Comments on Revised Straw Proposal on Outage Management Meeting on Aug. 14, 2025

1. Please provide a summary of your organization’s general comments on the Revised Straw Proposal (RSP) on Outage Management and materials shared on Aug 14th meeting.

2. Provide your organization’s comments regarding the draft Business Practice Manual (BPM) language related to Outage Reporting enhancements, and note whether your organization supports moving these items to a dedicated BPM process

3. Provide your organization’s comments regarding the enhancements to the Outage Management System (OMS).

4. Provide your organization’s comments regarding the near-term guidance on Representing Nonlinearity, as well as your organization’s perspective on long-term solutions.

ACP-California appreciates CAISO’s efforts to address Nonlinearity of storage resources and to continue to evaluate the appropriate treatment for the unique nature of energy storage resources. However, we have significant concerns regarding CAISO’s proposed near-term guidance on the nonlinearity issue, which effectively advises resources to use Plant Trouble to convey the impacts of nonlinearity and – in the long term – to “right-size storage resources’” RA capacity to their ability to discharge the qualifying capacity value continuously for at least four hours.

First, it appears that CAISO is too focused on the RA definition for energy storage (which points to four hours of output). But that definition was developed when storage was a newer technology and before some of the technical limitations, including nonlinearity, of storage devices were fully understood. And CAISO should not inherently assume that the current definition should result in energy storage resources taking an RA reduction due to nonlinearity. In fact, many other resource types have unique technical limitations that are not fully reflected in their RA values, such as ramping constraints for thermal resources and multi-stage generator transitions. We urge CAISO to look at storage’s nonlinearity in a similar light.

Thus, CAISO should use the Technical Limitations Not in Market Model nature-of-work for energy storage foldback limitations, which would except these outages from RAAIM. This is an appropriate designation for nonlinearity of energy storage as additional changes to the CPUC and CAISO RA programs are considered and implemented.

While CAISO has provided its reasoning for pushing forward with an approach that would expose energy storage resources experiencing nonlinearity to RAAIM, it does not appear to have considered the implications of this change. The implications of this policy would reduce the availability of RA from the storage fleet and – all else equal – limit the fleet of available RA resources to meet LSE RA needs. This especially concerning in a time of limited RA availability and a changing RA paradigm. The result of this change is likely to be an increase in costs to ratepayers, which is not necessary nor likely to provide any meaningful system benefits.

ACP-California requests additional discussion on this topic and exploration of alternative resolutions in the near and long-term. Additionally, we continue to have concerns that resource counting and RA outage rules may double penalize storage resources and under-represent the RA value of storage resources within the CAISO footprint.

5. Provide your organization’s comments regarding the draft Business Practice Manual (BPM) language related to SOC Definition and Estimation, and note whether your organization supports moving these items to a dedicated BPM process.

6. Provide your organization's comments regarding the update on the Co-located Follow DOT topic.

7. Provide your organization's comments on the overview of Bid Cost Recovery Perspectives.

8. Provide your organization's comments on the presentation offered by the California Energy Storage Alliance (CESA)

9. Please provide any additional comments, feedback, or examples regarding the RSP and the August 14th stakeholder meeting. You may upload examples or data using the “Attachments” field below.

1. Please provide a summary of your organization’s general comments on the Revised Straw Proposal (RSP) on Outage Management and materials shared on Aug 14th meeting.

 AES Corporation appreciates the opportunity to provide comments on the August 14, 2025, Storage Design and Modeling stakeholder workshop. As a leading developer and operator of energy storage systems across multiple CAISO facilities, AES recognizes the critical importance of establishing robust operational frameworks that accurately reflect storage capabilities and operational constraints.

The exponential growth in storage deployment within CAISO's footprint necessitates immediate attention to market design improvements. AES operates storage assets that demonstrate the practical challenges addressed in this initiative, particularly regarding nonlinearity representation, outage management complexity, and co-located resource coordination. Our operational experience indicates that current market mechanisms inadequately capture storage operational nuances, leading to suboptimal dispatch decisions and inappropriate penalty assessments.

AES strongly advocates for the expedited implementation of practical solutions that recognize storage as a unique resource class requiring specialized treatment in both market operations and regulatory oversight. The initiative should prioritize operational efficiency improvements that directly benefit grid reliability while ensuring storage resources can participate effectively in CAISO markets.

2. Provide your organization’s comments regarding the draft Business Practice Manual (BPM) language related to Outage Reporting enhancements, and note whether your organization supports moving these items to a dedicated BPM process

AES supports the proposed enhancements to outage reporting requirements.

AES conditionally supports moving these items to a dedicated BPM process, provided that storage operators maintain meaningful input throughout the BPM development process. We recommend establishing a technical working group with storage operators to review draft BPM language before finalization, ensuring operational practicality and accuracy.

3. Provide your organization’s comments regarding the enhancements to the Outage Management System (OMS).

AES strongly endorses the proposed OMS enhancements and urges CAISO to prioritize system capabilities that accurately reflect the operational complexity of storage. Our facilities underscore the pressing need for these improvements, as current OMS limitations lead to operational inefficiencies and inaccurate market signals.

The CAISO proposal does not address hybrids in general, but Outage Reporting Enhancements should also include enhancements to better account for component-level outages on hybrid resources. 

AES Priority Recommendations for OMS Enhancement:

Integrated Parameter Updates: Support overlapping outage cards with simultaneous adjustment of multiple parameters (Pmax, Pmin, energy limits) reflecting real-world storage operational constraints

Dynamic Capability Reporting: Enable real-time updates to reflect changing operational capabilities due to temperature, SOC, or equipment conditions

Automated Processing: Implement automatic acceptance of outage card updates for storage resources to reduce administrative burden and improve response times

4. Provide your organization’s comments regarding the near-term guidance on Representing Nonlinearity, as well as your organization’s perspective on long-term solutions.

CAISO's NGR (Non-Generating Resource) model cannot accurately reflect the dispatch and state-of-charge profiles of storage resources in the foldback region. This scenario is similar to the forbidden region of thermal resources. It's neither optimal nor feasible to manage storage dispatch in the foldback region using outage cards because the SOC is dynamic and continues to change in real-time, so outages always lag the actual resource condition by at least 15-20 minutes. We encourage ISO to focus its attention on developing default Masterfile parameters and eventually create biddable parameters for modelling SOC non-linearity in the foldback region, ensuring CAISO systems can manage storage dispatch using the NGR model in the foldback region.

The representation of nonlinearity, in the near term, through outage cards, which are a resource adequacy availability incentive mechanism (RAAIM), is broadly supported and critical for grid reliability. AES recommends that CAISO follow LRA guidelines for calculating Qualifying Capacity (QC) and adhere to its existing rules for NQC calculations, rather than revising the QC guidelines, which fall outside its jurisdiction. AES firmly believes that storage assets have deliverable energy in the foldback range. CAISO should create incentives for storage operators to make this energy available in real-time to the CAISO grid, rather than creating incentives for storage operators to either economically bid these ranges out of the market or put in an outage. It's also essential for CAISO to develop long-term solutions, especially given the fact that CAISO plans to implement the imbalance reserve product next year, and we expect storage to deliver this product mainly. With more than 15GW of storage coming online by the end of the year, the storage energy in the foldback range could be very critical during extreme system conditions.  The use of Technical Limitations Not in Market Model nature of work (NOW) is an appropriate near-term solution for storage operators to reflect nonlinearity. It should be included in the Draft Final Proposal.

5. Provide your organization’s comments regarding the draft Business Practice Manual (BPM) language related to SOC Definition and Estimation, and note whether your organization supports moving these items to a dedicated BPM process.

AES supports enhanced SOC definition and estimation procedures, recognizing their critical importance for accurate storage dispatch and market participation. Our operational experience demonstrates that SOC accuracy directly impacts both grid reliability and resource economic performance.

AES Technical Recommendations:

• Establish SOC accuracy standards with tolerance bands reflecting current technology capabilities
• Define protocols for SOC recalibration during market operations to maintain accuracy
• Create standardized methods for estimating SOC during communication disruptions
• Include guidance for temperature-corrected SOC calculations affecting resource capability

AES proposes enhanced telemetry requirements, including:

• Real-time SOC reporting with sub-MW precision
• Temperature monitoring data affecting storage performance
• Efficiency factor reporting enabling accurate SOC estimation

AES supports transitioning SOC-related items to a dedicated BPM process, provided that storage operators participate in technical review sessions.

6. Provide your organization's comments regarding the update on the Co-located Follow DOT topic.

AES operates multiple co-located facilities and strongly emphasizes the need for refined co-located resource coordination mechanisms that maximize operational flexibility while maintaining grid reliability.

AES Operational Experience with Co-located Resources: Our co-located facilities demonstrate that current "Follow DOT" instructions often unnecessarily constrain resources, particularly when aggregate capability constraints are not binding. This creates suboptimal resource utilization and reduces overall system efficiency.

AES Recommendations for Co-located Resource Management:

• Conditional Follow DOT Logic: Implement follow instructions only when aggregate capability constraints are binding, not preemptively. Most co-located facilities at power plants include controls to ensure plants do not exceed their POIs.

• Service-Specific Treatment: Differentiate between energy and ancillary service awards when determining follow instructions, recognizing that regulation down services do not require VER curtailment.

• Real-time Flexibility: Allow co-located resources to optimize within available aggregate capability without unnecessary coordination constraints.

AES proposes a Co-located Resource Optimization Framework:

1. Dynamic Constraint Assessment: Continuously evaluate whether aggregate constraints are binding rather than applying blanket restrictions. Identify scenarios where follow-DOT may be required and create incentives for stakeholders to manage those scenarios rather than simply enforcing follow-DOT, which is not an efficient market outcome.
2. Prioritized Resource Dispatch: Establish a clear hierarchy for resource utilization when constraints become binding.
3. Economic Optimization: Enable co-located resources to maximize financial value within physical constraints.

AES requests that CAISO provide a detailed analysis of co-located resource performance under current rules, including the frequency of unnecessary constraint applications and quantified impacts on resource revenues and system efficiency.

7. Provide your organization's comments on the overview of Bid Cost Recovery Perspectives.

AES recognizes that appropriate bid cost recovery mechanisms are essential for storage resource participation in real-time markets, particularly given the unique inter-temporal constraints storage resources face.

AES Perspective on Storage BCR Requirements: Storage resources face unique cost recovery challenges due to temporal displacement between charging and discharging activities. Unlike traditional generators, storage operational decisions in one interval directly affect capability and costs in subsequent intervals, creating complex cost attribution challenges.

AES Recommendations for Storage BCR Framework:

• Temporal Cost Recognition: Develop BCR mechanisms that recognize multi-interval cost impacts of storage dispatch decisions
• Opportunity Cost Integration: Include foregone revenue opportunities in BCR calculations when CAISO dispatch decisions prevent optimal storage utilization
• Default Energy Bid Alignment: Utilize storage-specific default energy bids that accurately reflect real-time operational constraints and opportunity costs

AES emphasizes that inadequate cost recovery mechanisms discourage storage participation in real-time markets, ultimately reducing grid reliability and market efficiency.

8. Provide your organization's comments on the presentation offered by the California Energy Storage Alliance (CESA)

AES supports CESA's conceptual framework for real-time make whole payments for storage resources, recognizing that the current bid cost recovery mechanism inadequately addresses the unique operational characteristics of energy storage systems. The framework correctly identifies that storage resources face revenue shortfalls that may occur in different intervals than their underlying causes, unlike conventional generation resources with lumpy commitment costs. The proposed methodology for distinguishing between CAISO-caused and operator-caused shortfalls provides a reasonable foundation for eligibility determination in make whole payment calculations. AES also supports CESA's recommendation for a comprehensive review of storage modeling in real-time markets rather than continuing with piecemeal modifications that fail to address systemic issues.

AES Additional Considerations:

• Technology Diversity: Market rules should accommodate various storage technologies with different operational characteristics
• Hybrid Resource Integration: Ensure market mechanisms support increasingly complex hybrid resource configurations.

9. Please provide any additional comments, feedback, or examples regarding the RSP and the August 14th stakeholder meeting. You may upload examples or data using the “Attachments” field below.

 AES Implementation Timeline Recommendations: AES strongly urges CAISO to accelerate implementation timelines for critical outage management and OMS enhancements. Current timelines extending to 2027 create unnecessary operational challenges for the rapidly growing storage fleet.

1. Please provide a summary of your organization’s general comments on the Revised Straw Proposal (RSP) on Outage Management and materials shared on Aug 14th meeting.

The California Community Choice Association (CalCCA) appreciates the opportunity to comment on the California Independent System Operator’s (CAISO) RSP and Working Group (WG) meeting. In summary, the comments below recommend that the CAISO:

• In the near term, direct battery energy storage systems (BESS) to represent nonlinearity using the Technical Limitations Not in the Market Model outage card;
• Develop a Master File parameter as the long-term solution to representing non-linearity; and
• Adopt the following principles for when to apply bid cost recovery (BCR) to storage resources:
  • If the CAISO caused the storage resource to operate at a loss, then BCR should apply;
  • If the storage operator caused the storage resource to operate at a loss, then BCR should not apply; and
  • Continue to work with how to define when a loss is incurred due to CAISO or storage operator action.

2. Provide your organization’s comments regarding the draft Business Practice Manual (BPM) language related to Outage Reporting enhancements, and note whether your organization supports moving these items to a dedicated BPM process

CalCCA has no comments at this time.

3. Provide your organization’s comments regarding the enhancements to the Outage Management System (OMS).

CalCCA has no comments at this time.

4. Provide your organization’s comments regarding the near-term guidance on Representing Nonlinearity, as well as your organization’s perspective on long-term solutions.

In the near-term, CAISO proposes all BESS to use the Plant Trouble outage card to reflect non-linearity. CalCCA does not support this proposed near-term guidance, as it will group foldback into a broad Nature of Work category with numerous other causes of derates, without a standardized way to differentiate between causes. Scheduling coordinators sometimes group Plant Trouble derates of various causes into one ongoing outage card, especially when overlapping outages are not fully functional for BESS. For example, if there are ongoing inverter issues with a facility, it may have one outage card for the whole month reflecting when, within that month, the facility is in-service and out-of-service. In these cases, foldback may be added as one line item within that card.

Even if CAISO resolves issues with reporting overlapping outages and requires each outage cause to have its own card, relying on the Short Description to document and track foldback, rather than the Nature of Work, means CAISO and stakeholders will need to use text-mining analytics, which is messy, inconsistent, and not guaranteed to be accurate in all instances. In contrast, Technical Limitations Not in Market Model will provide a 100 percent clean dataset, because there are no other such technical limitations currently approved for BESS. That classification will make foldback uniquely and unambiguously identifiable, preserving a high-quality data set for unforced capacity (UCAP) design and analysis. If the foldback outage data continues to be documented using the Plant Trouble outage card, it will complicate policy discussions about unforced capacity (UCAP), and potentially adversely impact BESS. On the other hand, if Technical Limitations Not in Market Model is permitted and overlapping outages properly enabled, the set of foldback outages will be easily identifiable. Stakeholders, the CAISO, and the California Public Utilities Commission will need to determine how to account for foldback in the resource adequacy program under a UCAP design within a slice-of-day program and should not be bound by outage data access issues when designing a UCAP methodology including BESS.

In addition, nonlinearity can be a fundamental characteristic of the resource, not always an issue of unavoidable outage. Nonlinearity for storage resources is comparable to the operational characteristics of multi-stage generating (MSG) resources. Like MSG resources, which have multiple operating configurations and only one such configuration can be operated in any one interval, storage resources can have different operating characteristics that they operate under depending on their state-of-charge. The Technical Limitations Not in the Market Model outage card is used to “provide notification that [the] resource is unavailable due to technical limitations not captured in the CAISO market model and that result in infeasible dispatches because they are inconsistent with the resource’s design capabilities.”[1] This definition better reflects the reason for submitting an outage card in cases of nonlinearity. The CAISO should revise its proposed path forward for representing nonlinearity in the near-term to direct BESS to use the Technical Limitations Not in the Market Model outage card.

CalCCA’s interest in this discussion is grounded in ensuring that California’s resource adequacy (RA) framework functions as intended, maintains investor confidence in storage, and preserves the reliability benefits of the state’s rapidly growing battery fleet. California policymakers have directed load-serving entities to rely on four-hour batteries as the marginal capacity for the clean energy transition. Applying outage treatment that diminishes RA credit for storage — without offering a corresponding market model that properly represents foldback — risks destabilizing the very framework California is using to achieve reliability through decarbonization.

Long-term, the CAISO should seek to expeditiously implement a Master File parameter, as the preferred and most durable approach. A Master File parameter is the best way to reflect nonlinearity, and consistent with how MSG operating configurations are reflected.

[1]            CAISO, Business Practice Manual for Outage Management, Version 30 (July 27, 2023), at 22.

5. Provide your organization’s comments regarding the draft Business Practice Manual (BPM) language related to SOC Definition and Estimation, and note whether your organization supports moving these items to a dedicated BPM process.

CalCCA has no comments at this time.

6. Provide your organization's comments regarding the update on the Co-located Follow DOT topic.

CalCCA has no comments at this time.

7. Provide your organization's comments on the overview of Bid Cost Recovery Perspectives.

Stakeholders, including CalCCA, appear to be coalescing around a common principle for when to apply BCR to storage resources:

• If the CAISO caused the storage resource to operate at a loss, then BCR should apply; and
• If the storage operator caused the storage resource to operate at a loss, then BCR should not apply.

The CAISO should adopt this principle and continue to discuss with stakeholders how to define when the loss is incurred due to CAISO or storage operator action.

8. Provide your organization's comments on the presentation offered by the California Energy Storage Alliance (CESA)

CalCCA has no comments at this time.

9. Please provide any additional comments, feedback, or examples regarding the RSP and the August 14th stakeholder meeting. You may upload examples or data using the “Attachments” field below.

CalCCA has no additional comments at this time.

1. Please provide a summary of your organization’s general comments on the Revised Straw Proposal (RSP) on Outage Management and materials shared on Aug 14th meeting.

Comments on Storage Design and Modeling

Working Group Presentation on August 14, 2025

Department of Market Monitoring

September 5, 2025

Summary

The Department of Market Monitoring (DMM) appreciates the opportunity to comment on the Storage Design and Modeling working group presentation on August 14, 2025.[1] DMM supports the ISO addressing the storage bid cost recovery (BCR) issues as a top priority, and DMM appreciates the attention given to this issue in recent working group meetings. While DMM continues to recommend a bottom-up approach to redesigning uplift for storage resources, DMM supports eliminating most day-ahead BCR and does not oppose implementing rules that prevent storage resources from receiving BCR when operator behavior leads to inefficient real-time schedules.

DMM supports further analysis on the costs and benefits that may accrue to storage resources due to the multi-interval optimization prior to discussing any potential policy changes. DMM also recommends additional discussion before considering any changes to the current ancillary services state-of-charge constraint framework.

Lastly, DMM supports the Business Practice Manual clarifications for storage outages, and recommends addressing foldback in the clarifications. DMM continues to support the long-term solutions for outages and foldback discussed in previous working group meetings.

Comments

Storage BCR/uplift

DMM supports the ISO addressing storage bid cost recovery (BCR) issues as a top priority. DMM supports the ISO eliminating day-ahead BCR in most scenarios, as DMM has found the vast majority of day-ahead BCR for storage resources arises from uneconomic schedules due to parameter submissions by the scheduling coordinators.[2],[3]

DMM does not oppose further discussion and development of stakeholder-suggested proposals to incentivize more efficient battery operator behavior by removing the eligibility for battery BCR under certain bidding conditions. Early discussions of such proposals present the initial stages of a potentially workable approach to identify when uneconomic bidding may be the main driver of state-of-charge (SOC) limitations that prevent dispatch of storage resources. 

As mentioned in previous comments, DMM’s recommendation is to redesign storage BCR rules to assume no eligibility, and only add eligibility under specific situations where it is deemed appropriate.[4] However, if the ISO continues to address storage BCR issues by instead carving out scenarios where BCR is unwarranted, DMM agrees that storage operators bidding inefficiently and submitting inaccurate parameters are avenues for storage resources to receive unwarranted BCR.

The fundamental issue with applying the current BCR framework to storage resources is that storage resources are modeled with a number of constraints and parameters that are unique to batteries. The existing BCR rules do not consider the limitations these constraints may place on battery resources, and the control over market dispatches that these constraints provide for battery operators.[5] While conventional generators are ineligible to receive BCR when they are on outage, batteries are able to circumvent this rule in some instances because battery-specific constraints and parameters reflected in outage cards can make storage resources unavailable to the market without directly derating the resource. This allows these resources to receive BCR when they are effectively on outage.

While DMM continues to recommend the ISO address storage BCR from a bottom-up approach, if the ISO chooses to instead adjust the current BCR framework for each situation where storage resources could earn unwarranted BCR, then DMM agrees that the bidding behavior of storage resources should be considered. However, as mentioned previously, there are battery attributes unrelated to economic bids that can lead to unwarranted BCR under current market design. DMM recommends that all of these circumstances be accounted for when determining when storage resources are eligible to receive BCR.

Using DEBs as a benchmark for efficient bidding

A framework that utilizes default energy bids (DEBs) as a benchmark for whether battery operators are bidding efficiently inherently relies on a storage DEB that accurately reflects the intra-day opportunity cost for batteries. DMM has long recommended that the storage DEB vary hourly to reflect the changing real-time opportunity costs of dispatching in one hour versus another.[6] In general, storage DEBs should be higher prior to the net peak hours to reflect the opportunity cost of being unavailable in the highest priced hours. Alternatively, storage DEBs should be lower during the peak hours as the opportunity cost to dispatch at a later hour decreases during the highest priced hours. Storage DEBs should also be appropriately lower earlier in the day, to reflect the fact that if discharged many hours before the highest priced hours, recharging opportunities exist and the opportunity of discharge in peak hours is not foregone. 

While storage DEBs should vary hourly to ensure proper market power mitigation, storage DEBs will also need to vary hourly if bids will be compared to DEBs to determine BCR eligibility. In a framework such as the one proposed by California Energy Storage Alliance (CESA) and discussed in the August 14 working group meeting, accurate DEBs are necessary to determine when battery unavailability in the real-time is due to uneconomic bidding and inefficient state-of-charge management by the battery operator. A static DEB across the day will be too high in some hours and too low in others. Determining efficient bidding behavior by comparing bids to their DEBs will be dependent on the hour of the day and the resource’s day-ahead schedule. Across the day, resources will face varying opportunity costs depending on expected prices in future hours.

Determining BCR eligibility using static storage DEBs can lead to unwarranted bid cost recovery (batteries bidding inefficiently and incorrectly being eligible for BCR) and loss of bid cost recovery that may be warranted (batteries bidding efficiently and incorrectly being ineligible for BCR). Either of these outcomes are possible with DEBs that are too high or too low, depending on the hour of the day and the day-ahead schedule of the battery resource.

In addition to reducing effective mitigation of market power, using DEBs that are too high to determine BCR eligibility may also make resources ineligible for BCR in hours where the static DEB far exceeds the intra-day opportunity cost. For example, assume a battery submits a charging bid in the morning when it has a day-ahead schedule to charge. If the battery is not dispatched to charge, then it will be ineligible for BCR in the highest shortfall interval if the charging bid in the morning hour is less than the static DEB. If the static DEB is based on the fourth highest price of the day, it is possible that the battery operator is submitting efficient bids based on expected prices, but the bid is still lower than the high static DEB. If the storage resource fails to receive a charging schedule for any reason, the resource will be ineligible for BCR if their bid is less than the DEB. This example highlights the importance of creating an hourly storage DEB if using the DEB to determine if the resource is bidding efficiently, rather than relying on a static DEB that reflects the highest intra-day opportunity cost of the day.

Regardless of whether this type of BCR rule is implemented, DMM continues to recommend that storage DEBs vary hourly to reflect the changing intra-day opportunity costs. However, if the DEBs are to be used for more than just mitigation, DMM recommends an even higher priority be placed on designing hourly DEBs that more accurately reflect the intra-day opportunity cost of storage resources.

Initial state-of-charge parameter

DMM has identified a number of cases where unwarranted BCR resulted from inaccurate estimation of the day-ahead initial state-of-charge (ISOC) parameter. In some cases, BCR accrues where the ISOC is simply a poor estimate of the realized real-time SOC. In other cases, this parameter may have been intentionally misused to generate surplus BCR payments. The day-ahead ISOC parameter may be inaccurate because battery operators submit estimates that do not materialize, or because battery operators fail to submit an estimate and the default of zero is different than the actual state-of-charge that arises. DMM supports providing incentives for battery operators to provide the best estimates of this parameter.

DMM conceptually supports the proposal suggested by stakeholders that market participants would be ineligible for BCR if their day-ahead ISOC is substantially different than their actual initial state-of-charge. This proposal would better incentivize battery operators to submit accurate estimates of their day-ahead initial state-of-charge. However, additional details need to be developed before such an approach could be implemented, e.g., the definition of “substantially different”, and over what time period in the day the resource would be ineligible for BCR. 

DMM acknowledges that issues can arise from the default day-ahead ISOC being equal to zero if battery operators fail to submit an estimate. If the market is unable to properly incentivize battery operators to submit estimates of their day-ahead ISOC, it may be necessary to improve the default value to better estimate a likely initial real-time SOC, or require the submission of the day-ahead ISOC parameter rather than making it a voluntary parameter.

Analysis of multi-interval optimization

DMM supports the ISO further analyzing the benefits and costs of the multi-interval optimization (MIO) prior to considering changes that would provide uplift to storage resources for uneconomic dispatches that may occur as a result of the MIO. DMM continues to highlight that while there may be uneconomic dispatch of storage resources in some intervals, the discussion has yet to focus on the potential overall gains a resource may realize by being optimized in a manner that considers future intervals rather than solely considering the economics of the binding interval. Before discussing any potential policy changes to provide uplift to batteries due to MIO, there should be sufficient analysis provided on the total losses and benefits gained by storage resources through MIO. If the overall gains from MIO for batteries are significant, DMM does not believe that resources must be compensated for every instance in which MIO resulted in a dispatch that may have turned out to be sub-optimal based on ex post calculations that assume perfect information on future prices.

Ancillary service state-of-charge constraint

DMM recommends further discussion prior to any consideration of changes to the ancillary service state-of-charge (ASSOC) constraint framework. Ancillary services (AS) awarded to all resources, including awards from the day-ahead market, are assumed to be deliverable in real-time. Ancillary services are not re-optimized in real-time, with the real-time market only awarding ancillary services incremental to those awarded in the day-ahead. The real-time ASSOC constraint ensures ancillary services awarded to batteries are deliverable for the duration required by the CAISO tariff. Scheduling coordinators can also take proactive measures to manage state-of-charge in support of ancillary service deliverability. Costs associated with state-of-charge management to ensure deliverability of awarded ancillary services are costs of storage resources providing ancillary services, and like other operating costs, should be borne by the resource and factored into market bids.

DMM does not support providing bid cost recovery for uneconomic dispatches due to the ASSOC constraint.[7] By providing BCR for uneconomic dispatches of storage resources associated with maintaining ancillary services, storage resources do not face the full cost of their ancillary service provision.[8] Providing BCR associated with the ASSOC constraint binding may also incentivize dependence on the constraint instead of incentivizing resources to take actions to manage state-of-charge leading up to ancillary service awards.

Ensuring storage resources are properly incentivized to provide their ancillary service awards is necessary for market reliability.[9] DMM does not believe that subjecting storage resources to AS no-pay when ancillary service awards are undeliverable is sufficient incentive for storage resources to be available for their ancillary service awards. Additional constraints and market incentives are necessary to support reliability by ensuring deliverability of awarded ancillary services.[10]

Outage reporting and the representation of nonlinearity

DMM supports improvements to the outage management system (OMS) to better reflect limitations unique to storage resources. These improvements would improve transparency of resource availability and would support coordination of resource adequacy policy developments between the ISO and CPUC staff.[11] The ISO states that improvements to OMS are scoped for a longer-term initiative. In the interim, DMM supports the additional guidance for storage outages in the outage management Business Practice Manual (BPM).

Foldback is an operational limitation on the power output of a resource (MW), and not the stored energy (MWh). Due to the physical limitations of the resource’s ability to provide power, DMM recommends the ISO continue to require scheduling coordinators to report the physical limitation as an outage that is not exempt from the resource adequacy availability incentive mechanism (RAAIM). Furthermore, DMM recommends the ISO include this clarification in the BPM.

For long-term improvements to represent foldback in the CAISO market, DMM continues to support the inclusion of foldback parameters through Master File, and the development of functionality to bid state-of-charge (SOC).[12] The inclusion of foldback parameters in the Master File would treat the resources as having a variable ramp rate that differs at the extremes of SOC.

Foldback prevents batteries from incurring damage and excess cost when operating at the minimum and maximum levels of the resource’s SOC. DMM views allowing a resource to bid SOC as a significant improvement in the ability of storage resources to accurately reflect costs and resource limitations applicable to a particular market interval that can vary based on SOC, so that the cost of producing at a given megawatt output level can vary depending on SOC. To the extent that the degree of foldback may be relaxed at a given price, the ability to bid based on SOC may allow better reflection of this cost.

[1] Working Group on Outage Management, Uplift & DEB, and Mixed-Fuel & Distribution-Level Resources presentation, California ISO, August 14, 2025: https://stakeholdercenter.caiso.com/InitiativeDocuments/Presentation-Storage-Design-and-Modeling-Aug14-2025.pdf

[2] Comments on Storage Bid Cost Recovery and Default Energy Bids, Department of Market Monitoring, July 18, 2024: https://www.caiso.com/documents/dmm-comments-on-storage-bcr-and-default-energy-bids-july-8-2024-workshop-jul-18-2024.pdf

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

[4] Comments on Storage Design and Modeling May 28, 2025 Presentation, Department of Market Monitoring, June 11, 2025: https://www.caiso.com/documents/dmm-comments-on-storage-design-and-modeling-may-28-2025-presentation-jun-11-2025.pdf

[5] Comments on Storage Bid Cost Recovery and Default Energy Bids, Department of Market Monitoring, July 18, 2024: https://www.caiso.com/documents/dmm-comments-on-storage-bcr-and-default-energy-bids-july-8-2024-workshop-jul-18-2024.pdf

[6] Comments on Energy Storage Enhancements Final Proposal, Department of Market Monitoring, November 15, 2022: https://www.caiso.com/documents/dmm-comments-energy-storage-enhancements-final-proposal-2022-11-15.pdf

[7] Motion to Intervene and Comments of The Department of Market Monitoring of the California Independent System Operator Corporation, Federal Energy Regulatory Commission - Docket No. ER22-2881, Department of Market Monitoring, September 19, 2022: https://www.caiso.com/documents/motion-to-intervene-comments-er22-2881-energy-storage-bid-cost-recovery-sep-19-2022.pdf  

[8] Comments on Energy Storage Enhancements Second Revised Straw Proposal, Department of Market Monitoring, August 4, 2022: https://www.caiso.com/Documents/DMM-Comments-Energy-Storage-Enhancements-Second-Revised-Straw-Proposal-Aug-4-2022.pdf

[9] Comments on Energy Storage Enhancements State of Charge Formula- Workshop Paper, Department of Market Monitoring, August 17, 2023: https://www.caiso.com/documents/dmm-comments-on-energy-storage-enhancements-workshop-paper-aug-17-2023.pdf

[10] Ibid.

[11] Comments on Storage Design and Modeling Issue Paper and Straw Proposal on Outage Management, Nonlinearity, and SOC Clarification, Department of Market Monitoring, May 23, 2025: https://www.caiso.com/documents/dmm-comments-on-storage-design-and-modeling-issue-paper-and-straw-proposal-on-outage-management-nonlinearity-and-soc-clarification-may-23-2025.pdf

[12] Comments on Storage Design and Modeling Working Group Session 2 and 3, Department of Market Monitoring, March 7, 2025: https://www.caiso.com/documents/dmm-comments-on-storage-design-and-modeling-working-group-sessions-2-and-3-mar-07-2025.pdf

2. Provide your organization’s comments regarding the draft Business Practice Manual (BPM) language related to Outage Reporting enhancements, and note whether your organization supports moving these items to a dedicated BPM process

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

3. Provide your organization’s comments regarding the enhancements to the Outage Management System (OMS).

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

4. Provide your organization’s comments regarding the near-term guidance on Representing Nonlinearity, as well as your organization’s perspective on long-term solutions.

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

5. Provide your organization’s comments regarding the draft Business Practice Manual (BPM) language related to SOC Definition and Estimation, and note whether your organization supports moving these items to a dedicated BPM process.

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

6. Provide your organization's comments regarding the update on the Co-located Follow DOT topic.

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

7. Provide your organization's comments on the overview of Bid Cost Recovery Perspectives.

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

8. Provide your organization's comments on the presentation offered by the California Energy Storage Alliance (CESA)

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

9. Please provide any additional comments, feedback, or examples regarding the RSP and the August 14th stakeholder meeting. You may upload examples or data using the “Attachments” field below.

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

1. Please provide a summary of your organization’s general comments on the Revised Straw Proposal (RSP) on Outage Management and materials shared on Aug 14th meeting.

Energy Division staff (ED Staff or Staff) of the California Public Utilities Commission (CPUC) develops and administers energy policy and programs to serve the public interest, advises the CPUC, and ensures compliance with CPUC decisions and statutory mandates. ED staff provides objective and expert analyses that promote reliable, safe, and environmentally sound energy services at just and reasonable rates for the people of California. [1]

On August 8th CAISO published its Revised Straw Proposal and held a stakeholder call on August 14th to discuss the proposal. The proposal focuses on outage reporting enhancements and clarifications, as well as state-of-charge (SOC) definitions as one of the four topic groups within the broader initiative. 

The Revised Straw Proposal also “offers specific guidance on outage reporting related to nonlinearity, a characteristic of lithium-ion batteries, the most common battery storage technology. Nonlinearity, or foldback, refers to a reduction in responsiveness and dispatch capability at both low and high state-of-charge. The guidance here has an added layer of relevance for battery storage resources that are shown for resource adequacy (RA) under the CAISO tariff. The revised straw proposal offers a robust rationale to continue using current outage reporting methods to convey the impacts of nonlinearity, leveraging policy principles and operational data.” [2]

Specifically, CAISO maintains its position regarding nonlinearity/foldback and the use of a non-RAAIM exempt outage card to manage this condition. CAISO states that “[t]he qualifying capacity of energy storage assets must be based on the output in megawatts at which the storage resource can discharge for four or more uninterrupted hours. The ISO therefore notes that a right-sized storage resource would be one that was developed with the ability to discharge its qualifying capacity value for at least four hours, without foldback impeding that discharge. Considering this interplay with the qualifying capacity of energy storage, a storage resource that is right-sized and has shown accurate values would not be exposed to RAAIM penalties regardless of the nature of work used if the outage does not affect its shown value.” 

ED Staff is supportive of the CAISO’s efforts to look at outage reporting enhancements and clarifications as they relate to foldback. ED staff recognizes it is important for resources to be available to CAISO’s markets at their committed Qualifying Capacity (QC) value over a continuous four-hour period. Currently, Staff does not take a position on the use of RAAIM exempt outage cards to address foldback issues. However, Staff believes that foldback is the result of a physical limitation of a storage resource that should be included in the QC value calculation. ED Staff provides the following comments regarding the QC methodology adopted by the CPUC for storage resources and the current implementation of this methodology to help advance stakeholder development on this issue. Staff also includes some recommendations on additional fields that may be added to the CAISO’s master file to ensure QC values are accurately calculated and incorporate foldback. 

• In D.14-06-050, the Commission adopted a flexible capacity framework and QC rules storage resources. Appendix B of that decision describes the QC methodology as follows: 
  • “Dispatchable storage shall receive a QC in the same manner as other dispatchable resources, including testing and verification in CAISO operations. Because all RA resources must be able to operate for four or more consecutive hours, the storage operator must submit to the CAISO an output level (in MW) at which the resource is capable of discharging for four or more uninterrupted hours; this is defined to be its PmaxRA, the maximum output that can be considered for RA calculations. Like fossil generators, the storage facility must then submit to physical testing by the CAISO to verify that it can be dispatched at this capacity. The QC will be equal to this PmaxRA value.”  
• Additionally, Appendix B notes, “If the Pmax output duration is below the four hour requirement for RA eligibility, it cannot be used as the PmaxRA value in RA credit determinations” (B-10).  
• In D.22-06-050 the Commission stated:  
  • “For energy storage resources under the 24-hour framework, the existing qualifying capacity methodology of maximum generating capability value, restricted to daily resource capabilities, shall apply. Excess capacity must be shown to cover battery capacity with efficiency losses. Parties are directed to develop an Unforced Capacity Evaluation-light mechanism to apply to energy storage resources as part of the identified workstreams” (OP 10).
• In D.23-04-010, Appendix A, described the QC methodology as: 
  • “[e]nergy storage resources will be assigned value based on Pmax, restricted to daily resource capabilities (e.g., maximum daily run hours, maximum continuous energy, and storage efficiency). Excess capacity must be shown to cover battery capacity with efficiency losses.  
• In D.23-04-010 the Commission adopted Energy Division proposed Master Resource Database (MRD) process that uses public data sources and default values to populate the MRD used in the Slice-of-Day (SOD) framework. The adopted process authorizes Energy Division to publish a draft MRD list for the coming compliance year, and request generator responses with corrections. Specifically, “Energy Division is authorized to solicit informal feedback from parties, compare feedback from generators with information in CAISO’s Master File, and incorporate corrections and feedback into the MRD, as warranted. The MRD will be updated annually for deliverability and net qualifying capacity updates.” 
• To implement the current QC methodology, outlined in the above decisions, for storage resources ED does the following:  
  • Staff uses data in the master file, specifically the MAX_ CONT_MWH_LIMIT (maximum continuous energy limit) field, , and divides it by four hours, with the result constrained to the Point of Interconnection (POI), or to Pmax. In cases where a battery is greater than four hours in duration, Pmax is the maximum NQC possible. In cases where a battery is less than or equal to four hours in duration, it is the MAX_ CONT_MWH_LIMIT , divided by four hours; this ensures a resource’s energy capacity is calculated to a four-hour equivalent duration.  
  • Under the SOD framework, energy storage resources may be shown in the LSE Compliance Showing Tool up to their Pmax value, restricted to daily resource capabilities (Max continuous energy limit). Storage resources can use a default profile, a customer profile, or utilize the optimization tool to determine their placement across the 24-hour period. The compliance showing tool does not currently limit the shape of the resource to a continuous four-hour period. Additional details on how storage resources can be shown in RA compliance are provided in the Resource Adequacy Slice-of-Day Showing Template User’s Guide (pg. 18). 

Given the discussions around foldback, Staff believes that new fields may need to be added to the Masterfile to reflects the max continuous energy a resource is able to provide over a four-hour period and/or a Pmax RA value that was described in the D.14-06-050 Appendix B. It is important for the CPUC to have this information to correctly calculate the QC value of storage resources pursuant to the adopted QC methodology. Staff also notes that additional changes may be needed in the CPUC’s RA proceeding to clarify storage QC rules and SOD implementation of the rules. 

Several stakeholders advocated CAISO should consider “development of additional outage types that are unique to storage resources” in “close coordination with any developments within the Resource Adequacy Modeling and Program Design (RAMPD) initiative.” ED Staff agrees with CAISO that there should be consistency and coordination across all efforts, especially in order to “enable the efficient and accurate reflection of overlapping and/or interrelated unavailabilities across different operating characteristics" [3].

[1] More information about the CPUC Energy Division is available at: https://www.cpuc.ca.gov/about-cpuc/divisions/energy-division.

[2] CAISO Revised Straw Proposal at 4 (RevisedStrawProposal-StorageDesignModeling-OutageManagement-Aug082025.pdf).

[3] CAISO Revised Straw Proposal at 10.

2. Provide your organization’s comments regarding the draft Business Practice Manual (BPM) language related to Outage Reporting enhancements, and note whether your organization supports moving these items to a dedicated BPM process

No comment at this time.

3. Provide your organization’s comments regarding the enhancements to the Outage Management System (OMS).

No comment at this time.

4. Provide your organization’s comments regarding the near-term guidance on Representing Nonlinearity, as well as your organization’s perspective on long-term solutions.

ED Staff supports DMM’s recommended approach to begin with no real-time bid cost recovery (BCR) eligibility for batteries as the default, and to then define specific and limited situations where BCR is warranted. Staff is concerned that if CAISO begins by assuming broad real-time BCR eligibility for batteries, ratepayers would be exposed to significant costs that are not warranted due to uplift caused by state of charge (SOC) related constraints or poor bidding behavior. Staff support further discussions to define specific scenarios where uplift is warranted, and to discuss what longer-term market enhancements will promote strong incentives for storage operators to bid accurate marginal and opportunity costs.   

In response to stakeholder perspective on multi-interval optimization (MIO), Staff support DMM’s recommendation that the ISO conduct further research and provide analysis on both losses and benefits as the result of MIO. Staff support DMM’s comment [4] that it is premature to conclude that this feature results in net losses for batteries in a manner that would warrant a new BCR paradigm. 

[4] Comments on Storage Design and Modeling Working Group Presentation on June 30, 2025 Department of Market Monitoring (DMM)  July 16, 2025. 

5. Provide your organization’s comments regarding the draft Business Practice Manual (BPM) language related to SOC Definition and Estimation, and note whether your organization supports moving these items to a dedicated BPM process.

No comment at this time.

6. Provide your organization's comments regarding the update on the Co-located Follow DOT topic.

No comment at this time.

7. Provide your organization's comments on the overview of Bid Cost Recovery Perspectives.

No comment at this time.

8. Provide your organization's comments on the presentation offered by the California Energy Storage Alliance (CESA)

Staff appreciate the California Energy Storage Alliance’s (CESA) presentation on a conceptual BCR framework. Staff agree with the general guiding principle that losses caused by storage operator actions should not warrant uplift. We support further discussion on defining the specific circumstances where CAISO market intervention would justify BCR uplift that is paid by consumers. 

Staff note that the DEB design does not currently capture an hourly opportunity cost; static DEBs could be too high or too low relative to the opportunity cost of that hour. Staff is concerned about the unintended outcomes that could lead to unwarranted uplift costs to customers [5], especially given that DEBs are intended to act as a market power mitigation tool, not for determining BCR eligibility. Overall, we support further discussions on a conceptual framework but recommend the premise articulated by DMM that most storage real-time BCR is not warranted, and then carefully define transparent and narrow exceptions where CAISO-caused outcomes justify uplift. This better ensures fair treatment of storage while minimizing unnecessary costs to ratepayers.  

[5] There is a history of manipulation of the CAISO bid cost recovery mechanism. See CAISO settlement with JP Morgan in 2013:  https://www.caiso.com/Documents/ISODeclaresFERC-OrderedSettlement_JPMorganVindication_CaliforniaRatepayers.pdf.  While FERC market manipulation rules may prohibit such actions, the enforcement is an after the fact identification and reporting to FERC.

9. Please provide any additional comments, feedback, or examples regarding the RSP and the August 14th stakeholder meeting. You may upload examples or data using the “Attachments” field below.

No comment at this time.

1. Please provide a summary of your organization’s general comments on the Revised Straw Proposal (RSP) on Outage Management and materials shared on Aug 14th meeting.

The Public Advocates Office at the California Public Utilities Commission (Cal Advocates) appreciates the opportunity to comment on the California Independent System Operator Corporation’s (CAISO) August 14, 2025 meeting on CAISO’s Storage Design and Modeling Initiative[1] and the Revised Straw Proposal on Outage Management.^[2]

Cal Advocates supports CAISO’s proposal to continue use of the Plant Trouble nature of work outage card to represent the impact of nonlinearity, or foldback, that reduces the responsiveness and dispatch capability of storage resources at low and high state-of-charge (SOC).[3]  Cal Advocates also supports CAISO’s proposal to continue applying the resource adequacy availability incentive mechanism (RAAIM) to storage under foldback conditions,[4] and agrees with CAISO’s conclusion that storage resource operators must have the capability to provide the net qualifying capacity (NQC) that they commit to CAISO.[5]  Moreover, ratepayers should only bear the costs of capacity that can be delivered.  CAISO’s continued application of RAAIM will provide an incentive for resource operators to deliver their committed capacity by properly sizing the storage resource or adjusting the storage NQC.[6]  As stated by CAISO, “there should not be a blanket RAAIM exemption for foldback since it is a known technological limitation that can be minimized through asset design or considered in resource adequacy (RA) contracting.”[7]

However, as Cal Advocates indicated in prior comments, RAAIM may not be sufficient on its own to incentivize storage to be able to provide its full must-offer obligation NQC to the CAISO market.[8]  A longer-term, durable, and more effective approach is to modify the representation of energy storage in the CAISO master file to incorporate the effects of SOC, including foldback, in market assumptions of storage dispatch.  CAISO must ensure that ratepayers do not bear costs for unavailable capacity that results from known technical limitations.  Cal Advocates agrees with CAISO that the values registered in the master file should be an accurate representation of the physical characteristics of the resource.[9] 

[1] CAISO, Working Group on Outage Management, Uplift & DEB, and Mixed-Fuel & Distribution-Level Resources, August 14, 2025 (August 14 Workshop).  Materials available at: https://stakeholdercenter.caiso.com/StakeholderInitiatives/Storage-design-modeling.

[2] CAISO, Revised Straw Proposal on Outage Management Topic Group, August 8, 2025 (Revised Straw Proposal).  Available at: https://stakeholdercenter.caiso.com/InitiativeDocuments/RevisedStrawProposal-StorageDesignModeling-OutageManagement-Aug082025.pdf.

[3] Revised Straw Proposal at 11.

[4] Resource capacity that is “shown” as resource adequacy (RA) capacity to the CAISO is obligated to be made available to the CAISO day-ahead and real-time markets.  The RAAIM is the primary enforcement tool for those obligations.  Revised Straw Proposal at 14.  See also 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] CAISO, Working Group on Outage Management, Uplift & DEB, and Mixed-Fuel & Distribution-Level Resources, August 14, 2025 (August 14 Workshop Slides) at 21.  Available at: https://stakeholdercenter.caiso.com/InitiativeDocuments/Presentation-Storage-Design-and-Modeling-Aug14-2025.pdf; and August 14 Workshop Recording, available at: https://www.youtube.com/watch?v=cKnl5bDi1X4 at 1:50:21.

[6] August 14 Workshop Slides at 21.

[7] Revised Straw Proposal at 16.

[8] Cal Advocates, Comments on Issue paper and Straw Proposal and May 9 Working Group Meeting, May 23, 2025 at 1.  Available at: https://stakeholdercenter.caiso.com/Comments/AllComments/a278055e-4347-4ae8-bfd5-abdc49e61dad#org-cf587fc4-1687-481a-8e8c-2b22880570a5.

[9] Revised Straw Proposal at 15.

2. Provide your organization’s comments regarding the draft Business Practice Manual (BPM) language related to Outage Reporting enhancements, and note whether your organization supports moving these items to a dedicated BPM process

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

3. Provide your organization’s comments regarding the enhancements to the Outage Management System (OMS).

The Revised Straw Proposal modifies energy storage outage reporting requirements to be independent of the length of continuous storage dispatch[1] and adds several specific examples of storage outages that are applicable under the Plant Trouble outage card.[2]  The Revised Straw Proposal also clarifies the meaning of “available” SOC in the Direct Telemetry Business Process Manual (BPM).[3]  These additions and clarifications are reasonable, and CAISO should adopt the changes in the final proposal.

[1] Revised Straw Proposal at 10.

[2] Revised Straw Proposal at 11.

[3] Revised Straw Proposal at 18.

4. Provide your organization’s comments regarding the near-term guidance on Representing Nonlinearity, as well as your organization’s perspective on long-term solutions.

Please see Cal Advocates' response to Question 1.

5. Provide your organization’s comments regarding the draft Business Practice Manual (BPM) language related to SOC Definition and Estimation, and note whether your organization supports moving these items to a dedicated BPM process.

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

6. Provide your organization's comments regarding the update on the Co-located Follow DOT topic.

NextEra Energy Resources (NEER) identified a potential market inefficiency related to CAISO’s requirement that variable energy resources (VER) must follow a Dispatch Operating Target (DOT) in the real-time market when co-located resources behind the same Aggregate Capability Constraint (ACC) receive ancillary service (AS) awards.[1]  The DOT may result in a curtailed dispatch of the VER.  NEER argues that CAISO should eliminate the requirement because it degrades market efficiency by discouraging energy storage from participating in the AS market, inhibits price formation, and makes coordination of co-located resources more challenging for resource operators.[2]

CAISO’s analysis of NEER’s proposal considers two distinct cases: the award of downward AS and upward AS.[3]  CAISO points out that, if a co-located storage resource receives a downward AS award and the award results in a reduction in dispatched storage energy or an increase in storage charging, the dispatched energy of the entire co-located resource will not exceed the ACC and the co-located VER dispatch should not be affected.[4]  CAISO indicates that it is exploring implementation of an enhancement to exempt VERs from the DOT requirement in the case of downward AS awards.  Cal Advocates supports CAISO’s proposal because it provides more capability for co-located storage to provide downward AS and removes a potential limit on charging that will benefit reliability by allowing co-located storage to charge to a higher SOC.  CAISO’s proposal may also reduce curtailment from VERs, which would benefit ratepayers by reducing generation costs by utilizing renewable energy that typically is self-scheduled at zero marginal cost.

However, the case of upward AS is more complex because in the event of an upward AS award, CAISO must re-optimize the co-located resource dispatch and allocate any curtailed dispatch between two or more co-located resources to stay within the ACC limit in real-time.  CAISO indicates that further analysis and stakeholder engagement is necessary for it to implement an effective solution.[5]  CAISO should investigate possible solutions for the upward AS case, while maintaining the ACC limit and ensuring that the re-optimized dispatch leads to a lower-cost market outcome relative to CAISO’s current policy.

[1] NEER, CAISO Storage Design and Modeling Initiative, June 30, 2025 (NEER Presentation) at 11.  Available at: https://stakeholdercenter.caiso.com/InitiativeDocuments/NexteraPresentation-StorageDesignandModeling-Jun30-2025.pdf.  The ACC constrains the total output of co-located resources to the shared point of interconnection limit.  See CAISO, Information Posting Aggregate Capability Constraint, March 15, 2021 at 1.  Available at: https://stakeholdercenter.caiso.com/InitiativeDocuments/InformationalPosting-AggregateCapabilityConstraint.pdf.

[2] NEER Presentation at 11.

[3] August 14 Workshop Slides at 33 and 37. 

[4] August 14 Workshop Slides at 33.

[5] August 14 Workshop Slides at 35.

7. Provide your organization's comments on the overview of Bid Cost Recovery Perspectives.

Cal Advocates appreciates CAISO’s comprehensive overview of stakeholder perspectives on Bid Cost Recovery (BCR).[1]  CAISO indicates that most stakeholders agree that real-time BCR is only warranted when CAISO market actions prevent appropriate recovery of costs and is not warranted when scheduling coordinator actions cause a lack of cost recovery.[2]  CAISO also indicates that a significant majority of stakeholders agree that CAISO should eliminate day-ahead BCR under most circumstances.[3]  In prior comments in the Storage Design and Modeling initiative, Cal Advocates recommended that CAISO should make storage ineligible for real-time BCR except under limited circumstances related to CAISO market actions of exceptional dispatch, local market power mitigation (MPM), and multi-interval optimization.[4]  The CAISO’s Department of Market Monitoring’s (DMM) analysis shows that most real-time storage BCR results from operator-driven SOC limitations, not CAISO market actions.[5]  DMM recommends that CAISO eliminate most real-time BCR and all day-ahead BCR.[6]  CAISO should adopt DMM’s recommendation, which would result in the elimination of most storage BCR and ensure that ratepayers do not bear unreasonable costs that result from storage operators’ actions in the market.

Vistra Corporation (Vistra) argues that the elimination of storage BCR must be accompanied by measures to provide storage operators with more control of real-time SOC, including exempting storage from MPM, elimination of the ancillary service state-of-charge (ASSOC) constraint,[7] and cessation of the practice of converting AS obligations into energy when derates occur.[8]  Vistra states that it would support the elimination of day-ahead and real-time BCR in exchange for these concessions.

The ASSOC is a necessary market enhancement that ensures storage resources have sufficient SOC to deliver energy from their awarded AS.[9]  MPM is a long-standing CAISO process that ensures that all resources, including energy storage, provide energy at or near their cost of production and cannot exercise market power and unduly increase energy prices in locally constrained areas.[10]  If CAISO exempts storage from MPM, ratepayers would be exposed to the risk of high local energy prices, and other resources that remain subject to MPM would face discriminatory behavior.

Cal Advocates opposes Vistra’s proposal to trade-off needed BCR efficiency improvements for important ratepayer protections developed in prior CAISO initiatives.  Cal Advocates instead supports DMM’s proposal to eliminate unwarranted BCR due to storage operator actions.

[1] August 14 Workshop Slides at 53-56.

[2] August 14 Workshop Slides at 53.

[3] August 14 Workshop Slides at 54.

[4] Cal Advocates, Comments on May 28, 2025 Storage Design and Modeling Meeting, June 11, 2025 at 4-5.  Available at: https://stakeholdercenter.caiso.com/Comments/AllComments/8376a4bc-545d-4583-b452-4d67bc29d7ea.

[5] CAISO DMM, Storage Design and Modeling Bid Cost Recovery, June 30, 2025 (DMM Presentation) at 5.  Available at: https://stakeholdercenter.caiso.com/InitiativeDocuments/DMM-Presentation-Battery-BCR-Discussion-Jun-30-2025.pdf.

[6] DMM Presentation at 10.

[7] The ASSOC was adopted in the CAISO Energy Storage Enhancements Initiative to ensure that storage resources have sufficient SOC to deliver energy from AS awards.  Prior to the implementation of the ASSOC, CAISO indicates that there were multi-week periods in which large storage resources were unable to deliver energy from AS awards which lead to significantly less access to AS that what was initially procured for reliable grid operations.  See CAISO, Energy Storage Enhancement Final Proposal, October 27, 2022 (ESE Final Proposal) at 12.  Available at: https://stakeholdercenter.caiso.com/InitiativeDocuments/FinalProposal-EnergyStorageEnhancements.pdf.

[8] August 14 Workshop Slides at 58.

[9] ESE Final Proposal at 7.

[10] CAISO, 2024 Special Report on Battery Storage, May 29, 2025 at 34.  Available at: https://www.caiso.com/documents/2024-special-report-on-battery-storage-may-29-2025.pdf

8. Provide your organization's comments on the presentation offered by the California Energy Storage Alliance (CESA)

CAISO should not delay the implementation of DMM’s recommended near-term reforms to eliminate most storage BCR and shield ratepayers from unwarranted BCR payments.

CESA offers a conceptual framework under which storage resources could be eligible for real-time BCR if their bids reflect their marginal costs, including the opportunity cost of discharging or charging in a different interval.[1]  CESA acknowledges that storage should not be eligible for BCR if an hourly revenue shortfall is caused by the storage operator due to bidding that is inconsistent with real-time conditions, storage outages, and uninstructed deviations.[2]  CESA suggests that the CAISO-calculated real-time Default Energy Bid (DEB) could be used by CAISO to determine if storage bids reflect marginal costs.  CESA argues that, if the storage resource bid is “consistent” with the real-time DEB, then the resource should be eligible for real-time BCR if CAISO dispatches it differently than its day-ahead award.[3]

However, as pointed out by DMM, the current real-time DEB is a static value over all hours of the operating day based on the fourth highest locational marginal price from the day-ahead market plus a 10 percent adder.[4]  DMM states that use of the static value leads to a DEB that is too high in some hours, and too low in other hours.[5]  DMM recommends that CAISO develop an hourly real-time DEB that has higher values in the hours leading up to peak pricing hours, when opportunity costs are high, and lower values in later intervals as opportunity costs decline.[6]  Cal Advocates notes that, as a general matter, storage has near-zero opportunity cost at the peak electricity price hour but has the strongest incentive to exert market power at the peak hour since it is a time of relatively lower resource competition due to higher resource need.

At a minimum, CAISO should implement an hourly real-time DEB in advance of implementing a BCR re-design for storage based on CESA’s ideas.  It is not clear how a real-time bid that incorporates dynamic opportunity costs can be deemed consistent with a day-ahead based static value.   Moreover, CESA’s conceptual framework may be vulnerable to strategic bidding to manipulate storage’s eligibility for BCR on an hour-by-hour basis in the real-time market.  CAISO’s initial BCR reform efforts sought to eliminate storage resources’ ability to use real-time bids to gain additional, unwarranted revenue through increased BCR.[7]  CAISO must ensure that any future BCR design does not introduce unintended opportunities for market gaming through strategic real-time bids.

Cal Advocates does not oppose the development of a longer-term, fundamental market reform for storage BCR.  However, CAISO should not delay the implementation of DMM’s recommended near-term reforms that will shield ratepayers from the cost of storage operator-driven BCR.

[1] CESA, Real-time make whole payment conceptual framework, August 14, 2025 (CESA Presentation) at 11.  Available at: https://stakeholdercenter.caiso.com/InitiativeDocuments/CESA-Presentation-Storage-Design-Modeling-Aug14-2025.pdf.

[2] CESA Presentation at 10.

[3] CESA Presentation at 12.

[4] DMM, Comments on Storage Bid Cost Recovery and Default Energy Bid Enhancements, Revised Straw Proposal, September 23, 2024 (DMM Comments on BCR-DEB Revised Straw Proposal) at 7.   Available at: https://stakeholdercenter.caiso.com/Common/DownloadFile/5f313118-10cc-4f66-a321-4a4033c06016.

[5] DMM Comments on BCR-DEB Revised Straw Proposal at 7.

[6] DMM Comments on BCR-DEB Revised Straw Proposal at 7.

[7] CAISO, Storage Bid Cost Recovery and Default Energy Bid Enhancements, Issue Paper and Straw Proposal for Track 1, July 26, 2024 at 12.  Available at: https://stakeholdercenter.caiso.com/InitiativeDocuments/Issue-Paper-and-Straw-Proposal-Storage-Bid-Cost-Recovery-and-Default-Energy-Bids-Enhancements-Jul-26-2024.pdf.

9. Please provide any additional comments, feedback, or examples regarding the RSP and the August 14th stakeholder meeting. You may upload examples or data using the “Attachments” field below.

Cal Advocates does not have additional comments at this time. 

1. Please provide a summary of your organization’s general comments on the Revised Straw Proposal (RSP) on Outage Management and materials shared on Aug 14th meeting.

The California Energy Storage Alliance (CESA) appreciates the opportunity to comment on the August 14, 2025, Storage Design and Modeling stakeholder workshop.  The rapid increase in storage within the CAISO footprint requires a holistic review of storage participation. This is similar to ten years ago when wind and solar reached production levels that caused the Participating Intermittent Resource Program to negatively impact market efficiency. To address this, CAISO developed a system that automatically updates resource bids within the operating hour. The market optimization uses short-term forecasts to adjust the bid curves of variable energy resources in the real-time market. CAISO also developed a fifteen-minute market to further incentivize economic bidding in the real-time market. Market design changes of a similar magnitude should be considered for storage resources

As previously noted in CESA comments[1], CESA believes that a full documentation of the storage modeling constraints in the integrated forward market, residual unit commitment process, fifteen-minute market, and real-time dispatch is needed to perform a holistic review of storage participation in the CAISO markets. 

[1] https://stakeholdercenter.caiso.com/Comments/AllComments/358973f2-427a-49c1-9c19-389ad14e4f47#org-1b262832-9685-449e-82fe-cf298c44ccdf

2. Provide your organization’s comments regarding the draft Business Practice Manual (BPM) language related to Outage Reporting enhancements, and note whether your organization supports moving these items to a dedicated BPM process

CESA continues to believe the pace of the Outage Management portion of the initiative could be accelerated to complete the policy development. The outage reporting enhancements and SOC definition and estimation refinements are universally supported.  Likewise, the representation of nonlinearity, in the near term, through outage cards which are resource adequacy availability incentive mechanism (RAAIM) exempt is broadly supported.  The use of Technical Limitations Not in Market Model nature of work (NOW) is an appropriate near-term solution for storage operators to reflect nonlinearity and should be included in the Draft Final Proposal.

3. Provide your organization’s comments regarding the enhancements to the Outage Management System (OMS).

CESA support the proposed outaga management system enhancements (OMS) and seeks clarification that CAISO is also supportive of the OMS enhancements and CAISO’s only concern is that the following OMS enhancements cannot be implemented until 2027 at the earliest: 

• Overlapping outage cards that can adjust Availability, Load Max, Max Energy and Min Energy values on one card
• Allowing non-NULL values in addition to NULL for other cards (as related to ancillary services)
• Creating a single Out-of-Service checkbox for Non-Generator Resources (NGRs)
• Allowing for Load Max (Pmin) rerates on Test Energy cards during New Resource Implementation 
• Allowing automatic acceptance of updates to forced outage cards

4. Provide your organization’s comments regarding the near-term guidance on Representing Nonlinearity, as well as your organization’s perspective on long-term solutions.

CESA opposes CAISO’s recommended use of the Plant Trouble nature of work (NOW) for nonlinearity management in the near term and subjecting storage resources to RAAIM penalties.  CAISO should apply the Technical Limitations Not in the Market Model outage card to reflect nonlinearity.

First, it is illogical to subject storage resources to RAAIM penalties if the CAISO’s ultimate goal is to modify the market model or introduce new Master File parameters to adequately reflect nonlinearity in the market optimization.  Why would the CAISO support a RAAIM penalty for a near-term solution and not once the operational characteristic is included in the market model?  Second, if the CAISO has issues with the calculation of qualifying capacity (QC) developed by the CPUC, CAISO should engage in a CPUC process and not inappropriately apply RAAIM penalties whose purpose is NOT to validate QC calculations.

The use of Technical Limitations Not in Market Model NOW is the accurate outage card to reflect nonlinearity. RAAIM penalties should not be used by CAISO to second guess the appropriateness of a resource’s QC as calculated consistent with CPUC rules.  The goal of RAAIM is to improve the incentives for resource adequacy capacity to be available consistent with the must-offer obligation and create comparable incentives for flexible capacity. RAAIM penalties should not be used as a back door to implement changes to storage QC calculations CAISO desires outside of a CPUC rulemaking.

CESA has developed three scenarios that indisputably demonstrate critical flaws with using RAAIM for these purposes.  In all three scenarios, Resource C has met its CPUC minimum duration requirement and its CAISO must-offer obligation to be available all twenty-four hours. The RAAIM assessment hours exceed the minimum duration requirements and impose a higher standard than the CPUC QC rules dictate.

CAISO has also stated that subjecting storage to RAAIM penalties will incentivize storage resources to modify their bidding behavior and augment charging duration.  This belief is misplaced as demonstrated by the attached Resource C scenarios. 

As demonstrated in scenario 1, what bidding behavior should change?  Should the resource offer to discharge at the $1,000/MWh bid cap in HE18 so that it isn’t discharged and run the risk of a RAAIM penalty in HE22.  Should the resource be allowed to include the potential for RAAIM penalties in its energy bid even under mitigation?  Does CAISO want the potential for RAAIM penalties to be reflected in locational marginal prices (LMP)?  Does the CAISO want the resource to not make available to the market optimization SOC that is within the foldback region because it would trigger a RAAIM penalty?

With regards to augmenting the storage duration, Resource C met its resource adequacy obligation by fully discharging at its QC for four hours.  Does CAISO believe that the resource should augment the storage duration so that the foldback region is never available to the market in the RAAIM AAH even for storage resources that have flexible capacity obligations that extend the AAH beyond five hours used for non-flexible resource adequacy capacity resources?

The CPUC’s Qualifying Capacity and Effective Flexible Capacity Calculation Methodologies for Energy Storage and Supply-Side Demand Response Resources revised straw proposal[1] published on April 9, 2014 in the Resource Adequacy Proceeding R.11-10-023 states on page 6:

“Because all RA resources must be able to operate for four or more consecutive hours, the storage operator must submit to the CAISO an output level (in MW) at which the resource is capable of discharging for four or more uninterrupted hours; this is defined to be its PmaxRA, the maximum output that can be considered for RA calculations. Like fossil generators, the storage facility must then submit to physical testing by the CAISO to verify that it can be dispatched at this capacity. The QC will be equal to this PmaxRA value. The facility will also be subject to the standard CAISO NQC process, whereby the Net Qualifying Capacity of a resource is limited to an output level that is deliverable to the aggregate of CAISO load; this process is also undertaken for conventional resources.

Storage facilities may also submit a short-term maximum rated output to the CAISO, for dispatch purposes. This is defined as the resource’s Pmax, and is a value which could be greater than PmaxRA. If the Pmax output duration is below the four hour requirement for RA eligibility, it cannot be used as the PmaxRA value in RA credit determinations.”

The Commission adopted Staff’s principles in its Final Decision D.14-06-050 discussed in Section 5 and Appendix B.^[2] This set a precedent for energy storage resources to be allowed to register its physical maximum discharge/curtailment rate for dispatch purposes while simultaneously having its RA value limited to no more than a QC that can be sustained over four hours.^[3]

CAISO states on slide 21, “A “right-sized” storage resource would be one that was developed with the ability to discharge its QC value for four or more hours, without foldback impeding that discharge.”

Based upon CAISO’s “right-sized” logic, let’s review Resource C.  Resource C has 120MWh of storage.  Between 120MWh and 20MWh, Resource C can be discharged at 25MW.  Between 20MWh and 0 MWh, Resource C can be discharged at 10MW because it is within its foldback region.  The QC of the resource is 25MW.  The resource is shown for 25MW of resource adequacy. Since Resource C is “right-sized”, it should not be subject to RAAIM penalties.  However, that is not the case.

Assuming Resource C is only a Generic Resource Adequacy (RA) Resource with Availability Assessment Hours (AAH) for its Net Qualifying Capacity from HE18 to HE22 during March 1 through May 31 and the remainder of the year from HE17 to HE 21. If the storage resource also is a Flexible Resource Adequacy resource then the AAH for its Effective Flexible Capacity would extend the hours under assessment to a flexible category 1 asset would also have AAH assessed from HE6 to HE22 year-round.^[4] According to CAISO’s Effective Flexible Capacity list for 2025, there are a meaningful portion of the battery energy storage fleet providing Category 1 flexible capacity.^[5] For many storage resources they will be assessed from HE6 to HE22 year round where the below examples would be starker in impact. For simplicity, CESA describes three scenarios purely based on the Generic RA obligations below.

In scenario 1, Resource C enters into the RAAIM availability assessment hours (AAH) with a full SOC of 120MWh.  The resource is then dispatched at 25MW for HE18, HE19, HE20, and HE21.  At the start of HE22, an outage must be submitted because Resource C is within its foldback region.  The dispatch capability is reduced from 25MW to 10MW.  Under CAISO’s proposal Resource C is subject to RAAIM penalties for that hour.   However, Resource C has fully met is resource adequacy obligation to provide 4 hours of energy at its 25MW QC.  In addition, Resource C has provided additional reliability benefits by being able to dispatch at 10MW for HE22.

In scenario 2, based upon real time conditions, Resource C is dispatched in HE17 at 25MW.  As a result, Resource C enters RAAIM AAH with only 95MWh SOC.  The resource then is dispatched at 25MW for HE18, HE19, and HE20.  At the start of HE21, an outage must be submitted because Resource C is within its foldback region.  The dispatch capability is reduced from 25MW to 10MW.  Resource C is subject to RAAIM penalties for HE21 and HE22.  Again, Resource C has fully met is resource adequacy obligation to provide 4 hours of energy at its 25MW QC.  In addition, Resource C has provided additional reliability benefits by being able to dispatch at 10MW for HE21 and HE22.

In scenario 3, based upon real time conditions, Resource C is dispatched in HE16 and HE17 at 25MW.  As a result, Resource C enters RAAIM AAH with only 70MWh SOC.  The resource then is dispatched at 25MW for HE18 and HE19.  At the start of HE20, an outage must be submitted because Resource C is within its foldback region.  The dispatch capability is reduced from 25MW to 10MW.  Resource C is subject to RAAIM penalties for HE20 and HE21.  Again, Resource C has fully met its resource adequacy obligation to provide 4 hours of energy at its 25MW QC.  In addition, Resource C has provided additional reliability benefits by being able to dispatch at 10MW for HE20 and HE21.  Resource C would not be subject to RAAIM penalties in HE22 because the outage could be removed and Resource C would still receive a feasible dispatch of 0 MW because the SOC constraint is binding.

On a long-term basis CESA supports REV Renewables propsal to add "Marketable Continuous Energy Limit (Min and Max) to the MasterFile.  CAISO should also evaluate how areas within the foldback region can be represented in the market optimization to ensure feasible dispatches.

[1] https://www.joannagubman.com/wp-content/uploads/2016/03/April-9-2014-QC-Energy-Division-Proposal.pdf

[2] CPUC Decision 14-06-050, R.11-10-023, June 26, 2014, https://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M097/K619/97619935.PDF.

[3] Id at B-11.

[4]  CAISO Reliability Requirements Business Practice Manual, Version 80, Page 9

[5] Final Effective Flexible Capacity Report for Compliance Year 2025, https://www.caiso.com/documents/final-effective-flexible-capacity-report-for-compliance-year-2025.xlsx.

5. Provide your organization’s comments regarding the draft Business Practice Manual (BPM) language related to SOC Definition and Estimation, and note whether your organization supports moving these items to a dedicated BPM process.

CESA supports the proposed language to be added to Section 14.5 of the Direct Telemetry BPM.  The Minimum Continuous Energy Limit should also include the language added for Instantaneous SOC and Maximum Continuous Energy Limit. 

6. Provide your organization's comments regarding the update on the Co-located Follow DOT topic.

CESA seeks clarity on the current rules regarding when the VER follow DOT is issued when a storage resource is awarded ancillary services.  Based on the material presented by CAISO it appears that any ancillary services award will trigger the VER follow DOT instruction to co-located resources. CESA reiterates its request from the workshop for CAISO to provide data regarding instances where the aggregate capability constraint (ACC) is not binding yet the VER follow DOT instruction was issued.

CESA agrees that a regulation down award to storage should not trigger the VER follow DOT instruction since any response by the storage resource to the regulation signal will reduce flows at the point of interconnection (POI).  CESA requests CAISO confirm that a regulation down award to storage will not enable an increase in energy awards or upwards ancillary services to other co-located resources.  That is regulation down awards cannot provide counterflow to relieve the ACC.   

For simplicity, assume there are two co-located resources, a 100MW solar resource and a 100MW/400MWh battery, that share a 100 MW POI.  The sum of the solar energy dispatch, battery energy dispatch, and battery upward ancillary services cannot exceed 100 MW. If the battery was awarded 30 MW of upward ancillary services, the solar could receive an energy dispatch up to 70 MW assuming its forecast was greater than or equal to 70MW.  If the solar forecast was only 50 MW, the energy dispatch would be limited to 50 MW and the ACC would not be binding unless the battery was dispatched for 20 MW of energy in addition to its ancillary services award.  If the battery was not dispatched for 20 MW of energy, the solar resource should be allowed to generate as capable up to 70 MW. Under current market functionality, the solar resource should not be allowed to operate above 70 MW even though its potential output is up to 100 MW.  Alternatively, the CAISO could explore more holistic AS reform including changes to identify unavailable ancillary service on the battery, assess AS no pay for any unavailable AS due to the solar operating up to its capability, and perform incremental AS procurements to ensure maintaining sufficient AS most efficiently. CESA encourages CAISO to consider broader market reforms in future initiatives/tracks.

CESA looks forward to CAISO analysis on how often the ACC is not binding yet the VER follow DOT instruction is given.

7. Provide your organization's comments on the overview of Bid Cost Recovery Perspectives.

The dispatch flexibility of storage resources is crucial to meeting California’s environmental policy goals. Make-whole payments are a key feature of wholesale market design to provide incentives to participate in the real-time market and follow dispatch instructions. A poorly designed real-time make-whole settlement will create disincentives for storage resources to participate voluntarily in the real-time market where storage resources are the primary resource needed to reliably balance supply and demand.  The current bid cost recovery (BCR) design was developed for thermal resources and extended to storage resources.  BCR should not be eliminated for storage resources but rather be replaced by a real-time make whole payment design that is designed for storage resources.

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

This principle is particularly important in distinguishing between the day-ahead and real-time markets. In the day-ahead market, BCR payments tend to be low because the full 24-hour horizon is optimized and financially binding in a single run. Storage resources will be scheduled by the market optimization consistent with the resource’s energy and ancillary services bids to maximize the resource’s profits. However, the real-time market horizon is limited and only a single interval in the optimization is financially binding for each market run. As a result, real-time make whole payment may be necessary when energy buy-backs or sell-backs outside the storage resource’s scheduling coordinator’s (SC) control result in the resource not fully recovering its costs.

CESA recommends that the focus of this initiative is developing a real-time make whole payment design specific for storage. At this time, CESA does not believe day-ahead BCR is needed nor does a new day-ahead make whole payment design need to be developed for storage.

8. Provide your organization's comments on the presentation offered by the California Energy Storage Alliance (CESA)

CESA appreciated the opportunity to present its conceptual framework at the stakeholder workshop.  The purpose of the conceptual framework was to demonstrate that while a make whole payment is warranted in the real-time market, that doesn’t mean the current real-time BCR rules should continue to be applied to storage.  A new real-time make whole payment should be designed for storage resources consistent with the principle outlined above. 

Unlike thermal resources, actions of storage resources in a prior interval result in a shortfall occurring in a subsequent interval because the original actions proved to be inconsistent with actual real-time conditions that materialized. A key premise made by many opponents of storage receiving current BCR, is that the primary driver of storage BCR was the storage resource bidding inconsistent with real-time conditions.  A new real-time make whole payment design needs to determine if the actions of the storage operator were consistent with real-time conditions.  The use of the default energy bid, which includes an estimate of real-time opportunity costs, as a reference level enables an objective  assessment as to whether in a given operating hour a storage resource is bidding consistent with real-time conditions.  If the storage resource is bidding consistent with real-time conditions, then any shortfall is not caused by the storage operator and should be eligible from a real-time make whole payment.   

CESA requests that CAISO conduct a comprehensive analysis of historical real-time BCR payments to storage resources to assess if the storage resource was bidding inconsistent with real-time conditions as reflected in the default energy bid.  The CAISO should identify resources that have received a large daily BCR payment under the current rules.  The CAISO could then provide the hourly energy bids and the resource’s default energy bid.  The CAISO should take all necessary steps to mask the data to ensure no commercially sensitive information of the storage resource is provided.  The conceptual framework could then be applied for the given day.  This would assess whether the daily shortfall was caused by the storage operator or by CAISO market design limitations.  The analysis could also help to inform us how to evolve the conceptual framework into a CASIO market design proposal.

ASSOC Constraint Reform

Lastly, CESA looks forward to reconsideration of the current ancillary services state of charge (ASSOC) constraint implementation and transitioning to a no-pay framework. Storage resources that are unable to meet day-ahead AS awards face the cost energy scheduling up to $1,000/MWh, while conventional resources simply receive no-pay at day-ahead AS prices. The current ASSOC enforcement represents a policy decision to maintain AS awards "at any cost." Since this is a CAISO policy decision, it can be argued storage resources need a real-time make whole payment.  In addition, the ASSOC constraint implementation is why CESA has continued to request CAISO document of all storage constraints and how those constraints are implemented in IFM, RUC, HASP, FMM and RTD. This document will facilitate a holistic review of storage participation in the CAISO markets.

9. Please provide any additional comments, feedback, or examples regarding the RSP and the August 14th stakeholder meeting. You may upload examples or data using the “Attachments” field below.

No additional comments

1. Please provide a summary of your organization’s general comments on the Revised Straw Proposal (RSP) on Outage Management and materials shared on Aug 14th meeting.

NextEra Energy Resources, LLC (Energy Resources) is grateful to CAISO and the stakeholder working group for diligently exploring and seeking solutions to the various issues raised in the Storage Design and Modeling initiative. Energy Resources commends CAISO for its willingness to expand the scope of this initiative to incorporate items not previously raised, such as the co-located Follow DOT topic. Energy Resources appreciates CAISO’s transparency and sense of urgency in addressing the topics currently under consideration.   

2. Provide your organization’s comments regarding the draft Business Practice Manual (BPM) language related to Outage Reporting enhancements, and note whether your organization supports moving these items to a dedicated BPM process

Energy Resources supports CAISO’s proposed revisions and believes this working group is the appropriate venue to fully vet the proposal through robust stakeholder engagement (as opposed to a dedicated BPM process). Energy Resources notes there is an interaction between section 3.4 of CAISO’s draft BPM revisions and CAISO’s proposed near-term guidance on nonlinearity/foldback. If CAISO’s intent is for storage operators to use the Plant Trouble nature of work outage card when experiencing foldback, Energy Resources would suggest that CAISO augment its proposed revisions to section 3.4 to explicitly include foldback in the list of example criteria that would require use of the Plant Trouble nature of work outage card, for avoidance of doubt. However, as described below, Energy Resources does not support CAISO’s near-term proposal to require the Plant Trouble nature of work for foldback.

In addition, Energy Resources notes an apparent typo in section 4.1 of CAISO’s proposed revisions: “These reports are due to the ISO within 60 minutes of discovery [and] are required only to include” [suggested correction added].

3. Provide your organization’s comments regarding the enhancements to the Outage Management System (OMS).

No comments.

4. Provide your organization’s comments regarding the near-term guidance on Representing Nonlinearity, as well as your organization’s perspective on long-term solutions.

In Energy Resources’ view, CAISO’s proposal to use Resource Adequacy Availability Incentive Mechanism (RAAIM) penalties to ensure that a 4-hour BESS’s Qualifying Capacity (QC) value reflects its true operational capability over this 4-hour window is effectively a proposal to modify the CPUC’s QC methodology. CAISO’s Tariff-defined role in translating QC values to NQC values for purposes of administering RAAIM is limited to assessing resource deliverability to CAISO aggregate load. If CAISO believes the QC values for storage resources it receives from the CPUC are flawed due to foldback (or any other reason), it should engage with the CPUC to revise the QC calculations at the source. Moreover, it is unclear why CAISO seeks to expose storage operators that experience foldback to potential RAAIM penalties in the near-term (through the proposed Plant Trouble nature of work) but not in the long term (once CAISO upgrades its systems to reflect foldback in the Master File and/or market model).

Energy Resources also notes that UCAP is under development in both the CPUC’s Resource Adequacy proceeding as well as CAISO’s Resource Adequacy Modeling and Program Design initiative. These pre-existing layers of regulatory development are underway at both CAISO and the CPUC to address accreditation for storage based on operational capability and it is unclear why CAISO is proposing another layer here without first allowing those other solutions to take effect.

5. Provide your organization’s comments regarding the draft Business Practice Manual (BPM) language related to SOC Definition and Estimation, and note whether your organization supports moving these items to a dedicated BPM process.

No comments.

6. Provide your organization's comments regarding the update on the Co-located Follow DOT topic.

Energy Resources is grateful for CAISO’s willingness to add the Follow DOT topic to the Mixed-Fuel and Distribution-Level Resources track of this initiative. The Follow DOT flag is a critical element of CAISO market design affecting both VER and BESS market participation. Energy Resources is similarly encouraged by CAISO’s conclusion that a co-located BESS that clears Regulation Down should not affect the energy dispatch of a co-located VER and by CAISO’s tentative plan to deactivate the Follow DOT flag in this scenario starting later this year.

As to whether and when the Follow DOT should be activated when a co-located BESS clears upward ancillary services, Energy Resources offers the following revised straw position. It is Energy Resources’ understanding that CAISO’s primary goal with the Follow DOT flag is to prevent a freely-generating VER from contributing to over-generation at a shared POI. Further, Energy Resources understanding is that CAISO’s ACC accomplishes this by limiting the resources’ combined upward energy and ancillary service awards to the ACC limit. To use CAISO’s example, suppose a 130 MW VER and a 70 MW BESS are co-located behind a 100 MW POI. Further suppose that both resources participate wholly in the energy market, such that the BESS clears 70 MW of energy and the VER clears 30 MW of energy. Existing Tariff rules permit the BESS to deviate downward from its dispatch instruction to make room for any extra VER availability that materializes in real-time and puts the onus on the resource operator to implement proper site control logic so that the two resources’ instantaneous power never collectively exceeds the ACC limit. Energy Resources has ample experience with operating co-located assets in this manner, i.e., using site controls to prioritize real-time VER availability by “backing down” co-located BESS output. Notably, this status quo is maintained without the use of a Follow DOT flag for the VER in this scenario.

By contrast, suppose the BESS instead clears 70 MW of Regulation Up in the day-ahead market and that the VER seeks to participate in the real-time energy market. While CAISO’s ACC logic would still appropriately cap the VER’s real-time energy awards at 30 MW, the additional activation of the Follow DOT flag for the VER unduly harms the VER due to potential forecast error. For example, suppose the VER’s forecasted availability at the time of SCED execution was 10 MW. It is Energy Resources’ understanding that due to the Follow DOT flag, this 10 MW value would become the setpoint that the VER would now be obligated to follow for the entire 5-minute dispatch interval – even though there is still an incremental 20 MW of remaining ACC headroom and regardless of whether the VER’s actual availability exceeds 10 MW at any time during the dispatch interval.

In Energy Resources’ view, CAISO’s use of the Follow DOT flag is therefore overly conservative. Further, it is unclear why the decision of whether to activate the Follow DOT flag in these scenarios should logically hinge on whether the co-located BESS clears 70 MW of energy or upward ancillary services. While the BESS’ cumulative energy generation over the dispatch interval due to an ancillary service deployment may be less predictable, the BESS’ instantaneous power cannot exceed its capacity award (i.e., 70 MW in this example).

Accordingly, Energy Resources recommends that CAISO replace the Follow DOT flag with a “Do Not Exceed” dispatch paradigm wherein the VER’s DOT is simply set at the remaining amount of ACC headroom as determined by CAISO. Specifically, the VER in this example would receive a Do Not Exceed DOT of 30 MW rather than a potentially lower DOT driven by CAISO’s VER forecast. To the extent the VER’s actual availability exceeds 30 MW during the dispatch interval, it would be the VER operator’s responsibility to utilize site controls to curtail the VER output to 30 MW for the entire interval. Energy Resources knows from first-hand experience that this is operationally feasible.

Further, Energy Resources believes that the Tariff already reasonably protects against the possibility that the VER’s site controls result in an ACC limit violation. Specifically, CAISO’s presentation explained that in this event the ACC logic would be temporarily disabled, and CAISO would adjust each co-located resource’s PMax downward on a pro rata (or other ratio as requested by the customer) basis such that the sum of the PMax values equals the interconnection service capacity. To the extent the co-located resources have different Scheduling Coordinators, the parties could address this contingency through use of liquidated damages or similar contractual mechanisms in their shared services agreement to hold the BESS Scheduling Coordinator harmless.

CAISO seeks feedback regarding how CAISO should communicate optimized energy and ancillary service awards to all co-located resources behind the same ACC to ensure the ACC limit is not exceeded if the Follow DOT flag is no longer activated when a co-located BESS receives an upward ancillary service schedule. Under Energy Resources’ proposal, there is no need for such communication or coordination on CAISO’s part, even if there are multiple VERs each represented by a different Scheduling Coordinator. Once the current ACC logic determines the optimal mix of energy and ancillary service awards, CAISO’s sole task would be to issue Do Not Exceed dispatches to each VER and ensure that their summed value does not exceed the ACC limit minus any BESS upward ancillary service schedules.

Finally, Energy Resources acknowledges the concern raised by some stakeholders that absent ancillary service re-optimization in real-time, there is a risk that a co-located BESS could carry an infeasible upward ancillary service schedule that prevents the co-located VERs from generating as much energy as it otherwise would have. For example, if the BESS in the above example fails to reserve sufficient state of charge to support its 70 MW Regulation Up award, the co-located VER would be economically disadvantaged to the extent it could have generated more than 30 MW over the dispatch interval but for the BESS’ undeliverable Regulation Up award. First, Energy Resources notes that a similar commercial risk exists for the VER under the current Follow DOT paradigm whenever a co-located BESS receives an upward ancillary service schedule that ultimately proves undeliverable. Second, Energy Resources’ understanding is that undeliverable ancillary service awards should be relatively uncommon for BESS since the CAISO market protects their awards at a high penalty price. Moreover, to the extent that the two resources have different Scheduling Coordinators, Energy Resources believes this scenario could be remedied through contractual means.

7. Provide your organization's comments on the overview of Bid Cost Recovery Perspectives.

Energy Resources supports CAISO’s planned analysis of sub-optimal multi-interval optimization (MIO) outcomes. Energy Resources encourages CAISO to provide as much transparency as possible, including publishing advisory prices along with advisory schedules, so that market participants can better tune their offer strategies and settlement models to account for these impacts. However, Energy Resources reiterates that despite the broad stakeholder consensus that market participants should be entitled to BCR when the shortfall is caused by actions beyond their control, BCR typically does not provide meaningful relief in the context of revenue drag from sub-optimal MIO dispatches because the market participant must first realize a net loss in the market for a given trade date.

8. Provide your organization's comments on the presentation offered by the California Energy Storage Alliance (CESA)

No comments.

9. Please provide any additional comments, feedback, or examples regarding the RSP and the August 14th stakeholder meeting. You may upload examples or data using the “Attachments” field below.

No comments.

1. Please provide a summary of your organization’s general comments on the Revised Straw Proposal (RSP) on Outage Management and materials shared on Aug 14th meeting.

• Foldback Issue: Foldback is a real physical limitation on storage resources that needs to be understood. We do not recommend any tariff changes or changes to RAAIM. We recommend using master file settings to help resources manage foldback in the near-term (without tariff changes) while CAISO and stakeholders quantify the potential size of this issue. After which, CAISO and stakeholders can discuss the ramifications of continuing with the status quo verses making changes.
• CESA’s Proposal: PG&E agrees with CESA’s cost causation principle for bid cost recovery but finds the proposal underdeveloped and in need of further clarification and workshops.
•  PG&E further outlines its stance on the following topics:
  • supports CAISO’s SOC estimation approach, where telemetry reflects usable energy above minimum SOC.
  • opposes special treatment for co-located solar under Follow DOT and supports equitable curtailment across all solar resources.
  • supports the BPM outage reporting changes but requests clear communication and training for battery derates and new outage categories.
  • asks CAISO to clarify the scope and timeline of OMS software changes and assess impacts from related RA initiatives.

2. Provide your organization’s comments regarding the draft Business Practice Manual (BPM) language related to Outage Reporting enhancements, and note whether your organization supports moving these items to a dedicated BPM process

PG&E supports the proposed BPM changes and believes they can be made with minimal system changes or required simulation testing.  However, the new reporting requirements for battery derates should be communicated clearly to all market participants with battery resources, and any training needed to support this change should be offered prior to the reporting requirement being activated. Similarly, clear documentation on the additional available outage reporting categories should be provided along with any needed training to make sure the new categories are used appropriately.

3. Provide your organization’s comments regarding the enhancements to the Outage Management System (OMS).

PG&E requests that CAISO provide more specificity around the effort required, and the possible timeline of work, for the battery-related software changes to the OMS system.  In addition, CAISO can assist in evaluating its final proposal for OMS changes if it can identify the potential impacts it sees from other ongoing initiatives, especially those related to RA, UCAP, and RAAIM.

4. Provide your organization’s comments regarding the near-term guidance on Representing Nonlinearity, as well as your organization’s perspective on long-term solutions.

CAISO has clarified in its most recent Revised Straw Proposal (RSP) and presentation that it believes its tariff is clear in requiring a capability to discharge for four hours continuously at the submitted RA capacity in order to fulfill the tariff requirements.  PG&E believes it is clear that the “foldback” issue only affects discharge near minimum state of charge, and that charging characteristics near maximum SOC should be removed from this discussion as they do not affect RA materially.  Batteries are free to define a minimum SOC in their master file submission such that CAISO will not operate the battery below that minimum SOC, and this appears to be the best approach to dealing with the issue at this time, while acknowledging that loss of battery system and flexible RA across the board, if this were to occur, might require immediate rethinking of the tariff requirements. 

5. Provide your organization’s comments regarding the draft Business Practice Manual (BPM) language related to SOC Definition and Estimation, and note whether your organization supports moving these items to a dedicated BPM process.

PG&E supports what it believes to be CAISO’s position on SOC definition and estimation, namely that the value submitted via telemetry should represent the maximum continuous energy available from an NGR resource (when its master file minimum SOC value is subtracted).  It is appropriate for this requirement to be clarified.

6. Provide your organization's comments regarding the update on the Co-located Follow DOT topic.

PG&E is skeptical of the need for special treatment of solar resources deviating from forecast simply because these resources are co-located, while acknowledging the capability of batteries with charging capability to absorb excess solar output.  “Follow DOT” instructions are issued to solar resources for more general CAISO system reliability needs, and PG&E does not believe co-located solar resources should be excused from the expected reduction in output during periods of potential over-supply that threatens reliability.  PG&E in general supports equitable treatment of all solar resources in responding to system constraints. 

7. Provide your organization's comments on the overview of Bid Cost Recovery Perspectives.

8. Provide your organization's comments on the presentation offered by the California Energy Storage Alliance (CESA)

As PG&E has previously stated, it agrees with the principle of cost causation expressed by CESA (and in CAISO’s summary of stakeholder comments) for bid cost recovery or other make whole payments to batteries.  In other words, PG&E believes that make-whole payments should be issued when SOC limits are triggered due to CAISO market processes, even when market participants bid at or above opportunity cost levels, because these bids are appropriate signals of a preference to receive awards in later hours (perhaps because of day ahead award buyback risk), and no higher level of signal is possible in the market.

CESA’s presentation is, as they have stated repeatedly, not fully baked.  It seems clear to PG&E that if the same bidding rule were applied to hours with day ahead discharge awards as has been suggested for prior hours without awards, such bidding would indicate a willingness to buy back at any price below the DEB, and hence would have a different purpose from that discussed.  Additionally, it isn’t really clear whether sequence of bids and awards is essential to the calculation proposed, and how potential effects across days could be considered.

At a minimum, PG&E believes that the calculation of a (potentially hourly varying, potentially dynamic) DEB and a full identification of conditions that would qualify for make whole payments or BCR will require at least an additional detailed workshop before a draft proposal is developed.

9. Please provide any additional comments, feedback, or examples regarding the RSP and the August 14th stakeholder meeting. You may upload examples or data using the “Attachments” field below.

1. Please provide a summary of your organization’s general comments on the Revised Straw Proposal (RSP) on Outage Management and materials shared on Aug 14th meeting.

PGE appreciates the efforts of CAISO staff in developing the revised straw proposal. PGE continues to have major concerns with the operational feasibility of using outage cards to represent the nonlinearity characteristics of specific, unique BESS resources. PGE believes that the CAISO could instead consider supporting direct updates to the resource-specific Masterfile to communicate physical limitations. CAISO staff should outline and provide examples as for how outage cards might work from an operational standpoint.  

Overall, PGE recognizes the importance of balancing near-term improvements to provide immediate relief with the need for comprehensive reform. However, PGE is concerned that some interim or short-term design changes may unintentionally become long-term workarounds to complex issues needing holistic redesign efforts. To ensure long-term market efficiency and reliability, CAISO should clearly anchor short-term fixes within a roadmap for holistic storage design improvements—including SOC management, bid cost recovery, and accurate modeling of nonlinearity. In this way, stakeholders can benefit from immediate fixes today while retaining confidence that the end-state design will be durable and internally consistent.

2. Provide your organization’s comments regarding the draft Business Practice Manual (BPM) language related to Outage Reporting enhancements, and note whether your organization supports moving these items to a dedicated BPM process

PGE asks that the CAISO clearly distinguish between the high-level rules that belong in tariff (such as what constitutes a reportable outage or limitation) and the procedural details that can be maintained in BPMs. Establishing a clear guideline will provide transparency and flexibility. 

Additionally, PGE asks that CAISO clarify requirements that (1) apply only to CAISO BA entities or (2) extend to all EIM/EDAM entities in both tariff and BPM language.

3. Provide your organization’s comments regarding the enhancements to the Outage Management System (OMS).

PGE supports enhancements to the OMS that allow more accurate reporting of genuine outages and temporary derates. These improvements could help align market awards with actual physical capability and reduce unnecessary mitigation. 

At the same time, OMS should remain a tool for reporting genuine outages and limitations, not a substitute for modeling resource characteristics. PGE is concerned with the proposal to use outage cards to represent nonlinearity, as this would obfuscate true forced outages and inherent performance attributes – distinct concepts.

The impacts from non-linearity change dynamically and in concert with SOC and Emax, which OMS tools were not designed to capture. The proposed outage types require manual approval by CAISO, and accurately reflecting nonlinearity characteristics would require multiple outage card submittals in a very short period while the battery is operating in the region of nonlinearity. This is extremely cumbersome and does not provide the most accurate resource data to the market optimization.  

To maintain data integrity and operational clarity, PGE believes that OMS enhancements should be limited to legitimate outage reporting, while long-term modeling solutions should be pursued through separate market model improvements.

4. Provide your organization’s comments regarding the near-term guidance on Representing Nonlinearity, as well as your organization’s perspective on long-term solutions.

PGE does not support the use of outage cards as a proxy for nonlinearity. This approach is a misapplication of outage reporting and could create confusion for operators and inefficient market outcomes. Instead, PGE believes nonlinearity should be modeled in the Master file on a curve that considers dynamic Emax and current SOC to derive available output in real time. Resources should also have the ability to re-rate via outage card submission. 

Because BESS are not a temporary or niche resource but an increasingly critical component of grid reliability, PGE urges the CAISO to pursue a durable, long-term solution that accurately represents nonlinear operating characteristics within the market model itself, including improvements to SOC visibility and enhanced bid structures. If the CAISO proceeds with the proposed short-term workaround, PGE urges the ISO to explicitly designate it as an interim measure and provide a clear roadmap for replacement with a true modeling solution. 

PGE recognizes that the CAISO needs to ensure accurate representation of 4-hour battery availability for purposes of RA compliance, consistent with CPUC NQC standards. However, this approach forces storage operators to lose up to 20% of their battery capacity to fit within an outdated framework. Instead, CAISO should work with the CPUC to align NQC rules with modern storage operating characteristics, so that full, dynamic capacity can be recognized in both the RA and market constructs.

5. Provide your organization’s comments regarding the draft Business Practice Manual (BPM) language related to SOC Definition and Estimation, and note whether your organization supports moving these items to a dedicated BPM process.

PGE requests clarity regarding the process and timeline involved with moving this item to a dedicated BPM process. In the interest of utilizing time and capacity efficiently, PGE encourages continued discussion of this topic within this working group before moving forward.

6. Provide your organization's comments regarding the update on the Co-located Follow DOT topic.

PGE supports the CAISO’s effort to clarify DOT treatment for co-located resources. However, PGE is concerned that current rules could require a solar and battery resource to move in the same direction during curtailments, preventing the battery from charging when it otherwise would.

In practice, there are times when an operator may prefer to prioritize battery output over solar, or vice versa, and those preferences can vary day by day depending on system conditions, economics, and reliability needs. Co-located resources should retain this flexibility when bidding separately, rather than being required to move in lockstep. The CAISO should ensure co-located storage retains the flexibility to operate independently when bidding separately and provide illustrative examples to demonstrate how the revised DOT logic will avoid these conflicts. 

Additionally, PGE is concerned that the CAISO’s compliance enforcement is based on CAISO BAA rules (such as POI and Large-Generator Interconnection Agreements), which can impact non-CAISO BA entities. Such an approach risks exporting CAISO-specific compliance requirements into the broader EIM/EDAM footprint, where distinct interconnection and operational rules apply. 

While PGE does not currently operate hybrid or co-located VERs in the CAISO market and therefore cannot fully assess all impacts or prescribe the ideal solution, PGE asks that the CAISO provide illustrative examples and test cases that demonstrate how the revised DOT logic will preserve operational optionality. This transparency will help stakeholders without direct experience in the co-located model to understand operational implications, while ensuring that future PGE resources are not disadvantaged by rules that conflate POI enforcement with market dispatch flexibility. 

7. Provide your organization's comments on the overview of Bid Cost Recovery Perspectives.

PGE does not yet participate in the CAISO day-ahead market. However, BESS resource integration and day-ahead market participation, respectively, are core near-term priorities for PGE, so PGE staff have carefully followed design conversations around BCR.  

PGE agrees with CESA and others that infeasible dispatches caused by market design shortcomings should remain eligible for uplift, while those caused by bidding behavior should not. PGE is not in favor of a blanket elimination of BCR payments. Given the relatively low BCR payment to total battery revenue ratio, and the small percentage of total BCR payments currently going to battery operators, PGE urges the CAISO to prioritize enhancements to optimization and modeling before removing market safeguards that are not currently driving large-scale market inefficiencies.  

Separately, PGE requests that the CAISO prioritize simple improvements to the DA-ISOC default calculation, as outlined in PG&E’s comments submitted 7/16/25. 

Overall, given that bid cost component changes approved in November 2024 have yet to take effect, PGE cautions against changing additional variables until the impacts of the November 2024 revisions become clearer.

8. Provide your organization's comments on the presentation offered by the California Energy Storage Alliance (CESA)

PGE appreciates CESA’s presentation and agrees that a holistic review of storage and modeling participation in the real time market is justified. 

9. Please provide any additional comments, feedback, or examples regarding the RSP and the August 14th stakeholder meeting. You may upload examples or data using the “Attachments” field below.

1. Please provide a summary of your organization’s general comments on the Revised Straw Proposal (RSP) on Outage Management and materials shared on Aug 14th meeting.

REV Renewables (REV) appreciates CAISO’s progress on Outage Management proposals and moving forward other issues including Bid Cost Recovery. REV supports some of CAISO’s Outage Management proposals, but offers edit suggestions on the SOC definition and REV opposes the Nonlinearity solution, as discussed in more detail in #4.  

2. Provide your organization’s comments regarding the draft Business Practice Manual (BPM) language related to Outage Reporting enhancements, and note whether your organization supports moving these items to a dedicated BPM process

REV supports the BPM language related to Outage Reporting enhancements, including the reporting parameters and the storage-related cause descriptions. REV appreciates CAISO continuing to work on automatic acceptance of updates to outage cards. REV supports this moving to a dedicated BPM process.

3. Provide your organization’s comments regarding the enhancements to the Outage Management System (OMS).

See #4

4. Provide your organization’s comments regarding the near-term guidance on Representing Nonlinearity, as well as your organization’s perspective on long-term solutions.

REV opposes using the “Plant Trouble” nature of work outage card and instead strongly recommends the “Technical Limitations Not in Market Model” nature of work if an outage card is needed. REV also requests CAISO incorporate nonlinearity into the Master File as soon as possible, and provide a potential timeline for doing so. REV has developed a basic concept for Master File updates for CAISO and stakeholder consideration, as described below and attached.

Regarding use of outage cards in the near-term, REV highlights that this will be a complex solution to a dynamic situation and CAISO should consider the practical limitations of this proposal. If CAISO determines an outage card is the near-term solution, REV strongly disagrees with using the “Plant Trouble” nature of work that creates exposure to RAAIM penalties.

• Implementation complexity of using outage cards - While REV agrees with CAISO that a resource can use economic bidding as a way to manage SOC, and thus their exposure to foldback, there are practical limitations to this. In particular, a resource has to submit their bids 75 minutes in advance of the Real Time dispatch. If a resource is nearing the last hour of SOC, there is a significant lag in being able to bid to respond to foldback and when the resource may start experiencing foldback. Would a resource need to put in an outage card in anticipation of the SOC, even though it may not occur? If the resource submits a nonlinearity outage, it is possible the foldback could be over by the time CAISO accepts the outage, especially if the resource receives a small charge or Regulation award that impacts SOC.
• RAAIM exposure is unwarranted – The RAAIM calculation occurs over five-hour availability assessment hours (AAH) throughout the month and is not an appropriate tool to police whether a storage resource has met its qualifying capacity value. As described in CESA’s comments, a storage resource could perform perfectly during the AAH for four hours and meet its must offer obligation requirements, but if it needs to use an outage card subject to RAAIM it could get penalized because of foldback during the fifth AAH. This is an unjust and unreasonable outcome that does nothing to incentivize RA availability. The outcome could be even worse if the resource is mitigated, causing it to dispatch before its Day Ahead awards or AAH. REV requests that, if CAISO continues to propose using outage cards to reflect nonlinearity, that it use “Technical Limitations not in Market Model” nature of work, which is not unnecessarily punitive and reflects the reality of the situation (i.e. it is a technical limitation not in the market model).
• Qualifying Capacity discussions should occur at CPUC – If CAISO has suggestions on how to interpret or enforce qualifying capacity for storage resources, REV suggests that those occur in CPUC’s Resource Adequacy proceeding and CAISO’s Resource Adequacy Modeling and Program Design initiative.

For a long-term solution for nonlinearity, REV requests the CAISO include parameters in the Master File and for CAISO to provide a date estimate for this solution. REV drafted a proposed solution below with “Degradation” factors to model the impact of foldback due to high or low SOC and how they would interplay with SOC constraint formulas. This approach provides a simple cut in the feasible space for the asset that fits with the CAISO’s SCED. This currently assumes Min/Max SOC of 0% and 100% but can easily be extended to consider that. This also only considers a single breakpoint and a linear drop in available power due to foldback until the SOC limit is reached. Extending this to multiple breakpoints is feasible but would require the expected foldback rate to be monotonically increasing to keep these same properties. The attached spreadsheet reflects this simple formula and how it could be integrated into the Master File. REV welcomes CAISO and stakeholder feedback on this option.

5. Provide your organization’s comments regarding the draft Business Practice Manual (BPM) language related to SOC Definition and Estimation, and note whether your organization supports moving these items to a dedicated BPM process.

REV offers the following edits and comments on SOC definition.

• The Instantaneous SOC is the amount of energy in MWh that the battery, in real time, has available for CAISO participation at the time this value is conveyed through telemetry. This value should be between the Minimum Continuous Energy Limit and Maximum Continuous Energy Limit as registered in the Master File align with what is registered in the Master File, adjusted by any applicable outage, derate, or rerate. The SOC will be maintained within energy limit constraints (minimum and maximum) defined in the CAISO Master File. Data should be updated every four seconds and should vary from zero to maximum energy limit.
  • This edit is suggested to provide clarity, since the Instantaneous SOC is a constantly changing number and is not in the Master File. REV thinks the definition was not meant to imply that, but the edits would make it clear.
• For the Maximum Continuous Energy Limit, REV supports this definition.
• REV suggests that a new “Marketable Continuous Energy Limit” (Min and Max) Master File parameter and definition would provide more accuracy in operations and reflecting storage capabilities.
  • While Min/Max Continuous Energy Limit are the amounts to which CAISO could charge/discharge, the Marketable Continuous Energy Limit (Min and Max) would be the stored energy limits between which CAISO can expect the site to deliver at its full MW capabilities. In other words, this would be the operating range of the batteries where no foldback/nonlinearity would occur. These points should be conveyed through telemetry to CAISO.
    • The “Marketable” range would represent the storage unit’s full capability for Resource Adequacy capacity value, energy, and ancillary services.
      • The min/max beyond that marketable range would still be available to CAISO as needed, but the storage resource should not be penalized for foldback limitations within that range.
      • Note that the resource is available without foldback limitations for charging fully between Minimum Continuous Energy Limit and Maximum Marketable Continuous Energy Limit, and discharging from Maximum Continuous Energy Limit to Minimum Marketable Continuous Energy Limit.
    • See the graphical example below to illustrate this difference.
  • A new “Marketable Continuous Energy Limit” would align with the first breakpoint of the foldback equation REV provided in Question 4 as well.

6. Provide your organization's comments regarding the update on the Co-located Follow DOT topic.

REV has no comments at this time. 

7. Provide your organization's comments on the overview of Bid Cost Recovery Perspectives.

See #8

8. Provide your organization's comments on the presentation offered by the California Energy Storage Alliance (CESA)

REV supports CESA’s real-time make whole payment conceptual framework and concepts presented at the workshop. While REV agrees that there are limited circumstances in which BCR should be triggered as CAISO and DMM suggest, there are not zero circumstances and therefore BCR should not be eliminated for storage. REV supports CESA’s comments that if the storage operator caused the shortfall, then it should not be eligible for make whole; but if the CAISO market caused the shortfall, then it should be eligible for make whole. The scenarios for forced buy back or sell back provide a useful starting point to identify instances where a storage resource should be eligible for BCR.

9. Please provide any additional comments, feedback, or examples regarding the RSP and the August 14th stakeholder meeting. You may upload examples or data using the “Attachments” field below.

1. Please provide a summary of your organization’s general comments on the Revised Straw Proposal (RSP) on Outage Management and materials shared on Aug 14th meeting.

SDG&E appreciates CAISO’s ongoing efforts to develop market-model solutions for storage resources, including the Revised Straw Proposal on Outage Management and the materials shared at the August 14th stakeholder meeting. Broadly speaking, SDG&E supports CAISO’s commitment to enhancing outage visibility and standardizing processes that will ultimately improve system reliability and better integrate storage resources into the market. As a load serving entity and scheduling coordinator of storage resources, SDG&E believes there is a range of potential enhancements that could help strike the right balance between improving market integration and optimization for storage resources, while also addressing the concerns raised throughout this working group process. However, SDG&E is discouraged with the direction CAISO has chosen to take on representing nonlinearity and encourages staff to revise the proposal to avoid unintended consequences. Of the options being considered in the interim, this proposal is most likely to influence market behavior in an undesirable way and does not recognize the underlying issue that the market model does not account for the operating characteristics of these resources. 

First, SDG&E supports the recommendations to add BPM clarifications to outage reporting for all capability attributes and storage related cause descriptions in the nature-of-work table. Both enhancements will better account for the unique characteristics of storage resources in the BPMs and improve CAISO’s visibility into storage operations. We also appreciate CAISO’s efforts to clarify the policy considerations and timing for implementation of the larger suite of much needed OMS enhancements. SDG&E maintains that additional OMS functionality that allows for overlapping outage cards should be a high priority given the impact on operational accuracy and system efficiency. We request that CAISO provide additional detail on the evaluation and impact assessment for these modifications such that stakeholders can be better informed of the expected timeline for these changes.

SDG&E continues to have concerns with CAISO’s proposal to convey the impacts of nonlinearity through OMS via the “Plant Trouble” outage card as an interim solution. CAISO presents two primary reasons to justify this decision. The first is the notion that foldback is a known technological limitation that can be minimized via asset design or RA contracting and therefore should not be exempt from RAAIM penalties. However, in the timeframe by which this near-term guidance would be applied, RAAIM penalties would not result in changes to asset design (i.e., oversizing) to existing resources or changes to existing RA contracting. This policy could have increased pricing impacts on any new long-term RA contracting even though this is meant to be an interim solution, which would impact SDG&E’s retail customers over the life of the contract. The second issue relates to differences between the operational characteristics of storage resources and performance of storage resources as described by the CPUC’s QC definition. While such differences exist, they should be discussed in a more appropriate venue and this initiative should remain focused on creating a clear path for storage resources to fully deliver their capabilities to CAISO, without relying on workarounds or penalties for expected operational performance due to existing policy or market model limitations.

2. Provide your organization’s comments regarding the draft Business Practice Manual (BPM) language related to Outage Reporting enhancements, and note whether your organization supports moving these items to a dedicated BPM process

SDG&E supports the draft BPM language for outage reporting as outlined in the Revised Straw Proposal. The addition of storage-related cause descriptions in the nature-of-work table will provide greater detail and insight into the operations of the storage fleet. CAISO should progress these outage reporting requirements and enhancements to a dedicated BPM process.

3. Provide your organization’s comments regarding the enhancements to the Outage Management System (OMS).

OMS application improvements continue to be a top priority for SDG&E, as they will improve visibility into the capabilities and operation of our growing storage fleet. We support the proposed modifications outlined in the proposal, including the stakeholder recommendation to have the system automatically apply the most restrictive value during the overlapping period and then transition to the next applicable load maximum once the initial period concludes. SDG&E strongly encourages the timely development of functionality in OMS to allow for overlapping outage cards to reduce manual overhead and improve timeliness, and therefore data accuracy.

CAISO’s initial impact assessment shows this enhancement may not be in service before spring 2027. SDG&E asks that CAISO publish a timeline and resource-effort estimate for each OMS enhancement and to explore a phased rollout or interim pilot projects that deliver critical functionality sooner.

4. Provide your organization’s comments regarding the near-term guidance on Representing Nonlinearity, as well as your organization’s perspective on long-term solutions.

In prior comments, SDG&E recommended that, in the interim and until a long-term solution is developed, CAISO represent outages due to nonlinearity via the “Technical Limitations not in Market Model” nature of work. This solution would address the immediate need for increased tracking and visibility into these outages until a long-term solution is implemented, preferably via a comprehensive representation of nonlinearity as an operating characteristic of storage resources into the market model.

CAISO’s updated proposal would use the “Plant Trouble” nature of work to represent nonlinearity, subjecting resources to the risk of RAAIM penalties for the periods for which the outage card is used. SDG&E agrees that the use of outage cards in OMS is the most straightforward and effective way to represent foldback limitations in the near-term. However, SDG&E is concerned that penalizing outages tied to foldback will drive resource owners to understate their availability in the Master File and artificially constrain the capacity CAISO can rely on for reliability.

CAISO asserts in the Revised Straw Proposal that compliance with the defined QC value will prevent instances of foldback impeding a resource’s shown RA value. However, even a "right-sized" storage resource will experience foldback at SOC extremes during both charging and discharging. These nonlinear behaviors are inherent to lithium-ion technologies and occur regardless of whether the resource takes a haircut on its shown RA. While operators can technically manage their state of charge, and therefore their likelihood of entering foldback ranges, via their bids, withholding SOC is not the most efficient or practical way to operate the storage fleet. For SDG&E, this would require near constant manual adjustments to economic bids, which is extremely inefficient and impractical with a growing fleet. It is unclear if this penalty-based approach will incentivize storage resource performance in the near-term and is certain to increase costs to customers and exacerbate RA scarcity, especially during critical periods.

If bidding strategy is expected to be the primary tool for managing foldback, we urge CAISO to pursue the additional functionality needed for scheduling coordinators to efficiently and effectively represent this storage characteristic in the market. Additionally, CAISO uses data from DMM's recent storage report to suggest that storage resources as a whole are already "right-sized" and successfully employ bidding strategies that avoid entering foldback ranges during critical net peak periods. However, as discussed during the August 14 stakeholder meeting, these results may be conflating the impact of some new facilities that are built with extra capacity in anticipation of future degradation. As the storage fleet matures, these assumptions may not hold true and the challenges with foldback will become more pronounced.

More broadly, SDG&E recommends closer coordination with the RAMPD initiative to ensure alignment between the proposed penalty design and treatment of storage nonlinearity. There is meaningful overlap between these two initiatives, especially as the proposal on representing non-linearity directly relates to CAISO’s RA rules and reliability. We also strongly encourage CAISO to consider whether unique rules are warranted for storage given its distinct operational characteristics.

5. Provide your organization’s comments regarding the draft Business Practice Manual (BPM) language related to SOC Definition and Estimation, and note whether your organization supports moving these items to a dedicated BPM process.

SDG&E supports migrating these SOC definition and estimation provisions into a standalone BPM process.

6. Provide your organization's comments regarding the update on the Co-located Follow DOT topic.

As the operations of hybrid resources are complex, we urge CAISO to continue work to examine the constraints on storage resources and improve their operational capacity.

7. Provide your organization's comments on the overview of Bid Cost Recovery Perspectives.

No comment.

8. Provide your organization's comments on the presentation offered by the California Energy Storage Alliance (CESA)

No comment.

9. Please provide any additional comments, feedback, or examples regarding the RSP and the August 14th stakeholder meeting. You may upload examples or data using the “Attachments” field below.

No comment.

1. Please provide a summary of your organization’s general comments on the Revised Straw Proposal (RSP) on Outage Management and materials shared on Aug 14th meeting.

The Six Cities generally support or do not oppose the CAISO’s proposed approach to the outage management, nonlinearity, and state of charge (“SOC”) topics as discussed in the Revised Straw Proposal.  Provided below are comments regarding certain aspects of the Revised Straw Proposal.  The Six Cities appreciate the August 14^th stakeholder discussion regarding uplift and maintain their perspective that uplift is unwarranted apart from specific circumstances that are not within the control of the market participant. 

2. Provide your organization’s comments regarding the draft Business Practice Manual (BPM) language related to Outage Reporting enhancements, and note whether your organization supports moving these items to a dedicated BPM process

The Six Cities do not oppose moving this topic to a Business Practice Manual (“BPM”) process.  The language proposed in the Revised Straw Proposal to (i) address outage reporting for capability attributes; and (ii) include storage related cause descriptions in the nature of work (“NOW”) table for the Plant Trouble NOW appear to be reasonable starting points for discussion in the BPM Change Management Process. 

3. Provide your organization’s comments regarding the enhancements to the Outage Management System (OMS).

The Six Cities acknowledge the CAISO’s initial assessment of the scope and timing for Outage Management System enhancements, which preliminarily indicate that these enhancements could not be implemented before spring of 2027 (and presumably this timeframe could be extended based on other priorities).  The Six Cities agree with the CAISO that alignment with other projects is appropriate, especially implementation of policy changes from the Resource Adequacy (“RA”) Modeling and Program Design (“RAMPD”) initiative. 

4. Provide your organization’s comments regarding the near-term guidance on Representing Nonlinearity, as well as your organization’s perspective on long-term solutions.

The Six Cities do not oppose use of the Plant Trouble NOW for representing non-linearity impacts and, at this time, concur with the decision not to use an RA Availability Incentive Mechanism (“RAAIM”) exempt NOW.  Because of the broader policy issues that are implicated here, including whether and when to provide a RAAIM exemption and how a resource’s qualifying capacity (“QC”) may or may not create or increase RAAIM exposure, there may be a need to revisit the use of the Plant Trouble NOW in the future, particularly depending on the evolution of discussions about RAAIM and Unforced Capacity (“UCAP”) mechanisms in the RAMPD process.  Therefore, it may make sense to adopt an interim proposal on this topic or for the CAISO to otherwise commit to a future review of the policy approach adopted through this initiative. 

The Six Cities note that the CAISO’s discussion about the likelihood of RAAIM exposure for resources that the CAISO asserts are sized appropriately and have accurate RA values is predicated on application of the California Public Utilities Commission (“CPUC”)-approved QC methodology.  The CPUC is not the only local regulatory authority (“LRA”) that establishes QC values; it is possible that some LRAs may use different approaches that would not operate to reduce the RA value of a storage resource based on foldback impacts.  The CAISO should be aware in its assessment of impacts that not all LRAs may employ the same QC methodology as the CPUC, and it is possible this may affect the extent of RAAIM exposure for an individual resource.

5. Provide your organization’s comments regarding the draft Business Practice Manual (BPM) language related to SOC Definition and Estimation, and note whether your organization supports moving these items to a dedicated BPM process.

The Six Cities do not oppose the proposed BPM language. 

6. Provide your organization's comments regarding the update on the Co-located Follow DOT topic.

The Six Cities do not have comments on this topic at this time. 

7. Provide your organization's comments on the overview of Bid Cost Recovery Perspectives.

The Six Cities continue to support the CAISO’s perspective that, in most instances, Bid Cost Recovery (“BCR”) for storage resources is unwarranted, although they remain open to understanding if there are circumstances where BCR may be appropriate.  At a conceptual level, these circumstances would appropriately be ones where the triggering conditions for uplift eligibility are not within the control of the market participant, such as exceptional dispatch or during market power mitigation.  At this time, uplift based on multi-interval optimization impacts does not appear justified.

8. Provide your organization's comments on the presentation offered by the California Energy Storage Alliance (CESA)

The Six Cities acknowledge CESA’s position that a holistic review of the participation and modeling for storage resources in the real-time market is needed.  The CAISO has addressed various aspects of storage resource participation in multiple initiatives over several years.  Given the continuing evolution and growth in the storage fleet, there may be value in such a holistic review.  To ensure effective use of stakeholder and CAISO resources, the problem statements and objectives of such a review would need to be well-defined and will likely take some time to develop.  At this time, it is unclear if this initiative is the intended forum for this effort, or if the CAISO annual Policy Initiatives Roadmap process must be leveraged to enable the stakeholder community and the CAISO to assess whether a comprehensive review of storage market participation and modeling will be a priority.

9. Please provide any additional comments, feedback, or examples regarding the RSP and the August 14th stakeholder meeting. You may upload examples or data using the “Attachments” field below.

 The Six Cities have no additional comments at this time. 

1. Please provide a summary of your organization’s general comments on the Revised Straw Proposal (RSP) on Outage Management and materials shared on Aug 14th meeting.

Southern California Edison (SCE) comments can be viewed under the subsequent questions.

2. Provide your organization’s comments regarding the draft Business Practice Manual (BPM) language related to Outage Reporting enhancements, and note whether your organization supports moving these items to a dedicated BPM process

SCE appreciates the California ISO’s (CAISO) efforts to enhance outage reporting through the proposed BPM language revisions. SCE supports the proposed changes and offers the following additional recommendations for consideration. 

SCE encourages CAISO to include further clarification on what constitutes a “discovered” de-rate, particularly in the day-ahead timeframe. This clarification should address scenarios where foldback limitations should have reasonably been known in advance due to factors such as ambient temperature, ongoing equipment issues, or other operational constraints. The current BPM language in the revised straw proposal primarily addresses changes in availability in the real-time timeframe, and additional guidance for the day-ahead timeframe would improve transparency and compliance. 

Furthermore, SCE recommends that CAISO provide more specific BPM language to guide market participants to accurately represent the true availability of storage resources. In particular, the BPM should include guidance on: 

• How to reflect changes in power rating due to foldback 

• How to report changes in capacity, including adjustments to minimum or maximum energy fields within the Outage Management System (OMS). 

These enhancements would support more accurate and consistent outage reporting across the market. 

3. Provide your organization’s comments regarding the enhancements to the Outage Management System (OMS).

SCE supports the much-needed enhancements to the Outage Management System (OMS) to better reflect and communicate the availability of energy storage resources. 

SCE initially assumed that CAISO’s original straw proposal to enhance OMS would be a short-term effort and could be implemented within a year. However, the revised straw proposal indicates that implementation will not be completed before spring 2027. Given this extended timeline, SCE believes it is appropriate to re-evaluate whether to continue pursuing the current proposal or to consider a complete redesign of the OMS, specifically for storage resources. 

While the proposed enhancements would improve the current OMS functionality for storage, the long implementation horizon suggests that a more comprehensive redesign may offer greater long-term value. SCE recommends that CAISO solicit additional stakeholder input to assess whether a new OMS design would provide more benefits than the currently proposed enhancements. 

SCE reiterates its previous comment proposing that a new OMS design could better accommodate storage resources by allowing them to reflect their availability at different states of charge (SOC). This design could be modeled after the existing OMS framework used for multi-stage generators.[1]

[1] SCE Comments on CAISO Storage Design and Modeling Issue Paper and Straw Proposal, May 23, 2025, question #2 at https://stakeholdercenter.caiso.com/Comments/AllComments/a278055e-4347-4ae8-bfd5-abdc49e61dad#org-d3c6e5fb-43f1-4017-8a38-31bef59d23fc 

4. Provide your organization’s comments regarding the near-term guidance on Representing Nonlinearity, as well as your organization’s perspective on long-term solutions.

SCE supports CAISO’s proposal to use the “Plant Trouble” Nature of Work (NOW) to report nonlinearity and foldback conditions. These limitations, while inherent to the technology, directly impact a resource’s ability to meet its Resource Adequacy (RA) obligations and should not be exempt from the Resource Adequacy Availability Incentive Mechanism (RAAIM). Exempting foldback would undermine the integrity of RA performance metrics and misalign market operations with the California Public Utilities Commission’s (CPUC) definition of Qualifying Capacity (QC), which requires sustained output over a four-hour period. Aligning CAISO’s market rules with CPUC’s QC criteria is essential to ensure system reliability and consistent treatment of resource capabilities. 

SCE does not support making market rule changes at this time; However, we recognize that nonlinearity is a valid issue that is not currently addressed by the CPUC. Therefore, SCE recommends that the four-hour continuous delivery requirement for storage RA resources first be revisited in the CPUC’s annual RA rulemaking and in CAISO’s RA counting rules. Only after the CPUC has established updated RA requirements should stakeholders begin discussions on potential market design changes to address foldback and nonlinearity. This sequencing will help ensure that any market reforms are aligned with CPUC regulatory requirements and reflect actual storage performance and operational needs.  

5. Provide your organization’s comments regarding the draft Business Practice Manual (BPM) language related to SOC Definition and Estimation, and note whether your organization supports moving these items to a dedicated BPM process.

SCE supports the draft BPM language for SOC definition and estimation and moving these items to a dedicated BPM process. SCE requests further clarifications on how to appropriately represent max energy and consequently, maximum continuous energy limit (MCEL), for the day-ahead IFM process: 

• The reporting obligations on expected and foreseen impacts to the maximum continuous energy limit distinguishing appropriate causes. 

• How SOC estimation should be handled in cases where operational limitations are known in advance (e.g., conflicts caused by ‘beginning of day SOC’ bids and minimum energy re-rates via outage cards).

6. Provide your organization's comments regarding the update on the Co-located Follow DOT topic.

SCE continues to support NextEra’s proposal to disable the “Follow DOT” flag when co-located energy storage resources are exclusively awarded Ancillary Service (AS) Regulation Down. SCE also supports continued stakeholder discussions on AS Regulation to ensure market rules reflect operational realities. 

SCE believes that if Aggregate Capability Constraint (ACC) limits are not exceeded, there should be no unnecessary restrictions on the output of Variable Energy Resources (VERs). Removing such constraints will help optimize resource performance and market efficiency.  Furthermore, when a “Follow DOT” flag is used, it should always be set up in a manner that fully utilizes all available capacity behind the ACC, even if the “Follow DOT” flag must be set at a level above the VER forecasted output. 

Additionally, SCE supports CAISO’s proposal to allow proration when multiple Scheduling Coordinators share an ACC. This is a practical and equitable solution for managing co-located resources and will help ensure fair access to market opportunities.

7. Provide your organization's comments on the overview of Bid Cost Recovery Perspectives.

SCE strongly supports the Department of Market Monitoring’s (DMM) proposed framework, which begins with the presumption that storage resources are not eligible for Bid Cost Recovery (BCR), and then identifies narrowly defined circumstances under which BCR may be appropriate. 

SCE believes that any compensation mechanism for storage resources should be grounded on the basis of recovering lost revenue directly attributable to market operator actions or inefficiencies in market optimization.  Examples include exceptional dispatch, out-of-merit dispatch, or challenges associated with multi-interval optimization. Aligning compensation with these specific conditions will help ensure that storage operators are appropriately incentivized to manage their state of charge (SOC) effectively, adhere to their day-ahead schedules, and compensated only for lost revenue due to issues with the market optimization or manual interventions by the market operator. 

Furthermore, SCE urges CAISO to prioritize the re-evaluation of BCR eligibility and design as a central focus of this initiative. Given the increasing role of storage participation in the market, it is crucial that BCR rules support efficient market outcomes. 

8. Provide your organization's comments on the presentation offered by the California Energy Storage Alliance (CESA)

SCE does not have any comments.

9. Please provide any additional comments, feedback, or examples regarding the RSP and the August 14th stakeholder meeting. You may upload examples or data using the “Attachments” field below.

SCE does not have any comments.

1. Please provide a summary of your organization’s general comments on the Revised Straw Proposal (RSP) on Outage Management and materials shared on Aug 14th meeting.

2. Provide your organization’s comments regarding the draft Business Practice Manual (BPM) language related to Outage Reporting enhancements, and note whether your organization supports moving these items to a dedicated BPM process

3. Provide your organization’s comments regarding the enhancements to the Outage Management System (OMS).

4. Provide your organization’s comments regarding the near-term guidance on Representing Nonlinearity, as well as your organization’s perspective on long-term solutions.

5. Provide your organization’s comments regarding the draft Business Practice Manual (BPM) language related to SOC Definition and Estimation, and note whether your organization supports moving these items to a dedicated BPM process.

6. Provide your organization's comments regarding the update on the Co-located Follow DOT topic.

7. Provide your organization's comments on the overview of Bid Cost Recovery Perspectives.

8. Provide your organization's comments on the presentation offered by the California Energy Storage Alliance (CESA)

9. Please provide any additional comments, feedback, or examples regarding the RSP and the August 14th stakeholder meeting. You may upload examples or data using the “Attachments” field below.

1. Please provide a summary of your organization’s general comments on the Revised Straw Proposal (RSP) on Outage Management and materials shared on Aug 14th meeting.

There was no mention of changes made for mixed fuel Hybrid resources in the proposal.  Does this mean the CAISO currently does not intend to make changes regarding outage management for hybrids?

2. Provide your organization’s comments regarding the draft Business Practice Manual (BPM) language related to Outage Reporting enhancements, and note whether your organization supports moving these items to a dedicated BPM process

Terra-Gen largely supports changing the BPM language but believes any changes to the BPM should come after the OMS enhancements have been decid

3. Provide your organization’s comments regarding the enhancements to the Outage Management System (OMS).

The CAISO proposal largely ignores hybrids in general, but Outage Reporting Enhancements should also include enhancements to better account for component level outages on hybrid resources.  As stated in Terra-Gen’s Comments for Storage Design and Modeling meeting on 6/30

This limitation means that derates on a hybrid’s Variable Energy Resource (VER) component do not flow into the CAISO VER forecast. This directly impairs the accuracy of system-wide forecasts, particularly for Residual Unit Commitment (RUC), leading to inefficient procurement and inaccurate price signals. It forces SCs to operate conservatively, further degrading market efficiency.

CAISO must commit to updating the OMS to allow for sub-resource ID component-level outages and ensure this granular data is incorporated into all relevant market and forecasting processes.

These concerns should be addressed in any enhancements to OMS.

4. Provide your organization’s comments regarding the near-term guidance on Representing Nonlinearity, as well as your organization’s perspective on long-term solutions.

Terra-Gen strongly disagrees with the use of outages to represent nonlinearity.  The nature of nonlinearity is that it is a dynamic number, which means during the times of dispatch an OMS card would be inaccurate as soon as it has been submitted.  The use of OMS submissions will not have any helpful impacts CAISO for reliability and will not prevent dispatches batteries are not capable of, especially if OMS is not enhanced to allow for auto acceptance.  

If a battery submits a nonlinearity outage, once battery fully discharges, would it be able to end the outage? Would a new outage need to be submitted if the battery receives a small charge? These changes will not even have an impact until CAISO accepts the outage, so it will not affect the discharge instructions until it is too late.  The use of outages for nonlinearity is overly burdensome with no benefits.

OMS outages are meant to reflect a change in the capability of the batteries, and nonlinearity is not a change in capability.  The best way to handle nonlinearity would be through telemetry for the power available, or a formulaic estimation of the capability of a battery as it approaches the State of Charge (SOC) where it starts to experience foldback.

The CAISO recommends “the use of economic bidding as a means to manage their SOC and, as such, their exposure to entering their foldback ranges.”  This is not feasible, bids are due 75 minutes before the start of the trading hour, so by the end of the trading hour, a 4-hour duration battery could have used more than 50% of its SOC capability.  The batteries are subject to market mitigation based on the opportunity cost of energy and does not account for foldback ranges.  Batteries also often supply regulation, and during those times a resource has less transparency as to how the resource will be dispatched.

By using OMS tickets with the Plant Trouble nature of work of work The CAISO proposal has taken an operational concern regarding a technical limitation of the CAISO system and used it as a means to increase RAAIM penalties battery resources without improving the underlying operational concern.  The application of RAAIM to nonlinearity is overly punitive.  If a battery is discharged to the point it can no longer discharge at it’s full Pmax, but has stopped discharging because of the market economics, does it just have to keep the outage in indefinitely, suffering RAAIM penalties for the entire time?  Does it get to end the outage once it has finally discharged completely?

In the CAISO example “At the end of the month, the difference between the shown RA value (25 MW) and the OMS value (20 MW) will be identified for this fourth hour, resulting in RAAIM exposure”  The outage could be in for the entirety of the assessment hours just because it did not fully discharge, which would be overly punitive. 

For the long-term solution Terra-Gen recommends REV’s recommendation to include parameters in the Master File to use a formulaic approach for the foldback impact. If the formulaic approach is not implemented, dynamic limits should be adopted.

5. Provide your organization’s comments regarding the draft Business Practice Manual (BPM) language related to SOC Definition and Estimation, and note whether your organization supports moving these items to a dedicated BPM process.

Terra-Gen supports moving the language related to SOC Definition and Estimation to a dedicated BPM process. 

6. Provide your organization's comments regarding the update on the Co-located Follow DOT topic.

Terra-Gen agrees this is an important topic and a more robust holistic solution should be pursued.

7. Provide your organization's comments on the overview of Bid Cost Recovery Perspectives.

Terra-Gen believes this is an important topic and a more robust holistic solution should be pursued.

8. Provide your organization's comments on the presentation offered by the California Energy Storage Alliance (CESA)

No comment

9. Please provide any additional comments, feedback, or examples regarding the RSP and the August 14th stakeholder meeting. You may upload examples or data using the “Attachments” field below.

No additional comments

1. Please provide a summary of your organization’s general comments on the Revised Straw Proposal (RSP) on Outage Management and materials shared on Aug 14th meeting.

WPTF appreciates the opportunity to provide these comments on the Revised Straw Proposal and discussion during the Aug 14 stakeholder meeting. We generally support the CAISO exploring longer-term solutions to accurately reflect in the market model foldback limitations for storage resources. The market model today reflects similar limitations for other resource types, thus we encourage CAISO to continue these discussions for storage.

We continue to oppose the CAISO’s proposal to have storage resources use a Nature of Work (“NOW”) for outages due to foldback that is not RAAIM-exempt. In addition to the reasons we have expressed in previously submitted comments, we also want to emphasize that exposing storage resources to RAAIM will create perverse bidding incentives that further exacerbate the CAISO’s concern that storage resources today are not incentivized to bid in a manner that aligns with real-time conditions.

Lastly, we strongly believe that BCR should not be eliminated for storage resources. While we appreciate that the current BCR framework may not be best suited for storage resources, simply eliminating BCR in all but extreme cases is discriminatory. Thus we are open to further discussions on alternative frameworks such as the one presented by CESA but also encourage the CAISO to prioritize other modeling and market improvements given (1) the interim BCR solution that will go into place later this year and (2) the cost of BCR for storage relative to the cost of the wholesale market is minimal.

2. Provide your organization’s comments regarding the draft Business Practice Manual (BPM) language related to Outage Reporting enhancements, and note whether your organization supports moving these items to a dedicated BPM process

3. Provide your organization’s comments regarding the enhancements to the Outage Management System (OMS).

4. Provide your organization’s comments regarding the near-term guidance on Representing Nonlinearity, as well as your organization’s perspective on long-term solutions.

We support exploring market optimization changes that better reflect storage resource characteristics for a long-term solution. This likely includes updates to both the Masterfile and the introduction of a resource-specific constraint that limits maximum charge/discharge schedules when the state of charge (SOC) is at or near foldback thresholds.

Regarding short-term solutions, we continue to strongly oppose the use of an outage card that exposes storage resources to RAAIM penalties. As discussed in stakeholder meetings and previous comments, there are several valid reasons why such conditions should be exempt from RAAIM:

• Creates perverse bidding incentives that will exacerbate CAISO’s concern that storage resources today are “not incented in real-time to bid in a manner aligned with real-time conditions”
• The “Technical limitations not in market model” outage card is intended for precisely this situation. It is inconsistent and potentially discriminatory that some resources qualify for exemption under this card while storage resources do not.
• These limitations are not modeled in the market and cannot be forecasted or managed through market participation.
• RAAIM penalties in these cases offer no meaningful incentive for improved performance.
• Penalizing resources for conditions beyond their control imposes unnecessary costs, ultimately passed on to ratepayers without delivering reliability or efficiency benefits.

WPTF would like to take this opportunity to emphasize and elaborate more on the first point above. During the call WPTF raised the concern that requiring storage resources to use an outage card that is not RAAIM exempt compared to an outage card that is RAAIM exempt will create perverse bidding incentives. In fact it will create bidding incentives that further exacerbate CAISO’s on-going concern that storage resources are not incented in real-time today to bid in a manner that aligns with real-time conditions. Availability Assessment Hours (AAHs) do not necessarily align with real-time conditions.  If a storage resource knows that it will be exposed to RAAIM if it reaches the SOC that triggers foldback within the AAHs, it will be incentivized to bid in a way that ensures it does not get discharged earlier (even if the earlier hours are the hours the real-time market needs the storage resource the most); rather than bidding in a way that allows the market to use it when needed most, e.g., prior to AAHs, it will bid in a way to ensure it is not used earlier than AAHs such that by the end of the AAHs it does not have to submit an outage card and then be penalized through RAAIM. The CAISO has stated multiple times it wants to ensure storage resources bid in a way in real-time that aligns with real-time conditions. This means that they want to make sure storage resources are bidding in a way that will allow the market to decide which hours it needs those resources the most (i.e., highest priced hours); those highest priced hours may not align with the AAHs. Thus storage resources are going to bid to prevent the market from dispatching it in all the highest priced hours (i.e., bid in a way that is not aligned with real-time conditions) such that it does not get exposed to RAAIM for being unavailable due to foldback during the AAHs. This will further exacerbate the CAISO’s on-going concern with real-time bidding incentives for storage resources.  If the CAISO allows storage resources to be RAAIM exempt due to foldback, then the storage resource no longer has the incentive to bid in a manner that prioritizes AAHs over actual real-time condition needs.

Additionally, this situation is similar to how thermal resources are treated when ramp constrained and when MSG resources are transitioning between configurations. For instance, a 100 MW thermal unit with a 1 MW/min ramp rate is not expected to reach Pmax within a single hour and is not penalized under RAAIM. The most it can ramp to is 75 MW (assuming 15 MW minload) but is not penalized by RAAIM for the additional 25 MWs unavailable in that hour. Likewise, a 25 MW / 100 MWh storage resource may be limited to 20 MW due to foldback, yet it faces penalties because the market does not model this limitation like it models ramp rates for thermal assets, forcing scheduling coordinators to rely on outage cards for feasible schedules.

CAISO should move forward with the RAAIM-exempt “NOW” card to ensure fairness and uphold the purpose of RAAIM during this transitional period.

5. Provide your organization’s comments regarding the draft Business Practice Manual (BPM) language related to SOC Definition and Estimation, and note whether your organization supports moving these items to a dedicated BPM process.

6. Provide your organization's comments regarding the update on the Co-located Follow DOT topic.

7. Provide your organization's comments on the overview of Bid Cost Recovery Perspectives.

WPTF believes it is inappropriate to consider eliminating Bid Cost Recovery (BCR) for storage resources based on outcomes driven largely by limitations in CAISO’s market optimization framework. BCR is not a bad thing; it’s a fundamental element that recognizes when there is a complex market optimization run that the resulting prices and revenues a resource may receive may not cover the energy bid costs on which the market made the decision to dispatch said resource. For example, a storage resource may be completely unconstrained in the market and discharged based on a $50/MWh discharge bid but the market prices end up being $49/MWh. This can and does happen; it’s a natural outcome of a complex optimization that has binary variables. Why should we not provide this resource the $1/MWh BCR to cover its energy bid costs but still pay another resource in the same situation the $1/MWh BCR? There are several other examples that increase in complexity that also continue to support the need for some BCR framework for storage resources and not just in extreme situations like exceptional dispatches. Importantly, this scenario illustrates how revenue shortfalls can arise for energy bid costs not just commitment costs

WPTF respectfully urges CAISO to ensure that policy initiatives are grounded in robust data, informed by stakeholder perspectives, and reflective of historical efforts. We are concerned with the current framing of the BCR issue, which omits key context, presents isolated data without broader analysis, and disregards previously raised stakeholder concerns. Storage resources operate under complex intra-day dynamics that the current market design does not adequately capture. The DMM’s focus on relatively small BCR payment amounts does not justify prioritizing elimination, especially when doing so risks reducing market efficiency and reliability. Further, these relatively small BCR amounts may be overstating actual BCR amounts since the CAISO has yet to implement the interim solution adopted in the Bid Cost Recovery and Default Energy Bid Enhancements expedited effort. WPTF requests the CAISO report out on the change to BCR payments after implementing the interim approach prior to moving forward with any BCR proposal in this initiative. We urge CAISO to prioritize improvements to market optimization and modeling. For a more detailed discussion please see our previously submitted comments.

8. Provide your organization's comments on the presentation offered by the California Energy Storage Alliance (CESA)

WPTF is open to exploring alternative bid cost recovery frameworks for storage resources such as the one presented by CESA. BCR is a fundamental element of a competitive market to help ensure resources are appropriately compensated and can cover costs reflected in the market.

9. Please provide any additional comments, feedback, or examples regarding the RSP and the August 14th stakeholder meeting. You may upload examples or data using the “Attachments” field below.