deliverability challenges.

While very supportive of the three tracks in this new stakeholder initiative, CESA offers two additional issues that may warrant further consideration.

1. Creating local versus regional deliverability designations: As the ISO embarks on a review of the generator deliverability assessment methodology, CESA believes that it would also be a good time to consider whether local-only deliverability studies could be developed, conducted, and implemented. CESA acknowledges the complexity of such a revision since it would require multiple study types and may entail an “unbundling” of System and Local RA attributes, impacting the transactability of RA contracts. Importantly, it would have an impact to other projects interconnected on the system or in the queue, with “system-only” resources potentially having reduced deliverability due to “local-only” resources serving a greater portion of such loads. Despite these complexities, CESA still believes that it is worthwhile for the ISO to consider a local deliverability designation, studies, and process since many local energy storage projects are stalled or bear high costs to ensure deliverability network upgrades are in place to be able to wheel power to the bulk electric system, even though, from a power flow perspective, the generation and/or energy storage will likely serve local load (e.g., LA Basin storage unlikely to actually serve load in the SF Bay Area). The Update Paper touches upon this issue, but further comprehensive changes merit some discussion and potential further development of proposals, especially as clean local generation and storage resources play an important role in both the state’s reliability requirements and decarbonization goals.
2. Addressing deliverability process and timelines for behind-the-meter (BTM) aggregations with export capacity: CESA believes that this is the appropriate stakeholder initiative to receive clarifications on the applicability of the current distributed generation deliverability (DGD) study criteria and modifications to the current deliverability study and allocation process to accommodate BTM aggregations – an issue that has confounded the ability for BTM aggregations under the Distributed Energy Resource Provider (DERP) model to qualify for RA for its export capabilities. Notably, the applicability of the current commercial viability and deliverability retention criteria will require some clarifications or revisions to accommodate BTM hybrid and energy storage project development. Whereas COD is more clear and appropriate for IFOM projects, DERAs are almost always built over time (i.e., not all at once), where VPP contracts are typically executed in a way where certain development milestones are in place for customer sites are progressively developed and incorporated into the VPP portfolio. A number of key areas of clarification and/or modification are detailed in a proposal that CESA jointly submitted with collaborating parties in R.21-10-002.[1]

[1] See Joint DER Parties Reply Comments in R.21-10-002 filed on February 24, 2022 here.

1. Please provide your organizations comments on concerns regarding the current deliverability assessment methodology.

2. Please provide your organizations comments on concerns regarding the timeliness and availability of deliverability.

3. Please provide your organizations comments on the path forward outlined in the update paper.

4. Please provide your organizations comments on the proposed next steps.

5. Please provide any additional comments you have on the deliverability challenges.

The Energy Division of the California Public Utilities Commission (CPUC) develops and administers energy policy and programs to serve the public interest, advise the Commission, and ensure compliance with Commission decisions and statutory mandates.  

CPUC Energy Division Staff greatly appreciates and supports the CAISO’s newest initiative to examine the challenges in determining the deliverability of resources that are applying for grid interconnection. Safe, reliable, and timely interconnection of resources that can provide deliverable flows to the CAISO system is a critical part of California’s aggressive efforts to decarbonize the grid in affordable ways.  We appreciate the CAISO’s candid explanation of these challenges and the sense of urgency in discussing these issues with stakeholders before the Cluster 15 interconnection process is fully underway.

CPUC Staff stands ready to explore appropriate ways for certain projects to move forward quicker in the interconnection process and be deemed deliverable. As the CAISO considers these issues, we suggest broadening the scope to include examining ways to ensure interconnection of storage projects that have been identified by CAISO as lower-cost alternatives to transmission, and that have been ordered by the CPUC to be procured through competitive processes or other processes to be determined in the future, such that these projects can be interconnected in time to meet the reliability needs that CAISO identified. These kinds of storage projects would be dispatched as market resources, but occasionally may be used to provide transmission services, so the value of these dual benefits may warrant some kind of “transitional relief” that provide a quicker path to interconnection.

We believe the state could benefit from this review of deliverability issues and we hope the CAISO prioritizes full consideration of all possible options to enhance the interconnection process.  We applaud the CAISO's ongoing efforts to enhance the coordination between planning, procurement and interconnection of new infrastructure.  

1. Please provide your organizations comments on concerns regarding the current deliverability assessment methodology.

CalWEA is concerned that the CAISO’s deliverability assessment methodology is unnecessarily conservative, thereby preventing a significant volume of wind, solar and energy storage capacity resources from obtaining the Transmission Planning Deliverability (“TPD”) necessary to qualify as Resource Adequacy (RA) capacity.  As a result, these resources that could otherwise provide Resource Adequacy (RA) capacity during all hours of significant reliability concern are being prevented from interconnecting to the CAISO system.  Without a solution to this issue, California’s mid-term reliability and clean energy goals are in jeopardy.  Stated another way, these resources will be needed to meet the state’s dual reliability and clean-energy goals. At a minimum, if a substantial number of resources are able to attain deliverability due to reforms implemented by the CAISO, these resources will help to create a competitive market as LSEs seek to meet their substantial mid-term reliability targets. 

Importantly, plans for building additional transmission capacity that were adopted in the previous transmission planning cycle, and those that will be adopted in the current cycle, cannot be realized soon enough to interconnect the RA resources that CAISO will need to meet the state’s reliability and clean energy goals prior to 2032.  The good news, however, is that reforming the CAISO’s deliverability assessment methodology can be timely achieved while keeping the grid reliable, buying CAISO the time it will need before new capacity becomes available.  Furthermore, making more efficient use of the existing grid will reduce environmental impacts and substantially reduce costs to ratepayers by reducing transmission upgrade costs while increasing competition in the RA market.  

2. Please provide your organizations comments on concerns regarding the timeliness and availability of deliverability.

Many developers, including most CalWEA members developing greenfield projects, whose projects were scheduled to come online in the next few years, have recently discovered that they will not be able to obtain a Transmission Plan Deliverability (“TPD”) allocation that is necessary to qualify under the CPUC’s RA program and, in turn, are unable to successfully commercialize the projects and proceed with development.  This is a clear and concerning signal that available TPD capacity appears to be insufficient to meet the CPUC’s 2026 clean-energy capacity goals, let alone its larger goals in the 2030 timeframe prior to when new transmission can become available.  Without some prospect of the availability of TPD capacity, otherwise viable new developments are contemplating significant development delays or abandoning projects completely.

3. Please provide your organizations comments on the path forward outlined in the update paper.

Regarding the proposed Track 1, CalWEA very much appreciates the opportunity that the CAISO is creating to review the current deliverability methodology and discuss whether modifications are warranted, commencing by the end of Q1 2023.  

Regarding the proposed Track 2, CalWEA supports the CAISO’s ongoing consideration of whether changes to inputs and assumptions, and particularly dispatch assumptions, are warranted sooner rather than later. To that end, in addition to considering changes to offshore wind dispatch assumptions, we encourage the CAISO to reconsider its recently revised storage dispatch assumptions.  We believe it would be useful for CAISO to address the three points that CalWEA made in our September 23, 2022, comments that we believe support further revisions to the storage dispatch assumptions.[1] 

Additionally, CAISO should not wait to modify its assumed dispatch conditions where all previously studied Variable Energy Resources (VERs) in a particular area are assumed to operate at levels higher than their Net Qualifying Capacity (“NQC”) levels granted by the CAISO and all VERs requesting deliverability in the same area are assumed to operate at levels higher than their Qualifying Capacity (“QC”) levels granted by the CPUC. Instead, CAISO should assume generation levels that are expected during the hour(s) of peak demand being studied in the HSN test.  The use of expected peak-hour generation levels in the HSN test should converge with the NQC levels adopted by the CPUC in future years.[2]  However, there is no need for CAISO to wait for the CPUC to adopt such an NQC methodology before assuming expected peak-hour production levels in the HSN deliverability test.  CAISO’s current practice of using values that exceed current QCs for VERs requesting deliverability and NQCs for previously studied VERs is inappropriate because the system is designed to rely only on the NQCs of VERs, not more, to meet the peak scenario demand during the operating conditions that CAISO studies.  Hence, CAISO should adjust, typically dial back, VERs’ dispatch levels to their QC or NQC levels in its deliverability assessment studies and TPD allocation processes and avoid allocating TPD capacity beyond what is required based on the QC or NQC level of the resource.  In fact, such an approach would make the CAISO deliverability methodology consistent with those of PJM and MISO.[3]

Regarding the proposed Track 3 to explore whether “some sort of transitional relief would be appropriate, particularly when delays to network upgrades impact resource development,” CalWEA supports such an effort, but suggests that this be addressed within the first track.  

[1] In CalWEA’s September 23, 2022, comments, CalWEA requested that the CAISO respond to three specific points:  (1) that HE 18 should not have been moved to the low-risk SSN window; (2) that the SSN test is improperly aimed at local curtailment of supply resources, rather than system reliability; and (3) that assumed storage operations should reflect CAISO’s optimal/secure dispatch.

[2] Presently, the CPUC’s QC values for VERs are statistical expectations for production from VERs achieved over many hours, not necessarily during times of potential resource shortfalls (HSN scenario).  In the future, however, under its new “24 hourly” Resource Adequacy framework, the CPUC is moving to establish QC values that reflect expected generation levels during the hour of potential resource shortfall of each month. The CPUC is currently considering various “exceedance” approaches, or facsimiles thereof, to set those expected generation levels.

[3] See table below.

4. Please provide your organizations comments on the proposed next steps.

CalWEA provides the following comments and feedback on the CAISO’s December 12, 2022, update paper on Deliverability Challenges for the CAISO’s consideration as it prepares its first issue paper for the new stakeholder proceeding. In preparing these comments, CalWEA reviewed the  deliverability study methodologies of PJM and MISO, which are summarized in the table below.[4]

CalWEA Summary of On-Peak Deliverability Study Methodologies

a.  CAISO should place any discussion of NERC Standard TPL-001, relating to N-2 contingencies and extreme event contingencies, in its proper context.  The TPL-001 standard is one of NERC’s Transmission System Planning Performance Requirements and does not apply to generation deliverability studies. 

The TPL-001 requirement is aimed at preventing loss of “non-consequential” load if a single, or certain double, transmission element outages occur in the system (e.g., two major line outages, simultaneously or sequentially, N-2).  To determine whether load loss would occur under such outage conditions, NERC translates load loss into violations of various operating criteria, namely line overloads or voltage limit violations.  When transmission element outage(s) occur and supply capacity is reduced to parts or all the system, line overloads or voltage violations can occur which must be corrected by dropping load to correct the operating criteria violations.  Thus, the criteria violations are simply a proxy for loss of load, which TPL-001 is aimed at avoiding.

In generation deliverability studies, operating criteria violations can be mitigated simply by reducing some of the generation whose deliverability is being studied.  Such a reduction will not lead to loss of load since the system is planned to have significantly more generation (at least 15% more generation) than total system demand throughout the CAISO balancing area.  Hence, attempting to tie generation deliverability studies to the TPL001 standard by discussing violations of operating criteria is incorrect and misleading. 

b.  CAISO should consider the methodologies used by PJM and MISO (which cover more than half the country). There are no NERC or FERC standards, or even guidelines, regarding deliverability study methodology and requirements; thus, methodologies have typically been developed by system operators.  In that regard, CAISO’s deliverability assessment methodology, originally inspired by the PJM approach, has departed substantially from those of its fellow system operators in several important areas.  We discuss the approaches of PJM and MISO below, as summarized the table below.

Low-risk vs. high-risk system conditions. Deliverability studies are focused on loss of generation, not loss of load.  CAISO is reasonably concerned that loss of generation could lead to loss of load; however, this concern is only valid during times of high system need (i.e., evening summer hours, which is anticipated to remain the high-risk period for many years for California[5]).  Indeed, the CAISO paper notes (at p. 4) that the purpose of the deliverability analysis is to ensure the availability of sufficient resources “under stressed system conditions.” This is the only time that all RA resources are potentially needed to meet the demand (and, in addition, operating reserves are available); many fewer resources are needed during low-risk hours outside of this time frame.  Therefore, CAISO should consider, in the stakeholder process, whether it should apply only a high system need (HSN) test and drop its test for low-risk hours (such as the secondary system need, SSN, test) for the on-peak-deliverability assessment.  This would make CAISO’s approach consistent with the deliverability assessment methodologies of both PJM and MISO, which study only one scenario that is equivalent to HSN. 

N-1 vs. N-2.  Similarly, CAISO should consider whether to abandon its N-2 assumption for its on-peak-deliverability assessment.  An N-2 condition is an extremely rare operating condition; assuming that such a condition would coincide with the HSN (or SSN) scenario and with a lack of sufficient generation capacity in other parts of the system to meet the peak scenario demand, is simply inconsistent with any system operating experience.[6] 

Again, abandoning the N-2 condition for the on-peak-deliverability assessment would make CAISO’s approach consistent with PJM’s and MISO’s methodologies,[7] none of which study N-2 for their deliverability (capacity designation) studies.    

CAISO should elaborate on the December paper’s discussion of a contingency analysis involving loss of the Windhub transmission lines.  CalWEA generally supports limiting deliverability from specific resource pockets that are in a corner of the system; however, the purpose of CAISO’s reference to this special condition is not clear. 

Dispatch assumptions.  As discussed under 3 above, CAISO should also revisit its dispatch assumptions, which are also incongruous with those of PJM and MISO as noted above and in the table below.

Assumed study area. CAISO includes a more expansive set of resources in a study area than do the other system operators.  These assumptions of each system operator are summarized in the table below.

Local constraint areas.  The CAISO’s paper notes a concern that CalWEA has previously raised, that resources in local constrained areas are deemed as unable to provide local capacity if they cannot (under the current methodology) deliver into areas of the grid outside of the locally constrained area.  CAISO states (at p. 4) that there have been no cases where such a situation has driven network upgrades between local capacity areas.  Likely not, because no generator could afford to pay for such upgrades; however, many resources, that could have been developed to meet local capacity needs, potentially in competition with existing local capacity resources, have not been built as a result.  As a result, we propose, CAISO and stakeholders consider, in the upcoming process, whether resources in locally constrained load areas should be qualified to provide RA capacity in the local area (only) but not allowed to provide system RA capacity, hence freeing existing RA resources in the constrained area to provide RA capacity to LSEs all over the system. 

[7] The CAISO’s December paper (at p. 6) erroneously states that PJM and MISO assume an N-2 condition.  This is not an issue of different study processes or terminology.

[5]  The high-system-need test will evolve as high-risk periods evolve, so there is no need to anticipate other periods that may, someday, become high-risk as suggested on p. 5 of the paper (“It (is) necessary to consider the ability of the transmission system to deliver generation to load during a broader range of conditions as opposed to focusing exclusively on an examination of peak load conditions”).

[6] For example, an N-2 condition was not present during the stressed system conditions experienced in August 2020 and September 2022, nor were there any unusual dispatch conditions or extensive resource curtailments.

[4] PJM’s Deliverability Study Methodology can be found at: PJM Manual 14B: PJM Region Transmission Planning Process.  MISO’s methodology can be found at:  https://www.misoenergy.org/legal/business-practice-manuals/ (navigate to BPM 015-Generation Interconnection, Appendix C).

5. Please provide any additional comments you have on the deliverability challenges.

a.  Curtailment Concerns.  CAISO and stakeholders should consider whether significant generator curtailments would occur if the SSN test were to be eliminated.  The Queue contains hundreds of proposed stand-alone storage and storage/solar projects, widely dispersed across the CAISO grid. CalWEA believes that deliverability reforms would allow storage to be built in high-congestion resource areas that would address curtailment under SSN and other operating scenarios. This natural solution can be tested in a production simulation studies by CAISO (or its consultant) as part of the TPP process. Any needed economic upgrades identified by the SSN test, can planned for, and constructed in that fashion.

b.  CAISO resource constraints.  CalWEA understands that CAISO is resource-constrained due to staffing shortages.  However, adopting the deliverability reforms proposed above will immediately reduce the CAISO’s workload in the following ways:

• Using NQC rather than the CAISO exceedance figures for VERs’ dispatch eliminates the need to evaluate exceedance numbers particularly as the migration to 24-hourly RA framework continues;
• Eliminating the SSN scenario will reduce one component of CAISO’s deliverability assessment methodology;
• Eliminating the N-2 study condition will reduce another component of CAISO’s deliverability assessment methodology; and
• Providing stakeholders with clarity on deliverability and a path forward will reduce the number of individual discussion requests CAISO receives from interconnection customers.

In conclusion, CalWEA believes that any challenges related to studying and implementing deliverability reforms will prove well worth the effort, since increasing the availability of TPD capacity will be essential to cost-effectively achieving the state’s twin goals of ensuring reliability while reducing greenhouse gases.  Moreover, such reforms will add new resources to the grid (including many dispatchable storage resources), which will alleviate the challenges that the CAISO has faced during extreme weather events in recent years.

1. Please provide your organizations comments on concerns regarding the current deliverability assessment methodology.

Golden State Clean Energy (“GSCE”) supports CAISO examining its deliverability assessment methodology (now and periodically) to ensure aspects like generator dispatch assumptions are still reasonable and not overly onerous for resources under current grid conditions. This allows CAISO to maximize the amount of available deliverability with the existing infrastructure. As CAISO showed in the past year with battery storage dispatch assumptions, reasonably relaxing storage dispatch assumptions provides multiple benefits without detracting from the rigor of the deliverability assessment. These types of changes should continue to be considered and made whenever possible.

At the same time, we recognize the deliverability assessment underpins reliable grid operations and that CAISO must ensure the integrity of the deliverability assessment methodology in the face of economic and reliability planning pressures. GSCE appreciates CAISO kicking off this initiative with a detailed explanation of some of the key aspects of the deliverability methodology to facilitate better stakeholder understanding about the methodology.

We also remain focused on the fact the state will require much more deliverability from new transmission to support the resource build-out required to meet SB 100.

If CAISO does find it warranted to make additional changes to its deliverability methodology, GSCE urges CAISO to provide a clear future date for implementation. Ideally, changes would not be implemented until after the March deliverability allocation results have been released to interconnection customers. This notice is needed to allow interconnection customers to make informed decisions about possible deliverability transfers that may be desired following changes to dispatch assumptions, and CAISO would benefit by ensuring that projects already in the queue can maximize their potential RA value and more timely make use of additional deliverability.

2. Please provide your organizations comments on concerns regarding the timeliness and availability of deliverability.

3. Please provide your organizations comments on the path forward outlined in the update paper.

4. Please provide your organizations comments on the proposed next steps.

5. Please provide any additional comments you have on the deliverability challenges.

GSCE supports this initiative. We agree that receiving an allocation of deliverability is a significant challenge for projects in the queue, and even once a project receives deliverability it still has uncertainty in the form of network upgrade construction timelines that may lead to delays in the project’s COD (with possible PPA ramifications) or in the ability to secure a deliverability status and provide RA. We support CAISO examining deliverability challenges to make clear the issues facing interconnection customers and to explore possible near- and long-term solutions.

CAISO’s update paper states that there is an excessive volume of projects in the interconnection queue. We agree that the size of the queue is a major issue. However, our queue analysis shows that the historic rate of projects in the queue reaching commercial operation is very low, such that the queue actually needs to grow significantly to allow CAISO to interconnect the amount of resources needed for California to reliably meet its SB 100 goals. To us, the high failure rate of projects in the queue is one of the most significant issues underlying interconnection and deliverability challenges – among other things, the queue is filled with projects that can receive an allocation of deliverability but never be built, or at least face significant delays coming online and providing resource adequacy. 

Our queue analysis finds that the historical success rate of projects in CAISO’s queue reaching commercial operation is only 6.3 percent (in terms of megawatts).^[1]  California needs to ramp up development to reliably meet its policy goals, yet as we observed with the Cluster 14 supercluster challenges, it is not realistic to assume that CAISO or the utilities could manage a queue of the size that is needed to produce the expected results while maintaining the current low rate of projects reaching commercial operation. CAISO has recently provided an estimate that 279 to 308 interconnection requests are expected in Cluster 15 (based on non-binding indications from the development community that allows actual interconnection requests to exceed this amount),[2]  which adds to the interconnection challenges and urgency for reform.  Given the scarcity of human resources to study projects and manage them through the queue, the only logical conclusion is the success rate for projects in the queue must improve significantly – by as much as four-fold – to set California up to meet its policy goals. We have attached a white paper that we issued in September of 2022 (and previously shared with CAISO in the 2021 IPE initiative and elsewhere) to explain these concerns with the queue and deliverability allocation, as well as some of our proposed solutions to address these issues.

We highlight the high failure rate of projects in the queue because we share CAISO’s concerns with deliverability, but we believe queue reform is one area that CAISO must address to create a more sustainable generator interconnection and deliverability allocation process. This initiative should examine how queue reform can provide solutions related to the problems discussed. The hyper level of competition CAISO references in its update paper is not going away if the queue continues to be allowed to be saturated with projects that fail to reach commercial operation in a timely manner (and Cluster 15 is posed to further support this), so short-term fixes should not be the sole focus of this initiative.

Nonetheless, we agree that there is some urgency to act now given the current reliability challenges and need to add a significant amount of new resources in the near-future. We are interested in exploring CAISO’s concept of transitional relief to better understand CAISO’s thinking, and we also think other options should be on the table once CAISO receives feedback and more fully explains the scope of this initiative and the relevant issues.

Regarding possible solutions CAISO examines in this initiative, some guiding principles that CAISO should adopt is to look for least regrets resource areas and areas where CAISO can get the most bang for its buck. Given the magnitude of CAISO’s deliverability challenges and the urgent need to act, CAISO cannot take on ideas that will not produce timely or meaningful results, nor should it look toward solutions with substantial uncertainty.

Instead, CAISO should focus on efforts that create access to a significant amount of capacity on a relatively quick time horizon. This includes efforts that identify low-cost, scalable resources; target geographic regions where proven technologies can interconnect and deliver to the bulk grid; and unlock areas where resources can come online relatively quickly and where land use issues are not known to create hurdles that delay project development. The Central Valley is one area that would satisfy these principles and would provide an opportunity to quickly develop least regrets renewables and storage. If CAISO focuses on the principles of developing least regrets resource areas and areas where it can get the most bang for the buck, it will help de-risk the projects CAISO targets by reducing uncertainty and expediting the potential online date. We do not oppose CAISO focusing on other types of project attributes, but we see these aspects as indicating projects that CAISO can rely on to provide more immediate relief and meaningful amounts of capacity.

[1] This queue data is current as of July 14, 2022, as provided in CAISO’s Public Generator Interconnection Queue information. All references to our own analysis or current queue data are net at the point of interconnection and based on the public data we pulled on July 14, 2022, unless specifically stated otherwise or other sources are cited. Our analysis of the queue’s historical success rate excludes Cluster 14, as Cluster 14 has not completed the study process yet and does not fairly inform this data.

[2] CAISO market notice: Results of estimated number of cluster 15 interconnection requests, Dec. 30, 2022: http://www.caiso.com/Documents/results-of-estimated-number-of-cluster-15-interconnection-requests.html.

1. Please provide your organizations comments on concerns regarding the current deliverability assessment methodology.

LSA supports broadening the proposed initiative to focus on larger issues related to PTO capability to meet state goals and CPUC procurement objectives, possible mismatches between the current TPD allocation and those directives, and viability of projects currently holding TPD allocations.  LSA’s specific comments are stated below.

Deliverability assumptions

LSA believes that the issue of “deliverability to where?” should be addressed in the initiative, as described below. 

Deliverability for Local Capacity Resources (LCRs)

The current CAISO methodology assumes that: (1) All generation receiving “deliverability” must be deliverable to “the aggregate of load;” and (2) such generation located within a Local Capacity Area (LCA) can be designated as LCRs.  The Update defends the current construct by noting that some have argued that LCRs need only be deliverable with their respective LCAs and then refutes that argument by saying that LCRs must be available to serve load outside their LCAs under some conditions.

LSA questions whether this issue is so black-and-white.  LSA acknowledges the CAISO’s statement that some LCRs may sometimes need to be available to serve load outside their LCAs but questions whether all such LCRs must have that capability.  LSA believes that the CAISO should consider in the upcoming initiative whether some portion of the LCR requirement could be satisfied by resources passing a test to be deliverable only to their LCAs.

This question is particularly urgent for energy storage resources that may be developed to provide local reliability or RA deliverability.  The CAISO is heading in a direction of market procurement for such resources without providing for the deliverability those resources need for such market development.  Energy storage resources must have deliverability to be developed as market resources, as they simply cannot obtain the Power Purchase Agreements (PPAs) needed for such development without it.

For example, the CAISO recently approved a battery storage facility at Lamont Substation to provide local reliability that is being procured by the PG&E Central Procurement Entity (CPE) as a market resource.  However, there is no deliverability left in that area, so it is unclear how such a resource can be developed as a market resource.

Similarly, the preliminary policy-driven analyses in the 2022-2023 Transmission Planning Process (TPP) identified numerous potential storage solutions in the PG&E Off-Peak Deliverability Assessment.  These resources cannot be developed as market resources without deliverability in those areas, yet the TPP analyses (Policy-Driven or Economic) made no provision for the deliverability that will be needed.

Thus, the CAISO should:

• Complete the Storage as a Transmission Asset (SATA) initiative, to provide a better framework for CAISO procurement of such assets without deliverability requirements; and/or

• Modify the Deliverability Assessments in the TPP, to provide deliverability needed for market procurement of storage capacity identified as needed to meet reliability or policy-driven needs.

• Consider whether some portion of the Local Capacity Requirement could be awarded deliverability even if it is only deliverable within the LCA or other constrained area and not to the “aggregate of load.”

Slice-of-the Day framework

LSA believes that the initiative could consider the CPUC’s possible move toward a Slice-of-the-Day framework.  Discussions in CPUC proceedings have raised the issue of whether all FCDS solar energy need be deliverable to “the aggregate of load,” or – given peak production in what are now off-peak hours – at least some of that generation could be considered deliverable if it can reach its co-located or nearby energy storage facilities, even if it does not reach load directly. 

A growing portion of solar production will never reach load directly yet can still contribute significantly to reliability by filling energy storage.  Even OPDS resources are assessed for their ability to deliver to load, not storage.  This is particularly important given the CAISO’s assertion in the CPUC proceeding that solar energy filling FCDS storage must also have FCDS (though the CAISO seems to have moderated that position somewhat). 

In other words, Energy-Only solar capacity can certainly be deliverable to storage and should count within LSE portfolios as meeting the requirements for filling FCDS storage.

Facilitating queue exit

LSA has advocated before for voluntary incentives for projects to exit the queue, such as forgiveness of financial-security forfeits that would otherwise apply, and the initiative could consider this as well.  The initiative could also consider ways to make it easier for projects to transfer deliverability to projects that have different POIs that are nearby electrically, e.g., behind the same limiting constraint; perhaps such requests could be assessed in the annual Reassessment, and approved if no additional upgrades were triggered.

Study assumptions

As a general matter, the dispatch assumptions in the assessment methodology should be consistent with the ways the CAISO dispatches resources and otherwise operates the system.  For example, it is LSA’s understanding that the CAISO monitors and redispatches N-2 contingencies on only a few selected paths in its real time dispatch, and the N-2 criterion should be reconsidered in that light.

2. Please provide your organizations comments on concerns regarding the timeliness and availability of deliverability.

LSA believes that the upcoming initiative should consider these priorities:

First priority:  Keep projects with TPD and PPAs on track. 

The CAISO has stated that “only” 10 projects were delayed in the more recent Reassessment process, citing this statistic as a tremendous improvement.  Thus, in the past 2-3 years, it’s possible that maybe 30-40 projects (many with executed GIAs and PPAs), with hundreds or perhaps thousands of MWs, have been delayed late (perhaps very late) in the development process.  The delays appear to be 12-24 months or more, a level that would expose many projects to severe financial penalties under most PPAs, or perhaps loss of the PPAs entirely.

While recent tariff changes would allow such projects to recoup their financial security if withdrawing from the queue after “significant errors or omissions,” with all due respect, this is not a satisfactory outcome, for the developer or the system as a whole.  Instead, those much-needed resources need to stay in the queue and on track, and refunds of security generally do not come close to recouping significant developer expenditures to bring a project into these late development stages.

Thus, when projects are delayed, the CAISO and PTOs should be required to provide information about: (1) acceleration options, e.g., finding ways to implement RAS/CRAS or circuit-breaker upgrades more quickly; or (2) mitigation options, e.g., which projects can come on-line before RAS/CRAS implementation or circuit-breaker replacement.  (There is no clear reason why a RAS or RAS – not physical transmission upgrades – should be the longest-lead-time upgrades for a project COD.) 

These mitigation efforts should include more information about available Interim Deliverability and/or Limited Operation Study results. There are projects in the queue today that are awaiting completion of multi-year Network Upgrades to achieve FCDS or COD but will likely be able to interconnect or access Interim Deliverability earlier. However, there is no practical way for a developer in this situation to keep the project on tract if Network Upgrades are delayed because of the “chicken-and-egg” problem created by the timing for Interim Deliverability or Limited Operation Study analysis. That analysis is only available within 3-6 months of a project’s in-service date, but without this information, developers cannot contract for the project’s capacity and finance construction of the project. Providing an earlier look at Interim Deliverability and Limited Operation would address this problem and enable projects to be brought online earlier.

The Update states that “the ISO is actively supporting a number of other efforts to expedite the largest number of new resources to commercial operation.”  Likewise, the Update mentions some “softening” of requirements or “transitional” measures to address TPD availability.  The CAISO should explain in the upcoming initiative what these “active efforts” are and what kinds of relaxation or transitional actions it considers to be acceptable. 

Second priority:  Assess whether there is enough deliverability in the system to achieve the Mid-Term Reliability goals and those in the years beyond. 

• If not, are the PTOs actually capable of building transmission at the needed level?  It appears that PG&E, for example, is already undergoing some financial strain to meet transmission requirements for fire safety and other needs, and there have been many delays of key transmission projects needed by new resources; even with transmission construction by entities other than the three large PTOs, can the state construct the transmission needed to meet its renewable-energy and reliability requirements?  If not, what a*re the options?  The initiative should examine how to give the PTOs the tools they need to construct transmission needed to meet state requirements.

• Even if there is enough deliverability in the system and/or the PTOs can be enabled to build it at the needed level, it appears that new-resource development requiring TPD is simply “stuck,” at least in the near term.  Deliverability has simply run out in many areas and is unobtainable for any new projects. 

The initiative should examine whether existing deliverability is allocated to a mix of resources that can meet CPUC and state procurement targets, and/or whether projects holding TPD allocations currently may not be viable, even if they have not been in the queue for 7 years.  It would be helpful if the CAISO could provide information on projects that have TPD but are not moving forward or are otherwise non-viable, e.g., do not have Site Exclusivity and/or PPAs even after being in the queue for some time. 

Thus, the initiative should consider criteria for non-viability, and potential reallocation of previously awarded TPD from non-viable projects to those that are viable and ready.  While this is the first time LSA has advocated potential deliverability reallocation within the current 7-year tariff development timeline, LSA has long supported measures to remove non-viable projects from the queue using voluntary and other means.  Our earlier support contributed to the development and implementation of the Commercial Viability Criteria, for example. 

LSA’s concerns during the Interconnection Process Enhancements (IPE) initiative with the CAISO’s Commercial Readiness proposals for Interconnection Requests were not with the concept itself but the hurried execution and mismatch between the proposal details and the CAISO-area resource development process.  In addition, the proposal would have taken effect starting with Cluster 15, and therefore it would not have helped with the current TPD allocation.

LSA is not advocating specific viability criteria at this time but believes that the upcoming initiative could consider appropriate and relevant criteria for this purpose.

3. Please provide your organizations comments on the path forward outlined in the update paper.

LSA agrees with the CAISO that “tighter coupling of resource and transmission planning, procurement, and interconnection processes is needed to focus near and midterm activities.”  Our suggestions above are geared to improving that resource-transmission coordination.

4. Please provide your organizations comments on the proposed next steps.

  LSA has no other comments on next steps beyond those provided above.

5. Please provide any additional comments you have on the deliverability challenges.

No additional comments at this time.

1. Please provide your organizations comments on concerns regarding the current deliverability assessment methodology.

New Leaf Energy, Inc. (“New Leaf Energy”), an independent developer of energy storage that was recently spun out of solar and storage developer Borrego, thanks CAISO Staff for its thoughtful response to stakeholder concerns regarding deliverability challenges as outlined in the December 12, 2022 paper entitled Deliverability Challenges: An ISO Update (“Update Paper”) and for the opportunity to provide these comments. New Leaf Energy looks forward to participating in the forthcoming stakeholder process, during which CAISO staff and stakeholders can dive deeply into the technical topics raised in the Update Paper as well as others.

For example, while the Update Paper briefly touches on the issue of deliverability in Local Capacity Areas (“LCAs”), New Leaf Energy suggests that the CAISO consider exploring the distinct study needs for Local Resource Adequacy (“RA”) as compared to System RA. Currently, resources are studied the same way, regardless of which need they are seeking to serve – that of the entire CAISO system or that of a single LCA. However, Local RA resources are designed explicitly to serve local reliability needs. They must necessarily be deliverable to the LCA that they are intended to serve, but it is unnecessary to require them to be deliverable to the entire CAISO system. New Leaf Energy suggests that the forthcoming stakeholder process consider whether Local RA resources should be studied under a distinct local deliverability scenario to obtain a Local RA capacity qualification, rather than be studied under the same System RA study conditions.

2. Please provide your organizations comments on concerns regarding the timeliness and availability of deliverability.

New Leaf Energy suggests that the forthcoming deliverability stakeholder process should address three distinct topics:

• First, New Leaf Energy agrees with the Update Paper that CAISO’s deliverability assessment methodology and potential study reforms are a critical issue. Any changes to the methodology must allow a more efficient utilization of the existing transmission system while still maintaining reliability.
• Second, New Leaf Energy recommends that the initiative consider ways to assess how much of the CAISO’s already-allocated deliverability is going to materialize on the system and how to free up the capacity that is unlikely to be used. The initiative should explore how to distinguish between projects that are real – those that are making good faith progress but have been delayed due to factors outside of their control – and projects that are clearly non-viable. For the latter category, there may be opportunities to “recycle” deliverability that has been allocated to projects that are now dead. Early on in the Interconnection Process Enhancements initiative, the CAISO invited stakeholders to consider steeper requirements for a projects to prove that they are moving forward in the seven year period between their deliverability allocation and their commercial online date (“COD”). Some stakeholders were supportive, while others expressed concerns or suggested that the CAISO’s time would be better spent considering the projects that are already at or beyond their seven year time-in-queue limit.[1] New Leaf Energy suggests that all of these topics should be in scope for the forthcoming deliverability initiative.
• Third, New Leaf Energy recommends that the forthcoming initiative explore how the anticipated retirements of gas and nuclear generators over the next decade or so will “create” new deliverability on the existing transmission system. In the stakeholder process, it would be useful to conduct an analysis of how these resource retirement timelines comport with the timing of the need for new Local and System RA resources.

[1] “Interconnection Process Enhancements 2021 Issue Paper and Straw Proposal” (December 6, 2021), p. 42-44, available at: http://www.caiso.com/InitiativeDocuments/IssuePaper-StrawProposal-InterconnectionProcessEnhancements2021.pdf.

3. Please provide your organizations comments on the path forward outlined in the update paper.

New Leaf Energy appreciates the difficult task facing the CAISO amid an unprecedented transition to renewable energy and accelerating extreme weather events. The deft handling of the events of September 6, 2022 demonstrates that the CAISO is preparing appropriately for these challenges. New Leaf Energy believes that the deliverability reform conversation is an important part of that preparation.

The Update Paper correctly observes that the volume of interconnection requests have increased in recent years and are expected to increase again in 2023, creating a strain on the CAISO. However, given the economic and reliability drivers of the clean energy transition in the United States and in California, high volume queues are very unlikely to subside, as they are a symbol of a vibrant and competitive market. The ideas addressed in the Update Paper and the many others that will be discussed in the forthcoming initiative are potential solutions to the challenge of delivering clean capacity that California needs, especially in LCAs.

Finally, New Leaf Energy notes the CAISO’s growing interest in storage as a policy- or economic-driven solution to transmission system needs. For example, during the November 17, 2022 stakeholder meeting in the 2022-2023 Transmission Planning Process, the CAISO identified many gigawatts of energy storage as potential mitigations in PG&E territory.[1] However, for these resources to be developed, there must be deliverability available. But there is no deliverability in those identified areas and – at least at this time – no proposed Network Upgrades to create more deliverability. The deployment of energy storage that the CAISO itself sees as needed will not be realized without a pathway to deliverability.

[1] Slide Deck for 2022-2023 Transmission Planning Process Stakeholder Meeting, November 17, 2022. See p. 141-142 (Slides 107-208). Available at: http://www.caiso.com/InitiativeDocuments/Presentation-2022-2023-Transmission-Planning-Process-Nov%2017,%202022.pdf.

4. Please provide your organizations comments on the proposed next steps.

The ISO proposes to review stakeholder feedback provided herein and to incorporate it into two issue papers, which will serve to initiate a stakeholder process by the end of Q1 2023. The first issue paper will be “a review of the methodology […] to ensure the deliverability requirements strike the appropriate balance between reliability and cost containment, and that the reliability requirements are not unduly burdensome.”[1] The second issue paper will explore “if some sort of transitional relief would be appropriate, particularly when delays to network upgrades impact resource development.”

New Leaf Energy applauds the CAISO on proposing concrete and timely next steps to advance this important conversation. New Leaf Energy offers itself as a resource to CAISO stuff while preparing the issue papers and looks forward to actively participating in the forthcoming stakeholder process.

[1] Update Paper, p. 8

5. Please provide any additional comments you have on the deliverability challenges.

New Leaf Energy has no further comment at this time.

1. Please provide your organizations comments on concerns regarding the current deliverability assessment methodology.

NextEra Energy Resources, LLC (NextEra) appreciates the opportunity to provide comments on the ISO’s Generator Deliverability Challenges Update paper. While NextEra understands the complexity that goes into the deliverability assessment methodology, the methodology should evolve as the needs of the California grid grow. With ongoing drought conditions and increasing summer heat waves, combined with state agencies’ prediction for unprecedented load growth in the next few years, ensuring the addition of reliable resources on the grid is more important than ever.

The Deliverability Update covers three concerns with the current methodology dispatch assumptions, the need for High System Need (HSN) and Secondary System Need (SSN) scenarios, and consideration of n-2 contingencies. NextEra’s comments focus on some aspects of these topics below.

NextEra urges the ISO to compare all deliverability methodology dispatch assumptions with what was actually delivered and/or called upon to be delivered during critical days this last summer. In all study cases, dispatchable resources, including gas, are dispatched to the Pmax, while renewables are dispatched per ELCC. While gas resources are assumed to achieve their ideal values at standard test conditions, deliveries often fall short in real time due to derates related to weather/heat conditions. The ISO should review the dispatch methodology for all types of resources.

Under the Federal Power Act, public utilities’ tariff, rules and practices may not grant undue preferences. All dispatchable resources, including hydro, gas, and storage should be represented in deliverability studies in a manner that accounts for actual observed production and outputs during peak periods. This will ensure that dispatchable resources are modeled properly as being available when capacity shortages are most likely to occur.

Specific to the on-peak deliverability methodology and dispatch of the energy storage resources, NextEra appreciates the ISO’s work in reviewing and improving the dispatch assumptions in both the: short term and long term deliverability assessments.

In particular, NextEra appreciates the ISO’s work to adjust the dispatch assumptions of storage in the SSN, and we directionally appreciate the revised ISO’s assumptions, where in:

• For near/short-term deliverability assessments, in the SSN study, storage should be studied at 80% of installed capacity
• For mid and long-term deliverability assessments, in the SSN study, storage should be studied at 50% of installed capacity

However, based on our review of the System Operating events in September, 2022, we believe there is a need to further improve upon the dispatch assumptions as conforming to real time events. During September, 2022 events the average storage dispatch level during the SSN time window ranged from 10-46% of the peak storage output.

NextEra’s recommendations are as follows:

• For near/short-term deliverability assessments, in the SSN study, storage should be studied at 30% of installed capacity as an approximate midpoint of the observed dispatch range;
• For mid and long-term deliverability assessments, in the SSN study, storage should be studied at 10% (or less) of installed capacity, based on the lower end of the observed range.

The revised dispatch numbers will better align with how storage is dispatched in real time. In addition, the dispatch reduction will result in less resources being constrained during the SSN window, which should result in more resources receiving the deliverability in those areas in which the SSN is the binding constraint.

Finally, NextEra continues to evaluate the ISO use of n-2 contingencies as dictated in NERC standard TPL-001. Last year, the WECC Transmission Planning with stakeholders’ approval agreed to relax n-2 contingencies when studying two adjacent transmission circuits. This decision will help reduce the level of n-2 contingency studied in the ISO GIP and is a positive step for reducing the level of constraints in the TPD assessment.

2. Please provide your organizations comments on concerns regarding the timeliness and availability of deliverability.

The Deliverability Update considers: the timeliness of deliverability for projects with PPAs and a path to deliverability for the excessive volume of requests in the interconnection queue. NextEra appreciates that the ISO is open to exploring with state agencies and the industry if some transitional relief could help relieve some of the disruptions due to delayed network upgrades. There are two issues here: 1) timing of upgrades, and 2) allocation of TPD to projects with CODs beyond the current market for PPAs.  

First, regarding timing of upgrades, NextEra’s development group coordinates regularly with PTOs in an effort to keep the mandatory upgrades required for an interconnection on schedule; however, there is no meaningful contractual incentive for the PTOs to implement the necessary network upgrades timely, whether for deliverability or reliability. A recent trend shows transmission and interconnection upgrade timelines being significantly delayed, causing a delay in the interconnection of new resources. NextEra urges the ISO to consider if there are additional tools and mechanisms available to the ISO to keep PTOs on track to meet construction milestones, including financial penalties if reasonable efforts are not being met. Ensuring the timeliness of network upgrade builds is a major step toward ensuring new projects can interconnect on time and be available when the ISO needs them during stressed conditions. The ISO should coordinate with other state agencies, CPUC and CEC, to ensure oversight over the permitting and construction of network upgrades.

Transitional relief could take many forms and NextEra would like to better understand how each of these options could impact resources currently in the queue. Interim mitigation measures in lieu of network upgrades offer a reasonable approach to helping projects interconnect sooner with transitional deliverability, which provides more certainty than the current status of Interim Deliverability, until upgrades are complete. Independent of the form of relief, it is also critical that the PTOs provide this relief with sufficient advance notice of the projected project in-service date so that generators can make necessary commercial arrangements with contracted offtakers. Additionally, the ISO could work with the PTOs to develop transitional Operation Procedures consisting of system reconfiguration, RAS, or the use of interim dynamic line ratings.

Second, one of the challenges facing developers is a timeline that sets potential TPD allocation 8+ years into the future, which is the case for the majority of projects with Phase 1 study results in Cluster 14.  It is nearly impossible to contract for PPAs for projects in 2030+ when the contracting objectives of load serving entities are significantly earlier.  Further, based on today’s study methods, which do not take into account any deliverability upgrades that have not yet been approved through the TPP, the ISO (with limited exception) is essentially sold out of deliverability and there seems to be no viable path for projects to receive deliverability.  To that end, the ISO, in conjunction with the CPUC and CEC, should develop a list of the top “no regrets” transmission needs in the state and develop an implementation plan.  Upgrades that would qualify for this list are a subset of upgrades identified in recent Cluster 9-14 studies and should be implemented as part of the next Transmission Planning Process.  The selected upgrades are those that provide the most meaningful impact to enabling as much generation and storage as possible based on what has been proposed by the developer community and consistent with the CPUC developed portfolios.  The ISO should allocate deliverability based on a future view of expected TPP-approved upgrades, which will allow some projects to move forward with the expectation of getting TPD and ultimately be successful in contracting. 

As for the excessive volume of the interconnection queue, NextEra supports the ISO continuing to consider further Interconnection Process Enhancements (IPE). While IPE is an important part of the solution, waiting to start another phase of this initiative until more information on the size Cluster 15 is available would be ideal. If Cluster 15 is as large as Cluster 14, then the ISO should pursue starting another IPE initiative.

3. Please provide your organizations comments on the path forward outlined in the update paper.

NextEra supports the ISO exploring all three tracks and believes there is benefit in each one. As stated above, NextEra recommends updating the dispatch assumptions in the deliverability methodology, updating the SSN case, and looking into transitional relief and more oversight of the timeliness of network upgrades.

4. Please provide your organizations comments on the proposed next steps.

NextEra appreciates the ISO allowing time for stakeholders to provide comments and feedback on the Generator Deliverability Challenges Update paper.

NextEra urges a forum to explore ways to solve the current PTO resource constraints that are, in large part, contributing to upgrade delays, as these impact both deliverability and actual interconnection of resources.

NextEra looks forward to the ISO initiating a full stakeholder process on this topic as it is critical to get resources on the grid.

5. Please provide any additional comments you have on the deliverability challenges.

No additional comments.

1. Please provide your organizations comments on concerns regarding the current deliverability assessment methodology.

PG&E appreciates the opportunity to provide these comments on CAISO’s update paper regarding generator deliverability challenges.  As a general principle, PG&E believes this new initiative and any proposed changes to the existing deliverability assessment methodology by the CAISO in response to concerns raised by the developer community must be considered in the broader, historical context as to why many of the existing requirements are currently in place.  While PG&E appreciates the CAISO’s desire to strike a balance between reliability and cost containment in determining deliverability requirements, it should be balanced with a review of the existing requirements and reasoning for them in the first place.  Thus, PG&E recommends that any immediate actions to solve the near-term issues raised by the industry be supported with concurrent analysis and quantification of the proposed changes.

Below are PG&E’s comments on the path forward and next steps outlined in the paper.

2. Please provide your organizations comments on concerns regarding the timeliness and availability of deliverability.

3. Please provide your organizations comments on the path forward outlined in the update paper.

This initiative raises a couple of concerns that PG&E recommends the CAISO address.  From the description in the update paper, it appears that CAISO is seeking to alter the way it determines conditional deliverability in an effort to expand the number of resources that can get Full Capacity Deliverability Status (FCDS) and thus become eligible to meet Resource Adequacy (RA) requirements.  This will likely entail a relaxation of the standards used to determine conditional deliverability, and subsequently increase risk to reliably operating the transmission system due to new lower standards.  Before proceeding with lowering the standards for determining conditional deliverability, PG&E recommends the CAISO quantify the reduction in reliability from a change in the standard so the benefit of a change can be calculated.     

This initiative also appears to run counter to the restrictions the CAISO has added to its Local Capacity Requirement (LCR) methodology.   The CAISO has added additional restrictions in the LCR analysis, effectively limiting resources that can be used to meet local requirements.   In the LCR analysis, the CAISO has adopted a dynamic assessment methodology with explicit requirements for in area production to recharge storage devices, limiting the ability of storage to replace conventional resources in local areas.  PG&E requests the CAISO provide an explanation in the next iteration of the update paper or subsequent straw proposal to provide the rationale behind loosening resource deliverability standards while tightening LCR requirements.   

4. Please provide your organizations comments on the proposed next steps.

The proposed methodology in the Update Paper will result in more resources counting for RA with fewer transmission upgrades.  This will have the following consequences:

• Increased renewable generation curtailments will lower the overall value of existing load-serving entities’ (LSEs) Power Purchase Agreements (PPAs) that were based on anticipated energy market revenues.
• Increased congestion costs resulting in higher energy prices that will take multiple Transmission Planning Process (TPP) cycles to identify and approve economic transmission solutions.
• Continue the recent history of large number of interconnection requests in queue clusters.

The proposed next steps will only exacerbate the issue.  The assumption that future congestion can be forecasted in LSE procurement processes for the benefit of all customers is highly questionable, and rather it should be done within the TPP.  As previously suggested, PG&E urges the CAISO to initiate a stakeholder process to improve how it identifies and develops congestion related upgrades that are distinct from deliverability upgrades.

5. Please provide any additional comments you have on the deliverability challenges.

1. Please provide your organizations comments on concerns regarding the current deliverability assessment methodology.

2. Please provide your organizations comments on concerns regarding the timeliness and availability of deliverability.

3. Please provide your organizations comments on the path forward outlined in the update paper.

REV Renewables (REV) appreciates CAISO opening this Generator Deliverability Challenges stakeholder initiative to provide a platform to discuss solutions to this important issue. REV understands that reliability is of utmost importance and that should be a key consideration in potential changes to deliverability. However, given the amount of new resources that are needed in the coming years to meet California’s clean energy goals and reliability requirements, now is the time to revisit deliverability requirements. REV supports CAISO’s proposed path forward and looks forward to engaging on this initiative as it progresses.

4. Please provide your organizations comments on the proposed next steps.

5. Please provide any additional comments you have on the deliverability challenges.

1. Please provide your organizations comments on concerns regarding the current deliverability assessment methodology.

SEIA appreciates the challenge CAISO faces in maintaining reliability while integrating increasing amounts of new resources. The solar and storage industry supports a smart, tailored approach to interconnection that ensures reliability through its resource adequacy program while at the same time avoiding saddling developers and ratepayers with potentially unnecessary costs and delays.  SEIA, overall, echoes many of the industry concerns highlighted in the paper and supports the initiation of a formal stakeholder process to further explore and quantify these concerns. SEIA recognizes that some of this uncertainty stems from factors beyond the deliverability methodology, including the lack of coordination between the procurement and interconnection processes. SEIA nevertheless encourages CAISO, in its review of the deliverability methodology, to ensure that the studies performed achieve the goal of ensuring the resource can deliver its power to the grid under peak conditions without creating unreasonable standards for project performance. The study of N-2 contingencies, for example, does promote the reliable operation of the transmission system, but likely goes beyond the peak system conditions the deliverability studies are intended to reflect.

2. Please provide your organizations comments on concerns regarding the timeliness and availability of deliverability.

SEIA appreciates CAISO’s effort to recognize and address the commercial and timing challenges resulting from limited deliverability. SEIA believes that, as CAISO mentions in the paper, many of these issues will be mitigated or resolved through increased coordination between the interconnection, resource procurement, and transmission planning processes. SEIA recognizes that CAISO may not have those discussions in this initiative but encourages CAISO to engage with stakeholders and the CPUC on those discussions to the greatest extent possible.

SEIA recommends that the upcoming stakeholder initiative explore and validate which study processes and standards result in a reliable, just and reasonable outcome for both ratepayers and developers. For example, the initiative could consider alternative approaches and mechanisms that will enhance the transparency of available deliverability, create more equitable cost allocation of upgrade costs needed for deliverability, and not compromise reliability. RTOs and states around the country are exploring ways to resolve the same issues described by CAISO including high-volume interconnection queues and prohibitively high upgrade costs needed for interconnection. Rather than propose specific solutions at this time, SEIA supports CAISO’s decision to establish of a formal stakeholder process to explore the concerns raised in the Update Paper and looks forward to putting forward ideas.

3. Please provide your organizations comments on the path forward outlined in the update paper.

SEIA supports the proposed path forward, particularly the review of the deliverability methodology and the potential transitional relief for developers. SEIA also looks forward to future discussions around interconnection and transmission planning enhancements and improved coordination with resource procurement plans. 

4. Please provide your organizations comments on the proposed next steps.

Support.

5. Please provide any additional comments you have on the deliverability challenges.

1. Please provide your organizations comments on concerns regarding the current deliverability assessment methodology.

At this time, the Six Cities do not have comments regarding the specific elements of or methodology used in the CAISO’s deliverability assessment methodology, but they agree with the general premise underlying the Update Paper, which is that the CAISO’s methodology and process for studying and allocating deliverability may delay deliverable resource development at a time when CAISO load-serving entities are facing significant challenges in procuring resource adequacy capacity for peak months.  The Six Cities concur with the CAISO that it should be looking for ways to support expedited resource development, and that the CAISO may need to adopt a greater degree of flexibility in both its deliverability assessment methodology and allocation processes, but also in considering deliverability requirements for resource adequacy (“RA”) resources. 

2. Please provide your organizations comments on concerns regarding the timeliness and availability of deliverability.

One challenge in the deliverability allocation process that the Cities have faced is the “chicken and egg” dilemma of whether to proceed with procurement efforts for resources that do not have deliverability allocations and without any guarantee that resources, even with executed power purchase agreements (“PPAs”), will qualify as full capacity deliverability resources in a timely manner.  This creates substantial procurement risk for the Cities, which could find themselves unable to rely on resources that have been procured for RA purposes if the resources do not receive deliverability for the procured capacity or face significant delays due to the need for network upgrades to ensure deliverability throughout the CAISO system.  Taking steps to execute a PPA, only to later find out that the resource did not qualify for deliverability (or received only a partial allocation), is a highly inefficient use of resources on the part of both developers and off-takers like the Cities.  And absent adequate assurance of deliverability, LSEs and developers are compelled to dedicate time during the procurement stage to negotiation of elaborate contractual terms designed to address the contingency that deliverability is not awarded, is not awarded in the required quantity, or is not awarded timely to enable the resource to come online within required timeframes.  While there are a number of variables and risks that can adversely impact resource development in the current environment, interconnection and deliverability challenges should be capable of mitigation, at least in part, through improvements to CAISO processes.  The Six Cities therefore see merit in the CAISO developing more affirmative guarantees in the deliverability allocation processes for deliverability associated with PPAs that have been executed or are shortlisted.  Providing greater assurance of deliverability for resources that appear highly likely to be developed based on an executed PPA (or being shortlisted for a PPA) should narrow the universe of resources requiring deliverability and expedite removal from the queue of resources that are unlikely to be developed, and it will aid CAISO LSEs in addressing some of the procurement risk that they face. 

As another approach to addressing these concerns, the Six Cities would support consideration of revisions to the dispatch assumptions in the CAISO’s deliverability study methodology to ensure that the assumptions are appropriately calibrated to the risks faced by the system based on recent events.  As the Update Paper also explains, the CAISO’s study methodology and assumptions underlying the high system need and secondary system need assessments should be updated as system conditions change from year to year, as the CAISO acknowledges having recently done with respect to the treatment of storage capacity.  As to the Update Paper’s discussion of extreme events and how these are considered in planning assessments, it appears reasonable to consider extreme event scenarios in deliverability studies, but the CAISO should exercise caution and focus on those scenarios that appear to have the greatest likelihood of occurring and posing material risks within the CAISO footprint.  Finally, the Six Cities support the CAISO proposal to consider approaches to expansion of the availability of temporary deliverability on an expedited basis.  The CAISO appears to predicate implementation of “transitional relief” on the need for coordination with state agencies, but the Six Cities urge the CAISO to consider that some of its load-serving entities within the CAISO footprint, including the Six Cities, are not jurisdictional to the CPUC with respect to procurement activities, and revisions to the deliverability methodology to expand temporary deliverability status should not be unduly delayed while the CAISO undertakes coordination efforts with state agencies.

3. Please provide your organizations comments on the path forward outlined in the update paper.

In general, the Six Cities agree with the path forward described in the Update Paper, but request the CAISO to be more clear regarding its contemplated approach to stakeholder engagement for these issues.  Is the CAISO planning to open formal stakeholder initiatives to consider these topics in Q1 of 2023?

4. Please provide your organizations comments on the proposed next steps.

Please refer to the comments provided in response to Question No. 3 above.

5. Please provide any additional comments you have on the deliverability challenges.

Any discussion of deliverability limitations is incomplete without a discussion of the constraints placed on import resource procurement by operation of the CAISO’s Maximum Import Capability (“MIC”) methodology.  While the CAISO has resisted changing the MIC study methodology to increase the MIC-established cap on import RA resource procurement, the MIC continues to limit the pool of resources that can meet CAISO LSEs’ RA requirements.  At a time when the CAISO is seeking access to additional capacity resources and enhanced regional integration, continuing to cap import RA at historical levels is incompatible with these policy objectives.  Therefore, any resulting initiatives should consider impacts on and possible changes to the MIC methodology alongside improvements to the methodology and allocation for deliverability for internal resources. 

In addition, consideration of potential revisions to deliverability requirements and/or the methodology for assessing deliverability should consider impacts of the CAISO’s policy regarding scheduling priorities for wheeling services provided to external entities.  Consistent with FERC’s recognition of priority access to the transmission system to meet native load requirements, transmission requirements for both capacity imports to serve CAISO load and deliverability for resources to be sited within the CAISO balancing authority area should have higher priority than requests for wheeling services.

1. Please provide your organizations comments on concerns regarding the current deliverability assessment methodology.

No comments on this section.

2. Please provide your organizations comments on concerns regarding the timeliness and availability of deliverability.

No comments on this section.

3. Please provide your organizations comments on the path forward outlined in the update paper.

Southern California Edison (SCE) supports the CAISO’s proposal to assess its current deliverability methodology to determine if it can be revised to better support the expected significant increase in the demand for deliverable resources.  SCE, as a Participating Transmission Owner and a Load Serving Entity, plans to actively participate in the CAISO’s upcoming stakeholder process.  SCE supports the CAISO’s proposed next steps, including the CAISO preparing issue papers in Q1 2023.  As the CAISO develops its schedule for this stakeholder process, SCE requests that the CAISO clarify how this deliverability initiative will be developed in coordination with the CAISO’s current Transmission Planning Process Enhancements initiative as well as any potential future Interconnection Process Enhancements initiative.  SCE also requests the CAISO provide more detail on “transitional relief” to help bridge procurement timing and deliverability.  If considering action, CAISO should ensure it is maintaining the competitive procurement processes of LSEs and not result in forced winners and losers.  The further integration of the planning, procurement, and interconnection processes appears to be a common factor for all these efforts.

4. Please provide your organizations comments on the proposed next steps.

See response to number 3 regarding proposed next steps.

5. Please provide any additional comments you have on the deliverability challenges.

No additional comments