Comments on Straw Proposal for Penalty Enhancements: Demand Response, Investigation, and Tolling

1. Please provide a summary of your organization’s general comments on the PEDRIT straw proposal and presentation:

The California Efficiency + Demand Management Council (Council) appreciates the opportunity to comment on the CAISO’s Straw Proposal for its Penalty Enhancements: Demand Response, Investigation, and Tolling stakeholder initiative (Straw Proposal).

The Council generally supports the CAISO’s Monitoring Data Submission Timelines proposal and Monitoring Data Penalties proposal as illustrated in the example provided in the Straw Proposal.  With regard to the CAISO’s request for feedback on its proposed 90-day historical data requirement for new customers, the Council urges the CAISO to minimize the amount of historical data to the greatest extent that is reasonable, and recommends 45 days of historical data.  As a new but related item, the Council requests that the CAISO adopt a T+44B internal automatic notice for missing DR monitoring data, just as was adopted in the Rules of Conduct Enhancements Track 1 stakeholder initiative for Settlement Quality Meter Data (SQMD).  

2. Please provide your organization’s comments on the proposed defining of submission requirements and penalty structure for DR monitoring data, as described in the straw proposal:

The Council supports the Monitoring Data Submission Timelines proposal to require DR monitoring data be submitted by Scheduling Coordinators (SC) by T+52B with data accepted up to T+214B.  This appears to be a reasonable compromise in lieu of the Council’s proposal in the Rules of Conduct Enhancements stakeholder initiative to either 1) allow late DR monitoring data to go unpenalized when the local utility fails to provide it in time, or 2) to allow the SC to estimate any missing data to ensure a complete and timely data set is provided to the CAISO.  However, the Council respectfully cautions that flexibility may be needed if a utility exceeds 214 days in providing the required data.

The Council also supports the proposed Monitoring Data Penalties proposal to replace the current $500/day/resource penalty with a $1,000 penalty/Trading Day but, as explained in the preceding paragraph, the Council maintains that missing data may be outside the control of the SC or DR provider, so the CAISO should reserve a degree of discretion in applying the $3,000/Trading Day penalty after T+214B.  This support is based on the example provided for the Monitoring Data Penalties proposal, in which the penalty is $1,000 regardless of the number of resources for which DR monitoring data are late and the number of days beyond T+52B (until T+214B) that the data are submitted.[1]

In response to the CAISO request for feedback on the need for 90 days of historical data for monitoring purposes, the Council recommends that as a matter of principle, the CAISO should try to minimize the number of days’ data for new customers to the greatest extent possible, as long as it does not impair the CAISO’s operations.  All else being equal, requiring fewer days of historical data in this instance would speed up the process for DR providers to register new customers into the Demand Response Registration System (DRRS) and allow them to be available for use in a DR resource that much sooner.  Though the Council admittedly has no analytical basis for recommending a specific number of days, 45 days would appear to be a reasonable amount of time to ensure the CAISO will has a sufficient amount of data for its monitoring purposes.

[1] Straw Proposal, at p. 8.

3. Please provide your organization’s comments on the proposed streamlining of the Rules of Conduct investigative process, as described in the straw proposal:

The Council reserves comment.

4. Please provide your organization’s comments on the proposed update to the penalty tolling process, as described in the straw proposal:

The Council reserves comment.

5. Please provide your organization’s comments on the inaccurate meter data materiality threshold or waiver discussion, as described in the straw proposal:

The Council reserves comment.

6. Please provide your organization’s comments on the proposed WEIM classification for this initiative, as described in the straw proposal

The Council reserves comment.

7. Please provide additional comments on the PEDRIT straw proposal not mentioned above:

The Council requests that the CAISO adopt a T+44B internal automatic notice for missing DR monitoring data, just as was adopted in the Rules of Conduct Enhancements Track 1 stakeholder initiative for Settlement Quality Meter Data (SQMD).  In its September 13, 2023 CAISO Board of Governors and Western Energy Imbalance Market Governing Body Memorandum on this initiative, the CAISO explained the benefits of this change to its practice:

Currently, the ISO sends a Notice of Missing Measurements on the 53rd business day after the trade date. In response to stakeholder      concerns, Management has agreed to extend an internal automatic notice for missing SQMD on the 44th business day after the trade date to market participants in addition to the current notice on the 53rd business day. This will enhance market participant compliance with data submission deadlines by providing an alert prior to the first deadline and will particularly alert those at risk of failing to submit on the 52nd business day after the trade date. 

Adopting the same practice for DR monitoring data would provide similar benefits.

1. Please provide a summary of your organization’s general comments on the PEDRIT straw proposal and presentation:

Please see the attached Comments from the Department of Market Monitoring.

2. Please provide your organization’s comments on the proposed defining of submission requirements and penalty structure for DR monitoring data, as described in the straw proposal:

Please see the attached Comments from the Department of Market Monitoring.

3. Please provide your organization’s comments on the proposed streamlining of the Rules of Conduct investigative process, as described in the straw proposal:

Please see the attached Comments from the Department of Market Monitoring.

4. Please provide your organization’s comments on the proposed update to the penalty tolling process, as described in the straw proposal:

Please see the attached Comments from the Department of Market Monitoring.

5. Please provide your organization’s comments on the inaccurate meter data materiality threshold or waiver discussion, as described in the straw proposal:

Please see the attached Comments from the Department of Market Monitoring.

6. Please provide your organization’s comments on the proposed WEIM classification for this initiative, as described in the straw proposal

Please see the attached Comments from the Department of Market Monitoring.

7. Please provide additional comments on the PEDRIT straw proposal not mentioned above:

Please see the attached Comments from the Department of Market Monitoring.

1. Please provide a summary of your organization’s general comments on the PEDRIT straw proposal and presentation:

The City of Corona (“Corona”) supports the CAISO’s PEDRIT initiative and appreciates the opportunity to comment on the Straw Proposal. Corona supported the CAISO’s Rules of Conduct Tariff Amendment to redesign penalties for inaccurate meter data to the lower of: (a) 30% of the error value; or (b) $1,000/trading day. The penalties associated with inaccurate meter data have been shown to be disproportionate to the impact of those errors and Corona believes this was a first step towards ensuring that inaccurate meter data does not result in unjust and overly punitive penalties. However, Corona believes that, even with this change, there is still the possibility for penalties to be unjust and unreasonable. As such, the CAISO should also consider specific waivers under certain circumstances as noted below.

2. Please provide your organization’s comments on the proposed defining of submission requirements and penalty structure for DR monitoring data, as described in the straw proposal:

No comments at this time.

3. Please provide your organization’s comments on the proposed streamlining of the Rules of Conduct investigative process, as described in the straw proposal:

No comments at this time.

4. Please provide your organization’s comments on the proposed update to the penalty tolling process, as described in the straw proposal:

No comments at this time.

5. Please provide your organization’s comments on the inaccurate meter data materiality threshold or waiver discussion, as described in the straw proposal:

Corona supports continued evaluation and consideration of both a materiality threshold and a waiver process for first offenses under certain situations. Corona recognizes the importance of timely and accurate meter data, however penalties associated with inaccurate data should be appropriate in light of the impact of the error and the surrounding situation resulting in the inaccurate meter data.

Specifically, for first offenses Corona continues to recommend that the CAISO consider allowing waivers in the following specific circumstances:

1. The entity has self-reported.
   1. By providing waivers for a self-reported first offense, the CAISO encourages entities to self-report. When entities self-report and voluntarily correct errors, the market functions at a higher level and the data provided is more accurate.
2. The error is minor.
   1. An entity who has never had an offense and makes a minor error should not be penalized. The entity is unlikely to be a “bad actor” and should be given grace for a one-time offense. “Minor error” could be specifically defined to demonstrate to FERC that CAISO is not subjective in their decision-making. 

Similarly, Corona would support a materiality impact threshold for inaccurate meter data penalties.  A materiality impact threshold would, similarly, encourage self-reporting and voluntary correction of errors and would ensure that minor errors would not result in unjust and unreasonable penalties. Corona does not have a specific proposal at this time to evaluate a potential threshold but would support furthering this proposal through this initiative process.

6. Please provide your organization’s comments on the proposed WEIM classification for this initiative, as described in the straw proposal

No comments at this time.

7. Please provide additional comments on the PEDRIT straw proposal not mentioned above:

No comments at this time.

1. Please provide a summary of your organization’s general comments on the PEDRIT straw proposal and presentation:

 Idaho Power appreciates the CAISO’s continued efforts in revising its penalty structure to ensure that meter data penalties are not disproportionately high for small, long-term meter data inaccuracies as well as its effort to streamline the investigative and penalty tolling process. 

2. Please provide your organization’s comments on the proposed defining of submission requirements and penalty structure for DR monitoring data, as described in the straw proposal:

No comments at this time.

3. Please provide your organization’s comments on the proposed streamlining of the Rules of Conduct investigative process, as described in the straw proposal:

 Idaho Power is supportive of streamlining the investigative process with two notices rather than three. 

4. Please provide your organization’s comments on the proposed update to the penalty tolling process, as described in the straw proposal:

 Idaho Power is supportive of updating the penalty tolling process but asks that CAISO provide clarity on the expectations of the SC once it receives the results of review if it issues a violation and/or penalty, specifically the steps the SC must take in order to appeal to FERC.   For example, if the SC files a CIDI ticket after the first notice (the Notice of Review), does the SC need to file a new CIDI ticket after the Findings/Results of Review is issued?   If the answer is yes, Idaho Power believes the SC should be able to file in the same CIDI ticket as it initially filed in (Notice of Review) so that the entire history of the issue is in one CIDI ticket versus multiple CIDI tickets.  Another question is how does the SC provide the ISO with the FERC docket number outlining its appeal – is this done in a CIDI ticket, in an email to CAISO, or through another method?  This should be clarified in the proposal and draft tariff language.  Idaho Power also believes the tariff provisions streamlining the investigate procedure should be clearly tied to the penalty tolling provisions so that the steps the SC needs to take are abundantly clear.

5. Please provide your organization’s comments on the inaccurate meter data materiality threshold or waiver discussion, as described in the straw proposal:

 Idaho Power appreciates the CAISO’s consideration of Idaho Power’s suggestion that CAISO consider a materiality impact threshold for inaccurate meter data penalties.  As Idaho Power has consistently commented throughout the rules of conduct/penalty initiatives, with respect to WEIM entities, the rules of conduct penalty structure has a disproportionate impact on the WEIM entity as compared to the error’s impact on the market outside the WEIM entity’s BAA. Idaho Power recognizes the importance of ensuring that timely and accurate meter data is reported but maintains that some errors have such a de minimis impact on the market that they should be exempted from penalties. In addition, the labor it takes to process the penalty, review and research the potential penalty amount, and respond accordingly by both the CAISO and Market Participants can be greater than that of the penalty itself.   

Idaho Power believes the CAISO is in the best position to determine what type of materiality threshold is most fair and reasonable but recommends the threshold be applied daily consistent with the assessment of a penalty.   One recommended approach could be to set a daily error threshold based on a percentage of load (such as 1% for example).  For example, if the meter error was 1 MW for an hour and the participant had 2,000 MW of load, the total error amount would be .05% which is significantly lower than the 1% error threshold and would not be subject to the meter penalty for that day and no violation or penalty would be assessed.

As stated in our previous comments for the Rules of Conduct initiative, Idaho Power would request that CAISO review the current meter penalty structure to determine if the penalties assessed for WEIM entities should be the same as those in the CAISO BAA. We believe that a proper review of the penalty structure for WEIM and potential EDAM entities should be performed to determine the appropriateness for entities that are responsible for submitting accurate meter data on behalf of their BAA and are not in the CAISO BAA.

6. Please provide your organization’s comments on the proposed WEIM classification for this initiative, as described in the straw proposal

No comments at this time.

7. Please provide additional comments on the PEDRIT straw proposal not mentioned above:

 Idaho Power notes that the materiality threshold is not included in the Summary of Topics Table in the draft proposal. 

1. Please provide a summary of your organization’s general comments on the PEDRIT straw proposal and presentation:

2. Please provide your organization’s comments on the proposed defining of submission requirements and penalty structure for DR monitoring data, as described in the straw proposal:

3. Please provide your organization’s comments on the proposed streamlining of the Rules of Conduct investigative process, as described in the straw proposal:

4. Please provide your organization’s comments on the proposed update to the penalty tolling process, as described in the straw proposal:

5. Please provide your organization’s comments on the inaccurate meter data materiality threshold or waiver discussion, as described in the straw proposal:

NV Energy appreciates CAISO’s continuous effort to work with stakeholders on the Rules of Conduct section of the ISO tariff.  NV Energy supports the initial comments from Idaho Power and the City of Corona with regards to the creation of a materiality threshold or waiver for inaccurate meter data penalties. At this time, NV Energy does not have a specific proposal to offer for the creation of the threshold but is supportive of the overall concept.

6. Please provide your organization’s comments on the proposed WEIM classification for this initiative, as described in the straw proposal

7. Please provide additional comments on the PEDRIT straw proposal not mentioned above:

1. Please provide a summary of your organization’s general comments on the PEDRIT straw proposal and presentation:

PG&E appreciates the opportunity to provide comments on the PEDRIT Straw Proposal. PG&E provides comments on two items: 1) The inaccurate meter data materiality threshold or waiver discussion in Chapter seven of the PEDRIT straw proposal. 2) on the stakeholder request in Chapter 4 of the PEDRIT straw proposal to reduce the requirement for historical data for monitoring purposes from 90 days to 45 days.  Please find PG&E comments in responses to question number five and seven below.

2. Please provide your organization’s comments on the proposed defining of submission requirements and penalty structure for DR monitoring data, as described in the straw proposal:

3. Please provide your organization’s comments on the proposed streamlining of the Rules of Conduct investigative process, as described in the straw proposal:

4. Please provide your organization’s comments on the proposed update to the penalty tolling process, as described in the straw proposal:

5. Please provide your organization’s comments on the inaccurate meter data materiality threshold or waiver discussion, as described in the straw proposal:

PG&E submits this feedback regarding the inaccurate meter data materiality threshold or waiver discussion in Chapter seven of the PEDRIT straw proposal. 

PG&E supports the concept that a meter data inaccuracy below a certain percentage or megawatts (MW) value should not be considered a CAISO tariff violation. PG&E also supports the concept of waivers for meter data inaccuracies that are self-reported and/or minor.  PG&E looks forward to participating in further stakeholder engagements to develop specific metrics for these proposals. 

6. Please provide your organization’s comments on the proposed WEIM classification for this initiative, as described in the straw proposal

7. Please provide additional comments on the PEDRIT straw proposal not mentioned above:

PG&E submits this feedback per the stakeholder request in Chapter four of the PEDRIT straw proposal, which seeks to reduce the requirement for historical data for monitoring purposes from 90-days to 45-days. 

PG&E supports reducing the requirement of historical days of data so new customers with less than 90-days of historical data, but with sufficient historical data to calculate settlements, could be eligible for demand response participation sooner.  PG&E suggests the historical data requirement should be determined by the baseline methodology.  Per Section 4.13.4 of the CAISO tariff, the 10 in 10 Load Baseline Methodology requires up to 45-days of historical data to perform settlement quality meter data calculations, whereas the Weather Matching Methodology requires up to 90-days.  Matching the historical data requirement with the baseline methodology would provide sufficient data for monitoring while facilitating new customer participation in demand response.

1. Please provide a summary of your organization’s general comments on the PEDRIT straw proposal and presentation:

SCE appreciates CAISO providing the opportunity to comment on this initiative.  SCE comments are summarized as follows: 

• SCE opposes CAISO’s proposed penalty structure for submission requirements and DR monitoring data.  SCE believes the current process and penalty structure is sufficient and the terms CAISO is proposing are excessive. 

• SCE opposes the reduced time to respond and increased burden on scheduling coordinators as proposed in changing the Rules of Conduct (ROC) investigative process from a Three Letter Process to a Two Letter Process. Should a Two Letter Process be implemented SCE requests that the second letter should not be issued until CAISO and scheduling coordinator/market participant resolves the ROC event or if the scheduling coordinator/market participant is non-responsive. 

• SCE recommends CAISO reach out to resource owners with Participating Generator Agreements for additional feedback on the new changes for the ROC process. SCE believes it is inefficient to assign Scheduling Coordinators as the point-of-contact for ROC events and CAISO should contact the resource owner directly. 

• SCE supports CAISO’s inaccurate meter data materiality threshold proposal and looks forward to further discussions in future stakeholder meetings. 

Further details of SCE’s comments can be found under the following questions below. 

2. Please provide your organization’s comments on the proposed defining of submission requirements and penalty structure for DR monitoring data, as described in the straw proposal:

SCE opposes CAISO’s proposal to apply a $1,000 per trading day penalty for DR monitoring data submitted after T+52B and an additional $3,000 per trading day penalty for DR monitoring data missing past T+214B. SCE believes the CAISO Tariff already provides a sufficient submission requirement and penalty structure for DR monitoring data for “monitoring, compliance, and audit purposes”. 

Pursuant to Section 10.3.10.1¹, SCs are required, on a biennial basis, to audit and test the accuracy and integrity of the meter data used to establish performance evaluation methodologies or Demand Response Energy Measurements (DREM), which includes the DR monitoring data (e.g. BASE, CBL, TMNT). Under Section 37.6.3.2², failure to submit an audit report as required by Section 10.3.10.1 would result in penalties of $1000/day until the audit report is received by the CAISO. For all other violations³ of this rule the sanctions shall be as follows: for the first violation in a rolling twelve (12) month period, $1000/day; for the second violation in a rolling twelve (12) month period, $2000/day; for the third and subsequent violations in a rolling twelve (12) month period, $5000/day. 

SCE respectfully requests CAISO not move forward with the straw proposal’s penalty structure as it would create excessive penalties for DR monitoring data submissions that are already subject to CAISO Tariff auditing and testing requirements. If CAISO does decide to keep this proposal in the revised straw proposal, SCE requests CAISO add a detailed explanation of the market ramifications of staying with the current rules and how the DR monitoring data will be used differently under this new proposal.

¹ California Independent System Operator Corporation, Fifth Replacement FERC Electric Tariff, Effective as of April 1, 2024. See Section 10.3.10.1 Audit and Testing by Scheduling Coordinator.

² See Section 37.6.3.2 Audit Materials, Sanctions

³ A violation is defined as each failure to provide all information required under the audit or test, from the date that the information was due until all required information is received by the CAISO. 

3. Please provide your organization’s comments on the proposed streamlining of the Rules of Conduct investigative process, as described in the straw proposal:

SCE opposes the reduced time to respond in moving from a Three Letter Process to a Two Letter Process 

SCE supports CAISO’s efforts to streamline the Rules of Conduct (ROC) investigative process however, CAISO should not do so by minimizing the opportunity for Scheduling Coordinators (SC)/market participants (MP) to resolve an ROC event. SC/MPs should still be given the same opportunity and time to make corrective actions and/or provide information or evidence to resolve an ROC event before a penalty is assessed. CAISO’s straw proposal eliminates the third letter, essentially consolidating the second and third letter of the Three Letter Process and eliminates another 30-day opportunity for SC/MPs to respond. This would mean that a SC/MP’s only remedy after 30 days would be an appeal to FERC, which is unusually fast and will likely less efficient than the current process for both SC/MP’s and the CAISO.  If CAISO implements a two-letter process CAISO should continue to allow at least 30 days for SC/MPs to respond to the first letter. Upon receipt of the SC/MP’s response CAISO should provide adequate time after receipt of response for the SC/MP to resolve the ROC where both CAISO and SC/MP come to a resolution on the ROC event. So long as the SC/MP continues to show due diligence in providing information to resolve the ROC event, CAISO should not issue the second and final letter until a resolution is reached between CAISO and the SC/MP.  If 30 days after the last communication from CAISO the SC/MP is non-responsive, or if the ROC event has been resolved between the SC/MP and CAISO, then CAISO issues the Results of Review or the second and final letter. 

SCE requests CAISO seek additional feedback from market participants with CAISO Participating Generator Agreements (PGA) 

The proposed Two Letter Process will have significant impact to both Scheduling Coordinator and resource owners.  SCE recommends that CAISO reach out to resource owners with PGAs for additional feedback.  SCE believes that many resource owners might be unaware of this initiative and its proposed changes, thus emphasizing the need for their feedback is highly important.

SCE opposes the Scheduling Coordinator be the point of contact for ROC events 

SCE does not agree that the SC should serve as the point of contact for ROC events as described in the straw proposal. Having the SC as the investigative point of contact for ROC events creates unnecessary inefficiencies. To have the SC receive CAISO notifications on ROC events and serve as the investigative point of contact is unwarranted and unnecessary because the SC has does not have visibility to the ROC event nor has a role in taking corrective action or able to provide information on the ROC event. SCE recommends that CAISO only notify the resource or resource owner directly of ROC events and provide them an opportunity for a direct response to CAISO via the CIDI process as the resource or resource owner are the ones that can provide information on the ROC event, not the SC. Having the SC serve as the investigative point of contact is superfluous and inefficient and should not be required.

4. Please provide your organization’s comments on the proposed update to the penalty tolling process, as described in the straw proposal:

SCE does not have any comments on the penalty tolling process at this time.

5. Please provide your organization’s comments on the inaccurate meter data materiality threshold or waiver discussion, as described in the straw proposal:

SCE supports the idea of an inaccurate meter data materiality threshold and looks forward to more discussions around what a reasonable threshold should be.

6. Please provide your organization’s comments on the proposed WEIM classification for this initiative, as described in the straw proposal

SCE with CAISO on the proposed WEIM classification for this initiative. 

7. Please provide additional comments on the PEDRIT straw proposal not mentioned above:

As described above in #3, having the SC serve as the investigative point of contact (POC) is not only inefficient but problematic because the SC is not in a position to communicate or take corrective action on ROC events. Resource Owners (RO) or MPs have established contracts or Participating Generator Agreements (PGA) with the CAISO for their market participation which include requisites to maintain their operations and facilities and responsibilities to communicate with CAISO among other things.  Moreover, if the SC delays to respond appropriately to the investigative process resulting in a penalty, the existing contract between the SC and RO does not include terms for settlement of the penalty payment. SCE recommends the CAISO assess any ROC penalty payment directly to the RO, not the SC, and not add unnecessary complexity to the process by assigning SCs as the investigative POC. The resolution of ROC events shall remain between CAISO and the resource or plant owner consistent with executed PGAs.