Comments on Analysis and May 3 meeting discussion

1. Please provide your organization's overall comments on the WEIM RSE Enhancements Analysis.

PG&E appreciates the effort that went into these[1]^,[2] and prior analyses[3]^,[4] and offers the following comments:

1. The analysis shows that the California Balancing Area is not leaning inappropriately on the WEIM. This analysis demonstrates that during high-load (‘critical’) hours, the CAISO is exporting more through the WEIM than it is importing. This indicates that the CAISO Balancing Area is not inappropriately leaning on the WEIM.  The policy phase of this initiative should address any asymmetric rules that were motivated by the notion that the CAISO Balancing Area is inappropriately leaning on the WEIM.

2. The analysis shows that the California Balancing Area is firming up energy for free and risking additional RSE failures. The data show that there is a persistent under-delivery of WEIM transfers into CAISO when comparing the advisory (or expected) import transfers during the Hour-Ahead Scheduling Process (HASP) with the real-time dispatch (RTD). The HASP is taking non-firm (expected) imported energy and using it as the basis to support firm exports in real-time. This puts the California Balancing Area at a higher risk of failing the WEIM Resource Sufficiency Evaluation. The policy phase of this initiative should address the appropriateness of the CAISO providing this firming service and address how it disadvantages the CAISO Balancing Area.

[1] Analysis Report - Intertie Deviation - WEIM Resource Sufficiency Evaluation Enhancements Final Analysis 04/26/2022 http://www.caiso.com/InitiativeDocuments/AnalysisReport-IntertieDeviation-WEIMResourceSufficiencyEvaluationEnhancements-FinalAnalysis.pdf

[2] Analysis Report - Interaction of Hourly Intertie Schedules and Transfers - WEIM Resource Sufficiency Evaluation Enhancements 04/26/2022 http://www.caiso.com/InitiativeDocuments/AnalysisReport-InteractionofHourlyIntertieSchedulesandTransfers-WEIMResourceSufficiencyEvaluationEnhancements.pdf

[3] Analysis Report - Load Conformance Impact on Resource Sufficiency Evaluation 03/25/2022 http://www.caiso.com/InitiativeDocuments/Analysis-LoadConformanceImpactonResourceSufficiencyEvaluation.pdf

[4] Analysis Report - Flexible Ramping Uncertainty Calculation in the Western Energy Imbalance Market 03/25/2022 http://www.caiso.com/InitiativeDocuments/Analysis-FlexibleRampingUncertaintyCalculationintheWesternEnergyImbalanceMarket.pdf

[5] See May 10^th presentation by the CAISO. http://www.caiso.com/InitiativeDocuments/Presentation-FlexibleRampingProductRefinementsImpacts-WEIMResourceSufficiencyEvaluation-May102022.pdf

2. Please provide your organization's comments on the Interaction of Hourly Intertie Schedules and WEIM Transfers.

The analysis shows that the California Balancing Area is not leaning inappropriately on the WEIM. This analysis shows that during high-load (‘critical’) hours, the CAISO is exporting more through the WEIM than it is importing (as shown in Figure 1).

Figure 1. WEIM transfers in RTD came in lower than HASP transfers during peak hours in critical summer days, as illustrated by the illustration of WEIM transfers to/from CAISO on July 7^th to 12^th of 2021. Slide 10 of the CAISO presentation on May 3^rd, 2022.

This demonstrates that the CAISO Balancing Area is not inappropriately leaning on the WEIM. This was also supported by the analysis by the MSC and CAISO with respect to load conformance resulting in leaning.[1]

The policy phase of this initiative should address any asymmetric rules that were motivated by this false impression that the CAISO Balancing Area is inappropriately leaning on the WEIM.

The analysis shows that the California Balancing Area is firming up energy for free and risking additional RSE failures. The data show that there is a persistent under-delivery of WEIM transfers into CAISO when comparing the advisory (or expected) import transfers during the Hour-Ahead Scheduling Process (HASP) with the real-time dispatch (RTD). The HASP is taking non-firm advisory WEIM imports and allowing them to support firm exports in real-time.

It is worth noting here that, based on discussions in the Transmission Service and Market Scheduling Prioritization initiative[2], no other WEIM Balancing Area would schedule firm exports unless there was (i) an accompanying firm import or a firm power contract; and (ii) a contract for firm transmission service. The CAISO Balancing Area is providing a firm export without either of those two.

This is illustrated by the counter-factual HASP analysis performed by CAISO. The counter-factual analysis shows what the CAISO software could do when facing unrealized transfers: i) dispatching internal generation, ii) paying for additional imports, or iii) cutting exports. However, it should be noted that CAISO considers the HASP exports firm and currently only relies on the first two tools: increasing internal generation or increasing imports, both of which come at a cost to CAISO load.

Not only is the CAISO paying to support exports based on unrealized transfers, but the unrealized transfers put the California Balancing Area at a higher risk of failing the WEIM Resource Sufficiency Evaluation. This has been noted before. The CAISO has found that “the interaction between HASP and the RSE during stressed system condition already significantly disadvantages the CAISO in passing the RSE[3]…the HASP process has the potential to award block hourly exports from the CAISO based on the assumed availability of EIM transfers; to the extent this occurs, this adds to the CAISO’s capacity test obligations while not adding to its available supply.”[4]  Further, the unrealized transfers may actually reduce the supply available to CAISO balancing area to meet its RSE as the CAISO market software will dispatch internal generation is backfill the unrealized transfers.

The MSC and CAISO have already identified that the misalignment between the RSE and the HASP process can cause the CAISO BAA to fail the RSE test inappropriately. This issue should be addressed urgently and does not require additional analysis to diagnose it. The policy phase of this initiative should address the appropriateness of the CAISO providing this firming service and address how it disadvantages the CAISO Balancing Area.

[1] The MSC’s opinion concluded there is “no leaning on the rest of the system as a result of using load conformance adjustments in HASP and RTPD; rather, the CAISO loads buy power at high prices in the FMM and sells it back in RTD.  This should be a concern to CAISO ratepayers, but it benefits non-CAISO EIM entities who export power to the CAISO in the FMM.”

See “Opinion on Energy Imbalance Market (EIM) Resource Sufficiency Evaluation Enhancements.” Members of the Market Surveillance Committee of the California ISO. February 2, 2022.  Pg. 20 at http://www.caiso.com/Documents/MSCFinalOpiniononEIMResourceSufficiencyEvaluationEnhancements-Phase1.pdf 

[2] To our knowledge, all non-CAISO EIM entities require firm transmission service in order for a transaction to be considered firm. Salt River Project, Bonneville Power Administration, and Idaho Power Company all gave presentations on how one obtains firm transmission service on their networks. See Transmission Service and Market Schedule Prioritization initiative Phase 2: https://stakeholdercenter.caiso.com/StakeholderInitiatives/Transmission-service-and-market-scheduling-priorities

[3] EIM Resource Sufficiency Evaluation Enhancements Phase 1.  Revised Draft Final Proposal. December 16, 2021. Pg. 15 at http://www.caiso.com/InitiativeDocuments/RevisedDraftFinalProposal-EIMResourceSufficiencyEvaluationEnhancements.pdf

[4]  Id. pg. 14

3. Please provide your organization's comments on the Intertie Deviation Adder.

PG&E appreciates the time and effort that went into this analysis, and we are looking forward to further discussion on the policy implications of these data.

1. Please provide your organization's overall comments on the WEIM RSE Enhancements Analysis.

Please see Powerex’s comments available at CAISO May 3 EIM RSE Enhancements Phase 1B Analysis Comments

2. Please provide your organization's comments on the Interaction of Hourly Intertie Schedules and WEIM Transfers.

Please see Powerex’s comments available at CAISO May 3 EIM RSE Enhancements Phase 1B Analysis Comments

3. Please provide your organization's comments on the Intertie Deviation Adder.

Please see Powerex’s comments available at CAISO May 3 EIM RSE Enhancements Phase 1B Analysis Comments

1. Please provide your organization's overall comments on the WEIM RSE Enhancements Analysis.

The Six Cities appreciate the CAISO’s efforts in preparing and presenting additional analyses of the interactions among imports and exports to and from the CAISO BAA and WEIM transfers and of intertie deviations.  As discussed in greater detail in response to Item 2 below, the Six Cities are extremely concerned that interactions among imports and exports clearing in the HASP and WEIM transfers are resulting in increased reliability risks to the CAISO BAA as well as potential unreasonable incremental costs.  With respect to intertie deviations, it would appear that the absence of trends or correlations in intertie deviations makes it difficult to design a deviation adder that would enhance the accuracy of uncertainty calculations.

2. Please provide your organization's comments on the Interaction of Hourly Intertie Schedules and WEIM Transfers.

The CAISO’s analysis of interactions among imports and exports clearing in HASP and WEIM transfers supports a conclusion that those interactions produce increased risks to reliability of the CAISO BAA and have the potential to impose unreasonable incremental costs on CAISO customers.  The analysis and the discussion in the May 3^rd web meeting confirmed that a significant volume of imports cleared in the HASP are not realized in real-time, and that this creates challenges to the CAISO’s ability to maintain power balance for the BAA.  The representative from Powerex at the May 3^rd meeting described the fundamental concern as the HASP optimization potentially over-extending the CAISO prior to the Real-Time market.

There are at least two types of adverse impacts on reliability.  First, the advisory import schedules in HASP (which are non-binding) can support clearing of export schedules that are binding.  This leaves the CAISO in the position of serving increased demand with resources that may not materialize. 

A second adverse impact on reliability is that the CAISO BAA may fail the WEIM Resource Sufficiency Evaluation because the test includes exports cleared in HASP as part of the demand the CAISO must demonstrate ability to meet but excludes advisory WEIM transfers that supported those exports in the HASP optimization.  When the CAISO BAA fails the RSE, its import transfers through the WEIM are limited, resulting in increased reliability challenges and reduced options for meeting them.  In addition, the CAISO may incur higher prices for incremental dispatch of internal resources and capacity costs for out-of-market dispatches.   

The analysis and discussion at the May 3^rd meeting highlight the need for the CAISO to attach high priority to addressing these concerns as promptly as possible and certainly prior to implementing further revisions to the WEIM RSE or the Extended Day-Ahead Market.

3. Please provide your organization's comments on the Intertie Deviation Adder.

Overall, the analysis of intertie deviations did not identify any trends in such deviations or correlations with overall market conditions or other types of uncertainties.  Given the apparent unpredictability of intertie deviations, it seems unlikely that an intertie deviation adder would contribute meaningfully to improving the accuracy of uncertainty requirements calculations.

1. Please provide your organization's overall comments on the WEIM RSE Enhancements Analysis.

SCE is concerned that CAISO HASP intertie transactions are scheduled as binding while WEIM transfers from HASP are advisory in nature.   Since WEIM Transfers are advisory, it creates a huge disservice to the CAISO BAA.  The “Interaction of Hourly Intertie Schedules and WEIM transfers” analysis paper shows that the WEIM Advisory imports are consistently undelivered leaving the CAISO BAA with a larger than normal export (that burdens capacity within the CAISO to support the exports that should be backed by imports). 

Moreover, the interaction of HASP , T-40 tagging the RSE test create a situation that the CAISO may fail the RSE because of parties failing to tag, while still supporting exports.   This is untenable and needs to be addressed.  CAISO customers should not fail the RSE test because parties fail to tag.  And the CAISO should not be obligated to support exports that are depending on advisory HASP imports.

At a minimum, the CAISO needs to address the RSE test to prevent CA load from being penalized from non-deliveries.

2. Please provide your organization's comments on the Interaction of Hourly Intertie Schedules and WEIM Transfers.

3. Please provide your organization's comments on the Intertie Deviation Adder.