Comments on Working group meeting

1. What additional clarifications would be helpful from the CAISO that were not already covered in the November 8 workshop?

One question that was not able to be addressed at the workshop related to CAISO’s visibility of storage duration. For resource adequacy (RA) reporting purposes, storage resource capacity is reported based on four-hour continuous output. However, storage resources may have more capacity output (higher Pmax) available at shorter duration or the same Pmax but at longer durations than four hours. For loss of load expectation (LOLE) modeling purposes, it is important to model the resources with the correct Pmax and duration. In subsequent workshops, AReM recommends that the CAISO confirm it accurately models storage Pmax and duration in LOLE studies or incorporate this issue into the relevant problem statement to be corrected in future studies.

2. Are there any gaps that have not been covered that result in a near-term compliance risk? Please elaborate on the issue and impact.

The workshop discussion raised two compliance risks, whereby a load-serving entity (LSE) could be compliant on its slice of day (SoD) filing with the California Public Utilities Commission (CPUC) and not be compliant with CAISO RA requirements. The first relates to storage with durations of less than 4 hours. The SoD framework allows LSEs to report such resources at their maximum output (Pmax). For instance, a one-hour battery with a Pmax of 100 MW could show 100 MW for one, one-hour slice. Under CAISO rules, however, that resource would only count for 25 MW, the four-hour continuous output. If an LSE relied heavily enough on these short-duration storage resources to meet peak demand, this could lead to a case where the LSE was compliant with SoD filings, but not CAISO filings. The impact of this is expected to be limited in the near-term as most storage resources have four-hour durations but could become problematic in the long-run. LSEs may find themselves unable to shape resources to meet a load shape and instead fall back to the 4-hour minimum duration to meet CAISO requirements, which would also increase costs if shorter battery durations were sufficient to meet demand under the SoD paradigm.

The second issue involves the possible use of separate planning reserve margins (PRMs) for SoD and CAISO compliance. Obviously, it would be possible for an LSE to be compliant with CPUC RA requirements and not CAISO RA requirements if the CAISO used a higher PRM. However, the CPUC has jurisdictional authority to set the PRM, and the CPUC has proposed to scope the PRM into its own RA proceeding (CPUC Docket No. 23-10-011). AReM expects this issue to largely be addressed with the CPUC stakeholder process. AReM recommends the use of consistent PRMs to avoid any possibility of compliance incompatibility.

Ultimately, it is critical that CPUC-jurisdictional LSEs not be found to be deficient by the CAISO while compliant by the CPUC in measuring RA. Given the two issues described above, that risk is not zero. Therefore, AReM recommends that through this working group, the CAISO explore options to allow CPUC-jurisdictional LSEs to demonstrate RA compliance using SoD compliance tools and by so doing, avoid any risk of capacity procurement mechanism cost allocation.

3. Does your organization have any additional feedback on 2025 Slice of Day Implementation related to CAISO processes?

The Working Group meeting did not suggest nor discuss any CAISO plans for RA reform. AReM understands that the CPUC undertook RA reform largely due to concerns over how to quantify the reliability benefits of storage resources. Though the CAISO rules still treat a 4-hour duration battery as equal in RA value to a fossil-fired plant, the two are not equivalent. AReM would like to better understand CAISO’s plan to deal with this fact. Is it waiting for the CPUC to test SoD before deciding whether to implement it? Is it planning to consider alternative reforms? AReM is concerned that if the CAISO pursues a different storage reliability framework, the risk of compliance incompatibility will persist. AReM hopes this or a future Working Group process can ensure any CAISO RA reform will be compatible with CPUC rules and that both entities strive to improve reform implementation to reduce administrative burden on LSEs while maintaining reliability. 

1. What additional clarifications would be helpful from the CAISO that were not already covered in the November 8 workshop?

The California Community Choice Association (CalCCA) appreciates the opportunity to comment on the California Independent System Operator’s (CAISO) November 8, 2023, workshop on Slice-of-Day (SOD) near-term implementation. CalCCA’s primary near-term concern is ensuring that if a load-serving entity (LSE) complies with SOD at the California Public Utilities Commission (CPUC), the LSE will also comply with the CAISO’s resource adequacy (RA) program without the LSE having to take additional procurement actions. The CAISO should confirm whether LSEs will definitively meet CAISO RA requirements if they meet SOD requirements. If not, the CAISO should take additional steps to minimize the need for CPUC-jurisdictional LSEs to meet two different compliance obligations.  

As CalCCA understands the CAISO’s proposed steps for validating RA showings under SOD, if LSEs meet CPUC SOD requirements, they will meet CAISO RA requirements in most instances. There could be situations when an LSE shows storage for less than four hours and more than its capacity at four-hour duration in which the storage would count for less at CAISO than it would at the CPUC. These situations have the potential of creating two compliance paradigms by only counting storage at its four-hour duration, when the CPUC would allow storage to count at durations less than four hours. The CAISO should work with the CPUC to develop a uniform minimum duration used in CAISO and CPUC processes so it is consistent between the two programs.  

2. Are there any gaps that have not been covered that result in a near-term compliance risk? Please elaborate on the issue and impact.

There are two gaps that have not been sufficiently addressed by CAISO:  

First, the way the CAISO proposes to require maximum import capability (MIC) is inconsistent with how import resources can be shown under SOD. The CAISO plans to require MIC for the amount of NQC shown in the one hour the CAISO will validate, regardless of whether the import is shown in that hour or not, or if the import is shown for more or less capacity in other hours. Requiring showings of MIC in this manner may under or over-utilize MIC. This is because, under the CPUC’s SOD counting rules, non-resource specific imports can count in the hours specified in their contracts. If an LSE shows a solar import during the daylight hours and a gas resource in all 24 hours, assuming the solar resource is unavailable during the hour the CAISO validates, the CAISO would effectively only require MIC for the gas resource, even though both the solar and the gas would be shown for non-zero values during the daylight hours. Conversely, if an LSE shows two storage imports, one in the morning ramp and another in the evening ramp, the CAISO would require MIC that totals the net qualifying capacity (NQC) of the two storage resources, even though they do not overlap in any hour on the LSE’s RA showing. The CAISO’s planned MIC requirements under SOD will result in requiring more or less MIC than required to import out-of-state RA resources.  

Second, the CAISO provides very little information about how it will make capacity procurement mechanism (CPM) decisions under SOD. It indicates that it will CPM “[b]ased on shown RA (up to NQC value).” This level of detail is insufficient for a long-term solution to assessing the need for CPM and allocating CPM costs. The CAISO must discuss with stakeholders how it should conduct backstop once CPUC jurisdictional LSEs are subject to SOD and non-CPUC jurisdictional LSEs are not. Ensuring all local regulatory authorities (LRA) bring their share of RA capacity necessary to meet reliability needs in all hours will be an important consideration, especially considering the CAISO’s responsibility to administer the different RA programs adopted by each LRA. LRAs have their own definitions, methods of measurement, and planning standards for their RA programs. Assuming the CAISO and non-CPUC LRAs do not shift to a SOD RA program like the CPUC has, the CAISO needs some other way to determine whether each of the different RA programs results in an RA fleet that is available when and where needed to meet reliability needs in all hours, not just the single hour the CAISO currently checks for compliance.  

3. Does your organization have any additional feedback on 2025 Slice of Day Implementation related to CAISO processes?

CalCCA has no additional feedback at this time.

1. What additional clarifications would be helpful from the CAISO that were not already covered in the November 8 workshop?

None at this time.

2. Are there any gaps that have not been covered that result in a near-term compliance risk? Please elaborate on the issue and impact.

None at this time.

3. Does your organization have any additional feedback on 2025 Slice of Day Implementation related to CAISO processes?

NCPA is in general agreement with CAISO’s approach to the 2025 Implementation Year as part of a broader Resource Adequacy Enhancements initiative. NCPA is especially appreciative of CAISO’s recognition that not all CAISO LSEs are CPUC jurisdictional, and CAISO’s respect for the jurisdictional rights of those LSEs.

NCPA further supports CAISO’s view that a deliberative approach to RA reform is the best policy, and that any material changes to the Resource Adequacy program will need to be coordinated with the evolving DAME, EDAM and WRAP initiatives. NCPA looks forward to participating in this process.

1. What additional clarifications would be helpful from the CAISO that were not already covered in the November 8 workshop?

PG&E seeks clarifications on the required Import Allocation Rights (IARs) for solar resource import to count for RA and on the CAISO timeline for further discussions on Slice of Day & CAISO RA program alignment.

Import counting rules for solar:

PG&E is seeking clarification from CAISO on the required IARs (Import Allocation Rights) or MIC (Maximum Import Capability) for solar imports counting for RA. CAISO plans to set solar for QC at the gross peak hour, choosing the greater value between the gross peak and 0.1. PG&E requests CAISO to specify if an IAR of 0.1 is sufficient for such imports to count for RA.

In this context, the impact of MIC on wheeling needs clarification.

CAISO timeline for further discussions on Slice of Day & CAISO RA program alignment:

CAISO indicates (slides, p.7) there will be a review of 2024 Slice of Day test year results in the upcoming months, coordinated with the CPUC. The RAMPD Working Group discussions on Slice of Day & CAISO RA program alignment will continue. PG&E is interested in any details about the timeline and scope for future topics to be addressed.

2. Are there any gaps that have not been covered that result in a near-term compliance risk? Please elaborate on the issue and impact.

No comments at this time.

3. Does your organization have any additional feedback on 2025 Slice of Day Implementation related to CAISO processes?

The difference between the CPUC and the CAISO NQC for VERs: when the VER QC value is 0.00 in the peak hour, the CPUC will hand-off a 0.10 MW QC value to the CAISO.

As stated in the CPUC Decision 23-04-010 (pages 75-77), “CAISO encourages parties to explore other compliance options in CAISO’s stakeholder process. CAISO states that its proposal would require system changes and discussion in CAISO’s stakeholder processes to determine values for must-offer and outage substitution rules.”

PG&E is seeking clarification on the costs of updating CIRA, the magnitude of the discrepancy, and how it will be factored into CPM decision-making.

1. What additional clarifications would be helpful from the CAISO that were not already covered in the November 8 workshop?

SDG&E appreciates the opportunity to comment on the Resource Adequacy Modeling and Program Design initiative. Please see our comments below:

SDG&E would appreciate more information about how system requirements are formulated and adjusted. While system requirements are communicated to LSE’s, the forecast modifications that organizations, such as the CPUC and CEC, complete to arrive at the final system requirements is unclear. CAISO could provide information about these processes for better transparency and to understand the magnitude of adjustments, which can be significant, from one year to the next. These changes translate to a percentage difference that is notionally significant and impactful when managing a portfolio. Especially in a landscape in which requires maintaining tight margins and selling any remaining.

2. Are there any gaps that have not been covered that result in a near-term compliance risk? Please elaborate on the issue and impact.

As the CPUCs Slice of Day Framework SOD framework implementation dates approach, it is evident that a gap exists between the CAISO and (SOD) counting methodology and requirements. SDG&E urges CAISO to ensure counting methods are consistent to meet reliability targets of both programs in all hours.

For example, the market continues to incorporate a growing fleet of batteries and they are counted differently based on the counting methodology. The CPUC SOD filling allows for variability in counting batteries, such as run hours, and maximum continuous energy and apply that to each slice. Alternatively, CAISO will have their own operational methodology and may limit dispatch based on needs of grid. Instead of CAISO taking the discharge amount in the HE 19 gross peak hour, SDG&E believes the full capacity should be made available in that hour. Additionally, batteries with a discharge period of more than 4 hours do not receive a higher amount of credit for RA capacity than those that can only discharge energy for 4 hours, which is not necessarily what will be presented in the CPUC filling.   Another gap is regarding the transactability of RA resources, specifically when selling renewable assets. As these renewable resources are sold it would be helpful to see what counterparty will be able to claim on supply plan and profile.

3. Does your organization have any additional feedback on 2025 Slice of Day Implementation related to CAISO processes?

SDG&E requests to know the details of RA requirements from systems standpoint including reporting, requirements, and system changes. Most importantly, the CAISO RA system should be able to operate with the CPUCs SOD model upcoming test year in 2024 and implementation in 2025.

SDG&E would like to emphasize transparency in this initiative, and we encourage the CAISO to be open and complete with data they're providing to LSEs.  As data requirements evolve over time, it will become evident what is needed.  

1. What additional clarifications would be helpful from the CAISO that were not already covered in the November 8 workshop?

The CAISO should provide additional examples of how the CPUC showings under Slice-Of-Day (SoD) compare with the CAISO validation. Specifically, the examples that were shown are all for the same month with the peak load in HE19 and solar no longer producing at that point in time. Examples should be considered for other months when the peak and solar contribution at peak might be different. The examples also showed example CPUC SOD profiles for the solar and storage resources, but the examples should also show the CAISO’s expected net load values.

As different LRAs may set their own RA requirements for their jurisdictional LSEs, when the CAISO determines that a potential shortage of RA capacity exists, and the CAISO procures backstop capacity the CAISO needs to clarify how it allocates the costs. Since different LSEs can have different PRMs it is not clear how the CAISO determines that there is a potential aggregate shortage and how backstop procurement costs would be allocated to different LSEs with different PRMs or resource counting rules. While these issues have existed since the beginnings of RA, they will become more pronounced with the CPUC implementation of the SOD and the potential for other LRAs to stick with single-hour frameworks.

2. Are there any gaps that have not been covered that result in a near-term compliance risk? Please elaborate on the issue and impact.

SCE doesn’t see any issues other than those discussed in the responses to the other questions.

3. Does your organization have any additional feedback on 2025 Slice of Day Implementation related to CAISO processes?

SCE reiterates the comments that it has previously made that the CAISO needs to consider how the single RA number reported by the CPUC under the SoD, which will likely differ from the current ELCC based number, may impact reliability assessments. The CPUC recently revised its calculation of the SoD PRM to meet a 1 in 10 LOLE to 15.43%. This contrasts with the single-point PRM of 17% previously approved for 2024 and 2025, and the even higher values used to justify the “effective” PRMs. This indicates the CAISO needs to carefully consider the PRM and reliability assessment implications as CPUC entities move to SoD.

Similarly, CAISO needs to thoroughly explain, likely with examples, how it will determine RA compliance and when it will procure backstop capacity and how this will be allocated to all LRAs and/or LSEs. This means backstop procurement for LSE deficiencies as well as potentially aggregate deficiencies or exceptional events. CPUC LSEs need to understand the CAISO process so that they may ensure that they are not only RA compliant under the CPUC SOD mechanism, but so that they are not potentially subject to CAISO backstop costs. As the CAISO presentation from the SOD Workshop demonstrated, the CAISO showing for RA and the CPUC SOD showing may differ and it is important for LSEs to understand these potential differences and how they may impact the CAISO’s determination of the need to backstop RA. SCE’s suggestion above that the CAISO provide examples of the RA showings for different months is an example of one type of information that the CAISO should develop and discuss with stakeholders.

Finally, CAISO, together with the CPUC, needs to demonstrate that they have procedures in place to effectively allow for the validation of RA SoD by the CPUC. The CPUC Energy Division is scheduled to publish a study by February 1, 2024, of the SoD implementation process based on the annual 2024 SoD showings that are due at the end of November, which should include any potential issues associated with the validation process. An open discussion of this with the CPUC and stakeholders would likely be helpful in ironing out any potential issues and give stakeholders advance warning of any issues to help prepare comments on the CPUC ED report.

1. What additional clarifications would be helpful from the CAISO that were not already covered in the November 8 workshop?

WPTF would appreciate additional clarification on a few items.

First, whether the CAISO will update the Regulatory Requirements BPM and create training material so that LSEs and resources understand the new programmatic differences between the CPUC and CAISO RA programs. WPTF believes the CAISO must update their BPM at minimum to describe how the showing process will work (more on this below). For example, if a 50 MW/200 MWh storage resource is shown to the CPUC with the following profile.

It seems like the CAISO would need to clarify in the BPM what should be shown to the CAISO to ensure the full amount is covered by their must-offer obligation and other RA mechanisms. The current BPM description does not seem sufficient.

Second, it is unclear how the CAISO expects resources to be shown in their systems depending on what is shown to the CPUC. This has two parts – whether there is a resource showing requirement (we assume not since this would take a FERC change) and more complex, not what the CAISO requires, but what the CAISO expects the resources/LSEs to show so that they are giving accurate information to both organizations.

• Specifically, on slide 31 of the presentation it states that “LSEs and suppliers should show all RA resources to CAISO reflected in CPUC 24-hour showings.” The CPUC indicated that all resources shown on the 24-hour SOD showing must also be included in the supply plan to the CAISO. However, the CAISO then indicated that the CAISO is not forcing resources to be shown. WPTF would like to the CAISO to clarify whether it will be allowed (i.e. not a tariff violation) for LSEs and suppliers to show a resource to the CPUC, but not the CAISO.
• WPTF also asks the CAISO to clarify how each resource type should be shown if the goal is for the LSE/resource to completely align the CPUC and CAISO showings and ensure all shown CPUC resources are fully under all CAISO RA rules.

Third, it is unclear whether the CAISO will change the NQC values of resources (upward or downward) based on the CPUCs exceedance methodology and whether there is sufficient deliverability to support an NQC increase.

Fourth, it is unclear how the CAISO plans to count MIC for renewable resources and whether they will only need .1 MW of MIC if importing solar going forward.

Finally, WPTF understands that under the CPUC’s SOD program, for storage resources to be included in the 24-hour showing, the LSE must have additional capacity across the 24-hour horizon to meet the charging requirement of the storage resource. Thus, LSEs may contract with additional resources solely for the purposes of being able to show the storage resource. During the workshop discussion on this issue there seemed to be some outstanding questions that warranted follow-up.

If the LSEs are required to show the resource contracted for meeting the charging requirement on its supply plan to the CAISO, would it have the full RA obligations imposed? Or, since the CPUC uses the supply plans to validate the showings against the SOD requirements, is the additional resource included on the supply plan but somehow indicated that it is not needed to meet the LSE’s CAISO RA requirement and thus does not have the full RA obligations imposed? Second, if a co-located storage resource is relying on an energy only resource to meet its charging requirement, does the energy only resource now have to be shown on the supply plan? It’s our understanding that the energy only resource would not have an NQC value and thus would not be able to be shown on the supply plan, which then questions if/how the CPUC can use the supply plan to validate the showings against its SOD requirements. For example, a battery may be paired with an energy only solar facility and the LSE is using the energy only solar facility to meet the charging requirement of the battery. If the solar facility shows up on the supply plan with an NQC of 0 MWs then will the CPUC in its validation process under-count the amount of available capacity that can be used to count towards meeting the charging requirement?    

2. Are there any gaps that have not been covered that result in a near-term compliance risk? Please elaborate on the issue and impact.

WPTF is concerned that without consideration of rule changes on the CAISO side, the CAISO may be overcounting the amount of RA capacity available to meet each LRA’s RA requirement and will be unable to accurately calculate deficiencies, allocate costs, or rely on its CPM backstop mechanism. It is WPTF’s understanding that the CAISO will continue to conduct its stack analysis of aggregated shown RA capacity against the RA requirement to determine if it has sufficient capacity. However, because there is a disconnect between what resources are used to meet each of the hourly requirements for the CPUC’s SOD versus what resources are used to meet the CAISO’s monthly RA requirement, the CAISO may find itself thinking it has sufficient capacity to meet the LRA determined RA requirement when in reality it does not. This discrepancy, and reliability risk, is highlighted on slides 24 and 25 of the CAISO’s presentation. Slide 24 shows the total capacity used to meet HE 19 requirement per CPUC’s SOD program to be exactly equal to the requirement of 53 MWs. Slide 25 then shows how the same set of resources would be used to meet the CAISO’s RA requirement. Assuming HE 19 on slide 24 happens to also be the monthly peak hour setting the CAISO’s monthly requirement, slide 25 shows that the CAISO has more than 53 MWs of RA capacity even though it’s using the same set of resources as on slide 24. WPTF is concerned that without consideration of rule changes on the CAISO’s side, the CAISO may be over-stating the amount of capacity it has available to meet system requirements and is consequently unable to use its system backstop authority if needed.   

3. Does your organization have any additional feedback on 2025 Slice of Day Implementation related to CAISO processes?

WPTF strongly encourages the CAISO to ensure it has thought through all the process-oriented steps from consuming RA data to feeding the RA data to downstream systems to confirm no additional changes are needed.  For example, if the CPUC provides the CAISO with 0.1 MW of NQC for a solar resource, does that resource now only have a 0.1 MW/total NQC*forecast RA obligation in the CAISO market or will the CAISO send another NQC value to downstream systems?