Comments on 3/24 DAME Configurable Parameters Working Group

1. Please provide a summary of your organization's comments on the March 24, 2026 DAME Configurable parameters implementation working group discussion.

Comments on Day-Ahead Market Enhancements Configurable Parameters

Working Group Presentation on March 24, 2026

Department of Market Monitoring

April 7, 2026

Summary

The Department of Market Monitoring (DMM) appreciates the opportunity to comment on the Day-Ahead Market Enhancements - Configurable Parameters Implementation Working Group presentation on March 24, 2026.[1] DMM supports the ISO’s proposal to use a lower envelope multiplier value, a lower deployment imbalance reserve (DIR) factor, and reduced imbalance reserve (IR) requirements at go-live to help minimize the risks associated with implementing a new product in a new market structure. DMM continues to recommend the ISO use the lowest values possible for these three inputs and only consider increasing these values if operational data shows a need for procuring additional IR capacity or improving real-time deliverability.

Comments

DMM supports using the lowest possible values for envelope multipliers and deployment imbalance reserve factors at go-live

DMM supports the ISO lowering the envelope multiplier and DIR values to 45 percent. However, DMM reiterates that there is no evidence yet available from real-time market results to indicate that these parameters will improve real-time deliverability. Therefore, DMM would support using even lower values at go-live.[2] As for the second phase of the configurable parameters initiative, DMM continues to recommend the ISO only consider increasing these parameter values if (1) market results demonstrate that increased values would meaningfully impact the real-time deliverability of IR and (2) that the reliability need to do so justifies any increase in IR procurement costs.

DMM recommends the ISO further reduce the net load uncertainty percentile used to establish the imbalance reserve requirement

DMM supports the ISO’s proposal to use a lower percentile of net load uncertainty to establish the IR requirement. However, DMM recommends the ISO consider a value lower than the 90^th percentile as this may not meaningfully reduce IR requirements from levels established using the 97.5^th percentile. DMM continues to recommend starting with the lowest IR requirement possible in order to minimize risk and allow the ISO to gain operational experience procuring IR.

The mathematical formulation of the current imbalance reserve demand curve assumes that if there is not enough imbalance reserve to cover actual net load difference between day-ahead and real-time, then the ISO will violate contingency reserve requirements and face a minimum penalty of $247/MWh. However, as DMM has previously noted, this is not likely the case since there are a number of other options besides IR procurement that can address net load uncertainty between day-ahead and real-time markets.

The purpose of the real-time market is to resolve differences between day-ahead and real-time conditions, and the historical levels of net load uncertainty used by the ISO to inform residual unit commitment (RUC) adjustments indicate a belief that the resources available in the real-time market will generally be effective in doing so without procuring a large amount of capacity specifically to meet net load uncertainty. Since the ISO began selecting the percentiles that set RUC adjustments for net load uncertainty between the day-ahead and 15-minute markets, the ISO has used a percentile at or below the 75^th percentile on the vast majority of days.[3] DMM believes that starting go-live with lower requirements could protect against inefficiently high IR prices without creating much risk that net load uncertainty between day-ahead and real-time will be unable to be met.

[1]  Day-Ahead Market Enhancements: Configurable Parameters Implementation Working Group presentation, California ISO, March 24, 2026: https://stakeholdercenter.caiso.com/InitiativeDocuments/presentation-day-ahead-market-enhancements-dame-configurable-parameters-implementation-working-group-mar-24-2026.pdf

[2]  Comments on Day-Ahead Market Enhancements Configurable Parameters Working Group Presentation on January 29, 2026, Department of Market Monitoring, February 19, 2026: https://www.caiso.com/documents/dmm-comments-on-day-ahead-market-enhancements-configurable-parameters-implementation-jan-29-2026-working-group-feb-19-2026.pdf

[3]  2024 Annual Report on Market Issues and Performance, Department of Market Monitoring, August 7, 2025, pp 255-260: https://www.caiso.com/documents/2024-annual-report-on-market-issues-and-performance-aug-07-2025.pdf

2. Please provide a summary of your organization’s comments regarding the proposal for setting the envelope constraint multiplier to 45%.

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 a summary of your organization’s comments regarding the proposal for setting the deployable factor to 45%.

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 a summary of your organization’s comments regarding the proposal for setting the Imbalance Reserve requirement to 90th and 10th percentiles for upward and downward reserves.

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 a summary of your organization’s comments regarding the proposal for having a flexible and adaptive schedule to move into the second phase of the proposal

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 March 24, 2026 DAME Configurable parameters implementation working group discussion.

The Public Advocates Office at the California Public Utilities Commission (Cal Advocates) appreciates the opportunity to comment on the California Independent System Operator Corporation’s (CAISO) March 24, 2026 meeting on CAISO’s Day-Ahead Market Enhancements (DAME) Configurable Parameters Implementation Working Group (Working Group).[1]

Cal Advocates provides the following comments on the Working Group:

• CAISO should seek to minimize ratepayer costs by adopting lower imbalance reserve (IR) requirements.
• CAISO should clarify renewable resource participation in imbalance reserve up (IRU) and consider impacts to California’s renewable policies.  Specifically, CAISO should:
  • Describe how renewable energy credit (REC) values are considered by CAISO in simulated IRU resource bid assumptions;
  • Describe how RECs are treated in the calculation of opportunity costs that CAISO would pay to a resource awarded IRU but not dispatched by CAISO through the exercise of the IRU award;
  • Clarify how CAISO’s lost opportunity cost (LOC) mechanism accounts for negative energy bids from resource adequacy (RA) capacity; and
  • Clarify if CAISO considers any decreases in renewable generation caused by IRU awards to be renewable curtailments, and if so, explain how CAISO would categorize the curtailments in its curtailment records.
• CAISO should establish a “no later than” date to evaluate IR effectiveness and costs after the Extended Day-ahead Market (EDAM) launches.

CAISO imbalance reserve requirements will result in higher costs to ratepayers

CAISO IR requirements will be costly for CAISO Balancing Authority Area (BAA) ratepayers while not necessarily providing clear and quantifiable reliability benefits that CAISO BAA ratepayers need.[2]  Cal Advocates agrees with SCE’s recommendation,

that the CAISO consider lower IR requirements for CAISO BAA in Phase One [of the EDAM launch], while allowing other regions to assess their own risk preferences based on local market structures and obligations.[3]

As SCE correctly points out, California has a “robust Resource Adequacy framework and corresponding must-offer obligations that already ensure substantial real-time capability.”[4]  Due to the high ratepayer costs of IR and the risk that these costs are in fact unnecessary, CAISO should seek to minimize ratepayer costs by adopting the 75/25 percentile for IR requirements.[5]  While the CAISO’s current plan[6] to implement 90/10 percentile levels instead of the original 97.5/2.5 IR procurement requirements when EDAM launches is an improvement, the 90/10 requirements are still too high for initial implementation.  As soon as practical but within the first year of EDAM operations, CAISO should also adjust the IR procurement targets on a day-to-day basis, as residual unit commitment (RUC) adjustment is done today.  CAISO has changed RUC adjustment policy to have lower adjustment levels on low-risk days.[7]

These high requirements have been accompanied with high IR prices, in the parallel operations market runs.[8]  In response to the February 26, 2026 meeting of this Working Group, CAISO’s Department of Market Monitoring (DMM) stated that IR price results from recent simulations “do not seem consistent with the actual costs of providing the product.”[9]  The CPUC Energy Division’s comments included analysis that estimates total annual IR costs of approximately $218 million.[10]  Cal Advocates used data[11] provided in the Workshop Slides that used March 12, 2026 conditions to estimate annual cost impacts at different procurement/percentile levels for IRU and imbalance reserves down (IRD):[12]

To add context to the cost impacts in the table above, The Brattle Group (Brattle) projected total annual EDAM benefits for the CAISO BAA from $148 million to $319 million.[13]  Taking both those annual benefits and the IR costs at face value, the IR costs would significantly reduce the EDAM benefits for ratepayers in the CAISO BAA.  Although CAISO has argued against the validity of any specific estimates of IR costs,[14] CAISO has not developed a cost-benefit study for the DAME products[15] and stakeholder estimates using CAISO data are the only current means to anticipate the costs of IR.  In addition to the challenges of extrapolating from a small number of days, CAISO has objected that,

these estimates treat IR costs as purely additive. That is simply not accurate. Today, we already incur costs for similar services—hidden in uplift charges, real-time imbalance costs, and [resource adequacy] contracts.[16] 

CAISO has not provided estimates of how these other costs would change or decrease, or how they compare to other effects, such as increases in the market-clearing price of energy.[17]  In short, CAISO has not explained how any changes in uplift charges, real-time imbalance costs, and RA contracts would affect total IR costs.  Therefore, stakeholders are unable to fully assess what the net cost of IR is and whether those costs would shift in the manner that CAISO suggests.

Given stakeholder concerns of high IR costs,[18] and the unclear reliability benefits that IR may provide, CAISO should adopt lower IR procurement requirements when CAISO launches EDAM in May 2026.  CAISO’s proposal to use a 90/10 percentile and decreased parameter values fails to minimize ratepayer costs for IR.[19] 

Bid design of imbalance reserve up for renewable resources

At the Working Group, CAISO showed simulated IRU bids from renewable resources up to approximately 5,000 megawatts (MW) in some hours,[20] and hourly IRU awards to renewables up to approximately 1,500 MW.[21]  CAISO’s design of IRU co-optimizes the product with energy, meaning that a resource awarded a volume of IRU cannot simultaneously receive energy awards for that same volume.[22]  The co-optimization of IRU and energy means that renewable resources[23] would curtail a portion of their generation equal to their IRU awards unless CAISO actually dispatches the resource through that IRU award.  Such curtailment would cause the resource to not create RECs[24] that it otherwise would if it had received an energy award.  As discussed below, Cal Advocates seeks clarifications from CAISO related to renewable resource IRU bidding assumptions and IR bid designs in general. 

First, renewable resources that submit economic bids in CAISO markets typically bid at negative prices because their marginal costs are zero and their generation creates valuable RECs.[25]  Since RECs created by renewable generation have value to the generator, the generator’s decision to bid for IRU could mean a loss of REC revenue if the resource does not generate.[26]  The CAISO should: 1) describe how REC values are considered by CAISO in simulated IRU resource bid assumptions, and 2) describe how RECs are treated in the calculation of opportunity costs[27] that CAISO would pay to a resource that is awarded IRU but not dispatched by CAISO through exercise of the IRU award.

Second, the DAME Business Requirements Specification (BRS) describes CAISO’s calculation of LOC applied to certain RA resources that receive IRU awards.[28]  The calculation isolates the RA capacity of the resource that receives the award and multiplies that volume by the day-ahead energy locational marginal price (LMP) decreased by the resource’s day-ahead bid price.[29]  If a resource includes the negative value of a REC in its bid, this may cause the LOC calculation to exceed the energy LMP.  CAISO should clarify that this interpretation of the BRS is correct; that if a renewable generator submits a negative economic bid equal to the negative value of a REC, the LOC will include that REC value via the negative bid.

Third, if a renewable resource is awarded IRU but is not dispatched by CAISO through that IRU award, it would not generate for the volume and market interval of the IRU award.  CAISO maintains records of daily[30] and annual[31] curtailment activity, and the federal government tracks renewable curtailments with those reports.[32]  CAISO should clarify if it considers decreases in renewable generation caused by IRU awards to be renewable curtailments.  If so, CAISO should explain how it would categorize the  curtailments in its curtailment records.

Lastly, CAISO should recognize economic and policy concerns related to reductions in renewable generation caused by IRU awarded to renewables.  Although renewable curtailment occurs today on an economic basis, renewable resources could voluntarily bid for IRU and be consequently curtailed because of IRU design.  Curtailments of renewables would slow California’s progress to meet RPS goals, may not be consistent with the state’s intent to encourage renewable generation,[33] and could increase the cost of the RECs that entities use to comply with California’s RPS program.[34] 

[1] Slides for the meeting presentation are available online: CAISO, Day-Ahead Market Enhancements: Configurable Parameters Implementation Working Group Session #9, March 24, 2026 (Workshop Slides).  Available at: https://stakeholdercenter.caiso.com/InitiativeDocuments/presentation-day-ahead-market-enhancements-dame-configurable-parameters-implementation-working-group-mar-24-2026.pdf.

[2] See California Public Utilities Commission (CPUC) Energy Division and Southern California Edison Company’s (SCE) comments submitted on March 12, 2026.  CPUC Energy Division, Comments on 2/26 DAME Configurable Parameters Working Group, March 12, 2026 at Section 4.  Available at: https://stakeholdercenter.caiso.com/Comments/AllComments/be123471-5b14-4d05-9128-f2a7ba0e229a#org-87c2b840-7ae1-4628-aa21-b192dc3fc08e; and SCE, Comments on 2/26 DAME Configurable Parameters Working Group, March 12, 2026 (SCE March Comments) at Section 4.  Available at: https://stakeholdercenter.caiso.com/Comments/AllComments/be123471-5b14-4d05-9128-f2a7ba0e229a#org-43b4b934-4671-462a-a5eb-13ef9780c9c3.

[3] SCE March Comments at Section 4.

[4] SCE March Comments at Section 4.

[5] CAISO studied procurement volume and costs of IR at the 75/25 percentile requirement levels and found procurement levels were reduced with commensurate reductions in IR pricing.  Workshop Slides at 60-73.

[6] Workshop Slides at 78.

[7] CPUC Energy Division, Comments on Day-Ahead Market Enhancements Configurable Parameters Implementation Working Group – Oct 21, 2025, November 10, 2025 (CPUC ED November Comments) at Section 5.  Available at: https://stakeholdercenter.caiso.com/Comments/AllComments/7575843f-83b8-4baa-beb7-d042181dad1c#org-1b842753-f0d9-4c35-9ced-9ad5baca860f.

[8] Workshop Slides at 64.

[9] DMM also recommended caution when interpreting simulation results as they are based on unrealistic input data.  DMM, Comments on 2/26 DAME Configurable Parameters Working Group, March 12, 2026 (DMM March Comments) at Section 1.  Available at: https://stakeholdercenter.caiso.com/Comments/AllComments/be123471-5b14-4d05-9128-f2a7ba0e229a#org-8b156068-d9b9-4b68-bf5a-780c8e7b85a4.

[10] CPUC Energy Division, Comments on 2/26 DAME Configurable Parameters Working Group, March 12, 2026.  Available at: https://stakeholdercenter.caiso.com/Comments/AllComments/be123471-5b14-4d05-9128-f2a7ba0e229a#org-87c2b840-7ae1-4628-aa21-b192dc3fc08e.

[11] To estimate costs, Cal Advocates digitized the y-axis graph values shown on Workshop Slides 61 and 64 to determine the market requirement prices and quantities of IR in the CAISO BAA for the percentile scenarios.  These cost impacts are rough estimates since they reflect parallel operations results for the single day CAISO analyzed, March 12, 2026.  Other days will have different market conditions.

[12] In the table, “Percentile scenario” refers to the three sets of percentiles for IRU and IRD requirements that CAISO analyzed for the CAISO BAA.  The IRU/IRD “per day” columns are the total costs for the March 12 analysis, derived by multiplying IRU and IRD requirement volumes (bottom row of Workshop Slides at 61) by prices of IRU and IRD respectively (Workshop Slides at 64).  The “Total” column is the sum of IRU and IRD costs on March 12.  The “365 days of March 12” column multiplies the “Total” column by 365 to derive an approximate annual estimate.

[13] These are the “Baseline+” and “Split Market” scenarios previously provided by Brattle.  Brattle, Preliminary Day-Ahead Market Impacts Study, January 24, 2025 at 25.  Available as “261300” at: https://efiling.energy.ca.gov/Lists/DocketLog.aspx?docketnumber=24-IEPR-01.

[14] CAISO, Comment Responses – Day-Ahead Market Enhancements (DAME) Configurable Parameters Working Group – Dec 17, 2025, December 17, 2025 (CAISO December Comment Responses) at 3 and 7.  Available at: https://stakeholdercenter.caiso.com/StakeholderInitiatives/Day-ahead-market-enhancements.

[15] Cal Advocates has repeatedly requested that CAISO conduct DAME product cost estimates in the course of CAISO’s development of DAME.  See e.g., Cal Advocates, Comments on Draft Final Proposal, December 21, 2022 at Section 3.  Available at: https://stakeholdercenter.caiso.com/Comments/AllComments/9ad17b1a-1975-490c-85f0-c52d3984e28e#org-e8f6879d-1e1a-49a2-aeba-cbcc41c4f6cd.

[16] CAISO December Comment Responses at 7.

[17] For example, CPUC ED November Comments at Section 4.

[18] In addition to the concerns raised by the Commission’s Energy Division, SCE, and DMM discussed above, Six Cities (CAISO December Comment Responses at 3), and Pacific Gas and Electric Company (CAISO December Comment Responses at 4) raised concerns of high IR costs. 

[19] This position is consistent with the following statement from DMM:

DMM believes that starting go-live with lower requirements could protect against inefficiently high IR prices without creating much risk that uncertainty between day-ahead and real-time will be unable to be met. This would allow the ISO to gather and analyze market data to determine whether increasing the requirements is necessary for market efficiency and reliability.

DMM March Comments at Section 1.

[20] Workshop Slides at 33.  The slides show a bid pattern consistent with solar production, rather than other types of renewables.

[21] Workshop Slides at 53.

[22] For example, a 50 MW resource that receives an IRU award of 30 MW for a market interval could at most only provide 20 MW of energy in the same interval.  For further information on the co-optimization of IRU and energy, see CAISO, Day-Ahead Market Enhancements and Extended Day-Ahead Market, FERC Docket ER23-2686, August 22, 2023 at 49-55.  Available at: https://www.caiso.com/Documents/Aug22-2023-DAME-EDAM-Tariff-Amendment-ER23-2686.pdf.

[23] Renewable resources, specifically wind and solar, are able to receive IRU awards.  CAISO, Business Requirements Specification: Day-Ahead Market Enhancements Version 1.7, February 11, 2026 (CAISO DAME BRS) at 165.  Available at: https://www.caiso.com/documents/business-requirements-specification-day-ahead-market-enhancement.pdf.

[24] Each 1 MW of renewable generation typically creates 1 REC.  Load-serving entities and other entities in California use RECs to comply with the California Renewables Portfolio Standard (RPS).  For more information, see: https://www.energy.ca.gov/programs-and-topics/programs/renewables-portfolio-standard/renewables-portfolio-standard-0.

[25] The negative bid may also include the value of any per megawatt-hour tax credits.  DMM, Self-Schedules Bid Cost Recovery Allocation and Lower Bid Floor Draft Final Proposal, August 23, 2016 at 2-3.  Available at: https://www.caiso.com/documents/dmmcomments_self_schedulesbidcostrecoveryallocation_bidfloor.pdf.

[26] Namely, this would occur if the renewable resource received an IRU award but is not actually dispatched by CAISO through that award in the real-time market.

[27] That is, the opportunity costs that are “drivers for setting” IR prices, rather than the opportunity cost calculation CAISO uses for the LOC component of overlapping RA capacity, described in the next paragraph.  Workshop Slides at 25.

[28] CAISO DAME BRS at 98.

[29] CAISO DAME BRS at 98.

[30] Available at: https://www.caiso.com/library/daily-wind-solar-real-time-dispatch-curtailment-reports.

[31] Available at: https://www.caiso.com/library/production-curtailments-data.

[32] See data sources that the federal government uses: US Energy Information Administration, Solar and Wind Power Curtailments are Increasing in California, May 28, 2025.  Available at: https://www.eia.gov/todayinenergy/detail.php?id=65364.

[33] See California Public Utilities Code at Sections 399.11(a) and 399.20(a)(1).

[34] Fewer RECs generated year to year would reduce the available supply of RECs to meet fixed RPS compliance targets.  This would increase the value and price of RECs due to a scarcer supply of RECs.

2. Please provide a summary of your organization’s comments regarding the proposal for setting the envelope constraint multiplier to 45%.

Cal Advocates provides no comment on this topic at this time.

3. Please provide a summary of your organization’s comments regarding the proposal for setting the deployable factor to 45%.

Cal Advocates provides no comment on this topic at this time.

4. Please provide a summary of your organization’s comments regarding the proposal for setting the Imbalance Reserve requirement to 90th and 10th percentiles for upward and downward reserves.

CAISO’s proposal for setting the IR requirement to 90/10 percentiles for upward and downward reserves is not sufficient to minimize ratepayer costs.  As explained above, CAISO should set the IR requirements to the 75/25 percentiles for upward and downward IR. 

5. Please provide a summary of your organization’s comments regarding the proposal for having a flexible and adaptive schedule to move into the second phase of the proposal

Cal Advocates appreciates CAISO’s proposal to utilize a flexible and adaptive schedule in Phase 2.[1]  However, the Phase 2 schedule would benefit from setting a date no later than the end of 2026 to begin an evaluation of the effectiveness and costs of DAME products.  CAISO currently anticipates conducting discussions to consider any enhancements to EDAM on an “as needed” basis.[2]  The lack of any dates for EDAM enhancements and Phase 2 of DAME initiatives fails to provide assurances that stakeholders will have a clear timeline to raise and address concerns with EDAM operations.

[1] Workshop Slides at 77-80.

[2] CAISO, 2026-2028 Final Policy Initiatives Roadmap, December 12, 2025 at 10.  Available as “2026-2028 Final Policy Initiatives Roadmap and Dispositions” at: https://stakeholdercenter.caiso.com/RecurringStakeholderProcesses/Annual-policy-initiatives-roadmap-process-2025.

1. Please provide a summary of your organization's comments on the March 24, 2026 DAME Configurable parameters implementation working group discussion.

Energy Division staff (ED staff or staff) of the California Public Utilities Commission (CPUC) develops and administers energy policy and programs to serve the public interest, advises the CPUC, and ensures compliance with CPUC decisions and statutory mandates. ED staff provides objective and expert analyses that promote reliable, safe, and environmentally sound energy services at just and reasonable rates for the people of California.?? 

?ED staff appreciates the opportunity to submit comments on the Day-Ahead Market Enhancements (DAME) configurable parameters implementation working group. ED staff also appreciates the considerable amount of material analyzed and released for discussion as the working group has progressed over the last several months.  

As stated in previous comments, ED staff continues to be concerned that the imbalance reserve requirements may be set too high and may prove costly, given the preliminary results from Market Simulation and Parallel Operations.

ED staff is concerned that the Imbalance Reserve product, as designed, will cause CAISO customers to double-pay for capacity resources that must bid into CAISO markets: once through capacity contracts for resource adequacy (RA) resources that have day-ahead and real-time must offer obligations, and a second time for those same capacity resources when they are selected as Imbalance Reserves. Ultimately, the Imbalance Reserve design must ensure that CAISO customers do not double-pay for reliability capacity.

ED staff notes that all California resource adequacy (RA) resources already have a must-offer obligation, so these imbalance reserve awards are a duplicative capacity payment and do not improve reliability when our RA resources already have a day-ahead market (DAM) and real-time must offer obligation (RTM MOO).

Thus, ED staff supports CAISO’s proposal to adjust the configurable parameters for go-live on May 1^st. In addition, ED supports CAISO reducing the imbalance reserve requirements for go-live to limit potentially large costs that will be incurred by CAISO customers associated with the imbalance reserve requirement.

2. Please provide a summary of your organization’s comments regarding the proposal for setting the envelope constraint multiplier to 45%.

ED staff is supportive of CAISO’s proposal to reduce the envelope constraint multiplier in the next phase of parallel operations and EDAM go-live from 60% to 45%. Of the tunable configurable parameters, the envelope constraint multiplier has the largest impact on imbalance reserves prices. ED staff will continue to monitor parallel operations once these new parameters are introduced into the parallel operations environment on April 1^st and are stabilized. ED staff requests that CAISO more thoroughly explain the rationale or reasoning behind setting the envelope constraint multiplier to 45% rather than a lower value (e.g., 30%). ED staff asked about this during the configurable parameters working group, but requests further explanation for this parameter decision. For example, are there any downsides to pursuing a 30% envelope constraint multiplier? Did CAISO staff identify any issues with battery storage resources not being charged sufficiently at the 30% envelope constraint multiplier, so they were effectively not deployable? If CAISO staff did not identify any battery charging sufficiency issues at a 30% envelope constraint multiplier, then what is the tradeoff to pursuing a 30% envelope constraint multiplier?

3. Please provide a summary of your organization’s comments regarding the proposal for setting the deployable factor to 45%.

ED staff is supportive of CAISO’s proposal to reduce the deployed imbalance reserve factor (DIR) from 60% to 45% for the next phase of parallel operations and EDAM go-live. Of the two tunable configurable parameters presented during the March 24^th meeting, the deployable imbalance reserve factor has minimal impact on prices. Has CAISO identified any reliability or delivery issues in the real-time market when this factor is reduced to 30%? ED staff continues to support the most conservative combination of parameters possible to minimize the cost impact of a duplicative product. ED staff requested further explanation from CAISO staff during the March 24^th working group call, as ED staff would like to better understand whether there are any tradeoffs to reducing the DIR to 30%.

4. Please provide a summary of your organization’s comments regarding the proposal for setting the Imbalance Reserve requirement to 90th and 10th percentiles for upward and downward reserves.

ED staff is supportive of CAISO’s decision to reduce the imbalance reserve requirement from 97.5% to 90%, but recommend CAISO continue to test and consider using the 75% percentile of uncertainty.[1] ED staff has consistently argued that the 97.5% percentile of uncertainty being used for imbalance reserve procurement is too high.  ED staff recognizes that the reduction of imbalance reserve requirements to 90% has a non-linear impact on the size of imbalance reserve awards – approximately in the 30-40% range. Based off the data presented in the March 26^th working group meeting, a 90% percentile of uncertainty can produce imbalance reserve up/imbalance reserve down (IRU/IRD) award spreads of about 2,000 MW. The corresponding price data presented during the March 24^th sensitivity analysis is displaying lower prices, but these prices are resulting from a low-load day in the middle of March – not a time of year when ED staff would expect high market prices. Imbalance reserve costs in the middle of spring might be significantly lower than in the summer months, but are likely not needed, as there are generally few reliability concerns on low load days. Therefore, ED staff remains concerned that even a 2,000 MW award spread would produce unnecessary amounts of ratepayer cost exposure, and on a higher load day – one would reasonably anticipate IRU/IRD and energy prices clearing significantly higher, therefore producing higher costs.

Therefore, ED staff reiterates that the experience in the current market design illustrates that using the 97.5% percentile of uncertainty leads to substantial procurement of imbalance reserves, which leads to higher costs for ratepayers without necessarily providing commensurate reliability benefits. Analysis from DMM about the current market has shown that the 97.5% percentile of uncertainty has hardly been used in recent years for the RUC adjustment, for a variety of reasons, and notably, there have been many days/hours with no adjustment at all.[2] In fact, in 2024 – 97% of all hours were covered by a RUC adjustment percentile of uncertainty of 75% or less, so while 90% is less than 97.5% the rationale for using a 90% percentile of uncertainty remains unclear considering market operational experience illustrates that a large requirement remains largely unnecessary.

CAISO’s Department of Market Monitoring (DMM) published the chart below illustrating RUC adjustments in 2024. [3]

When these values are converted to hourly figures, the results for 2024 show that CAISO used a 97.5% percentile uncertainty adjustment in only 3% of the hours.

More recently, CAISO has reduced its RUC adjustments even further, as shown in the slide below, demonstrating that the 97.5% uncertainty level is too high.

In addition, DMM has presented this graph that shows the 97.5% percentile of uncertainty has been used only infrequently and thus even the 90% uncertainty level will be unnecessary on the vast majority of days:

[4]

ED staff will not insert updated cost analysis in this section, due to the stage outage and ongoing parallel operations instability, as there is not sufficient time to conduct additional analysis in time to provide them in these comments.

[1] The percentile of uncertainty for imbalance reserve procurement is tied to CAISO’s Business Practice Manual. Per pg. 73, of the CAISO DAME-EDAM Tariff Amendment August, 2023, Aug22-2023-DAME-EDAM-Tariff-Amendment-ER23-2686.pdf

[2] Pg. 121, Department of Market Monitoring Quarter 2 Report on Market Issues and Performance, 2025-second-quarter-report-on-market-issues-and-performance.pdf

[3] Pg. 259, 2024 Department of Market Monitoring Annual Report, 2024-annual-report-on-market-issues-and-performance-aug-07-2025.pdf

[4] DMM’s Q2 Report on Market Issues and Performance, pg.119, 2025-second-quarter-report-on-market-issues-and-performance.pdf

5. Please provide a summary of your organization’s comments regarding the proposal for having a flexible and adaptive schedule to move into the second phase of the proposal

ED staff is not supportive of CAISO’s proposal to have a “flexible and adaptive schedule” to phase 2 of EDAM go-live. ED staff in our last round of comments recommended that CAISO keep these more conservative configurable parameters and lower imbalance reserve requirements through September and only make changes after discussions with stakeholders and the CAISO’s Market Surveillance Committee (MSC).  ED staff continues to support this approach for two reasons. First, large changes should not be made in August or September, which can be high-load months, and it does not make sense to be making untested changes during this time, with the potential for unintended results.  The EDAM go-live plan will mitigate the impact of these new DAME products, but this mitigation or low prices should not be taken as a rationale to increase any of the configurable parameters or increase the imbalance reserve requirement especially during summer. A flexible approach to phase 2 leaves the door open to doing just that. Second, ED staff recommends consultation with the MSC before changing them in Phase 2 which would allow further input on these important parameters before they are implemented in the market and would provide an opportunity for CAISO and stakeholders to assess the parameters and requirements and the effects on market efficiency and costs more broadly.

Finally, ED staff remain concerned about the size of RCU awards and corresponding prices but will conduct further cost analysis once parallel operations have re-stabilized.

1. Please provide a summary of your organization's comments on the March 24, 2026 DAME Configurable parameters implementation working group discussion.

PG&E appreciates CAISO being willing to listen to stakeholders and pivot on the DAME configurable parameter values.

PG&E supports launching with the proposed lower values.

• Support lowering the envelope constraint multiplier to 45%.
• Support lowering the Deployed Imbalance Reserve (DIR) factor to 45%.
• Support reducing the IR Requirement to the 90/10 percentile level.

CAISO should retain these parameter values until data demonstrates that there is a need to increase them.

The overall package of parameters errs on the side of keeping costs low at the launch. PG&E believes this is the correct approach given the CAISO has a number of tools to address uncertainty today but fewer tools to undo errors in the clearing of the markets. Explicitly stated, these lower values should not be increased automatically or based on a timeline. They should remain until market data suggest a need for an increase.

PG&E supports continued meetings on imbalance reserve effectiveness and the tuning parameters.

PG&E suggests that, for at least six months, these meetings continue using the same cadence. The Parallel Operations testing of these parameters has been helpful and support the new, lower parameter values. But the data is not convincing enough to say with certainty and granularity how each of the parameters impacts the market and to what magnitude. Therefore, PG&E expects detailed analysis from the CAISO as soon as possible once the market goes live to better understand how these elements are impacting the market. Such data will provide greater clarity on whether or if the configurable parameters and IR requirement should be changed. PG&E also believes that continuing these meetings is the correct forum for this conversation.

At some point the market results and analysis will reach a point where the discussion does not require its own meeting. At which point, we suggest folding this topic into another stakeholder forum, e.g., the quarterly MPPF meetings.

2. Please provide a summary of your organization’s comments regarding the proposal for setting the envelope constraint multiplier to 45%.

PG&E Supports setting the Envelope Constraint Multiplier at 45%

A lower envelope constraint multiplier would allow storage to provide more imbalance reserves and decrease the cost of procured imbalance reserves. This reduced cost comes with some risk of some storage being dispatched in early hours and unable to deliver on the imbalance reserve award in later hours. However, PG&E believes this risk is low given that, by statistical definition and design, much of the procured imbalance reserve for each hour should not be needed. PG&E believes the benefit of reduced imbalance reserve procurement cost impact outweighs this risk based on presently available data.

RUC may warrant its own unique storage envelope multiplier parameter value

On a related topic, some stakeholders raised concerns about whether this is an envelope constraint multiplier in RUC. We agree that there should be an envelope multiplier constraint applied to storage in RUC and believe it is reasonable to use a different value for RUC than for imbalance reserves. These are two different products and have different expectations of energy dispatch within the hour. In essence, the RUC solution is expected to guarantee a fully feasible solution to meet the CAISO’s forecast of CAISO BAA load in all hours, based on a hypothetical dispatch relative to the day ahead energy awards.  If the incremental/decremental dispatch of batteries is not guaranteed to be feasible in all hours (considering SOC based on that dispatch), that solution would be inconsistent with the objectives of RUC.

3. Please provide a summary of your organization’s comments regarding the proposal for setting the deployable factor to 45%.

PG&E Supports setting the Deployable Imbalance Reserve (DIR) Factor to 45%

Lowering the DIR factor would require less of the awarded imbalance reserve capacity to be deliverable under the deployment scenario and lower the cost of imbalance reserves. This parameter is inherently a trade-off between the deliverability of imbalance reserves in the deployment scenario and the total increased cost of imbalance reserves, including phantom congestion. We believe the cost impact outweighs the potential reliability risk based on the presently available data.

4. Please provide a summary of your organization’s comments regarding the proposal for setting the Imbalance Reserve requirement to 90th and 10th percentiles for upward and downward reserves.

PG&E supports lowering the IR requirement to the 90/10 uncertainty percentile.

Lowering the percentile target for procurement would reduce the amount of imbalance reserve up and down that is cleared in the market and lower imbalance reserve costs. Lowering the target procurement comes with the risk that the realized uncertainty is greater than the procured imbalance reserves.

When the IR requirement was set to 97.5/2.5 uncertainty percentile, the IR demand curve was responsible for a significant amount of IR procurement. This means that not all of the imbalance reserve demand is actually being awarded. This suggests that there may not be any actual reliability risk to lowering the procurement target as the lower procurement target might not lower the awarded amount of imbalance reserves. CAISO noted in its presentation that there was no IR demand curve procurement at the 90/10 uncertainty percentile. PG&E finds this to be a good indicator that the 90/10 uncertainty percentile is a more appropriate target. We believe the benefit, in terms of cost impact, outweighs the risk of lowering the procurement target to the 90/10 percentiles.

5. Please provide a summary of your organization’s comments regarding the proposal for having a flexible and adaptive schedule to move into the second phase of the proposal

CAISO should retain these parameter values until data demonstrate that there is a need to increase the parameter values.

The overall package of parameters errs on the side of keeping costs low at the launch. PG&E believes this is the correct approach given the CAISO has a number of tools to address uncertainty today but fewer tools to undo errors in the clearing of the markets. Explicitly stated, these lower values should not be increased automatically or based on a timeline. They should remain until market data suggest a need for an increase.

PG&E supports continued meetings on imbalance reserve effectiveness and the tuning parameters.

PG&E suggests that, for at least six months, these meetings continue using the same cadence. The Parallel Operations testing of these parameters has been helpful and support the new, lower parameter values. But the data is not convincing enough to say with certainty and granularity how each of the parameters impacts the market and to what magnitude. Therefore, PG&E expects detailed analysis from the CAISO as soon as possible once the market goes live to better understand how these elements are impacting the market. Such data will provide greater clarity on whether or if the configurable parameters and IR requirement should be changed. PG&E also believes that continuing these meetings is the correct forum for this conversation.

At some point the market results and analysis will reach a point where the discussion does not require its own meeting. At which point, we suggest folding this topic into another stakeholder forum, e.g., the quarterly MPPF meetings.

1. Please provide a summary of your organization's comments on the March 24, 2026 DAME Configurable parameters implementation working group discussion.

PacifiCorp generally supports the changes to the configurable parameters, setting the imbalance reserve requirement to the 90^th and 10^th percentiles for upward and downward reserves, and the plan for the adaptive schedule. The one configurable parameter PacifiCorp does not agree with is the envelope constraint multiplier for reliability capacity up and down.

PacifiCorp believes the constraint multipliers should be set to 100% for reliability capacity because the risk of having insufficient state of charge in real-time poses a reliability risk. The imbalance reserve envelope constraint multipliers are reasonable because there is more variability in the net load uncertainty between day-ahead and real-time. There is likely less variability in the load forecast uncertainty between day-ahead and real-time, so it seems prudent to start with the reliability capacity envelope constraint multipliers at 100% to start the EDAM so that the capacity is available in real-time.

2. Please provide a summary of your organization’s comments regarding the proposal for setting the envelope constraint multiplier to 45%.

PacifiCorp supports using 45% for the imbalance reserve envelope constraint multiplier. PacifiCorp’s current understanding is that 45% will also be used for the reliability capacity envelope constraint multiplier. With this assumption, PacifiCorp believes that 100% should be used for the reliability capacity envelope constraint multiplier instead so that the capacity awarded to batteries will be available in real-time. In PacifiCorp’s opinion, this will help ensure there is sufficient capacity in real-time to meet the forecasted load.

3. Please provide a summary of your organization’s comments regarding the proposal for setting the deployable factor to 45%.

PacifiCorp supports setting the deployment factor to 45%. This will hopefully keep imbalance reserve congestion low while stakeholders gain experience with the products and the CAISO collects data on how the deployment scenarios impact market clearing prices.

4. Please provide a summary of your organization’s comments regarding the proposal for setting the Imbalance Reserve requirement to 90th and 10th percentiles for upward and downward reserves.

PacifiCorp supports setting the imbalance reserve requirements to the 90^th and 10^th percentiles for upward and downward reserves but does not support going to percentiles lower than the 90^th and higher than the 10^th at this time. The reason is that going to something like the 75^th and 25^th percentiles risks causing the imbalance reserve requirements to be lower than the flexible ramping requirements in the Western Energy Imbalance Market (WEIM). This may cause challenges for non-CAISO EDAM balancing areas to procure enough capacity to meet the balancing areas’ supply needs. PacifiCorp does not have an equivalent to CAISO’s RA must-offer obligation, and so the EDAM RSE is the main driving force requiring generation to be offered into EDAM. If the imbalance reserve requirements were decreased further to something like the 75^th and 25^th percentile, this could directly reduce the amount of generation and interchange offered into EDAM from non-CAISO BAAs. If the imbalance reserve requirement was decreased, operators would likely use RUC load adjustments to ensure adequate capacity is procured to account for uncertainty between day-ahead and real-time. However, because these RUC adjustments would exceed the obligations of the EDAM RSE, there is no guarantee that sufficient capacity would be offered from non-CAISO BAAs to meet this increased RUC requirement.

Another potential consequence of moving to something like the 75^th and 25^th percentiles for setting the imbalance reserve requirements is that CAISO market operators may continue to feel the need to load bias in RUC to cover net load uncertainty. One of the key benefits of the imbalance reserve product is to reduce the magnitude and frequency of CAISO market operator load biasing in RUC. If the requirement is lowered and CAISO market operators continue to frequently load bias to cover net load uncertainty, PacifiCorp believes the market should just use a higher requirement instead. CAISO operators still will use the RUC Net Short Operational Adder if the full imbalance reserve requirement is not met by resource awards, but the process seems to be limited to periods of high demand in the CAISO balancing area. The use of a higher requirement with a defined process for the RUC Net Short Operational Adder is a better process, in PacifiCorp’s opinion, than using a lower imbalance reserve requirement with more frequent CAISO market operator load biasing.

5. Please provide a summary of your organization’s comments regarding the proposal for having a flexible and adaptive schedule to move into the second phase of the proposal

PacifiCorp supports having a flexible schedule for evaluating the configurable paraments but does want to avoid making any major changes near Portland General Electric’s go-live. If there are severe economic impacts after EDAM go-live that can be resolved by changing the imbalance reserve parameters, the CAISO should maintain the necessary flexibility to make changes. On the other hand, if there are not severe impacts, consistency for at least the first few months of EDAM will allow market participants to gain experience with the new market products and will allow market participants to refine their bidding strategies. This will lead to consistent price formation that market participants can use to understand the new market dynamics. As such, PacifiCorp does not want too many things to change at the same time as Portland General Electric prepares to join the EDAM because it will be difficult to evaluate whether changes to price formation are due to the configurable parameters or another balancing area joining the EDAM. As part of the 2026 Policy Initiatives Catalog and Roadmap, PacifiCorp is advocating for an initiative to evaluate the imbalance reserve product. If the CAISO and market participants find that the configurable parameters at the start of EDAM are reasonable for the first year of EDAM, PacifiCorp believes a full stakeholder initiative would be ideal for holistically evaluating the configurable parameters.

1. Please provide a summary of your organization's comments on the March 24, 2026 DAME Configurable parameters implementation working group discussion.

San Diego Gas & Electric (SDG&E) appreciates the opportunity to provide comments on the March 24, 2026 Configurable Parameters Implementation Working Group discussion. SDG&E supports CAISO’s efforts to refine the Day-Ahead Market (DAME) parameters, recognizing their significant impact on procurement efficiency and costs associated with the new imbalance reserve product. SDG&E also appreciates CAISO’s continued diligence in keeping stakeholders informed regarding the benchmark case analysis and the planned go-live approach. Additionally, SDG&E supports the proposal to implement lower parameter values and a lower demand curve percentile for go-live.

2. Please provide a summary of your organization’s comments regarding the proposal for setting the envelope constraint multiplier to 45%.

SDG&E supports setting the envelope constraint multiplier to 45% and testing the market optimization and outcomes in parallel operations with this applied parameter value.

3. Please provide a summary of your organization’s comments regarding the proposal for setting the deployable factor to 45%.

SDG&E supports setting the deployable factor to 45% and testing the market optimization and outcomes in parallel operations with this applied parameter value. 

4. Please provide a summary of your organization’s comments regarding the proposal for setting the Imbalance Reserve requirement to 90th and 10th percentiles for upward and downward reserves.

SDG&E supports the proposal for targeting the 90^th percentile for the upwards and downwards imbalance reserve requirement in parallel operations and upon go-live. The lowering of the demand curve was supported by analysis presented by the DMM during the Q4 Market Issues and Performance meeting, and SDG&E views this modification as an appropriate initial recalibration to the requirement that follows the CAISO’s commitment to a conservative approach for DAME implementation.

5. Please provide a summary of your organization’s comments regarding the proposal for having a flexible and adaptive schedule to move into the second phase of the proposal

The two-phase plan for go-live as outlined in the most recent presentation is a reasonable plan of action. SDG&E thanks CAISO for taking into consideration feedback by participants that changes to the parameter values are minimized during the summer months, as it may be particularly risky to implement adjustments to the methodology during periods of tight supply conditions unless found to be absolutely necessary. Furthermore, SDG&E supports continued stakeholder engagement to ensure that any future parameter changes are thoroughly discussed, well understood, and thoughtfully implemented.

1. Please provide a summary of your organization's comments on the March 24, 2026 DAME Configurable parameters implementation working group discussion.

Six Cities Summary:  At this time and subject to ongoing review of Parallel Operations outcomes, the Six Cities do not oppose setting the envelope constraint multiplier to 45%, the deployable Imbalance Reserve (“IR”) factor to 45%, and the IR requirements to the 90^th and 10^th uncertainty percentiles for upward and downward reserves respectively.  Further evaluation of the configurable parameters during the remainder of Parallel Operations and the initial implementation period for the Extended Day-Ahead Market (“EDAM”) should include consideration of further reducing the parameter settings.  The Six Cities generally support the CAISO’s proposal to follow a flexible and adaptive schedule for moving into the second phase of the process for establishing and evaluating the performance of the configurable parameters for IR procurement, including collection and analysis of data on IR performance over an initial implementation period that encompasses multiple seasons and a variety of system conditions.  However, if CAISO’s monitoring identifies IR performance outcomes that appear extreme or anomalous, the CAISO should be prepared to move expeditiously to correct unintended or inefficient consequences.  The Six Cities disagree with the view expressed by CAISO staff at the March 24, 2026 meeting that historical RUC performance does not provide an appropriate basis for evaluating IR performance.  As expressed by Professor Bushnell during the February 6, 2026 Market Surveillance Committee web meeting on the configurable parameters, whether the cost of IR compares favorably with the costs resulting from out-of-market solutions (i.e., RUC) previously relied upon for ensuring availability of necessary reserves is a key metric for evaluating the success of the IR design.

2. Please provide a summary of your organization’s comments regarding the proposal for setting the envelope constraint multiplier to 45%.

Six Cities’ Comments:  At this time and subject to ongoing review of Parallel Operations outcomes, the Six Cities do not oppose setting the envelope constraint multiplier to 45%.  Further evaluation of the configurable parameters during the remainder of Parallel Operations and the initial implementation period for the EDAM should include consideration of further reducing the parameter settings.

3. Please provide a summary of your organization’s comments regarding the proposal for setting the deployable factor to 45%.

Six Cities’ Comments:  At this time and subject to ongoing review of Parallel Operations outcomes, the Six Cities do not oppose setting the deployable IR factor to 45%.  Further evaluation of the configurable parameters during the remainder of Parallel Operations and the initial implementation period for the EDAM should include consideration of further reducing the parameter settings.

4. Please provide a summary of your organization’s comments regarding the proposal for setting the Imbalance Reserve requirement to 90th and 10th percentiles for upward and downward reserves.

Six Cities’ Comments:  At this time and subject to ongoing review of Parallel Operations outcomes, the Six Cities do not oppose setting IR requirements to the 90^th and 10^th percentiles for upward and downward reserves respectively.  Further evaluation of the configurable parameters during the remainder of Parallel Operations and the initial implementation period for the EDAM should include consideration of further reducing the parameter settings.

5. Please provide a summary of your organization’s comments regarding the proposal for having a flexible and adaptive schedule to move into the second phase of the proposal

Six Cities’ Comments:  At this time and subject to ongoing review of Parallel Operations outcomes, the Six Cities generally support the CAISO’s proposal to follow a flexible and adaptive schedule for moving into the second phase of the process for establishing and evaluating the performance of the configurable parameters for IR procurement.  In general, it appears to be reasonable to collect and analyze data on IR performance over an initial implementation period that encompasses multiple seasons and a variety of system conditions as a basis for evaluating the appropriateness of modifications to the initial configurable parameter values.  However, if CAISO’s monitoring identifies IR performance outcomes that appear extreme or anomalous, the CAISO should be prepared to move expeditiously to correct unintended or inefficient consequences. 

In this regard, the Six Cities strongly disagree with the view expressed by CAISO staff at the March 24, 2026 meeting that historical RUC performance does not provide an appropriate comparison point for evaluating IR performance.  As noted in the Six Cities’ February 19, 2026 comments, during the February 6, 2026 Market Surveillance Committee web meeting on the configurable parameters, Professor Bushnell identified as the key metric for evaluating the success of the IR design whether the cost of IR compares favorably with the costs resulting from out-of-market solutions (i.e., RUC) previously relied upon for ensuring availability of necessary reserves.  The Six Cities also note the discussion during the Department of Market Monitoring’s (“DMM”) April 2, 2026 web conference on 2025 4^th Quarter Market Performance regarding Slide 18, which related levels of historical RUC procurement to different levels of coverage for uncertainty.  The DMM representative indicated that the comparison suggested that the IR-Up Demand Curve may be much too high in most hours, even at the 90^th percentile level.  While the market-based IR design is intended to provide a more efficient method than RUC for reserving capacity to address uncertainty, that outcome should be tested and demonstrated, not presumed. 

1. Please provide a summary of your organization's comments on the March 24, 2026 DAME Configurable parameters implementation working group discussion.

SCE believes that the more conservative levels for the Configurable Parameters, and the reduced procurement from using 10/90 percentiles, is an appropriate starting point for EDAM go-live. SCE also supports the more flexible and adaptive schedule proposed for determining when to move to second phase of the proposal.

2. Please provide a summary of your organization’s comments regarding the proposal for setting the envelope constraint multiplier to 45%.

SCE agrees that setting the envelope constraint multiplier to 45% for the remainder of Parallel Operations and initially in go-live makes sense. Until consistent data is able to confirm how Imbalance Reserves are converted into energy in real-time, adopting a lower multiplier is best course of action.

3. Please provide a summary of your organization’s comments regarding the proposal for setting the deployable factor to 45%.

SCE agrees that setting the deployable factor to 45% for the remainder of Parallel Operations and initially in go-live makes sense. Until consistent data is able to confirm how Imbalance Reserves are converted into energy in real-time, adopting a lower multiplier is best course of action.

4. Please provide a summary of your organization’s comments regarding the proposal for setting the Imbalance Reserve requirement to 90th and 10th percentiles for upward and downward reserves.

SCE agrees with CAISO’s decision to modify the Imbalance Reserve requirement to the 90^th and 10^th percentiles levels for the remainder of Parallel Operations and initially for go-live. The previous Parallel Operations results have shown that the larger requirements lead to greater differences between IR requirements and awards, which indicates that the market is not procuring the  97.5^th or 2.5^th percentile amounts; thus, if the changed percentiles simply reduce the instances of awards not meeting requirements, there should be no real impact in reliability. Additionally, this should ease pressure on the RC market as it will not have to fill as big of a gap from the IR results. This should not pose a problem for the CISO BAA because resource adequacy resources are required to bid into real-time so the likelihood of shortage of real-time bids in the CAISO markets will be very small. The same may not be true for the PacifiCorp BAAs, since they don’t have RA requirements. During the remaining time of Parallel Operations, CAISO should be checking to ensure there are no adverse reliability issues within the PACE and PACW BAAs.

5. Please provide a summary of your organization’s comments regarding the proposal for having a flexible and adaptive schedule to move into the second phase of the proposal

SCE concurs with having a flexible and adaptive schedule for moving into the second phase of the Configurable Parameters proposal. Since market participants’ level of participation in the Parallel Operations runs does not appear to match the level in production, the results from Parallel Operations may not be indicative of the how the actual markets will perform. Further, Parallel Operations is being conducted during a non-stressed period. In general, it likely makes sense not to adjust the parameters until after the summer period and once there has been a chance to examine the results. As SCE and others have stressed, adjustments should not occur until late September at the earliest. Though, as the EDAM/DAME changes are implemented, and if stressed conditions arise, CAISO should be prepared to respond quickly to changed conditions or results, and maintaining flexibility in the Configurable Parameters Proposal could be critical.

1. Please provide a summary of your organization's comments on the March 24, 2026 DAME Configurable parameters implementation working group discussion.

The Energy Authority (TEA) supports CAISO's decision to reduce the IRU/D deployment factor and the storage IRU envelope multiplier parameters to 45% for EDAM Go-Live, as well as its decision to reduce the confidence interval for setting the IRU/D requirements to 90%/10%. TEA's position here aligns with the comments TEA submitted earlier in the stakeholder process, where TEA suggested CAISO do what it can to limit the impact of the new DAME products during the first 6-12 months of EDAM operations to give time for the market to adapt and to test the products across multiple seasons. These products are intended to enhance market efficiency and reliability. Inserting them with lower parameters and tuning them over time is fully aligned with that intent.

TEA believes CAISO should, however, go a step further and address the overly stringent EDAM Resource Sufficiency Evaluation requirements parameters prior to May 1, 2026, go-live by reducing the EDAM RSE confidence interval to 90%/10%. TEA understands (but has been unable to confirm) that the EDAM RSE load-based BAA-level requirements are set with a 97.5%/2.5% confidence interval, which was carried over from the WEIM RSE methodology. TEA's experience in EDAM MarketSim and ParallelOperations indicates that this calculation likely is dramatically overstating the capacity need of the market and is too stringent of a marker to use in day-ahead. In TEA's experience, this overly aggressive RSE target disproportionately penalizes LSEs in the non-CAISO EDAM BAAs because these LSEs are unable to rely on economic intertie markets to increase the supply pool that counts for RSE like CAISO can for its BAA (and LSEs). When these LSEs are forecasted by CAISO and their EDAM BAO to be "short" relative to the expected RSE requirement, they must go to markets outside their EDAM BAA to secure supply. Given EDAM timelines, these markets are often illiquid at the time when the LSEs would be looking to procure supply, especially for weekend days, furthering driving up the cost of compliance. Moreover, if the LSEs are able to find that supply, they must lock it in day-ahead as an intertie self-schedule as there is no economic intertie market for the non-CAISO EDAM BAAs at this time. This effectively increases the "must-run" supply in EDAM that then has to be optimized around in the day-ahead and real-time solution, which significantly decreases market efficiency, creates ramping issues, leads to renewable resource curtailment, and increases congestion costs. TEA expects that moving the load-based RSE requirement calculation down to 90%/10% would strike an acceptable balance between CAISO BAA LSE and non-CAISO BAA LSE interests. TEA requests CAISO test that lower requirement in ParallelOperations as soon as possible and update the parameter for go-live to reflect that lower confidence level as a new "transitionary" measure that will help smooth EDAM implementation. TEA believes that if and when CAISO and the EDAM BAAs enable economic intertie bidding at non-CAISO EDAM BAA interfaces and enable convergence bidding, and as additional entities join EDAM through 2028, market liquidity and efficiency will greatly improve and it may be defensible to increase the confidence interval at that time -- to the extent an EDAM RA program has not been developed by that point that would remove the need for the EDAM RSE in the first instance.

2. Please provide a summary of your organization’s comments regarding the proposal for setting the envelope constraint multiplier to 45%.

Full support.

3. Please provide a summary of your organization’s comments regarding the proposal for setting the deployable factor to 45%.

Full support.

4. Please provide a summary of your organization’s comments regarding the proposal for setting the Imbalance Reserve requirement to 90th and 10th percentiles for upward and downward reserves.

Full support.

5. Please provide a summary of your organization’s comments regarding the proposal for having a flexible and adaptive schedule to move into the second phase of the proposal

TEA supports CAISO moving forward without a fixed schedule for tightening the parameters. TEA expects it will take 2-3 years, or longer, for the day-ahead market to stabilize given the planned EDAM BAA additions and planned WEIM exits over that time and the impact those additions will have on the supply/demand balance and connectivity of the EDAM footprint. TEA would like to see CAISO gather data over this period and then discuss with stakeholders the potential gain and loss of adjusting the parameters further, so long as there are not large impacts showing up in the market early-on that need to be addressed by further reducing the parameters while additional testing and model tuning can be done.