Comments on 1/21 Call

1. Please provide a summary of your organization’s comments on the Day-Ahead Sufficiency Draft Final Proposal and January 21, 2025 stakeholder meeting.

The California Efficiency + Demand Management Council (Council) appreciates this opportunity to comment on the Day-Ahead Sufficiency Draft Final Proposal.  We continue to support the elements of the proposal addressed below with one exception.  In order to improve the CAISO’s visibility of investor-owned utility (IOU) demand response (DR) programs, which are not shown on load-serving entity (LSE) supply plans, the Council recommends that the CAISO establish a 9:00 a.m. bidding deadline into the Integrated Forward Market (IFM) for any Proxy Demand Resources (PDR) that are credited against LSE Resource Adequacy (RA) requirements.  This will ensure an accurate account of the contribution of these resources to the advisory Resource Sufficiency Evaluation (RSE) can be made and mitigate the risk they would otherwise create of failing the binding RSE.

2. Please provide your organization’s comments on the CAISO Balancing Authority (BA) processes for estimating supply available to meet its day-ahead resource sufficiency evaluation (RSE) obligation.

The Draft Final Proposal indicates that, because the IOUs’ DR programs are not shown on supply plans, the CAISO would only count them in the 9:00 a.m. advisory RSE to the extent that they are bid into the IFM by 9:00 a.m.  The Council believes that the CAISO should have as much visibility as possible of the resources in its market, including to accurately assess its risk of failing the RSE.  To that end, the CAISO should establish a 9:00 a.m. bidding deadline for any PDRs that receive RA credit in lieu of being shown on supply plans.  This would eliminate the uncertainty surrounding the quantity of the IOUs’ available DR resources on any given day which, in turn, will improve reliability and ensure California ratepayers are not saddled with financial penalties for failing the RSE.

3. Please provide your organization’s comments on the proposed method of accounting for Reliability Demand Response Resources (RDRR) in the day-ahead time frame.

The Council continues to support the CAISO’s proposed approach for accounting for RDRRs in the RSE and, when applicable, to the Reliability Unit Commitment process.  The Council also thanks the CAISO for confirming its intent to honor the use limitations of RDRRs.

4. Please provide your organization’s comments on the proposed method for accounting for Strategic Reliability Reserve (SRR) resources.

The Council reserves comment.

5. Please provide your organization’s comments on the proposed monitoring at EDAM launch to determine whether additional incentives for tagging cleared day-ahead imports should be developed.

The Council reserves comment.

6. Please provide any additional comments not covered by the questions above.

N/A

1. Please provide a summary of your organization’s comments on the Day-Ahead Sufficiency Draft Final Proposal and January 21, 2025 stakeholder meeting.

Comments on CAISO BA Day-Ahead Sufficiency - Draft Final Proposal

Department of Market Monitoring

February 4, 2025

Summary

The Department of Market Monitoring (DMM) appreciates the opportunity to comment on the CAISO BA Day-Ahead Sufficiency Draft Final Proposal.[1] This initiative focuses on the day-ahead resource sufficiency evaluation (RSE) that will be implemented in the Extended Day-Ahead Market (EDAM). The initiative aims to (1) ensure the advisory RSE results for the CAISO BAA provides an accurate assessment of expected supply and demand obligations, (2) ensure that the RSE for the CAISO BAA accurately accounts for different types of demand response resources and strategic reserve resources, and (3) establish an approach to cure any remaining RSE shortfalls for the CAISO BAA. The initiative also discusses the topic of timely submission of e-tags for import capacity used to pass the RSE. 

DMM supports the aspects of the draft final proposal that address the issues of advisory RSE results for the CAISO BAA, accounting for demand response and strategic reserve resources, and curing remaining RSE shortfalls. However, DMM notes that under the draft final proposal some reliability demand response resource (RDRR) capacity may be double-counted in the RSE. Further, we note that it may be appropriate to consider short start strategic reserve capacity in the CAISO BAA day-ahead RSE under similar conditions as RDRR, and that concerns of capacity double-counting would not apply in this case because strategic reserve resources do not submit day-ahead bids.

DMM does not oppose the ISO’s proposal to monitor submission of e-tags for import capacity used to pass the RSE. However, we continue to highlight the potentially significant costs imposed on the market when a single participant’s failure to tag even a small quantity can result in loss of diversity benefits in the Western Energy Imbalance Market (WEIM) RSE. DMM recommends the ISO be prepared to act quickly after EDAM go-live to develop and implement stronger incentives for timely e-tag submission if needed, in alignment with cost causation principles.    

The advisory RSE approach in the draft final proposal should provide an adequate assessment of the likelihood of CAISO BAA RSE failure

One purpose of this initiative is to ensure reasonably accurate results from the 9 a.m. RSE advisory run, so that there is sufficient time to cure any projected shortfall before the binding RSE at 10 a.m. Since day-ahead market bids are not due until 10 a.m., the advisory RSE may not account for all capacity that will ultimately be available. In order to account for expected bids not yet submitted by the 9 a.m. advisory RSE, the ISO previously proposed that for resource adequacy resources with bid insertion requirements, the existing bid insertion rules would apply at 9 a.m. For resource adequacy resources without a bid insertion requirement, the ISO would insert advisory offers for use only in the 9 a.m. advisory RSE, but discard these offers before the day-ahead market run.

The draft final proposal does not include the insertion of bids or advisory offers for the advisory RSE. The ISO has concluded through stakeholder input and additional analysis that a significant portion of resource adequacy capacity with a bid insertion requirement typically offers by 9 a.m. The ISO proposes to encourage (but not require) participants to submit day-ahead bids by 9 a.m. whenever possible. Further, the ISO notes that insertion of offers associated with resource adequacy capacity is still only an estimation of total available capacity as it does not account for non-resource adequacy capacity.

Finally, the draft final proposal discusses a number of other available market results that may be referenced to help determine the likelihood of an RSE shortfall.[2] These findings suggest that the advisory RSE may provide adequate information on the likelihood of RSE failure, even without estimating advisory offers and applying bid insertion for the advisory RSE. The ISO’s findings further highlight that the potential benefits of this added functionality are uncertain.   

DMM supports the draft final proposal approach to the advisory RSE for the CAISO BAA. DMM encourages the ISO to closely monitor advisory and binding RSE results after EDAM go-live to assess any need for potential future enhancements.

DMM supports inclusion of demand response capacity in the RSE

The draft final proposal clarifies treatment of demand response resources in the day-ahead RSE and advisory RSE for the CAISO BAA. DMM appreciates the ISO’s clarification on the treatment of utility proxy demand response (PDR) resources that are not shown on supply plans, but count as a credit toward a load serving entity’s resource adequacy (RA) requirements. DMM supports the ISO’s proposal that these resources are RSE-eligible, but will only be included in the advisory RSE to the extent that they have submitted bids by 9 a.m., similar to other resources.

The draft final proposal also clarifies treatment of reliability demand response resources (RDRRs) in the day-ahead RSE and residual unit commitment (RUC) for the CAISO BAA. RDRRs are resource adequacy resources, but are primarily meant for emergencies. RDRRs are eligible to participate in the day-ahead market, but only have a must offer obligation in the real-time market. The ISO proposes that if the 9 a.m. advisory RSE indicates an upward shortfall, and the CAISO BAA expects an Energy Emergency Alert (EEA) watch in real-time, RDRR capacity may be considered in the CAISO BAA RSE at the discretion of the CAISO system operators.

DMM supports the ISO’s proposal to account for RDRR capacity in the day-ahead RSE when emergency conditions are forecasted and the advisory RSE suggests a shortfall is likely. By including RDRR capacity in the day-ahead RSE, the CAISO may be able to pass the day-ahead RSE and avoid the administrative penalty. In addition, the day-ahead RSE is meant to ensure there is capacity available, and RDRRs accurately represent additional capacity that is available in real-time emergency situations.

The draft final proposal may result in double-counting of some RDRR capacity

The draft final proposal further clarifies that RDRRs that have submitted day-ahead offers by the 9 a.m. advisory RSE will also be considered in the day-ahead RSE. Any additional capacity considered at operator discretion will only include capacity not offered by 9 a.m. However, the draft final proposal does not specify the treatment of day-ahead RDRR bids that come in after the 9 a.m. advisory RSE, but before the 10 a.m. cutoff for the day-ahead market. DMM understands that in this circumstance, there may be double-counting of some RDRR capacity from resources that submit bids between 9 a.m. and 10 a.m., but that CAISO operators have already elected to manually include in the binding RSE. DMM recommends the ISO mitigate this possible double-counting by implementing software that links capacity included at operator discretion to specific RDRR resource IDs, and ensures that if the same resource IDs appear in the binding RSE calculation due to a submitted bid, the capacity is only counted once in the binding day-ahead RSE.   

RUC adjustments to account for RDRR capacity may be necessary, but can create additional uncertainty for low-priority exports

In addition to considering RDRR capacity in the RSE for the CAISO BAA, the ISO also proposes to adjust the RUC procurement target to account for RDRR capacity not bid into the day-ahead market. DMM understands that this may be necessary to prevent EDAM transfers from replacing RDRR capacity used to cure upward shortfall from the advisory RSE. In calculating any adjustment for RUC to account for RDRR capacity, the process should consider only RDRR capacity that was included in the RSE at operator discretion, but did not later submit a day-ahead bid. This would ensure that the potential double-counting problem described above does not flow into the RUC process.

While DMM understands the need to adjust RUC to account for unbid RDRR capacity, as noted in earlier comments, decreasing the RUC procurement target has implications for both low-priority (LPT) day-ahead exports and RDRR capacity dispatched in real-time emergency conditions.[3] A lower RUC procurement target can allow a greater quantity of LPT exports to clear RUC on days that the CAISO is forecasting emergency conditions. On such days, these additional LPT exports may be more likely to be curtailed in real-time. In addition, it may be possible that RDRR capacity is dispatched in real-time emergency conditions while some LPT exports that cleared RUC are not curtailed.[4] In this instance, RDRR capacity may contribute to the real-time support of the potentially higher volume of LPT exports that cleared RUC.  

DMM supports including strategic reliability reserve capacity in the RSE for the CAISO BAA

The ISO proposes to include long-start strategic reliability reserve (LS-SRR) capacity in the RSE for the CAISO BAA. CAISO operating procedures state that LS-SRR resources do not submit day-ahead bids, but will be started manually outside of the market, days in advance, to be available in real-time when emergency conditions are expected. Because these resources do not bid into the day-ahead market, but will be available to meet real-time forecasted emergency conditions, the ISO proposes that CAISO operators monitor LS-SRR activity and include this capacity in the day-ahead RSE when these resources have been brought online. DMM supports this approach since this is capacity that does not participate in the day-ahead market but will be available to meet real-time needs when emergency conditions are forecasted. 

The ISO further clarifies in the draft final proposal that short-start strategic reliability reserve (short-start SRR) capacity will not be considered in the day-ahead RSE for the CAISO BAA. The ISO states that this is because these resources do not bid into the day-ahead market, are not qualified as RA, and do not have contracts creating must-offer obligations, and therefore do not qualify as RSE capacity. 

DMM understands that while SRR are not RA capacity, short-start SRR resources would be expected to be available for dispatch in real-time under the same anticipated or realized emergency circumstances as RDRRs. Therefore, it may be appropriate to consider short-start SRR capacity located in the CAISO BAA in the day-ahead RSE for the CAISO BAA through the same approach as RDRR capacity that has not bid before the 9 a.m. advisory RSE.

Short-start SRR capacity in the CAISO BAA could be considered at operator discretion, when the 9 a.m. advisory RSE for the CAISO BAA, along with other operator sources, indicate an upward RSE shortfall in one or more intervals, and the CAISO BAA expects EEA Watch conditions in real-time. As with RDRR capacity included at operator discretion, making a proportionate adjustment to the RUC procurement target to account for any short-start SRR may be appropriate.

Additional incentives may be needed for timely e-tag submission for day-ahead imports

As DMM has previously noted, during tight conditions, the EDAM policy for tagging non-resource specific imports could result in a small quantity of imports untagged by the short-term unit commitment (STUC) run. This can cause the entire balancing area to be removed from the EDAM pool for the Western Energy Imbalance Market (WEIM) RSE. DMM believes that the financial consequences of an EDAM failing the pooled WEIM RSE should be allocated to entities whose actions contribute to the failure. Identifying and appropriately allocating these financial consequences may provide important incentives to tag prior to the STUC run, for those imports that count towards the EDAM RSE.

DMM understands from the draft final proposal that the ISO is not planning to address this issue prior to the implementation of EDAM. The CAISO instead proposes to wait and determine whether additional incentives are needed to ensure that day-ahead imports into the EDAM BAAs are tagged within the timeframe required by the EDAM design.

DMM does not oppose the ISO monitoring this issue, and would support a future initiative focused on aligning penalties in a way to better incentivize appropriate tagging of non-resource specific imports. DMM recommends the ISO be prepared to act quickly after EDAM go-live to develop and implement stronger incentives for timely e-tag submission if needed, in alignment with cost causation principles.    

[1] CAISO BA Day-Ahead Sufficiency - Draft Final Proposal, California ISO, January 14, 2025: https://stakeholdercenter.caiso.com/InitiativeDocuments/Draft-Final-Proposal-Day-Ahead-Sufficiency-Jan-14-2025.pdf

[2] Ibid., p 15

[3] Comments on Day-Ahead Sufficiency Straw Proposal, Department of Market Monitoring, May 27, 2024: https://www.caiso.com/documents/dmm-comments-on-day-ahead-sufficiency-straw-proposal-may-27-2024.pdf

[4] DMM’s understanding is that if time permits, CAISO operators should verify LPT exports are being curtailed in an emergency before forcing RDRR dispatch. However, this may not always be possible and in such circumstances, RDRR may support some portion of LPT exports. Operating Procedure 4420: System Emergency – Version No. 15.9, p 13, California ISO, December 3, 2024: https://www.caiso.com/Documents/4420.pdf

2. Please provide your organization’s comments on the CAISO Balancing Authority (BA) processes for estimating supply available to meet its day-ahead resource sufficiency evaluation (RSE) obligation.

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.

3. Please provide your organization’s comments on the proposed method of accounting for Reliability Demand Response Resources (RDRR) in the day-ahead time frame.

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.

4. Please provide your organization’s comments on the proposed method for accounting for Strategic Reliability Reserve (SRR) resources.

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.

5. Please provide your organization’s comments on the proposed monitoring at EDAM launch to determine whether additional incentives for tagging cleared day-ahead imports should be developed.

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.

6. Please provide any additional comments not covered by the questions above.

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.

1. Please provide a summary of your organization’s comments on the Day-Ahead Sufficiency Draft Final Proposal and January 21, 2025 stakeholder meeting.

The CPUC is concerned that the current proposal does not sufficiently incorporate Reliability Demand Response Resources (RDRR) into the day-ahead sufficiency evaluation under the Extended Day-ahead Market (EDAM). The current proposal subject to today’s comments proposes that CAISO will include RDRR in the Balancing Area Authority Resource Sufficiency Evaluation (BA-RSE) only when both an RSE shortfall and Energy Emergency Alert (EEA) Watch conditions are expected. California customers will be subject to penalties if there is an RSE shortfall, and CPUC staff estimate this shortage could occur frequently for a conservatively estimated $13-25 million penalty for each occurrence of shortfall solely due to the omission of an actual RA resource not being shown in the RSE. Such penalties will be paid for by ratepayers in addition to the actual cost of the RDRR program.  In its draft final proposal, CAISO stated:

“The EDAM tariff allows but does not require RDRR to be included as an RSE-eligible resource. Including RDRR in the RSE when both an RSE shortfall and EEA Watch conditions are expected is the approach that best meets the requirements of the EDAM tariff, the RA program, and the RDRR settlement as currently written." [1]

The EDAM tariff does not prohibit inclusion of RDRR in the RSE before emergency conditions arise. Sections 33.31.4 and 33.31.4.1 of the tariff explicitly allow demand response to be factored into the forecasts and RSE. More specifically, the tariff allows adjustments to demand forecasts to reflect demand response participation, rather than strictly limiting it to emergency conditions, which gives the ISO flexibility in adopting a more proactive reliability planning approach. The CPUC strongly recommends that CAISO include RDRR in the RSE whenever a potential for a shortfall is identified, instead of also requiring certain emergency conditions, in order to 1) be consistent with the CPUC’s RA construct that considers RDRR as a capacity resource and the existing RDRR settlement agreement [2] 2) ensure that California customers do not pay twice for capacity, and 3) prevent California customers from being unduly penalized for shortfalls that may be illusory.

[1] Pg 20. Draft Final Proposal - Day-Ahead Sufficiency - Jan 14, 2025

[2] See h and l, pg. 4 of the Demand Response rulemaking (DR OIR) (R.07-01-041) Appendix A

“h. RDRR will help mitigate, or limit the duration of, Scarcity Pricing events.

l. The RDRP product design will modify the existing system trigger from pre-Stage 1 imminent to the point immediately prior to the CAISO need to canvas neighboring balancing authorities and other entities for available exceptional dispatch energy/capacity. That is, the DR resource will be eligible for dispatch once the CAISO has issued a Warning Notice under its Emergency Operating Procedures and immediately prior to the CAISO need to canvas neighboring balancing authorities and other entities for available exceptional dispatch energy/capacity."

2. Please provide your organization’s comments on the CAISO Balancing Authority (BA) processes for estimating supply available to meet its day-ahead resource sufficiency evaluation (RSE) obligation.

Please see comments below.

3. Please provide your organization’s comments on the proposed method of accounting for Reliability Demand Response Resources (RDRR) in the day-ahead time frame.

CPUC Energy Division staff reiterates its recommendation that CAISO count the IOU reliability demand response (RDRR) towards the CAISO’s BAA day-ahead (DA) resource sufficiency evaluation (RSE) if it expects to fail the resource sufficiency test, as this policy is consistent with CAISO’s Final Proposal on the Extended Day-Ahead Market (EDAM), which was adopted by the CAISO Board and WEIM Governing Body.

In its recent day-ahead sufficiency proposal, CAISO indicates that it will count IOU RDRR only if it expects to fail the RSE *and* if it expects EEA conditions in the real-time [3]. This additional requirement that the “CAISO BAA is expecting EEA conditions in real-time” is not consistent with the conditions stated in the EDAM Final Proposal, which explicitly states that “If advisory EDAM RSE results indicate a potential inability for the ISO BAA to meet its next day obligations, the ISO could modify its forecast in the extended day-ahead market and the RUC. This will result in the market not procuring energy, imbalance reserves, or reliability capacity up to its full, unmodified, day-ahead forecast, but would allow the ISO BAA to pass the EDAM RSE and fully participate in the day-ahead market. The ISO BAA would then have RDRR bids enabled into the real-time market for the same intervals ensuring the supply is available for the real-time market’s optimal use." [4]

Not only is this issue important because CAISO’s proposal may be inconsistent with the Board approved policy, but CAISO's recently introduced imbalance reserve requirement imposes an uncertainty factor that increases the likelihood that the CAISO BAA fails the DA RSE, potentially imposing significant costs on CAISO customers due to uncertainty. Under the recently proposed imbalance reserve requirement in the EDAM, CAISO will require load serving entities (LSEs) in its BAA to procure imbalance reserves. The imbalance reserve requirement product is intended to cover 95 percent of the uncertainty that can arise between the day-ahead and the real-time 95 percent of the time. In practice, the uncertainty that arises will not be as large as anticipated 95 percent of the time, meaning imbalance reserve product will not be needed for reliability 95 percent of the time. Based on previous studies, it appears that the imbalance reserve requirement will be at least 4,000 MW per day. Since 4,000 MW per day can easily outpace the RA resource requirements imposed by the CPUC without there being an actual emergency condition, there are likely to be at least some scenarios in which the day-ahead requirements - which include the load forecast, required reserves, and the imbalance reserves - will not be covered by bid-in resources, despite there being no anticipated EEA in real-time.

An example of when CAISO load, plus required reserves, plus imbalance reserves would create a large DA RSE requirement occurred in August 2023. On August 15 and 16, 2023, CAISO forecasted load was at ~46,000 MW; with reserves would be ~48,760 MW, and further adding the 4,000 MW of imbalance reserves, would result in a 52,760 MW DA RSE requirement. Depending on resource adequacy bids into the market, CAISO could have easily failed the RSE, even though no emergency was expected to be called (and none was actually called). The load levels only came in at 44,000 MW, not 46,000 MW. The uncertainty component also explains why it is possible to forecast RSE failure while not simultaneously calling an emergency in the real-time, if the projected uncertainty fails to materialize in the real-time - which it will not 95 percent of the time, given the way the uncertainty factor is calculated. In sum, due to the large imbalance reserve requirement - which is not expected to materialize under most circumstances -  it would appear more likely than not that covering the uncertainty requirement will overestimate the resources required, making it more likely that the CAISO BAA will fail the RSE without counting its RDRR resources, and subsequently incurring potentially large penalties.

Failing to count approximately 1,000 MW of ratepayer funded RDRR resources in the EDAM RSE evaluation could regularly subject IOU customers to significant penalties for 1,000 MW shortfall – in addition to the baseline cost of the RDRR program itself.  CPUC staff conservatively estimate that IOU customers would routinely be exposed to $13-$25 million in penalties, simply for not counting a resource that exists, but is not put into the showing because there is not an otherwise declared or expected emergency. To estimate the penalty exposure for IOU customers, CPUC staff note that in the EDAM, CAISO will penalize BAAs that fail the RSE, based on the largest hourly failure multiplied by the difference between the highest bilateral price and LMP, over the 16-hour peak period, even if the failure only occurs in one hour. The rationale is that RSE failure would require bilateral purchases. However, existing bilateral indices are not liquid enough to support large, e.g. 1,000 MW of purchases, given the typical very small number of trades on stressed system days (e.g., 3 x 25 MW over 16 hours). Further, even if the quantities of resources were made available, bilateral indices are subject to manipulation, and there is often substantial price separation between CAISO’s market and the other regions on stressed system days. Nonetheless, below is an estimate, using data from June 17, 2021 and August 16, 2023, illustrating the penalty for failure if CAISO did not include 1,000 MW of RDRR (as an approximation) for these two days - $25 million and $13 million for each day, respectively. See tables below (a range of $13-$25 million is established by multiplying the difference between the bilateral hub price and load weighted LMP by 1.25).

The RSE sufficiency penalty is in addition to the millions of dollars that the IOUs spend on the Base Interruptible Program, other RDRR, and strategic reserve programs that CAISO is proposing to not count in its RSE.  For example, at $12/kW-month for a 1,000 MW program, this would result in costs of approximately $144 million annually, in addition to the tens of millions of dollars in penalties that would accrue daily for DA-RSE failures arising directly from not counting the CPUC’s and the state’s reliability programs in the DA-RSE. 

CPUC Staff expect that faced with this outlook, other BAAs with similar interruptible programs will reduce their load forecast (or load forecast uncertainty) to reflect their well understood ability to call on interruptible resources when needed. CPUC Staff are concerned that CAISO will be disadvantaging IOU customers relative to other BAAs if that is the case.  Therefore, CPUC staff recommend that CAISO remove from the proposal “expected EEA conditions in real time” as a requirement for CAISO to count RDRR towards the RSE for the CAISO BAA.  Absent this revision, CPUC Staff is concerned that the RDRR program may no longer be cost-effective for CPUC-jurisdictional ratepayers.

[3] Pg. 16. Presentation - Day-Ahead Sufficiency - Jan 21, 2025.

[4] CAISO, “Extended Day-Ahead Market:  Final Proposal,” December 7, 2022, p. 70 (emphasis added), available at https://stakeholdercenter.caiso.com/InitiativeDocuments/DraftFinalProposal-ExtendedDay-AheadMarket.pdf.

4. Please provide your organization’s comments on the proposed method for accounting for Strategic Reliability Reserve (SRR) resources.

Consistent with the comments above regarding RDRR, CPUC Energy Division staff believe that SRR resources should count towards the day-ahead RSE because they are available for real-time emergency conditions and excluding these resources could result in costly and unnecessary penalties, as these resources are available during stressed system conditions. 

5. Please provide your organization’s comments on the proposed monitoring at EDAM launch to determine whether additional incentives for tagging cleared day-ahead imports should be developed.

In this proposal, CAISO has proposed that failure to bid 1 MW of resources that have an e-tag and are counted in the DA-RSE would result in the CAISO BAA being removed from the diversity benefit of EDAM, even if it had sufficient resources to pass the DA-RSE.  For example, assume that the CAISO BAA used only e-tagged RA imports to meet its load and had 50,000 MW of e-tagged imports and a DA-RSE requirement of 45,000 MW, including the load forecast, ancillary services, and imbalance reserve, with an excess of 5,000 MW. Now assume that 1 MW of imports failed to tag. Under these circumstances, the CAISO BAA would need to replace this 1 MW or it would be excluded from the EDAM diversity benefit in the real-time RSE, which seems unduly draconian, given the circumstances. Therefore, CAISO should reconsider this aspect of its proposal.

6. Please provide any additional comments not covered by the questions above.

CPUC Energy Division staff is concerned about CAISO’s proposal to use exceptional dispatch to cure DA-RSE failures. Given that a significant and largely unknown quantity of RSE failures will be due to a shortfall of imbalance reserves, which are by their nature over-estimating the uncertainty 95 percent of the time, CAISO will likely procure expensive backstop (to cover missing imbalance reserves) that it does not need most of the time. CAISO should provide an estimate of how frequently the CAISO BAA will fail the DA-RSE, by looking at the data for the last 4 years, to determine under what circumstances this might occur and how often the uncertainty arises.

CPUC staff request CAISO clarify what they mean by procuring additional resources through exceptional dispatch when a BAA fails the DA-RSE. In some contexts, exceptional dispatch might be dispatch to existing in-BAA generators, and in other instances it might mean buying emergency assistance at the interconnection ties, and/or procured energy through out-of-merit order dispatch or other means?  It would be helpful to understand if and when CAISO has done this in the past, under what conditions, and how much CAISO paid per MWh and in total.

1. Please provide a summary of your organization’s comments on the Day-Ahead Sufficiency Draft Final Proposal and January 21, 2025 stakeholder meeting.

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. 

In response to the California Independent System Operator Balancing Area Day-Ahead Sufficiency Draft Final Proposal,[1] Cal Advocates recommends that the CAISO not use its Exceptional Dispatch Capacity Procurement Mechanism (CPM) authority to cure the Extended Day-Ahead Market (EDAM) Resource Sufficiency Evaluation (RSE) shortfalls because it would result in unnecessary ratepayer cost.  Instead, the CAISO should continue exploring alternatives to Exceptional Dispatch.

[1] CAISO, CAISO BA Day-Ahead Sufficiency: Draft Final Proposal, January 14, 2025 (Draft Final Proposal).  Available at: https://stakeholdercenter.caiso.com/InitiativeDocuments/Draft-Final-Proposal-Day-Ahead-Sufficiency-Jan-14-2025.pdf.

2. Please provide your organization’s comments on the CAISO Balancing Authority (BA) processes for estimating supply available to meet its day-ahead resource sufficiency evaluation (RSE) obligation.

Cal Advocates has no comment on this topic at this time.

3. Please provide your organization’s comments on the proposed method of accounting for Reliability Demand Response Resources (RDRR) in the day-ahead time frame.

Cal Advocates has no comment on this topic at this time.

4. Please provide your organization’s comments on the proposed method for accounting for Strategic Reliability Reserve (SRR) resources.

Cal Advocates has no comment on this topic at this time.

5. Please provide your organization’s comments on the proposed monitoring at EDAM launch to determine whether additional incentives for tagging cleared day-ahead imports should be developed.

Cal Advocates has no comment on this topic at this time.

6. Please provide any additional comments not covered by the questions above.

The RSE is an EDAM process that will set daily requirements for participating Balancing Areas (BAs) at levels sufficient to meet next-day  hourly electricity needs.[1]  The Day-Ahead Sufficiency initiative considers how to cure potential BA-wide RSE shortfalls created when the total hourly bid volumes from the California Independent System Operator Corporation (CAISO) and its load-serving entities (LSEs) are below what the RSE process requires as necessary for next-day operations.[2]  The Draft Final Proposal would allow the CAISO to use existing its Exceptional Dispatch authority to address projected RSE shortfalls.[3]  The CAISO is able to use Exceptional Dispatch to address types of system emergencies or market disruptions through the procurement of energy or ancillary services.[4]  For non-resource adequacy (RA) resources, Exceptional Dispatch results in a 30-day minimum CPM designation.[5]

The Draft Final Proposal notes that stakeholders, including Cal Advocates, have expressed “interest in alternatives to exceptional dispatch.”[6]  Cal Advocates’ previous comments recommended that an Exceptional Dispatch CPM should be a last resort measure to cure RSE shortfalls given the proportionally higher costs of a month-long CPM designation to cure a potentially small need.[7]  An Exceptional Dispatch CPM designation procures capacity from a non-RA resource[8] for a minimum of 30 days that is ultimately funded by ratepayers. 

Southern California Edison Company (SCE) opposed using Exceptional Dispatch to cure potential RSE shortfalls on the basis that “it could be counterproductive to generating an accurate Advisory RSE result and unnecessary cost to ratepayers.”[9]  SCE argued that:

Absent a proven method for forecasting non-RA supply for the Advisory RSE, this proposal could provide behavioral incentives for market participants to delay scheduling their non-RA resource(s) ahead of the Advisory RSE during stressed grid conditions, in anticipation of an expected RSE failure and an [Exceptional Dispatch].  An [Exceptional Dispatch] would result in a CPM designation that would award the non-RA resource a lucrative capacity payment of $7.34/KW for the entire month.  This could lead to more false indications of RSE failures due to the lack of bids, resulting in unnecessary [Exceptional Dispatch].[10] 

Cal Advocates agrees with SCE.  The RSE will run every day of the year, including in months where the CPM Soft Offer Cap of $7.34/kW-mo is above typical monthly RA contract rates[11]  SCE is correct in its characterization of a CPM as a “lucrative capacity payment” compared to RA prices in non-summer months.[12] 

The CAISO proposes to use its Exceptional Dispatch authority for the RSE but notes that alternatives have been scoped into Track 3 of the RA Modeling and Program Design (RAMPD) initiative.[13]  However, the CAISO may implement the RSE before alternatives can be explored as Track 3 currently does not have a schedule for development and implementation.  The CAISO should protect ratepayers from unreasonable costs that would result from using Exceptional Dispatch CPM designations to cure RSE shortfalls.  Instead, the CAISO should explore the development of more cost-effective options to cure RSE shortfalls.

[1] Draft Final Proposal at 4.

As established in the EDAM design, the final binding RSE will be conducted for each Balancing Authority in the EDAM every day at 10 a.m. prior to running the day-ahead market. The RSE will test whether the CAISO BA and other EDAM participating BAAs have sufficient supply for each hour of the next day. The RSE will test each BAA’s offered supply against its RSE obligation, including its demand forecast, imbalance reserve requirements and ancillary services requirements.

[2] Draft Final Proposal at 25.

[3] Draft Final Proposal at 26.

[4] CAISO Tariff 34.11.

[5] CAISO Tariff 34.11 and 43A.2.5.

[6] Draft Final Proposal at 26.

[7] Cal Advocates demonstrated that a hypothetical 20 megawatt (MW) RSE shortfall in a single hour may have a value of $1,800 if the price of energy is $90/megawatt-hour, an RSE penalty for a 20MW RSE shortfall would be $6,000, and the cost of a CPM for 20 MW would be $146,800.  Cal Advocates, Day-ahead Sufficiency Initiative Comments of the Public Advocates Office, May 28, 2024 at Section 7.  Available at: https://stakeholdercenter.caiso.com/Comments/AllComments/95741ac1-a259-4b3a-8ad5-9cbb01848cdc#org-c28df7e7-b8ff-4d43-82ea-399909ad96cd.

[8] Exceptional Dispatch orders would not trigger a CPM designation for an RA resource since RA resources are not eligible for CPM designations.

[9] SCE, Day-ahead Sufficiency Initiative Comments of Southern California Edison, May 28, 2024 (SCE May Comments) at Section 2.  Available at: https://stakeholdercenter.caiso.com/Comments/AllComments/95741ac1-a259-4b3a-8ad5-9cbb01848cdc#org-ee84a112-6b0c-4a49-96a2-f32062c289c0.

[10] SCE May Comments at Section 2.

[11] CPUC, 2022 Resource Adequacy Report, May 2024 (CPUC 2022 RA Report) at 28-29.  Available at: https://www.cpuc.ca.gov/-/media/cpuc-website/divisions/energy-division/documents/resource-adequacy-homepage/2022-ra-report_05022024.pdf.

[12] For example, historic off-summer contract rates reported by the CPUC are regularly lower than the CPM soft offer cap which most CPM designations are paid.  CPUC 2022 RA Report at 28-29.

[13] Draft Final Proposal at 26.

1. Please provide a summary of your organization’s comments on the Day-Ahead Sufficiency Draft Final Proposal and January 21, 2025 stakeholder meeting.

PG&E appreciates the opportunity to comment on CAISO Day-Ahead Sufficiency (DAS) initiative.

Below is our response to the DAS draft final proposal and the items that PG&E would need to feel comfortable that CAISO is appropriately situated to participate within EDAM. But before going over the draft final proposal comments, PG&E notes that a broader discussion is still needed around transparency coming from CAISO on DAS. Specifically, PG&E would like to better understand the sequence of processes for forecasting shortfalls and how that drives decision-making.

• PG&E wants to help best position CAISO to participate in the future EDAM market.
• This means helping CAISO better account for its RSE-eligible supply so as to have an accurate picture of its EDAM RSE position.
  • Additionally, PG&E would like to better understand the sequence of processes for forecasting shortfalls and how that drives decision-making.
• But this also means CAISO must appropriately count all of the supply that Load Serving Entities (LSEs) have procured, which includes RDRR and long-start/short-start SRRs.
  • Reliability Demand Response Resources (RDRR): the criteria for utilizing RDRR may be too restrictive and might cause CA to pay for EDAM RSE failure surcharges when RDRR was available.
  • Long-start SRRs: PG&E would like more information on how CAISO forecasts an EEA Watch or higher to call long-start SRRs and how that matches up with potential EDAM RSE shortfalls. PG&E foresees a possibility that CAISO does not forecast an EEA Watch or higher, and yet may still fail the EDAM RSE, in which case CA has paid for capacity and not gotten credit for it in the EDAM RSE.
  • Short-start SRRs: CAISO should count these resources since CA LSEs have paid for this capacity to be available.
• Need to find better solutions for the tagging requirement.
• Rational decisions to cure: when EDAM RSE failure surcharges are applied to CAISO, it should have a cost causation-driven mechanism for allocating the costs. This discussion belongs in DAS as opposed to RAMPD, where it seems to be getting lost in the shuffle of larger policy discussions.

2. Please provide your organization’s comments on the CAISO Balancing Authority (BA) processes for estimating supply available to meet its day-ahead resource sufficiency evaluation (RSE) obligation.

PG&E wants to help best position CAISO to participate in the future EDAM market. PG&E is willing to submit advisory bids by 9am to help CAISO understand its EDAM RSE position by 9am, so long as they remain advisory and this does not become the new bidding deadline.

Additionally, PG&E would like to better understand the sequence of processes for forecasting shortfalls and how that drives decision-making. Based on the draft final proposal, PG&E understands that CAISO has a number of mechanisms for gaging potential shortfalls, and some of them branch off to drive different decisions. To wit, the draft final proposal mentions:

• Looking at results from the previous DA market run.
• Readiness Alert System, which does a D+7 thru RT rolling forecast of available capacity.
• DA EEA Watch or higher forecast
• Forecasted capacity shortfalls that drive exceptional dispatches under CAISO’s Capacity Procurement Mechanism (CPM) tariff sections 43A.2.5 and 43A.4.2.1.
• The EDAM RSE itself

For PG&E’s understanding, it would help us to better help CAISO if we could learn more about the sequential nature of these processes, what data drives each process, and then which decisions those outcomes influence.

3. Please provide your organization’s comments on the proposed method of accounting for Reliability Demand Response Resources (RDRR) in the day-ahead time frame.

PG&E appreciates CAISO’s proposal to count RDRR as part of EDAM RSE-eligible supply, but is concerned that criteria for utilizing RDRR may be too restrictive and might cause CA to pay for EDAM RSE failure surcharges when RDRR was available. CAISO proposes to utilize RDRR when it:

1. Forecasts an RSE shortfall, and
2. Forecasts an EEA Watch or higher in Real-Time (RT).

There may be times when CAISO suffers an EDAM RSE shortfall and it did not forecast an EEA Watch or higher, in which case CA would suffer an EDAM RSE failure surcharge, even though it had RDRR available.

Additionally, it would be good context to understand if other future EDAM BAs have RDRR or similar emergency DR programs and how they plan to utilize those in meeting the EDAM RSE.

4. Please provide your organization’s comments on the proposed method for accounting for Strategic Reliability Reserve (SRR) resources.

Long-start SRRs: PG&E would like more information on how CAISO forecasts an EEA Watch or higher to call long-start SRRs and how that matches up with potential EDAM RSE shortfalls. PG&E foresees a possibility that CAISO does not forecast an EEA Watch or higher, and yet may still fail the EDAM RSE, in which case CA has paid for capacity and not gotten credit for it in the EDAM RSE.

Short-start SRRs: PG&E would like more clarity on what the draft final proposal means by “Short-start ESSRRP resources . . . will not submit day-ahead offers, but may offer into the real-time market when the CAISO or other California BAs declare an EEA Watch or more severe EEA conditions.” Are these resources required to bid into the RT market after an EEA Watch or higher, or do they have discretion? Because if these resources are required to bid, then CAISO should count these resources since CA LSEs have paid for this capacity to be available, even if it doesn't technically meet CAISO's EDAM RSE-eligibility criteria.

5. Please provide your organization’s comments on the proposed monitoring at EDAM launch to determine whether additional incentives for tagging cleared day-ahead imports should be developed.

CAISO needs to find better solutions for the tagging requirement. Suppose the following hypothetical:

• CAISO RSE obligation:                        30,000 MW
• CAISO RSE-eligible supply:     35,000 MW
• CAISO Imports failing to tag:    1 MW

CAISO will allow an EDAM BA to re-supply that 1 MW, but only using resources that were not scheduled in the DA market. So, unless additional supply materializes in RT, CAISO would be kicked out of the WEIM diversity benefit pool (pool). It seems absurd for CA to get kicked out of the pool for a 1 MW failure when it brought 5,000 MWs of excess supply.

Furthermore, such scenarios are plausible. Most, if not all, of CAISO’s supply is bound by CPUC least-cost dispatch orders. This means that all our supply must bid into the CAISO market. Consider July 2023 when Arizona was experiencing a record-breaking heat wave. All of CAISO’s supply would likely get scheduled in the DA market to support reliability in a neighboring BA. So the question arises, where is the additional 1 MW going to come from? CA LSEs are happy to help their neighbors, but the CAISO rules should not punish us for the favor.

Solution 1: last year when the DA Sufficiency initiative kicked off, there was some talk about CAISO forecasting RT bids that were likely to come online and using those to re-supply the deficient amount. PG&E would support this solution.

Solution 2: penalize the import rather than the entire BA. PG&E agrees that it may be appropriate to have some incentive for entities to submit their e-tags on imports, but it is inappropriate to penalize the receiving BA. This causes some structural problems.

First of all, it inappropriately changes the nature of the EDAM RSE. The RSE is supposed to be a check to make sure that no BA is “leaning” on the rest of the EDAM BAs. As we can see from the example above, CAISO is bringing excess supply to EDAM, and yet CAISO is still getting punished. Penalizing the tagging requirement in this manner changes the EDAM RSE from an RSE to an RSE plus a tagging requirement. While those may often be related, they are not the same, and they do not serve the same purpose.

Additionally, this is using a shotgun to kill a fly. Going back to the example above, CAISO is serving 30,000 MWs of load and 1 MW failed to tag. Instead of punishing that 1 MW transfer that failed to tag, CAISO is punishing the entire 30,000 MWs of load. We may have killed the fly, but at what cost to the house. PG&E recommends getting a fly swatter.

6. Please provide any additional comments not covered by the questions above.

Cost allocation: when EDAM RSE failure surcharges are applied to CAISO, it should have a cost causation-driven mechanism for allocating the costs. This discussion belongs in DAS as opposed to RAMPD, where it seems to be getting lost in the shuffle of larger policy discussions.

1. Please provide a summary of your organization’s comments on the Day-Ahead Sufficiency Draft Final Proposal and January 21, 2025 stakeholder meeting.

SDG&E appreciates the opportunity to comment on the Day-Ahead Sufficiency Draft Final Proposal and stakeholder meeting. SDG&E is generally supportive of this initiative and is grateful for the CAISO’s consideration of, and responses to, questions posed in the last set of comments regarding RDRR accounting, short-start SRR, and tagging.

2. Please provide your organization’s comments on the CAISO Balancing Authority (BA) processes for estimating supply available to meet its day-ahead resource sufficiency evaluation (RSE) obligation.

SDG&E supports the 9am advisory RSE run with the ability for SCs to adjust the offers until the 10am deadline.  An advisory run will provide needed flexibility for SCs without creating the operational difficulties that a binding run would.

SDG&E is also supportive of the proposed process for estimating available supply, including utilizing the day-ahead market results from the previous day, the readiness alert system, and operator estimations of available RA. Allowing the CAISO BA operators to utilize the full range of information at their disposal for identifying potential shortfalls and reliability risks will more effectively enable the CAISO BA’s assessment of available and committed capacity, and whether the BA will pass the binding RSE.

3. Please provide your organization’s comments on the proposed method of accounting for Reliability Demand Response Resources (RDRR) in the day-ahead time frame.

SDG&E continues to support the inclusion of RDRR in the RSE. The proposed method of accounting for RDRR in the day-ahead time frame is logical: RDRR capacity is not required to submit a day-ahead offer, but capacity offered into the day-ahead market by 9am will be reflected as RSE-eligible supply, and any non-offered RDRR would only be included in the RSE under EEA Watch conditions, based upon the discretion of the CAISO BA system operator.

4. Please provide your organization’s comments on the proposed method for accounting for Strategic Reliability Reserve (SRR) resources.

SDG&E requests that the CAISO provide further clarification regarding the proposal not to include short-start strategic reliability reserves in the RSE. The proposal states that the short-start resources do not meet the requirements for RSE eligibility as the resources are not qualified as RA, do not bid into the day-ahead market, and do not have contracts creating must-offer obligations. However, the same can be said of the long-start strategic resources: long-start strategic reserves are also not considered RA, and are not required to bid into the day-ahead market. Utilizing the definition of eligibility put forth in the proposal, either both long- and short-start resources should be included in the RSE, or neither should.

Given that both long-start and short-start strategic reliability reserve resources are available in real-time under emergency conditions, SDG&E strongly urges CAISO to include both long-start and short-start strategic reserves in the RSE.

5. Please provide your organization’s comments on the proposed monitoring at EDAM launch to determine whether additional incentives for tagging cleared day-ahead imports should be developed.

SDG&E remains concerned that the failure to tag, even a de minimis amount, of day-ahead imports could cause the CAISO BAA to be removed from the WEIM pool when it has demonstrated resource sufficiency. Despite these continued reservations, SDG&E agrees that monitoring this issue at EDAM launch to determine whether additional incentives should be developed will be a critical exercise, as this data will better inform whether there is a need for modification to the current policy.

6. Please provide any additional comments not covered by the questions above.

SDG&E does not have any additional comments at this time.  

1. Please provide a summary of your organization’s comments on the Day-Ahead Sufficiency Draft Final Proposal and January 21, 2025 stakeholder meeting.

The Six Cities are not opposed to the CAISO’s proposed approach to estimation of resources available for the Day-Ahead (“DA”) Resource Sufficiency Evaluation (“RSE”), as discussed in the Draft Final Proposal at chapter 1.  The Six Cities continue to have concerns regarding the CAISO’s proposals regarding the accounting for Reliability Demand Response Resources (“RDRRs”) and Strategic Reliability Reserve (“SRR”) resources.  The Six Cities also remain concerned with the CAISO’s fixed policy position relating to the application of tagging timelines for resources included in the DA RSE.  Finally, more information is needed regarding the CAISO’s proposal to exercise its authority to issue Exceptional Dispatches to cure RSE deficiencies in the upward direction. 

2. Please provide your organization’s comments on the CAISO Balancing Authority (BA) processes for estimating supply available to meet its day-ahead resource sufficiency evaluation (RSE) obligation.

In general, the Six Cities do not oppose the CAISO’s proposed approach to estimation of available supply to meet its DA RSE, subject to comments provided below regarding RDRRs and SRR resources.  The Draft Final Proposal entails some degree of subjectivity and operator discretion to determine a reasonable estimate of resources expected to be available, especially for the period between the 9 am advisory run of the RSE and 10 am, at which time the binding RSE will be conducted.  It appears reasonable to consider market results from the prior day to estimate incremental capacity from non-resource adequacy (“RA”) resources and RA resources not subject to bid insertion (and presumably this exercise would omit resources known to be on outages), and it also is reasonable to estimate unoffered RA capacity and other state-contracted resources as of 9 am.  Presumably estimating anticipated RA supply that has not bid as of 9 am would be straightforward as to resources that are subject to a must-offer obligation.  The Six Cities likewise do not oppose the use of the readiness alert system.

Because the estimation process proposed by the CAISO relies on discretionary assessments of resources that are anticipated to be available for inclusion in the binding RSE, the Six Cities encourage the CAISO to monitor the effectiveness and accuracy of this methodology and to report to stakeholders on the extent to which the estimates are accurate.  This monitoring will enable stakeholders to make informed decisions about whether alternative approaches should be considered. 

3. Please provide your organization’s comments on the proposed method of accounting for Reliability Demand Response Resources (RDRR) in the day-ahead time frame.

The Six Cities continue to support the CAISO’s proposed approach of including in the DA RSE any RDRRs that have been voluntarily submitted into the CAISO DA Market. 

For RDRRs that do not have offers into the DA Market, the Six Cities urge the CAISO to reconsider the approach in the Draft Final Proposal and include in the DA RSE any RDRRs that have offer obligations into the real-time (“RT”) market and are expected to comply with those obligations.  Although the Six Cities acknowledge that the CAISO intends to consider these RDRRs if the advisory RSE indicates a shortfall in the upward direction and if EEA Watch conditions are anticipated, given the contractual commitments of these resources to participate in the RT market, it does not seem reasonable to exclude them as a default in the DA timeframe. 

The Six Cities are also unpersuaded that any inclusion of unbid RDRRs in the DA Market should result in a corresponding adjustment to the quantity of load conformance in the Residual Unit Commitment (“RUC”) process.  For the reasons discussed in comments provided by the Department of Market Monitoring in this initiative, the Six Cities do not support a standardized or automatic adjustment to RUC load conformance that could result in RDRRs being used to support low priority exports from the CAISO. 

More broadly, as the Six Cities stated previously, it is not clear that the use of load conformance in RUC should be addressed in this initiative.  It would be preferable to address issues related to the use of load conformance adjustments holistically in a stand-alone process. 

4. Please provide your organization’s comments on the proposed method for accounting for Strategic Reliability Reserve (SRR) resources.

The Six Cities concur with the CAISO’s proposal that long start SRR resources will be included in the RSE when they are online and meeting operational requirements.  During the stakeholder meeting, there were questions about whether the long start SRR resources would be included at Pmin levels or at their full capacity value.  The CAISO confirmed that the inclusion of the resource would be at full capacity, bearing in mind inter-temporal constraints.  The Six Cities encourage the CAISO to add this clarification to the Final Proposal.

For the short start resources, the Six Cities disagree with the proposal to exclude these from the RSE, at least as to resources internal to the CAISO balancing authority (“BA”) area.  Rather, since the resources will submit offers into the RT Market in specified conditions, it seems reasonable to include these in the DA RSE if they are available and not on an outage. 

5. Please provide your organization’s comments on the proposed monitoring at EDAM launch to determine whether additional incentives for tagging cleared day-ahead imports should be developed.

The Six Cities are disappointed with the CAISO’s insistence that the lack of a de minimis exception to its tagging timeline is a fixed element of EDAM policy that is unable to be changed.  The overly rigid rule that any quantity of untagged DA imports (that is not subsequently able to be resupplied), no matter how small, should result in removal of the related BA from the pooled RSE does not represent sound policy and would seem to have a high probability of unreasonable and disproportionately costly outcomes.  Absent a willingness to consider alternatives to this policy, the Six Cities concur with the proposal to not directly assign the costs of any lost diversity benefit to entities that fail to tag on a timely basis.  The Six Cities note that they requested additional information from the CAISO regarding the potential implications of this policy in their comments on the Straw Proposal in this initiative, and the Cities are unclear as to whether this information is available or has been provided. 

The Six Cities do think that the CAISO should monitor tagging non-compliance, and the results of this monitoring should inform future policy.  For example, if tagging failures prove to be limited and isolated, that would tend to support the need for a de minimis exception to the consequences of failing to timely tag.  On the other hand, if there is data demonstrating a persistent practice of belated tagging or a failure to tag by a class or category of entities or resources, then, to create appropriate incentives, it is necessary to understand the reasons for the tagging issues.

Finally, the Six Cities request more information about how the resupply obligation (due to a failure to tag) will be implemented and communicated to the entities that are responsible for providing additional supply.  Does the CAISO have a process to inform entities that a tagging failure has generated a need for resupply of RSE-eligible capacity?    

6. Please provide any additional comments not covered by the questions above.

The Draft Final Proposal discusses the use of Exceptional Dispatch to address upward RSE shortfalls.  The Six Cities request that the CAISO provide additional information regarding how it will exercise its Exceptional Dispatch authority in the context of the EDAM RSE before finalizing any proposal in this initiative. 

The Six Cities also recommend that the CAISO evaluate the proposed eligibility criteria for RSE counting in relation to practices of other BAs participating in the EDAM.  Recognizing that there are differences in the RA procurement programs among BAs in the western region, there nevertheless should be consistency in the types of resources eligible to be counted for Day-Ahead RSE testing purposes.  The fundamental purpose of RSE testing is to ensure that BAs participating in the DA and Imbalance Energy markets have the ability to supply the loads for which they are responsible prior to engaging in economic transfers with other BAs.  It would be unjust and unreasonable to permit some BAs to rely on types of resources for that purpose that are not considered for other BAs. 

1. Please provide a summary of your organization’s comments on the Day-Ahead Sufficiency Draft Final Proposal and January 21, 2025 stakeholder meeting.

WPTF appreciates the opportunity to submit these brief comments on the CAISO’s Day-ahead Sufficiency Draft Final Proposal that was posted Jan 14, 2025 and presented at the Jan 21, 2025 stakeholder meeting. The comments below focus specifically on two aspects of the proposal – the treatment of Strategic Reliability Reserve (SRR) resources and Reliability Demand Response Resources (RDRR). Regarding the RDRRs without day-ahead bids; given they are used only during emergency conditions in real-time, we seek clarification from the CAISO as to why they should be treated differently than short-start SRR resources which also do not have bids in the day-ahead market and are available in real-time only under emergency conditions. Regarding the SRR resources; we are seeking confirmation/clarification on if/how they will be counted in the CAISO’s RSE under various situations.

2. Please provide your organization’s comments on the CAISO Balancing Authority (BA) processes for estimating supply available to meet its day-ahead resource sufficiency evaluation (RSE) obligation.

No comment.

3. Please provide your organization’s comments on the proposed method of accounting for Reliability Demand Response Resources (RDRR) in the day-ahead time frame.

WPTF seeks additional clarification from the CAISO on two aspects of the proposed treatment for RDRRs that have not submitted bids into the day-ahead market. The proposal notes that these resources will be reflected in the RSE under certain conditions by reducing CAISO’s RSE obligation. First, can the CAISO please confirm that the EDAM Tariff provides the ability for CAISO BAA to lower its RSE obligation to account for supply side resources? If so, do other non-CAISO BAAs also have this authority?  From an accounting perspective, reducing the obligation or increasing the supply results in the same outcome, thus we wonder if it would be best to have the RDRRs reflected through increased supply.

Second, and more importantly, WPTF wonders if RDRRs that have not submitted bids in the day-ahead market should receive similar treatment as short-start SRR resources. Both sets of resources are not obligated to bid into the day-ahead market and both also are only dispatched in real-time under certain emergency conditions. The CAISO is proposing to not count short-start SRR resources due to them not being available in day-ahead but allow RDRRs that do not have day-ahead bids to count.  Thus, we question if it’s appropriate to treat similarly situated resources differently.  

4. Please provide your organization’s comments on the proposed method for accounting for Strategic Reliability Reserve (SRR) resources.

SRR resources include both long and short start resources. Short start resources will not be committed before the day-ahead market by operators and do not submit bids in the day-ahead market, and thus CAISO is proposing to not include them in the RSE. WPTF supports this element of the proposal given that the day-ahead RSE is based on day-ahead capacity available to meet day-ahead needs.

During the call the CAISO stated that long-start SRR resources may be committed and online prior to the day-ahead market run and those resources can submit bids into the day-ahead market. For example, if CAISO issues an ED to an SRR long-start to have it start coming online, it may reach the Pmin level and be online by the time the day-ahead market runs. This may occur due to it being the second day of the event and the resource was kept online per operating procure, or due to the timing of when the ED was first issue, it may reach the pmin level by 10am. First, we ask the CAISO to confirm our understanding based on the stakeholder meeting discussion that long-start SRR resources can submit bids in the day-ahead market when they have been committed by operators to pmin (or above pmin).

We also recognize that there are some conditions whereby the long-start SRR resources may not be committed online prior to the day-ahead market run and do not submit day-ahead bids. Thus, there are different scenarios in terms of long-start SRR resources being made available in the day-ahead market run, and WPTF is seeking clarification on how these resources will be treated in the RSE under the different situations.

The table below identifies different scenarios that warrant clarification in terms of how they will be treated in the RSE as we envision different treatment will apply. All the examples below assume a 700 MW long-start SRR resource with a 100 MW pmin.

WPTF appreciates the confirmation and clarification from the CAISO to ensure appropriate accounting of the long-start SRR under different conditions is considered and the added transparency this will provide market participants.

5. Please provide your organization’s comments on the proposed monitoring at EDAM launch to determine whether additional incentives for tagging cleared day-ahead imports should be developed.

No comment.

6. Please provide any additional comments not covered by the questions above.

No comment.