Provide your organization’s comments on the proposed energy storage resource model, as described in the straw proposal:
Provide your organization’s comments on the proposed reliability enhancements for storage resources, as described in the straw proposal:
Provide your organization’s comments on the proposed co-located enhancements, as described in the straw proposal:
LSA/SEIA comments below both: (1) Provide feedback for the specific proposals in the Proposal; and (2) request CAISO responses to earlier clarification requests for current market rules and LSA/SEIA reform proposals.
FEEDBACK ON SPECIFIC PROPOSALS IN THE STRAW PROPOSAL
As noted under #1 above, LSA/SEIA support the CAISO’s proposals for grid-charging management and Pseudo Tie eligibility for ACCs. The reasons for this support, along with suggested modifications and clarifications for the grid-charging management proposal, are explained further below.
GRID-CHARGING MANAGEMENT FOR CLR MFRs
The Proposal contains a concept reflecting the CAISO’s understanding that, consistent with LSA/SEIA’s earlier comments, the ability to limit grid charging is absolutely critical to the economic viability of MFRs, due to the importance of the Investment Tax Credit (ITC) and property-tax exemptions in project financing and operations (both of which depend on such limits).
The three main elements of this concept in the Proposal are excerpted below.
- Real-time dispatch: “The ISO proposes new functionality for co-located storage resources in the day-ahead and real-time markets…The ISO proposes an electable functionality to limit dispatch instructions for storage resources so that they are no greater than the forecast of co-located renewable resources.”
- Exceptions: “This functionality will not precent storage resources from receiving instructions to charge from the ISO in excess of dispatch instructions issued to co-located VER resources in all instances. If the ISO issues dispatch instructions to economically curtail output from VER because there is more supply on the system than demand, the ISO will not reduce charging instructions to co-located storage resources."
- Real-time deviations: “Finally, the ISO proposes that storage resources be allowed to deviate down from dispatch schedules during intervals when co-located renewables are only able to produce less than forecast…The storage resource may not deviate beyond the difference in scheduled and actual energy from the variable resource and is required to charge at the level of output from the VER resource when deviating from dispatch instructions.”
This concept would provide a degree of control to CLR owners to limit grid charging. However, we have issues and questions, detailed below, with each of the three elements above, and more generally how this concept would interact with other current and proposed market-design features.
Real-Time Dispatch (element #1 above): LSA/SEIA support this functionality but request the modifications and clarifications described below.
- “Electable functionality:” CLR owners would have to elect to use the new concept, and the election would be associated with the storage CLR specifically (since it does not impact scheduling, dispatch, or settlement for the VER CLR). The owner would have to provide:
…documentation that the associated storage resource is part of an energy project eligible and planning to apply for investment tax credits and the expected window that the facility will be eligible to receive investment tax credits (i.e. 5 years). At that time the ISO will implement this logic for the specified eligibility timeframe of the investment tax credit.
LSA/SEIA have no problem with the electability feature in general, and the details of the required demonstration can probably be addressed in BPM changes. However:
- The electability of this feature should be more granular, or contain a real-time override for the CLR owner or Scheduling Coordinator (besides the CAISO’s override in element #2 – see below). The concept assumes that the grid-charging election is an all-or-nothing prospect, i.e., the storage CLR could elect only unlimited grid charging or none at all. However, as the Proposal recognizes, limited grid charging could be economic under certain circumstances, and not all PPAs prohibit it. (In fact, LSA/SEIA assume that the CAISO is hoping that offering this grid-charging management tool to prevent such prohibitions in future PPAs, and/or encourage already-contracted parties to loosen such restrictions via contract modifications.)
Thus, LSA/SEIA recommend that the CAISO include in the concept design some ability to disable this feature, e.g., on an hourly basis or based on market parameters (e.g., market energy prices below a specified level).
- The eligibility rules should also consider property-tax issues. While the Proposal mentions property-tax issues at p.16, the eligibility requirements do not consider them.
The Proposal says “The ISO would like to continue to understand these concerns better to develop the best policy possible to facilitate these resources and assess the prevalence for these kinds of tax implication.” Rather than have the CAISO immerse itself in local property-tax issues, LSA/SEIA recommend eligibility-requirement modifications to allow participation extension beyond 5 years based on significant property-tax issues, perhaps with a materiality threshold.
- Forward scheduling issues: The Proposal says the new concept would apply to the “day-ahead and real-time markets” but only mentions real-time operational and settlement issues, e.g., Dispatch Instructions, deviations from them, and resulting settlements impacts. LSA/SEIA ask that CAISO clarify whether/how this proposal would apply to forward schedules in either Day Ahead or Real Time markets, e.g., how the Day Ahead market would be affected.
Exceptions (element #2 above): The Proposal states that the market would override the VER-storage balancing concept when the CAISO is issuing Dispatch Instructions “to economically curtail output from VER because there is more supply on the system than demand.” There are two reasons that the CAISO would be curtailing the VER CLR in real time.
The first is resource-specific, i.e., if the VER CLR is being curtailed pursuant to an economic bid submitted for the resource. (This would include any Ancillary Services bids, though A/S certification is not common for VERs). This type of curtailment is usually called “economic curtailment” in CAISO documents (e.g., presentations at Market Planning & Performance Forums).
The second is reliability-related, i.e., if the CAISO has run out of economic bids and is curtailing VER (and other) resources that submitted self-schedules, for either congestion or over-generation reasons. This type of curtailment is usually called “self schedule” or “uneconomic curtailment” in CAISO documents.
However, based on the discussion at the stakeholder meeting, it appears that the CAISO is referring to the second kind of curtailment as “economic” for some reason, and that the concept does not address the first kind of curtailment at all. The CAISO should provide this important clarification.
Finally, the CAISO should clarify whether the recently implemented Minimum State of Charge (MSOC) feature would provide another exception to exercise of this concept. The MSOC ensures that storage CLR capacity is charged sufficiently to meet Day Ahead discharge schedules, so the CAISO should clarify whether the MSCO would override any charging reductions due to the proposed concept above.
Real-time deviations (element #3 above): The Proposal says that the storage CLR “can only deviate down” “beyond the difference in scheduled and actual energy from the variable resource and is required to charge at the level of output from the VER resource.” The CAISO should:
- Clarify that the meaning of “deviate down” here means reducing the level of charging. (Some might call that “deviating up.”)
- Correct the language to say “the difference in dispatched and actual energy from the variable resource.” There could be a difference between: (1) the VER scheduled energy and the VER Dispatch Instruction; and/or (2) the VER Dispatch Instruction and the actual VER production. This provision seems to refer to (2) and not (1).
PSEUDO TIE (PT) MFR ELIGIBILITY FOR ACCs
As stated above, LSA/SEIA appreciate the CAISO’s inclusion of this issue in the scope of this initiative. We strongly support the CAISO’s proposal to allow PT MFRs in CLR configurations (PT MFR CLRs) the same access to ACCs as inside-CAISO resources, with the CAISO clarification that both Resource IDs “must be in the same BAA.” (We interpret to mean that both the VER and storage CLRs are Pseudo Tied to the CAISO BAA, but CAISO should clarify that.)
As noted in our Issue Paper comments and Workshop presentation, PT MFR CLRs have exactly the same need for ACCs – i.e., risks of “stranding” large amounts of capacity needed for both project economic viability and CAISO market needs – as inside-CAISO MFR CLRs. Use of ACCs is completely compatible with PT firm-transmission requirements; that requirement is based on interconnection service capacity and maximum simultaneous output at the point of interconnection, not installed generation/storage capacity behind the interconnection.
In addition, this change is needed to correct a serious process violation. The current prohibition against MFR PT Resource use of ACCs: (1) Was never addressed in the Hybrid Resource Initiative stakeholder process; and (2) was not prohibited in the tariff language, only mentioned in the FERC filing cover note. LSA/SEIA believe that it therefore should never have been included in the filing cover note and support the CAISO’s proposed “fix” in this initiative.
CAISO RESPONSES TO OTHER LSA/SEIA CLARIFICATION REQUESTS AND RECOMMENDATIONS
The Proposal states in Section 3.4 as follows:
The ISO understands that there may be additional changes that stakeholders would like to be considered, but are not addressed in this proposal. At this time, the ISO will continue to consider additional changes, but is not currently including them in the proposal. Please include comments on critical additional topics that are not covered in this proposal but should be considered in this initiative.
With all due respect, stakeholders cannot be sure that the CAISO has noticed and/or seriously considered their proposals unless the CAISO acknowledges and responds to those proposals. It is also important that stakeholders understand, not only the reasons for subsequent CAISO proposals, but also the reasons why the CAISO did not include those not accepted. It is frustrating for stakeholders to develop proposals for CAISO consideration and then have no idea why they were not included.
That is why we specifically included a request in our last comments for CAISO responses to “all points raised in stakeholder comments.” The points raised below – requests for clarification of current CAISO policy, and suggestions for additional grid-charge management options – are important, and LSA/SEIA again request that the CAISO address them in this initiative.
LSA/SEIA’s EARLIER CLARIFICATION REQUESTS FOR CURRENT MARKET RULES
As noted above, LSA/SEIA support the CAISO’s grid-charging management concept in the Proposal. However, in their earlier workshop presentation, LSA/SEIA requested that the CAISO clarify whether certain grid-charging management tools that may be available now, under current market rules for MFRs in a CLR configuration; these questions were based on lack of clarity of past CAISO statements on this issue.
LSA/SEIA summarize those requests below – modified slightly in light of the Proposal content – and ask again that the CAISO please provide the requested clarifications in this initiative.
- MFR CLR use of their own “limiting schemes” (software or physical limitations) to limit grid charging, based both on long-standing guidance below in the CAISO’s 2016 Technical Bulletin on MFRs and subsequent statements in the Hybrid Resources Initiative Straw Proposal and Revised Straw Proposal.
- CAISO Technical Bulletin (2016): Projects with multiple Resource IDs could have “all options,” including charging “from on-site generation only.” (p.12) (Table also included in Hybrid Resource Initiative Revised Straw Proposal.)
- Hybrid Resources Initiative Straw Proposal & Revised Straw Proposal: “Metering” sections included information for facilities configured as CLRs charging only from on-site generation, saying “A limiting scheme must be in place to prevent charging from the grid.”
- Aggregate Capability Constraint (ACC) minimum setting at zero. As stated in LSA/SEIA’s last comments, this solution would allow storage CLRs to fully offer their entire positive and negative operating range in CAISO markets (even where not required by their Must-Off Obligations (MOOs)) without fear that doing so would expose them to large grid-charging risks. This option can be accommodated within the current ACC functionality, without any tariff or software changes.
LSA/SEIA’s OTHER GRID-MANAGEMENT TOOL SUGGESTIONS
LSA/SEIA recommended consideration of other tools as well, including (but are not limited to) those listed below. LSA/SEIA again request that the CAISO consider these suggestions and respond to them, including explanations for why the CAISO did not include them in the Proposal.
- Additional Master File options, e.g., separate storage CLR Pmin parameters for physical limitations and market-dispatch limitations. For example, the former could apply during System Emergencies and the latter could apply at all other times.
- Expanded storage CLR flexibility, since the Minimum State of Charge (MSOC) ensures availability for subsequent hourly schedules (and, presumably, any MSOC replacement would do the same). For example, the CAISO could:
- Revise real-time dispatch software so that storage CLRs could elect to have CAISO Dispatch Instructions reflect the storage flexibility already allowed, i.e., automatically increase storage CLR charging or reduce discharging where real-time VER output is above schedule.
- Allow storage CLRs to exercise storage flexibility (in both directions) in intervals when providing A/S, subject to the MSOC.
- Bid/payment “adders” where storage CLR grid charging would result in loss of ITC and other tax benefits. These could be similar to greenhouse-gas adders, though possibly more complex to design.
Provide your organization’s comments on the proposed EIM classification for this initiative, as described in the straw proposal: