Comments on Straw Proposal and Stakeholder Call Discussion

1. Please provide a summary of your organization’s comments on the Day-Ahead Sufficiency straw proposal:

The California Community Choice Association (CalCCA) appreciates the opportunity to comment on the California Independent System Operator (CAISO) Day-Ahead Sufficiency Straw Proposal. This initiative will ensure that the CAISO, in its role as an extended day-ahead market (EDAM) balancing authority area (BAA), meets its day-ahead resource sufficiency evaluation (RSE) obligations by identifying potential shortfalls in the advisory timeframe and curing those shortfalls when necessary. When identifying potential shortfalls in the advisory timeframe, the CAISO must properly estimate the amount of resources available to meet the RSE. This is because some resources may make themselves available between when the CAISO must make cure decisions and when it runs the binding RSE. Failure to properly estimate the amount of this supply that will become available could result in curing shortfalls that did not actually exist or failure to cure when shortfalls did exist. Either outcome could be costly. 

With these considerations in mind, CalCCA makes the following recommendations:

• The CAISO should adopt its proposal for processes to estimate supply available to meet its day-ahead RSE obligation. 

• The CAISO should ensure it does not hold Reliability Demand Response Resource (RDRR) out of the day-ahead RSE when it anticipates a day-ahead RSE failure and when RDRR has not yet met its use limitations, given RDRR would be available if the CAISO declared an energy emergency alert (EEA) in real-time. 

• The CAISO should modify its proposal to account for short-start strategic reliability reserve (SRR) resources the same way the CAISO proposes to account for RDRR in the RSE, meaning if the CAISO expects an RSE shortfall and the CAISO expects EEA conditions, then the CAISO should adjust the RSE eligible supply to include SRR capacity.   

• The CAISO should ensure that de minimus untagged imports do not affect the CAISO’s ability to participate in the WEIM RSE pool, particularly if the CAISO already passes the day-ahead RSE with the rest of its supply. 

• The CAISO should refer to CalCCA’s May 17, 2024, Resource Adequacy Modeling and Program Design (RAMPD) Working Group comments regarding the CAISO’s proposal for curing upward RSE shortfalls.[1]

   

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  [1]           https://stakeholdercenter.caiso.com/Comments/AllComments/4726dcff-0976-4bbe-a424-6382c3a38012#org-c3024a68-903e-4503-8e9b-d78c3ab0666a.

    

2. Please provide a summary of your organization’s comments on the May 13, 2024 stakeholder call discussion:

See the response in Section 1.  

3. 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 CAISO proposes to estimate the supply available to meet its day-ahead RSE obligation by inserting advisory bids for Resource Adequacy (RA) resources that have not submitted offers by the 9 a.m. advisory RSE run. For resources subject to bid insertion rules, scheduling coordinators (SC) would be able to overwrite inserted bids until 10 a.m. For resources not subject to bid insertion, the CAISO would discard advisory bids at 10 a.m. The CAISO should adopt this proposal, as it allows for a reasonable estimation of available supply, given RA resources must offer when they are available per their must offer obligations. It also ensures SCs still have control over their offers consistent with the CAISO’s existing bid insertion rules.  

4. Please provide your organization’s comments on the proposed method of accounting for Reliability Demand Response Resources (RDRR) in the day-ahead time frame. In addition, please explain other potential appropriate uses for RDRR in reducing scarcity pricing:

RDRR resources have the option but are not required to offer into the day-ahead market. Upon the CAISO declaring an EEA, RDRR is required to offer in the real-time market. The CAISO proposes to account for unoffered RDRR in the day-ahead RSE if it expects an upward RSE shortfall in the 9 a.m. advisory RSE run and if the CAISO BAA is expecting EEA conditions in real-time. The proposal will likely reflect RDRR availability. However, the CAISO should better define when it “reasonably expects emergency conditions to materialize in real-time,”[1] given the CAISO generally does not declare EEA conditions until the real-time. The CAISO should ensure it does not hold RDRR out of the day-ahead RSE when it anticipates a day-ahead RSE failure and when RDRR has not met its use limitations, given RDRR would be available if the CAISO declared an EEA in real-time.

CalCCA offers the following responses to CAISO’s requests for stakeholder feedback:[2]

• It is CalCCA’s understanding that the investor-owned utilities (IOU), who operate the RDRR programs, provide the CAISO with daily RDRR availability updates. This information can inform the quantity of RDRR available and prevent double counting by ensuring the total RDRR included in the day-ahead RSE does not exceed the daily RDRR availability updates from the IOUs.
• The CAISO should reflect energy limits allocating RDRR in a manner that minimizes RSE shortfall. For example, if there is an RSE shortfall in five hours (but RDRR can only be used for four hours) and allocating RDRR in the first four hours results in an RSE shortfall of 100 megawatts (MW) and allocating RDRR in the last four hours results in an RSE shortfall of 150 MW, then the CAISO should allocate the RDRR in the first four hours of the shortfall.

[1]           Straw Proposal at 10.

[2]           Straw Proposal at 12.

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

The CAISO proposes to account for long-start SRR resources in the day-ahead RSE if committed. The CAISO should adopt this proposal as it will accurately reflect the availability of long-start SRRs given they will be committed prior to the day-ahead RSE runs and if not committed, will not be available in real-time.

The CAISO proposes not to include short-start SRR resources in the day-ahead RSE because short-start SRR resources will not submit offers into the day-ahead market. Short-start SRRs, while not committed prior to the day-ahead market, will be available to the CAISO BAA in real-time under emergency conditions. Ignoring short-start SRR resources in the RSE could result in the CAISO failing the RSE when it should have passed. The CAISO should modify its proposal to account for short-start SRR resources the same way the CAISO proposes to account for RDRR in the RSE, meaning if the CAISO expects an RSE shortfall and the CAISO expects EEA conditions, then the CAISO should adjust the RSE eligible supply to include SRR capacity. 

6. Please provide your organization’s comments on the need for additional incentives for tagging cleared day-ahead imports:

Per the EDAM policy, the CAISO will count non-resource-specific imports in the day-ahead RSE. To remain in the WEIM RSE pool for BAAs that pass the day-ahead RSE, non-resource-specific imports relied upon to meet the day-ahead RSE must meet tagging requirements by 5 hours before the start of the operating hour or resupply to replace untagged imports. The CAISO proposes to monitor the need for additional incentives for tagging day-ahead imports to ensure imports relied upon to pass the day-ahead RSE meet their tagging requirements. It is prudent for the CAISO to monitor the need for greater incentives to tag non-resource-specific imports.

The CAISO should ensure that de minimus untagged imports do not affect the CAISO’s ability to participate in the WEIM RSE pool, particularly if the CAISO already passes the day-ahead RSE with the rest of its supply. The CAISO’s analysis of day-ahead economy energy imports shows that imports have performed well under stressed system conditions and show up in real time in excess of day-ahead schedules. It would be excessive for the CAISO to be removed from the real-time WEIM RSE pool should the CAISO experience de minimus untagged imports due to inadvertent tagging errors.

7. Additional comments:

The CAISO should refer to CalCCA’s May 17, 2024, Resource Adequacy Modeling and Program Design (RAMPD) Working Group comments regarding the CAISO’s proposal for curing upward RSE shortfalls.[1]

[1]           https://stakeholdercenter.caiso.com/Comments/AllComments/4726dcff-0976-4bbe-a424-6382c3a38012#org-c3024a68-903e-4503-8e9b-d78c3ab0666a.

1. Please provide a summary of your organization’s comments on the Day-Ahead Sufficiency straw proposal:

CDWR provides clarification on the operation of long-start Strategic Reliability Reserve (SRR) Resources in the Electricity Supply Strategic Reliability Reserve Program (ESSRRP).  Please note that CDWR’s ESSRRP is overseen by the Statewide Energy Office (SWEO) at CDWR (which is separate and apart from the State Water Project).

2. Please provide a summary of your organization’s comments on the May 13, 2024 stakeholder call discussion:

CDWR did not provide any comments on the stakeholder call.

3. 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:

 CDWR has no comment at this time.

4. Please provide your organization’s comments on the proposed method of accounting for Reliability Demand Response Resources (RDRR) in the day-ahead time frame. In addition, please explain other potential appropriate uses for RDRR in reducing scarcity pricing:

CDWR has no comment at this time.

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

Long-start SRR Resources are by default “off.”  The resource may be turned on for approved testing and in advance of a forecasted extreme event.  CDWR’s ESSRRP contracts with the long-start SRR Resources only allow for CDWR ESSRRP or the CAISO as the grid operator to approve or direct them to turn on.

CDWR also clarifies that long-start SRR Resources are required to follow CAISO exceptional dispatch, which may or may not include bidding in the Day-Ahead Market.

6. Please provide your organization’s comments on the need for additional incentives for tagging cleared day-ahead imports:

CDWR has no comment at this time.

7. Additional comments:

CDWR has no comment at this time.

1. Please provide a summary of your organization’s comments on the Day-Ahead Sufficiency straw proposal:

The California Efficiency + Demand Management Council (Council) appreciates the opportunity to comment on the Day-Ahead Sufficiency Straw Proposal (Straw Proposal).  The Council generally supports the Straw Proposal as it pertains to Proxy Demand Resources (PDR) and Reliability Demand Response Resources (RDRR).  Regarding the request for feedback on how to prioritize the use of RDRRs when multiple RSE shortfall intervals are expected in a given day, all things being equal, the CAISO should dedicate the RDRR capacity to the largest expected shortfall.  If there is no clear distinction in that regard (and again, all else being equal), the CAISO should prioritize the interval that most closely conforms with the RDRR event duration limit.

2. Please provide a summary of your organization’s comments on the May 13, 2024 stakeholder call discussion:

Please see above.

3. 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 Council is sympathetic to the CAISO’s dilemma in trying to account for all resources that are eligible to be counted in the Extended Day-Ahead Market (EDAM) Resource Sufficiency Evaluation (RSE), even if some RSE-eligible resources have not yet been bid into the Integrated Forward Market (IFM).  If the CAISO cannot accomplish this successfully, the effectiveness of the EDAM will be seriously undermined.    

For Resource Adequacy (RA) resources that are not subject to bid-insertion, such as Proxy Demand Resources (PDR), the CAISO proposes to insert $0/MWh advisory offers at 9:00 a.m. when there are no existing offers and then discard them by 10:00 a.m. Scheduling coordinators would continue to be responsible for meeting their day-ahead must offer obligations by 10:00 a.m.  Without commenting on other resources not subject to bid-insertion, the Council supports this approach for PDR RA resources because it will ensure that they are appropriately counted in the RSE while enabling Scheduling Coordinators to retain their bidding flexibility in the Integrated Forward Market (IFM).

4. Please provide your organization’s comments on the proposed method of accounting for Reliability Demand Response Resources (RDRR) in the day-ahead time frame. In addition, please explain other potential appropriate uses for RDRR in reducing scarcity pricing:

The Council agrees with the CAISO’s intention to ensure that it does not utilize the market or otherwise lean on other EDAM Balancing Authority Areas (BAA) to avoid dispatching Reliability Demand Response Resources (RDRR) when their use is warranted. 

To this end, the CAISO proposes that if the 9:00 a.m. advisory RSE for the CAISO BA indicates an upward RSE shortfall in one or more intervals and the CAISO BA expects emergency conditions in real-time the following day, then the CAISO BA may account for RDRR in the RSE at the discretion of CAISO BA system operators.  The adjustment would be limited to the available RDRR capacity that did not submit a day-ahead offer in the IFM by 9:00 a.m.  As the CAISO describes it, it would only make this adjustment to the extent it reasonably expects emergency conditions to materialize in real-time based on its existing and anticipated supply conditions.  The CAISO would also account for this potential use of RDRRs in the Residual Unit Commitment (RUC) process by offsetting any upload load forecast adjustment.  In spite of these two steps, there would be no guarantee that the RDRR programs would be dispatched in real-time; the existing RDRR activation triggers would continue to apply.

The Council provides feedback on the following questions posed by the CAISO in the Straw Proposal:

1. The CAISO BA will need information each morning to calculate the quantity of available RDRR capacity that has not voluntarily submitted a day-ahead offer as of 9 a.m. While these programs have a resource adequacy capacity value, the CAISO BA must know and ensure potential adjustments reflect actual expected resource availability. Will this information be readily available to the CAISO BA on a daily basis, and how?

The Council reserves comment.

2. RDRR scheduling coordinators are able to voluntarily submit day-ahead offers and will continue to do so under the EDAM design. However, the CAISO BA will perform its RSE adjustment based on the 9 a.m advisory RSE and wants to ensure it does not inadvertently double count any supply offers submitted between 9 and 10 a.m. How best can the CAISO BA ensure the RDRR supply is not inadvertently double counted in this manner?

The Council recommends that the CAISO apply its initial Straw Proposal element –  to encourage all Scheduling Coordinators to submit all day-ahead offers by 9:00 a.m. – to RDRRs bidding into the IFM. If this approach is proven to be ineffective or problematic, the CAISO can reassess.  However, to the Council’s knowledge, very little, if any RDRRs are bid into the IFM.

3. The CAISO would like to discuss how energy limits to RDRR capacity (i.e., maximum run times, maximum starts per day) should be reflected in the RSE adjustment. More specifically, if the CAISO BA at 9 a.m. expects upward RSE shortfalls in multiple intervals, for which intervals should the RSE be reduced, and/or are there any specific intervals the CAISO BA should limit reductions to?

      In instances when the CAISO forecasts upward RSE shortfalls in multiple intervals in a day, all else being equal, the CAISO should dedicate the        RDRR capacity to the largest expected shortfall.  If there is no clear distinction in that regard (and again, all else being equal), the CAISO should        prioritize the interval that most closely conforms with the RDRR event duration limit to maximize the usage of these resources.  For example, if          the RSE shows a two-hour and five-hour RSE shortfall of a similar magnitude, RDRRs should first be applied to the five-hour interval.

The Straw Proposal also notes that the PDRs providing RA will be counted as RSE-eligible supply.  In addition, Load Modifying DR will be reflected as a reduction to the CAISO BA day-ahead demand forecast when the load-serving entity (LSE) commits to its dispatch.  The Council supports this treatment of PDRs, as explained above, as well as the proposed approach for Load Modifying DR.

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

The Council reserves comment.

6. Please provide your organization’s comments on the need for additional incentives for tagging cleared day-ahead imports:

The Council reserves comment.

7. Additional comments:

N/A

1. Please provide a summary of your organization’s comments on the Day-Ahead Sufficiency straw proposal:

Please see the attached Comments from the Department of Market Monitoring.

2. Please provide a summary of your organization’s comments on the May 13, 2024 stakeholder call discussion:

Please see the attached Comments from the Department of Market Monitoring.

3. 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 attached Comments from the Department of Market Monitoring.

4. Please provide your organization’s comments on the proposed method of accounting for Reliability Demand Response Resources (RDRR) in the day-ahead time frame. In addition, please explain other potential appropriate uses for RDRR in reducing scarcity pricing:

Please see the attached Comments from the Department of Market Monitoring.

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

Please see the attached Comments from the Department of Market Monitoring.

6. Please provide your organization’s comments on the need for additional incentives for tagging cleared day-ahead imports:

Please see the attached Comments from the Department of Market Monitoring.

7. Additional comments:

Please see the attached Comments from the Department of Market Monitoring.

1. Please provide a summary of your organization’s comments on the Day-Ahead Sufficiency straw proposal:

Please see attached comments.

2. Please provide a summary of your organization’s comments on the May 13, 2024 stakeholder call discussion:

Please see attached comments.

3. 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 attached comments.

4. Please provide your organization’s comments on the proposed method of accounting for Reliability Demand Response Resources (RDRR) in the day-ahead time frame. In addition, please explain other potential appropriate uses for RDRR in reducing scarcity pricing:

Please see attached comments.

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

Please see attached comments.

6. Please provide your organization’s comments on the need for additional incentives for tagging cleared day-ahead imports:

Please see attached comments.

7. Additional comments:

Please see attached comments.

1. Please provide a summary of your organization’s comments on the Day-Ahead Sufficiency straw proposal:

The Public Advocates Office at the California Public Utilities Commission (Cal Advocates) is the state-appointed 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.  Our efforts to protect ratepayers include energy, water, and communications regulation advocacy. 

Cal Advocates recommends that the California Independent System Operator (CAISO) use this initiative to explore more cost-effective solutions for curing Resource Sufficiency Evaluation (RSE) shortfalls.  Exceptional Dispatch Capacity Procurement Mechanism (CPM) designations should be a last resort solution for curing an RSE shortfall if other, more cost-effective solutions are not available.

2. Please provide a summary of your organization’s comments on the May 13, 2024 stakeholder call discussion:

Please see Cal Advocates response to Question 1.

3. 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 does not provide a response to this question at this time.

4. Please provide your organization’s comments on the proposed method of accounting for Reliability Demand Response Resources (RDRR) in the day-ahead time frame. In addition, please explain other potential appropriate uses for RDRR in reducing scarcity pricing:

Cal Advocates does not provide a response to this question at this time.

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

Cal Advocates does not provide a response to this question at this time.

6. Please provide your organization’s comments on the need for additional incentives for tagging cleared day-ahead imports:

Cal Advocates does not provide a response to this question at this time.

7. Additional comments:

An RSE shortfall occurs when insufficient energy is offered to the day-ahead market to meet the CAISO’s forecasted next-day needs in the CAISO Balancing Authority Area (BAA).  The CAISO has considered a number of solutions, such as bid-insertion of Resource Adequacy (RA) resources and stand-in advisory assumptions.[1]  The Straw Proposal also states that the CAISO “plans to use its existing Exceptional Dispatch authority to address any underlying reliability issues identified by the EDAM RSE.”[2]  Exceptional Dispatch refers to either an out-of-market order to dispatch an RA resource within the day-ahead or real-time timeframes or a CPM designation of a non-RA resource.[3]  Exceptional Dispatch CPMs would procure the greater of the Pmin of the designated resource or the volume needed to clear the shortfall.[4]  The CPM would have a delivery term of no less than 30 days[5] and pay the CPM Soft Offer Cap of $7.34/kilowatt-month (kW-mo).[6]  The CAISO is willing to consider alternatives due to prior stakeholder concerns that the cost of an Exceptional Dispatch CPM may be an inefficient solution for an RSE shortfall.[7]

The CAISO should consider more cost-effective alternatives to using an Exceptional Dispatch CPM to cure an RSE shortfall.  A 30-day delivery term to cure what may be a single hour in a single day of the RSE is not a cost-effective solution.  For example, a 20 megawatt (MW) shortfall in a single hour of the RSE when the locational marginal price (LMP) is $90/MWh has a value of $1,800.  Curing the shortfall with a 30-day CPM designation would cost at least $146,800, not including any energy payments for actual dispatch.[8]  Assuming a “Tier 2” failure and a maximum Mid-C or Palo Verde cost of $100/MWh,[9] the surcharge for failing to cure the RSE would be $6,000.[10]  This surcharge estimate does not include the consequence of the CAISO balancing authority area (BAA) being evaluated individually, rather than as a pooled resource, at the real-time RSE due to an EDAM RSE failure.[11]  The cost of curing an RSE shortfall should not be significantly higher than the cost of tolerating an RSE shortfall.

During the May 13 Working Group, Pacific Gas and Electric Company indicated that the Assistance Energy Transfer mechanism could apply as a potential solution for an RSE shortfall.  The CAISO should explore this potential solution and other more cost-effective potential solutions in the course of this initiative.  Exceptional Dispatch CPM should be a last resort measure to cure RSE shortfalls given the proportionally higher costs of a month-long CPM designation.

[1] CAISO, Day-Ahead Sufficiency: Straw Proposal, May 2024 (Straw Proposal) at 8.  Available at: http://www.caiso.com/InitiativeDocuments/StrawProposal-Day-AheadSufficiency.pdf.

[2] Straw Proposal at 15.

[3] During the May 13 Working Group, CAISO staff indicated that either type of exceptional dispatch may be used to cure an RSE shortfall.

[4] CAISO Tariff 43A.2.5.2.1.

[5] CAISO Tariff 43A.3.6.

[6] The CPM Soft Offer Cap is currently $6.31/kW-mo but will increase to $7.34/kW-mo in June, 2024.  CPM designations may be paid a lower or higher rate, but the Soft Offer Cap is the typical price paid to past CPM designations.  CAISO Tariff 43A.4.1.1.  See also CAISO, Resource Adequacy Working Group: Updated Discussion Paper & Draft Recommendation Plan, April 29, 2024 (RAMPD Draft Recommendation Plan) at 12, footnote 6.  Available at: https://www.caiso.com/InitiativeDocuments/DiscussionPaper-ResourceAdequacyModeling-ProgramDesign-Apr29-2024.pdf.

[7] RAMPD Draft Recommendation Plan at 15-16.

[8] $7.34/kW-mo * 20,000 kW = $146,800.  This assumes that the Pmin of the designated resource is below 20 MW.

[9] Administrative surcharges of RSE failures use a three-tier system that applies multipliers for higher severity.  CAISO, Extended Day-Ahead Market Final Proposal, December 7, 2022 (EDAM Final Proposal) at 71.  Available at: https://www.caiso.com/InitiativeDocuments/FinalProposal-ExtendedDay-AheadMarket.pdf.

[10] This example uses similar figures used in an example surcharge in the EDAM Final Proposal for convenience.  EDAM Final Proposal at 73.

[11] Straw Proposal at 16.

1. Please provide a summary of your organization’s comments on the Day-Ahead Sufficiency straw proposal:

NCPA understands that without updates to bidding processes and timelines, 9AM advisory RSE results may only factor in approximately 75% of total bid-in capacity. One suggestion, if 75% is consistent, is for CAISO to set advisory runs at 75% of need, similar to how annual system RA requirements are only set to 90%.

Another suggestion is to run the advisory RSE closer to 10AM, say 9:30 AM. NCPA believes good utility practice would prevent SCs from submitting bids at the very last minute. There must be some buffer and NCPA would like CAISO to better gauge what that is while recognizing there must be a minimum buffer to run the advisory RSE. How long is that? Can the RSE process be accelerated?

NCPA supports having the CAISO BAA quantify volumes expected from RA resources between 9AM and 10AM, and use such estimates to supplement advisory RSE results. Timelines are already too tight to require SC to submit bids by 9AM and SCs don’t have time to submit multiple versions of bid sets if they can avoid it. NCPA does not support advance bid insertion by CAISO without further clarification of what assumptions will be used to develop inserted bids[1]. There could be significant financial and operational consequences if an SC can’t overwrite inserted bids with its preferred bids for whatever reason.

CAISO’s quantification should use best case scenarios in order to ensure it is not triggering invalid deficiencies and procurement. For example, if an RA resource isn’t materializing then CAISO must look for and account for any resource that may be replacing it such as non-RA import or bids in excess of RA obligations from another resource in the SC’s portfolio.

[1] For example, a Load-Following Metered Subsystem is not subject to certain generated bid requirements, and NCPA would like to ensure such existing practices are not negatively impacted by the proposal to insert bids prior to the close of the DAM process.

2. Please provide a summary of your organization’s comments on the May 13, 2024 stakeholder call discussion:

No comment at this time. 

3. 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 refer to our response to item one above. 

4. Please provide your organization’s comments on the proposed method of accounting for Reliability Demand Response Resources (RDRR) in the day-ahead time frame. In addition, please explain other potential appropriate uses for RDRR in reducing scarcity pricing:

No comment at this time. 

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

No comment at this time. 

6. Please provide your organization’s comments on the need for additional incentives for tagging cleared day-ahead imports:

No comment at this time. 

7. Additional comments:

No additional comments at this time. 

1. Please provide a summary of your organization’s comments on the Day-Ahead Sufficiency straw proposal:

PG&E’s comments can be summarized as follows:

• 9am Advisory Run Proposal – PG&E recommends setting energy quantity parameters (e.g., max use limit and initial state of charge for storage) for the inserted bid set be based on clean bids from the previous trade date.

• Reliability Demand Response Resources (RDRR) – PG&E supports CAISO’s proposed methodology for incorporating RDRR in the EDAM RSE to ensure its dispatch aligns with the programs intended objectives.

• Strategic Reliability Reserve (SRR) resources – PG&E agrees with CAISO’s methodology for counting long start SRRs in the EDAM RSE. Regarding short start SRRs, PG&E recommends that CAISO consider counting the portion capable of delivering in RT if they were to receive a DA award.

• Day-Ahead (DA) Import Tagging Requirement – PG&E recommends that CAISO revise the failure penalty for its DA import tagging requirement.

• Additional Comments – PG&E recommends that CAISO move the cost allocation issue from the Resource Adequacy Modeling and Program Design (RAMPD) initiative to this initiative and prioritize its resolution.

2. Please provide a summary of your organization’s comments on the May 13, 2024 stakeholder call discussion:

No comment.

3. 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 recommends setting energy quantity parameters (e.g., max use limit and initial state of charge for storage) for the inserted bid set be based on clean bids from the previous trade date. The problem is that CAISO lacks visibility into its supply by the 9am deadline. To address this problem, CAISO proposes to:

1. Request Scheduling Coordinators (SCs) to submit advisory bids by 9am voluntarily.
2. For resources subject to bid insertion, CAISO will insert bids at 9am for those resources, if no bid exists.
3. For resources not subject to bid insertion, CAISO will submit advisory bids at 9am that it will then discard at 10am.

Under category #2, for resources subject to bid-insertion, CAISO might need to adjust its bid insertion rules from those applied at 10am. Specifically, for energy-limited dispatchable hydro and battery storage resources, the current bid insertion rules may lead to inaccurate results.

4. Please provide your organization’s comments on the proposed method of accounting for Reliability Demand Response Resources (RDRR) in the day-ahead time frame. In addition, please explain other potential appropriate uses for RDRR in reducing scarcity pricing:

PG&E supports CAISO’s proposed methodology for incorporating RDRR in the EDAM RSE to ensure its dispatch aligns with the programs intended objectives. During the DA Sufficiency meeting on 5/13, CAISO noted that it plans to use RDRR to reduce its RSE obligation IF it anticipates an upward RSE shortfall and expects EEA conditions in Real-Time (RT). If CAISO were to remove the requirement to project an EEA Watch in RT, this would potentially trigger RDRR more frequently than intended for the Demand Response (DR) programs. This heightened frequency could result in customer fatigue and could jeopardize California’s capacity during emergencies.

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

PG&E agrees with CAISO’s methodology for counting long start SRRs in the EDAM RSE. Regarding short start SRRs, PG&E recommends that CAISO consider counting the portion capable of delivering in RT if they were to receive a DA award. PG&E also urges CAISO to provide clarity on what portion of short start SRRs it expects would be able to comply with a hypothetical DA schedule.

6. Please provide your organization’s comments on the need for additional incentives for tagging cleared day-ahead imports:

PG&E recommends that CAISO revise the failure penalty for its DA import tagging requirement. The current penalty removes a Balancing Authority Area (BAA) from the WEIM diversity benefit due to a single transaction failing to tag, even if surplus supply resources are available. This alteration fundamentally changes the nature of the EDAM RSE, essentially transforming it from an RSE to an RSE combined with a DA tagging guarantee. While these issues are occasionally related, they are distinct. PG&E proposes the following calculation: RSE Supply – RSE Obligation – DA Imports failing to tag = X. If X is greater than or equal to 0, the BAA should pass.

For illustrative purposes, PG&E presents two failure examples:

Failure example 1

RSE Obligation: 30,000 MW

RSE Supply: 35,000 MW

DA Imports failing to tag: 1 MW

This would result in a BAA being removed from the WEIM diversity benefit, which does not appear to be an appropriate result.

Failure example 2

RSE Obligation: 30,000 MW

RSE Supply: 35,000 MW

DA Imports failing to tag: 5,000 MW

While this also constitutes a failure, in PG&E’s view it should not. Despite the 5,000 MWs of failed tagging, the BAA still meets its obligation. The concern is that the presence of these DA imports negatively impacts the BAA’s overall evaluation where it would have passed without those extra bids. Thus, PG&E advocates for a penalty mechanism that directly addresses the specific transaction that failed to submit their tags. An administratively set charge amount, would avoid the problems that CAISO noted of determining the actual cost of the failure to tag. PG&E acknowledges the challenge of determining an appropriate administrative charge at this time and would welcome further discussion.

7. Additional comments:

PG&E recommends that CAISO move the cost allocation issue from the Resource Adequacy Modeling and Program Design (RAMPD) initiative to this initiative and prioritize its resolution.

CAISO must develop a method to evaluate each BAA’s position in EDAM, considering both their RSE Obligation and their RSE Supply. Currently, CAISO can only evaluate its RSE Obligation and RSE Supply at the BAA level, which is insufficient. CAISO has over 60 LSEs. One entity might fail to procure sufficient RSE eligible supply and cause an EDAM RSE failure, even if others procured more than is required. But the cost of such a failure would be distributed equally among all LSEs based on load share.

Regarding the allocation of EDAM RSE surcharges and revenues, PG&E supports the two-step processes proposed by both Southern California Edison (SCE) and San Diego Gas & Electric (SDG&E) at the June 14, 2023, Extended Day Ahead Market ISO BAA Participation Rules workshop. The process strikes a balance by initially allocating costs of failure to the deficient LSEs based on their failure amount, and then distributing any remaining EDAM RSE surcharge among all LSEs on an equal basis, according to load share.

1. Please provide a summary of your organization’s comments on the Day-Ahead Sufficiency straw proposal:

SDG&E appreciates the opportunity to comment on the Day-Ahead Sufficiency straw proposal, offering broad support for the effort to develop the details of how the resource sufficiency evaluation (RSE) would apply to the ISO BAA in the extended day-ahead market. It is critical to find a balanced approach to account for emergency resources (such as RDRR and SRR resources) and resources that have not yet submitted bids by the 9:00 a.m. deadline for the advisory RSE, as these results will be used to inform and cure any potential RSE shortfalls of the ISO BAA.

SDG&E offers the following targeted comments to the straw proposal:

• SDG&E supports the three-step approach to account for resources in the advisory RSE, noting that this method strikes a good balance between estimating the RA capacity by 9 a.m. while maintaining the ability for scheduling coordinators to adjust these offers up to the 10 a.m. deadline.
• SDG&E requests CAISO provide more specific, written clarification on when and under what conditions system operators will account for RDRR in the RSE.
• SDG&E believes it is important to explore mechanisms to integrate the short-start SRR into the RSE and urges CAISO to continue discussion on this topic.
• SDG&E is concerned that the failure to tag, even a de minimis amount, of day-ahead imports could cause the ISO BAA to fail the EDAM RSE, including instances where the ISO BAA has met its RSE obligations. As a principle, SDG&E does not believe that the CAISO BAA should be removed from the WEIM pool when it has demonstrated resource sufficiency and requests additional clarification and analysis from CAISO on the frequency and magnitude of this issue. If this is likely to be a frequent issue, SDG&E believes the CAISO should explore additional channels to avoid BAAs being removed from the WEIM pool when they concurrently fail to tag resources but demonstrate resource sufficiency.

2. Please provide a summary of your organization’s comments on the May 13, 2024 stakeholder call discussion:

No comment.

3. 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 is supportive of CAISO’s proposal to use a combination of automatic RA bid insertions for resources subject to bid insertion, and advisory offers for resources not subject to bid insertion, to more accurately inform the 9 a.m. advisory RSE results. The analysis provided in the Straw Proposal makes it clear that accounting for this missing supply is needed for the ISO BAA, and this approach is an appropriate solution. Critical to our support are the elements of the proposal that allow Scheduling Coordinators (SCs) to retain the ability to over-write the bid-insertion inputs up until 10:00 a.m., as is the proposal to discard the advisory offers for resources not subject to bid-insertion at 10:00 a.m. if SCs do not bid these into the market.

SDG&E also supports the proposal to reflect RA eligible intermittent resources in the 9:00 a.m. advisory RSE via adjustments to the VER forecast, thereby avoiding the need to insert advisory offers for these resources.

4. Please provide your organization’s comments on the proposed method of accounting for Reliability Demand Response Resources (RDRR) in the day-ahead time frame. In addition, please explain other potential appropriate uses for RDRR in reducing scarcity pricing:

Broadly, SDG&E supports integration of RDRR in the RSE. Although we do not have any specific feedback on CAISO’s proposed accounting of RDRR in the RSE at this time, SDG&E believes it will be useful to have more certainty on what specific conditions warrant operators including these resources in the calculation of the RSE, given that the Straw Proposal states that “the CAISO BA may account for RDRR in the RSE at the discretion of the CAISO BA system operators.”  Given the potential financial impacts of using RDRR resources or curing through the market, SDG&E requests further clarification on this topic.

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

SDG&E appreciates the proposal to account for long-start SRR resources in the RSE, although we would like further details on how CAISO will consider the ability for these resources to be accounted for by multiple EDAM BAAs located within California. Further, while SDG&E recognizes the challenges of accounting for short-start SRR resources in the RSE since they are not required to bid into the day-ahead market, we believe that there is sufficient reason to explore how to integrate these resources in the RSE. One potential accounting mechanism could be as a load-modifier, accounting for these resources by adjusting the RSE load obligation down. SDG&E looks forward to further discussions and proposals on this topic.

6. Please provide your organization’s comments on the need for additional incentives for tagging cleared day-ahead imports:

As we stated in our response to Question 1, on principle, SDG&E does not believe that the ISO BAA should fail the RSE and be removed from the WEIM pool solely for failing to tag DA imports, especially if the untagged quantity is minimal and there are sufficient resources to pass the RSE even after subtracting those imports. While SDG&E recognizes this design originates from the EDAM final proposal and tariff language, we agree with concerns from stakeholders, particularly the comments on the loss of potential diversity benefits from a de minimis RSE failure.

While SDG&E recognizes CAISO is not currently concerned that untagged imports will cause the ISO BAA to fail the day-ahead RSE, we request that CAISO include analysis of historical data backing this point in the next iteration of the proposal. Additional detail on how frequently (or infrequently) failures to tag day-ahead imports would result in the ISO BAA’s removal from the WEIM pool would help to inform SDG&E’s position on whether this topic should be paused until a later policy effort.

7. Additional comments:

No comment.

1. Please provide a summary of your organization’s comments on the Day-Ahead Sufficiency straw proposal:

As discussed below, the Six Cities generally are in agreement with the CAISO’s proposed approach to estimation of resources available in the Day-Ahead (“DA”) timeframe, but request that the CAISO broaden its consideration of Reliability Demand Response Resources (“RDRRs”) and Strategic Reliability Reserve (“SRR”) Resources.  The Six Cities also urge the CAISO to consider whether removal from the Resource Sufficiency Evaluation (“RSE”) pool due to de minimis or erroneous tagging failures represents sound policy and to provide data to help inform possible refinement of this policy.  Finally, the Six Cities continue to request consolidation of this initiative with the topics in the Resource Adequacy (“RA”) Modeling and Program Design initiative that are related to the RSE and seek data on the likelihood of the CAISO balancing authority area (“BAA”) failing the DA RSE. 

2. Please provide a summary of your organization’s comments on the May 13, 2024 stakeholder call discussion:

The Six Cities’ comments on the May 13^th stakeholder discussion are provided in response to the proposal topics below.

3. 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 CAISO proposal regarding how it will estimate supply to meet the DA RSE obligation generally appears to be reasonable, subject to the comments below regarding RDRRs and SRR Resources.  The Six Cities understand that the CAISO will include its in advisory RSE run at 9:00 am (1) all offers or self-schedules that are in the market as of 9:00 am (which are subject to overwriting by Scheduling Coordinators (“SCs”) until 10 am); (2) all RA resources that are subject to bid insertion, with prices set at the Default Energy Bid (“DEB”) (also subject to adjustment by SCs); and (3) RA resources not subject to bid insertion, with advisory offers at $0 prices and RA capacity quantities.  The Six Cities also understand that the CAISO will use the forecast of Variable Energy Resources’ (“VERs”) production quantities for the day, for both RA VERs and those that are non-RA. 

4. Please provide your organization’s comments on the proposed method of accounting for Reliability Demand Response Resources (RDRR) in the day-ahead time frame. In addition, please explain other potential appropriate uses for RDRR in reducing scarcity pricing:

The Six Cities agree with the CAISO’s proposed approach of including in the DA RSE any RDRRs that have been voluntarily submitted into the CAISO market.  With respect to RDRRs that do not have offers into the market, the Six Cities are not yet convinced that exclusion of these RDRRs (except if operators exercise discretion to include them) is the correct approach.  While input from the entities that have RDRRs under contract would be informative, to the extent that RDRRs have a Real-Time (“RT”) must offer obligation and are expected to comply with that obligation to submit offers into the RT Market, it does not seem reasonable to establish a default of excluding these resources from the RSE, including in the DA timeframe. 

Whether and how the inclusion of RDRRs in the RSE affects—or should affect—the use of load conformance in the Residual Unit Commitment (“RUC”) process, as discussed on page 10 of the Straw Proposal, does not seem like an issue that belongs within the scope of this initiative.  The linkage with the potential for leaning on Reliability Capacity transfers from other EDAM BAAs appears to present a separate (and broader) issue than just how RDRRs are included in the RSE.  If the CAISO intends to stakeholder issues with how load conformance is applied, it would be preferable to address those issues holistically in a stand-alone process. 

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

At this time, the Six Cities agree with the CAISO’s proposed approach to inclusion of long-start SRR Resources in the RSE (i.e., such resources will be included if they are committed to minimum load and expected to submit DA offers).  For the short start resources, however, the Six Cities do not agree with the proposal to exclude these from the RSE, at least as to resources in the CAISO BAA.  Rather, since the resources are obligated to submit offers into the RT Market if directed, it seems reasonable to include these in the DA RSE if they are available and not on an outage. 

6. Please provide your organization’s comments on the need for additional incentives for tagging cleared day-ahead imports:

The Six Cities are concerned by the Straw Proposal’s discussion about incenting compliance with tagging requirements and would like to understand more about intervals where there is a failure to tag and why.  Can the CAISO provide data that demonstrates for a historic period whether there was a failure to tag resources timely such that, under the requirements for remaining in the EIM RSE pool that will be applicable under EDAM, the CAISO would have been removed?  How often does this occur, and what is the typical magnitude of tagging deficiencies?  The Six Cities continue to question whether removal of a BAA from the pooled RSE analysis due to a failure to timely tag, including where the tagging issue was due to an error or is de minimis, constitutes sound policy and will produce reasonable outcomes.  If tagging failures are limited and isolated, that would tend to support the need for a exception to the unduly draconian consequences for failure to meet tagging requirements to accommodate the rare instances in which tagging is not timely completed.  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.  In the absence of additional data, the Six Cities continue to have significant concerns with the CAISO’s policy regarding removal of BAAs from the pooled RSE due to market participants’ potentially imperfect tagging practices and do not support directly assigning the value of any lost diversity benefits as a result of pool removal to parties that commit tagging errors.   

7. Additional comments:

The topics assigned to this initiative overlap with topics under consideration in the RA Modeling and Program Design initiative.  In the RA Modeling and Program Design stakeholder process, the CAISO has stated that it intends to consider the allocation of surcharges and revenues associated with failures of the RSE and development of new products and procedures to cure RSE shortfalls.  Consistent with their comments in the RA Modeling and Program Design initiative, the Six Cities would support consolidation of these CAISO BAA RSE topics into a single stakeholder process, ideally in this initiative.  A failure to satisfy requirements for RA showings is not the same as and does not necessarily lead to a failure to provide sufficient resources to pass the RSE, and a failure to pass the RSE does not necessarily signify an insufficiency of RA resources.

It would also be instructive for the CAISO to provide data or estimate the extent to which, under the as-approved EDAM market rules, the CAISO BAA would be expected to fail the DA RSE.  A backward looking analysis for a recent summer period may be instructive.  If the CAISO anticipates failure rarely or under limited conditions, that would likely inform stakeholders as to appropriate approaches and solutions in this initiative and for the related topics in the RA Modeling and Program Design initiative. 

1. Please provide a summary of your organization’s comments on the Day-Ahead Sufficiency straw proposal:

SCE appreciates this opportunity to comment on the Day-Ahead Sufficiency straw proposal.   SCE’s comments can be summarized as follows: 

• SCE opposes CAISO using Exceptional Dispatch of non-RA resources to cure potential RSE shortfalls: SCE believes using non-RA resources for Exceptional Dispatch to cure shortfalls could create perverse incentives for market participants to withhold their bids until after the 9am Advisory RSE is finalized.

• SCE provides recommendations to improve Advisory RSE accuracy: SCE suggests that CAISO should estimate all available non-RA resources (not on outage) and short-term intertie contracts for the Advisory RSE.  

• CAISO should explore using Long-Start SRRs to cure RSE shortfalls: SCE requests CAISO explore using Long-Start SRRs that can be exceptionally dispatched before the 10am day-ahead deadline to cure RSE shortfalls. 

• CAISO must account for RDRRs and Short-Start Strategic Reserves: SCE believes using RDRRs as a load modifying adjustment to the CAISO forecast is the correct approach. SCE urges CAISO to apply RDRRs automatically to the RSE load forecast when the Advisory RSE shows a failure. SCE advocates CAISO apply the same approach to Short-Start SRRs since both resource types have the same dispatch criteria and can only be used during real-time emergencies. 

• SCE's support for CAISO's proposal to monitor tagging of day-ahead imports: SCE agrees with CAISO's proposal to continue to monitor the behavior of market participants who do not tag their cleared day-ahead imports.  

Further details of SCE’s comments can be found under the following questions below. 

2. Please provide a summary of your organization’s comments on the May 13, 2024 stakeholder call discussion:

In general, SCE supports most areas of CAISO’s proposals except its proposal of curing anticipated upward RSE shortfall using Exceptional Dispatch (ED) authority.  

SCE opposes CAISO using Exceptional Dispatch of non-RA to cure potential RSE shortfalls 

SCE understands that the proposal to address expected RSE shortfalls would result in an ED of non-RA resources and a monthly CPM designation. SCE opposes this approach as it could be counterproductive to generating an accurate Advisory RSE result and unnecessary cost to ratepayers. 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 ED.   An ED 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 ED. 

For SCE to support the proposal, CAISO must first demonstrate the accuracy of the Advisory RSE.   SCE recommends CAISO wait until EDAM go-live to monitor the results of the Advisory RSE. CAISO should then adjust the Advisory RSE as necessary to achieve the most accurate results.  Only after the Advisory RSE proves to be sufficiently accurate would SCE be open to supporting CAISO procuring shortfalls on LSEs behalf.  SCE provides recommendations under question #3 for CAISO to consider. 

CAISO should explore using Long-Start SRRs to cure RSE shortfalls 

Prior to EDAM go-live, CAISO should explore using Long-Start Strategic Reserves (LS-SRR) resources for curing shortfalls. Operating procedure 4420, section 3.2.3.2 states below that these resources are available for Exceptional Dispatch: 

1. When a forecasted emergency event is expected one (1) to four (4) days in advance, CAISO will notify the LS-SRR Scheduling Coordinator(s) of plans to use the LS-SRR resources.  

2. If the CAISO has not already done so in the 4-7 day timeframe, the CAISO will issue Exceptional Dispatch instruction(s) to the LS-SRR SCs at PMin for the range of trade dates and times forecasted for the emergency event with due consideration for resource dependencies and start-up lead times. 

CAISO has identified all the LS-SRR resources in its proposal but should also include the start-up lead times for awareness.  This would allow market participants to evaluate which LS-SRR resource(s) could be utilized for curing shortfalls between the 9am to 10am day-ahead timeframe.   

CAISO must account for RDRRs and Short-Start Strategic Reserves 

Lastly, CAISO must account for all resources already funded by California ratepayers, such as Strategic Reliability Reserves (SRR) and Reliability Demand Response Programs (RDRR). The CAISO proposal is unclear about when RDRRs are used as a load adjustment. The CAISO must make it clear that if the Advisory RSE shows a failure, CAISO will apply a load adjustment that includes RDRR.   CAISO states in the proposal that Short-Start SRR will not be utilized in the Day-Ahead timeframe but only in Real-time when an EEA Watch or higher is declared. If RDRRs are applied as a load modifier and both products can only be used during an EEA Watch declaration or higher, then the 263.5 MW of short-start SRRs should also be counted as a load modifier. 

3. 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:

SCE agrees with CAISO’s methodology for estimating the RA supply required to meet the day-ahead RSE obligation. While SCE supports CAISO’s approach, it would be valuable to provide stakeholders with data on the following aspects: 

• What percentage of use-limited RA resources are not subject to bid-insertion rules at 10 am? 

• Which hours of the day will use-limited RA resources be applied for? 

• What percentage of non-RA resources are available to the market and how will CAISO estimate non-RA resources for the Advisory RSE? 

• What percentage of short-term contracts at the interties are purchased daily in the DA?   

This additional data could provide stakeholders with a clearer understanding of the accuracy of the method used to estimate supply for the Advisory RSE. Furthermore, it could provide insight into the quantity (in MW) of non-RA and intertie resources that CAISO would need to develop a methodology for estimating, given the absence of a Must-Offer Obligation for those resources. This information could enhance transparency and foster informed decision-making among stakeholders. 

Additionally, CAISO's proposal does not provide information concerning the methodology for estimating non-RA resources as part of the 9am Advisory RSE. SCE recommends that CAISO estimate all non-RA resources that are not on outage for the estimation, based on historical availability and performance. This would provide a more realistic picture of the potential supply that could be procured in the real-time market and avoid underestimating or overestimating the shortfall. SCE also requests CAISO clarify how it would estimate short-term contracted power at the interties that don’t have bids in by 9am. CAISO should detail the process for estimating these contracts and their impact on the RSE. These enhancements would further increase the accuracy and transparency of the RSE and help stakeholders make informed decisions. 

4. Please provide your organization’s comments on the proposed method of accounting for Reliability Demand Response Resources (RDRR) in the day-ahead time frame. In addition, please explain other potential appropriate uses for RDRR in reducing scarcity pricing:

SCE endorses CAISO’s proposed methodology for accounting for RDRR in the day-ahead timeframe. SCE believes that treating RDRRs as a load modifier is the most logical approach. Mandating RDRRs to bid in the day-ahead for the resource to be counted towards the RSE could lead to unintended consequences, such as exposing the resource to potential economic dispatch rather than preserving it as a last-resort emergency resource. This could also result in RDRRs being dispatched to support economic exports when it should be reserved for California’s reliability. 

As mentioned under question #2, SCE advocates for the consistent application of RDRRs as a load modifier when the 9am RSE results indicate an expected upward shortfall. The RDRR load modifier should be implemented before any curing activities are undertaken. SCE suggests that CAISO develop a process to notify market participants when a failure is anticipated after the 9am Advisory RSE results. This enhancement should be a live notification to market participants, rather than a report in OASIS. CAISO could utilize many existing systems to inform market participants in real-time of a failure. It should be explicitly clear to market participants if CAISO plans to account for RDRRs before any curing event occurs. SCE recommends that CAISO include language in the next proposal that provides this clarity. The current proposal contains discretionary language regarding when RDRRs will be applied, which creates too much uncertainty.

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

As mentioned under question #2, SCE believes that Short-Start Strategic Reliability Reserves should be provided with the same opportunity as RDRRs to count as a load modifier for the EDAM RSE test since both resource types have the same dispatch criteria. SCE agrees with CAISO that Long-Start Strategic Reliability Reserves should count towards the Advisory RSE if bid-in before the 9am deadline.   It is unclear what the lead times (start-up times) are for the Long-Start resources listed in the proposal.   If there are any resources that can be exceptionally dispatched before the 10am day-ahead deadline then CAISO should consider those resources for curing potential RSE shortfalls.

6. Please provide your organization’s comments on the need for additional incentives for tagging cleared day-ahead imports:

SCE supports CAISO’s proposal to continue to monitor to determine if incentives are needed.  If CAISO observes that there are repeat offenders that are not tagging cleared day-ahead imports, then CAISO could develop a penalty structure that would hold that market participant accountable.  The penalty would increase each time the same market participant commits an offense.  More details of incentives could be developed later if CAISO finds there is a need.   

7. Additional comments:

SCE does not have any additional comments.

1. Please provide a summary of your organization’s comments on the Day-Ahead Sufficiency straw proposal:

The Energy Authority (TEA) appreciates the opportunity to provide feedback on the CAISO’s Day-Ahead (DA) Sufficiency straw proposal. TEA believes that the CAISO’s straw proposal largely represents a balanced, reasonable approach to implementing the EDAM RSE for the CAISO BAA, while waiting for lessons learned during market simulation and in the transitionary period of initial market operation to inform future adjustments. TEA wishes to underscore the importance of this initiative for the EDAM as a whole as while it is focused on the CAISO’s operationalizing of the EDAM RSE for its own BAA, the decisions the CAISO makes will undoubtedly be seen as somewhat precedential for the other EDAM BAs as they develop their own solutions. TEA therefore requests that as the CAISO moves toward a final proposal, it updates the WEIM Governing Body, WEIM GB Market Expert, and the EDAM community as a whole not only on the outcomes of the policy decisions but on the considerations that were weighed, as doing so should help each of the EDAM BAs when working on what will hopefully be mostly harmonized business practices and/or tariff revisions for their own areas explaining how they will work with their own internal, affected parties to achieve similar ends.

2. Please provide a summary of your organization’s comments on the May 13, 2024 stakeholder call discussion:

TEA was not able to attend the call live but did review the recording. TEA appreciated the robust stakeholder engagement, as well as CAISO’s openness in acknowledging the limits of what can be achieved within the scope of this initiative – that the EDAM RSE mechanics and the DA market enhancements being implemented are firmly-set policy at this point that have to be worked with as-is, and that the CAISO is not looking to bring multiple other initiatives’ scope into this initiative. A number of good considerations were raised though that are clearly in scope for this effort and TEA shares its perspective on each below.

3. 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 CAISO’s approach to estimating supply availability is reasonable when taken within the constraints of the EDAM RSE design. As was acknowledged during the EDAM development process, the EDAM RSE is a simple stacking of resources against an hourly requirement profile, not a robust, locationally-constrained assessment of likely RT market outcomes. It is not intended to be a substitute for RA programs, nor is it intended to drive long-term resource investments or procurement activity. And it will always be limited in its accuracy on both the requirement and supply sides of the ledger given the simplicity of its spot-check methodology. With that in mind, the most important elements to consider are whether the counting the CAISO develops can be done consistently from day to day, whether the counting norms can be replicated by the other EDAM BAAs, and whether the calculation of the RSE requirement applied can be performed with similar levels of accuracy across all EDAM BAAs. From TEA’s perspective, CAISO’s straw proposal has attempted to fit some of CAISO and California’s unique programs into a counting methodology that can be replicated by other EDAM BAs while considering their own unique scenarios around demand response programs, emergency resources, and the like, and therefore is pointed in the right direction at this time. 

4. Please provide your organization’s comments on the proposed method of accounting for Reliability Demand Response Resources (RDRR) in the day-ahead time frame. In addition, please explain other potential appropriate uses for RDRR in reducing scarcity pricing:

The CAISO’s proposal is reasonable and appears to stay within the bounds of what can and currently cannot be done with RDRRs, and allows other EDAM BAAs with similar programs to develop similar counting rules. TEA believes that scarcity pricing policy should continue to be addressed within the Price Formation Enhancements initiative so that it stays within the proper governance categorization and can be weighed by all stakeholders, and to the extent there are concerns about the interaction of RDRR with market pricing or bidding rules, that would be the appropriate forum to raise them in.

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

The CAISO’s proposal is reasonable and fits with TEA’s understanding of the drivers for development and intended use of these resources, and also believes the proposal sets a good benchmark for other EDAM BAs to consider unique “emergency resource” needs in their own EDAM RSE counting policy. Bidding rules and Price Formation related considerations for SRR Resources should be considered in other initiatives as the EDAM RSE is not about economics and market efficiency, it is about making a simple assessment of resource availability. 

6. Please provide your organization’s comments on the need for additional incentives for tagging cleared day-ahead imports:

TEA does not believe that additional incentives for tagging cleared DA imports (or exports for that matter) are needed at this stage as there is not evidence of a problem at this time. Should issues develop in the future following market go-live, policy adjustments could be made relatively easily.

7. Additional comments:

TEA supports the CAISO’s intention to develop alternatives to the “exceptional dispatch” approach to curing expected RSE shortfalls in the RA Modeling and Program Design working group effort.

______________________

About TEA: The Energy Authority is a public power-owned, nonprofit corporation that as a national energy marketing company, evaluates challenges, manages risks, and executes solutions to help its clients maximize the value of their assets and respond competitively in the changing energy markets. TEA partners with over 60 public power clients, managing approximately 30,000 MW of peak load and 24,000 MW of generation in North America’s organized and bilateral wholesale energy markets. TEA’s Western Interconnect partners are directly engaged in and impacted by the CAISO’s existing and evolving day-ahead and real-time energy markets.