Comments on Draft 2023 flexible capacity needs assessment and availability assessment hours April 14, 2021 stakeholder call discussion

1. Please provide your organization’s comments on the Draft 2023 Flexible Capacity Needs Assessment and Availability Assessment Hours April 14 stakeholder call discussion:

California Community Choice Association (CalCCA) appreciates the opportunity to comment on the Draft 2023 Flexible Capacity Needs Assessment and Availability Assessment Hours stakeholder call. The results of the Draft 2023 Flexible Capacity Needs Assessment (Draft Assessment) show a significant increase in the flexible capacity requirements for 2023 compared to the 2022 requirements. It is expected that as new variable energy resources come onto the system, the need for flexible capacity will increase. To better understand the drivers of the increase for 2023 the California Independent System Operator Corporation (CAISO) should provide additional information to allow stakeholders to assess the magnitude of the increase for 2023.

The summary of expected capacity from variable energy resources (VERs) on slide 11 shows an expected increase of roughly 3,000 Net-Dependable Capacity[1] megawatts (MW) of in-front of the meter VERs and an increase of roughly 1,000 MWs of behind-the-meter solar from 2022 to 2023. The increase in flexible requirements between 2022 and 2023 (at most 4,892 MW) is larger than the amount of new VERs expected to come online between 2022 and 2023 (roughly 4,000 MW total). 

Because this delta could be explained by differences in what was expected and what actually came online, CalCCA also evaluated the difference in the Total Internal and Dynamically Scheduled VERs in the Flexible Capacity Needs Assessment for the 2022 Assessment and the 2023 Draft Assessment.  The expected 2022 MW in last year’s study was 20,049 MW[2] and the expected 2023 MW used in this year’s study is 22,672 MW[3]; a difference of only 2,623 MW. It is not clear how this change in VER capacity results in a more than one-for-one increase in the flexible capacity requirement.

The Draft Assessment indicates, “Other factors that have contributed to an increase in the 2023 three-hour ramp forecast include an increase in the peak and ramp CEC forecast, additional co-located and traditional VERs in survey submittals, as well as weather and curtailment variability.”[4] The CAISO should provide more information explaining how each of these factors contributes to the resulting requirements and should provide the Net Load Data set as it has in previous years to allow stakeholders to evaluate the study and resulting 2023 requirements.

[1]             Pmax; as defined in the BPM for Definitions and Acronyms.

[2]             Flexible Capacity Needs and Availability Assessment Hours Technical Study for 2022 Presentation at Slide 12: http://www.caiso.com/InitiativeDocuments/Presentation-2022FlexibleCapacityNeedsAssessment-Apr222021.pdf.

[3]             Draft 2023 Flexible Capacity Needs and Availability Assessment Hours Technical Study at Slide 11: http://www.caiso.com/InitiativeDocuments/Presentation-2023FlexibilityCapacityNeedsAssessment-Apr142022.pdf.

[4]             Draft 2023 Flexible Capacity Needs Assessment at 11: http://www.caiso.com/InitiativeDocuments/Draft2023FlexibleCapacityNeedsAssessment.pdf.

1. Please provide your organization’s comments on the Draft 2023 Flexible Capacity Needs Assessment and Availability Assessment Hours April 14 stakeholder call discussion:

In the past few years, CDWR has been expressing its concern to CAISO on the allocation methodology to an LSE attributed to its load ramps and how the calculations result in the positive allocation even when the LSE managed its load ramps to be consistently negative, in prior years. Significant cost impact can result from the flawed allocation methodology, as expressed by CDWR. For 2023 allocations, the same concern exists and CDWR believes it should be addressed.

1. Please provide your organization’s comments on the Draft 2023 Flexible Capacity Needs Assessment and Availability Assessment Hours April 14 stakeholder call discussion:

The California Independent System Operator (CAISO) sets Availability Assessment Hours (AAH) that correspond to operating periods when high demand conditions occur.[1]  AAH are primarily used to establish the binding hours of Resource Adequacy (RA) must-offer obligations (MOO) which are enforced by the RA Availability Incentive Mechanism.  The AAH consist of five consecutive hours that currently include Hour Ending (HE)17 to HE21 (4:00pm to 9:00pm).[2] 

The CAISO observed high load hours later in the day for actual loads in March and April 2019-2021 and forecasted monthly peak loads for the same months in 2023-2025.[3]  To account for the later high load hours, the CAISO proposes to implement in 2023 a new Spring season AAH consisting of March and April, and to set the Spring AAH at HE18-HE22.[4]  The AAH for other months will remain unchanged.

Altering the AAH may require the California Public Utilities Commission (CPUC) to update its Qualifying Capacity (QC) Methodology Manual (QC Manual).  The QC Manual uses CAISO AAH time ranges to set RA Measurement Hours (the time ranges used to record the historical generation of non-dispatchable resources and demand response resources).[5]  When AAH were last altered in 2018, the CPUC adopted new RA Measurement Hours to match the adjusted AAH and updated the QC Manual with those hours.[6]  The CPUC adopted the new RA Measurement Hours to maintain consistency between the CPUC RA program and CAISO market operations, and to avoid potential negative effects on contract uncertainty and grid reliability.[7]

The CAISO’s Draft Flexible Capacity Needs Assessment Report does not include a reference to AAH or the CAISO’s proposal to alter the AAH system.[8]  Cal Advocates recommends that the CAISO ensure that the Final Flexible Capacity Needs Assessment Report (Final FCN Report) describe the CAISO’s intention to add the Spring season and the adjusted hours for that season.  Since the Final FCN Report will be submitted into the CPUC’s RA Rulemaking,[9] inclusion of the Spring season AAH changes in the Final FCN Report would allow the CPUC to conduct a stakeholder process in that Rulemaking to consider the proposed change to AAH and any necessary adjustments to the RA Measurement Hours adopted in the present CAISO initiative.[10]

[1] CAISO Tariff 40.9.3.1.

[2] CAISO, Draft 2023 Flexible Capacity Needs and Availability Assessment Hours Technical Study Presentation, April 14, 2022 (FCN Assessment Presentation), p. 54.

[3] FCN Assessment Presentation, p. 46.

[4] FCN Assessment Presentation, pp. 46, 54.

[5] The RA Measurement Hours are intended to match AAH.  CPUC, 2020 Qualifying Capacity Methodology Manual, November 2020, pp. 11, 15-16, 22.  Available at: https://www.cpuc.ca.gov/-/media/cpuc-website/files/legacyfiles/q/6442466773-qc-manual-2020.pdf.

[6] Decision 18-06-030, Ordering Paragraph 13.

[7] The CPUC noted that sustaining RA Measurement Hours misaligned from the AAH causes the CPUC to  count resource values in different time frames than when the resources are actually required to offer capacity to the CAISO, which creates confusion and uncertainty among resource owners, and potentially can affect grid reliability (Decision 18-06-030, pp. 41, 43).  The CAISO also executed a one-year waiver process for demand response resources in order to work around the misalignment.  See: CAISO Comments on proposed Decision, June 11, 2018, pp. 4-5.  Available at: https://docs.cpuc.ca.gov/PublishedDocs/Efile/G000/M216/K273/216273346.PDF

[8] The Draft Flexible Capacity Needs Assessment Report is available at: http://www.caiso.com/InitiativeDocuments/Draft2023FlexibleCapacityNeedsAssessment.pdf.

[9] See CPUC, Assigned Commissioner’s Scoping Memo and Ruling: R.21-10-002, December 2, 2021, p. 10.  Available at: https://docs.cpuc.ca.gov/PublishedDocs/Efile/G000/M428/K181/428181323.PDF.

[10] Cal Advocates notes that the CPUC currently anticipates service of the Final FCN Report by April 29, 2022, though the CAISO has already notified the CPUC that Final FCN Report was subject to delay and will be served after April 29, 2022.  See CAISO Draft 2023 Local Capacity Technical Analysis and Update Regarding Draft 2023 Flexible Capacity Needs Assessment, April 7, 2022, pp. 1-2.  Available at: https://docs.cpuc.ca.gov/PublishedDocs/Efile/G000/M466/K270/466270216.PDF.