Comments on Jan 22. Discussion on Uplift & Default Energy Bids (DEB), Outage Management, and State-of-Charge Management

1. Please provide a summary of your organization’s comments on the January 22, 2026 stakeholder meeting.

ACP-California appreciates CAISO’s continued engagement through the Storage Design and Modeling (SDM) initiative and the January 22 working group discussion covering uplift and Default Energy Bids (DEB), outage management, nonlinearity, and state-of-charge (SOC) management.

Overall, ACP-California supports:

• Continued advancement of a modeled solution to address nonlinearity (foldback);
• A thoughtful review of the bid cost recovery (BCR) paradigm as it applies to storage resources; and
• Further development of the Energy Storage Resource (ESR) model concept to better align dispatch instructions and bids with SOC-dependent operating characteristics.

At the same time, we emphasize the importance of grounding future discussions in increasingly concrete proposals, supported by analysis and data, to ensure that stakeholder engagement remains productive and implementation-focused.

2. Please provide your organization’s comments on the initiative’s timeline for 2026, including the cadence and length of the meetings scheduled.

ACP-California supports the overall timeline and cadence outlined in the meeting and we look forward to papers and proposals on the various topics included in the initiative.

As the initiative progresses, ACP-California encourages CAISO to ensure that stakeholder meetings increasingly focus on specific, well-defined design options rather than high-level conceptual framing. Given the technical nature of storage modeling and uplift reform, advancing concrete proposal language, implementation concepts, and example use cases will be critical to meaningful stakeholder feedback and timely completion of this initiative.

3. Please provide your organization’s comments on the next steps related to nonlinearity, particularly on the potential modeled solution based on Master File values presented by the ISO.

ACP-California appreciates CAISO’s recognition of the value of pursuing a modeled solution to represent foldback/nonlinearity. In particular, we thank CAISO for moving away from the previously proposed 2025 “clarification” approach that would have required resources to reflect only the range unaffected by foldback in the Master File. That clarification approach would have functioned as a blunt instrument and would have rendered the foldback range effectively invisible in the Master File, reducing transparency and potentially distorting the ability of storage resources to participate with their full capabilities in the market. We appreciate the CAISO’s responsiveness to stakeholder feedback on this matter.

We further support CAISO’s decision to instead pursue a modeled solution based on Master File parameters, even if that solution can’t be implemented until Spring 2027. Ultimately, a solution that explicitly incorporates nonlinearity into the feasible operating parameters is a more durable and transparent approach, and, importantly, is an approach that accurately reflects and values the resources that have already accounted for foldback. Moving to a modeled solution as quickly as feasible is important to avoid prolonged reliance on manual workarounds and to better align market dispatch with the physical characteristics of storage resources. And, in the interim, while that solution is developed, stakeholders can further discuss the appropriate outage card treatment for foldback. ACP-California understands CAISO’s general position is that such outages should generally be subject to RAAIM but looks forward to discussing this more in the RAMPD initiative.

4. Please provide your organization’s comments on the review and discussion of the current bid cost recovery paradigm, particularly on the discussion questions put forth and on whether and how specific elements of the current paradigm should be considered in a future storage uplift framework.

ACP-California appreciates CAISO’s review of the existing BCR construct and discussion around potential changes for storage resources. We agree that the current BCR paradigm was designed with conventional thermal resources in mind and that certain elements may not map cleanly onto storage resources.

In our last comments, ACP-California recommended against spending limited CAISO resources on BCR issues at this time. And, as noted in our past comments, we recommend that if CAISO seeks to address uplift issues it may make sense to focus on improving DEBs for storage.

That said, if CAISO continues to move forward with BCR-related issues ACP-California encourages CAISO to provide additional justification and empirical analysis before proposing significant changes to storage BCR eligibility or structure.  Additionally, CAISO’s analysis should include a review of BCR eligibility and structure for all eligible resources – storage resources as well as conventional thermal resources, to ensure any market design changes support market operations based on true market fundamentals vs. selective compensation for only conventional thermal resources.

5. Please provide your organization’s comments on the overview of the energy storage resource (ERS) model concept and its benefits.

ACP-California appreciates CAISO’s overview of the conceptual ESR model. We are interested in exploring this concept further. The benefits outlined – particularly improved SOC constraint enforcement and more realistic bid submission aligned with operational costs – could prove to be useful. However, more information is needed, and stakeholders would benefit from more information on the proposal and its functionality as the process moves forward.

6. Please provide any additional comments, feedback, or examples. please upload examples or data using the Attachments field below.

N/A

1. Please provide a summary of your organization’s comments on the January 22, 2026 stakeholder meeting.

The California Community Choice Association (CalCCA) appreciates the opportunity to comment on the January 22, 2026, stakeholder meeting. The comments herein recommend, in summary, that the CAISO:

• Continues efforts to develop a modeled solution for reflecting foldback as soon as feasible;
• Considers a storage bid cost recovery (BCR) framework that provides uplift when it is warranted and minimizes opportunity for strategic bidding to inflate BCR payments, rather than fitting storage into the existing BCR mechanism designed for conventional thermal assets; and
• Continues to explore the energy storage resource (ESR) model concept with stakeholders in this working group.

2. Please provide your organization’s comments on the initiative’s timeline for 2026, including the cadence and length of the meetings scheduled.

CalCCA has no comments at this time.

3. Please provide your organization’s comments on the next steps related to nonlinearity, particularly on the potential modeled solution based on Master File values presented by the ISO.

CalCCA appreciates the CAISO’s commitment to addressing nonlinearity through a modeled solution, rather than through the clarification discussed in the previous iteration of the CAISO’s proposal. That previous iteration would result in the market being unable to access the foldback range at any time. A modeled solution to reflect foldback in the market is the most durable approach to reflecting non-linearity going forward.

CalCCA’s interest in this discussion is grounded in ensuring that California’s resource adequacy (RA) framework functions as intended, maintains investor confidence in storage, and preserves the reliability benefits of the state’s rapidly growing battery fleet. CalCCA understands the CAISO plans to address related RA issues within the Resource Adequacy Modeling and Program Design (RAMPD) initiative and agrees that there remain open RA-related issues related to nonlinearity. Within the RAMPD initiative, the CAISO should consider its previous comments on nonlinearity as it relates to reflecting nonlinearity in the RA qualifying capacity value,[1] the RA availability incentive mechanism, and unforced capacity (UCAP) values.[2]

Specifically, the CAISO should allow a resource to show up to its Pmax provided the sum of the energy in each hour shown does not exceed the capability of the resource when foldback occurs. Given that the California Public Utilities Commission (CPUC) has moved to an hourly RA structure, and a storage resource can provide up to its Pmax in the four hours of its discharge, the CAISO should allow the resource to show its full capacity subject to its energy limitation. If this requires a change in the CAISO tariff, the CAISO should proceed with a tariff filing at the Federal Energy Regulatory Commission to effectuate necessary changes that properly reflect the reliability contributions of storage while recognizing energy limitations. In addition, the CPUC and CAISO should ensure that if foldback is accounted for in the qualifying capacity value, it is not also counted against a resources UCAP value, and vice versa.   

[1]            CalCCA Comments on Nov 12 Hybrid Meeting, Working Group Session 10

(Nov. 26, 2025), https://stakeholdercenter.caiso.com/Comments/AllComments/7ebde4c4-2e11-413b-a307-d130a5313c5c#org-c6b84df7-a546-4955-b92b-0db4d501d19c.

[2]            CalCCA Comments on Revised Straw Proposal on Outage Management (Sept. 5, 2025), https://stakeholdercenter.caiso.com/Comments/AllComments/a35d7182-e62e-4559-93c0-80ede736ceba#org-a3c4805c-db85-45ec-b58c-a9ccff090a32.

4. Please provide your organization’s comments on the review and discussion of the current bid cost recovery paradigm, particularly on the discussion questions put forth and on whether and how specific elements of the current paradigm should be considered in a future storage uplift framework.

The CAISO asks stakeholders to opine on which BCR eligible costs are the most material for storage resources and whether the current definitions of commitment periods (self-commitment or CAISO commitment) are useful for a future uplift paradigm. CalCCA encourages the CAISO to consider a storage BCR framework that provides uplift when it is warranted and minimizes opportunity for strategic bidding to inflate BCR payments. The CAISO should seek to design a BCR framework that meets these objectives rather than fitting storage into the existing BCR mechanism designed for conventional thermal assets. Unlike conventional thermal resources, opportunity costs incorporated into energy bids materially impact storage resources, while start-up and commitment costs generally do not. As a general principle, negative revenues attributed to market algorithms or CAISO action should warrant uplift, and negative revenues attributed to bidder behavior should not warrant uplift. Therefore, losses resulting from self-scheduling should not be subject to uplift.

The CAISO also asks stakeholders to weigh in on whether the current practice of netting surpluses and losses in day-ahead separately from surpluses and losses in real-time should be maintained for storage. The BCR design should incentivize storage resources to be flexible to changes in real-time conditions relative to day-ahead, rather than assuming the day-ahead market always “gets it right.” Before changing the practice of netting surpluses and losses separately, the CAISO should evaluate how incremental settlement would change this incentive.

5. Please provide your organization’s comments on the overview of the energy storage resource (ERS) model concept and its benefits.

CalCCA appreciates the overview of the ESR model concept. While additional discussion is necessary for CalCCA to take a position on such a model, at present, the concept appears promising for resources for which costs are state-of-charge dependent. The CAISO should continue to explore the concept with stakeholders in this working group.  

6. Please provide any additional comments, feedback, or examples. please upload examples or data using the Attachments field below.

CalCCA has no additional comments at this time.  

1. Please provide a summary of your organization’s comments on the January 22, 2026 stakeholder meeting.

The California Energy Storage Alliance (CESA) appreciates the opportunity to comment on the January 22, 2-26 working group meeting. CESA is appreciative of CAISO decision to develop a proposal to implement modeling of nonlinearity in the market optimization and we look forward to providing comments as the model is documented. CESA does note that the need to review again the current bid cost recovery paradigm and the energy storage resource (ESR) model highlights that the pace and scheduling of this initiative is not optimal. The scope of the Storage Design and Modeling initiative covers a broad range of topics with varying degrees of completeness and consensus.

CESA reiterates its initial comments in this initiative: we “should discuss the foundational changes regarding SOC management and then how the related design considerations such as BCR, DEB, and other design elements need to be modified to support efficient use of storage in the market.”    

2. Please provide your organization’s comments on the initiative’s timeline for 2026, including the cadence and length of the meetings scheduled.

CESA believes that for 2026 to be successful, CAISO should focus its efforts by identifying items that are sufficiently complete, such as the co-located VER follow DOT proposal and documenting those items in a final proposal. CAISO must then prioritize remaining items that will be completed for Governing Body decision this year. CESA recommends the CAISO focus on nonlinearity modeling, holistic review of storage modeling, and developing an appropriate make-whole structure for storage.

CESA also recommends better continuity between meetings. The current schedule is to review Mixed-Fuel & Distribution Level Resources issues, then Outage Management, and then return to Uplift & DEB and SOC Management in May. There are items in each topic group that can impact the design decisions in other topic groups. For example, the SOC management and capacity awards topics are directly related to the storage uplift design. This is why a holistic review of storage is necessary.

3. Please provide your organization’s comments on the next steps related to nonlinearity, particularly on the potential modeled solution based on Master File values presented by the ISO.

CESA is supportive of CAISO developing a proposal to model nonlinearity in the market optimization which builds upon the conceptual framework developed by REV Renewables. Accurately modeling nonlinearity will enhance reliability by enabling CAISO operators to access the full capability of storage even beyond resource adequacy must offer obligation. It will also improve economic efficiency as storage operators who wish to offer beyond their resource adequacy must offer obligation will be able to be awarded both discharging and charging schedules in the foldback region.

CESA supports including two additional parameters in the MasterFile to reflect where a storage resource enters the foldback region limiting the Pmax (LSOC’) and the foldback region limiting the Pmin (USOC’). Storage operators have highlighted that the point at which a resource enters the foldback region can vary based upon operating conditions. The CAISO should consider allowing a single update to either set of parameters through (1) a biddable parameter similar to operational ramp rates or (2) outage reporting with a new nature of work. This will further enhance the reliability and economic efficiency provided by storage resources.

CESA does support ensuring storage resources meet their resource adequacy must offer obligations and should be subject to RAAIM if unable to do so. This will require RAAIM enhancements and should be discussed more broadly in the Resource Adequacy Modeling and Program Design initiative. For example, assume a 100MW / 500 MWh battery which has sold 100 MW of resource adequacy. The resource has registered in Masterfile a LSOC’ of 80 MWh. The resource clearly is meeting the CPUC 4-hour discharge requirements since (500 MWh – 80 MWh) / 4 hours equals 105 MW sustained for four hours. Assume the resource updates it LSOC’ to 100 MWh to reflect current operating conditions. The resource is still meeting its 4-hour discharge requirement. However, if the resource updates the LSOC’ to 120 MWh, it is only capably of discharging at 95 MW over the 4-hour discharge which should subject 5 MW to RAAIM penalties. This example demonstrates that additional logic must be included in the RAAIM market design than currently exists.

4. Please provide your organization’s comments on the review and discussion of the current bid cost recovery paradigm, particularly on the discussion questions put forth and on whether and how specific elements of the current paradigm should be considered in a future storage uplift framework.

CESA continues to believe that a new make-whole payment needs to be developed for storage resources and that the current bid cost recovery (BCR) paradigm is not adequate for storage. The CAISO’s current BCR process ensures scheduling coordinators are able to recover Start-Up Costs (SUC), Minimum Load Costs (MLC), Multi-Stage Generator Resource Transition Costs (TC), Energy Bid Costs, and Ancillary Service (AS) Bid Costs. SUC, MLC, and TC are the primary drivers of revenue shortfalls when the market optimization commits the resource, but system conditions subsequently do not warrant dispatching the resource above Pmin. Energy and ancillary services bids cost are a very minor driver of revenue shortfalls for conventional resources and actually serve to reduce BCR payments because profits are earned when the resource is economically dispatched above Pmin.

It is well established that SUC, MLC, and TC do not apply to storage resources. However, the modeling of SOC can have significant impacts on the energy and ancillary services dispatch that warrant a make whole payment. The justification for the make-whole payment is similar to that of conventional resources. If the market optimization has made a dispatch decision that subsequently proves to be uneconomic such that the resource cannot fully recover its costs over the operating day, then it receives a make whole payment.

Another principle of the existing BCR framework for conventional resource is that a resource is eligible for BCR for SUC, MLC, or TC only if the commitment decision was made by CAISO. As noted above, the current definition of commitment period is irrelevant for storage resources since SUC, MLC, and TC do not apply to storage. However, the principle is relevant to a storage make-whole payment design regarding who is responsible for the commitment decision. If CASIO made the commitment decision, then these costs are eligible for BCR consideration. If the resource made the commitment decision, then these costs are excluded BCR calculations. It should be noted that in both cases, energy and ancillary services are included in the BCR calculations. This is because in the vast majority of cases the conventional resource will be dispatched by the market consistent with its energy and ancillary services bids which results in revenue surpluses that offset other BCR costs.

If a conventional resource submits a self-schedule for energy or a self-provision for ancillary services, those intervals are ineligible for BCR because the resource made the decision to schedule the resource. The principle that CESA and a majority of stakeholders support is that storage resources should only be held accountable for shortfalls that are directly caused by the resource itself. In such cases, the resource should not be eligible for a make-whole payment. However, when a shortfall arises due to CAISO actions—such as, forecasting errors, default energy bids that are unable to reflect real-time conditions, limited real-time market optimization horizons, impracticality of settling all market intervals—or from broader shortcomings in market design, then the storage resource should not bear that shortfall. In those cases, the storage resource should remain eligible for a real-time make-whole payment to ensure fairness and proper cost recovery.

5. Please provide your organization’s comments on the overview of the energy storage resource (ERS) model concept and its benefits.

CESA highlights that completing a holistic review of current SOC management under the non-generator resource model will be beneficial to the ERS model. Thus, CAISO should prioritize the holistic review versus continuing to review a new energy storage model. 

6. Please provide any additional comments, feedback, or examples. please upload examples or data using the Attachments field below.

No comment. 

1. Please provide a summary of your organization’s comments on the January 22, 2026 stakeholder meeting.

Comments on Storage Design and Modeling

Working Group Presentation on January 22, 2026

Department of Market Monitoring

February 17, 2026

Summary

The Department of Market Monitoring (DMM) appreciates the opportunity to comment on the Storage Design and Modeling working group presentation held on January 22, 2026.[1]

DMM supports the ISO addressing storage bid cost recovery (BCR) issues and enhancements to the storage default energy bid (DEB) as top priorities. DMM recommends the ISO prioritize creating a standardized storage DEB option for Western Energy Imbalance Market resources and implementing software changes to allow DEBs to vary hourly, independent of any proposed revisions to storage BCR.

DMM continues to recommend a default of no BCR eligibility for storage resources, with only narrowly defined exceptions where BCR is necessary to promote efficient bidding and market outcomes for storage resources. The ISO should utilize working group discussions to identify the specific scenarios in which storage resources should receive BCR, rather than discussing the appropriateness of multi-settlement markets for storage resources, or reevaluating the separation of day-ahead and real-time BCR calculations as a means of addressing storage-related issues. DMM recommends that for storage and all other resource types, the ISO retain the current BCR design that nets costs and revenues across day-ahead and real-time markets separately. This structure encourages real-time market participation and best incentivizes resources to submit bids that accurately reflect their real-time operating costs.

DMM also supports improvements to storage modeling. However, this should be a lower priority than addressing storage BCR issues and enhancements to the storage DEB. Any work to improve storage modeling should not delay the ISO addressing these higher priority issues. For specific modeling improvements, DMM supports the development of new Master File parameters for state-of-charge to represent resource nonlinearities, and the long-term proposal to develop a new non-generator resource model to bid based on state-of-charge. These improvements require close attention to interrelated policies. However, if implemented correctly, these improvements will allow storage resources to more accurately reflect their economic value and physical constraints.

Comments

DMM continues to recommend BCR eligibility for storage resources only under specific situations where BCR is deemed appropriate and necessary to support market efficiency. DMM does not recommend broad redesign of the entire BCR framework to solve storage BCR issues.

DMM continues to recommend the ISO develop storage BCR rules that allow no eligibility for BCR by default, and only allow eligibility under certain situations where uplift to storage resources is deemed appropriate and necessary to support market efficiency. DMM further recommends the ISO utilize stakeholder workshops to identify the specific scenarios where storage resources should be eligible for BCR, rather than considering broad changes to the BCR framework to address storage-related issues. DMM believes it is more productive for the working group to focus on developing solutions that allow for storage resources to receive BCR in appropriate situations, rather than discussing possible changes to the existing BCR paradigm that separates day-ahead and real-time costs and revenues. This general design functions effectively for both storage resources and conventional generators.

DMM recommends the ISO continue to separate day-ahead and real-time BCR calculations and consider other solutions to solve the storage BCR issues

DMM does not believe that changing the BCR calculation to net costs and revenues across day-ahead and real-time markets together would resolve the issue of BCR distorting storage bidding behavior. The ISO began netting day-ahead and real-time BCR separately in 2014 to address the fact that suppliers were not properly incentivized to submit bids in the real-time market that reflected their actual marginal operating costs.[2]^,[3]  When costs and revenues were netted together across markets, suppliers saw limited benefit in participating in the real-time market compared to the financial risks.[4] This created potential incentives for suppliers to submit bids solely aimed at preserving their day-ahead schedules, rather than submitting bids that reflected their real-time marginal costs. Separating bid cost recovery calculations across markets eliminated this issue. DMM recommends the ISO establish BCR rules for storage resources that incentivize real-time market participation using bids that reflect real-time marginal costs.

DMM continues to recommend creating a BCR framework for storage resources that incentivizes efficient real-time bidding

DMM maintains that the real-time market is most efficient when all resources, including storage, are incentivized to submit bids that reflect real-time conditions and operating costs. Under the current BCR design, storage resources are not exposed to real-time prices they must pay when buying back a day-ahead schedule due to insufficient state-of-charge (SOC). Therefore, the current BCR paradigm removes incentives for storage resources to reflect real-time costs in bids and fails to incentivize storage resources to bid efficiently in the real-time market. Netting day-ahead and real-time BCR together does not solve this issue, as it would potentially further remove exposure to real-time prices by creating an incentive for storage resources to submit bids aimed at preserving their day-ahead schedule regardless of real-time conditions. While day-ahead schedules are based on an optimization of the entire 24-hour timeframe, it is still important for all resources, including storage, to bid in a manner that allows the market to re-dispatch them efficiently in real-time based on real-time costs and conditions.

There are instances where it would be economic for storage resources to buy back day-ahead schedules in some intervals in order to increase their real-time dispatch in others. This is the case when the benefits of those incremental dispatches exceed the cost of the buybacks. However, because the current BCR paradigm provides uplift to storage resources that uneconomically buy back day-ahead schedules due to insufficient SOC, battery operators are not exposed to the real-time price of those day-ahead buybacks and are therefore not incentivized to submit efficient real-time bids in earlier hours that reflect expectations of later hour real-time prices. However, netting day-ahead and real-time markets together could simply shift the distortion—instead of being indifferent to real-time conditions during hours of day-ahead schedules, storage resources may be actively incentivized to preserve those schedules even when real-time conditions warrant a different dispatch. Storage resources should be incentivized to bid in such a way that takes into account the costs of not providing their day-ahead schedules, as well as the potential revenues that could be gained by different schedules in real-time.

To incentivize bidding behavior that reflects real-time conditions, storage resources must be exposed to the cost of day-ahead buybacks (under most circumstances) and be properly incentivized to participate in the real-time market rather than solely preserving day-ahead schedules. The current BCR paradigm fails to expose storage resources to real-time prices by providing uplift uneconomic buybacks due to insufficient SOC. However, netting day-ahead and real-time together could further remove exposure to real-time prices by incentivizing resources to bid in such a way to preserve day-ahead schedules regardless of real-time conditions. DMM believes the solution to storage BCR issues should ensure storage resources are incentivized to accurately reflect their real-time costs in their real-time bids, which neither the current BCR paradigm nor netting markets together in the BCR calculation accomplish.  

DMM supports improvements to storage modeling, but as a lower priority than addressing storage BCR issues and enhancing the storage default energy bid

The storage design and modeling initiative seeks to address a wide range of topics, including storage BCR, default energy bid enhancements, OMS improvements, and various enhancements to storage resource modeling. As discussed in these comments, DMM supports many of the ISO’s proposed enhancements and other changes proposed in the storage design and modeling initiative. However, we emphasize that many of these proposed changes are time consuming to both develop and implement. The ISO and stakeholders have limited resources and bandwidth which may require allocating resources toward the highest priority items. DMM continues to recommend the ISO place top priority on implementing software changes allowing storage DEBs to vary hourly, and development of a standardized storage default energy bid for storage resources. Pursuit of changes to the modeling of storage resources should only be undertaken to the extent they do not delay these higher priority items and other more detailed enhancements to the storage BCR design that may be appropriate.

DMM supports incorporation of storage nonlinearities in the market model; inaccessible charging and discharging capacity should be subject to RAAIM

In December 2025, the ISO proposed to improve modeling of storage nonlinearities by clarifying that storage resources “should only reflect the range unaffected by foldback [in the] Min/Max Continuous Energy Limit in the ISO’s Master File.”[5] In the subsequent stakeholder meeting, the ISO decided to hold off on the proposed clarification in the storage design and modeling stakeholder process to require resources to limit their SOC range to obviate foldback.[6] However, in the interim the ISO proposed in the California Public Utilities Commission resource adequacy proceeding to update the qualifying capacity calculation methodology to reflect nonlinearities, as proposed in the December 2025 stakeholder meeting.[7] DMM previously supported this proposed change in the storage design and modeling initiative, but supports the shift to make this a policy change in the qualifying capacity calculation versus a clarification in the storage design and modeling stakeholder process. Additionally, DMM continues to support the short-term rule that all power limitations should be reflected in OMS and subject to the resource adequacy availability incentive mechanism (RAAIM).[8]

In the January stakeholder meeting, the ISO proposed a solution to modeling storage resource nonlinearities in the SOC extremes using improvements to Master File, and accompanying modifications to the market model. The proposed solution to modeling nonlinearity uses additional Master File parameters that will scale the charging and discharging capabilities of the resource linearly with SOC. The solution creates an envelope of the operational range for storage resources to ensure feasible dispatches, allowing for full access to the stored energy of the resource.

DMM has long recommended improvements to Master File and storage resource modeling, and supports this improvement to modeling nonlinearities.[9] Further, DMM has cautioned that any changes to storage capacity modeling need to contemplate the interrelated policies around resource adequacy and RAAIM. Any power output limitation on resource adequacy capacity, even if modeled in Master File, should still be subject to RAAIM. The ISO has indicated that RAAIM will be addressed in the Resource Adequacy Program and Modeling Design (RAMPD) initiative.[10] DMM will continue to be an active stakeholder in that process.

Biddable SOC functionality would improve the market model for storage

The ISO is contemplating development of a new non-generator resource (NGR) model for storage resources to allow better representation of their operational and economic characteristics.[11] DMM continues to support the ISO’s development of a new energy storage model that considers variation in cost and operational characteristics by SOC.[12] DMM views this model as a significant improvement in the ability of storage resources to accurately reflect costs and resource limitations applicable to a particular market interval. However, development and implementation of such a model is likely to be time consuming and resource intensive. DMM continues to highlight the importance of working toward such modeling improvements only to the extent it does not delay work on more urgent issues such as the storage BCR issues and default energy bid enhancements referenced earlier in these comments. Addressing these issues first should be the top priority of the ISO, and these issues should receive priority access due to limited resources.

The current model for energy bidding requires storage resources to bid a price-quantity pair based on opportunity costs of an assumed SOC for current and future intervals. Because real-time bids cannot be updated after the bid submission deadline 75 minutes before the operating hour, submitted energy bids remain static even if dispatch changes SOC before the operating hour. This creates potential misalignment between bid assumptions and actual conditions at dispatch. Allowing bids to be submitted in relation to SOC rather than power output would address this timing issue by enabling the market model to translate SOC-based bids into standard price-quantity pairs that more accurately reflect marginal costs at dispatch, given the resource’s SOC. This enhancement would help storage resources avoid issues such as foldback and other SOC related constraints, and improve bid accuracy in representing intraday marginal costs. DMM continues to highlight it will be important that the translation of SOC-based bids to price-quantity bid curves represent marginal costs, not average costs, to ensure consistent price formation across all resource types in the market.[13]^{, [14]}

DMM requests the ISO give careful consideration to the translation of SOC-based bids to the standard price-quantity pair, and provide clear detail on how this will be accomplished in a manner that results in a monotonic non-decreasing bid curve. Assuming the translations of the SOC-based bids can represent marginal costs, and maintain monotonicity, DMM recommends close attention be paid to local market power mitigation (LMPM), particularly in the real-time dispatch (RTD) market. Supposing bids for SOC are translated to a standard bid curve and price-quantity pairs, the LMPM runs will need to modify mitigation as SOC changes. However, in RTD, a bid could be mitigated in an advisory interval and flow through to the binding RTD interval. With the SOC changing between advisory and binding intervals, so could the bid curve. A more appropriate mitigated bid in this instance would consider the mitigated SOC bid applicable to the SOC at the start of that interval, rather than the previous advisory intervals. This would ensure that the market clearing solution in the binding interval accurately reflects the cost of the mitigated energy storage resource at the SOC in that interval of binding schedules, but would require significant changes to the RTD LMPM process.[15]^, [16]

Finally, DMM asks the ISO to consider interrelated policies in the context of this model and the translation of SOC-based bids to price-quantity pairs. Specifically, DMM requests the ISO work through examples of the bid mapping, and demonstrate how these mappings will work for all of the market products, i.e., ancillary services, flex ramp, BCR, and new products introduced by the day-ahead market enhancements (DAME). An example of where this could be of concern is an ancillary service award that has a probability of being dispatched and thus changing the SOC of a resource, and the energy bid price, with the change in SOC. DMM also recognizes there will be overlap with resource adequacy policy, and will be an active stakeholder in the RAMPD policy process in the development of this new NGR model.[17]

[1]  Storage Design and Modeling: Working Group on Uplift and Default Energy Bid, Outage Management, and State-of-Charge Management presentation, California ISO, January 22, 2026: https://stakeholdercenter.caiso.com/InitiativeDocuments/Presentation-Storage-Design-Modeling-Jan-22-2026.pdf

[2] 2014 Annual Report on Market Issues and Performance, Department of Market Monitoring, June 2015, p 67: https://www.caiso.com/Documents/2014AnnualReport_MarketIssues_Performance.pdf

[3] Draft Final Proposal - Renewable Integration: Market and Product Review Phase 1, California ISO, November 4, 2011: https://www.caiso.com/documents/draftfinalproposal-renewableintegrationmarket-productreviewphase1.pdf

[4] ISO Board of Governors Memorandum, Eric Hildebrandt, Director, Market Monitoring, December 8, 2011: https://www.caiso.com/documents/department_marketmonitoringupdatedec2011.pdf

[5]  Storage Design and Modeling: Working Group on Outage Management, Uplift & DEB, and Mixed-Fuel & Distribution-Level Resources presentation, California ISO, December 4, 2025: https://stakeholdercenter.caiso.com/InitiativeDocuments/Presentation-Storage-Design-and-Modeling-Dec-4-2025.pdf

[6]  Storage Design and Modeling: Working Group on Uplift and Default Energy Bid, Outage Management, and State-of-Charge Management presentation, California ISO, January 22, 2026: https://stakeholdercenter.caiso.com/InitiativeDocuments/Presentation-Storage-Design-Modeling-Jan-22-2026.pdf

[7]  Comments of the California Independent System Operator Corporation on Order Instituting Rulemaking, California ISO, CPUC R.25.10.003, November 4, 2025: https://docs.cpuc.ca.gov/PublishedDocs/Efile/G000/M586/K273/586273752.PDF

[8]  Comments on Storage Design and Modeling Working Group Presentation on November 12, 2025, Department of Market Monitoring, November 26, 2025: https://www.caiso.com/documents/dmm-comments-on-storage-design-and-modeling-nov-12-2025-working-group-presentation-nov-26-2025.pdf

[9]  Ibid.

[10]  Storage Design and Modeling: Working Group on Uplift and Default Energy Bid Working Group on Uplift & DEB, Outage Management, and State-of-Charge Management presentation, California ISO, January 22, 2026: https://stakeholdercenter.caiso.com/InitiativeDocuments/Presentation-Storage-Design-Modeling-Jan-22-2026.pdf

[11]  Ibid.

[12]  Comments on Storage Design and Modeling Working Group Session 1, Department of Market Monitoring, January 8, 2025: https://www.caiso.com/documents/dmm-comments-on-storage-design-and-modeling-working-group-session-dec-11-2024-jan-8-2025.pdf

[13]  Ibid.

[14] Comments on Energy Storage Enhancements Revised Straw Proposal, Department of Market Monitoring, April 7, 2022: https://www.caiso.com/documents/dmm-comments-on-energy-storage-enhancements-revised-straw-proposal-apr-7-2022.pdf

[15] Ibid.

[16]  Comments on Storage Design and Modeling Working Group Session 1, Department of Market Monitoring, January 8, 2025: https://www.caiso.com/documents/dmm-comments-on-storage-design-and-modeling-working-group-session-dec-11-2024-jan-8-2025.pdf

[17]  Ibid.

2. Please provide your organization’s comments on the initiative’s timeline for 2026, including the cadence and length of the meetings scheduled.

Please see the PDF attached below the final question for DMM's fully formatted complete set of comments. For the reader's convenience, the complete text of the comments is pasted in response to #1, but there may be some formatting errors.

3. Please provide your organization’s comments on the next steps related to nonlinearity, particularly on the potential modeled solution based on Master File values presented by the ISO.

Please see the PDF attached below the final question for DMM's fully formatted complete set of comments. For the reader's convenience, the complete text of the comments is pasted in response to #1, but there may be some formatting errors.

4. Please provide your organization’s comments on the review and discussion of the current bid cost recovery paradigm, particularly on the discussion questions put forth and on whether and how specific elements of the current paradigm should be considered in a future storage uplift framework.

Please see the PDF attached below the final question for DMM's fully formatted complete set of comments. For the reader's convenience, the complete text of the comments is pasted in response to #1, but there may be some formatting errors.

5. Please provide your organization’s comments on the overview of the energy storage resource (ERS) model concept and its benefits.

Please see the PDF attached below the final question for DMM's fully formatted complete set of comments. For the reader's convenience, the complete text of the comments is pasted in response to #1, but there may be some formatting errors.

6. Please provide any additional comments, feedback, or examples. please upload examples or data using the Attachments field below.

Please see the PDF attached below the final question for DMM's fully formatted complete set of comments. For the reader's convenience, the complete text of the comments is pasted in response to #1, but there may be some formatting errors.

1. Please provide a summary of your organization’s comments on the January 22, 2026 stakeholder meeting.

 No comment.

2. Please provide your organization’s comments on the initiative’s timeline for 2026, including the cadence and length of the meetings scheduled.

NV Energy appreciates CAISO presenting a full schedule, while tentative, for the initiative and supports the current schedule.  However, NV Energy remains cautious about whether the appropriate amount of time is scheduled in each meeting for effective stakeholder discussion.

3. Please provide your organization’s comments on the next steps related to nonlinearity, particularly on the potential modeled solution based on Master File values presented by the ISO.

NV Energy appreciates CAISO acknowledging stakeholder concerns regarding CAISO’s initial clarification on available State of Charge (SOC) unaffected by foldback and pivoting toward a modeled solution based on Master File data.  NV Energy supports the use of Master File parameters to represent the unique characteristic of foldback range.

NV Energy seeks clarification if the foldback modeled solution extends to the Extended Day-Ahead Market and how the proposed modeled solution affects EDAM RSE.

4. Please provide your organization’s comments on the review and discussion of the current bid cost recovery paradigm, particularly on the discussion questions put forth and on whether and how specific elements of the current paradigm should be considered in a future storage uplift framework.

 No comment.

5. Please provide your organization’s comments on the overview of the energy storage resource (ERS) model concept and its benefits.

NV Energy is not opposed to the ESR model at this time.  However, NV Energy requests that CAISO present more detailed examples to better understand how the concept would work within the markets.  Likewise, NV Energy asks CAISO to include examples of how the ESR model will interact with other market elements, such as imbalance reserves and flexible ramp products.

6. Please provide any additional comments, feedback, or examples. please upload examples or data using the Attachments field below.

No comment.

1. Please provide a summary of your organization’s comments on the January 22, 2026 stakeholder meeting.

Pacific Gas & Electric (PG&E) appreciates the opportunity to comment on the ISO’s last working group meeting. PG&E’s feedback can be summarized in three key points: 

• PG&E supports prioritizing further development of the REV Renewables’ foldback proposal. There appears to be a consensus that a detailed version of the proposal could conclusively deal with the issue of foldback in battery dispatch, and we believe that a final proposal for nonlinearity under state-of-charge (SOC) management is achievable in the updated timeline. 

• PG&E believes the ISO should deprioritize the discussion on default energy bids (DEB) and uplift mechanisms until extended day-ahead market (EDAM) experience provides guidance on changes, if any are deemed necessary. Specifically, PG&E believes policy development on the BCR paradigm will be heavily influenced by the EDAM and day-ahead market enhancements (DAME) provision of quality data and a better understanding of the changing market dynamics.  

• Development of the energy storage resource (ESR) model is not urgent. While this model might be import in the long-run, the need is not urgent. Conceptual changes to a storage model (that incorporates SOC-based bidding) are supported, but any further development on the ESR model should be delayed or slowed down until additional EDAM experience and there is a clearly announced stakeholder desire for implementation of it. 

2. Please provide your organization’s comments on the initiative’s timeline for 2026, including the cadence and length of the meetings scheduled.

PG&E believes that the updated timeline may not allow stakeholders the time necessary to thoroughly evaluate the analytic framework of non-linearity, the bid cost recovery paradigm, and the conceptual ESR model. The latest CAISO roadmap has this initiative reaching a final proposal and approval by the end of the year. While this may be possible on a subset of the issues, it seems insufficient time to address all the issues.   

PG&E still sees the storage design and modeling (SDM) initiative as appropriately focused on addressing interrelated challenges for adequate storage participation in the wholesale market. As documented in the issue paper, these challenges include reducing incentives for uplift-seeking behavior, development of SOC management to reduce infeasibilities, and DEB constructs to improve representation of real-time opportunity costs.   

We believe that separating and prioritizing these concepts within the SDM initiative will lead to more efficient policy development. This results in prioritizing further development of the modeled solution on nonlinearity based on REV Renewables’ foldback proposal. There appears to be a consensus that a version of it would conclusively deal with the issue of foldback in battery dispatch, and we believe that a final proposal is achievable in the updated timeline.  We believe that the discussion on the DEB, uplift, and the ESR model should be deprioritized as solutions are not possible in the near-term, given the complexities of the issues and lack of consensus among stakeholders. 

PG&E sees the SDM initiative as appropriately focused on addressing interrelated challenges for adequate storage participation in the wholesale market. As documented in the issue paper, these challenges include reducing incentives for uplift-seeking behavior, development of a better representation of SOC management to reduce infeasibilities, and default-energy bid constructs to improve representation of real-time opportunity costs. 

3. Please provide your organization’s comments on the next steps related to nonlinearity, particularly on the potential modeled solution based on Master File values presented by the ISO.

PG&E supports prioritizing further development of the REV Renewables’ foldback proposal. As a next step, PG&E requests detailed technical paper(s) describing the proposed modeled solution and moving towards a straw proposal in line with the current initiative timeline. The proposed linearization of foldback builds SOC limits directly into dispatch, and this should reduce infeasible awards that later trigger Resource Adequacy Availability Incentive Mechanism (RAAIM) penalties or real-time corrections by allowing battery storage to show reliable delivery given their SOC and not just nameplate capacity. Overall, we support the proposed nonlinearity breakpoints based on MF values. Within this proposal, we emphasize a need for a clear mathematical description of the breakpoints and foldback relations, and the interaction of the foldback model with other NGR market rules.   

Furthermore, there are several unanswered questions related to this modeled solution that PG&E would appreciate are addressed in the technical paper(s) before stakeholders can evaluate implementation of feasibility and cost impacts. These include, but are not limited to: 

1. How will the nonlinearity breakpoints, reduced Pmax/Pmin values, and SOC-dependent feasibility regions be incorporated into the MF? 

1. Are these breakpoints going to be statically determined from Pmax/Pmin values (i.e. as a percentage), or will they be different across resources? 

2. How would outage cards interact with the foldback parameters? Are outage cards necessary under this proposal? 

3. Should there be a foldback model in the DA market?  

1. Of the many considerations with incorporating nonlinearity foldback constraints into the DA market, the most succinct issue is whether the current severity of DA infeasibility (and even strategic behavior) justifies the additional modeling and computational complexity required for adequate implementation? 

4. Please provide your organization’s comments on the review and discussion of the current bid cost recovery paradigm, particularly on the discussion questions put forth and on whether and how specific elements of the current paradigm should be considered in a future storage uplift framework.

PG&E supports continued development, but we believe the ISO should deprioritize the discussion on default energy bids and uplift until the EDAM, and DAME products, provision quality data and a better understanding of the changing market dynamics. We believe that stakeholders are far from consensus on DEB and uplift issues and that further discussions are necessary. As stated in our comments to December 4th working group meeting, the objectives of bid cost recovery reforms (or “make whole”) should meet the following criteria:  

1. Mitigation to a DEB that fairly represents each battery’s true opportunity costs, with some consideration for the fact that batteries include opportunity costs in their bids representing values beyond the CAISO’s market horizons; and  

2. Out-of-merit dispatch that results in negative net revenues should, in general, be compensated, irrespective of the CAISO’s rationale for such dispatch. 

As such, batteries’ true opportunity costs are SOC-dependent and relate to the existing BCR paradigm using the Energy and AS bid costs. In addition, the implementation of imbalance reserves will add SOC-dependent opportunity costs. Regarding the concept of netting BCR across markets, PG&E believes comments on uplift mechanisms are better suited for after implementation of EDAM and should be deprioritized in the near-term.   

5. Please provide your organization’s comments on the overview of the energy storage resource (ERS) model concept and its benefits.

PG&E appreciates the ISO’s efforts to explore an ESR model that more explicitly reflects SOC–dependent operating characteristics. However, we do not see an urgent need for development of the ESR model in the near term. The potential benefits of an ESR model depend significantly on how it interacts with existing market constructs, including interval granularity coordination and nonlinearity. Further clarity on these interactions would help stakeholders more fully assess the value of the ESR concept. Given these complexities, we believe that development of this model should be delayed or slowed down until there is a clearly expressed stakeholder desire for implementation of it.    

6. Please provide any additional comments, feedback, or examples. please upload examples or data using the Attachments field below.

We recognize that consideration of real-time (RT) ancillary service (AS) re-optimization is a long-term effort, but we believe it has the potential to improve overall market efficiency. PG&E requests that the ISO provide additional detailed analysis which evaluates the potential role of RT AS re-optimization for storage resources.  We believe that AS re-optimization has the potential to mitigate SOC-driven infeasibilities in RT by allowing for resources to sellback AS awards when SOC conditions, or price opportunity costs, present themselves. The current framework, without RT AS re-optimization, treats AS awards as constraints when there may be opportunities to improve overall market efficiency for both market participants and the CAISO system as a whole. Some questions we hope this analysis could provide more information on include: 

1. How frequently do fixed DA AS awards materially constrain RT SOC feasibility for storage resources and under what system conditions are these constraints most binding? 

2. What comparisons result with, and without, RT AS re-optimization on outcomes such as dispatch feasibility, SOC deviations, energy/AS prices, and uplift payments? 

1. Please provide a summary of your organization’s comments on the January 22, 2026 stakeholder meeting.

Portland General Electric (“PGE”) appreciated the January 22 working group discussion and views the meeting as marking a constructive shift in the initiative’s direction, particularly with respect to the treatment of storage nonlinearity. The ISO’s movement away from approaches that would suppress portions of a storage resource’s physical capability in market optimization, and toward solutions that preserve access to the full operating range while improving how nonlinearity is represented, is a positive development.

PGE supports continued exploration of solutions that rely on more accurate and transparent representation of resource characteristics (particularly through Master File parameters) rather than blunt exclusions or capacity-withholding mechanisms. PGE also appreciated the clearer separation of nonlinearity modeling considerations from California-specific resource adequacy policy constructs, which will help ensure that modeling improvements for storage do not create unintended market or operational distortions.

In summary, PGE found the January 22 discussion helpful in framing the distinction between near-term guidance and longer-term design evolution and looks forward to continued engagement as the ISO refines its proposals.

2. Please provide your organization’s comments on the initiative’s timeline for 2026, including the cadence and length of the meetings scheduled.

PGE supports the initiative timeline as previewed by CAISO staff.

Whenever possible, PGE asks that stakeholder meetings be scheduled for either the morning or the afternoon, rather than scheduled for the entire day, even if it requires splitting one topic into two sequential working group meetings.

3. Please provide your organization’s comments on the next steps related to nonlinearity, particularly on the potential modeled solution based on Master File values presented by the ISO.

PGE supports continued development of a Master File–based approach to representing storage nonlinearity and views this direction as a more durable and principled solution than approaches that rely on excluding state-of-charge (“SOC”) ranges from optimization or routine use of outage cards. Improving how nonlinearity is reflected through resource-specific parameters has the potential to enhance dispatch feasibility and consistency across the storage fleet while preserving access to the full physical operating range in market optimization.

More generally, PGE believes that solutions which embed nonlinearity representation directly into modeling inputs are preferable to operational workarounds, particularly where nonlinearity is a predictable and recurring characteristic rather than a discrete outage condition. A Master File–based approach could reduce reliance on mechanisms that were not designed to convey nuanced, SOC-dependent behavior.

At the same time, PGE recognizes that further clarification will be needed regarding governance and implementation of any new Master File parameters, including how such data would be validated, updated, and applied consistently across market timeframes. PGE encourages the ISO to continue developing this concept in a staged manner, in coordination with the stakeholder community.

As the ISO evaluates potential design options, PGE suggests that it may be worthwhile to explore whether foldback inputs could scale as a function of SOC percentage rather than fixed energy thresholds expressed in MWh. Anchoring representation to SOC percentages may provide a more flexible way to approximate performance degradation across changing operating conditions, cell degradation, and partial outages. PGE offers this as a concept for consideration and welcomes further discussion on its feasibility and potential tradeoffs.

4. Please provide your organization’s comments on the review and discussion of the current bid cost recovery paradigm, particularly on the discussion questions put forth and on whether and how specific elements of the current paradigm should be considered in a future storage uplift framework.

PGE appreciates the ISO’s effort to revisit the existing bid cost recovery (“BCR”) framework for storage resources and to begin articulating guiding principles for a future, storage-specific uplift construct. PGE understands and agrees that the current BCR paradigm was developed primarily for conventional generation, and that increased storage participation warrants a careful reassessment of whether existing mechanisms continue to produce efficient incentives.

At this stage, PGE views the discussion as primarily exploratory and is focused on understanding the underlying drivers of BCR payments for storage, as well as the potential interactions between bidding behavior, SOC management, and uplift eligibility. PGE supports the ISO’s emphasis on distinguishing between (1) negative revenues attributable to market design or ISO actions versus (2) those driven by participant bidding decisions.

As an EIM and future EDAM entity preparing for increased storage participation, PGE is not yet prepared to take a definitive position on specific elements of a future storage uplift framework. PGE encourages the ISO to continue developing the analytical foundation for this topic, including transparent data and clear problem statements before advancing toward concrete design proposals.

5. Please provide your organization’s comments on the overview of the energy storage resource (ERS) model concept and its benefits.

PGE appreciates the ISO’s overview of the Energy Storage Resource (“ERS”) model concept and at a high level understands it as a longer-term modeling direction. At this stage, PGE staff will need to develop a clearer understanding of the ERS framework and its potential benefits.

PGE’s near-term focus remains on achieving a durable resolution to the nonlinearity issue and on the ongoing review of storage uplift and bid cost recovery constructs, which have more immediate relevance for market outcomes and EDAM readiness.

As ERS discussions continue, additional clarity on how the concept would translate into actionable design changes and implementation sequencing would be helpful.

6. Please provide any additional comments, feedback, or examples. please upload examples or data using the Attachments field below.

1. Please provide a summary of your organization’s comments on the January 22, 2026 stakeholder meeting.

REV thanks CAISO for the update at the January 22 meeting and is very supportive of the plan for a nonlinearity modeled solution. REV appreciates CAISO’s collaboration on this effort and looks forward to working on the model details and implementation.

2. Please provide your organization’s comments on the initiative’s timeline for 2026, including the cadence and length of the meetings scheduled.

REV supports timely progress in this initiative, and that may include prioritizing efforts that can be completed in the near-term while continuing discussions for longer-term efforts. The solution for non-linearity, for example, seems to be a near-term effort that could benefit from more stakeholder discussion as CAISO is developing the modeled solution and potential interim measures. REV also requests that meetings follow posting of new information, since meetings to review stakeholder comments do not appear to be as fruitful. It may be helpful to have workshop meetings to brainstorm and discuss potential solutions prior to a paper, and in-person meetings for that effort would be beneficial for discussions.

REV notes that the proposed schedule is already out of date, as two paper posting dates have passed, so requests an updated timeline at the next meeting.

3. Please provide your organization’s comments on the next steps related to nonlinearity, particularly on the potential modeled solution based on Master File values presented by the ISO.

REV greatly appreciates CAISO adopting the proposal for modeling nonlinearity and integrating into the Master File. This modeled solution is a significant step forward and will help storage resources better reflect their capability to CAISO. REV supports this effort and the Spring 2027 implementation timeline, and encourages CAISO to not delay implementation past that date. REV also supports moving the RA impact discussion to the RA initiative.

As CAISO develops the full solution, REV suggests that CAISO consider implementing the breakpoints in SOC where foldback starts as a percentage of the unit rather than as absolute MWh. This will allow for real-time updates on outages to more accurately reflect foldback, given the delay in Master File updates. For example, if by default a 400 MWh resource has a 40 MWh foldback breakpoint (10%), and the site submits an OMS ticket to derate down to 80 MWh, the foldback breakpoint should really now be 8 MWh (10%) not still 40 MWh (50%). However, if MWh breakpoints are required, then CAISO should include the breakpoints in the OMS tickets, not just in the Master File. REV understands a percentage solution may not be possible to meet a Spring 2027 launch, and if that is the case then the MWh solution should be pursued first but the percentage solution should be pursued as a next step upgrade.

If CAISO is not able to implement percentage limits, REV suggests that CAISO consider how to update foldback limits through day-ahead and the real-time bidding. This would allow the most up-to-date information to be sent to CAISO and improve reliability. REV recognizes that this will not be possible by Spring 2027 but suggests a plan for implementation.

4. Please provide your organization’s comments on the review and discussion of the current bid cost recovery paradigm, particularly on the discussion questions put forth and on whether and how specific elements of the current paradigm should be considered in a future storage uplift framework.

REV commented on this topic January 8 and does not have any additional comments than at this time.

5. Please provide your organization’s comments on the overview of the energy storage resource (ERS) model concept and its benefits.

CAISO’s ESR model concept is interesting and REV supports further discussion of this model. While the ESR model can have benefits compared to the NGR model, REV highlights that the NGR model works very well for storage today and enhancements to this model should be continued in parallel to the ESR model to maintain its effectiveness.

6. Please provide any additional comments, feedback, or examples. please upload examples or data using the Attachments field below.

1. Please provide a summary of your organization’s comments on the January 22, 2026 stakeholder meeting.

San Diego Gas and Electric (SDG&E) thanks the CAISO for their work on this initiative and offers the following comments on the January 22, 2026 stakeholder meeting.

2. Please provide your organization’s comments on the initiative’s timeline for 2026, including the cadence and length of the meetings scheduled.

SDG&E appreciates the effort to establish more tangible timelines for different topic groups of this initiative. While we recognize that all dates are tentative until confirmed through a notice in the CAISO daily briefing, it is challenging to weigh in on the cadence and length of meetings or comments when these scheduled dates are frequently postponed. SDG&E suggests prioritizing work that results in concrete technical solutions and progresses those efforts, rather than pursuing accelerated timelines in areas where there is less consensus.

3. Please provide your organization’s comments on the next steps related to nonlinearity, particularly on the potential modeled solution based on Master File values presented by the ISO.

We are supportive of the next steps outlined in the January 22 meeting and agree that a modeled solution to foldback/nonlinearity should be based on information and parameters in the Masterfile. SDG&E looks forward to the inclusion of the modeled solution discussed during the stakeholder meeting in the upcoming paper on outage management.

4. Please provide your organization’s comments on the review and discussion of the current bid cost recovery paradigm, particularly on the discussion questions put forth and on whether and how specific elements of the current paradigm should be considered in a future storage uplift framework.

The review and discussion of the current BCR paradigm was helpful and SDG&E is considering what elements are appropriate to maintain as we take on holistic review of the uplift framework. While we do not submit answers at this time to the discussion questions presented in the January meeting, we reiterate the point made in Question #2 that a Draft Final Proposal on a less consensus driven topic group such as Uplift, DEB, and SOC management may be overly ambitious, especially if analysis from DAME and EDAM market outcomes is to be considered.

5. Please provide your organization’s comments on the overview of the energy storage resource (ERS) model concept and its benefits.

SDG&E is open to the energy storage resource model as a long-term solution to enhancing the storage participation model and looks forward to continued development of this concept.

6. Please provide any additional comments, feedback, or examples. please upload examples or data using the Attachments field below.

No comment.

1. Please provide a summary of your organization’s comments on the January 22, 2026 stakeholder meeting.

Southern California Edison (SCE) appreciates the opportunity to comment on the January 22, 2026 stakeholder meeting on storage design and modeling. SCE’s comments are summarized as follows: 

Initiative Timeline and Process: 
SCE supports the proposed 2026 timeline, meeting cadence, and shorter half-day meeting format, which provides sufficient opportunity for stakeholder engagement while improving efficiency. 

Storage Nonlinearity and Master File Modeling: 
SCE supports CAISO’s proposal to represent storage nonlinearity through modeled solutions using Master File parameters. SCE agrees that embedding charge and discharge foldback behavior directly in the market optimization is more transparent and durable than relying on outage cards or other administrative mechanisms. SCE requests illustrative examples showing how existing Resource Adequacy and RAAIM requirements would apply under the proposed modeling changes and emphasizes that any changes affecting RAAIM must remain aligned with CPUC-approved Resource Adequacy policy. 

Bid Cost Recovery and Uplift Framework: 
SCE reiterates support for eliminating routine BCR payments for storage, with limited exceptions for clearly defined reliability-driven circumstances such as exceptional dispatch. SCE requests additional data and transparency on the impacts of recent BCR reforms recently implemented. SCE also notes that insufficient information has been provided to evaluate proposals such as netting uplift across market timeframes. 

Energy Storage Resource (ERS) Model Concept: 
SCE views the ERS model concept as a promising approach to better reflect state-of-charge dependent storage operations and bidding behavior. SCE supports continued discussion of the ERS framework while encouraging CAISO to carefully evaluate implementation complexity, interaction with the existing NGR model, and potential impacts on other market systems and designs. 

2. Please provide your organization’s comments on the initiative’s timeline for 2026, including the cadence and length of the meetings scheduled.

SCE supports the timeline, cadence, and length of the meetings for this initiative.   SCE appreciates that CAISO has considered shortening the length of the meetings to half-day meetings as opposed to full-day meetings.

3. Please provide your organization’s comments on the next steps related to nonlinearity, particularly on the potential modeled solution based on Master File values presented by the ISO.

SCE supports CAISO’s proposed next steps to address storage nonlinearity through a modeled solution using Master File parameters. SCE agrees that representing charge and discharge foldback behavior directly within the market optimization is a more transparent and durable approach than reliance on outage cards or other administrative mechanisms. As discussed during the meeting, lithium-ion storage resources, when used near their actual upper and lower SOC, exhibit inherently nonlinear operating characteristics, and embedding these characteristics directly in the Master File improves consistency and allows the market to more accurately reflect the physical ability of a y energy storage resource. Furthermore, this approach provides CAISO with improved visibility into operational capability both within and beyond the foldback region and should provide scheduling coordinators the operational outage fields to reflect realtime temporary de-rates due to resource-level voltage imbalances and the impact on marginal charge/discharge potential. 

To support stakeholder understanding and facilitate a smooth transition, SCE recommends that CAISO provide concrete, illustrative examples showing how today’s RAAIM treatment would apply once nonlinearity is represented through Master File parameters. Concrete examples demonstrating how availability, performance, and compliance would be assessed under current rules—with and without modeled foldback ranges using a defined RA compliance quantity—would help clarify expectations and reduce uncertainty. Such examples would also allow stakeholders to better assess whether additional coordination with the CPUC may be required as the Master File solution is further developed. 

SCE also reiterates its long-standing position that CAISO’s Resource Adequacy Availability Incentive Mechanism (RAAIM) treatment for storage resources must remain aligned with CPUC requirements. Under existing policy, storage resources are expected to deliver the capacity for which they are counted for Resource Adequacy purposes, and deviations that limit delivery are appropriately subject to RAAIM charges. If changes to RAAIM treatment are contemplated in the future as a result of enhanced nonlinearity modeling, these changes must be incorporated into the resource adequacy structure, which must be done by the local regulatory authorities, including the CPUC.  CAISO must then subsequently align RAAIM to the local regulatory authority-approved RA framework. SCE does not support modifying RAAIM treatment solely through CAISO market design absent corresponding changes to the RA program. 

4. Please provide your organization’s comments on the review and discussion of the current bid cost recovery paradigm, particularly on the discussion questions put forth and on whether and how specific elements of the current paradigm should be considered in a future storage uplift framework.

SCE continues to support a fundamental reevaluation of bid cost recovery (BCR) as applied to storage resources, consistent with the view that the existing paradigm was designed primarily for conventional thermal generation and does not translate cleanly to state-dependent storage technologies. SCE reaffirms its longstanding position and support for DMM’s BCR approach which is to eliminate routine BCR payments for storage resources, with limited exceptions for clearly defined circumstances such as exceptional dispatch or other out-of-market reliability actions.   CAISO should move forward with this design immediately due to the current flawed application of BCR to storage resources.  Storage resources lack traditional startup, minimum load, and transition costs, and applying legacy BCR constructs risks weakening incentives for accurate and efficient bidding behavior. 

With regards to the idea of netting uplift payments across the day-ahead, RUC, and real-time markets, CAISO did not provide sufficient information on the benefits or impacts of this change. Therefore, SCE does not have enough information to meaningfully evaluate the proposal at this time and requests that CAISO provide additional detail on the objectives and expected benefits. While acknowledging CAISO’s interest in exploring this change, SCE cautions that day-ahead BCR exposure for storage resources is already limited, and additional structural changes should be evaluated carefully to avoid unintended consequences. 

Before pursuing further design discussions, SCE recommends that CAISO provide greater transparency on the impacts of recently implemented BCR reforms, including comparative data showing system-wide BCR outcomes under the legacy framework versus the updated proxy-based methodology. Without evidence that remaining BCR concerns are material, it would be premature to introduce additional complexity into the uplift framework.

5. Please provide your organization’s comments on the overview of the energy storage resource (ERS) model concept and its benefits.

SCE views the proposed Energy Storage Resource (ERS) model concept as a promising evolution in storage bidding and dispatch representation, particularly in its shift from traditional price–quantity bid curves to bids expressed as a function of state of charge. SCE believes that the ERS framework more naturally captures the physical and economic realities of storage operation, including asymmetric charging and discharging behavior and the increasing marginal value of energy as state of charge approaches operational limits. By embedding these dynamics directly into the bid structure, the ERS model has the potential to improve dispatch efficiency and reduce reliance on operator interventions. 

At the same time, SCE notes that the ERS model could introduce additional complexity and warrants careful implementation. Key questions remain  regarding how the ERS model would coexist with the existing Non-Generator Resource (NGR) model, including whether resources would be required to elect one model through Resource Data Template (RDT) parameters and whether such elections could be modified over time.  

Overall, SCE is interested in the conceptual idea of the ERS concept.  SCE requests CAISO to continue to pursue additional discussions with the ERS concept.  In addition to the ERS concept, it would be helpful if CAISO could identify other areas that require change when using this new concept, such as whether the existing OMS design would need to be re-designed specifically for storage resources. 

6. Please provide any additional comments, feedback, or examples. please upload examples or data using the Attachments field below.

SCE does not have any additional comments.