Comments on rampd 8/28 mtg and track 2

Resource adequacy modeling and program design

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Comment period
Aug 29, 04:00 pm - Sep 19, 05:00 pm
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ACP-California
Submitted 09/17/2025, 08:10 am

Submitted on behalf of
ACP-California

Contact

Caitlin Liotiris (ccollins@energystrat.com)

1. Please provide your organization's overall feedback regarding the Resource Adequacy Modeling and Program Design (RAMPD) Stakeholder Meeting on August 28, 2025.

As discussed below, ACP-California is disappointed with the lack of substantive proposals and improvements that are proposed in Track 2 of this initiative at this time. We encourage CAISO to implement the modifications discussed below to provide the improvements that CAISO sought to achieve through this initiative.  

2. Please provide your organization's overall feedback regarding the RAMPD Track 2 Straw Proposal, which was posted on August 26, 2025.
Note: for feedback towards the Tracks 1 and 3 Draft Final Proposals, please submit your feedback separately on those two separate comment templates, below this comment template.

ACP-California appreciates the opportunity to comment on CAISO’s Track 2 Straw Proposal in the Resource Adequacy Modeling and Program Design (RAMPD) initiative. While we recognize the effort CAISO staff has put into developing proposals on outage and substitution, we are disappointed that the Straw Proposal retreats from earlier commitments to consider meaningful reforms. Specifically, the Track 2 Straw Proposal dismisses the concept of conditional outages with little justification, and instead advances a substitution pool design that closely resembles tools that already exist but are rarely used. Together, these choices risk leaving the current flawed system largely unchanged and would not achieve the objectives laid developed for this initiative.

On the issue of conditional outages, ACP-California is particularly concerned that CAISO has abandoned further exploration of this option despite broad stakeholder support. Multiple parties filed in favor of conditional outages earlier this year, and CAISO initially indicated openness to the idea. The Straw Proposal now dismisses it, suggesting instead that the currently existing off-peak “opportunity outages” represent a suitable option for taking an outage without requiring substitute capacity. We find this reasoning disingenuous. Off-peak Opportunity Outages, as defined by Section 9.3.1.3.6 of the CAISO tariff, must be begin during off-peak hours and must be completed prior to on-peak hours on the next weekday. These opportunity outages apply only to an extremely narrow set of very short-term maintenance needs and are impractical for most generator outages. Suggesting that this program can either substitute for a conditional outage framework or is a reasonable option for taking outages without having to procure substitute capacity misrepresents its scope and utility.

We continue to believe that conditional outages can be implemented in a manner that fully preserves reliability and reduces costs for ratepayers, while also providing a valuable tool for RA resources to take outages without having to secure substitute capacity. CAISO already evaluates outage requests and has experience assessing system conditions to determine feasibility. With the addition of year-ahead RA filings, enhanced visibility into the generator fleet from Track 3, and historic outage patterns, staff would have even better data to evaluate whether substitute capacity is needed for a given month.  It would be a major missed opportunity to gather the data proposed in Track 3 but then not use it to assess substitute capacity needs, which could ratepayer costs by eliminating unnecessary substitution and placing more RA supply into the market.  Furthermore, CAISO could retain full authority to rescind any conditional approval if system conditions change or additional forced outages occur. This directly addresses the reliability concern raised in the Straw Proposal that changing conditions could create new substitution needs. Knowing that an outage could be rescinded up to T-8 would allow a generator to weigh the RAAIM and UCAP risks of not procuring substitute capacity in advance, while still allowing time to seek substitute capacity. Furthermore, allowing conditional outages at least during non-summer, off-peak months would be a reasonable first step, particularly since CAISO used to approve outages in precisely this manner before the full substitution requirement was implemented. This institutional knowledge should greatly reduce the “implementation lift” concerns that staff expressed regarding various implementation options. CAISO should develop appropriate guidelines to allow for conditional outages to achieve the stated Track 2 goals of “usability” for RA resources while also addressing CAISO’s reliability concerns. Doing so is particularly important to improve the efficiency of the RA outage and substitution process given that CAISO is not proposing any meaningful reforms to the substitution pool (as discussed below).

On improvements to the substitution process, ACP-California is similarly concerned that the proposed substitution pool does not deliver meaningful improvements over the status quo, failing the stated Track 2 goals of usability, certainty, reliability, and durability. CAISO’s recommended approach – a peer-to-peer marketplace where scheduling coordinators post and procure capacity between T-45 and T-8 – is effectively a slightly more polished version of the existing Power Contracts Bulletin Board. That tool has not proven useful in practice, and there is little reason to expect materially better outcomes under the Straw Proposal’s design. The proposal does not resolve the core challenges of bilateral transactions, including failing to address the difficulty of finding matches for specific outage periods. These challenges are acknowledged even in CAISO’s examples, which show mismatches and excess procurement that must then be renegotiated. If a substitution pool option continues to be pursued, ACP-CA would prefer a CAISO-managed approach which would eliminate issues currently facing bilateral transactions.  The statement by staff that “buyers and sellers lose direct control” in a CAISO-managed approach is not necessarily negative, since the bilateral nature is what has failed to date. In our comments earlier this year, ACP-California recommended that CAISO consider an aggregated, centrally managed procurement model. Such an approach would address the bilateral contracting issues, ensure participation, and more effectively match supply and demand. While this option remains far preferable to replicating a bulletin board structure that has not worked, ACP-CA recognizes the challenges in designing and standing up a new market structure. This is why conditional outages are strongly preferred to a substitution pool as it would be much more effective at meeting the stated the goals of Track 2 while also being a much lower implementation lift for CAISO staff.

In summary, the Track 2 Straw Proposal is disappointing in that after nearly two years of discussion, staff sets aside the promising conditional outage construct with little explanation, while advancing a substitution pool that offers no real benefits over the tools already available. ACP-California urges CAISO to reconsider both elements of this proposal as there is no indication from buyers or sellers of RA that the CAISO proposed substitution pool would be utilized. We continue to believe that allowing conditional outages, particularly in off-peak periods, offers a workable, reliability-protective solution to outage scheduling challenges, and that any substitution mechanism must go beyond the status quo to deliver true usability and efficiency. Without such improvements, Track 2 risks becoming a missed opportunity that fails to address the very issues this initiative set out to resolve.

Alliance for Retail Energy Markets
Submitted 09/19/2025, 04:35 pm

Contact

Mary Neal (mnn@mrwassoc.com)

1. Please provide your organization's overall feedback regarding the Resource Adequacy Modeling and Program Design (RAMPD) Stakeholder Meeting on August 28, 2025.

The Alliance for Retail Energy Markets (AReM) thanks CAISO for the opportunity to attend the stakeholder meeting and provide these comments on its proposals to enhance the Resource Adequacy (RA) market. AReM lauds the progress made but remains concerned regarding the differences between CAISO’s proposals and the California Public Utilities Commission (CPUC) RA program. AReM’s focus in this RA initiative has always been CAISO’s backstop procurement mechanism. CAISO’s decision to delay work on backstop-related issues to Track 3B delays important design considerations that will have an impact on the incentives, effectiveness and fairness of the solution to the substitution and default counting problems the CAISO hopes to address in Tracks 1 and 2. AReM recommends the consideration of these issues not be fully separated from each other and that CAISO refrain from tariff revisions until all tracks reach the final proposal stage. 

2. Please provide your organization's overall feedback regarding the RAMPD Track 2 Straw Proposal, which was posted on August 26, 2025.
Note: for feedback towards the Tracks 1 and 3 Draft Final Proposals, please submit your feedback separately on those two separate comment templates, below this comment template.

Because substitute capacity is needed in the T-45 to T-8 timeframe, substitution management is more of a supplier issue as opposed to a load-serving entity (LSE) issue.  That said, LSEs are still likely to be impacted significantly by outage substitution rules because of their month-ahead RA showing obligations at T-45.  The CAISO’s current design of this market is clearly inefficient and increases costs to LSEs due to its significant impact on month-ahead capacity markets.

There is concern that the CAISO’s current approach to replacing this market will result in another inefficient design, particularly since CAISO is approaching the problem on a piecemeal basis and is not taking a comprehensive perspective.  Not only is the current Track 2 straw proposal separated from Track 3B, but it also fails to include any redesign of the RA Availability Incentive Mechanism (RAAIM) also slated for Track 2. Decisions made now about the design and operation of a pool of substitution resources could easily limit options for other aspects of the design, such as non-performance penalties.  The delay of Track 3B issues is of particular concern since issues to be determined there are likely to have an impact on the mechanisms being formulated in Track 2.

Consequently, the CAISO’s approach is attempting to implement particular RA market changes without enough regard to the entirety of the system and the incentives it creates.  The existing system was built on individual policies that did not adequately consider the incentives created with existing requirements.  For instance, changing the incentives for ‘planned to forced’ outages without adjusting RAAIM, and the self-funding design of RAAIM.  

CAISO needs to provide greater clarity regarding the relationship between the resource pool mechanism and CAISO’s discretion to allow outages to take place without replacement.  CAISO should explain whether there will be changes that allow short-term outages to take place without substitution if conditions allow. There also needs to be greater clarity regarding the relationship between this proposed resource pool and the CAISO’s Competitive Solicitation process, which currently has significant obligations for participation.

Greater consideration must be given to out-of-institution, but in-market incentives.  For instance, the CAISO proposes a public, voluntary bulletin-board arrangement, and encourages parties to post available capacity, but it is unclear whether the mechanism would provide the proper incentives for both sides of the market to participate in the mechanism. The impact on monthly RA market transactions should be adequately assessed, including whether suppliers have the incentive to offer all available capacity.

While a simpler design is preferred, it is more important that all pieces of the framework work well together and provide the desired incentives for efficiency. At a minimum, if CAISO maintains its current bulletin board approach as outlined in the straw proposal, it should remain voluntary.  Moreover, AReM recommends the bulletin board be set up as a pilot program with a review period to assess the effectiveness of the bulletin board. If CAISO finds the bulletin board is not being utilized, it should take action on an alternative solution.

California Community Choice Association
Submitted 09/19/2025, 11:04 am

Contact

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

1. Please provide your organization's overall feedback regarding the Resource Adequacy Modeling and Program Design (RAMPD) Stakeholder Meeting on August 28, 2025.

The California Community Choice Association (CalCCA) appreciates the opportunity to comment on the RAMPD Track 2 Stakeholder Meeting and Straw Proposal. CalCCA directionally supports the California Independent System Operator’s (CAISO) Straw Proposal to develop a voluntary outage and substitution pool. A well-utilized pool will: (1) remove friction for scheduling coordinators (SC) seeking substitute capacity; (2) minimize the need to hold back RA capacity for substitution; and (3) retain the responsibility of providing substitution on the entity in control of the outage. Buying SCs should be allowed to repost capacity if they procure excess so that they can optimize their portfolios at least cost.

CalCCA does not take a position on whether buyers and sellers should have direct control over transactions, or the CAISO should match buyers and sellers. If the CAISO pursues one of the alternatives in which the CAISO matches buyers and sellers, however, the CAISO should pursue alternative approach 1, prioritizing buyers with the highest daily bids. Alternative approach 2, prioritizing matching the largest outages, would not always result in the maximization of megawatts procured and minimize costs.

Since the problem of excess capacity being withheld for substitution is a significant problem, the CAISO should continue to ensure that the amount of substitution capacity required reflects actual system needs, rather than a default substitution requirement, which likely drives excess procurement in many cases. Therefore, CalCCA is concerned with the CAISO’s removal of the “conditional” outages concept, which was introduced in the issue paper, from the straw proposal. A conditional outage would mean the CAISO approved the outage without substitute capacity on a conditional basis when reliability conditions allow. If closer to the operating day, reliability conditions changed, the CAISO may indicate substitute capacity must be provided for the resource to continue to take its conditional outage as scheduled.

As a general matter, suppliers should be able to perform short-term maintenance without having to substitute capacity during non-stressed periods. This would allow for more opportunities to perform planned maintenance necessary to support reliable grid operation, minimizing potential maintenance delays and minimizing forced outages. While the CAISO would continue to allow off-peak opportunity outages that do not require substitute capacity, off-peak opportunity outages are only allowed during certain hours of the day and cannot extend multiple days. They can therefore only be utilized for certain types of outages.

2. Please provide your organization's overall feedback regarding the RAMPD Track 2 Straw Proposal, which was posted on August 26, 2025.
Note: for feedback towards the Tracks 1 and 3 Draft Final Proposals, please submit your feedback separately on those two separate comment templates, below this comment template.

See response in Section 1, above.

California Department of Water Resources
Submitted 09/15/2025, 01:33 pm

Contact

Mohan Niroula (mohan.niroula@water.ca.gov)

1. Please provide your organization's overall feedback regarding the Resource Adequacy Modeling and Program Design (RAMPD) Stakeholder Meeting on August 28, 2025.

CDWR appreciates CAISO’s effort in reducing barriers to providing substitute capacity for resources undergoing planned maintenance.

2. Please provide your organization's overall feedback regarding the RAMPD Track 2 Straw Proposal, which was posted on August 26, 2025.
Note: for feedback towards the Tracks 1 and 3 Draft Final Proposals, please submit your feedback separately on those two separate comment templates, below this comment template.

The straw proposal on Track 2 (Outage and Substitution) is inclusive of the concerns raised by market participants and presents options with potential models to address those concerns. CDWR understands that CAISO will publish a separate straw proposal addressing potential updates to its availability incentive mechanism which is associated with outage and substitution. The current proposal focuses on improving the processes for more cost-effective and efficient procurement of substitute capacity as an important first step in enhancing CAISO’s RA rules and reliability.  

 

  1. CDWR prefers the recommended approach – “scheduling coordinator outage substitution pool” using CAISO’s platform. It provides a transparent platform and flexibility for buyers and sellers.
  2. Posting values should be voluntary. CDWR’s operational constraints and variability of operations requires offering capacity to be voluntary.
  3. Under the recommended approach option, in case of outcome with an excess capacity procurement for substitution, the excess capacity should be able to be reposted.
  4. In the information on substitution pool, it would be advantageous to include RA type for the resource and capacity. RA type (system, local & local area, flexible RA and Category) information can provide buyers and sellers valuable information on monthly RA capacity availability (not just the substitution) as well if the sellers know the capacity can be extended for next month or so forth.
  5. CAISO is envisioning the timeline of the pool to operate between T-45 and T-8. Given the planned outage can be in advance of several months, it would be advantageous to have substitution pool available extended for a couple of months. Having a planned outage substitution resource in advance allows for robust planning for outages of resources that will be part of RA portfolio for a month. Scheduling coordinators (buyer/seller) can lock the substitution capacity well in advance.

 

  1. Participating Load (PL) outage:

 

  1. According to the Outage Management Business Practice Manual (BPM), outages are defined as:
  • Planned Outage - A period of time during which a Generation or Transmission Operator (i) takes its transmission facilities out of service for the purposes of carrying out routine planned maintenance, or for the purposes of new construction work or for work on de-energized and live transmission facilities (e.g., relay maintenance or insulator washing) and associated equipment; or (ii) limits the capability of, or takes out of service, its Generating Unit or System Unit for the purposes of carrying out routine planned maintenance, or for the purposes of new construction work.
  • Forced Outage - An Outage for which sufficient notice cannot be given to allow the Outage to be factored into the Day-Ahead Market or RTM bidding processes

 

As defined above, a PL resource is not a generating unit. At times, a PL resource that is used for RA may need to be relieved from RA obligation by substitution (after T-45, for certain cases where its continuous operation would be needed for meeting water supply delivery target, or other operational constraints). In this example, typically the PL resource would need to be taken out as planned outage (after T-45) for substitution by other resources to relieve from RA obligation to enable the continuous pumping to meet water delivery or other constraints. While it can be executed today assuming it as equivalent to a generating unit, the definition of planned outage does not quite fit the purpose of planned outage for a PL resource. Therefore, to capture this scenario for a PL resource, the Planned Outage as defined above could be modified as:

  • Planned Outage - A period of time during which a Generation, a supply resource, or Transmission Operator (i) takes its transmission facilities out of supply service for the purposes of carrying out routine planned maintenance, or for the purposes of new construction work or for work on de-energized and live transmission facilities (e.g., relay maintenance or insulator washing) and associated equipment; or (ii) limits the capability of supply service, or takes out of service, its Generating Unit or System Unit for the purposes of carrying out routine planned maintenance, or for the purposes of new construction work.
  1. Nature of Work (NOW) cards for a PL resource: The Nature of Work (NOW) outage cards in BPMs for planned outage and forced outage may need to be defined to include PL outage scenarios.

California ISO - Department of Market Monitoring
Submitted 09/19/2025, 01:46 pm

Contact

Aprille Girardot (agirardot@caiso.com)

1. Please provide your organization's overall feedback regarding the Resource Adequacy Modeling and Program Design (RAMPD) Stakeholder Meeting on August 28, 2025.

Comments on Resource Adequacy Modeling and Program Design

Track 2: Outage and Substitution Straw Proposal

Department of Market Monitoring

September 19, 2025

 

Overview

The Department of Market Monitoring (DMM) appreciates the opportunity to comment on the Resource Adequacy Modeling and Program Design Track 2 Outage and Substitution Straw Proposal and Meeting dated August 26 and 28, respectively.[1],[2] In these comments, DMM adds to our previous comments in response to the Resource Adequacy Modeling and Program Design (RAMPD) Working Group dated March 13, 2025.[3] DMM includes additional comments on the following three issues:

  • Outage substitution pool. DMM continues to support the creation of an outage substitution pool to increase market efficiency. However, DMM cautions against the approach outlined in the straw proposal, which does not appear to be the most efficient design and which may lead to strategic bidding that does not reflect the true cost and value of the needed substitute capacity.
  • Outage substitution pool alternatives. DMM continues to suggest an outage substitution pool design based on a reverse second price auction. DMM believes this design would provide incentives for scheduling coordinators to reveal their true cost and value of the substitution capacity, and would provide improved market efficiency and reduce the potential for market power.
  • “Like-for-like” capacity substitution. DMM agrees the ISO should not make like-for-like capacity determinations in the outage substitution pool. However, the ISO should continue to work with the local regulatory authorities to ensure that capacity accounting appropriately reflects the contribution of a resource.

 

Comments

Outage substitution pool

Current market design incentivizes load serving entities to hold back resource adequacy (RA) capacity from the market to avoid potential penalties from the outage substitution requirement for planned outages. Holding back capacity creates an artificial tightness to the RA market, which the ISO and stakeholders have identified could be overcome with changes to outage substitution rules. To solve the issue and to develop specific objectives for outage substitution changes, the ISO and stakeholders decided that the outage substitution rules should meet the five objectives:

  • Efficiency and usability
  • Incentive alignment
  • Regulatory alignment
  • Reliability and certainty
  • Fairness, simplicity, and durability

DMM agrees with these principles, but also recommends that outage substitution rules should increase fungibility and lower transaction costs to finding substitution capacity. An outage substitution pool that meets these criteria would increase the efficiency of outage substitutions, eliminate the need for individual entities to hold surplus capacity to cover potential short-term outages, and decrease the reliability risk.[4]

The ISO has proposed a decentralized matching system that would function like a bulletin board for buyers and sellers to request or provide substitution capacity. This marketplace would simply be a central clearinghouse to share information for direct bilateral transactions. The ISO would not facilitate any transactions, but would simply assist in information sharing to reduce a portion of the soft transaction costs of finding substitution capacity. The ISO has likened this marketplace to “StubHub”.

The marketplace proposed by the ISO would facilitate information sharing for needs and offerings (capacity available, dates, and prices) and operate between T-45 and T-8 days from the start of the deadline for capacity showings. The interface would have a modern “shopping place” interface to facilitate the transactions, where market participants would be trading volumes on a daily basis during the operating period. Upon completion of the transaction, the marketplace would match the buyers and sellers, and the transactions would occur bilaterally between the buying and selling scheduling coordinators. The advantages of the marketplace would be decreased informational frictions for scheduling coordinators to find replacement capacity. Otherwise, the marketplace would be like the current bilateral system, but with increased informational transparency.

DMM understands the proposed marketplace meets the objectives detailed in the straw proposal. However, with this marketplace design, DMM is concerned about the tradeoff between increased information and market clearing prices, and economic efficiency.[5]

By revealing prices on both the supply and demand side, the proposed marketplace will allow for price transparency, but in cases of tight supply conditions could provide sufficient information to exert market power up to the upper end of the potential value of substitute capacity to buyers. This upper end is the financial impact of incurring the resource adequacy availability incentive mechanism (RAAIM) penalty instead of purchasing substitute capacity. The goal of the substitution pool and marketplace is to avoid scheduling coordinators relying on the outside option, which is currently forced outages that incur penalties from the RAAIM. This would compromise reliability and economic efficiency – two goals the proposal should seek to mitigate.

Alternate outage substitution pool design

DMM has proposed an approach to outage substitution pool design based on a reverse second price auction.[6],[7] The advantage of such an auction is buyers and sellers are incentivized to reveal their true reservation prices for substitution capacity non-publicly, as opposed to publicly under the current proposal. Publicly revealing the price and quantity on both the supply and demand side of a market can lead to a strategic game of pricing that does not reveal true reservation (or opportunity) cost and value of capacity for buyers and sellers. This leads to an economically inefficient market. This is the current formulation of the outage substitution pool proposal preferred by the ISO.

Conversely, a reverse second price auction would be more economically efficient in that it incents the showing of resources, and is a reliable process for buyers, sellers, and the ISO. The theoretical structure of the auction will reduce search and coordination frictions, reduce market power concerns, and be designed to disincentivize strategic interactions between market participants. A reverse second price auction elicits true reservation prices by market participants, and results in an economically efficient outcome known as a Nash equilibrium, where no participant could be better off by choosing a different strategy.[8]

The ISO has indicated the design of the auction would be exceedingly complicated and proposed an alternative design in their Alternative Approach 1 that approximates the reverse second price auction.[9] The complications mentioned in the straw proposal are that the timing of the auction run and the coordination of the length of procurement of the capacity would be infeasible.

DMM suggests that the product purchased in the auction could be analogous to the ISO’s preferred option in the straw proposal, but use the auction mechanism instead. This would require the auction clearing on a unit of capacity per day, just as the proposed marketplace option in the ISO’s currently preferred design. The main difference is the auction would clear resources with the highest marginal value for substitute capacity, and bid prices would not be revealed to market participants. This will ensure the economic efficiency of the market, in addition to the objectives outlined in the straw proposal.[10]

DMM recommends the ISO consider an alternate design rather than the currently proposed design as a means of promoting greater market efficiency and achieve a cost minimizing outcome. The currently recommended approach does not ensure cost minimization, and may even lead to the ability of sellers to exert market power. DMM recommends these concerns be addressed prior to the recommended approach moving forward.

Like-for-like capacity substitution

DMM continues to support creating a set of capacity accounting methodologies that produce like-for-like capacity accounting across the RA resources.[11] The ISO stated they will not be requiring a like-for-like standard. However, since outage substitutions are for RA capacity, this highlights the need to ensure that RA capacity accounting is treated on a like-for-like basis across resource types.

In Track 1 of the RAMPD initiative, the ISO has developed a set of default capacity accounting techniques that will be used if a local regulatory authority (LRA) does not provide their own resource valuations.[12] Both the LRAs and the ISO should work to ensure that the capacity valuation of resources should possess a like-for-like quality in its overall valuation, or contribution to reliability in the CAISO system. DMM recommends the ISO continue to work with, and support, LRA determination of robust capacity valuations to ensure grid reliability.

 


[1]  Resource Adequacy Modeling and Program Design Track 2: Outage and Substitution Straw Proposal, California ISO, August 26, 2025: https://stakeholdercenter.caiso.com/InitiativeDocuments/Track-2-Straw-Proposal-Resource-Adequacy-Modeling-and-Program-Design-Aug-26-2025.pdf

[2]  Resource Adequacy Modeling and Program Design, California ISO, August 28, 2025: https://stakeholdercenter.caiso.com/InitiativeDocuments/Presentation-Resource-Adequacy-Modeling-and-Program-Design-Aug-28-2025.pdf

[3]  Comments on Resource Adequacy Modeling and Program Design Working Group, Department of Market Monitoring, March 13, 2025: https://www.caiso.com/documents/dmm-comments-on-resource-adequacy-modeling-and-program-design-working-group-mar-13-2025.pdf

[4]  Comments on Resource Adequacy Modeling and Program Design Working Group, Department of Market Monitoring, March 13, 2025: https://www.caiso.com/documents/dmm-comments-on-resource-adequacy-modeling-and-program-design-working-group-mar-13-2025.pdf

[5]  Resource Adequacy Modeling and Program Design Track 2: Outage and Substitution Straw Proposal, California ISO, August 26, 2025: https://stakeholdercenter.caiso.com/InitiativeDocuments/Track-2-Straw-Proposal-Resource-Adequacy-Modeling-and-Program-Design-Aug-26-2025.pdf

[6]  Outage substitution capacity pool auction: A theoretical framework, Department of Market Monitoring, February 11, 2025: https://www.caiso.com/documents/presentation-outage-substitution-dmm-feb-11-2025.pdf

[7]  Comments on Resource Adequacy Modeling and Program Design Working Group, Department of Market Monitoring, March 13, 2025: https://www.caiso.com/documents/dmm-comments-on-resource-adequacy-modeling-and-program-design-working-group-mar-13-2025.pdf

[8]  Vickrey, William. “Counterspeculation, Auctions, and Competitive Sealed Tenders.” Journal of Finance, col. 16, no. 1, pp 8-37.

[9]    Resource Adequacy Modeling and Program Design Track 2: Outage and Substitution Straw Proposal, California ISO, August 26, 2025: https://stakeholdercenter.caiso.com/InitiativeDocuments/Track-2-Straw-Proposal-Resource-Adequacy-Modeling-and-Program-Design-Aug-26-2025.pdf

[10]   Please see previous materials from DMM for further market design principles, and the properties that provide for improved market efficiency and cost reductions.

[11]   Comments on Resource Adequacy Modeling and Program Design Working Group, Department of Market Monitoring, March 13, 2025: https://www.caiso.com/documents/dmm-comments-on-resource-adequacy-modeling-and-program-design-working-group-mar-13-2025.pdf

[12]   Resource Adequacy Modeling and Program Design, Modeling and Default Rules (Track 1) Draft Final Proposal, California ISO, August 25, 2025: https://stakeholdercenter.caiso.com/InitiativeDocuments/RAMPD-Track1-DraftFinalProposal-final.pdf 

2. Please provide your organization's overall feedback regarding the RAMPD Track 2 Straw Proposal, which was posted on August 26, 2025.
Note: for feedback towards the Tracks 1 and 3 Draft Final Proposals, please submit your feedback separately on those two separate comment templates, below this comment template.

Please see the PDF attached below the final question for DMM's fully formatted complete set of comments. For the reader's convenience, the complete text of the comments is pasted in response to #1, but there may be some formatting errors.

California Public Utilities Commission - Public Advocates Office
Submitted 09/12/2025, 03:22 pm

Contact

Patrick Cunningham (patrick.cunningham@cpuc.ca.gov)

Karl Dunkle Werner (karl.dunklewerner@cpuc.ca.gov)

1. Please provide your organization's overall feedback regarding the Resource Adequacy Modeling and Program Design (RAMPD) Stakeholder Meeting on August 28, 2025.

The Public Advocates Office at the California Public Utilities Commission (Cal Advocates) is the independent ratepayer advocate at the California Public Utilities Commission (CPUC).  Our goal is to ensure that California ratepayers have affordable, safe, and reliable utility services while advancing the state’s environmental goals. 

Below, Cal Advocates addresses the following:

  • The California Independent System Operator (CAISO) should provide a description of the Power Contracts Bulletin Board System’s design and what lessons learned from its operation may inform the design of a resource adequacy (RA) substitution marketplace;
  • The CAISO should explicitly clarify that any RA substitution platform implemented by this initiative will not invalidate current and future RA substitution capacity procured by other means;
  • The CAISO should directly consider the tradeoffs between customization, negotiation, and liquidity on the substitute RA platform.
2. Please provide your organization's overall feedback regarding the RAMPD Track 2 Straw Proposal, which was posted on August 26, 2025.
Note: for feedback towards the Tracks 1 and 3 Draft Final Proposals, please submit your feedback separately on those two separate comment templates, below this comment template.

Consideration of the Power Contracts Bulletin Board System

The CAISO proposes to implement an outage and substitution pool marketplace platform to facilitate transactions of RA substitution capacity.[1]  Scheduling Coordinators (SC) could offer available RA capacity for sale and SCs in need of substitution RA could purchase those offers at a platform hosted by the CAISO.[2]  The CAISO’s proposed design does not acknowledge the existence of a “Power Contracts Bulletin Board” system already hosted by the CAISO that is a very similar platform to connect buyers and sellers of substitution RA capacity.[3]

In the next Track 2 proposal, the CAISO should describe how the design of the Power Contracts Bulletin Board system compares to its proposed marketplace and explain any lessons that can be learned from its operation to date.  The CAISO should also describe how its proposed marketplace platform would provide improvements to RA substitution procurement respective to the ongoing use of the Power Contracts Bulletin Board.  Such a description may help the CAISO to avoid repeating any mistakes made with the Power Contracts Bulletin Board that have apparently necessitated the development of an RA substitution marketplace.

Clarity that a new RA Substitution Marketplace will not Prohibit Alternative Means of Procurement

The CAISO’s proposal to implement an outage and substitution pool marketplace, and proposed alternative options, should complement, rather than replace, existing means of RA substitution procurement.[4]  The CAISO should clarify that any RA substitution platform developed in this initiative will be complementary to other means of RA substitution procurement, such as bilateral and brokered transactions.  Doing so will help ensure that SCs can choose the most efficient and appropriate method of RA substitution capacity procurement.

Consideration of Liquidity Promotion and Negotiated Contracts

In its proposed RA substitution marketplace design, the CAISO appears to have conflicting characterizations of how customized or negotiable transactions would be.  There are two dimensions to consider here, which intersect in important ways.

  1. Would sellers have full flexibility in what they offer, or is it limited or standardized in some way? For instance, CAISO’s proposal seems to limit the price structure to a constant $/MW-day, and temporal structure to daily granularity.[5]
  2. Would sellers and buyers negotiate the sale terms (e.g. MW, dates, or even prices), or do buyers pick offers and “check out” without further negotiation?  Here, CAISO gave conflicting signals, both indicating a desire for participants to negotiate quantities and that the check-out would be like an online shopping experience.[6]

If the CAISO is pursuing a standardized, less negotiable product, it should consider the tradeoffs between standardization and the flexibility necessary to avoid requiring buyers to purchase more than they need.  For instance, consider the extreme case where there is no negotiation and all listings must be posted in month-long blocks.  This would force uniformity (making the listings more interchangeable), but would require many buyers to purchase more days of substitution RA than they need.

The CAISO should coordinate with stakeholders to consider interface design measures that are not strictly necessary but would smooth the process.  One example could be the CAISO providing a drop-down menu to allow buyers to view the RA qualifying capacity (QC) in a different accreditation system.  (Analogous to currency selection in an online shopping system.)  For example, a resource could be sold by a buyer outside the CPUC accreditation system, but purchased to substitute for a CPUC-accredited resource.  The buyers’ browsing would be simplified if they could see all resources in equivalent-accreditation terms.  To do this, CAISO would need to calculate each resource’s QC under each accreditation system.  A second example might allow sellers to tag their CPUC-local-RA region, so that buyers can purchase substitute RA that also meets their local RA requirements.

The CAISO noted that more complicated alternatives are possible, including various auction designs.  In the live discussion, some market participants representing generation resources voiced support for those designs.[7]  At this time, Cal Advocates agrees with CAISO’s position that implementing these designs in an incentive-compatible way is more complicated than it is worth.  However, if the CAISO is considering them, Cal Advocates strongly recommends not building up an auction mechanism by iteratively adding more and more complicated components.[8]  Instead, the CAISO should consider spectrum auctions and other auction market designs.[9]


[1] CAISO, Resource Adequacy Modeling and Program Design Track 2: Outage and Substitution Straw Proposal, August 26, 2025 (Track 2 Straw Proposal) at 7-8.

[2] Track 2 Straw Proposal at 7-8.

[3] The Power Contracts Bulleting Board requires CIRA access and is available here: https://www.caiso.com/generation-transmission/resource-adequacy/power-contracts-bulletin-board.

[4] Track 2 Straw Proposal at 7, 10-11.

[5] Track 2 Straw Proposal at 9.

[6] Track 2 Straw Proposal at 8 and CAISO staff discussion during the workshop.  See “Aug 28, 2025 - Resource Adequacy Modeling and Program Design Working Group Tracks 1, 2 and 3A” (Workshop Recording).  Available at: https://www.youtube.com/watch?v=lfsjp-K3UJc at 3:33:33.

 

[7] Workshop Recording at 4:30:50.

[8] Examples of complications include the need for buyers to procure contiguous blocks of time, sellers offering RA that is not necessarily a homogenous product for every buyer, and potential issues of incentive-compatible bidding.

[9] A well-written example is: Cramton, Peter. “Spectrum auction design.” Review of industrial organization 42, no. 2 (2013): 161-190.  Available at: https://www.cramton.umd.edu/papers2005-2009/cramton-spectrum-auction-design.pdf

CESA
Submitted 09/19/2025, 03:24 pm

Contact

Perry Servedio (perry.servedio@gdsassociates.com)

1. Please provide your organization's overall feedback regarding the Resource Adequacy Modeling and Program Design (RAMPD) Stakeholder Meeting on August 28, 2025.

CESA is encouraged that CAISO recognizes the value in making the capacity substitution process more efficient within its Track 2 proposal. However, CESA believes that CAISO's current proposals for an RA Substitution Capacity Pool do not go far enough to be useful and fail to address key inefficiencies that lead to artificial capacity tightness. It is incumbent on CAISO to resolve these issues, as doing so would support a more reliable fleet of resources, enable advanced planning of maintenance outages, and decrease just-in-time forced outages that impair system reliability.

CESA strongly recommends CAISO re-consider its hasty decision in the Spring of 2021 to require substitution capacity for all planned outages, regardless of system conditions and availability of RA capacity on the system. CAISO’s planned outage substitution rules have been a major burden on suppliers trying to plan needed maintenance outages over the past 10 years and has led to an increase in forced outages. High forced outage rates jeopardize system reliability because there is not an opportunity for CAISO to coordinate outages aligned with its reliability imperative.

Regarding the remaining planned outage substitution needs, CESA proposes a comprehensive, centrally cleared substitution capacity pool design that aims to provide outage scheduling certainty and minimize transaction costs, while maximizing maintenance outage value and ensuring transparent pricing.

2. Please provide your organization's overall feedback regarding the RAMPD Track 2 Straw Proposal, which was posted on August 26, 2025.
Note: for feedback towards the Tracks 1 and 3 Draft Final Proposals, please submit your feedback separately on those two separate comment templates, below this comment template.

Align Planned Outage Substitution Requirements with System Reliability Needs

Managing a reliable fleet of resources requires reasonable investment in scheduled maintenance outages. However, the CAISO has placed increasing burdens on suppliers trying to plan needed maintenance outages over the past ten years. From replacement requirement rules for scheduled generator outages to just-in-time substitution rules for planned outages, the current RA policies have led to a noticeable decrease in the capacity on planned outage each year. During the same period, generators have increasingly taken forced outages to fix critical plant issues. High forced outage rates jeopardize system reliability because there is not an opportunity for CAISO to coordinate outages aligned with its reliability imperative. The chart below shows the annual average MW on planned outage versus forced outage for each year from 2012 through 2022 based on data from the Department of Market Monitoring’s annual reports.

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CESA proposes CAISO perform a month-ahead reliability study to establish the amount of RA capacity needed to reliably operate the system and use this result to inform the amount of planned outages that can be taken without substitution capacity. Furthermore, CAISO should determine certain times with minimal reliability risk to allow more planned outages to be taken without a substitution requirement.

A Market for Remaining Planned Outage Substitution Needs

The current bilateral substitution capacity market is plagued by several inefficiencies that contribute to artificial capacity tightness and undermine system reliability. These issues include high transaction costs associated with discovery, multi-counterparty arrangements, contracting, and settlement. There is also a notable unavailability of short-duration capacity (e.g., for one-day substitutions) and an unwillingness among suppliers to engage in the bilateral market due to these complicating factors. A critical problem arises when Scheduling Coordinators (SCs) hold back Resource Adequacy (RA) capacity for partial-month outage substitutions, inadvertently creating artificial tightness in the RA bilateral market as more capacity is withheld than necessary. This situation, coupled with outage approval uncertainty and challenges like mismatches between contract terms and outage durations, often leads to potential maintenance delays and an increase in forced outage rates, ultimately impairing system reliability.

CESA proposes a centrally cleared substitution capacity pool to be executed at various intervals. The CAISO will clear capacity substitutions and planned maintenance outages at daily granularity resulting in unconditionally approved planned maintenance outages and financial settlement of the substitution capacity between buyers and sellers at a daily marginal clearing price.

Maximizing Outage Value and Providing Transparent Pricing

CESA's proposal for a centrally cleared substitution capacity pool emphasizes specific mechanisms to drive participation by offering outage scheduling certainty and transparent incentives.

A core element designed to encourage participation is the commitment that outages successfully clearing the pool should receive immediate and unconditional approval. This addresses a significant current inefficiency where outage approval uncertainty hinders suppliers' willingness to engage in the bilateral market and plan necessary maintenance. By guaranteeing approval, suppliers gain the certainty they need to confidently schedule and perform planned maintenance work, removing a major barrier to participation.

The proposal also calls for the pool to support clearing outages at various intervals, including Long-term, Month-ahead, and Week-ahead (extending out to the end of the month). This flexibility allows suppliers with excess capacity to strategically weigh the value of holding supply for their own use versus offering it to the pool. Offering multiple timeframes caters to different planning horizons and operational needs of resources, making it more appealing for a broader range of suppliers to offer their capacity when it is most convenient for them.

The availability of transparent substitution pricing results within these timeframes will drive participation. Transparent pricing information from past clearing periods provides market participants with valuable data, enabling them to make more informed decisions about when and at what price to offer or bid for substitution capacity, as well as weigh these costs against their expected value for performing the maintenance work. This transparency helps build confidence in the market, encouraging both buyers and sellers to engage, as they can better predict potential costs and revenues. These combined factors aim to create a more efficient and reliable system by incentivizing greater supplier engagement and facilitating advanced planning.

Minimizing Transaction Costs

CESA's proposal directly addresses the significant issue of high transaction costs in the current bilateral substitution capacity market by advocating for a centrally cleared system. Currently, the market is burdened by various expenses, including those related to discovery of available capacity, negotiating multi-counterparty arrangements, drafting contracts, and managing financial settlement.

To minimize these inefficiencies, CESA proposes that CAISO should take on the role of clearing the transactions and revenues associated with the substitution capacity pool. This centralized approach is designed to eliminate most of the aforementioned transaction costs. By having CAISO act as the clearinghouse, the need for individual Scheduling Coordinators (SCs) to engage in complex and time-consuming bilateral negotiations for each substitution need is removed. This streamlines the process by providing a single point of interaction for all participants.

Furthermore, a key benefit of CAISO clearing transactions is its ability to efficiently facilitate multi-party clearing. Such multi-party transactions, which are often necessary to efficiently match supply and demand across the system, are largely infeasible in a purely bilateral market structure. The central clearing mechanism allows for a more complex and optimized matching process that can aggregate smaller offers and demands, thereby enhancing market liquidity and reducing the fragmentation that currently drives up costs.

Participation and Pool Clearing Details

In CESA's proposal for a centrally cleared substitution capacity pool, the market participants and mechanisms are clearly defined to enhance efficiency and transparency.

  • Buyers and Sellers. The buyers in this pool are entities with outages that need substitute capacity, and they will express this need through a daily willingness-to-pay quantity/price bid curve. The sellers consist of two main groups: those suppliers offering non-shown excess RA capacity through a daily willingness-to-sell quantity/price offer curve, and Load-Serving Entities (LSEs) contributing their shown RA Plan excess capacity at a defined reservation price.
  • Bidding Process. Participants will bid into the pool with daily granularity. For buyers, this means submitting a daily willingness-to-pay quantity/price bid curve for their required outage capacity. Sellers will submit a daily willingness-to-sell quantity/price offer curve for their available excess capacity. LSEs also contribute to the supply side by making their excess shown RA Plan capacity available at a reservation price. The pool would allow for clearing outages at various timeframes, including Long-term, Month-ahead, and Week-ahead (up to the end of the month). SCs with both outage demand and substitution supply would be given the ability to “self-provide” substitution capacity for their outages, which would set both the outage demand and substitution supply as price-takers, thereby ensuring the outage clears and insulating them from the pricing.
  • Pool Clearing Mechanism. CAISO would be responsible for clearing the transactions and revenues, a central role intended to eliminate high transaction costs. The core objective of the pool clearing mechanism is to maximize the total sum of quantity multiplied by bid price over the specified clearing period – for example, over the entire month in a month-ahead period. This centralized system is crucial for enabling multi-party clearing, which would otherwise be infeasible in a purely bilateral market. A significant incentive for participation is that outages successfully clearing the pool are to receive immediate and unconditional approval, providing certainty to suppliers.
  • Setting of Daily Market Clearing Price. The proposal establishes transparent daily marginal clearing prices. This transparency is intended to reinforce participation in the market and support the development of forward markets for substitute capacity.

Further Topics for Consideration

CESA recognizes that this proposal will require more refinement and consideration of the eventual implementation effort. However, CESA urges the CAISO to recognize that low implementation effort proposals such as its bulletin board proposal will provide extremely low value to the market and not resolve key market inefficiencies. A substitution pool that centrally clears daily capacity to efficiently schedule planned maintenance outages is highly valuable and CAISO can measure the minimum potential market size by observing the GWs of planned outages currently being approved.

CESA recognizes the following considerations for further refinement:

  • Consideration of the reliability target to be achieved in the substitution pool: If actual system conditions are tracking well below the established RA program needs, CAISO should consider adjusting the overall system reliability need to measure the amount of substitution capacity needed. Adjusting the need down, aligned with up-to-date reliability assessments, would allow for more planned maintenance work to be performed improving overall generation fleet performance and reducing the overall fleet forced outage rate.
  • Recognition and utilization of "over-shown" capacity: The process for explicitly recognizing and utilizing "over-shown" capacity on an RA Plan as substitution supply within the pool needs to be defined.
  • Financial treatment of excess RA Plan capacity: Considering a reservation price to be returned to load-serving entities in months with excess RA capacity or a specific assignment of capacity “contract ownership” rights between LSE SCs with excess capacity on their RA Plans and the SCs that schedule the resources requires some refinement.
  • Interaction of penalty mechanisms with market price: While CESA notes that any penalty mechanism levied against outages taken without substitution will effectively act as a price-cap in the market, the design and setting of such penalties in conjunction with the pool's pricing mechanism would need careful consideration. Stakeholders should consider the incentive effects of linking the penalty price for SCs taking planned outages without substitution to the substitution market clearing price versus setting a fixed penalty value.
  • Optimization Implementation: Outages are often an "all-or-nothing" decision, which means the optimization process for the pool might need to handle "blocky" decisions. However, the supply side of the optimization may not have similar blocky decisions to weigh.  The optimization would require up to a 31-interval optimization representing the days remaining in the month during the period being cleared. Other granularities could be considered to the extent that these details present issues. CESA recommends CAISO release as much information as possible about the outages that would be cleared each month to allow stakeholders to fully understand the potential implementation feasibility.

Middle River Power, LLC
Submitted 09/19/2025, 04:34 pm

Contact

Brian Theaker (btheaker@mrpgenco.com)

1. Please provide your organization's overall feedback regarding the Resource Adequacy Modeling and Program Design (RAMPD) Stakeholder Meeting on August 28, 2025.

MRP appreciates the stakeholder discussion on August 28th. As discussed in previous meetings, the bilateral market for outage substitution capacity is limited.[1] This inefficient procurement raises costs, leaves surplus capacity unusable for some owners, and leaves costs unrecovered. Improving the substitution market and process can help reduce the impact of forced outages and improve grid reliability. 

 


[1] See March 13, 2024 Middle River Power LLC “Why I Hate POSO” presentation (available at https://stakeholdercenter.caiso.com/InitiativeDocuments/MRPPresentation-ResourceAdequacyModeling-ProgramDesign-Mar13-2024.pdf

2. Please provide your organization's overall feedback regarding the RAMPD Track 2 Straw Proposal, which was posted on August 26, 2025.
Note: for feedback towards the Tracks 1 and 3 Draft Final Proposals, please submit your feedback separately on those two separate comment templates, below this comment template.

In the Track 2 straw proposal, CAISO states that the current cost of procuring replacement capacity often exceeds the cost of paying the RAAIM penalty for non-availability and therefore creates a disincentive for scheduling necessary maintenance which has contributed to forced outage rates that exceed the levels planned for by CAISO and CEC.[1]  MRP disagrees with this statement because the CAISO assumes that the decision to procuring replacement capacity rather than accepting a RAAIM penalty comes down to simple economics.  Rather, other factors have led to forced outage rates being higher than those planned for by CAISO and CEC.

The first factor is the number of resources the CAISO has exempted from RAAIM due to either technology type or their status as acquired resources or use-limitation reached resources. These resources may account for higher forced outages due to the lack of incentive to procure forced outage substitution.

The second factor is the inefficiency of procuring substitute capacity in the bilateral market. Resource owners are often unable to find the volume and duration of required substitute capacity in the bilateral market.  A bilateral market is very difficult for buyers because they must find sellers that are able and willing to transact for non-standard terms (e.g., duration) for substitute capacity. Substitute capacity is not the same as capacity used for RA compliance for an LRA which has a minimum of one month in duration. The inability to find short-duration substitute capacity incentivizes the resource owner to take forced outages in the form of short notice opportunity outages or off-peak opportunity outages, thereby increasing overall forced outage statistics. This is the wrong incentive. For LSEs that own capacity (ownership is defined as being or being able to direct the Scheduling Coordinator of the capacity), they may be able to self-supply substitute capacity from surplus capacity. For others that do not have surplus capacity (including the generator owner themselves), finding the right seller may be a daunting task.

The third factor is the administrative logistics of negotiating the confirmation after reaching tentative agreement. Some sellers require pre-payment or collateral; most counterparties require legal review which adds time because there’s no standard RA contract. Finally, some LSEs that may have surplus capacity have requirements in their contracts to always show such resources on RA plans, which prevents those resources from being used for substitute capacity or from being further resold downstream. This both artificially constrains the supply of capacity and reduces the ability of the LSE to monetize its surplus capacity.

For all these reasons, MRP believes CAISO should develop a better way for buyers to find substitute capacity.

MRP does not support CAISO’s recommended approach for a decentralized open marketplace for substitute capacity. This option does not yield a better outcome because buyers would still need to find the right seller or sellers that exactly match their substitution needs. It also does not take advantage of economies of scale that could be gained when multiple outages are solved together.

MRP supports a CAISO-administered pool to resolve the issues highlighted above. MRP requests CAISO host further workshops to discuss ways to optimally clear substitute capacity demand and supply.

MRP suggests additional topics for discussion.

  1. Market participation.  MRP understands the CAISO’s concern towards market participation based on the lack of participation in the CSP.  In order to bolster the market, MRP believes the CAISO-administered pool should be the only source for substitute capacity for planned outages.  This can ensure that all substitute capacity flows through the pool. Once the pool has operated with sufficient time, the mandatory requirement may be relaxed to more voluntary basis.
  2. Frequency of capacity clearing. It is important for generators to have assurance that sufficient substitution capacity is procured given the current “all or nothing” requirement.   SCs should be permitted to submit substitution bids to the pool early, such as six months in advance, and the pool also accept substitution offers at that time. The pool should clear frequently to allow more outages to be scheduled and more capacity to be sold up until the T+7 window.
  3. Self-supply. MRP believes that SCs should be permitted to self-supply capacity from their portfolio for planned outages. Careful consideration, however, should be given as to whether self-supply would limit the amount of substitute capacity supply made available to the pool. For example, if an SC were to only self-supply capacity for the duration and volume of their outage, then capacity for the remaining days of the month may not be made available at all to the market thereby decreasing market efficiency by withholding capacity.
  4. Flexibility of outage changes.  The duration and start and end dates of planned outages can and do change.  What happens when the buyer no longer needs the substitute capacity that was purchased from the pool?
  5. Ability for LSEs with surplus capacity to monetize surplus for outage substitution.  Providing an option to sell surplus capacity which otherwise may be contractually locked helps LSEs recover some of the capacity’s sunk cost and reduce overall costs to ratepayers. Generally, sellers of capacity must identify a resource to be used to substitute for other outages. Since the LSE may not be the SC of the resource being shown, MRP recommends discussion regarding LSEs being able to offer surplus MW from their showings, above the monthly reliability requirement, as supply for the substitution pool. This can be facilitated by the tracking system as proposed in Track 3A.

MRP acknowledges CAISO’s discussion regarding equivalent measurement for substitute capacity.  This is an issue because LRAs use different accreditation methodologies for various resource types. This is even prevalent in the CAISO’s own default counting rules being discussed in Track 1, which do not attribute equivalent reliability capacity value for all resources either. MRP advocates for a standard capacity product where substitute capacity does not have to be procured on a like-for-like basis as it creates significant barriers to finding substitute capacity.

CAISO’s March 2024 presentation presented data for the percentage of RA outages breakdown by fuel type (reproduced below).[2] This graph can indicate the volume of capacity that could use the CAISO administered pool. Unlike the CAISO’s CPM process, which is rarely used, the substitution pool would be utilized frequently.

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[1] Track 2 Straw Proposal at page 3

[2] CAISO March 13, 2024 Resource Adequacy Modeling and Program Design Working Group presentation at slide 26.  This presentation is available at https://stakeholdercenter.caiso.com/InitiativeDocuments/Presentation-Resource-Adequacy-Modeling-and-Program-Design-Working-Group-March13-2024.pdf

Pacific Gas & Electric
Submitted 09/19/2025, 02:32 pm

Contact

Adeline Lassource (Adeline.Lassource@pge.com)

1. Please provide your organization's overall feedback regarding the Resource Adequacy Modeling and Program Design (RAMPD) Stakeholder Meeting on August 28, 2025.

In the Track 2 Straw Proposal, the CAISO suggests maintaining the current approach for long-term planned outages and introducing a voluntary outage and substitution pool for planned/maintenance outages between T-28 to T-8.

PG&E supports CAISO’s proposal to keep the existing approach for long term outage planning, allowing SCs with far-future planned outages, which cannot be rescheduled, to continue arranging for substitute capacity outside of the pool structure.

Voluntary pool:

CAISO’s proposal establishes a decentralized outage and substitution pool that operates like an open marketplace. Selling SCs can post available capacity by date, megawatt quantity, price, contact information, etc. In this approach, CAISO will not actively match offers to buy or sell substitution capacity, nor will it ensure the financial settlement of transactions.

As discussed at the stakeholder meeting, CAISO also retains the authority to deny a planned outage even if a buying SC finds substitution capacity in the pool.

In previous comments on the pool features (link to the comments California ISO - All comments, questions 6 to 11), PG&E noted that the pool should be complementary to the existing bilateral market. PG&E is concerned that the voluntary pool as designed in the straw proposal will not have added value to current brokerage options, nor ensure that short-term outage finding substitution in the pool will get planned outage approved. PG&E asks CAISO to explain how this proposal is different than the existing bulletin board that is not used by market participants. The CAISO should also investigate ways to design the pool such that market participants can provide the CAISO with its market sensitive outage needs and resource availability as well as pricing preferences. The CAISO can then aggregate those needs into a single amount of daily supply and demand for outage substitution to help the market understand what days are more in demand. This information, as well as having the CAISO provide a range of pricing would allow buyers and sellers to understand whether it is worthwhile to engage with the pool or to attempt to reschedule their outage instead.

PG&E notes that the Straw Proposal does not address the revision of outage types particularly clarification of the opportunity and urgent outage types. PG&E encourages CAISO to clarify questions raised on the revision of outages definitions (link to the comments California ISO - All comments) - question 11).

Action requested for the revised straw proposal:

  • PG&E suggests that the CAISO assesses an alternative voluntary pool where CAISO will play a more active role in matching the selling buying substitution capacity offers. This approach would ensure that planned outage, finding substitution capacity found through the pool, will not be denied.

2. Please provide your organization's overall feedback regarding the RAMPD Track 2 Straw Proposal, which was posted on August 26, 2025.
Note: for feedback towards the Tracks 1 and 3 Draft Final Proposals, please submit your feedback separately on those two separate comment templates, below this comment template.

See comments in question 1.

Peninsula Clean Energy
Submitted 09/19/2025, 02:30 pm

Contact

Doug Karpa (dkarpa@peninsulacleanenergy.com)

1. Please provide your organization's overall feedback regarding the Resource Adequacy Modeling and Program Design (RAMPD) Stakeholder Meeting on August 28, 2025.

Peninsula Clean Energy supports CalCCA’s comments on these other tracks, although CAISO staff’s openness to stakeholder feedback and willingness to discuss ideas is always greatly appreciated.

2. Please provide your organization's overall feedback regarding the RAMPD Track 2 Straw Proposal, which was posted on August 26, 2025.
Note: for feedback towards the Tracks 1 and 3 Draft Final Proposals, please submit your feedback separately on those two separate comment templates, below this comment template.

 Peninsula Clean Energy strongly urges CAISO to move forward to develop a pooled substitution mechanism.  The current substitution rules requiring substitution capacity for every planned outage appears to result in too much capacity being withheld from RA markets and RA programs.  Withholding for substitution for possible outages restricts supply in the bilateral RA market, driving up prices.  In turn, higher prices and a lack of availability can drive in RA shortfalls.  Capacity that does not participate in the RA program does not have a must offer obligation to support reliability. Capacity that ends up unused and unoffered to the market helps neither affordability nor reliability.  Thus, the current system is economically inefficient, because it does not deliver reliability at least cost.

In addition, Scheduling Coordinators of generators need an easier substitution mechanism with greater substitution availability.  The current system appears to drive too many forced outages, either because of maintenance outages not taken, or because denied planned outages can result in Scheduling Coordinators needing to take forced outages later. 

Unfortunately, the electronic billboard construct proposed by CAISO is unlikely to solve either problem, to the extent that the problem in the substitution market is not primarily that buyers and sellers of substitution capacity cannot find each other. Thus, it seems unlikely to reduce the forced outage rate or to free up significant withheld capacity to the RA market.

Peninsula Clean Energy urges CAISO to engage in the work of developing a substitution pool methodology.  Although the concepts explored by CAISO in alternative 1 and alternative 2 may have some technical challenges, these are probably not insurmountable.  If a workable methodology is developed, rate payers and the system could see significant benefits.

 

Principles

Several principles should apply to any new substitution pool construct to ensure that it is likely to solve the key issues of withholding and denials of planned outages:

    1. Maximize allowing Scheduling Coordinators of generators to schedule outages with a reasonable degree of certainty.  If approval of planned outages is uncertain, these may often become forced outages, which are not supportive of reliability.
    2. Eliminate incentives for withholding capacity for substitution.  All capacity that could be willingly offered to provide substitution for any planned outage should be available to the RA pool. Self-providing entities offering capacity to cover their own outage can be integrated into the auction pool by giving these bids priority.
    3. Scheduling Coordinators of generators should have the visibility to scheduled planned outages by other generators to schedule their own planned outages when substitution demand is lowest.
    4. Provide substitution only as needed for reliability as cost-effectively as feasible. Since reliability is a system issue, the total need for substitution should be assessed on the system level, not the generator-by-generator level.
    5. Allow buyers of substitution (“buyers”) and sellers of substitution (“sellers”) to determine the prices they’re willing to pay for substitution or to provide it.
    6. Ensure that the costs of substitution are borne by the generators needing substitution, rather than socializing the costs to all ratepayers.

Since the current billboard proposal does not meet these principles, Peninsula Clean Energy strongly urges CAISO to take the time to develop an additional mechanism to ensure the two mechanisms together will meet these objectives. 

 

Potential proposal outline

There are probably many structures that could meet these principles.  To demonstrate that a pool proposal is feasible, Peninsula Clean Energy offers a starting framework for a workable auction mechanism.  If this particular proposal is taken up by stakeholders, undoubtedly many aspects should be altered and new functionalities resolved in the stakeholder process, but as a framework, this should serve as a demonstration that a workable system does exist.  The process may not result in the most theoretically efficient auction results, even an imperfect result could be an improvement on the current inefficient system.

This proposal uses a daily auction for each day of the month to fill the system level reliability need from available substitution capacity.  The system level reliability need is established by a system analysis, akin to the need assessment for the Capacity Procurement Mechanism. The system level reliability need is neither the RA shortfall nor the sum of all planned outages, because in some cases the system may be reliable with less than either of these (for example, if month ahead load forecasts are lower than was forecast for the year ahead RA obligations, during an anomalously cool summer, for example.).  Prices are established by 1) the price buyers (generator Scheduling Coordinators) would be willing to pay before deciding to forgo the planned outage and 2) the minimum price sellers of substitute capacity would be willing to accept to make themselves available.  When outages are covered by the auction in some, but not all, days of their outage, those buyer’s bids would be automatically adjusted based on their maximum price they’re willing to pay for the entire outage, not just their daily bids.  Additional mechanisms could compensate LSEs showing excess RA capacity or to ensure that sellers of capacity earn their required minimum for the month if the sum of their daily cleared bids is insufficient.

 

Illustrative example of an auction mechanism

  1. Principle:  Scheduling Coordinators of generators are only allowed to show substitution obtained in the substitution pool process. This would eliminate withholding for substitution and ensure all substitution capacity is offered to the system. This is appropriate, since reliability is a system issue, not a generator issue. 
    1. Self-providing entities that wish to both take a planned outage and offer substitution capacity can be accommodated in a pool system.  If the self-providing entity offers capacity and requests a planned outage, the outage can be prioritized in the auction with their sell bid and buy bids cleared against each other before the rest of the auction is conducted. Since self-providing entities would both pay and receive the clearing price for that capacity they should be indifferent to price and be a willing price-taker.  In addition, if the self-providing entity offers substitution capacity greater than the outage capacity, that additional capacity could earn additional funds. (e.g., using a 120MW unit as substitution for a 100MW unit outage would provide 100MW substitution for the 100MW unit outage, plus substitution revenue for the additional 20MW, if needed.). Conversely, a self-providing entity could offer smaller capacity than needed for the outage, clearing that portion of their buy bid automatically while leaving the remaining substitution need to be met in the regular auction.
  2. From T-365 one year prior to the outage month: Scheduling Coordinators of generators can submit the dates of their planned outages at any time.  These planned outages would be displayed anonymously to a (private) scheduling board.  Scheduling Coordinators scheduling outages could schedule their own outages to avoid days where other units are scheduled to be offline, since this would increase the demand for substitution for those days. This should have the effect of spreading outages across any given month, especially to hours or days with low anticipated needs.
  3. By T-45 when RA supply plans are submitted: 
    1. Generator Scheduling Coordinators (Buyers) would submit their maximum acceptable price for each day they plan to be taking a planned outage and a maximum total price summed across all days for their outage.
    2. Substitution sellers would offer their capacity at a minimum acceptable price, (and potentially a minimum total acceptable revenue for the whole month.  See 8.b below.) 
    3. (LSEs overshowing excess RA in their month ahead showings could be allowed to nominate their excess showing to be placed in the substitution pool as automatic price takers of the clearing price on a given day.)
  4. Between T-45 and T-30, CAISO would model the system reliability need by day, based on the total capacity shown in supply plans, (less any capacity nominated as substitution supply, if allowed,) and assuming all planned outages are taken as requested. This analysis is methodologically similar to the calculation of the Capacity Procurement Mechanism need, which could be calculated at the same time (and potentially procured in the same process.)
    1. This results in a daily need from the substitution pool. 
  5. Between T-45 and T-30:
    1. CAISO would settle the sellers’ bid stack against buyers’ bids determine a clearing priced based on the second highest clearing bid, up to the total reliability substitution need on a given day. Each buyer bid is matched against seller offers willing to accept less than the buyer is willing to pay.  If the next seller’s bid is higher than the next buyer’s bid for all or any fraction of their capacity, that buyer’s bid is not accepted in the first round. (That is, there is no supply available at the price the buyer is willing to pay, based on their daily bids.)  Once the auction clears the entire reliability need for a day, all planned outages on that day are approved for that day, even if their individual buyer bids were not cleared in the auction. 
    2. Once the daily auctions are cleared in the first round, some generators may have outages approved for some, but not all days of their planned outage.  In this case, that buyer would have their bid automatically increased on those days of their planned outage when their bid was not accepted and insufficient capacity was cleared to meet that day’s reliability need.  The automatic increase would be limited by the maximum total price the buyer is willing to pay for their entire outage, as follows:  The sum of the cost of substitution at thee clearing prices on the days where the buyer has substitution coverage (either because their particular bid was cleared, or because the entire reliability need for that day was cleared) constitutes a total amount committed to by the buyer.  This is likely less than the total amount the buyer is willing to pay for the entire period of their planned outage.  The difference between their total amount the buyer is willing to pay for the entire outage and the costs at the clearing prices on days where they were accepted constitutes additional funds that could be used to increase the buyer’s bid on days where the auction did not clear sufficient supply for them to take an outage on that day.  Thus, the buyer’s bids can be increased to try to match supply bids on the days where their buy bid was not accepted, so long as the total across all days of the outage is less than their initially stated maximum total cost. If this is sufficient to clear bids for the missing days, then the buyer has coverage for the whole outage for an amount the buyer is willing to pay in total.
      1. For example, a buyer bids a maximum total cost for a 4-day a 1 MW outage of $100 and indicates its daily maximum bid is $25 for each of the four days. The buyer’s bids are cleared for the first three days at a clearing price of $20, but the next available seller offer on the fourth day would cost $30, so the buyer’s bid on the fourth day does not clear the market.  This buyer would have substitution for three of its four days.  However, since the cost of the first three days is $60, the fourth day could support a cost of up to $40 and still meet the overall total cost cap for this buyer.  Thus, CAISO would automatically increase the buyer’s bid on the fourth day to $30 to clear the buyer’s bid and ensure substitution coverage.
    3. If the auction clears enough capacity to meet the substitution need for a given day, all planned outages on that day are deemed to have substitution.
    4. If automatic bid increases up to the maximum total cost are still insufficient to secure the needed substitution for every day of the buyer’s planned outage, the buyer’s outage would be provisionally denied, pending any curing of any RA deficiencies.
  6. At T-30 days, any cured RA shown is then directly removed from the daily substitution need, potentially meeting the substitution need on days that had shortfalls/provisional planned outage denials.  If the entire reliability need on a given day is now met all planned outages for that day are accepted for that day.
  7. Any planned outages that include any day with a remaining substitution need and that did not have a bid matched for that day are then denied. (Buyers with bids that cleared on a day that did not clear the entire reliability need are still approved for that day.  For example, if the reliability need is 100MW on a given day, but the auction only cleared 80MW, outages that include the bids cleared in that 80MW would still be approved for that day.)
  8. Several optional mechanisms should be considered:
    1. Planned outages that had winning bids on only some days but are ultimately denied could be accounted for in several ways:
      1. The costs of bids won by buyers that are ultimately denied an outage could be pro-rated across the generators taking planned outages to ensure that sellers that won bids in the first round are still paid and their substitution is available on the days where it is needed.  These charges could be pro-rated across the buyers whose outages were approved, up to the buyers’ maximum total costs.  Alternatively, the bids of the buyer denied an outage could be removed from the stack and the auction process rerun.  Although this is more precise, it also increases administrative overhead.
    2. An optional mechanism could ensure sellers with accepted bids recover their minimum overall price for the month. (e.g., if a supplier needs to earn $100 in a given month across all days to make offering worthwhile, but earns only $80 from bids, that supplier face a $20 shortfall, which could be made up from buyers taking outages).  Here this shortfall could be paid out of any headroom between the buyers’ maximum totals and the sum of their cleared bids.  If the total remaining headroom across all buyers is larger than the seller shortfalls, the mechanism could award top up payments to ensure supply minimum costs are met.  However, additional mechanisms may be needed to ensure this cannot be gamed by sellers. 
  9. Suppliers are compensated for their capacity at the clearing price on those days where their bids were accepted.  There may also be additional adders to the total daily costs to meet suppliers’ minimum monthly revenues or stranded winning bids of buyers denied outages (if either option is deployed).  These total costs are then shared pro rata among all suppliers taking an outage on that day (with top up adders or costs of stranded bids from buyers who were denied an outage shared on a MW-day pro rata basis among all buyers taking planned outages.

 

This mechanism likely meets all or most of the needs expressed to date by CAISO, but clearly further development is needed.  Alternatively, stakeholders may develop wholly new concepts, given that these issues are potentially solvable.  In any event, more consideration of a pool structure is warranted, because the existing system is highly inefficient and needs more reform that a bilateral clearinghouse billboard can provide. 

Given the limitations on CAISO staff time, it would not be unreasonable for stakeholders to take the lead in developing further proposals with input and direction from staff. 

Rev Renewables
Submitted 09/19/2025, 12:00 pm

Contact

Renae Steichen (rsteichen@revrenewables.com)

1. Please provide your organization's overall feedback regarding the Resource Adequacy Modeling and Program Design (RAMPD) Stakeholder Meeting on August 28, 2025.

See below

2. Please provide your organization's overall feedback regarding the RAMPD Track 2 Straw Proposal, which was posted on August 26, 2025.
Note: for feedback towards the Tracks 1 and 3 Draft Final Proposals, please submit your feedback separately on those two separate comment templates, below this comment template.

REV Renewables (REV) supports CAISO’s proposed SC Outage Substitution Procurement Pool as an incremental improvement to market liquidity over the status quo and, as CAISO notes, it should be relatively straight forward for CAISO to implement. REV offers the following comments to improve this proposal:

  • REV suggests that buyers and sellers be able to post RA availability and needs further in advance. It is unclear why the timing of this is limited to T-28 or T-45. It should not materially impact the marketplace if transactions are allowed for earlier dates, and would better allow resource owners to schedule planned maintenance.
  • REV recommends that excess procured RA is allowed to be re-offered into the pool. If the original seller has restrictions on re-offering then it could be limited in those instances, but it should be up to the buyers and sellers to negotiate and abide by those terms.
  • REV encourages further discussion on planned outages being approved, especially if a transaction occurs on the platform. As discussed in the workshop, it would be helpful if CAISO would approve planned outages that have substitution capacity procured on the platform. This would provide more assurance to resource owners that they are able to schedule and perform the maintenance needed. Ideally, this policy could also apply to transactions that occur outside of the platform as well.
  • REV recommends further consideration of whether substitution capacity is required in all months or circumstances. CAISO’s proposal is to no longer consider conditional outage approval or other changes to planned outage substitution rules. REV requests further discussion on potential procedures or circumstances that could allow conditional outage approval or planned outages without substitution capacity

San Diego Gas & Electric
Submitted 09/19/2025, 02:27 pm

Contact

Pamela Mills (pmills@sdge.com)

1. Please provide your organization's overall feedback regarding the Resource Adequacy Modeling and Program Design (RAMPD) Stakeholder Meeting on August 28, 2025.

Please see response below. 

2. Please provide your organization's overall feedback regarding the RAMPD Track 2 Straw Proposal, which was posted on August 26, 2025.
Note: for feedback towards the Tracks 1 and 3 Draft Final Proposals, please submit your feedback separately on those two separate comment templates, below this comment template.

SDG&E’s March 4 comments on Track 2 recommend, among other things, that the outage substitution pool be voluntary, utilize an administratively set price, allow procurement between T-28 and T-8, and allow an SC offering capacity to the pool to hold a right of first refusal to reclaim its resources in the event the capacity is needed to cover its own shortfall. SDG&E appreciates CAISO’s efforts to develop three options for the outage substitution pool structure but notes that there are concerns with each proposed approach, and, with the exception of the timeframe under CAISO’s recommended option and the voluntary nature of the pool, SDG&E’s recommendations noted above are not addressed in the Straw Proposal.  

CAISO’s recommended approach is the “shopping cart” option, which would be a first-come, first-served approach that facilitates bilateral transactions. CAISO’s two alternative options would give CAISO a more active role in matching offers and requests for substitute capacity, with the first alternative option prioritizing the highest bids, and the second alternative option prioritizing approval of the largest number of MW of requested outages. While the transparency of the recommended approach could be helpful, as CAISO notes, the duration of the capacity offers may not exactly match the duration of the outages. This could create inefficiencies and reduce flexibility given that it could result in the procurement of excess capacity, which could potentially then be offered back to the pool (pending the ultimate design). It is unclear whether the first alternative option, by prioritizing the highest bids, could impact and potentially inflate the price of substitute capacity. And for both alternative options, CAISO notes that it would match bids with offers only at fixed intervals (e.g., T-45, and potentially T-8), which would impact flexibility. Additionally, for any transaction, it is important to note that both counterparties would need to execute an agreement, and there are certain requirements that would need to be met (e.g., credit). If CAISO was to facilitate transactions under both alternative options as proposed, a situation could arise in which counterparties that, for example, do not have a standing agreement, are matched.

CAISO’s approach to the outage substitution pool requires additional development. SDG&E appreciates that CAISO’s second alternative option seeks to optimize for approving the largest number of MW of requested outages. SDG&E recommends that CAISO consider whether an automated process that seeks to optimize for approving the largest number of MW of requested outages by matching offers and requests on a first-come, first-served basis would be feasible. The automated nature of such an approach could provide the timeline flexibility that is lacking in the two alternative options, which could incentivize participation, and the optimization component may be able to address the excess concern under CAISO’s recommended approach by assigning only the capacity needed for each specific outage. CAISO could consider creating a price index that it could then use to set an administrative price to address pricing concerns. CAISO could also consider a mechanism that would allow the offering SCs to denote which offers have a right of first refusal attached. To address contracting concerns, CAISO could consider requiring all participants to indicate, confidentially, which parties they already have standing agreements with and can transact with (as in the Intercontinental Exchange). Finally, once substitution capacity has been assigned to an outage, this result should automatically be reflected in OMS. SDG&E believes the pool is a workable concept but setting up a process that mimics the bilateral market with less flexibility, or that favors the highest bids, may not incentivize broad participation.

Six Cities
Submitted 09/19/2025, 11:09 am

Submitted on behalf of
Cities of Anaheim, Azusa, Banning, Colton, Pasadena, and Riverside, California

Contact

Margaret McNaul (mmcnaul@thompsoncoburn.com)

1. Please provide your organization's overall feedback regarding the Resource Adequacy Modeling and Program Design (RAMPD) Stakeholder Meeting on August 28, 2025.

The Six Cities provide their comments on the topics addressed during the August 28th stakeholder meeting in their comments on the Straw Proposal below. 

2. Please provide your organization's overall feedback regarding the RAMPD Track 2 Straw Proposal, which was posted on August 26, 2025.
Note: for feedback towards the Tracks 1 and 3 Draft Final Proposals, please submit your feedback separately on those two separate comment templates, below this comment template.

The Six Cities generally support the CAISO’s recommended approach to establishing the resource adequacy (“RA”) resource outage and substitution pool.  The proposed approach is a reasonable starting point for initial implementation of the pool.  In particular, the Six Cities support the CAISO’s proposal to allow bilateral transactions to occur through postings and matching of resource availability and needs by market participants.  The Six Cities also support structuring the pool such that transactions having a duration of as little as one day can take place.  The Six Cities would like more information about the proposed checkout process, including how the process would be implemented in a way that would allow for parties to bilaterally reach agreement on the terms and conditions of a transaction.  For example, could the checkout process include a way for parties to attach or otherwise document the terms of a transaction confirmation?  The checkout process by itself, if it includes only the high-level information included in resource postings, may result in material terms and conditions of sale being omitted.  The obligations of the supplier in connection with providing an offer into the pool and having it being accepted through checkout also need to be clarified.  This would include consideration of creditworthiness requirements or evaluation procedures.

Although during the August 28th stakeholder meeting some commenters expressed skepticism about whether the outage pool as proposed by the CAISO is likely to be used by market participants (while others supported more elaborate design elements), a pool may facilitate reduction in the high occurrence of forced outages.  Exempting resources participating in the pool (through submitting an offer) from penalties if the resource experiences a forced outage might encourage higher participation.  This would mean that transactions would be unit contingent.

In connection with the CAISO’s proposal for permitting offers of substitute capacity at a daily granularity via the pool, does the CAISO intend to implement any changes to its requirements related to RA resource availability to implement daily granularity in RA showings?  As the Six Cities have extensively discussed in prior comments in this initiative, removal of the requirement that non-import RA resources be shown on RA plans for an entire month would facilitate significantly more flexibility in the use of RA capacity.  It would also enable more capacity to be made available for pool transactions.

In terms of the CAISO’s proposal not to proceed with further consideration of conditional outages, the Six Cities strongly encourage the CAISO to revisit this issue.  Is there data or information that could inform a conditional outage proposal that would provide entities with a reasonable degree of certainty that an unsubstituted outage could be taken?  For example, could it be possible to assess if certain months or seasons might accommodate implementation of conditional outages, especially if a resource commits to taking the outage outside of critical or peak hours?  Do other regional transmission organizations or independent system operators use a similar process that could be adapted for the CAISO?  The conditional outage concept was supported by a range of load serving entities and other stakeholders, and the Six Cities continue to see value in exploring this concept. 

Finally, the Six Cities request clarification on whether and when in this initiative the CAISO will address urgent outage, forced to planned outage and planned to forced outage topics. 

Southern California Edison
Submitted 09/19/2025, 04:59 pm

Contact

Stephen Keehn (stephen.keehn@sce.com)

1. Please provide your organization's overall feedback regarding the Resource Adequacy Modeling and Program Design (RAMPD) Stakeholder Meeting on August 28, 2025.

SCE is pleased that the CAISO is moving forward with elements of a revised RA policy and appreciates the discussions that occurred during the workshop. With the caveats expressed concerning the various proposals, SCE believes that the proposals offer helpful steps forward. SCE notes, however, that more work is needed to resolve important issues in the RA space. The default counting rules and PRM remain based in the peak hour RA construct, which may fail to fully address the reliability issues facing the grid. The CPUC has already adopted a Slice-of-Day mechanism that recognizes that reliability issues are no longer confined to the peak hour but are more likely to occur at the net peak or later when solar resources are no longer producing and storage resources are being utilized and must be charged. Reliability issues in the future may also arise during non-peak hours, such as the overnight hours during winter when solar production is limited and storage resources cannot be charged. Another issue that will need to be addressed is the relationship between the CAISO marketplace’s RA mechanism and the RSE construct in the EDAM market along with potentially other issues related to EDAM to ensure equitable treatment for customers.

2. Please provide your organization's overall feedback regarding the RAMPD Track 2 Straw Proposal, which was posted on August 26, 2025.
Note: for feedback towards the Tracks 1 and 3 Draft Final Proposals, please submit your feedback separately on those two separate comment templates, below this comment template.

SCE generally prefers the CAISO’s recommended approach to the substitution procurement pool of an open marketplace or “shopping cart” relative to the central clearing mechanism approach. The open marketplace option provides flexibility for both buyers and sellers, especially given the non-standard product that substitution capacity requires. Given that the requests for substitution capacity may not all occur at one time because the need to find substitution capacity may occur at different times and that the duration and timing of the substitution will be different for every transaction, allowing the buyers and sellers to contract bilaterally for the specifics of each contract seems generally reasonable and feasible. As evidenced by the discussion during the workshop, having a central clearing mechanism would be difficult and would likely not meet the requirements of buyers and sellers. For a centrally cleared marketplace to work, the product needs to be essentially uniform, but what is being sought through this process is not uniform. As the workshop discussion demonstrated, some entities may wish to set minimum amounts to make it worthwhile to become an RA resource or may need to set a minimum substitution duration.  Incorporating such requests into a centrally cleared process increases the complexity.

SCE believes that further discussions will be needed to both flush out the details of the open marketplace mechanism and to carefully vet the mechanism to ensure that it doesn’t result in any unintended consequences. Once the open marketplace details are determined, issues such as what the contracts would look like, how the CAISO, and potentially other market participants, would be informed of the details of those contracts, how much of that information should be made public, and whether there is any potential for market power or other price impacts on the broader RA market should be examined.

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