Jerret Fischer (email@example.com)
The Salt River Project Agricultural Improvement and Power District (SRP) appreciates the opportunity to comment on the CAISO’s triennial review process. Given the change in the inflationary environment including future expectations observed over the past few years, updates to the Variable Operations and Maintenance Costs should be looked at, discussed, and updated.
SRP appreciates the CAISO’s efforts to keep costs current and hopes that the CAISO can consider these process improvements as fundamental to ensuring the operational health of the asset owners participating in its markets.
SRP agrees that there should be an update to the VOM default values.
SRP encourages the CAISO to make this review process annual, as opposed to triennial, to increase the VOMs in-line with the rising costs asset owners face.
Since the current review is lagging, SRP requests that the CAISO consider taking the latest available inflation data based on the chosen inflation metric and inflating these costs uniformly by that amount. For example, the Q2 2023 data was just released, so the preference would be to escalate all the costs by that amount rather than using a year-ending 2022 value to go into effect at a later date. This process modification would assist in minimizing the duration of under-recovery for asset owners.
SRP notices that the CAISO has not applied a flat percentage to the increase for all asset types and requests that the CAISO applies a uniform percentage to escalate all the costs by 16%. See FIGURE 1
For the Coal assets, SRP has observed that the CAISO is using year-ending 2018 dollars for the VOM adder at 2.69. SRP recommends it should be adjusted for a longer term.
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