Comments on RAMPD

1. Please share your organization's overall feedback on the Resource Adequacy Modeling and Program Design Track 1 Draft Final Proposal, as discussed during the virtual stakeholder meeting held on September 17, 2025.

The Alliance for Retail Energy Markets (AReM) thanks CAISO for addressing some of its prior feedback at the September 17, 2025 meeting. Below, AReM makes a few additional suggestions regarding topics discussed at the meeting.

Implementation Timing

AReM maintains its recommendation that CAISO delay implementation of all Tracks until they are all complete. However, CAISO has expressed its intent to move its Track 1 Proposal forward to the CAISO Board of Governors in October for implementation ahead of the 2027 compliance year. At the meeting, some parties discussed delaying consideration of the Proposal to the December Board of Governors meeting to provide more time to work on unforced capacity (UCAP) design. Given the California Public Utilities Commission (CPUC) does not intend to implement UCAP until 2028, AReM sees no harm in waiting to implement this Proposal not only until December, but a full year. This could allow for greater coordination between CAISO and the CPUC to occur prior to implementation, reducing administrative burden for all parties.

Model Calibration

CAISO provided clarity about how it removes and adds gas plants to perform monthly model calibration, stating how it attempts to keep an even balance of plant removals across northern and southern regions, but does not include all local constraints in the model. The lack of inclusion of local constraints leads CAISO to assume that removing gas plants in local areas will not have a significant impact on the results. However, AReM is still concerned that without modeling these constraints, CAISO risks modeling invalid calibrated portfolios that do not include resources still needed for local reliability. Excluding such resources could have impacts to the effective load carrying capability (ELCC) of storage and other resources due to interactive effects. CAISO is open to further consideration of this issue. AReM continues to recommend modeling sensitivities be performed to determine the impact of local gas plant removals on the results and that CAISO consider using calibration methods consistent with the CPUC.

Multiple QC Values

CAISO stated it was rare for local regulatory authorities (LRA) to issue different qualifying capacity (QC) values for the same resource, and that rectifying the QC value in such an event was out of scope of Track 1. CAISO was open to examining this issue further, and AReM expects further discussion on this topic in Track 3B.

Battery Duration

CAISO has identified 685 MW of battery capacity with durations greater than five hours on its system today. More is expected to interconnect. Although CAISO has not identified a way to provide greater QC value to longer-duration storage under its default QC proposal, it is open to doing so in the future as part of its annual QC update process. AReM recommends CAISO incorporate the impact of battery duration on QC expeditiously, at least ahead of the CPUC’s 2028 deadline for long-duration storage procurement, to avoid divergent resource counting methodologies between multiple LRAs.

Other Topics

AReM stands behind all its previous recommendations provided in its prior comments. As discussed at the meeting, CAISO intends to keep active stakeholder discussions regarding default QC counting rules, with updates on an annual basis. AReM looks forward to participating in this process going forward.

1. Please share your organization's overall feedback on the Resource Adequacy Modeling and Program Design Track 1 Draft Final Proposal, as discussed during the virtual stakeholder meeting held on September 17, 2025.

CDWR appreciates the September 17, 2025, virtual meeting intended for understanding filed comments, providing clarifications, reviewing track 1 objectives, and presenting a) an overview of proposed modifications to 8/28 proposal with identified future improvements and, b) an updated draft default qualifying capacity (QC) & planning reserve margin (PRM) values.

CDWR maintains its positions reflected on the comments filed on 9/12/2025 on Track 1 draft final proposal. CDWR has following comments in regard to the 9/17/2025 virtual meeting discussions:

1. Consistent with prior comment submitted on 9/12/2025, as presented on slide #9, CDWR supports the CAISO statements that: a) the default QC methodology and PRM that are currently in the tariff (Section 40.2.2.1b - PRM and 40.8 - QC methodology) will be applicable only when an LRA does not provide a methodology, b) default counting rules do not impact the net qualifying capacity (NQC) of a resource (unless LRA chooses to adopt for QC methodology), and c) UCAP in Track 1 is not an additional derate to the LRA established NQC.
2. RA must offer obligation (MOO) is applicable only to the shown RA MW. This principle should be maintained through RAMPD Track 2.
3. CDWR does not oppose the proposal to define supply cushion hours using information derived by LOLE modeling.
4. As indicated in the slide #10 (and slide #14), the proposal states that Participating Load (PL) default QC methodology will remain as is in the tariff (average historic load reduction). However, CDWR’s suggested changes in the prior comment align with the practice and reality in which Participating Load Agreement (PLA) describes PL’s criteria for RA. CDWR’s suggested changes also support PL’s unique contributions to CAISO grid support such as in system emergency (operating procedure-4420). CDWR understands that default will not impact the CDWR’s PL QC values, and that it is possible that CDWR is the only entity having a PLA with CAISO with a significant wholesale hydro pumping load. Nevertheless, CDWR observes merit in its suggested language as the RAMPD effort is to make changes that align with the reality. CDWR sees no reason not to include CDWR’s proposed language.
5. As stated on slide #12 and #13, CDWR supports the statement that, a) LRAs retain ability to set individual resource QC values, b) the CAISO NQC process remains unchanged with this policy, and c) LRAs retain ability to update individual resource QC values on a rolling (monthly) basis.
6. As shown in the slide #16, identified future improvements include hydrological conditions impact on hydro effective load carrying capability (ELCC) with annual updates. CDWR is of the opinion that monthly granularity for hydrological changes is a practical approach CAISO should consider.

1. Please share your organization's overall feedback on the Resource Adequacy Modeling and Program Design Track 1 Draft Final Proposal, as discussed during the virtual stakeholder meeting held on September 17, 2025.

Executive Summary

In Section A below, CESA supports CAISO’s revised approach for setting the Unforced Capacity (UCAP) assessment hours based on studied critical hours.

• The proposal is much better aligned with CAISO's actual reliability needs than past proposals to use the inaccurate Supply Cushion Hours approach.
• The proposal may provide some harmonizing effect on the accreditation values between those based on UCAP and those based on Effective Load Carrying Capability (ELCC)
• CESA urges the CAISO to further recognize that implementing a robust Effective Forced Outage Rate in-demand (EFORd) approach would strengthen the current approach further.

In Section B below, CESA does not support CAISO’s revised set of outage natures-of-work that should be excluded from the UCAP assessment, because it is not aligned with well-established NERC forced outage definitions that are focused on plant equipment failures leading to loss of capability, and would result in penalizing resources for operating within their design specifications or for using outages to compensate for deficiencies in CAISO's market modeling.

• The proposal would not incentivize better resource maintenance and may incentivize withholding of valuable operating information from CAISO in the future.
• The proposal creates disparate treatment between resource types allowing more mature resource types with extensively modeled design limitations to inequitably receive higher accreditation values.
• CESA puts forward two options for avoiding disparate treatment
• CESA urges the CAISO to establish principles to guide the UCAP methodology in establishing an accurate and equitable representation of each resource’s contribution to reliability

Discussion

A. UCAP Assessment Hours

The decision by CAISO to revise its approach for setting UCAP assessment hours, abandoning the problematic Supply Cushion Hours methodology, is crucial for strengthening system reliability and accurately accrediting resource contributions to reliability. CESA consistently and deeply opposed the initial Supply Cushion Hours approach because it was fundamentally flawed, risking reliability and penalizing resources based on performance during times they were not genuinely needed for system stability. The Supply Cushion Hours approach was also criticized for being determined at a system-wide level, failing to recognize unit economics, and potentially penalizing resources for forced outages even when cheaper imports or resources behind local constraints were available, indicating the resource was not actually "in-demand". Furthermore, stakeholders noted that the original method could inadvertently punish resources for taking outages at a time when CAISO caused artificial “tightness” by approving planned outages that contributed to creating the supply cushion hour itself.

CESA is therefore supportive of CAISO's recognition in the revised proposal that UCAP assessment hours must be aligned with reliability, moving instead to focus on at-risk hours informed by Loss of Load Expectation (LOLE) modeling, such as the top 10 net load days from each month during critical periods (Summer: HE 17-22; Winter: HE 6-9 and 17-22). This shift ensures that the UCAP value more accurately reflects a resource's availability during the times of greatest system need.

To truly maximize the usefulness and accuracy of the UCAP value, CAISO should further recognize that implementing a robust Effective Forced Outage Rate in-demand (EFORd) approach would strengthen the current approach even further. The core benefit of an EFORd methodology is its focus on measuring the probability that a generating unit is unavailable due to forced outages only when there is actual demand on the unit to generate. This specificity ensures that the calculation is aligned with resource-specific performance and unit economics, reflecting when a resource was or would have been economically dispatched by CAISO. By evaluating outages only at times when they are consequential to system need—such as using PNode prices and Default Energy Bid (DEB) prices to determine resource-specific assessment hours—the EFORd approach provides a far more accurate metric of a resource’s dependable capacity during critical system hours. CAISO should recognize that continuing to refine its UCAP methodology by pursuing a comprehensive EFORd approach in future annual reviews could significantly strengthen the accuracy and comparability of the UCAP value across all resources, thereby improving reliability signals for procurement.

B. UCAP Assessed Outages

CESA does not support CAISO’s revised set of outage natures-of-work that should be excluded from the UCAP assessment, because it is not aligned with well-established NERC forced outage definitions that are focused on plant equipment failures leading to loss of capability. Furthermore, the new set of exclusions fail to recognize that suppliers must submit certain outages to reflect that CAISO’s dispatch algorithm has driven the resource into a known design limitation. To ensure an equitable application of the UCAP methodology across all resource types, CAISO must focus on plant equipment failures leading to loss of capability and exclude instances of incidental outages related to known design limitations that are not in CAISO’s market model.

In the Draft Final Proposal Follow-Up presented on September 17, 2025, CAISO articulated a revised position for which natures-of-work are considered in the UCAP calculation.  CAISO's revised proposal states that UCAP methodology is focused on measuring resource availability and will include all forced outage natures of work except for two specific exclusions: Transmission Induced and Force Majeure. This is a modification from the earlier August 28, 2025, Draft Final Proposal, which provided a more comprehensive list of natures-of-work that would be excluded from UCAP calculations.  CAISO's rationale for this broad array of assessed outages is “[t]o better predict future availability of resource contribution to overall reliability, all forced outage natures of work will be considered.”

The inclusion of certain natures-of-work in the forced outage rate calculation penalizes resources for operating within their inherent design limitations or for using outages to compensate for deficiencies in CAISO's market modeling. CESA maintains that the forced outage rate used to determine the UCAP value should not reflect outages used to ensure an accurate dispatch of a resource operating within its design specifications. This principle is crucial because such outages result from deficiencies in CAISO’s market/resource modeling and would result in disparate treatment among resource types:

• Market/Resource Modeling Deficiencies: Suppliers should not be penalized for expressing known operating limitations to CAISO through outage cards if those limitations are due to deficiencies in CAISO's market/resource modeling. Penalizing resources will not incentivize better resource maintenance and may incentivize withholding of valuable operating information from CAISO in the future.
• Disparate Treatment: For some mature resource types, similar operating criteria are explicitly built into the CAISO market resource model, negating their need to use outages to convey this information. If CAISO continues to include certain outage nature-of-works that reflect these limitations for other resource types, it creates disparate treatment between resource types. More mature resource types with extensively modeled design limitations would inequitably receive higher accreditation.

Avoiding Disparate Treatment Among Resource Types

On the stakeholder call on September 17, 2025, CESA expressed an example to illustrate the potential for disparate treatment among resource types. CAISO’s Multi-Stage Generation (MSG) resource model is nationally recognized for its advanced modeling of MSG resource known design limitations. CAISO’s dispatch algorithm may dispatch an MSG resource into its 1x1 configuration which has a lower Pmax than its 2x1 configuration. If system conditions tighten, the resource could remain in its 1x1 configuration due to its modeled minimum run times, even though reliability conditions may benefit from the resource transitioning to its 2x1 configuration. These resources do not need to enter outages into CAISO’s system to represent that it is currently operating at a lower Pmax value. Meanwhile, CAISO may dispatch an energy storage resource into a state-of-charge region that is ramp-limited, but within the resource’s known design specifications. CAISO’s energy storage resource model does not yet incorporate these known design limitations to enable its dispatch algorithm to appropriately make the economic trade-off associated with operating within or outside of the ramp-limited state-of-charge region. Energy storage operators experiencing the ramp limitation insert an outage card to CAISO so that CAISO’s algorithm will send feasible dispatches to the resource. CAISO’s UCAP proposal would penalize the energy storage resource for operating within its ramp-limitation region but not penalize the MSG resource for operating in a 1x1 configuration.

If CAISO were to model the energy storage limitations directly, like it does for MSG resources, then no outage would be required to be submitted to the CAISO.

To ensure storage and thermal UCAP values are comparable to each other, there are two options:

1. Do not count outages for resources operating within design specifications across all resources, or
2. Count interval unavailable pmax values for MSGs (pmax varies per configuration) against their UCAP value and count thermal ramp limitations against their UCAP value.

Both options above are logically consistent towards getting comparable values between resource types, but the first option would recognize that CAISO's dispatch optimization is in control of driving the resources and it does at times drive a resource into a limitation.

CAISO Must Establish Principles to Guide the UCAP Methodology in Establishing an Accurate and Equitable Representation of Each Resource’s Contribution to Reliability

CESA recommends the outages that impact a resource’s UCAP value should adhere to the following principles, aligned with the purpose of the UCAP value to capture the reliable and dependable capacity value and incentivize appropriate resource maintenance:

• The forced outage rate used to determine the UCAP value should reflect a resource’s tendency to experience equipment failures or imminent equipment failures leading to loss of capability. This principle recognizes that forced outages due to equipment failures occur suddenly and can severely strain reliability causing the need for extraordinary operator actions within a relatively short timeframe. The need for additional capacity procurement to address these instances is reflected through a derate to each resource’s capacity value. CESA's earlier comments proposed unambiguous forced outage definitions based on NERC GADS Event Types (U1, U2, U3, D1, D2, and D3) to ensure the definitions were appropriately focused on equipment failures. CESA pointed out that several "Forced" outages in the CAISO’s OMS would not fit the NERC GADS forced outage definition.
• The forced outage rate used to determine the UCAP value should not reflect outages used to ensure an accurate dispatch of a resource operating within its design specifications. This principle recognizes that all types of resources are available to the CAISO within their design specifications. If CAISO happens to dispatch resources into known operating limitations due to deficiencies in its market/resource modeling, suppliers should not be penalized for expressing these limitations to the CAISO through the submittal of an outage card. Many of these types of limitations are currently directly modeled by CAISO for some resource types, but not all, causing disparate treatment between resource types if this principle is not maintained.
• The forced outage rate used to determine the UCAP value should not reflect outages that are outside of management control. Certain outages that are completely outside of management control, such as transmission system limitations or gas pipeline limitations, are not the fault of a failure of generating equipment. The generator is fully available and capable of responding to a CAISO dispatch but is being limited by factors outside of its purview.

1. Please share your organization's overall feedback on the Resource Adequacy Modeling and Program Design Track 1 Draft Final Proposal, as discussed during the virtual stakeholder meeting held on September 17, 2025.

PG&E appreciates CAISO's proactive workshop scheduling to provide a deeper understanding of the UCAP assessment hours methodology. The alternative proposed addresses issues with the supply cushion approach noted by many stakeholders.

The revision of CAISO default counting rules and default planning reserve margin (PRM) is a better reflection of the contribution of different resource types and individual resources to maintain balancing authority area (BAA) wide reliability and meet a 1 in 10 Loss of Load Expectation (LOLE) industry standard, while maintaining the autonomy of local regulatory authorities to set their own rules. PG&E recognizes the challenge of setting default rules and managing stakeholder needs/desires.

Given the need for change and challenge it presented, we appreciate CAISO recognizing PG&E’s unease about Track 1 changes causing potential misalignment and additional considerations to address within Track 2 efforts as well as the California Public Utilities Commission (CPUC)’s current UCAP effort. PG&E appreciates CAISO's commitment to address issues including the following list of items:

• forced outage definitions,
• UCAP assessment hours,
• the number of years and year weighting factors for UCAP calculation,
• the treatment of new resources,
• variations in accounting for a specific resources type,
• Must Offer Obligation (MOO) requirements,
• short-term incentives revision like the RA Availability Incentives Mechanisms (RAAIM).

PG&E continues to encourage CAISO and the CPUC to work towards strong alignment of UCAP methodologies to ensure a reliable California grid and to provide the right incentives for resources to be available and perform adequately.

1. Please share your organization's overall feedback on the Resource Adequacy Modeling and Program Design Track 1 Draft Final Proposal, as discussed during the virtual stakeholder meeting held on September 17, 2025.

SDG&E appreciates CAISO’s efforts to address stakeholder concerns and provide clarification through a dedicated Track 1 workshop. Certain discussion points were particularly helpful, including clarification that all natures of work (NOW) (excl. transmission induced and force majeure) will be used in both the Supply Cushion UCAP and Average ELCC QC methods, and that the Supply Cushion UCAP annual weightings are intended to address historic performance anomalies. SDG&E has several remaining concerns and recommendations related to these items.

Regarding the NOW discussion, although LRAs have discretion to use different QC methodologies, CAISO’s proposal could influence LRA QC design. Thus, SDG&E remains concerned with the potential long-term implications of reducing the QC of resources operating within their design specifications based on instances when, due to limitations in the market model, they must use outage cards to represent known operating characteristics. Should CAISO’s methodology (or simply NOW selection) be utilized in LRA QC methodologies, this could artificially suppress the volume of resources available to CAISO, which could then increase costs to customers by reducing the value of resources procured on their behalf. This is especially relevant in the case of storage resources. SDG&E encourages CAISO to provide analysis to help stakeholders understand the potential system-wide magnitude of nonlinearity in the near-term and long-term, and to commit to a more durable and long-term solution through revisions to its market model so that the operational characteristics of energy storage can be fully accounted for. SDG&E understands that the Storage Design and Modeling initiative may be the appropriate venue for providing the requested analysis and moving forward with market model enhancements. To the extent these items are addressed outside the RAMPD initiative, SDG&E requests that CAISO incorporate reference to these actions within RAMPD to ensure that all stakeholders have the same level of information.

Regarding the historic performance anomaly issue, SDG&E recommends that CAISO consider additional solutions beyond the proposed Supply Cushion UCAP annual weightings. For example, in their September 12 comments, Six Cities recommended, among other things, that CAISO consider removing the worst performing year within the historical period. SDG&E recommends that CAISO further explore this proposal as it may better represent a resource’s capabilities. This element will likely also be further developed as part of the CPUC’s process. Notably, Decision 25-06-048 states that the “Commission finds parties’ assertions about the use of the best three out of four years for the UCAP calculation to be reasonable… [and] endorses the use of the best three out of four years to calculate the UCAP.”[1]

[1] See p. 51 at: 571237404.PDF.