Comments on Comments for Draft final proposal

1. Please provide a summary of your organization’s comments on the CPM Enhancements Track 1 draft final proposal

The California Community Choice Association (CalCCA) appreciates the opportunity to comment on the Capacity Procurement Mechanism (CPM) Enhancements Phase One Draft Final Proposal. CalCCA supports the Draft Final Proposal with a caveat regarding the tariff clarification to forbid resources from taking on new Resource Adequacy (RA) obligations after they have accepted a CPM designation.

The CAISO proposes two modifications that would provide additional flexibility in accessing CPM capacity. First, the CAISO proposes to have the authority to reduce the volume (in megawatts (MW)) of significant event CPM designations when the designated capacity is otherwise committed to the CAISO (e.g., through a RA contract, Reliability Must-Run (RMR) designation, or monthly CPM designation). Second, the California Independent System Operator Corporation (CAISO) proposes to have the authority to reduce the term of significant event CPM designations when the designated capacity is already committed or unavailable to the CAISO (e.g., capacity contracted to an entity outside the CAISO balancing authority area, RA resources not on a supply plan, or planned outage substitution). CalCCA supports these enhancements as they will provide the CAISO additional access to CPM capacity which may result in increased reliability and lower CPM costs. 

However, in the draft final proposal the CAISO also indicates that it plans to clarify the tariff to forbid resources from taking on new RA obligations after they have accepted a CPM designation if those new RA obligations conflict with the CPM obligations. CalCCA understands that this aspect of the proposal would apply to Significant Event CPMs and CPMs associated with resolving RA deficiencies (and not exceptional dispatch CPMs).

CalCCA supports this clarification for CPMs associated with resolving RA deficiencies only. For CPMs resolving RA deficiencies, the RA credit associated with the CPM capacity is allocated to load-serving entities (LSEs). Therefore, it makes sense to forbid the CPM capacity from taking on new RA obligations because that capacity is already counting towards RA obligations and the RA value of that capacity is already allocated out to LSEs through CPM credits.  CalCCA agrees with the CAISO that the CPM rules should ensure the same MW of capacity is not sold twice and is not counted for RA twice.

CalCCA does not support this clarification for Significant Event CPMs. For Significant Event CPMs, the RA credit associated with the CPM capacity is not allocated to LSEs because these CPM types are meant to obtain capacity in excess of RA requirements. If these CPMs extend beyond the initial 30-day term, there may be a situation where an LSE is looking to buy capacity for its monthly showing, but the capacity is already tied up in a long-term CPM. For example, assume a 10 MW resource accepts a 90-day CPM on September 10. The CPM, therefore, lasts until December 10. If an LSE is looking to procure an additional 10 MW for its November monthly RA showing due Sept 15 or its December monthly RA showing due October 15, after the resource accepts the multi-month CPM, it would not be able to access that capacity for its November or December RA obligation. The CPM process should be a backstop to the RA program, meaning that it should not preclude LSEs from procuring RA from resources if they can use the capacity for their RA showings. This is especially critical in today’s RA market, where RA capacity is extremely scarce and LSEs must procure most, if not all, available RA capacity to meet their obligations in peak months. Therefore, CalCCA recommends that the CAISO clarify the tariff to forbid resources from taking on new RA obligations after they have accepted a CPM designation if those new RA obligations conflict with the CPM obligations for CPMs associated with resolving RA deficiencies only. For Significant Event CPMs, the CAISO should allow the CPM resource to enter into an RA contract to serve CAISO Balancing Authority (BA) load and when it does, release the resource of its CPM status. The CAISO could issue another Significant Event CPM to cover the capacity from the resource that transitioned from a CPM resource to an RA resource should the need for the Significant Event CPM continue and excess capacity to CPM exists. Allowing LSEs to contract with capacity that is CPM capacity but whose RA value is not already allocated to LSEs would better enable LSEs to meet their RA obligations at lower costs and reduce the risk of the CAISO needing to perform additional CPM to cover RA deficiencies.  

CalCCA understands that the CAISO’s clarification that would forbid resources from taking on new RA obligations after they have accepted a CPM designation if those new RA obligations conflict with the CPM obligations would not apply to Exceptional Dispatch CPMs and that resources that receive an Exceptional Dispatch CPM could subsequently enter into an RA contract and have their CPM volume adjusted. CalCCA recommends this rule apply to Significant Event CPMs as well. If the CAISO believes this rule should not apply to Significant Event CPMs, more clarification is needed as to why it would apply for Exceptional Dispatch CPMs and not Significant Event CPMs.

2. Please provide specific comments (if applicable) on proposal 4.1

CalCCA has no additional comments at this time.

3. Please provide specific comments (if applicable) on proposal 4.2

CalCCA has no additional comments at this time.

4. Please provide specific comments (if applicable) on proposal 4.3

CalCCA has no additional comments at this time.

5. Please provide specific comments (if applicable) on proposal 4.4

CalCCA has no additional comments at this time.

6. Please provide specific comments (if applicable) on proposal 4.5

CalCCA has no additional comments at this time.

1. Please provide a summary of your organization’s comments on the CPM Enhancements Track 1 draft final proposal

Middle River Power (MRP) appreciates the opportunity to comment on the draft final proposal. 

MRP generally supports the direction of the proposal and provides the comments below for additional consideration and clarification. 

One aspect of the draft final proposal that MRP does not support is the new insertion limiting the ability for resources to sell capacity to other LSEs after a CAISO CPM designation.  MRP believes the CAISO’s restriction on selling CPM capacity is too broad and should be limited to only instances of exceptional dispatch CPM and intra-month significant event CPM designations.  As written, if the CAISO were to issue CPM designations for Local, System or Flexible capacity deficiencies in the year-ahead timeframe, the CPM capacity could not be contracted to an LSE even if the LSE needed the capacity to meet its own RA obligations.  Allowing for the CPM capacity to be contracted to LSEs within the CAISO is beneficial to the CAISO because it (1) ensures that the capacity is under RA contract, (2) leaves the CAISO no worse off operationally, and (3) ensures that the total costs of the CPM designation would be reduced because the new LSE would take on that cost.  Whether or not the contractual cost is higher or lower than CPM is irrelevant because the LSE wanted to buy the capacity for its needs rather than rely on the CAISO CPM to meet that obligation. 

2. Please provide specific comments (if applicable) on proposal 4.1

MRP understands the CAISO proposes to vary the volume of mid-term significant event CPM designations because a resource may have varying volumes of RA commitments that straddles two months.  First, MRP requests the CAISO define the term “mid-term”.  MRP interprets this term to primarily apply to a CPM designation that occurs after the first day of the operating month with a potential 30-day designation duration lasting until the next operating month.  If this interpretation is accurate, then MRP agrees that the CAISO should have the ability to reduce the volume of the CPM designation.  Second, MRP suggests that it is possible for a resource to be held back from being shown as RA capacity during an operating month because the LSE that owns or controls the capacity may wish to use it as substitute capacity for a planned outage.  For example, consider a situation in which LSE 1 procured a 100 MW resource (RES A) for April and needed the capacity for substitution capacity for the 2^nd week in the month for another resource (RES B) that is scheduled to be on planned outage then.  In this case, RES A would not be able to submit offers into the CSP because it is unable to offer the capacity for the entire month.  If the CAISO needed to solicit significant event CPM offers prior to the operating month, as it did so in 2018, MRP believes that RES A should have the capability to offer its capacity, if authorized by LSE 1, into the CAISO’s CSP process.  MRP highlights this example primarily to question whether the CAISO should limit its proposal to vary the volume of significant event CPMs throughout a 30-day term to only “mid-term” significant event CPMs or if it should have the capability to do such for any significant event CPM. 

3. Please provide specific comments (if applicable) on proposal 4.2

MRP generally supports this proposal but requests the CAISO clarify whether MRP’s example above of a resource being used for planned outage substitution for one week during an operating month would be allowed to effectively have two discontinuous CPM designation terms.  Under this section of the CAISO’s proposal, the CAISO states that this would not be allowed, but if there is a significant event and the CAISO needs the capacity, it makes little sense for the CAISO to not be able to procure the capacity.  MRP requests the CAISO provide in the final proposal details as to what might be permitted in MRP's example regarding capacity held back to provide substitute capacity above.  MRP also requests the CAISO consider if the CAISO’s CSP tool in CIRA can be utilized to facilitate such availability information from the scheduling coordinator of the resource to the CAISO rather than CIDI tickets.

4. Please provide specific comments (if applicable) on proposal 4.3

Inasmuch as the CAISO is proposing to post CPM designation information in OASIS rather than through market notices, MRP continues to request the CAISO post CPM designation data in OASIS that provides more information on the nature and length of the designation than the information previously provided in the market notices.  To be clear, MRP is not asking for information that would be considered sensitive, but rather for more complete non-sensitive information. 

5. Please provide specific comments (if applicable) on proposal 4.4

No comment..

6. Please provide specific comments (if applicable) on proposal 4.5

No comment..

1. Please provide a summary of your organization’s comments on the CPM Enhancements Track 1 draft final proposal

PG&E continues to generally support the incremental changes proposed in this initiative and appreciates the CAISO’s effort to improve and clarify these changes. Nevertheless, PG&E continues to be concerned that changes proposed in proposal 4.3 will decrease transparency of market information. In comments below, PG&E suggests the CAISO retain the existing reporting mechanism in addition to the proposed enhancement.

2. Please provide specific comments (if applicable) on proposal 4.1

PG&E has no further comments on this proposal at this time.

3. Please provide specific comments (if applicable) on proposal 4.2

PG&E has no further comments on this proposal at this time.

4. Please provide specific comments (if applicable) on proposal 4.3

PG&E is concerned that this change will decrease transparency of market information. In initial comments, PG&E expressed this concern, and asked that the CAISO expand reporting to OASIS without removing the requirement to post a CPM designation report to its website. In order to maintain availability of important market data and avoid reductions to transparency, the CAISO should retain the existing reporting mechanism in addition to the proposed enhancement.

5. Please provide specific comments (if applicable) on proposal 4.4

PG&E has no further comments on this proposal at this time.

6. Please provide specific comments (if applicable) on proposal 4.5

PG&E has no further comments on this proposal at this time.

1. Please provide a summary of your organization’s comments on the CPM Enhancements Track 1 draft final proposal

Vistra is generally supportive of the targeted changes to the CAISO’s Capacity Procurement Mechanism (CPM) proposed in track 1. We appreciate the CAISO’s thoughtful consideration of our two below requests as well as our clarification requests in response to the individual questions.

Vistra requests a revision after considering the stakeholder discussion on the business day deadline change for the CPM designation (Section 4.4). We request the CAISO revise its proposal to incorporate a market notice when the CPM need is identified, which will afford the CAISO the ability to extend the business deadline to allow it to complete all the tasks needed to issue a market notice detailing the CPM designation results. We request the CAISO consider what these two separate deadlines would be noticing need versus the designation for the processes to designate CPM (annual Competitive Solicitation Process, monthly Competitive Solicitation Process, Significant Event, Exceptional Dispatch). Please see our feedback below with requests for clarification on the various proposals.

Vistra is looking forward to track 2 effort where we may begin to look more holistically at CPM enhancements. We strongly support track 2 scope needs to include considering enhancements to the CPM soft offer cap and CPM FERC cost recovery review eligibility for offers above the soft offer cap. In addition, we also request the CAISO include in track 2 scope additional flexibility to reduce CPM volume or the CPM term after a CPM designation has been accepted. CAISO and stakeholders should consider more flexibility to seek subsequent modifications to the term especially for longer duration CPM designations. We believe it is in the best interest of the CAISO fleet to have backstop rules in place that do not prohibit entering into RA agreements to replace the need for the CPM designation, however this can only be done if adjustments to the MW amount or CPM designation term are able to be made after a CPM designation is made. We understand this is out of track 1 scope, but in developing our feedback on track 1 proposals where there are some challenges with limiting these changes Vistra now believes this flexibility should be scoped into track 2.

2. Please provide specific comments (if applicable) on proposal 4.1

3. Please provide specific comments (if applicable) on proposal 4.2

4. Please provide specific comments (if applicable) on proposal 4.3

5. Please provide specific comments (if applicable) on proposal 4.4

[1] The CPM types that we believe our included in the Competitive Solicitation Process auctions include Insufficient Local Capacity Area Resources in an annual Resource Adequacy Plan, collective deficiency in Local Capacity Area Resources, Insufficient RA Resources in an LSE’s annual Resource Adequacy Plan, and cumulative deficiency in the total Flexible RA Capacity included in annual Resource Adequacy Plans.

[2] Id.

6. Please provide specific comments (if applicable) on proposal 4.5

1. Please provide a summary of your organization’s comments on the CPM Enhancements Track 1 draft final proposal

WPTF does not support the draft final proposal and believes additional updates need to be made prior to completing this initaitive. 

2. Please provide specific comments (if applicable) on proposal 4.1

WPTF does not support this aspect of the proposal as it is unnecessary and fails to account for CPUC RA rules. If the ISO issues a CPM designation for full year from a resource and then an LSE wanted to contract with the same resource for balance of year - that is to the benefit of ratepayers. An LSE would only contract with a resource if short their need and it would be duplicative for the CAISO to continue to pay the resource under the CPM and for the CPUC to penalize the LSE for being short under their penalty program. Any judgements of whether or not that new LSE’s contract is higher or lower than CPM price is irrelevant and fails to account for the CPUC's RA program. 

3. Please provide specific comments (if applicable) on proposal 4.2

4. Please provide specific comments (if applicable) on proposal 4.3

WPTF does not understand why the CAISO cannot accomodate the request to provoide a consolidated CPM history. This is an important transparency item especially as the holistic planning and RA reform is under consideration at the CPUC. At the most basic level, only by understanding how well our existing rules have worked can we ensure new rules work better. Having a comprehensive history of backstop usage is a key part of this understanding. 

5. Please provide specific comments (if applicable) on proposal 4.4

6. Please provide specific comments (if applicable) on proposal 4.5