Comments on RAMPD (2/10 & 2/11 Stakeholder Call)

1. Track 1: Please provide your organization’s feedback on modeling improvements undertaken and additional improvements to consider.

ACP-California appreciates CAISO’s ongoing efforts to expand and enhance its near- and mid-term reliability analysis.  CAISO’s analysis provides a useful view on system needs which complements the analysis from the CPUC and other entities.  ACP-California continues to encourage the CAISO to identify opportunities for greater alignment in the simulation methods and input data used by the CPUC for its system modeling efforts, particularly regarding weather-driven effects.  The CPUC has developed an extensive probabilistic dataset to simulate correlated weather effects for load, variable energy resources, and, most recently, thermal derates and outages.  There are strong correlations within weather conditions which may be lost by a method which is stochastic rather than probabilistic.  ACP-California encourages CAISO to continue assessing risk scenarios.  In particular, CAISO should ensure it has fully evaluated reliability risks driven by hydroelectric conditions in California and the broader west.  Fully understanding this risk has important implications for planning and procurement decisions.

2. Track 1: Please provide your organization’s feedback on the qualifying capacity accreditation and PRM proposals discussed.

ACP-California has limited comments on the default capacity accreditation and Planning Reserve Margin (“PRM”) proposals at this time.  While accreditation and PRM are very important values, it is unclear how the default rules will impact load-serving entities (“LSEs”) or generators being shown by CPUC-jurisdictional or other LSEs subject to non-default Local RA (“LRA”) requirements.

While ACP-California appreciates the continued development of these default rules, it is unclear that the varied interests and constraints of the CAISO’s many LRAs will permit the establishment of a “unified theory of accreditation” that can be neatly ported to align with the CPUC program.  If such a transition were to be considered, ACP-California would reiterate its concern that modeling data and methodologies must align between the CPUC and CAISO programs to arrive at parallel valuation outcomes (even if expressed in different counting methods).

ACP-California is appreciative of the discussions and ongoing work brought forward by CAISO staff to further the resource counting discussion. The RAMPD initiative materials and discussions should be informative for the CPUC as it revisits its CAISO showing methodology for variable energy resources to resolve current challenges with the gross peak translation methodology.

3. Track 1: Please provide your organization’s feedback on the development of default qualifying capacity accreditation and PRM approaches and any preferred path the CAISO should pursue. In needed, what additional analysis would help inform the decision.

See question 2.

4. Track 1: Regarding the direction of CAISO’s UCAP proposal, please share your organization’s feedback on key elements discussed at the workshop such as implementation through CAISO NQC process, assessment hours, and interaction with LRA QC methodologies.

While ACP-California is directionally supportive of CAISO’s UCAP proposal (with modifications proposed by the California Energy Storage Alliance (“CESA”)), additional work will be necessary to align and implement UCAP between the CAISO and the CPUC.  For ACP-California members, whose contracts are predominantly with LSEs using CPUC or other non-default LRA rules, ACP-California expects UCAP to be implemented by those LRAs with technical support from CAISO.

ACP-California supports CESA’s recommendation to ensure UCAP does not unintentionally penalize storage resources for normal operating resource limitations, such as discharge limits which are well-established and already accounted for in LRA programs like Slice of Day.  ACP-California appreciates CAISO’s parallel efforts to improve market integration and optimization for storage which will provide a clear path forward for storage resources to provide their full resource capabilities to CAISO without the need for workarounds, including outage cards, for expected operational performance.

For new batteries that do not have operational history, the CAISO should avoid using a fleet average number that would subject these projects to de-rates that may result from issues with older facilities.  As resources age, they face greater risks of outages.  To fairly account for this reality, the CAISO should use a fleet average specifically for recently online storage units to develop qualifying capacity (“QC”) counting rules for new resources reflecting this narrower portion of the battery fleet.  We recommend developing a database that is comprised solely of resources that are within three years of their Commercial Operation Date and calculates outage assumptions based on this limited group of resources.  Once an individual resource has accumulated three years of operating history, its QC value should be based solely on that resource’s performance rather than that of the fleet.

Finally, market participants need a clear signal on the timing for which a UCAP transition will take place, as well as when the first round of data may be collected which will translate into UCAP compliance values.  ACP-California supports CESA’s recommendations on ensuring only clean, accurate data reflecting true outages is used for UCAP compliance evaluation.

5. Track 1: Please provide your organization’s feedback on accounting for ambient derates, particularly the interaction between a resource’s NQC after accounting for ambient derates, the NQC after potentially being reduced for UCAP, and the must offer obligation. Would you support the direction discussed and if not, what changes or analysis are required.

ACP-California encourages the CAISO to ensure ambient derates are not double-counted within reported outages which are captured for UCAP, and encourages further discussions with generators to understand the range of approaches asset owners currently take regarding ambient derates, such as reduced QC or showings below the full QC value.

6. Track 2: For the outage and substitution proposal leaning, please provide your organization’s recommendation and rationale for what threshold to use for conditional outages, including the pros and cons of different alternatives.

ACP-California appreciates CAISO’s exploration of alternate mechanisms for substitution RA requirements.  In prior comments, ACP-California recommended that CAISO remove requirements for substitution during times of the year that substitution is unnecessary for ensuring reliability.  Of the options being considered in Track 2, this proposal will provide the most clear benefit to generators and LSEs while not compromising reliability.

CAISO’s updated proposal would provide conditional approvals for outages without substitution.  ACP-California understands that approvals need to be conditioned to account for the risk that reliability needs can change as the CAISO gets closer to the outage period.  We appreciate CAISO’s willingness to prepare assessments of which months are most likely to require substitution using information from year ahead RA filings and enhanced visibility into the available generator fleet developed in Track 3.  This information can be compared to the expected system peak along with historic outage data for each month to determine if conditional outages are approved for that month.  Having this information as early as possible after the year-ahead RA filings will assist generators which often must schedule outages months in advance.  This feature is necessary to help generators evaluate the risk of a conditional approval of an outage without substitution.  In addition, we recommend clarifying the timeframe before real-time operations when the CAISO will rescind the conditional approval.  A preliminary reassessment notification at T-30 after month-ahead RA filings have been received and cured plus a final determination at T-8 is desired.  Eight days provides an SC a reasonable period of time to attempt to reschedule an outage if it is going to face substitution costs.  The eight-day timeframe is also sufficiently close to real-time operations to provide the CAISO enough time to update its assumptions and reevaluate the need for substitution.  With these clarifications, we believe the conditional outage proposal could significantly improve the current outage/substitution process and help reduce costs for all market participants.

7. Track 2: For the outage and substitution proposal leaning, please provide your organization’s recommendation and rationale for the product definition design attributes (granularity, participation, type of RA, and quantity). For participation, should offering to the pool and procuring from the pool be mandatory or voluntary for buyers and/or sellers? Why or why not?

ACP-California supports the concept of an outage pool for months that conditional approval of outages without substitution does not occur.  Development of an approach that maximizes the timeframe for outages without substitution should be the highest priority in Track 2, as it provides the clearest benefits.  While an outage pool will be beneficial in theory, significant questions remain for participation and the ability to efficiently match buyers and sellers.  If not done correctly, solely relying on an outage pool in Track 2 will provide no benefits over the status quo.

Scheduling coordinators for resources should be able to provide all attributes that may require substitution.  We recommend that the CAISO focus on ensuring that there will be robust participation in the substitution pool, which we believe can be achieved through clear and transparent compensation signals for participating resources.  Offering to the pool should be voluntary at first.  If the pool does not have sufficient participation or if there are large SCs that continue to withhold capacity from being available for substitution, the CAISO should reevaluate the approach and consider mandatory participation.

We also believe that the CAISO playing a role in administering a substitution pool could help resolve challenges Scheduling Coordinators face in securing substitute capacity for periods of time less than the full RA-month.  Instead of matching individual buyers and sellers in the pool, which may be challenging given different term length and products available, ACP-California tentatively supports CAISO aggregating procurement for all interested buyers, then spreading the cost pro rata based on volume and term.  While details would need to be worked out, it appears that aggregating demand will make it easier to match the overall supply need on an equitable basis.

8. Track 2: For the outage and substitution proposal leaning, please provide your organization’s feedback on visibility options. What type of information would help stakeholders understand the certainty of being able to take outages if relying on excess shown RA and the voluntary pool?

As noted in our response to Question 6, ACP-California supports the CAISO providing a regular assessment of capacity availability that is periodically updated throughout the year so SCs can better evaluate the ongoing risk of a conditional outage approval requiring substitution closer to real-time. 

For the outage pool, ACP-California recommends running the matching of aggregate bids and offers in parallel with the monthly RA showing process at T-45.  Interested parties can submit their supply and needs at that time, with CAISO clearing the market after the RA showing cure period.

9. Track 2: For the outage and substitution proposal leaning, please provide your organization’s feedback on access priority. Would the right of first refusal for the entity showing the capacity for substitution purposes overcome incentives to hold capacity back?

We believe that the right of first refusal should help overcome incentives for withholding capacity.  However, as noted in response to Question 7, since the effect of this aspect of the proposal on market behavior is speculative, we recommend first setting an optional participation standard and then reevaluate whether mandatory participation is necessary after CAISO monitors actual market behavior.

10. Track 2: For the outage and substitution proposal leaning, please provide your organization’s feedback on the price and procurement mechanism design attributes.

See responses to Questions 7 and 13.

11. Track 2: Please provide your feedback on adding “urgent” as an outage type. Are there any other outage types that should be considered in the straw proposal, if so, in what way are they not covered by the outage types available today?

No comment.

12. Track 2: Please provide your organization’s feedback on the joint LSE presentation.

No comment.

13. Track 2: Please provide your organization’s feedback on DMM’s presentation.

The concept presented by DMM is a reasonable starting point for development of a pricing structure but may not be practical when the resources being offered have diverse attributes, namely contract length and resource attributes.  DMM’s examples use a product that is of interest to all buyers.  In practice, buyers in an outage pool may want different contract lengths than those being offered (sellers may be providing specific days or weeks that differ from the buyer’s needs), while others may be offering Flex and Local RA attributes that buyers do not need.  How this product diversity would work in DMM’s structure is unclear, which is why having procurement to aggregate system needs as outlined in the response to Question 7 is preferred.

14. Track 2: Optionally, please provide your organization’s preliminary feedback on the availability and incentive mechanism straw proposal leaning discussion. A follow up working group meeting will be scheduled the week of March 3, 2025.

ACP-California does not support the establishment of a new incentive mechanism beyond the implementation of UCAP, which provides a substantial feedback signal for resource availability.  Implementation of the Measuring Unavailable RA (“MURA”) proposal has not been justified and it is unclear what problem CAISO is attempting to solve via its implementation.  UCAP will provide incentives based on historical performance impacting net qualifying capacity, while reforms being undertaken in the CAISO Price Formation Enhancements (“PFE”) initiative regarding scarcity pricing should provide generators with additional incentives to assure capacity is available during tight supply conditions.  While CAISO presented on concerns against using real-time pricing in the March workshop, it did not address the changes proposed in the PFE initiative nor did it present any data to identify what the issue is or how MURA will lead to more generation being available in real time.

15. Track 3: Please provide your organization’s feedback on the Track 3 Resource Visibility discussion as a whole.

ACP-California appreciates CAISO’s intent to proactively identify market and reliability risk which may arise from shifting dispositions of RA products, including off-system sales with the emergence of the Western Resource Adequacy Program.  However, ACP-California encourages the CAISO to pursue the most minimally-invasive path forward on data collection in an effort to reduce administrative burden for LSEs, generators, and SCs.

If the primary intent of the visibility proposal is to understand what resources, if any, are contracted outside of CAISO, CAISO should explore the potential for confidential data sharing with the Western Power Pool to exchange forward-looking information on import and export resources for the two programs prior to establishing a bottoms-up administrative program for all generators.

16. Track 3: Does your organization have any feedback on or suggested redlines to the list of capacity status categories discussed as potential reporting requirements for RA-eligible capacity not shown as RA?

RA-eligible capacity that is not shown as RA may be un-shown for many reasons, or no reason at all.  Moreover, the status of being shown may change as the compliance period draws nearer, making it difficult to categorize into one reason.  Rather than requiring a stated reason for a non-shown generator, CAISO should limit its options to “shown,” “committed outside of CAISO,” and “not committed.”  These categories should provide the insight needed to determine what resources are unavailable and what are available to meet resource needs beyond the shown RA fleet without having to further subdivide the reasons why.  It should not be necessary for CAISO to need to know the specific reasons that a resource is not committed to meet the visibility goals in Track 3.

17. Track 3: Does your organization have feedback on any other aspects of the potential design such as reporting frequency?

If the CAISO pursues this optional design, ACP-California recommends evaluating the year-ahead timeframe only to better understand changes in long-term contracts.

18. Track 3: Please provide your organization’s feedback on the presentation by Middle River Power.

No comment.

1. Track 1: Please provide your organization’s feedback on modeling improvements undertaken and additional improvements to consider.

The California Community Choice Association (CalCCA) supports the California Independent System Operator’s (CAISO) modeling improvements. Specifically, CalCCA supports the CAISO’s improved methodology for modeling hydro using 25 years of historical data and random draws of 500 hydro-year profiles. Previous CAISO analysis in the working group demonstrated through sensitivity simulations that hydro assumptions have significant impacts on loss-of-load expectation (LOLE) events, so increasing the number of hydro samples used in the model is a significant improvement over relying on an average hydro year. In addition, CalCCA supports the updates to storage modeling to model resource level characteristics, as well as the updates to outage rate modeling to use recent historical outage management system data.

2. Track 1: Please provide your organization’s feedback on the qualifying capacity accreditation and PRM proposals discussed.

See CalCCA’s responses to questions 3-5 below.

3. Track 1: Please provide your organization’s feedback on the development of default qualifying capacity accreditation and PRM approaches and any preferred path the CAISO should pursue. In needed, what additional analysis would help inform the decision.

Most LSEs participate under the California Public Utilities Commission’s (CPUC) resource adequacy (RA) program and, therefore, do not use the CAISO’s default counting rules or planning reserve margin (PRM). Before adopting default counting rules and default PRM, the CAISO should benchmark its own counting rules and PRM with the CPUC’s by identifying the PRM necessary to meet a 0.1 LOLE standard. The CPUC has moved to a Slice-of-Day (SOD) model that accounts for capacity in all hours. The CPUC’s LOLE study will use that SOD model to determine their PRM. With hourly granularity, it can be expected that the CPUC RA requirements will capture all reliability needs. The CAISO should work with the CPUC to ensure that the CAISO studies using a different counting methodology (i.e., effective load carrying capability with a single RA value versus an exceedance with different values in all hours) have consistent overall results.

4. Track 1: Regarding the direction of CAISO’s UCAP proposal, please share your organization’s feedback on key elements discussed at the workshop such as implementation through CAISO NQC process, assessment hours, and interaction with LRA QC methodologies.

The CAISO should continue its work to develop and implement a UCAP counting methodology. Such a methodology has the potential to better incentivize resource maintenance and availability than the status quo, which relies on the RA availability incentive mechanism (RAAIM) and forced outage substitution rules. CalCCA provides the following recommendations to the CAISO, which are consistent with CalCCA’s recommendations in its March 3, 2025, RA Track 3 Opening Comments in the CPUC’s RA proceeding, Rulemaking (R.) 23-10-011. As discussed in more detail below, the CAISO should: (1) coordinate with the CPUC; (2) verify PRM impacts through an LOLE study; (3) apply UCAP to all eligible RA resources, regardless of whether it was shown for RA during the time of a forced outage; (4) use a supply cushion approach; (5) adopt the CPUC Energy Division’s proposed weighting; (6) minimize impacts to existing contracts; (7) develop a methodology to calculate UCAP for new resources without a class average; and (8) work with stakeholders to better define UCAP-eligible outages for storage resources.

The CAISO and CPUC Should Coordinate Development of a UCAP Counting Methodology

The CAISO and the Commission should work together to develop a uniform UCAP counting methodology. The CPUC has its active RA proceeding, R.23-10-011, to evaluate UCAP. The CAISO and CPUC Energy Division staff should work together to ensure that progress in the CPUC’s proceeding and CAISO stakeholder initiative are aligned. To this end, the comments herein mirror CalCCA’s March 3, 2025, comments submitted to the CPUC in R.23-10-011, in response to Track 3 proposals. The CAISO and CPUC should also coordinate with other LRAs to the extent possible.

The CAISO Should Conduct a LOLE Study to Verify that UCAP Adoption Will Result in an Equal and Opposite Adjustment to the PRM

Since the current PRM accounts for forced outages and the resource’s net qualifying capacity (NQC) does not, any change to resource counting should be met with an equal and opposite offset in the PRM. Before implementing UCAP counting rules, the CAISO should provide data showing that this equal and opposite effect will materialize in the LOLE study that sets the PRM. If the offset is not equal and opposite, the CAISO should begin a dialogue with stakeholders to examine why. A shift to UCAP counting that does not meet this criterion appears flawed and deserving of further consideration to either perfect the UCAP calculation methodology or determine whether it is suitable in California. To validate this, the CAISO will need to perform a LOLE analysis. Given the time necessary to perform this calculation and for stakeholders to evaluate the result, the CAISO should not implement UCAP any earlier than 2028.

The CAISO Should Apply UCAP to All Eligible RA Resources Regardless of Whether it is Shown for RA at the Time of Forced Outage

The CAISO should apply UCAP to all resources regardless of whether the resource has been shown for RA at the time of the forced outage. Forced outages largely appear to be beyond the generator's control except for performing regular maintenance. Therefore, not counting an outage based upon the resource not being shown for RA will largely coincide with luck and not with any form of incentive. In addition, the CPUC should avoid mechanisms that encourage entities to show only the bare minimum to meet RA requirements. If an LSE has excess capacity, it should be encouraged to show a long RA position to the CPUC so that as many resources as possible are required to participate in the CAISO energy and ancillary services markets. With RAAIM, this incentive does not exist as resources would rather not be shown since it would take a financial risk. Similarly, if UCAP is only calculated for resources that are shown, the incentive to show the bare minimum will continue. Finally, if UCAP depends on RA showing status, this will further encourage LSEs to hold long positions to substitute for a forced outage. This is common practice in RA under RAAIM and has contributed to heightening RA scarcity. The CAISO should develop rules that encourage parties to either show or sell excess RA positions to avoid tight capacity market conditions.

The CAISO Should Continue to Develop a Supply Cushion to Identify Forced Outages that Apply to a Resource’s UCAP

Using a supply cushion to identify the forced outages that are used to calculate UCAP sets correct incentives. While in any given year, market participants do not know a priori which hours will be the most constrained, history predicts that these hours will primarily occur during the peak and net load peak of the summer. This history will give generators proper incentives to perform maintenance before the historically tightest hours. If and when those hours change, they will likely occur slowly, with one or a few hours moving to historically unseen periods. This movement will inform generators of what to expect in coming years and when to prepare their resources for reliable operation.

The CAISO Should Adopt Energy Division’s Proposed Weighting in Its RA Track 3 Proposal in R.23-10-011

The CAISO should adopt Energy Division’s proposal for a weighting of UCAP for resources that equates to a weight of 44.45 percent, 33.33 percent, and 22.22 percent for the three-year period from most recent to most distant.[1] This proposal is reasonable and should be adopted. Weighing the most recent year more highly than the others will provide an incentive to perform major maintenance that will significantly impact the ability to provide RA quickly. It will also provide an incentive to perform routine maintenance to avoid having increased forced outages.

The CAISO Should Minimize Impacts on Existing Contracts

To the extent practical, the CAISO should seek to minimize impacts on existing contracts. The CAISO should, therefore, seek to use existing terminology as those terms are often used in formulating contracts. The most relevant for this discussion is the NQC. Currently, the NQC is defined as the amount of Qualifying Capacity (QC) adjusted by the CAISO for deliverability. If the total provision of RA is now dependent on forced outage rates, the NQC should be that amount of QC derated by UCAP. In the alternative, the QC could account for the derate of UCAP, which would be consistent with the treatment of renewable resources whose QC is determined by an exceedance methodology that accounts for both fuel availability and resource outages. Either method is acceptable since RA contracts are generally denominated in NQC and should account for what the LSE can use to satisfy RA requirements.

The CAISO Should Adopt a Methodology for New Resources Without a Class Average

When assigning UCAP to a new resource at commercial operation without an existing class of technology, the CAISO should use a similar technology where available. For example, a new enhanced geothermal resource would use the class average for geothermal. This will likely serve as a reasonable starting point. In addition, if the CAISO adopts the weighting proposed above, the general related class average will be quickly replaced. If no similar technology exists, the CAISO should use an aggregate of a general classification. For example, if a new flow battery achieves commercial operation, the CAISO should use an aggregate of other storage technologies, which would currently include battery and pumped hydro. Again, this would quickly be replaced by resource-specific outages given the CAISO’s proposed weighting.

The CAISO Should Work with Stakeholders to Consider UCAP-Eligible Outages for Storage Resources

The UCAP should be developed to account for outages due to equipment failures. Critically, this will need to consider battery storage that is not available because any charging has already been used, and the resource is not available due to its state of charge and not due to equipment failure. The CAISO should also work with stakeholders to determine how to address storage resources that are receiving Investment Tax Credits and will only charge from its host renewable resource. In this case, evaluating the reliability of such resources may need to account for outages caused by fuel availability to charge the battery.

[1]            Administrative Law Judges Ruling on Energy Division’s Track 3 Proposals and Joint Staff Qualifying Capacity Proposal Status Update, R.23-10-011 (Jan. 21, 2025), Attachment 2: http://docs.cpuc.ca.gov/SearchRes.aspx?DocFormat=ALL&DocID=555183934.

5. Track 1: Please provide your organization’s feedback on accounting for ambient derates, particularly the interaction between a resource’s NQC after accounting for ambient derates, the NQC after potentially being reduced for UCAP, and the must offer obligation. Would you support the direction discussed and if not, what changes or analysis are required.

The CAISO puts forth two options for estimating ambient derates: (1) a historical lookback; and (2) unit capability testing. The CAISO should utilize a combination of both approaches, starting with a historical lookback. A calculation based on historical data is less burdensome than capability testing. If a resource does not have sufficient historical data, or disputes the CAISO’s historical lookback calculation, the CAISO should allow for unit capability testing.

Whether the CAISO uses ambient derates for a resource’s QC or NQC (inclusive of UCAP) will impact the resources’ must-offer obligation. If the CAISO includes ambient derates into a resource’s QC, then the resource’s must-offer obligation will also be reduced by the amount of the ambient derate. If the CAISO includes ambient derates into a resource’s NQC (inclusive of UCAP), then the resource’s must-offer obligation will not automatically be reduced by the amount of the ambient derate, and the resource will need to submit an outage card to reflect the ambient derate.

To determine which approach the CAISO should pursue, the CAISO should investigate how other ISOs and RTOs incorporate ambient derates into resource counting and evaluate how each option impacts the risk of meeting the must-offer obligation with a resource with ambient derates and who bears the cost of that risk.

6. Track 2: For the outage and substitution proposal leaning, please provide your organization’s recommendation and rationale for what threshold to use for conditional outages, including the pros and cons of different alternatives.

CalCCA supports the straw proposal direction of allowing conditional approval of planned outages without substitution, and if an outage would result in a reliability impact, offering a voluntary planned outage substitution pool for SCs to procure substitute capacity. This approach will allow for more opportunities to perform planned maintenance necessary to support reliable grid operation while retaining the responsibility of providing substitution on the entity in control of the outage.

CalCCA has no comments at this time on the threshold to use for conditional outages. The CAISO should put forth a straw proposal based upon its expertise managing outages and system reliability under various grid conditions for stakeholder feedback.

7. Track 2: For the outage and substitution proposal leaning, please provide your organization’s recommendation and rationale for the product definition design attributes (granularity, participation, type of RA, and quantity). For participation, should offering to the pool and procuring from the pool be mandatory or voluntary for buyers and/or sellers? Why or why not?

The CAISO supports a voluntary planned outage substitution pool. Holders of excess RA should retain their ability to use the capacity how they choose. Mandatory participation in a pool, even with a right-of-first refusal, would provide an incentive for entities not to show excess RA. Instead, the pool should more easily enable sellers to voluntarily offer their excess RA to the market for substitution.

8. Track 2: For the outage and substitution proposal leaning, please provide your organization’s feedback on visibility options. What type of information would help stakeholders understand the certainty of being able to take outages if relying on excess shown RA and the voluntary pool?

CalCCA has no comments at this time.

9. Track 2: For the outage and substitution proposal leaning, please provide your organization’s feedback on access priority. Would the right of first refusal for the entity showing the capacity for substitution purposes overcome incentives to hold capacity back?

CalCCA has no comments at this time.

10. Track 2: For the outage and substitution proposal leaning, please provide your organization’s feedback on the price and procurement mechanism design attributes.

CalCCA has no comments at this time.

11. Track 2: Please provide your feedback on adding “urgent” as an outage type. Are there any other outage types that should be considered in the straw proposal, if so, in what way are they not covered by the outage types available today?

The CAISO should couple UCAP with clarifications to the definitions of outage types (forced, planned, urgent, and opportunity) so that generators are clear about how to define their outages, and to which outage types UCAP applies. In the straw proposal, the CAISO should explain the intended outcomes of adding “urgent” as an outage type and how doing so will clarify outage reporting.

The CAISO should also categorize its nature of work categories into those that do and do not count towards resources’ UCAP and ensure no one nature of work should be used for both UCAP-eligible outages and non-UCAP-eligible outages. The CAISO should also revisit its bid insertion rules to ensure that resources are incentivized to properly submit outages when they are unavailable so that UCAP values accurately reflect availability.

12. Track 2: Please provide your organization’s feedback on the joint LSE presentation.

CalCCA has no comments at this time.

13. Track 2: Please provide your organization’s feedback on DMM’s presentation.

CalCCA has no comments at this time.

14. Track 2: Optionally, please provide your organization’s preliminary feedback on the availability and incentive mechanism straw proposal leaning discussion. A follow up working group meeting will be scheduled the week of March 3, 2025.

The CAISO should further explore the “measuring unavailable RA” concept. UCAP incentivizes resources to always be available because they cannot perfectly predict when supply cushion hours will occur. Resources should also have a financial incentive to be available during the most extreme grid conditions if possible because forced outages during most critical periods have greater negative impacts on the grid. CalCCA may have additional comments on this topic after the March 3, 2025, working group meeting.

15. Track 3: Please provide your organization’s feedback on the Track 3 Resource Visibility discussion as a whole.

CalCCA agrees that the CAISO operators should have enhanced visibility into the capacity available for the capacity procurement mechanism in high-risk months. In addition, increasing transparency of non-confidential, aggregated data would provide stakeholders the ability to better assess RA market trends.[1] For these reasons, CalCCA supports the CAISO developing a process to obtain increased visibility about RA resources and their availability to California.

The CAISO and stakeholders should further consider how to implement such a process so that it balances information accuracy and administrative burden. Compiling this information involves multiple parties and a chain of events that will be difficult to track. The CAISO’s straw proposal options are good starting points, but the CAISO and stakeholders will need to further consider these two objectives when developing the details.

[1]            For example, in 2024, the CAISO began posting historical aggregated RA showing information: https://www.caiso.com/documents/historicalresourceadequacyaggregatedata.xlsx. This information has greatly improved the transparency of shown RA.

16. Track 3: Does your organization have any feedback on or suggested redlines to the list of capacity status categories discussed as potential reporting requirements for RA-eligible capacity not shown as RA?

The capacity status categories generally capture the reasons RA-eligible resources are not shown.

17. Track 3: Does your organization have feedback on any other aspects of the potential design such as reporting frequency?

Reporting frequency should generally match the RA program’s monthly frequency. To limit the administrative burden of reporting, the CAISO could require reporting of changes from previously reported information.

18. Track 3: Please provide your organization’s feedback on the presentation by Middle River Power.

Middle River Power LLC (MRP) proposes an RA transaction ledger to log transactions into a CAISO system so the CAISO has visibility into RA-eligible resources. MRP states this concept “can eliminate manual updates of supply plans.”[1] CalCCA is concerned with a proposal that would eliminate supply plans. RA plans and supply plans are needed to confirm a resource’s RA status by the seller and the buyer. A validated supply plan triggers an RA resource’s must-offer obligation. Proposals to increase visibility into shown and non-shown RA capacity should ensure both the buyer and seller confirm the RA status of the capacity, so that the CAISO can perform its validation and apply must offer obligation to shown RA resources.

[1]            Middle River Power LLC, Visibility Solution Concept (Feb. 11, 2025) at Slide 4: https://stakeholdercenter.caiso.com/InitiativeDocuments/Presentation-Middle-River-Power-Visibility-Solution-Concept-Feb-11-2025.pdf.

1. Track 1: Please provide your organization’s feedback on modeling improvements undertaken and additional improvements to consider.

As provided in prior set of comments, for California Department of Water Resources (CDWR)’s unique hydro resources (uniqueness associated with hydrology based integrated water and power operations and operational constraints), stochastic modeling with assumption of an average hydro year may be appropriate for longer term forecast. For short term forecast (current year and the next), a better approach would be to have CDWR’s forecast based on the current hydrological conditions to reflect operational availability.

2. Track 1: Please provide your organization’s feedback on the qualifying capacity accreditation and PRM proposals discussed.

The slide #7 on “RA package options and leanings” indicates updated defaults are provided as a tool to Local Regulatory Authority (LRAs) to adopt CAISO default rules based on state-of-the-art, transparent probabilistic modeling. However, LRAs should not be subject to mandatory adoption.

CDWR supports CAISO indication (on Slide #17) that CAISO default QC rules and PRM would only apply to LRAs that do not have their own QC and PRM methods.

Certain resources such as hydro may have increased capacity in short term forecasts, such as within a Resource Adequacy (RA) compliance year, based on updated hydrological forecast. Currently, an increase in the Net Qualifying Capacity (NQC) values can be requested within a RA compliance year on a monthly basis. The RAMPD proposal should keep the provision to update an increase in NQC values within a RA compliance year so as to reflect real availability of resource in support of grid reliability with an increased capacity.

3. Track 1: Please provide your organization’s feedback on the development of default qualifying capacity accreditation and PRM approaches and any preferred path the CAISO should pursue. In needed, what additional analysis would help inform the decision.

CDWR has been stating that its loads and resources are hydrology based and can vary significantly from annual forecast of loads and resources (used for annual RA showings) to monthly forecast of loads and resources (used for monthly RA showings). In the monthly showing timeframe, both the changes in demand and resource capacity (also known as qualifying capacity-QC) due to hydrological changes can impact monthly RA showings and such changes also provide a better picture of operational demand and resource availability in support of grid reliability. Even though the default rules are being considered based on a probabilistic approach, CDWR real time operation depends on its actual forecast of demand and resource capacity and the operations must be aligned with the latest forecast of its demand and supply.

With the nature of uniqueness with CDWR operations compared to other LSEs, a preferred approach for CDWR would be to update the forecast of its demand and resources based on hydrological forecast and water pumping demand on a monthly basis which may or may not align with the one size fits all probabilistic approach. There is a merit to identifying such hydro resources and water pumping demand to be different from other loads and resources and to be treated as such. Allowing updated forecasts of water pumping demand and integrated hydro generation on a monthly basis and counting updated hydro generation capacity associated with the water pumping operation in an integrated water and power system will result in realistic representation of hydro pumping load and hydro generation in day-to-day operations.

One option among others would be identifying hydrology-based loads and resources associated with an integrated water and power operations such as CDWR, and allowing updated forecast of water pumping loads and hydro generation resources on a monthly basis based on the latest forecast of water operation. Providing grid reliability support (through RA capacity and beyond, such as Operating Procedure :4420-System Emergency)  is entirely dependent on the latest forecast of water pumping demand and integrated hydro resources.

As suggested in previous rounds of comments, for participating load (PL), default counting rule could be aligned with the PL Agreement (PLA) which requires capacity to be certified for non-spin by the CAISO to provide RA capacity. In addition, any further amendments in design such as real-time load bidding functionality in future should be assessed for its eligibility to provide RA.

4. Track 1: Regarding the direction of CAISO’s UCAP proposal, please share your organization’s feedback on key elements discussed at the workshop such as implementation through CAISO NQC process, assessment hours, and interaction with LRA QC methodologies.

If UCAP must be applied to a PL resource,  forced outage, as it relates to a PL resource, should be defined clearly as it is not a generating resource. In addition, discrete dispatch operational constraint for a PL pump could limit the Unforced Capacity (UCAP) reduction because a pump is either on or off and cannot be dispatched partially.

As indicated in the slide #53, UCAP derate will be applied to resources that do not receive  QC values from an LRA derived from a probabilistic or performance-based methodology (exceedance, ELCC, UCAP etc.). A process should be developed to identify if an LRA derived QC value uses some probabilistic inputs  that will determine if the method is probability based and whether it should be exempt from UCAP derates.

Slide #61 illustrates UCAP factors for resources excluding DR and hydro resources in 2022-2023 period. It would be helpful for informational purposes if there are any values derived for DR and hydro resources.

5. Track 1: Please provide your organization’s feedback on accounting for ambient derates, particularly the interaction between a resource’s NQC after accounting for ambient derates, the NQC after potentially being reduced for UCAP, and the must offer obligation. Would you support the direction discussed and if not, what changes or analysis are required.

Slides#31-33, do not include hydro resources. The intent of exclusion is not clear.

6. Track 2: For the outage and substitution proposal leaning, please provide your organization’s recommendation and rationale for what threshold to use for conditional outages, including the pros and cons of different alternatives.

No comment at this time.

7. Track 2: For the outage and substitution proposal leaning, please provide your organization’s recommendation and rationale for the product definition design attributes (granularity, participation, type of RA, and quantity). For participation, should offering to the pool and procuring from the pool be mandatory or voluntary for buyers and/or sellers? Why or why not?

The product could be granular to the level of hour and day if feasible. Type of RA could be for system, local, and flexible. Offering to the pool and procuring from the pool should be voluntary. CDWR’s operational constraints and variability of operations requires offering capacity to be voluntary.

8. Track 2: For the outage and substitution proposal leaning, please provide your organization’s feedback on visibility options. What type of information would help stakeholders understand the certainty of being able to take outages if relying on excess shown RA and the voluntary pool?

No comment at this time.

9. Track 2: For the outage and substitution proposal leaning, please provide your organization’s feedback on access priority. Would the right of first refusal for the entity showing the capacity for substitution purposes overcome incentives to hold capacity back?

No comment at this time.

10. Track 2: For the outage and substitution proposal leaning, please provide your organization’s feedback on the price and procurement mechanism design attributes.

No comment at this time.

11. Track 2: Please provide your feedback on adding “urgent” as an outage type. Are there any other outage types that should be considered in the straw proposal, if so, in what way are they not covered by the outage types available today?

CDWR in general is supportive of the urgent outage concept including planned outage without substitution (conditional outage approval).

12. Track 2: Please provide your organization’s feedback on the joint LSE presentation.

No comment at this time.

13. Track 2: Please provide your organization’s feedback on DMM’s presentation.

No comment at this time.

14. Track 2: Optionally, please provide your organization’s preliminary feedback on the availability and incentive mechanism straw proposal leaning discussion. A follow up working group meeting will be scheduled the week of March 3, 2025.

A new mechanism, Measuring Unavailable RA (MURA), would assess unavailability during stressed grid conditions and allocate the penalty costs collected from underperforming RA to load. CDWR supports any option with an outcome resulting in reasonable penalties. CDWR in general supports the CAISO recommendation of starting with Tx/RMO/EEAs as the assessment period as it is the most critical period for grid reliability.

15. Track 3: Please provide your organization’s feedback on the Track 3 Resource Visibility discussion as a whole.

On slide #80, the 5^th bullet should include “owned” resources and read as “owned or contracted but not needed to meet LSE’s requirements”.

16. Track 3: Does your organization have any feedback on or suggested redlines to the list of capacity status categories discussed as potential reporting requirements for RA-eligible capacity not shown as RA?

No comment at this time.

17. Track 3: Does your organization have feedback on any other aspects of the potential design such as reporting frequency?

No comment at this time.

18. Track 3: Please provide your organization’s feedback on the presentation by Middle River Power.

No comment at this time.

1. Track 1: Please provide your organization’s feedback on modeling improvements undertaken and additional improvements to consider.

The Public Advocates Office at the California Public Utilities Commission (Cal Advocates) is the independent ratepayer advocate at the California Public Utilities Commission (CPUC).  Our goal is to ensure that California ratepayers have affordable, safe, and reliable utility services while advancing the state’s environmental goals. 

Cal Advocates provides no response to this question at this time.

2. Track 1: Please provide your organization’s feedback on the qualifying capacity accreditation and PRM proposals discussed.

Cal Advocates provides no response to this question at this time.

3. Track 1: Please provide your organization’s feedback on the development of default qualifying capacity accreditation and PRM approaches and any preferred path the CAISO should pursue. In needed, what additional analysis would help inform the decision.

Cal Advocates provides no response to this question at this time.

4. Track 1: Regarding the direction of CAISO’s UCAP proposal, please share your organization’s feedback on key elements discussed at the workshop such as implementation through CAISO NQC process, assessment hours, and interaction with LRA QC methodologies.

The February 10, 2025 Workshop discussed UCAP and how the CAISO will identify the historical hours of the year that the CAISO should use to calculate resource outage rates and determine the appropriate derate to apply to UCAP-accredited resources.  The CAISO is leaning towards the use of “supply cushion” hours to “identify hours in each season that had tightest supply cushion” to determine which hours to observe resource availability for UCAP.[1]

To determine resource availability for UCAP, the CAISO should consider and discuss with stakeholders the option to use every hour of the year in which a resource had a resource adequacy (RA) must-offer obligation (MOO).  The CAISO MOO generally requires that all RA resources be available to the CAISO for dispatch in all hours of the day, not just during critical hours.[2]  Ratepayers pay for a resource to take necessary steps to be available to the CAISO during MOO hours through RA contracts or direct utility ownership of resources. 

It is unclear why the CAISO would consider only critical hours in a year rather than resource availability during all hours of the year in which a resource had a MOO.  It also remains unclear what, if any, binding penalties the CAISO applies to unavailable resources or uninstructed deviations, other than the Resource Adequacy Availability Incentive Mechanism (RAAIM).[3]

While it is important for resources to be available during times of critical need, resource availability throughout the year provides ratepayer benefits as well.  If an RA resource is unavailable but would have been awarded a dispatch, the marginal cost of energy may increase without that resource (since the CAISO markets would have selected a higher marginal cost resource to serve load).  Additionally, there is a decrease in resource diversity benefits if resources are unavailable; an unavailable resource may have been able to provide flexibility or baseload service needed for the market.  Unavailable resources may also cause reliability issues outside of supply cushion hours if a resource could provide generation needed in a particular region, such as due to transmission constraints in a local RA area.

The CAISO should provide a cost and effectiveness comparison between using all hours of the year in which a resource has a MOO and use of a supply cushion.

[1] CAISO, RA Modeling & Program Design, February 10, 2025 (February 10 Slides) at 58-59.  Available at: https://stakeholdercenter.caiso.com/InitiativeDocuments/Presentation-Resource-Adequacy-Modeling-and-Program-Design-Feb-10-2025.pdf.

[2] Generally, MOO requires resources to be available to CAISO all hours of the day in a month when the resource has a MOO, though the CAISO gives exceptional treatment to use-limited and variable energy resources.  However, the CAISO only assesses MOO compliance during availability assessment hours (AAH).  CAISO Tariff at 40.6.4 and 40.9.3.1.

[3] The RAAIM applies penalties to unavailable RA resources during AAH.  CAISO, Resource Adequacy Issue Paper, November 7, 2024 at 52-53.  Available at: https://stakeholdercenter.caiso.com/InitiativeDocuments/Issue-Paper-Resource-Adequacy-Modeling-and-Program-Design-Nov-07-2024.pdf.

5. Track 1: Please provide your organization’s feedback on accounting for ambient derates, particularly the interaction between a resource’s NQC after accounting for ambient derates, the NQC after potentially being reduced for UCAP, and the must offer obligation. Would you support the direction discussed and if not, what changes or analysis are required.

Cal Advocates provides no response to this question at this time.

6. Track 2: For the outage and substitution proposal leaning, please provide your organization’s recommendation and rationale for what threshold to use for conditional outages, including the pros and cons of different alternatives.

The CAISO proposes to implement a mechanism to conditionally approve planned outages without a requirement that the resource provide substitution capacity.[1]  The CAISO plans to develop the criteria to approve a conditional outage.[2]

The CAISO should adopt conditional outages without substitution capacity.  The CAISO’s authorization of a conditional outage should be informed by an estimation of RA and emergency resource availability, as well as forecasted demand conditions during the requested outage period.  Before the implementation of the Planned Outage Substitution Obligation (POSO) in 2021, the CAISO would authorize outages without substitution throughout the year.[3]  The CAISO should explain that pre-POSO conditional outage process in this initiative and consider adoption of some or all of those past criteria for enabling conditional outages in the future.

[1] February 10 Slides at 85-86.

[2] February 10 Slides at 87.

[3] CAISO, Tariff Amendment to Implement the Resource Adequacy Enhancements Phase 1 Initiative – Summer 2021 Provisions, March 29, 2021 at 4.  Available at: https://www.caiso.com/Documents/Mar29-2021-Tariff-Amendment-ResourceAdequacyRAEnhancements-ER21-1551.pdf:

Under current tariff [before adoption of POSO] rules, scheduling coordinators have the option to request an RA planned outage without substitution, but based on the CAISO’s evaluation of system needs a few weeks before the start of the month the outage is scheduled, the CAISO has the authority to reject the request and require substitution for any RA planned outage. 

7. Track 2: For the outage and substitution proposal leaning, please provide your organization’s recommendation and rationale for the product definition design attributes (granularity, participation, type of RA, and quantity). For participation, should offering to the pool and procuring from the pool be mandatory or voluntary for buyers and/or sellers? Why or why not?

The CAISO should not implement a substitution pool that transacts products longer than daily delivery terms.  Minimum lengths any longer than daily, such as weekly or monthly, would cause overprocurement for the party needing substitution capacity.  Overprocurement of capacity, such as a resource owner having to buy two weeks of substitution to meet an 8-day need, creates inefficient and unnecessary costs for the buyer.

8. Track 2: For the outage and substitution proposal leaning, please provide your organization’s feedback on visibility options. What type of information would help stakeholders understand the certainty of being able to take outages if relying on excess shown RA and the voluntary pool?

Cal Advocates provides no response to this question at this time.

9. Track 2: For the outage and substitution proposal leaning, please provide your organization’s feedback on access priority. Would the right of first refusal for the entity showing the capacity for substitution purposes overcome incentives to hold capacity back?

Cal Advocates provides no response to this question at this time.

10. Track 2: For the outage and substitution proposal leaning, please provide your organization’s feedback on the price and procurement mechanism design attributes.

Cal Advocates provides no response to this question at this time.

11. Track 2: Please provide your feedback on adding “urgent” as an outage type. Are there any other outage types that should be considered in the straw proposal, if so, in what way are they not covered by the outage types available today?

Cal Advocates provides no response to this question at this time.

12. Track 2: Please provide your organization’s feedback on the joint LSE presentation.

Cal Advocates provides no response to this question at this time.

13. Track 2: Please provide your organization’s feedback on DMM’s presentation.

Cal Advocates provides no response to this question at this time.

14. Track 2: Optionally, please provide your organization’s preliminary feedback on the availability and incentive mechanism straw proposal leaning discussion. A follow up working group meeting will be scheduled the week of March 3, 2025.

The CAISO is considering a new mechanism, Measuring Unavailable RA (MURA), to supplement or fully replace the RAAIM’s purpose to incentivize RA resource availability.[1]   The CAISO is considering using the existing AAH, stressed grid condition hours, or severe grid condition hours due to reserve shortages, as the MURA assessment periods.[2]

It is unclear why the CAISO would not use a mechanism that enforces the MOO in every hour for which an RA resource is obligated to be available to the CAISO.  The RAAIM currently uses the AAH which does not make all hours of the MOO binding, but the RAAIM does apply penalties to most days of each month.[3]  As described above, the CAISO requires RA resources to be available to the CAISO for all MOO hours and to provide economic and reliability benefits. Accordingly, it may be prudent for the CAISO to make all MOO hours binding through a MURA penalty for unavailability.[4]

A MURA assessment period of only critical reliability hours may fail to provide effective incentives since the price of energy during critical reliability hours would be high.  That high price of energy generally acts as an appropriate incentive for an RA resource to be available since that resource may be paid multiples of its cost to generate.  CAISO assessment of MURA only hours during reliability stage conditions like a system-wide Energy Emergency Alert (EEA) could fail to capture regional reliability issues like a potential transmission overload or local RA contingency events.

Other than the RAAIM and CAISO market revenue incentives,[5] the CAISO does not appear to have a mechanism to incentivize RA resources to be available during MOO hours.  A UCAP accreditation mechanism may derate a resource’s net qualifying capacity due to unavailability or outages.  However, the UCAP designs contemplated by both the CAISO and the CPUC may also only consider a small portion of hours in the year to determine a derate.[6]  A MURA that does not assess all MOO hours may fail to incentivize resources to be available to the CAISO despite obligations to do so.  For example, if the MURA and UCAP only assess availability during stressed conditions, then it is unlikely that the CAISO will assess any form of penalty to a resource with a MOO in months where stressed conditions are rare, such as April.[7]  In such a scenario, the RA fleet of resources would have no incentive to procure substitution capacity if the resources must take an outage, and typical energy prices would likely fail to incentivize availability.[8]

In this initiative, the CAISO should consider and discuss with stakeholders whether it is feasible for the CASIO to implement and enforce a MURA assessment period of all applicable MOO hours, as well as whether such a MURA assessment period would effectively incentivize RA resources to comply with their MOO.  If both feasible and effective, the CAISO should design the MURA to assess penalties in all applicable MOO hours for RA resources.  If it is not feasible or effective for the MURA to assess all MOO hours, the CAISO should consider using the current AAH design.  The AAH design applies to 5 hours a day for all MOO months,[9] or roughly 21% of all MOO hours for resources able to dispatch at all hours of the day.  The AAH fails to apply to all MOO hours but at least makes the MOO binding during a daily range of peak hours.[10]

Cal Advocates does not recommend a particular penalty structure at this time, as a penalty design must consider how often a penalty may occur.  However, a penalty based on the real-time price of energy at the generator’s appropriate price node would roughly capture the contemporary value of a resource’s unavailability and may be appropriate depending on the MURA’s assessment period.[11]

[1] CAISO, RA Modeling & Program Design, February 11, 2025 (February 11 Slides) at 31.  Available at: https://stakeholdercenter.caiso.com/InitiativeDocuments/Presentation-Resource-Adequacy-Modeling-and-Program-Design-Feb-11-2025.pdf.

[2] February 11 Slides at 34.

[3] CAISO, Final 2025 Availability Assessment Hours (AAH) Study, May 10, 2024 (Final 2025 AAH Study) at 11.  Available at: https://stakeholdercenter.caiso.com/InitiativeDocuments/Final-2025-Availability-Assessment-Hours.pdf.

[4] CAISO application of the MURA to assess all applicable MOO hours would be consistent with this initiative’s objective to “Create an incentive to meet applicable must-offer obligations.”  CAISO, RA Modeling & Program Design: Straw Proposal Options Track 2: Availability and Incentive Mechanisms, March 4, 2025 at 9.  Available at: https://stakeholdercenter.caiso.com/InitiativeDocuments/Presentation-Resource-Adequacy-Modeling-and-Program-Design-Mar-03-2025.pdf.

[5] Such as revenues from day-ahead or real-time energy dispatches, or ancillary services.

[6] February 10 Slides at 7.  See also: CPUC, Energy Division Track 3 Proposals in Proceeding R.23-10-011, January 17, 2025 at 4-5.  Available at: https://docs.cpuc.ca.gov/PublishedDocs/Efile/G000/M553/K679/553679249.PDF.

[7] The CAISO has not designated an alert in the month of April since 2013.  CAISO, Gride Emergencies History Report, March 25, 2025 at 151.  Available at: https://www.caiso.com/Documents/Grid-Emergencies-History-Report-1998-Present.pdf.

[8] The second quarter of a year yields relatively low energy prices and high rates of outages.  CAISO, 2023 Annual Report on Market Issues & Performance, July 29, 2024 at 6 and 64.  Available at: https://www.caiso.com/documents/2023-annual-report-on-market-issues-and-performance.pdf.

[9] Flexible RA resources have additional AAH.  Final 2025 AAH Study at 11.

[10] The AAH represents the historical top 5% of load hours in a month based on average hourly load.  Final 2025 AAH Study at 11.

[11] The CAISO discussed penalty price options including value of loss of load, bilateral RA prices, and real time prices.  February 11 Slides at 36.

15. Track 3: Please provide your organization’s feedback on the Track 3 Resource Visibility discussion as a whole.

Cal Advocates provides no response to this question at this time.

16. Track 3: Does your organization have any feedback on or suggested redlines to the list of capacity status categories discussed as potential reporting requirements for RA-eligible capacity not shown as RA?

Cal Advocates provides no response to this question at this time.

17. Track 3: Does your organization have feedback on any other aspects of the potential design such as reporting frequency?

Cal Advocates provides no response to this question at this time.

18. Track 3: Please provide your organization’s feedback on the presentation by Middle River Power.

Cal Advocates provides no response to this question at this time.

1. Track 1: Please provide your organization’s feedback on modeling improvements undertaken and additional improvements to consider.

N/A

2. Track 1: Please provide your organization’s feedback on the qualifying capacity accreditation and PRM proposals discussed.

The default accreditation and PRM proposals discussed have limited relevance given their limited applicability.  Should the rules eventually inform backstop procurement and/or the allocation of backstop costs, for example, the CAISO should implement a comprehensive and rigorous set of rules.  Many markets are gravitating towards marginal ELCC for the reasons that have been articulated by CAISO and its consultants.  At this juncture, CAISO seems to prefer average ELCC, in part because it seems to yield more “reasonable” results in the event that an LRA chooses its own counting rules, but is subject to the CAISO default PRM.  To avoid this potential outcome, the CAISO might require LRAs to implement compatible counting and PRM rules.  For example, the CAISO might require a demonstration by an LRA that its counting rules in combination with its PRM meet a 1-in-10 LOLE standard or similar, regardless of whether that is its own PRM or the CAISO default.

3. Track 1: Please provide your organization’s feedback on the development of default qualifying capacity accreditation and PRM approaches and any preferred path the CAISO should pursue. In needed, what additional analysis would help inform the decision.

See above.

4. Track 1: Regarding the direction of CAISO’s UCAP proposal, please share your organization’s feedback on key elements discussed at the workshop such as implementation through CAISO NQC process, assessment hours, and interaction with LRA QC methodologies.

Consistent with Calpine’s comments on related proposals in Track 3 of the CPUC RA proceeding, Calpine generally does not oppose CAISO’s UCAP proposal, which seems to be converging to the CPUC Staff proposal. Calpine supports close coordination and ideally convergence between the CAISO and CPUC approaches to UCAP.    

In particular, Calpine supports a unit-specific approach, reliance on public CAISO outage data, and the focus on capturing performance during tight supply cushion hours.  Calpine believes that the approach should be implemented no earlier than 2028 to allow the recalculation of the PRM to reflect UCAP counting, to allow time for contracts to adjust to reflect the new counting rules, and to give suppliers the opportunity to update QCs to clearly reflect the understanding that the CPUC and/or CAISO will adjust QCs for ambient derates.  In addition, Calpine shares the concerns of some stakeholders that the CAISO UCAP proposal could inordinately reduce the QC of some resources for a year or two of anomalous performance, particularly poor performance associated with the early months and years of the operation of new resources. Consequently, Calpine supports approaches that would allow a showing that a resource’s historical performance is no longer representative of expected future performance and hence should not be included in the calculation of UCAP.  In addition, Calpine could support CESA’s proposal to use the three best of the last four years of performance in the UCAP calculation.  Finally, Calpine agrees with CESA that it is important to exclude outages that reflect “normal operating limitations” that cannot otherwise be reflected in CAISO RDTs from the UCAP calculation.

5. Track 1: Please provide your organization’s feedback on accounting for ambient derates, particularly the interaction between a resource’s NQC after accounting for ambient derates, the NQC after potentially being reduced for UCAP, and the must offer obligation. Would you support the direction discussed and if not, what changes or analysis are required.

Calpine is not clear on the CAISO’s proposal for the must offer obligation associated with NQC that reflects forced and potentially ambient de-rates.  Calpine notes that in most markets, resources are expected to offer their full installed capacity even if they have sold and are compensated for their UCAP because doing so will ensure that a resource’s UCAP is available after accounting for outages.

6. Track 2: For the outage and substitution proposal leaning, please provide your organization’s recommendation and rationale for what threshold to use for conditional outages, including the pros and cons of different alternatives.

 It is not clear that the conditional outage proposal provides enough certainty about when substitution would not be required to be effective.

7. Track 2: For the outage and substitution proposal leaning, please provide your organization’s recommendation and rationale for the product definition design attributes (granularity, participation, type of RA, and quantity). For participation, should offering to the pool and procuring from the pool be mandatory or voluntary for buyers and/or sellers? Why or why not?

Calpine objects to mandatory participation in a substitution pool for either buyers or sellers.  Buyers and sellers should be allowed to structure substitution transactions in the manner that they find most efficient.  For example, there may be incremental transaction costs and minimal benefit to a portfolio generator using its own capacity for substitution to transact through the pool.  In addition, Calpine is concerned that mandatory participation for sellers could involve caps or mitigation that may inappropriately constrain pricing and not fully reflect the opportunity costs associated with substitute capacity.

8. Track 2: For the outage and substitution proposal leaning, please provide your organization’s feedback on visibility options. What type of information would help stakeholders understand the certainty of being able to take outages if relying on excess shown RA and the voluntary pool?

N/A

9. Track 2: For the outage and substitution proposal leaning, please provide your organization’s feedback on access priority. Would the right of first refusal for the entity showing the capacity for substitution purposes overcome incentives to hold capacity back?

It is unclear what this proposal entails, especially in light of the auction designs contemplated for substitute capacity.  Does it mean that an SC can offer at an arbitrarily high price to effectively preserve the capacity for its own use?  Does the ROFR effectively give the SC the flexibility to withdraw the capacity from the substitution pool as long as it uses it for its own substitution?

10. Track 2: For the outage and substitution proposal leaning, please provide your organization’s feedback on the price and procurement mechanism design attributes.

N/A

11. Track 2: Please provide your feedback on adding “urgent” as an outage type. Are there any other outage types that should be considered in the straw proposal, if so, in what way are they not covered by the outage types available today?

N/A

12. Track 2: Please provide your organization’s feedback on the joint LSE presentation.

N/A

13. Track 2: Please provide your organization’s feedback on DMM’s presentation.

N/A

14. Track 2: Optionally, please provide your organization’s preliminary feedback on the availability and incentive mechanism straw proposal leaning discussion. A follow up working group meeting will be scheduled the week of March 3, 2025.

Calpine supports elements of the CAISO's MURA proposal, in particular the focus on availability during tight hours and a penalty price sufficiently high to encourage performance and that more closely reflects the cost of replacement capacity.  In addition, Calpine agrees with CAISO that an availability incentive mechanism is not necessarily redundant with the implementation of UCAP.  For example, PJM has both resource counting that reflects historical performance as well as performance incentives.  Under the PJM approach, resource counting is intended to reflect expected performance during system stress conditions, while performance incentives are intended to ensure that resources perform at the levels reflected in their counting.  Calpine notes that both PJM and New England use penalties to pay bonuses to resources that perform better than how they were accredited and sold, including to "uncommitted" capacity, i.e., the PJM equivalent of non-RA capacity in California, rather than to load as proposed by CAISO.  These bonuses provide important additional incentives for resources to perform.

15. Track 3: Please provide your organization’s feedback on the Track 3 Resource Visibility discussion as a whole.

N/A

16. Track 3: Does your organization have any feedback on or suggested redlines to the list of capacity status categories discussed as potential reporting requirements for RA-eligible capacity not shown as RA?

If the reporting requirement is on suppliers, the categories should be limited to information that suppliers know with certainty, primarily what fraction of a resource’s capacity has been sold as RA capacity.  For example, it may be difficult for a supplier to clearly delineate the reason that capacity is unsold, e.g., to differentiate between capacity that is held for outage substitution versus simply not contracted.

17. Track 3: Does your organization have feedback on any other aspects of the potential design such as reporting frequency?

N/A

18. Track 3: Please provide your organization’s feedback on the presentation by Middle River Power.

Calpine does not oppose a registry to track who holds what RA capacity.  Calpine appreciates that a registry could obviate the need for other visibility reforms as well as the current RA/Supply plan validation process.

1. Track 1: Please provide your organization’s feedback on modeling improvements undertaken and additional improvements to consider.

CESA is pleased with CAISO’s loss of load expectation study efforts. It is clear and encouraging that CAISO staff listened to stakeholders and incorporated the stakeholder feedback into its design of the study scenarios. Further, CAISO provided a good framework for documenting the study inputs and assumptions. CESA is also pleased with CAISO’s continued stakeholder engagement on the modeling, its transparency, the robust discussions at the workshops, and CAISO’s general openness to improving its modeling with the help of the vast and diverse knowledge of the stakeholder community. CESA looks forward to continuing to engage with CAISO staff throughout this initiative.

CESA encourages CAISO to complete its full back-cast analysis using shown RA capacity in 2024. CAISO should also commit to performing this back-cast study every year so it can benchmark its annual projections for the following year. It will be interesting to see how close the shown RA for 2025 aligns with CAISO’s projection for a 0.3-0.7 LOLE.

CESA encourages CAISO to publish a new draft of its inputs & assumptions using the new energy storage modeling capabilities it discussed at the workshop. The models used to perform loss of load expectation studies are complex and include parameters such as time-to-repair, effective forced outage rate, effective forced outage rate on demand, maintenance rate, maintenance frequency, etc. CAISO should investigate each parameter/setting used in its modeling to make sure it accurately reflects the operation of energy storage in the CAISO balancing authority area. CAISO should also clearly document the settings being used along with its rationale for using such setting. Although not all stakeholders may agree with the settings, they will appreciate the transparency. The transparency will also allow for meaningful discussions to continuously improve the modeling each year.

Finally, CAISO must ensure the forced outage rates used in its LOLE modeling are consistent with those to be developed for UCAP purposes. CESA discusses its proposals for calculating an EFORd value for energy storage resources below.

2. Track 1: Please provide your organization’s feedback on the qualifying capacity accreditation and PRM proposals discussed.

No comment at this time.

3. Track 1: Please provide your organization’s feedback on the development of default qualifying capacity accreditation and PRM approaches and any preferred path the CAISO should pursue. In needed, what additional analysis would help inform the decision.

CAISO’s studies indicate a 0.3-0.7 LOLE for 2025 and likely a higher risk of loss of load was incurred in 2024. These are much higher than the industry standard 0.1 LOLE. These results appear to indicate that CAISO may need to re-examine its current practice of using default PRMs and QCs.

One tool CAISO has to maintain committed capacity at a 0.1 LOLE level, regardless of the capacity delivered from the myriad local regulatory authority RA programs, is its CPM process.  CESA encourages the CAISO to focus on improving the CPM process as a more direct approach to improving reliability.

To achieve its reliability objective, CAISO should focus its efforts on clearly defining (1) how it will perform its CPM assessments to identify when a CPM is needed to maintain a 0.1 LOLE (defining clear resource counting and PRM to be applied) and (2) developing a cost-allocation approach that is rooted in cost-causation across all LRAs and LSEs. CAISO must be able to meet its reliability requirements, regardless of the myriad local regulatory authority counting paradigms that exist now or in the future. Its studies have so far shown that the myriad local regulatory authority RA programs are not delivering sufficient capacity to CAISO to meet industry standard loss of load expectation, putting the balancing authority area at risk. To the extent that local regulatory authority program frameworks do not deliver sufficient capacity for CAISO to meet its reliability imperative, CAISO must maintain autonomy to procure more capacity and allocate those backstop costs to load-serving entities.

CAISO has already developed an effective framework for backstop procurement cost allocation that follows cost-causation among the myriad local regulatory authorities. If CAISO chooses to align its CPM evaluations more directly with its reliability responsibilities, it should also consider modeling its current system-wide/local CPM cost allocation after the Flexible RA Capacity CPM cost allocation which first evaluates each local regulatory authority’s procurement versus their share of the overall reliability need. The methodology also allows local regulatory authorities to define their own sub-allocations methodologies to constituent load-serving entities that differ from CAISO’s default methodology.

Continuing to rely on Significant Event CPM or Exceptional Dispatch CPM will place undue costs on the LSEs of LRAs with the strongest RA programs to the benefit of those LSEs with less strict LRA RA programs.

4. Track 1: Regarding the direction of CAISO’s UCAP proposal, please share your organization’s feedback on key elements discussed at the workshop such as implementation through CAISO NQC process, assessment hours, and interaction with LRA QC methodologies.

CAISO presented its initial leaning to develop UCAP values based on resource-specific Effective Forced Outage Rate in-demand (EFORd) calculations, where it determines that a specific resource is in-demand during “supply cushion hours.” It would apply its UCAP methodology to any resource QC that was not determined based on a probabilistic or performance-based Local Regulatory Authority QC methodology.

CESA supports the development of resource-specific EFORd values. However, there are several issues with CAISO’s proposal that require further consideration.

CESA Opposes the Use of Supply Cushion Hours to Define When Specific Resources Are In-Demand Under the UCAP Methodology

The CAISO proposes to deem that all resources are de facto in-demand during “supply cushion hours.” The supply cushion hours represent how much shown RA remains after serving net load, meeting contingency reserves, and accounting for all outages, then selecting the 20% most constrained hours within each season. This approach is meant to identify the hours in which a resource would have been in-demand.

The supply cushion hour approach is a radical departure from industry practice of using either system-wide high load (or net load) hours or, more accurately, individual unit economics. Although industry practice has varied, the approach that aligns most closely with resource-specific performance considers to the greatest extent possible factors influencing the demand for individual resources.

CESA remains committed to developing a resource-specific UCAP methodology that establishes accurate and comparable UCAP values.  To achieve accurate and comparable UCAP values, the identification of the in-demand hours must follow a resource-specific methodology that considers unit economics

The supply cushion hour approach is not a resource-specific methodology.  The supply cushion hours are determined at a system-wide level and attempt to identify when RA resources would be in-demand. However, the calculation depends on several factors that are not related to whether an individual resource would be in demand. First, the calculation is based on the specific set of resources that LSEs include on their RA Plans for a given month and the specific make-up of those portfolios change from month to month. Second, the calculation subtracts the impact of planned outages on the shown resources. This is problematic because the supply cushion would depend on the particular resources LSEs have decided to include on their plans, at no fault of the individual suppliers, and there are major maintenance outages that do not occur every year that would skew the selection of the in-demand hours from year to year. Third, the supply cushion hour approach does not identify if individual resources were actually in-demand, as the chosen hours may be the same hours in which there was plenty of available import supply for CAISO to reliably operate the grid or the same hours in which resources in local areas would have been constrained due abundant low-cost generation.

The supply cushion hour approach fails to recognize unit economics. Each resource on the system is subject to a different economic reality, given individual resource operating and opportunity costs, as well as local constraints. If CAISO would not have economically dispatched an RA resource in a given hour because other cheaper resources were available behind a local constraint, the resource should not be arbitrarily penalized through the UCAP methodology. Likewise, if imports were cheaper and readily available in a given hour such that an RA resource would not have been economically dispatched, then that RA resource was not actually in-demand.

The clearest indication that the supply cushion hour approach is flawed is the hours that CAISO identified for 2022-2023.  This data shows many days on which all 24 hours would be identified as in-demand as well as many more days in which 1 a.m. through 5 a.m. were identified as in-demand. The CAISO has not made a clear demonstration that the supply cushion hours represent the hours in which individual resources would be in demand or the hours in which there is a reliability need for capacity.

CESA proposes to determine resource-specific in-demand hours based on unit economics

EFORd values measure the probability that a generating unit will not be available due to forced outages or forced deratings on its Pmax, forced derates on its Maximum Continuous Energy Limit, forced rerates on its Minimum Continuous Energy Limit, and forced rerates on its Pmin when there is demand on the unit to generate. Measuring historical performance, EFORd is calculated as the percentage of total demand time that a unit was unavailable due to forced outages. It is important to only assess outages at times when the resource was or would be dispatched by the CAISO, as an outage in the middle of the night is typically of no consequence to system reliability.

Using the EFORd performance index necessarily requires a definition of when the resource is “in demand.”  Further, the “in demand” intervals must be clearly defined for two states: while the resource is in service and while the resource is on forced outage.

CESA proposes in-service in-demand hours to be all intervals where an energy storage resource receives a dispatch. This is obvious, because if the resource received an economic dispatch from CAISO, it was among the most cost-effective ways to meet demand at the time. Typically, the resource’s PNode price during these intervals will be greater than or equal to its bid price.

CESA proposes that in-demand hours while the resource is on forced outage be determined using the PNode prices, the resources’ DEB price, and are aligned with how the resource would typically be operated over the course of the day given its normal operating limitations. In general, the forced outage hours in-demand would be the highest priced intervals of the day where the resource PNode price is greater than or equal to its DEB price and the resource is on outage, plus the prior intervals that would have been required to charge the resource to meet awards. CESA discusses this further in the next section.

In-demand hours must be limited to only those hours that a storage resource would be expected to operate aligned with its normal operating limitations, such as its maximum continuous stored energy limit and the required hours to fully charge the resource accounting for round-trip efficiency losses

EFORd values measure the probability that a generating unit will not be available due to forced outages or forced deratings on its Pmax, forced derates on its Maximum Continuous Energy Limit, forced rerates on its Minimum Continuous Energy Limit, and forced rerates on its Pmin when there is demand on the unit to generate. Measuring historical performance, EFORd is calculated as the percentage of total demand time that a unit was unavailable due to forced outages. It is important to only assess outages at times when the resource was or would be dispatched by the CAISO, as an outage in the middle of the night is typically of no consequence to system reliability.

Using the EFORd performance index necessarily requires a definition of when the resource is “in demand.”  Further, the “in demand” intervals must be clearly defined for two states: while the resource is in service and while the resource is on forced outage. Determining if a resource was in demand during a forced outage/derate is a two-part process. First, identify the hours in which the resource would have been discharged using hourly PNode prices and Default Energy Bid (“DEB”) prices (i.e. the Discharge Forced Outage Hours in demand, or “Discharge FOHd”). Second, determine the hours the resource would have needed to have charged to support the presumed discharge (i.e. the Charging Forced Outage Hours in demand, or “Charging FOHd”), if any.

• In-Service Hours in demand (“Service Hours”). All intervals where the resource is in service and receives a dispatch award.
• Discharge FOHd. Evaluate all intervals where the resource is on forced outage or derate and the Pricing Node (“PNode”) price is greater than or equal to the resource Default Energy Bid (“DEB”) price. If the number of evaluation intervals in a single day exceeds the resource Maximum Continuous Energy Limit divided by the resource Pmax (Number of Maximum Discharge Intervals), limit the evaluated intervals to those where PNode price is greater than or equal to DEB price and PNode price is in the set of intervals with the highest PNode prices on the same day corresponding to the Number of Maximum Discharge Intervals.
• Charging FOHd. Evaluate all intervals in the same day prior to Discharge FOHd (Charging Evaluation Interval Set) to determine if there was enough available charging capacity to support the Discharge FOHd. Calculate the Charging Need as the sum of the Unavailable Pmax during Discharge FOHd divided by the resource round-trip efficiency. Calculate the Available Charging Capacity as the sum of the Available Pmin in the Charging Evaluation Interval Set. Calculate the Forced Charging Need as the minimum between zero and the Charging Need minus the Available Charging Capacity. The Charging FOHd is the set of intervals the resource is on Forced Outage/Derate in the Charging Evaluation Interval Set where PNode Prices are the lowest, limited to the number of intervals required to meet the Forced Charging Need.

Regarding the Discharge/Charging FOHd determination, consider a resource with a 100 MW Pmax, -100 MW Pmin, a 400 MWh Maximum Continuous Energy Limit, and a 75% round-trip efficiency. Assume this resource is on two forced outages in a single day, one outage from Hour Ending (“HE”) 2 through HE11, and another outage from HE14 through HE21.

The first step is to determine the Discharge FOHd by examining the hourly PNode Prices and DEB prices. Given that this is a 4-hour duration resource, find the four highest priced hours of the day where the PNode price is greater than or equal to the DEB price and the resource is on forced outage. The figure below shows that HE18 through HE20 are Discharge FOHd.

Figure 1: First Determine the Discharge FOHd

The second step is to determine the amount of charging capability that would have been needed for the resource to produce at Pmax during the Discharge FOHd (Forced Charging Need). Sum the Unavailable Pmax in each Discharge FOHd and divide by the resource round-trip efficiency. In this example, the resource was unable to produce 300 MWh from HE18 through HE20, requiring 400 MWh of Forced Charging Need earlier in the day (300 MWh divided by 0.75 is 400 MWh).

The third step is to determine how many, if any, forced outage intervals the resource would have needed to have been available prior to Discharge FOHd on this day to achieve 400 MWh of charging at full Pmin. Take the set of hours from HE1 through HE17 (all hours prior to Discharge FOHd, or “Charging Evaluation Interval Set”) and sort by increasing Available Pmin then by increasing PNode price. Starting at the top of the sorted set (presumably intervals with Available Pmin), iterate until Available Pmin plus Unavailable Pmin equals 400 MWh. This sorting allows intervals in which the resource has available charging capability to be used before determining that the resource would have had to have charged while on forced outage. The forced outage hours needed to achieve the full 400 MWh of Forced Charging Need are the Charging FOHd.

Figure 2: Identify the forced outage intervals prior to Discharge FOHd that would have been needed to support the Discharge FOHd

In this example, HE4 and HE18-HE20 are considered in-demand for purposes of calculating the resource EFORd value.

CESA Opposes the Selection of Specific Outage Nature-Of-Work Codes That Would Be Considered a UCAP Forced Outage, Because the CAISO Has Not Provided an Unambiguous UCAP Forced Outage Definition

The CAISO proposes to identify specific outage nature-of-work codes that its Outage Management System (OMS) has categorized as “Forced” outages.  CESA would find any stakeholder’s identification of an outage code as one that “should be” included as a UCAP forced outage highly suspect, as CAISO has not yet clearly defined a UCAP Forced Outage.

Absent a clear definition of a forced outage for UCAP purposes, it would be problematic to identify which outage codes should be used in calculating a UCAP value. It is unclear what standard is being applied to select the appropriate outages, and CAISO has not established a process to allow impacted entities to provide input as UCAP values are being developed. In fact, several of the “Forced” outages in the CAISO’s OMS would not fit the NERC GADS forced outage definition. The forced outage definition continues to be a moving target and the longer it remains undefined, the more questionable any outage code categorization will be.

CESA proposes unambiguous forced outage definitions (for UCAP purposes), based on the North American Electric Reliability Corporation (NERC) GADS definitions, as well as an established process for suppliers to provide necessary input to ensure the accuracy of the UCAP calculation. CESA expects that this definition will not initially map directly to an existing outage type or nature-of-work code, so CAISO must allow suppliers the opportunity to review and verify the CAISO’s initial outage classification.

CESA proposes the following UCAP Forced Outage definition which combine NERC GADS Event Types U1, U2, U3, D1, D2, and D3 and ensures the definitions are appropriately focused on equipment failures:

Forced Outage/Derate (Immediate).  This is an outage that requires immediate removal of a unit from service, derating, or another outage state due to equipment failure or risk of imminent equipment failure. This type of outage usually results from automatic control system trips or operator initiated manual trip of the unit in response to unit alarms but can also occur while the unit is offline.

Forced Outage (Delayed). This is an outage that does not require immediate removal of a unit from the in-service state or derating due to equipment failure or risk of imminent equipment failure, instead requiring removal or derating within six hours. This type of outage can only occur while the unit is in service.

Forced Outage (Postponed). This is an outage that can be postponed beyond six hours but requires that a unit be removed from the in-service state or derated due to equipment failure or risk of imminent equipment failure before the end of the next weekend (Sunday at 2400 or before Sunday turns into Monday). This type of outage can only occur while the unit is in service.

CESA Proposes a Forced Outage Classification Verification Process

Recognizing that a clear UCAP forced outage definition may not necessarily align within OMS’ existing outage codes, CESA proposes suppliers be given the opportunity to review and verify the CAISO’s initial outage classification. During this process, suppliers will provide corrections to each outage classification, along with the reason, and attest that the provided corrections align the outage classifications with the forced outage/derate definition.

The CAISO should endeavor to transparently apply as many appropriate type, timing, and natures-of-work screens as needed to develop a draft list of outages and whether each outage meets the forced outage definition or not. However, CESA expects the outage classifications based on the data available from OMS will not initially directly align with the forced outage definition. Suppliers will then be given the opportunity to verify the draft classification. Suppliers will submit the outage data list back to CAISO including its re-classifications, the reason the outage re-classifications are aligned with the forced outage definition, and a senior official attestation to the accuracy of the re-classifications.

This Forced Outage Classification Verification Process is meant to bridge the gap between the clear definition of a forced outage that should impact a resource’s UCAP value and the technological limitations with the source outage data. If the CAISO OMS is updated to incorporate a “UCAP forced outage” flag that meets the clear definition of a forced outage for UCAP purposes, this process may be retired after suppliers have been given an opportunity to review and verify the classification of outages prior to the existence of such a flag.

5. Track 1: Please provide your organization’s feedback on accounting for ambient derates, particularly the interaction between a resource’s NQC after accounting for ambient derates, the NQC after potentially being reduced for UCAP, and the must offer obligation. Would you support the direction discussed and if not, what changes or analysis are required.

No comment at this time.

6. Track 2: For the outage and substitution proposal leaning, please provide your organization’s recommendation and rationale for what threshold to use for conditional outages, including the pros and cons of different alternatives.

No comment at this time.

7. Track 2: For the outage and substitution proposal leaning, please provide your organization’s recommendation and rationale for the product definition design attributes (granularity, participation, type of RA, and quantity). For participation, should offering to the pool and procuring from the pool be mandatory or voluntary for buyers and/or sellers? Why or why not?

No comment at this time.

8. Track 2: For the outage and substitution proposal leaning, please provide your organization’s feedback on visibility options. What type of information would help stakeholders understand the certainty of being able to take outages if relying on excess shown RA and the voluntary pool?

No comment at this time.

9. Track 2: For the outage and substitution proposal leaning, please provide your organization’s feedback on access priority. Would the right of first refusal for the entity showing the capacity for substitution purposes overcome incentives to hold capacity back?

No comment at this time.

10. Track 2: For the outage and substitution proposal leaning, please provide your organization’s feedback on the price and procurement mechanism design attributes.

No comment at this time.

11. Track 2: Please provide your feedback on adding “urgent” as an outage type. Are there any other outage types that should be considered in the straw proposal, if so, in what way are they not covered by the outage types available today?

No comment at this time.

12. Track 2: Please provide your organization’s feedback on the joint LSE presentation.

No comment at this time.

13. Track 2: Please provide your organization’s feedback on DMM’s presentation.

No comment at this time.

14. Track 2: Optionally, please provide your organization’s preliminary feedback on the availability and incentive mechanism straw proposal leaning discussion. A follow up working group meeting will be scheduled the week of March 3, 2025.

No comment at this time.

15. Track 3: Please provide your organization’s feedback on the Track 3 Resource Visibility discussion as a whole.

No comment at this time.

16. Track 3: Does your organization have any feedback on or suggested redlines to the list of capacity status categories discussed as potential reporting requirements for RA-eligible capacity not shown as RA?

No comment at this time.

17. Track 3: Does your organization have feedback on any other aspects of the potential design such as reporting frequency?

No comment at this time.

18. Track 3: Please provide your organization’s feedback on the presentation by Middle River Power.

No comment at this time.

1. Track 1: Please provide your organization’s feedback on modeling improvements undertaken and additional improvements to consider.

Microsoft greatly appreciates CAISO’s efforts in undertaking loss of load expectation (LOLE) modeling and the progress made in this area. Microsoft has advocated for CAISO performing LOLE modeling, particularly in the short- and medium-terms to enhance portfolio reliability visibility. Reliable grid planning is critical to ensuring stability for all consumers, and having a transparent, data-driven approach is essential.

We commend CAISO’s LOLE study for 2025 based on the year-ahead RA filings and the historical pattern of month-ahead RA compliance. The results are informative, and we appreciate CAISO studying and presenting results for both the ‘shown’ RA portfolio of committed RA resources and the corresponding LOLE and also for the ‘all RA-eligible, base case,’ or the LOLE for total potential resources to meet RA requirements. The finding that the 2025 system LOLE is 0.308 is very concerning. Even more insightful is the fact that the ‘all RA eligible’ resources scenario results in a 0.024 LOLE for 2025 clearly showing there are enough resources in the system to meet a 0.1 LOLE but the current PRM is insufficient, or too low, to meet a 0.1 LOLE. This level of transparency provides important data points as we collectively consider system reliability. Microsoft is actively participating at the CPUC to advocate for a reasonable PRM to meet a 0.1 LOLE.  

The 2025 LOLE study was incredibly insightful, and we look forward to short- and mid-term modeling results. Microsoft continues to support CAISO studying the near and mid-term time periods as a priority, as these will be key in understanding near-term reliability risks. 

Additionally, we appreciate the investments made to ensure robust and timely LOLE modeling, such as the upgrade to PLEXOS 11 for improved accuracy. Furthermore, continued refinements to model inputs—particularly the improvements to battery storage modeling—are a positive step forward in improving modeling accuracy.

2. Track 1: Please provide your organization’s feedback on the qualifying capacity accreditation and PRM proposals discussed.

None

3. Track 1: Please provide your organization’s feedback on the development of default qualifying capacity accreditation and PRM approaches and any preferred path the CAISO should pursue. In needed, what additional analysis would help inform the decision.

None

4. Track 1: Regarding the direction of CAISO’s UCAP proposal, please share your organization’s feedback on key elements discussed at the workshop such as implementation through CAISO NQC process, assessment hours, and interaction with LRA QC methodologies.

Microsoft appreciates robust discussion and presentations from parties on UCAP. Microsoft continues to support a UCAP accounting methodology that aligns with the CPUC so there is continuity in resource accounting rules. 

5. Track 1: Please provide your organization’s feedback on accounting for ambient derates, particularly the interaction between a resource’s NQC after accounting for ambient derates, the NQC after potentially being reduced for UCAP, and the must offer obligation. Would you support the direction discussed and if not, what changes or analysis are required.

None

6. Track 2: For the outage and substitution proposal leaning, please provide your organization’s recommendation and rationale for what threshold to use for conditional outages, including the pros and cons of different alternatives.

None

7. Track 2: For the outage and substitution proposal leaning, please provide your organization’s recommendation and rationale for the product definition design attributes (granularity, participation, type of RA, and quantity). For participation, should offering to the pool and procuring from the pool be mandatory or voluntary for buyers and/or sellers? Why or why not?

None

8. Track 2: For the outage and substitution proposal leaning, please provide your organization’s feedback on visibility options. What type of information would help stakeholders understand the certainty of being able to take outages if relying on excess shown RA and the voluntary pool?

None

9. Track 2: For the outage and substitution proposal leaning, please provide your organization’s feedback on access priority. Would the right of first refusal for the entity showing the capacity for substitution purposes overcome incentives to hold capacity back?

None

10. Track 2: For the outage and substitution proposal leaning, please provide your organization’s feedback on the price and procurement mechanism design attributes.

None

11. Track 2: Please provide your feedback on adding “urgent” as an outage type. Are there any other outage types that should be considered in the straw proposal, if so, in what way are they not covered by the outage types available today?

None

12. Track 2: Please provide your organization’s feedback on the joint LSE presentation.

None

13. Track 2: Please provide your organization’s feedback on DMM’s presentation.

None

14. Track 2: Optionally, please provide your organization’s preliminary feedback on the availability and incentive mechanism straw proposal leaning discussion. A follow up working group meeting will be scheduled the week of March 3, 2025.

None

15. Track 3: Please provide your organization’s feedback on the Track 3 Resource Visibility discussion as a whole.

None

16. Track 3: Does your organization have any feedback on or suggested redlines to the list of capacity status categories discussed as potential reporting requirements for RA-eligible capacity not shown as RA?

None

17. Track 3: Does your organization have feedback on any other aspects of the potential design such as reporting frequency?

None

18. Track 3: Please provide your organization’s feedback on the presentation by Middle River Power.

None

1. Track 1: Please provide your organization’s feedback on modeling improvements undertaken and additional improvements to consider.

NCPA appreciates CAISO incorporating the following updates to its modeling:

• Upgrade to Plexos 11
• Stochastic Hydro profiles using 25 years of historical hydro data (2000-2024)
• Storage modeling improvements
• Historical OMS data from 2022-2024 to reflect resource-specific outage rates and ambient due to temperature derates.

However, for outage modeling (as such pertains to establishment of a default PRM and default qualifying capacity accreditation) NCPA believes that certain types of outages should be removed from the modeling if a UCAP is implemented that already accounts for such outages.  Since unit NQCs may be preemptively derated to account for certain types of outages under UCAP designs currently being discussed, NCPA requests that CAISO adjust its modeling assumptions to ensure outages are not “double counted”, especially in the case where outages are already being accounted for in multiple mechanisms that are individually being discussed as part of this holistic stakeholder initiative.  More specifically, if certain outages are accounted for in a proposed UCAP adjustment that is applied to resource NQC values, then it would be inappropriate to also account for the same outages in the form of an increased PRM.

2. Track 1: Please provide your organization’s feedback on the qualifying capacity accreditation and PRM proposals discussed.

The CAISO must continue to respect LRAs’ jurisdictional rights to establish their own PRMs and qualifying capacity accreditation rules, as well as any UCAP-related requirements; as such, NCPA appreciates CAISO’s continued respect for the jurisdictional authority of all LRAs in its current proposal to develop default qualifying capacity accreditation and PRM rules.

Regarding qualifying capacity accreditation, NCPA believes it is appropriate to establish qualifying capacity accreditation rules that reflect the actual operational capability of each resource on an individual, resource specific basis.  At this stage NCPA believes that Option/Proposal 1 is most closely aligned with this goal, but any default counting rules, including Option/Proposal 1, should reflect the actual capability of each resource on an individual, resource specific basis.  NCPA does not support deferring to a simple statistical methodology that does not reflect the actual operational capability of a resource because such methodology is “simple to administer”. Stakeholders make significant financial investments in resources and the value of resources should not be undermined based on the goal of administrative simplicity.  NCPA strongly believes that any default options offered should provide an option for a resource to demonstrate that its performance is superior to the common average or evaluation performed as part of any default counting rules (to account for unique situations). For instance, NCPA understands that the capacity of many hydroelectric resources is strongly linked to the type of water year, and NCPA does not discourage taking that into account where relevant; however, not all hydroelectric resources fall into this common category. For example, NCPA’s hydro facility is not subject to elevation derates associated with dry hydro years due to its substantial elevation drop and high head pressure. In other words, NCPA’s hydroelectric resource can produce the same peak output during drought events as it can during periods when the elevation of its reservoir is at maximum.  Any default criteria should include an option for any project to demonstrate its availability in at-risk hours to ensure proper accounting of its operational capability.

Regarding the PRM, while NCPA supports the performance of 0.1 LOLE analyses as valuable inputs for determining a default PRM, affordability, feasibility, system and resource operational characteristics, and stability are also critical.  The default PRM should not be based solely on a 0.1 LOLE standard but also must consider ratepayer and stability impacts, system and resource operational characteristics, as well as practical feasibility to support forward resource planning.  A default PRM informed by the 0.1 LOLE standard must consider the actual cost of procurement and affordability to customers.  RA prices have reached unprecedented levels that in many cases far exceed the marginal cost of new capacity.  Increasing the PRM while not taking affordability into consideration could potentially exacerbate and/or increase market power dynamics and further impact RA prices that will result in unreasonably higher rates for customers.  Similarly, a default PRM must be feasible to satisfy.  It will not enhance reliability to establish a PRM that cannot be met with capacity available or reasonably expected to be available within the relevant planning horizon.  Finally, entities must be able to rely on the PRM for planning purposes.  The 0.1 LOLE standard and study methodology must remain stable over time to support long term planning unless updates are warranted due to material changes in the input assumptions or reliability-based changes to the study methodology.  Adopted default PRMs should remain sufficiently stable to support mid- and long-term resource planning and procurement.

Although some stakeholders have asserted that a 0.1 LOLE standard was used to determine the original 15% CAISO default PRM, NCPA’s understanding is that the original 15% was a negotiated value that incorporated the following elements: 6% NERC/WECC operating reserve standard, 5% outages, and 4% demand variability. As such, if a UCAP were to be implemented, then NCPA would expect the outage reserve portion of the PRM to decrease.  Also, when the Flexible Ramping Product is implemented in 2026, NCPA would expect the demand variability reserve to decrease as well. In each case, in theory the default PRM should decrease accordingly based on these factors. Care must be taken to avoid double counting of outages across LOLE studies, counting rules, ambient derate rules and any UCAP that might be adopted.  It is very important for the CAISO to more clearly define what problem it is currently trying to solve as part of this ongoing initiative.  The CAISO markets have been very reliable and stable during the past number of years, and NCPA is still unclear as to what the true problem at hand is that we as a stakeholder community are now trying to solve, arguably with an even more complex step of rules then what is currently in place today.

3. Track 1: Please provide your organization’s feedback on the development of default qualifying capacity accreditation and PRM approaches and any preferred path the CAISO should pursue. In needed, what additional analysis would help inform the decision.

Please see NCPA’s response to question 2 above.  A key question NCPA still has is “what actual problem is the CAISO trying to solve as part of this initiative.”  It is worth noting that historically, only a handful of hours with controlled load shed has occurred during historic heating events under the current paradigm. Given the very limited number of problems the market has actually experienced under the current structure, it is far from clear that a complex new regime is either necessary or cost justified.  While one objective of the current proposal may be to simplify the current RA paradigm, NCPA believes that the current proposals being discussed in this initiative only further complicate and confuse the RA paradigm.  Market participants have very recently made billions of dollars of new investments in resources based on the current rules that are in place today (and that have worked well), and CAISO must be very mindful that any restructuring of the RA paradigm will likely have a significant impact on these investments.  These significant commercial investments cannot be simply changed or updated at will, great effort, risk and work is involved with any changes or amendments that may be driven by rule changes; therefore, CAISO must be absolutely clear as to the benefits that will be gained by rule changes and what it is striving to gain in this initiative.  NCPA is not yet convinced that a clear problem statement has been identified that we are now trying to solve.

With that said, NCPA supports working with CAISO, LRAs, Load Serving Entities, and others who have the responsibility to keep the grid clean, reliable, and affordable, to reassess existing default qualifying capacity accreditation and PRM approaches. NCPA supports CAISO’s approach of creating default rules that apply to LRAs that have not adopted criteria of their own. Adoption of default criteria that do not derate resources by applying mechanistic rules would facilitate LRAs adoption of similar criteria.

4. Track 1: Regarding the direction of CAISO’s UCAP proposal, please share your organization’s feedback on key elements discussed at the workshop such as implementation through CAISO NQC process, assessment hours, and interaction with LRA QC methodologies.

NCPA remains concerned about the CAISO’s proposal to apply UCAP selectively to LRA qualifying capacity determinations, which could be viewed as an indirect way of imposing non-LRA adopted default qualifying capacity accreditation rules to LRA resources. NCPA continues to be open to discussing the design of a UCAP mechanism in this stakeholder process, but NCPA remains concerned about how such would be applied across LRAs. If CAISO does proceed with a UCAP proposal, NCPA currently supports the following key concepts and elements:

• Resource specific – UCAP calculated based on individual resource performance
• Data source – use of CAISO OMS data to evaluate resource performance and availability
• Measured events – Use of select “Natures of Work”, with the focus of identifying systematic behavior (with less focus on intermittent one-off situations that may not be truly reflective of performance over time)
• Time horizon – 20% tightest hours for CAISO BAA per season, based on supply cushion calculation
• Methodology: based on historic performance; where such historic measurement is adjusted to account for betterments and improvements to resources focused on increasing reliability

NCPA supports the use of resource-specific outage data and recognizes that historical performance is often a good indicator of how a resource may perform in the future. A key concern NCPA has with certain UCAP design concepts that use historical forced outage data to predict a resource’s prospective availability, however, is that historical data will not reflect when a generator owner has performed a significant overhaul or repair to address the cause or source of the original issue. In these instances, past performance (before the overhaul or repair) does not reflect expected future performance (with the overhaul or repair now in place). Any UCAP design must account for what upgrades or repairs have been implemented at a facility that will greatly improve a resource’s availability once such repair or upgrade has been implemented.  Any UCAP design should provide the opportunity for the resource owner to provide this information for further consideration and evaluation.  The reality is that while generation owners may implement strong maintenance practices and goals to ensure the reliability of their equipment, many generation facilities are extremely complex machines, and it is inevitable that resources will experience forced outage due to unexpected events.  For example, if a resource experiences a forced outage due to an unexpected turbine failure, the likely repair involved would be replacement or refurbishment of that turbine; resulting in that unit’s availability likely being improved looking forward.  NCPA recommends that any UCAP concept that considers a historical “lookback” at forced outage rates, also include a process for the resource owner to provide evidence as to the improvements that have been implemented as a result of the forced outage that will further mitigate the same type of forced outage happening again in the future. 

In this regard, NCPA recommends expanding the lookback window and dismissing outlier years or events, similar to what has been proposed in WRAP. This would help ensure that any UCAP adjustment that is applied to a resource most accurately reflects the true expected availability of the resources looking forward; including taking into account any significant overhauls or repairs that have been made to improve the prospective reliability of the resource.

5. Track 1: Please provide your organization’s feedback on accounting for ambient derates, particularly the interaction between a resource’s NQC after accounting for ambient derates, the NQC after potentially being reduced for UCAP, and the must offer obligation. Would you support the direction discussed and if not, what changes or analysis are required.

NCPA believes that ambient derates should be only be accounted for in a resource’s UCAP performance assessment if such is not already accounted for as part of an LRA adopted qualifying capacity accreditation.  If ambient derates are already accounted for in an LRA adopted qualifying capacity accreditation, and ambient derates are again factored into a form of UCAP qualifying capacity derate, then such would result in possible double counting. NCPA currently reports ambient derates to CAISO via the OMS in the form of “ambient due to temp” forced outages, as is the generally accepted practice, and NCPA currently accounts for expected ambient derates in its LRA adopted qualifying capacity accreditation used today. To avoid creating rules that could be punitive to all resources (even if they are properly accounting for ambient derates), NCPA believes CAISO should study resource performance and investigate any generators that are unable to meet RA MOOs without supporting ambient due to temp derates in OMS. However, LRAs should still be able to override such derates in QC calculations since some generators are equipped with technology, such as “duct firing”, that allow short periods of additional production during the most stressed conditions.

One key factor that NCPA believes must be considered as part of this ongoing discussion is the difference between a resource’s NQC value and the amount of capacity that is actually claimed or shown from the resource on a RA Supply Plan.  In many cases, NCPA has heard general claims or acquisitions discussed during this stakeholder initiative that the NQC values set in the CAISO NQC list does not properly account for certain near term operating conditions.  The NQC value for a resource established on the NQC list only represents the amount of capacity that could be claimed from a resource under certain assumed conditions, but if the resource’s availability is expected to be reduced during a monthly showing period due to updated information or conditions, the amount of capacity actually claimed from a resource on a RA Supply Plan can be less than the NQC; this needs to be considered prior to making any definitive assumptions or acquisitions based solely on evaluating performance measured against the NQC value established on the NQC list.

6. Track 2: For the outage and substitution proposal leaning, please provide your organization’s recommendation and rationale for what threshold to use for conditional outages, including the pros and cons of different alternatives.

NCPA supports conditional approval of planned outages without substitution. The first-in last-out arrangement in place prior to RASC Calc implementation worked well for many years. NCPA believes the requirement for generators to supply replacement for all RA outages is excessive and overly conservative (and costly for ratepayers). During most days and hours of the year the CAISO has adequate capacity headroom to support shorter duration outages, and facilitating outages during these times of actual surplus will promote timely proactive maintenance of facilities.  For example, NCPA randomly selected August 21, 2024, to evaluate what excess capacity headroom CAISO had at its disposal.  As shown in the example below, CAISO was operating with a significant amount of excess capacity head room for a majority of this summer day.  To the extent generators could take advantage of this short term opportunity to conduct key maintenance, such proactive maintenance would only likely increase prospective reliability for future dates during which the CAISO may have much less excess capacity headroom available to support reliable operations:

NCPA believes one of the true problems with the current system is the complexity and amount of time that is required to properly manage and coordinate capacity replacements, and the observed experience that many market participants do not fully understand the rather complex outage reporting and reliability requirements. NCPA also believes that some generators, intentionally or not, over-commit their resources by selling RA in months when generators are expected to be on planned maintenance outages. NCPA believes CAISO should more strictly monitor when generators are committed for RA during these long duration outages and investigate accordingly.  

NCPA appreciates the idea of a replacement pool but is wary of again introducing concepts that are overly complex relative to the problem that is the focus of the solution.  CAISO should rather focus on enhancing its own internal situational awareness using information currently available to the CAISO via the OMS, to determine what its real-time capacity headroom is, rather than creating additional complex processes to harvest such data from the market.  The CAISO of all entities has the most up to date, real-time data, as to the current availability of each resource in their BAA. To the extent there is headroom and favorable conditions, CAISO should approve shorter duration planned outages without substitution on a first in last out basis as they have historically.

7. Track 2: For the outage and substitution proposal leaning, please provide your organization’s recommendation and rationale for the product definition design attributes (granularity, participation, type of RA, and quantity). For participation, should offering to the pool and procuring from the pool be mandatory or voluntary for buyers and/or sellers? Why or why not?

Please see NCPA’s comments in response to question 6.

8. Track 2: For the outage and substitution proposal leaning, please provide your organization’s feedback on visibility options. What type of information would help stakeholders understand the certainty of being able to take outages if relying on excess shown RA and the voluntary pool?

Please see NCPA’s comments in response to question 6.

9. Track 2: For the outage and substitution proposal leaning, please provide your organization’s feedback on access priority. Would the right of first refusal for the entity showing the capacity for substitution purposes overcome incentives to hold capacity back?

Please see NCPA’s comments in response to question 6.

10. Track 2: For the outage and substitution proposal leaning, please provide your organization’s feedback on the price and procurement mechanism design attributes.

Please see NCPA’s comments in response to question 6.

11. Track 2: Please provide your feedback on adding “urgent” as an outage type. Are there any other outage types that should be considered in the straw proposal, if so, in what way are they not covered by the outage types available today?

NCPA shares Vistra’s concerns that planned to forced outage limitations imposed by CAISO do not adequately address scenarios involving urgent outages required to address vital unforeseen maintenance needs that would help keep a plant online in future critical periods. NCPA supports the concept of an advanced notice forced, or otherwise urgent, outage, where a generator knows in advance of the forced outage window that vital repairs must be made to avoid future failure and to ensure the unit stays operational for future critical periods. It makes more sense to notify CAISO of such necessary outages in advance, rather than to implement planned-to-forced outages and risk FERC referrals for outages that are demonstrably necessary.

NCPA believes that forced outage rates are rising because the CAISO’s outage rules and definitions currently do not provide a clear and achievable path for the types of maintenance problems that have caused planned-to-forced outages in the past and encourage generators to opt for forced outages. Creating a useable path for these outages that minimize the chance of cancellation is most viable way to bring forced outage rates down for many types of resources.

NCPA also suggests creating “Planned Medium Notice Opportunity RA Outages” whereby SCs could submit requests between T-30 and T-8 days for discretionary outages limited to five days or less in duration without a substitution obligation. CAISO would have discretion to approve or deny such outages based on system conditions similar to the Forced Short Notice Opportunity RA Outages. This would open up additional opportunities for generators to perform short-term maintenance or quickly investigate vibration or other warning signs when it is prudent to do so.

12. Track 2: Please provide your organization’s feedback on the joint LSE presentation.

NCPA particularly supports the joint LSE principle that QC methodologies should be resource-specific. CAISO should be concerned about accurately reflecting the capacity that is truly available to it from each resource. Class averages or formulaic derates of hydro resources based on the water year (when it has no impact on capacity) are therefore not appropriate for a resource with an established track record demonstrating performance to the contrary. Instead, resources should have the ability to show that any established QC methodology is inappropriate based on actual performance. After a major outage, a resource should have the ability to show that the owner has done the necessary work to re-establish the resource’s NQC value.

NCPA also strongly supports the principle that any CAISO methodology should respect the ability of the LRAs to determine/apply a UCAP or alternative QC methodology.

13. Track 2: Please provide your organization’s feedback on DMM’s presentation.

The reverse second price auction proposal is complex, and NCPA is not convinced that it is grounded in a solid understanding of the nature of the problem or on how utility outages actually work in practice. The assumption that there is a sufficient amount of substitution supply to assure a liquid market seems perplexing. If there were large amounts of substitution capacity available, we would not need this process. Similarly, a daily auction for substitution capacity seems problematic since major maintenance outages often require several sequential days. NCPA believes that there would have to be major work done on this proposal before it would be viable even for stakeholder consideration and that it may be too complex for this process.

14. Track 2: Optionally, please provide your organization’s preliminary feedback on the availability and incentive mechanism straw proposal leaning discussion. A follow up working group meeting will be scheduled the week of March 3, 2025.

NCPA supports retention of the current CPM Soft-Offer Cap design, as such is representative of the marginal cost of existing capacity based on the going-forward fixed costs of the type of resource most likely to be marginal, plus an adder of 20%.  NCPA opposes modifying the CPM Soft-Offer Cap to be aligned with or based on VOLL, volatile market prices, or potentially excessive RTD prices that could be set to VOLL or otherwise extreme caps to be detriment of ratepayers.  Current RA bilateral prices have reached unprecedented levels that in many cases far exceed the marginal cost of both existing and new capacity.  The purpose of the CPM Soft-Offer Cap is to enable CAISO to gain access to back stop capacity to support reliability; as a result, a generator providing backstop services should receive fair compensation based on its marginal cost plus a reasonable profit.

NCPA opposes transitioning RAAIM from an incentive mechanism to a penalty. The current RAAIM price is anchored to the CPM soft offer cap. The CPM soft offer cap is grounded in reality due to the fact it is a result of the going forward cost of capacity. The fact that the RAAIM price is only 60% of the CPM soft offer cap should be further discussed. NCPA believes that the current CPM soft offer cap is in excess of capacity market costs in most months. NCPA suggests increasing the RAAIM price to 100% of the CPM price.

NCPA believes both RAAIM and MURA would be obsolete with the introduction of UCAP. The new penalty for unavailability in tight conditions will be derated NQC in future years. NCPA reserves the right to further address MURA after the follow up workshop.

15. Track 3: Please provide your organization’s feedback on the Track 3 Resource Visibility discussion as a whole.

CAISO should enhance its processes so that it is better aware of head room beyond that of shown RA through historical bidding, wheeling, and high priority export patterns, outage data, as well as RA plans in order for improved situational awareness of what is available to serve ISO load.

16. Track 3: Does your organization have any feedback on or suggested redlines to the list of capacity status categories discussed as potential reporting requirements for RA-eligible capacity not shown as RA?

CAISO should avoid undue complexity in any required reporting.

17. Track 3: Does your organization have feedback on any other aspects of the potential design such as reporting frequency?

Additional reporting should not impose any additional obligation on resources not shown as RA.

18. Track 3: Please provide your organization’s feedback on the presentation by Middle River Power.

No comment at this time.

1. Track 1: Please provide your organization’s feedback on modeling improvements undertaken and additional improvements to consider.

Not at this time.

2. Track 1: Please provide your organization’s feedback on the qualifying capacity accreditation and PRM proposals discussed.

See question 3.

3. Track 1: Please provide your organization’s feedback on the development of default qualifying capacity accreditation and PRM approaches and any preferred path the CAISO should pursue. In needed, what additional analysis would help inform the decision.

PG&E supports the following principles for defining the default qualifying capacity rules and planning reserve margin: 

1. Default counting rules (QC values) included in the CAISO tariff should reflect the relative contribution of different resource types and individual resources to maintain BAA-wide and local reliability.  

2. The default PRM in the CAISO tariff should be designed alongside counting rules to create a coherent set of RA standards. 

As noted in PG&E comments to the Issue Paper (question 6), it would make sense for the CAISO to develop two default PRMs depending on the counting rules used by the LRA. At a minimum, the default NQC list should be linked to the default PRM.

On the four proposals for the default qualifying capacity rules and PRM:

The proposals 1 and 4 could be designed or adapted to work with the UCAP designs currently being contemplated and provide a more consistent framework with the CPUC rules and CPUC-UCAP proposal.

4. Track 1: Regarding the direction of CAISO’s UCAP proposal, please share your organization’s feedback on key elements discussed at the workshop such as implementation through CAISO NQC process, assessment hours, and interaction with LRA QC methodologies.

PG&E supports the CAISO Straw proposal conceptual preview considering the UCAP derate via the NQC process to be applied unless RA resources are accredited via an LRA’s performance-based/probabilistic QC methodology (ELCC and/or exceedance).

Defining availability:

PG&E supports the CAISO proposal to use a resource specific UCAP calculated as part of the NQC process and to use the CAISO Outage Management System as the data source for forced outages.

Natures of work:

PG&E requests additional discussion with CAISO and stakeholders on the forced outage Natures of work to be included in the resource UCAP calculation. The objectives will be to clarify the different Natures of work and to identify which ones are relevant to assess the performance and availability of a resource.

In the meantime, PG&E notes the following preliminary observations on the Natures of work presented at the CAISO RA working group meeting on 2/11/2025 (slide 29 - see image below):

• Situational derates: this nature of work should be used for the ambient derates calculation not the UCAP calculation.
• Metering/ Telemetry and RTU/RIG: these Natures of work are not true forced outages. The unit is available and can fully operate, they should not be counted in the UCAP calculation.

Evaluation hours: supply cushion

CAISO notes that the EFORd (Equivalent Forced Outage Rate - demand) applied by other ISOs/RTOs is difficult to adopt due to battery storage penetration in CAISO BAA. CAISO proposes as an alternative to calculate UCAP resource specific values based on the 20% “tightest” hours for CAISO BAA per season based on supply cushion calculation.

The supply cushion is defined as the shown RA in a given hour minus wind & solar RA, planned/forced outage impacts, net real time average load for the hour, and 6% contingency reserves. It will be calculated for two seasons – peak and non-peak to identify the tightest hours to determine each resource forced outage rate.

CAISO presented on slide 63 a preview of the supply cushion hours for the 20% tightest hours in 2022 and 2023. PG&E provides some preliminary observations and requests additional analysis:

• It appears that many early morning hours fall under the supply cushion (hours 1 to 8) independently of the peak and off-peak season mainly in 2022.
  • Does CAISO have an explanation for this outcome?
• For the year 2022, it seems many more than 20% of the hours are in the supply cushion (visually it looks like two-thirds of the hours fall in the supply cushion.
  • Could CAISO provide more detailed analysis (more granularity) and share the data used to calculate the supply cushion hours?
• Expanded dataset: while the two years of data provided is a good start, an expanded dataset would be useful as it would help illustrate trends over several years rather than just two.  Additional data helps to identify and exclude outliers.  Could CAISO expand the analysis and calculate the supply cushion UCAP for 2021 and 2024?

Additional UCAP design questions:

There are additional questions that need to be addressed as presented in the LSEs presentation, for instance:

• Supply cushion hours: will CAISO provide an indication of the hours falling in the supply cushion in advance? Would UCAP be calculated for all RA-eligible resources or only shown RA resources?
• Data for calculating UCAP: how many years of data will be included? How will each year be weighted?
• PRM revision: how should the PRM be revised with the UCAP methodology?
• Forced outage: What will be the process to "cure" extended forced outages? What will be the process to convert an extended forced outage to planned outage?

5. Track 1: Please provide your organization’s feedback on accounting for ambient derates, particularly the interaction between a resource’s NQC after accounting for ambient derates, the NQC after potentially being reduced for UCAP, and the must offer obligation. Would you support the direction discussed and if not, what changes or analysis are required.

PG&E supports the overall approach to account for RA resource capabilities during peak conditions (ambient derates) through the NQC process.  However, PG&E would like to understand better the implications of basing the ambient derate value on the historic peak load conditions during the maximum energy output of the prior three years of top ten peak load days. It’s unclear to PG&E if this approach would use the top ten peak loads day per year or across the entire three years period. PG&E is concerned that an approach that focuses on a very narrow set of days will set NQC values for ambient derates that are more conservative than counting methods for other resources. PG&E urges the CAISO to coordinate with the CPUC on the final approach for determining the counting value, as the CPUC outlined some useful considerations in their UCAP proposal.

Implications on the must-offer obligation:

The RA requirements should be set at the NQC derated for ambient derates due to temperature. However, the must offer obligation should reflect the capacity that a unit is physically capable of operating (i.e., the Pmax of the unit). An ambient OMS card could be submitted on a daily basis to limit awards on the upper end, to account for weather conditions.

6. Track 2: For the outage and substitution proposal leaning, please provide your organization’s recommendation and rationale for what threshold to use for conditional outages, including the pros and cons of different alternatives.

PG&E supports the idea of not providing substitution when there are no reliability risks.

However, PG&E does not support the approach for conditional approval of outages (without substitution).

As defined in the principles to revise the outage and substitution process presented by the LSEs, the process should provide clarity on the substitution rule: i.e., clarity if substitution should be provided and who should provide the substitution based on clear criteria.

If there is no reliability risk and substitution is not required, it should be based on clear criteria and stay unchanged. In terms of RA and outage planning, it is burdensome to manage changes to the substitution status and provide substitution on short notice.

7. Track 2: For the outage and substitution proposal leaning, please provide your organization’s recommendation and rationale for the product definition design attributes (granularity, participation, type of RA, and quantity). For participation, should offering to the pool and procuring from the pool be mandatory or voluntary for buyers and/or sellers? Why or why not?

PG&E provides the following preliminary suggestions on the product attributes:

• On the quantity type: transaction in terms of megawatt (MW). The objective should be to pool multiple substitution needs into a single transaction (MWs are easier to transact than like for like/ marginal ELCC type).
• Participation type: preference for voluntary. The pool should be a complement to the bilateral market for RA substitution capacity existing today by providing substitution for different granularity (monthly, weekly and daily).
• Granularity: monthly, weekly, daily
• Other pool features:
  • Flexibility: offer capacity to the pool with different availability.
  • Firm commitment once substitute capacity is procured from the pool.
  • Resources should have the ability to modify their offer (availability) during the month if the resource availability changes, but before substitute capacity is awarded.

PG&E suggests also additional clarifications as presented by the LSEs:

• How will the planned outage approval process work with the pool?
• What will be the process for outage approval by CAISO with the pool? Are there risks that the outage won’t be approved?
• How will the pool be operated? What will be the pool timeline to access substitution capacity? What will be the intra-month process for outage?

8. Track 2: For the outage and substitution proposal leaning, please provide your organization’s feedback on visibility options. What type of information would help stakeholders understand the certainty of being able to take outages if relying on excess shown RA and the voluntary pool?

See question 6. If there is no reliability risk and substitution is not required, it should be based on clear criteria and stay unchanged.

9. Track 2: For the outage and substitution proposal leaning, please provide your organization’s feedback on access priority. Would the right of first refusal for the entity showing the capacity for substitution purposes overcome incentives to hold capacity back?

PG&E supports considering the “right of first refusal” option that would give priority to the substitution capacity offered in the pool (see also pool features developed in question 7). 

10. Track 2: For the outage and substitution proposal leaning, please provide your organization’s feedback on the price and procurement mechanism design attributes.

The pricing mechanism requires more discussion with the CAISO and stakeholders once the product attributes are better defined.

Overall, PG&E supports the use of an auction as an effective pricing mechanism to select substitution capacity and set the price. PG&E notes that depending on the product attributes (i.e., daily, weekly substitution capacity) it could lead to daily auctions for many products which could complicate the participation in the pool. Additional discussion is needed to balance the burden of daily auctions and the flexibility needed to find substitution with different granularity.

PG&E notes the administrative matching could be easy to implement and provide flexibility in finding substitution with different granularity (few days, a week, etc.).

11. Track 2: Please provide your feedback on adding “urgent” as an outage type. Are there any other outage types that should be considered in the straw proposal, if so, in what way are they not covered by the outage types available today?

CAISO still needs to address the main questions raised in the LSEs presentation:

• Does the new “urgent” outage type change the current CAISO forced outage definition (i.e., Maintenance Outage submitted 7 days or less prior to the start date for the Outage are considered as Forced Outage)??
  • The issue paper stated it will give the CAISO the ability to deny the outage if there is a reliability concern. CAISO already has this authority. What are the benefits of the definition change?
• What is the timing and what are the requirements associated with each outage type?
• How the outage will be approved? What will be the approval process?
• Are there risks that the outage won’t be approved?
• What will be the substitution requirements for each outage type? Penalties?
• In terms of UCAP:
  • Can you convert a forced outage to a planned outage? Under what circumstances?
  • What will be the process with a UCAP framework for "curing" extended forced outage? 

12. Track 2: Please provide your organization’s feedback on the joint LSE presentation.

See question 11.

13. Track 2: Please provide your organization’s feedback on DMM’s presentation.

PG&E supports additional discussion on auction to procure substitution capacity from the pool as a pricing mechanism.

PG&E suggests the DMM to provide additional details on the auction’s characteristics for instance the product to be auctioned.

• If the pool operates with daily auctions: what will be the product auctioned? Will it be only daily substitution capacity product? Will there be the option to sell/buy substitution capacity for multiple days?

14. Track 2: Optionally, please provide your organization’s preliminary feedback on the availability and incentive mechanism straw proposal leaning discussion. A follow up working group meeting will be scheduled the week of March 3, 2025.

Comments to be submitted on availability and incentives mechanism on March 13. 

15. Track 3: Please provide your organization’s feedback on the Track 3 Resource Visibility discussion as a whole.

PG&E continues to support CAISO’s proposal to improve CAISO’s visibility into RA-eligible capacity not shown as RA. The reporting should be simple, easy to implement and should not require additional costly software development as proposed in the Middle River Power presentation.

The CAISO proposal for monthly reporting requirements for RA-eligible capacity not shown as RA consists of reporting the following information:

• Sold outside the CAISO BAA
• Held for substitution
• Held for anticipated outages
• Not contracted
• Contracted but not needed to meet LSE’s requirement 

PG&E requests the CAISO to provide the following clarifications on the monthly reporting:

• Will the CAISO use existing template or develop a new template?
• What will be the granularity of reporting? PG&E assumes the reporting will consist of MW quantity for each category. It is unclear what will be the granularity of the reporting: MW/month or MW/day?
• How will the template address possible switch of category? For instance, a resource not shown can be “held for substitution” for couple of days in the month then switch to “Contracted but not needed to meet LSE’s requirement”. 
• What will be the specific process for submission? Will it be a binding monthly reporting?

16. Track 3: Does your organization have any feedback on or suggested redlines to the list of capacity status categories discussed as potential reporting requirements for RA-eligible capacity not shown as RA?

See question 15. 

17. Track 3: Does your organization have feedback on any other aspects of the potential design such as reporting frequency?

See question 15. 

18. Track 3: Please provide your organization’s feedback on the presentation by Middle River Power.

See question 15. 

1. Track 1: Please provide your organization’s feedback on modeling improvements undertaken and additional improvements to consider.

No comment.

2. Track 1: Please provide your organization’s feedback on the qualifying capacity accreditation and PRM proposals discussed.

As mentioned in prior comments, SDG&E encourages CAISO to work with the CPUC to minimize differences between RA programs. 

3. Track 1: Please provide your organization’s feedback on the development of default qualifying capacity accreditation and PRM approaches and any preferred path the CAISO should pursue. In needed, what additional analysis would help inform the decision.

Please see response to question 2.

4. Track 1: Regarding the direction of CAISO’s UCAP proposal, please share your organization’s feedback on key elements discussed at the workshop such as implementation through CAISO NQC process, assessment hours, and interaction with LRA QC methodologies.

As noted above, SDG&E encourages CAISO and the CPUC to work together to minimize differences between their RA programs. SDG&E appreciates CAISO’s comments at the workshop that it is looking to partner with the CPUC and other LRAs, and that its objective is consistent UCAP between all LRAs. That said, to the extent there are differences, particularly between the CAISO and CPUC programs, it would be helpful to provide an explanation of the rationale and impact. CAISO participated in the CPUC’s RA Track 3 workshops on February 12-13 and noted UCAP elements where both entities align, as well as areas where additional work is needed and/or there may be differences.  

Regarding CAISO’s proposal to apply its default UCAP derate only “to resources that that do not receive a QC value from an LRA derived from a probabilistic or performance-based methodology (exceedance, ELCC, UCAP etc.),” SDG&E is supportive of the intent, which is understood as an effort to ensure an equitable treatment and avoid applying a duplicative derate. However, SDG&E also echoes comments made at the workshop recommending that CAISO ensure that any LRA methods it accepts in lieu of applying its UCAP method are in fact equitable.  

5. Track 1: Please provide your organization’s feedback on accounting for ambient derates, particularly the interaction between a resource’s NQC after accounting for ambient derates, the NQC after potentially being reduced for UCAP, and the must offer obligation. Would you support the direction discussed and if not, what changes or analysis are required.

Please see response to question 2.

6. Track 2: For the outage and substitution proposal leaning, please provide your organization’s recommendation and rationale for what threshold to use for conditional outages, including the pros and cons of different alternatives.

SDG&E supports the effort to address inefficiencies and artificial tightness present in the bilateral RA market. Freeing scheduling coordinators (SCs) from the requirement to procure substitute RA capacity in circumstances where an outage would not impact grid reliability is a step in the right direction. However, SDG&E requests more clarity on the operation of the proposed mechanisms and deadlines prior to advocating for a specific threshold. Under the threshold options listed in the workshop slides, circumstances would inevitably arise where CAISO determines an outage will not impact reliability only to withdraw that approval due to changed conditions. LSEs need adequate prior notice and certainty about when and how much substitution capacity is needed. Notification and certainty are necessary so that LSEs have adequate time to secure the resources needed (which may require time to execute a confirmation and/or post collateral or prepayment) to meet any substitution obligation and deadline. These concerns are not adequately addressed and, therefore, SDG&E cannot recommend an option at this time.

7. Track 2: For the outage and substitution proposal leaning, please provide your organization’s recommendation and rationale for the product definition design attributes (granularity, participation, type of RA, and quantity). For participation, should offering to the pool and procuring from the pool be mandatory or voluntary for buyers and/or sellers? Why or why not?

Granularity – SDG&E requests additional information on how each granularity option would be implemented prior to making a recommendation. That said, a monthly level of granularity could prove to be too coarse and lead to inefficient procurement of substitute capacity for shorter-term outages.

Participation – SDG&E strongly recommends voluntary participation for both offering to the pool and procuring from the pool. Mandatory participation would impose undue constraints on LSEs' ability to manage their portfolios optimally and could create inefficient market outcomes. Voluntary participation preserves market flexibility while still providing a valuable mechanism for those who wish to use it.

Types of RA – More detail is required prior to commenting on this aspect of the proposal. Specifically, SDG&E requires confirmation of which outage types could be covered by each RA type.

Quantity – More detail is required prior to commenting on this aspect of the proposals. Specifically, how the quantities would be applied to each of the granularities discussed above.

8. Track 2: For the outage and substitution proposal leaning, please provide your organization’s feedback on visibility options. What type of information would help stakeholders understand the certainty of being able to take outages if relying on excess shown RA and the voluntary pool?

No comment.

9. Track 2: For the outage and substitution proposal leaning, please provide your organization’s feedback on access priority. Would the right of first refusal for the entity showing the capacity for substitution purposes overcome incentives to hold capacity back?

LSEs that offer capacity into the outage substitution pool should hold a right of first refusal to reclaim those resources in the event the capacity is needed to cover their own shortfall. SDG&E believes that granting the right of first refusal would help to overcome incentives to hold capacity back. While individual LSE motives and decision-making factors may vary, the right of first refusal creates an incentive for entities to make available their excess capacity to the substitution pool. Without such priority access rights, entities are incentivized to withhold capacity from the pool to maintain operational flexibility.

10. Track 2: For the outage and substitution proposal leaning, please provide your organization’s feedback on the price and procurement mechanism design attributes.

Price – SDG&E recommends that CAISO determine an administratively set price and provide notice of this price to SCs prior to the deadline to offer resources into the pool.

Mechanism – SDG&E recommends that CAISO first determine the pool parameters (product definition, visibility, etc.). Once these details are outlined, the feasibility and implementation details of each of the procurement mechanisms can be more appropriately analyzed.

Timeline – The current deadline is T-8, and SDG&E notes that this flexibility should be retained. SDG&E is supportive of the proposal to allow procurement between T-28 and T-8.

11. Track 2: Please provide your feedback on adding “urgent” as an outage type. Are there any other outage types that should be considered in the straw proposal, if so, in what way are they not covered by the outage types available today?

SDG&E understands the addition of “urgent” as intended to provide CAISO with additional information it can use to prioritize outages. This enhanced categorization could be helpful, but CAISO should provide more detail on the potential impacts of this addition to SC and CAISO processes.

12. Track 2: Please provide your organization’s feedback on the joint LSE presentation.

SDG&E appreciates PG&E’s presentation and notes that the questions outlined in the slides provide helpful guidance to CAISO and stakeholders regarding issues that need to be addressed.

13. Track 2: Please provide your organization’s feedback on DMM’s presentation.

SDG&E appreciates DMM’s explanation of the reverse second price auction, and its efforts to design a mechanism that endeavors to avoid gaming behavior. However, before determining whether this proposal should be adopted, as mentioned above, it would be beneficial to first determine the pool parameters.  This would establish the constraints that the procurement mechanism would need to operate within, which would help CAISO and stakeholders to more thoroughly evaluate this mechanism and other options.

14. Track 2: Optionally, please provide your organization’s preliminary feedback on the availability and incentive mechanism straw proposal leaning discussion. A follow up working group meeting will be scheduled the week of March 3, 2025.

SDG&E appreciates the CAISO’s overview of the proposed Measuring Unavailable RA (MURA) mechanism at today’s working group meeting. Our initial reaction is to flag concerns raised by parties that MURA may be duplicative with UCAP. SDG&E encourages CAISO to consider this issue and continue the discussion with stakeholders.

15. Track 3: Please provide your organization’s feedback on the Track 3 Resource Visibility discussion as a whole.

While SDG&E understands CAISO’s interest in resource visibility, as noted at the workshop, if a resource is not contracted for RA, it cannot be required to be available. In other words, the monthly data collection proposed by CAISO would not necessarily result in additional resource availability, which makes the value of the proposal unclear. Additionally, SDG&E notes that CAISO already has data for all IOU resources (shown, not shown, and sold). Rather than implementing a reporting requirement that duplicates data that CAISO has access to, SDG&E encourages CAISO to determine how to pull this data into a format that addresses the concern this proposal is seeking to address.

16. Track 3: Does your organization have any feedback on or suggested redlines to the list of capacity status categories discussed as potential reporting requirements for RA-eligible capacity not shown as RA?

Please see response to question 15.

17. Track 3: Does your organization have feedback on any other aspects of the potential design such as reporting frequency?

Please see response to question 15.

18. Track 3: Please provide your organization’s feedback on the presentation by Middle River Power.

SDG&E appreciates MRP’s efforts to create a proposal that addresses CAISO’s visibility concerns. However, given the high volume of transactions and additional workload that this proposal would create, as well as the fact that CAISO already has access to all IOU resource data, SDG&E does not believe this is a feasible or necessary solution.

1. Track 1: Please provide your organization’s feedback on modeling improvements undertaken and additional improvements to consider.

 The Six Cities have no comments on this topic at this time.

2. Track 1: Please provide your organization’s feedback on the qualifying capacity accreditation and PRM proposals discussed.

 Please refer to the specific comments provided below. 

3. Track 1: Please provide your organization’s feedback on the development of default qualifying capacity accreditation and PRM approaches and any preferred path the CAISO should pursue. In needed, what additional analysis would help inform the decision.

As an initial matter, the Six Cities reiterate their support for the CAISO’s proposed approach to develop default (rather than minimum required) counting rules and PRM approaches in this initiative.  Establishing criteria that local regulatory authorities are required to adopt as minimum values should remain outside the scope of this process.

Second, the Six Cities emphasize their earlier comments regarding design elements for capacity counting rules and the PRM:

• The Six Cities support an approach to variable energy resource (“VER”) counting that produces a single value, whether that value is based on an exceedance, ELCC, or other approach.  The CAISO should publish a list of qualifying capacity values based on this default methodology, and local regulatory authorities should then have the ability to review the published values and direct the CAISO to reflect an updated value for individual resources based on the local regulatory authority (“LRA”) approved counting methodology. 
• For entities that choose to rely on the values determined by the CAISO through its default rules, the CAISO should publish or make available data and information that enables LSEs to verify how the CAISO applied its default methodology to establish the default value.  These methodologies may include factors that result in variances among technology types and potentially based on region. 
• For VERs that are imports, all Maximum Import Capability (“MIC”) requirements for such resources should be based on CAISO default counting values, rather than values determined by individual local regulatory authorities.  This will result in uniform use of MIC for RA imports that are VERs.  The Six Cities are open to discussions about the interaction of MIC with default and LRA-established counting rules, with the objective of maximizing the MIC available for use while preserving LRA authority over resource qualification and counting requirements.
• The Six Cities are concerned with potential complications that may arise if there are differences between capacity recognized in NQC and covered by the Must Offer Obligation (“MOO”).  If capacity subject to the MOO is greater than capacity recognized in NQC, there could be a potential for inaccurate assessment of capacity available to the markets and/or for market conduct violations (i.e., bidding in more capacity than is actually available).  The Six Cities recommend further evaluation of this point.

In response to discussions during the February stakeholder meetings, the Six Cities also emphasize that NQC “discounts” should not be double-counted in the PRM calculation or through a “supply cushion” requirement. 

4. Track 1: Regarding the direction of CAISO’s UCAP proposal, please share your organization’s feedback on key elements discussed at the workshop such as implementation through CAISO NQC process, assessment hours, and interaction with LRA QC methodologies.

While the Six Cities do not oppose consideration of UCAP concepts as the basis for the CAISO’s default counting criteria for RA resources, it still remains unclear what the primary objective for UCAP is.  Determining the policy that underpins the shift to UCAP for specific resource technologies will aid in designing any UCAP program.  The Six Cities reiterate key concerns with UCAP program design. 

First, in view of the significant and continuing changes in the composition of the resource fleet available to the CAISO BAA, the Six Cities are concerned that focusing primarily on forced outage data for thermal resources may overlook more critical impacts on resource availability at times when system conditions are stressed. 

Second, with respect to any UCAP methodology that may be proposed, the Six Cities urge adoption of a transition period for implementation in order to minimize disruption of previously adopted resource plans and related commitments.

Third, any UCAP design should not introduce excessive complexity into the RA program.  LSEs and resources need to be able to verify the UCAP values, and there should be data and information available to enable them to do so. 

Finally, there should be an established process for updating the UCAP values as necessary, and this process should allow LSEs and/or resources to understand the basis for any updates to the UCAP for individual resources.

The Six Cities are also concerned with the CAISO’s proposal to derate resources that do not have QC values derived from probabilistic or performance based methodologies, even in situations where an LRA has determined that a different methodology for establishing QC is appropriate.  This approach essentially constitutes a “back door” to minimum requirements, and it undermines the authority of LRAs to establish resource counting values.

5. Track 1: Please provide your organization’s feedback on accounting for ambient derates, particularly the interaction between a resource’s NQC after accounting for ambient derates, the NQC after potentially being reduced for UCAP, and the must offer obligation. Would you support the direction discussed and if not, what changes or analysis are required.

In general, the Six Cities do not oppose inclusion of a default methodology for addressing ambient derates within the CAISO’s RA program.  However, the methodology should ensure that ambient derate impacts are not “double-counted” through, for example, reflection of the impacts of ambient derates on the RA fleet through the determination of the PRM and through the QC or NQC for resources.

6. Track 2: For the outage and substitution proposal leaning, please provide your organization’s recommendation and rationale for what threshold to use for conditional outages, including the pros and cons of different alternatives.

The Six Cities support further development of the conditional outage concept as discussed during the February stakeholder meetings.  While the Six Cities do not have specific criteria for such outages at this time, the Six Cities encourage the CAISO to consider structuring this program so that entities may rely on their ability to take an outage without substitution once the outage has been authorized by the CAISO.  In other words, once approved, the CAISO should not later revoke approval for outage (and the lack of the associated obligation to provide substitution), except perhaps when the CAISO is facing emergency conditions.  Entities must be able to rely on the outage approvals and plan accordingly; this is challenging to do when outages that are approved are subject to change. 

7. Track 2: For the outage and substitution proposal leaning, please provide your organization’s recommendation and rationale for the product definition design attributes (granularity, participation, type of RA, and quantity). For participation, should offering to the pool and procuring from the pool be mandatory or voluntary for buyers and/or sellers? Why or why not?

The Six Cities generally support the CAISO’s proposal leaning regarding the implementation of a pool that can be used to obtain substitute capacity. 

In terms of the pool design summarized on p. 22 of the February 11^th presentation, the Six Cities provide the following comments:

• For product definition, the Six Cities support allowing the product to be defined in terms of daily, weekly, and monthly granularity.
• The Six Cities do not have strong views at this time on whether a calendar or new tool is developed, but reiterate their concerns expressed elsewhere in these comments that the approach should be kept relatively simple to use.  This might support a calendar or bulletin board format.
• In terms of access priority, the Six Cities concur with the CAISO’s leaning that that once offered, an offeror retains a right of first refusal for substitute capacity until the point at which the capacity has been sold to another party.
• At this time, the Six Cities are continuing to evaluate the proposed pricing options suggested by the CAISO. 
• The procurement mechanism should be simple and administratively easy to access and utilize.  At this time, the Six Cities do not believe the complexity of auction processes are warranted.  With respect to timing, the proposal for T-28 to T-8 periods seems reasonable, although there may be value in considering whether the pool could accommodate offers of a longer duration; for example, if a party is prepared to offer capacity several months in advance, the Six Cities are inclined to support that optionality. 

8. Track 2: For the outage and substitution proposal leaning, please provide your organization’s feedback on visibility options. What type of information would help stakeholders understand the certainty of being able to take outages if relying on excess shown RA and the voluntary pool?

 Please refer to the comments provided in response to question no. 7 above.

9. Track 2: For the outage and substitution proposal leaning, please provide your organization’s feedback on access priority. Would the right of first refusal for the entity showing the capacity for substitution purposes overcome incentives to hold capacity back?

As noted in response to question no. 7, the Six Cities support structuring the pool such that voluntary participants should be able to withdraw an offering to the pool prior to any commitment to another market participant, but should not be permitted to claw back capacity that has already been purchased by another party.

10. Track 2: For the outage and substitution proposal leaning, please provide your organization’s feedback on the price and procurement mechanism design attributes.

Please refer to the comments provided in response to question no. 7. 

11. Track 2: Please provide your feedback on adding “urgent” as an outage type. Are there any other outage types that should be considered in the straw proposal, if so, in what way are they not covered by the outage types available today?

The Six Cities support continued consideration of the urgent outage category in this stakeholder process.  Including this category in the outage reporting process will allow for more granular and accurate resource status to be provided by the CAISO.  As a general matter, the Six Cities support modification of the forced outage structure away from timing-based criteria and toward condition-based criteria.

The Six Cities do not support the suggestion in the CESA presentation that outages of storage resources be exempted from availability assessments based on the likelihood that the resource would have been dispatched during the outage period.  There is no obvious reason why such an exemption, if adopted, should not apply to other types of resources, and it is inconsistent with the basic concept of availability for which RA payments are made.

12. Track 2: Please provide your organization’s feedback on the joint LSE presentation.

The Six Cities continue to support the need for the information and resolution of concepts addressed in the joint LSE presentation.  In particular, the Six Cities reiterate the request for the CAISO to consider outage categories and the implications of a forced or urgent outage that subsequently becomes an extended outage due to the need for maintenance activities that are determined to take multiple months.  In such a situation, the forced or urgent outage becomes more akin to a planned outage, and, as such, should be reflected differently in UCAP values. 

13. Track 2: Please provide your organization’s feedback on DMM’s presentation.

The Six Cities appreciate the DMM proposal regarding a possible structure for the RA substitution pool based on “reverse second price auction” theory.  While the concept described is interesting, it may involve a level of structure and complexity for the substitution pool that is more complex than would be needed, at least initially.  The Six Cities are concerned that a formalized auction would involve significant resources to develop, and might suffer from liquidity deficiencies (i.e., not enough participants on the purchasing and sales sides) to make development and implementation of an auction structure worthwhile.  For these reasons, while market participants become accustomed to use and availability of a substitution pool, it may be preferable to opt for a simple mechanism, like a bulletin board, to implement the substitution pool, at least initially.  An auction concept could be considered at a later time, if participation in the pool is high and an auction process is supported by stakeholders. 

In addition to these concerns, the Six Cities do not support mandatory participation in the substitution process; participation should be voluntary for purchasers and sellers. 

Lastly, any process to develop an auction should not preclude LSEs and suppliers from engaging in bilateral transactions for substitution purposes or from self-supplying substitution. 

14. Track 2: Optionally, please provide your organization’s preliminary feedback on the availability and incentive mechanism straw proposal leaning discussion. A follow up working group meeting will be scheduled the week of March 3, 2025.

Preliminarily, the Six Cities are concerned that adoption of both UCAP default counting rules and the MURA program may result in duplicative penalties for outages—once in the form of a MURA-based penalty, and again in the form of a reduction in a resource’s capacity value through the UCAP.  If the CAISO moves to a UCAP-based program and proceeds with development of the substitution pool that has been discussed, it may be preferable to monitor compliance with RA availability requirements and then assess if a penalty structure is needed as an additional compliance incentive.

The Six Cities will reserve remaining comments on the MURA design until after the March 4^th stakeholder meeting regarding availability incentives. 

15. Track 3: Please provide your organization’s feedback on the Track 3 Resource Visibility discussion as a whole.

The Six Cities remain unopposed to the CAISO’s request for reporting of the status of non-RA resources, provided that resources included in any non-RA resource status reports remain exempt from must-offer obligations and from any performance penalties (such as RAAIM). Please also refer to question 16 below.

16. Track 3: Does your organization have any feedback on or suggested redlines to the list of capacity status categories discussed as potential reporting requirements for RA-eligible capacity not shown as RA?

In general, the Six Cities do not oppose the general direction of the CAISO’s proposal regarding reporting of capacity status categories.  During the stakeholder discussions on February 11-12, it was suggested that several of the categories on page 14 could be consolidated to facilitate easier reporting; the Six Cities concur, but also do not oppose the categories that have been identified, provided that the CAISO acknowledges that the status of these resources will likely and should be permitted to change between annual (if annual reporting is required) and monthly showings.  For example, a resource that is initially designated as “not contracted” in the annual timeframe might become “held for substitution” or “held for anticipated outages” or externally contracted by the monthly showing.  While the Six Cities recognize the CAISO’s desire for added awareness of resources’ status, this reporting obligation should not be ongoing or continuous.  In other words, there should not be a requirement for continuous updating of resource status apart from submittal of accurate information in the monthly showings. 

17. Track 3: Does your organization have feedback on any other aspects of the potential design such as reporting frequency?

As stated in response to question no. 16, the Six Cities do not support requirements to report status information for non-RA resources except in monthly RA reports (and as required under the CAISO’s other reporting structures such as for outages that are outside the scope of what is being proposed here).  There could be value in considering if this supplemental reporting is needed only in summer months when peak period conditions are anticipated.  This would reduce the reporting burden associated with providing the CAISO with additional resource visibility. 

18. Track 3: Please provide your organization’s feedback on the presentation by Middle River Power.

The MRP proposal appears to involve more extensive availability reporting and tracking of resources than appears to be needed to meet the CAISO’s visibility requirements and facilitate the formation of a voluntary substitution pool.  For this reason, the Six Cities do not support the MRP ledger proposal at this time.