Comments on March 13, 2024 working group

1. Provide a summary of your organization’s comments on the 3/13 RAMPD working group discussion:

Alliance for Retail Energy Markets (“AReM”) does not oppose the proposed edits to Problem Statements 1 and 2 and looks forward to further discussion of Problem Statement 3 at the next working group meeting. AReM reiterates its support for including within the scope of Problem Statement 3 the elimination of the current discrepancy between the California Public Utilities Commission (“CPUC”) and the California Independent System Operation Corporation (“CAISO”) regarding treatment of demand response (“DR”) resource credits. 

2. Provide your organization’s feedback on the outage and substitution topic, including the discussion on background, mechanics, analysis, and planned-to-forced outage and PRR 1122. Please also provide any suggestions for analysis that you believe would help refine the problem statement, recommendations, or prioritization.

AReM offers no comments on this topic at this time. 

3. Provide your organization’s feedback on the DMM presentation on planned-to-forced outages:

AReM offers no comments on this topic at this time. 

4. Provide your organization’s feedback on the panel discussion on outage and substitution and performance availability incentives:

AReM offers no comments on this topic at this time. 

5. Provide your organization’s comments on Problem Statement 2: Applicable Sub-Issues: Planned Outage Substitution: Current rules requiring substitute capacity for all planned outages on RA capacity were designed assuming there was excess capacity available at commercially reasonable prices and may require revisiting. As a result, today planned outages often cannot find substitution which risks the health of the resource if this results in potential delays in performing maintenance. In addition, current substitution rules for planned outages may be overly burdensome.

Do you agree that the problem statement/sub-issue is ready to move forward to policy development? If not, please describe why the problem statement is incomplete or inaccurate, and if applicable your suggested edits and additional information and analysis required to move forward. (Note: In the policy develop phase for all the items included in these questions, CAISO staff recognizes that additional analysis and refinement of the problem statements/recommendations/goals will likely take place.)

AReM does not oppose the proposed problem statement language. It also does not oppose allowing this sub-issue to move forward to policy development. 

6. Provide your organization’s comments on the recommendations for Problem Statement 2: Applicable Sub-Issues: Planned Outage Substitution: Through a stakeholder policy development process the ISO should consider the following options as a part of a holistic solution to outage and substitution issues: 1) Address outages up front (PRM, Resource counting (e.g., UCAP)), 2) Replace RASC with a pool of RA resources for substitution, and 3) Portfolio assessment with backstop.

Do you agree that the recommendation is ready to move forward to policy development? If not, please describe why the recommendation is incomplete or inaccurate, and provide your suggested edits and additional information and analysis required to move forward.

AReM does not oppose the proposed problem statement language. It also does not oppose allowing this sub-issue to move forward to policy development. 

AReM is concerned about the need for CAISO and local regulatory authorities (“LRAs”) to partner to implement UCAP given the overlapping jurisdiction over necessary changes to make such an implementation successful. Although this is not mentioned in the text above, it is adequately addressed in the language provided under items 11 and 12 below. 

7. Provide your organization’s comments on the edits to Problem Statement 1: • Updating the CAISO’s Default Planning Reserve Margin: The CAISO’s default PRM is outdated and has not kept pace with changes in the RA landscape resource mix and reliability needs. • Updating the CAISO’s Default Counting Rules: The CAISO’s default counting rules have not kept pace with changes in the RA resource mix and reliability needs.

Do you agree that the problem statement/sub-issue is ready to move forward? If not, please describe why the problem statement is incomplete or inaccurate, and if applicable your suggested edits and additional information and analysis required to move forward.

AReM does not oppose the proposed problem statement language. It also does not oppose allowing this sub-issue to move forward to policy development.

8. Provide your organization’s comments on the recommendations for Problem Statement 1: Updating the CAISO’s Default Planning Reserve Margin: The ISO’s default PRM and default counting rules should meet a 0.1 LOLE at the ISO BAA level

Do you agree that the recommendation is ready to move forward? If not, please describe why the recommendation is incomplete or inaccurate, and provide your suggested edits and additional information and analysis required to move forward.

AReM does not oppose the proposed problem statement language. It also does not oppose allowing this sub-issue to move forward to policy development.

9. Provide your organization’s comments on the edits to Problem Statement 2: Applicable Sub-Issues: Availability and Performance Incentives: In light of a tight RA market, high RA prices, and market incentives -- the current CAISO mechanism for incentivizing capacity to be available, the Resource Adequacy Availability Incentive Mechanism (RAAIM), may be: insufficient and incentivize less reliable generation to be contracted, discourage showing of all RA resources, not reflect/incentivize real time performance/availability and/or actions to increase availability particularly during critical periods. Additionally, it creates operational backstop challenges for the ISO resulting in reliability risks.

Do you agree that the problem statement/sub-issue is ready to move forward? If not, please describe why the problem statement is incomplete or inaccurate, and if applicable your suggested edits and additional information and analysis required to move forward.

AReM does not oppose the proposed problem statement language. It also does not oppose allowing this sub-issue to move forward to policy development.

10. Provide your organization’s comments on the recommendations for Problem Statement 2: Applicable Sub-Issues: Availability and Performance Incentives: RAAIM should be assessed to see if it is meeting its intended objectives, if its objectives should be revisited, or if a new mechanism is needed to incent availability and/or performance. The need for either RAAIM reform or RAAIM elimination as well as any exploration of a new availability and performance mechanism should be done in concert/consideration of any counting rule changes to encourage all RA-eligible resources to be shown.

Do you agree that the recommendation is ready to move forward? If not, please describe why the recommendation is incomplete or inaccurate, and provide your suggested edits and additional information and analysis required to move forward.

AReM does not oppose the proposed problem statement language. It also does not oppose allowing this sub-issue to move forward to policy development.

11. Provide your organization’s comments on the edits to Problem Statement 2: Applicable Sub-Issues: Resource Accreditation: Current PRMs and counting rules may not accurately reflect forced outage rates or performance and availability which has the potential to result in a less efficient system. In light of changing regulatory structures at the CPUC (including the scoping of UCAP), the ISO has an opportunity to partner with the CPUC, other LRAs and stakeholders to create a more effective counting design and eliminate/redefine availability and performance incentives.

AReM does not oppose the proposed problem statement language. It also does not oppose allowing this sub-issue to move forward to policy development.

12. Provide your organization’s comments on the recommendations for Problem Statement 2: Applicable Sub-Issues: Resource Accreditation: • The ISO should prioritize data transparency and reporting on forced outage rates and resource availability required to calculate PRMs and resource accreditation.• The ISO should explore an updated default PRM and counting to reflect reliability needs and resource contribution to reliability in coordination with the CPUC, CEC, other LRAS and stakeholders (see edits to PS 1) • The ISO should explore a UCAP mechanism to reflect resource availability, in collaboration with the CPUC and with other LRAs, seeking alignment between all resources and LRAs within the ISO BAA. • The ISO should explore resource counting or tariff changes that directly measures/limits accreditation (e.g. ambient derates).

Do you agree that the recommendation is ready to move forward? If not, please describe why the recommendation is incomplete or inaccurate, and provide your suggested edits and additional information and analysis required to move forward.

AReM does not oppose the proposed problem statement language. It also does not oppose allowing this sub-issue to move forward to policy development.

13. Please provide your organizations recommendation of grouping and/or sequencing of the issues identified above.

AReM makes no recommendation about how to best group or sequence the issues identified. AReM only recommends that whatever sequencing is decided, it be clearly communicated to stakeholders such that AReM can best decide how to participate in future working group meetings.

14. Please provide any additional comments not captured above.

AReM is pleased to see progress on Problem Statements 1 and 2 and looks forward to further discussion of Problem Statement 3 at the next working group meeting. As discussed more thoroughly in its previous written comments, AReM supports including within the scope of Problem Statement 3 the elimination of the current discrepancy between the CPUC and CAISO regarding treatment of DR resource credits. Doing so is necessary to prevent the occurrence of load-serving entities being assigned cost responsibility for CAISO capacity procurement mechanism events despite being compliant with LRA requirements.

1. Provide a summary of your organization’s comments on the 3/13 RAMPD working group discussion:

The California Community Choice Association (CalCCA) appreciates the opportunity to comment on the March 13, 2024, Resource Adequacy Modeling and Program Design (RAMPD) Working Group (Working Group). The Working Group focused primarily on the planned outage substitution process, which was refined in 2021 in an expedited manner in response to the August 2020 load-shedding events. The refinements made in 2021 aimed to ensure planned outages can be taken as scheduled and that planned outages taken on Resource Adequacy (RA) resources are fully substituted such that the system has access to the full amount of RA capacity required to operate reliably.

Generators and the CAISO have expressed concerns with this process, specifically around the challenge generators face in finding available substitute capacity. These concerns are a function of the tight capacity market which load-serving entities (LSE) are procuring under to meet their obligations and generators are procuring under when they need to substitute an RA resource on planned outage. The California Independent System Operator Corporation (CAISO) should avoid proposals that would simply shift the obligation to provide substitute capacity from the generator LSEs simply because substitute capacity is expensive and hard to find. Instead, the CAISO should (1) seek solutions that incentivize taking planned outages at optimal times when RA requirements are not as high and substitute capacity is more readily available, and (2) allow the availability of substitute capacity to be more easily known by generators who seek it.

The Working Group also discussed revisions to the problem statements and recommended potential solutions to explore in the policy development phase. At this stage in the Working Group process, the CAISO should transition most of this initiative’s scope to the policy development phase, as recommended by the CAISO. Remaining in the problem statement phase for too long risks the Working Group stalling in an endless loop of discussions around problems without getting to solutions. Ample time has been spent discussing the problems associated with problem statements 1 and 2 such that these scope items can move forward to the policy development phase. Advancing straw proposals for stakeholders to react to will move the process forward in a productive manner that allows for iterative steps toward solutions.

2. Provide your organization’s feedback on the outage and substitution topic, including the discussion on background, mechanics, analysis, and planned-to-forced outage and PRR 1122. Please also provide any suggestions for analysis that you believe would help refine the problem statement, recommendations, or prioritization.

The outage and substitution topic began with a presentation on the current rules for planned and forced outages. As the CAISO notes, all planned outages on RA capacity require substitution unless they are off-peak opportunity outages or outages caused by transmission. Forced outages “have an opportunity” to submit substitute capacity to avoid Resource Adequacy Availability Incentive Mechanism (RAAIM) penalties priced at 60 percent of the Capacity Procurement Mechanism soft-offer cap. The CAISO notes that these processes can cause operational issues, including generator challenges finding substitute RA capacity which impacts their ability to take maintenance outages, and an increase in forced outages which could create reliability challenges for the CAISO.

To address these challenges, the CAISO should prioritize adopting a unforced capacity (UCAP) counting methodology. The interactions between planned outages and forced outages require a comprehensive solution that creates the proper incentives to conduct maintenance when necessary and be available when needed to support system reliability. UCAP does this by creating a meaningful disincentive to letting a resource get to the point that it requires a lot of forced outages. UCAP coupled with planned outage rules that incentivize taking maintenance outages at the right times (when not providing RA or when the system has excess capacity) is the right approach to ensuring resource availability.

Stakeholders appear to have an interest in revising the planned outage process in addition to developing UCAP and revising the forced outage process. As it considers potential solutions to the challenges created by the planned outage process, the CAISO should take care to maintain the incentives generators have to take planned outages when it is best for system reliability. The CAISO adopted its existing planned outage rules with the following logic:

Ultimately, providing RA is a commitment to be available to the CAISO. If a resource is unable to do so, it should have an obligation to find another resource that will, or not be shown as RA in that month. If, as many stakeholders have pointed out, there is abundant capacity available during off-peak months, then finding substitute capacity should be fairly straightforward and relatively inexpensive. Similarly, the lack of available substitute capacity suggests that the resource’s SC either submitted the request after other resources had submitted planned outages or that forecasted load conditions dictate that the resource is needed and should try to schedule the outage at a different time.[1]

Since the planned outage substitution rules were adopted, it has become clear that there is no longer an abundance of capacity, which has created challenges for LSEs procuring for their RA obligations and for generators procuring for substitute capacity. The CAISO’s logic for adopting its planned outage substitution requirements remains sound under these conditions. If capacity conditions dictate that the resource should schedule its outage at a different time, it should do so when there is sufficient excess RA capacity to find substitute capacity or refrain from selling RA in the month(s) it performs planned maintenance.

[1] https://www.caiso.com/InitiativeDocuments/ResourceAdequacyEnhancements-Phase1FinalProposal.pdf at 12-13.

3. Provide your organization’s feedback on the DMM presentation on planned-to-forced outages:

The CAISO and Department of Market Monitoring’s (DMM) presentations on planned-to-forced outages highlight yet another reason for the CAISO to move to a UCAP counting methodology to account for forced outages. The RAAIM provides insufficient disincentive for generators to submit denied planned outages as forced outages. While planned outages almost always require substitution, forced outages do not. RAAIM was intended to incentivize forced outage substitution, but under current RA prices, it is largely ineffective. Because the RAAIM price is so low, if a resource goes from planned to forced, there is little to no incentive for a resource to submit substitute capacity. UCAP would create the right incentives to take planned outages to conduct maintenance in the first place so generators can avoid forced outages entirely to ensure their UCAP value remains high.

DMM’s presentation on planned-to-forced outages also highlights the need for enhancements to the outage definitions. As stated by DMM, the current definition of Forced Outage focuses on the timing of submission and does not convey information about the urgency of necessary repairs. CalCCA agrees with DMM’s recommendation to enhance outage reporting to allow for an indication of outages that are immediately necessary versus those that are not. Consistent with the Sixth Revised Proposal[1] in the Resource Adequacy Enhancements initiative, the CAISO should consider adjusting the CAISO’s outage definitions to align with those used by the CAISO in its Reliability Coordinator function. The definitions include, in addition to planned and forced outages, urgent outages and opportunity outages.

• Urgent Outage - Facility/equipment that is known to be operable, yet carries an increased risk of a Forced outage occurring. Facility/equipment remains in service until personnel, equipment, and/or system conditions allow the outage to occur.
• Opportunity Outage – A Facility/equipment outage that can be taken due to a change in system conditions, weather, or availability of field personnel. Opportunity outages did not meet the short-range window requirements

Under a UCAP methodology, forced and urgent outages would impact a resource’s UCAP value, while planned and opportunity outages would not.

[1]            https://www.caiso.com/InitiativeDocuments/DraftFinalProposal-SixthRevisedStrawProposal-ResourceAdequacyEnhancements.pdf.

4. Provide your organization’s feedback on the panel discussion on outage and substitution and performance availability incentives:

CalCCA appreciates the creative solutions put forth by the panelists to move the discussion on the planned outage process forward. When evaluating potential solutions, the CAISO and stakeholders should focus on those that provide the right incentives for resources to conduct planned maintenance when they are not providing RA capacity or when substitute capacity is readily available, like during the shoulder months when RA requirements are much lower. The CAISO and stakeholders should avoid solutions that simply shift the substitution obligation from the generator to the LSE, as such proposals do not create the right incentives for maintenance to be conducted in a manner that best benefits system reliability. For these reasons, the CAISO should not adopt Middle River Power LLC’s suggestions two (move from a monthly to an annual RA program) and four (include planned outages in the PRM).

In addition, CalCCA is concerned that options two and four would further exacerbate challenges LSEs face procuring capacity in an already tight RA market. Under option two, LSEs would potentially lose access to hydro and imports, two important sources of RA capacity that typically make themselves available between the year-ahead and month-ahead showings once their availability is better known. Under an annual RA program, suppliers may be less willing to sell capacity that they are not yet certain will be available because it would put them at risk of needing to find substitute capacity. Allowing suppliers to sell RA capacity between the year-ahead and month-ahead allows them to offer more supply to LSEs than they would have been able to before they had certainty about their availability for the summer months. Increasing the Planning Reserve Margin (PRM) to account for planned outages, removes the incentive for generators to take planned outages at times that minimize the impact on system reliability. Instead, it would create a generic buffer that adds additional demand to an RA capacity market that is already scarce.  This is the same problem that generators state they face (lack of substitute capacity) that would simply be shifted from the entity that can control the timing of a planned outage, the generator, to an entity that cannot, the LSE. Finally, moving to an annual RA program or adjusting the PRM to account for planned outages is not a decision the CAISO can unilaterally make. They would require collaboration and agreement by the Local Regulatory Authorities (LRA) who administer RA programs across the CAISO balancing authority.

The CAISO could further explore Middle River Power LLC’s suggestions one and three. These options retain the responsibility for the generator to find substitute capacity when it takes a planned outage while providing RA, while enhancing the ability for generators to find and secure substitute capacity. CalCCA would also be open to further discussing the suggestion put forth by the City of Anaheim, subject to additional detail and clarification. As CalCCA understands the suggestion, it would allow LSEs to voluntarily show excess RA so that some of their RA resources could take planned outages without substitution as long as the rest of their RA resources fully cover their requirement.

5. Provide your organization’s comments on Problem Statement 2: Applicable Sub-Issues: Planned Outage Substitution: Current rules requiring substitute capacity for all planned outages on RA capacity were designed assuming there was excess capacity available at commercially reasonable prices and may require revisiting. As a result, today planned outages often cannot find substitution which risks the health of the resource if this results in potential delays in performing maintenance. In addition, current substitution rules for planned outages may be overly burdensome.

Do you agree that the problem statement/sub-issue is ready to move forward to policy development? If not, please describe why the problem statement is incomplete or inaccurate, and if applicable your suggested edits and additional information and analysis required to move forward. (Note: In the policy develop phase for all the items included in these questions, CAISO staff recognizes that additional analysis and refinement of the problem statements/recommendations/goals will likely take place.)

CalCCA agrees with the CAISO’s proposed path forward, in which the following topics would move on to the policy development phase:

• Modeling
• Default PRM
• Default Counting
• Exploration of UCAP
• Availability and Incentive Mechanisms
• Outage and Substitution
• Tangential Extended Day-Ahead Market (EDAM) Resource Sufficiency Evaluation (RSE) Issues

The following topics would remain in the working group phase:

• Backstop
• Requirements for RA Capacity (e.g., energy sufficiency, Flex RA)
• Continued Interoperability: Slice-of-Day/Western Resource Adequacy Program

This path forward advances issues that have received significant stakeholder discussion. Stakeholders have a good understanding of the issues at this point and can provide productive feedback to straw proposals put forth by the CAISO. While CalCCA may disagree with some specific framings of the problem statements (e.g., the framing of the planned outage process as overly burdensome) and potential recommendations outlined by the CAISO (e.g., addressing outages up front in the PRM), CalCCA generally agrees that the CAISO has captured the major challenges with its RA program design.

6. Provide your organization’s comments on the recommendations for Problem Statement 2: Applicable Sub-Issues: Planned Outage Substitution: Through a stakeholder policy development process the ISO should consider the following options as a part of a holistic solution to outage and substitution issues: 1) Address outages up front (PRM, Resource counting (e.g., UCAP)), 2) Replace RASC with a pool of RA resources for substitution, and 3) Portfolio assessment with backstop.

Do you agree that the recommendation is ready to move forward to policy development? If not, please describe why the recommendation is incomplete or inaccurate, and provide your suggested edits and additional information and analysis required to move forward.

See response to question 5. 

7. Provide your organization’s comments on the edits to Problem Statement 1: • Updating the CAISO’s Default Planning Reserve Margin: The CAISO’s default PRM is outdated and has not kept pace with changes in the RA landscape resource mix and reliability needs. • Updating the CAISO’s Default Counting Rules: The CAISO’s default counting rules have not kept pace with changes in the RA resource mix and reliability needs.

Do you agree that the problem statement/sub-issue is ready to move forward? If not, please describe why the problem statement is incomplete or inaccurate, and if applicable your suggested edits and additional information and analysis required to move forward.

See response to question 5. 

8. Provide your organization’s comments on the recommendations for Problem Statement 1: Updating the CAISO’s Default Planning Reserve Margin: The ISO’s default PRM and default counting rules should meet a 0.1 LOLE at the ISO BAA level

Do you agree that the recommendation is ready to move forward? If not, please describe why the recommendation is incomplete or inaccurate, and provide your suggested edits and additional information and analysis required to move forward.

See response to question 5. 

9. Provide your organization’s comments on the edits to Problem Statement 2: Applicable Sub-Issues: Availability and Performance Incentives: In light of a tight RA market, high RA prices, and market incentives -- the current CAISO mechanism for incentivizing capacity to be available, the Resource Adequacy Availability Incentive Mechanism (RAAIM), may be: insufficient and incentivize less reliable generation to be contracted, discourage showing of all RA resources, not reflect/incentivize real time performance/availability and/or actions to increase availability particularly during critical periods. Additionally, it creates operational backstop challenges for the ISO resulting in reliability risks.

Do you agree that the problem statement/sub-issue is ready to move forward? If not, please describe why the problem statement is incomplete or inaccurate, and if applicable your suggested edits and additional information and analysis required to move forward.

See response to question 5. 

10. Provide your organization’s comments on the recommendations for Problem Statement 2: Applicable Sub-Issues: Availability and Performance Incentives: RAAIM should be assessed to see if it is meeting its intended objectives, if its objectives should be revisited, or if a new mechanism is needed to incent availability and/or performance. The need for either RAAIM reform or RAAIM elimination as well as any exploration of a new availability and performance mechanism should be done in concert/consideration of any counting rule changes to encourage all RA-eligible resources to be shown.

Do you agree that the recommendation is ready to move forward? If not, please describe why the recommendation is incomplete or inaccurate, and provide your suggested edits and additional information and analysis required to move forward.

See response to question 5. 

11. Provide your organization’s comments on the edits to Problem Statement 2: Applicable Sub-Issues: Resource Accreditation: Current PRMs and counting rules may not accurately reflect forced outage rates or performance and availability which has the potential to result in a less efficient system. In light of changing regulatory structures at the CPUC (including the scoping of UCAP), the ISO has an opportunity to partner with the CPUC, other LRAs and stakeholders to create a more effective counting design and eliminate/redefine availability and performance incentives.

See response to question 5. 

12. Provide your organization’s comments on the recommendations for Problem Statement 2: Applicable Sub-Issues: Resource Accreditation: • The ISO should prioritize data transparency and reporting on forced outage rates and resource availability required to calculate PRMs and resource accreditation.• The ISO should explore an updated default PRM and counting to reflect reliability needs and resource contribution to reliability in coordination with the CPUC, CEC, other LRAS and stakeholders (see edits to PS 1) • The ISO should explore a UCAP mechanism to reflect resource availability, in collaboration with the CPUC and with other LRAs, seeking alignment between all resources and LRAs within the ISO BAA. • The ISO should explore resource counting or tariff changes that directly measures/limits accreditation (e.g. ambient derates).

Do you agree that the recommendation is ready to move forward? If not, please describe why the recommendation is incomplete or inaccurate, and provide your suggested edits and additional information and analysis required to move forward.

See response to question 5. 

13. Please provide your organizations recommendation of grouping and/or sequencing of the issues identified above.

Planned and forced outages, the PRM, and counting rules are all interrelated. The CAISO should therefore group these issues to maintain a cohesive solution.   

14. Please provide any additional comments not captured above.

 CalCCA has no additional comments at this time.

1. Provide a summary of your organization’s comments on the 3/13 RAMPD working group discussion:

1. CDWR provides comments on:
   • Planned to forced outage conversions;
   • A granular approach to allowing outages for less than a single day;
   • Its unique system and its ability to support grid reliability; and
   • Its concerns with changing the default PRM and counting rules and their application to CDWR harming CDWR’s ability to best operate its unique system to support grid reliability.

Other issues discussed at the working group discussion shed light on some of the items (such as planned to forced outage conversions including DMM’s findings, incentivizing shown excess RA, taking a small step rather than revamping the whole RA program, making RA susbtitution simpler, conditional RA showing in which an LSE could list unutilized capacity for substitution, among others), were worthwhile and may need further analysis for their merits.

2. Provide your organization’s feedback on the outage and substitution topic, including the discussion on background, mechanics, analysis, and planned-to-forced outage and PRR 1122. Please also provide any suggestions for analysis that you believe would help refine the problem statement, recommendations, or prioritization.

If planned outage to forced outage conversion is taking place, there may be a need to find out the incentive to do so. If substitution resource unavailability is incentivizing such trend, then improving availability of substitution capacity may mitigate some of those concerns. How can substitution capacity availability be improved in the current market condition is a question that needs to be addressed. A potential solution would be to simplify substitution rules and allow to even less than a whole day substitution during the hours when CAISO needs them most (during tighter reserve margin hours).

On the problem statement, temporal focus of demand and supply balance is important as we expect integration of more renewables with inherent variability of their availability. As CDWR suggested in its January 30, 2024, comments, a more granular approach such as allowing outages for less than a single day may allow non-RA resource capacity to be available for resource substitution during tighter reserve margin periods.

If the effective reserve margin (estimated with demand scheduled and RA resources provided) is comfortably higher than the set planning reserve margin (PRM) for certain hours of a day, allowing such time period for maintenance without penalty and making sure that the resource comes back within the same day during hours when system load is higher with tighter supply of RA (effective reserve margin is close to set PRM or lower). Many of the resources that are use limited could be helpful in mitigating tighter effective reserve margin (ERM) conditions. More resources could be available (for substitution also) for a shorter period such as tighter ERM period on the same day of the resources’ maintenance outage. Focusing on the critical period (with tighter ERM) of a day and allowing for resources such as use limited resources and the resources that can come back from outages within a day could improve the resources pool for availability to address tighter effective margin period of the day. The concept is illustrated in the chart below for the symbolic day of 09/06/2022.

Having any resource being able to count for RA capacity (such as for substitution if available for less than 24 hours) when the ERM falls below, let’s say a comfortable 23% reserve margin, would improve the reserve margin even if a resource is available for just 5 hours ( such as availability assessment hours) or less. There are instances that a resource does maintenance work (with an outage) and comes back operational during those critical hours but without any reliability designation. As an example, a resource on planned outage on 09/06/2022, without being counted as an RA resource, was able to provide above 550 MW generation during some of the super peak hours. If the CAISO system allows counting such resources as being operational following a maintenance during part of the day, it will improve the pool of available resources during critical hours and incentivize resources to be available during those tighter reserve margin hours.

Above illustration is to indicate that there may be a need to focus on a part of the day being more critical and address that need by some mechanism to allow more operational non-RA resources to count for reliability (such as RA substitution only for tighter reserve margin period or hourly) compared to the systemwide effective reserve margin. Even creating a capacity product to address shortfall of RA during a day (when ERM falls below the set PRM), and having unused non-RA capacity for those hours could address the reliability gap and incentivize taking resources in outage during hours when CAISO does not need them. One option may be to have CAISO run an intra- monthly competitive solicitation process (CSP) for hourly substitution.

3. Provide your organization’s feedback on the DMM presentation on planned-to-forced outages:

No comments.

4. Provide your organization’s feedback on the panel discussion on outage and substitution and performance availability incentives:

Please refer to the section 2 above.

5. Provide your organization’s comments on Problem Statement 2: Applicable Sub-Issues: Planned Outage Substitution: Current rules requiring substitute capacity for all planned outages on RA capacity were designed assuming there was excess capacity available at commercially reasonable prices and may require revisiting. As a result, today planned outages often cannot find substitution which risks the health of the resource if this results in potential delays in performing maintenance. In addition, current substitution rules for planned outages may be overly burdensome.

Do you agree that the problem statement/sub-issue is ready to move forward to policy development? If not, please describe why the problem statement is incomplete or inaccurate, and if applicable your suggested edits and additional information and analysis required to move forward. (Note: In the policy develop phase for all the items included in these questions, CAISO staff recognizes that additional analysis and refinement of the problem statements/recommendations/goals will likely take place.)

Please refer to the section 2 above.

6. Provide your organization’s comments on the recommendations for Problem Statement 2: Applicable Sub-Issues: Planned Outage Substitution: Through a stakeholder policy development process the ISO should consider the following options as a part of a holistic solution to outage and substitution issues: 1) Address outages up front (PRM, Resource counting (e.g., UCAP)), 2) Replace RASC with a pool of RA resources for substitution, and 3) Portfolio assessment with backstop.

Do you agree that the recommendation is ready to move forward to policy development? If not, please describe why the recommendation is incomplete or inaccurate, and provide your suggested edits and additional information and analysis required to move forward.

Please refer to the section 2 above.

7. Provide your organization’s comments on the edits to Problem Statement 1: • Updating the CAISO’s Default Planning Reserve Margin: The CAISO’s default PRM is outdated and has not kept pace with changes in the RA landscape resource mix and reliability needs. • Updating the CAISO’s Default Counting Rules: The CAISO’s default counting rules have not kept pace with changes in the RA resource mix and reliability needs.

Do you agree that the problem statement/sub-issue is ready to move forward? If not, please describe why the problem statement is incomplete or inaccurate, and if applicable your suggested edits and additional information and analysis required to move forward.

On the PRM question, a requirement may be subjective depending on the LSE’s capability to reduce or move load away from coincident peak hours. CDWR has demonstrated that it has, and it can support grid reliability by reducing load significantly or moving load away from super-peak hours.

CAISO proposes to amend the default counting criteria. As in the previous comments, CDWR restates that its load and resources are dependent on the hydrology and water demand that dictates primary function as water delivery and energy as the secondary. With changing hydrology, forecast of load and resources are made almost on a monthly basis. That level of forecast granularity gives opportunity to better forecast its loads and resources for reliability and availability. Changes to methods that do not capture this reality and application of default counting criteria to all resources may distort the real availability of resources which will not help the reliability.

Holding CDWR to a uniform standard on PRM or counting rules risks losing the significant benefits that CDWR has provided to the CAISO grid and the benefits of its flexible hydroelectric system, not to mention raising costs for water users due to the purchase of unneeded RA capacity for situations that CDWR has historically been able to manage in real time. CDWR’s operations are significantly different from those of other LSEs and the “standard” default rules are not always appropriate. CDWR has significant concerns with moving forward with Problem Statement 1 if the default PRM and/or counting rules were to require CDWR to adhere to the default PRM and/or counting rules that do not take into account CDWR’s system’s unique operations and abilities to support grid reliability.

8. Provide your organization’s comments on the recommendations for Problem Statement 1: Updating the CAISO’s Default Planning Reserve Margin: The ISO’s default PRM and default counting rules should meet a 0.1 LOLE at the ISO BAA level

Do you agree that the recommendation is ready to move forward? If not, please describe why the recommendation is incomplete or inaccurate, and provide your suggested edits and additional information and analysis required to move forward.

Please refer to section 7 above.

9. Provide your organization’s comments on the edits to Problem Statement 2: Applicable Sub-Issues: Availability and Performance Incentives: In light of a tight RA market, high RA prices, and market incentives -- the current CAISO mechanism for incentivizing capacity to be available, the Resource Adequacy Availability Incentive Mechanism (RAAIM), may be: insufficient and incentivize less reliable generation to be contracted, discourage showing of all RA resources, not reflect/incentivize real time performance/availability and/or actions to increase availability particularly during critical periods. Additionally, it creates operational backstop challenges for the ISO resulting in reliability risks.

Do you agree that the problem statement/sub-issue is ready to move forward? If not, please describe why the problem statement is incomplete or inaccurate, and if applicable your suggested edits and additional information and analysis required to move forward.

Please refer to section 2 above.

10. Provide your organization’s comments on the recommendations for Problem Statement 2: Applicable Sub-Issues: Availability and Performance Incentives: RAAIM should be assessed to see if it is meeting its intended objectives, if its objectives should be revisited, or if a new mechanism is needed to incent availability and/or performance. The need for either RAAIM reform or RAAIM elimination as well as any exploration of a new availability and performance mechanism should be done in concert/consideration of any counting rule changes to encourage all RA-eligible resources to be shown.

Do you agree that the recommendation is ready to move forward? If not, please describe why the recommendation is incomplete or inaccurate, and provide your suggested edits and additional information and analysis required to move forward.

No comment.

11. Provide your organization’s comments on the edits to Problem Statement 2: Applicable Sub-Issues: Resource Accreditation: Current PRMs and counting rules may not accurately reflect forced outage rates or performance and availability which has the potential to result in a less efficient system. In light of changing regulatory structures at the CPUC (including the scoping of UCAP), the ISO has an opportunity to partner with the CPUC, other LRAs and stakeholders to create a more effective counting design and eliminate/redefine availability and performance incentives.

With regard to counting, please refer to the section 7 above.

12. Provide your organization’s comments on the recommendations for Problem Statement 2: Applicable Sub-Issues: Resource Accreditation: • The ISO should prioritize data transparency and reporting on forced outage rates and resource availability required to calculate PRMs and resource accreditation.• The ISO should explore an updated default PRM and counting to reflect reliability needs and resource contribution to reliability in coordination with the CPUC, CEC, other LRAS and stakeholders (see edits to PS 1) • The ISO should explore a UCAP mechanism to reflect resource availability, in collaboration with the CPUC and with other LRAs, seeking alignment between all resources and LRAs within the ISO BAA. • The ISO should explore resource counting or tariff changes that directly measures/limits accreditation (e.g. ambient derates).

Do you agree that the recommendation is ready to move forward? If not, please describe why the recommendation is incomplete or inaccurate, and provide your suggested edits and additional information and analysis required to move forward.

No comment.

13. Please provide your organizations recommendation of grouping and/or sequencing of the issues identified above.

No comment.

14. Please provide any additional comments not captured above.

No comment.

1. Provide a summary of your organization’s comments on the 3/13 RAMPD working group discussion:

The Public Advocates Office at the California Public Utilities Commission (Cal Advocates) is the state-appointed independent ratepayer advocate at the California Public Utilities Commission (CPUC).  Our goal is to ensure that California ratepayers have affordable, safe, and reliable utility services while advancing the state’s environmental goals.  Our efforts to protect ratepayers include energy, water, and communications regulation advocacy. 

Cal Advocates provides the following responses and recommendations on the March 13, 2024, RA Modeling and Program Design (RAMPD) Working Group:

• Cal Advocates opposes Middle River Power, LLC’s (MRP) “Suggestion 2” because it would eliminate the month-ahead resource adequacy (RA) showing process resulting in a 100% year-ahead RA showing requirement for load-serving entities (LSEs);
• Cal Advocates recommends changes to Problem Statement 2, sub-issue Planned Outage Substitution, to focus on complexity and costs of procurement instead of capacity availability;
• Cal Advocates recommends that Problem Statement 2 sub-issue Planned Outage Substitution’s recommendation options be modified to consider the roll-back of the Planned Outage Substitution Obligation (POSO) rules;
• Cal Advocates disagrees with the recommendation to move the Loss of Load Expectation (LOLE) study process to the policy development stage; and
• The assessment of the RA Availability Incentive Mechanism and performance incentive assessments should be precluded by a discussion of all existing incentives and penalties applied to performance and availability of resources.

2. Provide your organization’s feedback on the outage and substitution topic, including the discussion on background, mechanics, analysis, and planned-to-forced outage and PRR 1122. Please also provide any suggestions for analysis that you believe would help refine the problem statement, recommendations, or prioritization.

Please see Cal Advocates’ responses to particular subjects below.

3. Provide your organization’s feedback on the DMM presentation on planned-to-forced outages:

Cal Advocates does not provide a response for this topic at this time.

4. Provide your organization’s feedback on the panel discussion on outage and substitution and performance availability incentives:

Cal Advocates appreciates the panelists’ work to develop this initiative as it moves toward the proposal stage.  MRP presented four suggestions for how to modify POSO and make substitution RA rules and procurement more efficient.[1]  Cal Advocates has specific concerns regarding MRP’s suggestion 2.

MRP’s Suggestion 2 appears to suggest changing the CPUC’s RA program to remove the month-ahead showing process and instead require a single year-ahead showing of 100% of the compliance requirements.[2]  First, changes to the CPUC’s RA program should be considered in the CPUC’s RA proceeding.  Second, MRP’s suggested change would effectively replace a key feature of the CPUC’s RA program.  Currently, the CPUC’s RA program requires LSEs to show 90% of their needs for May-September of the following year by October 31^st, followed by showing 100% of their RA requirements for all months 45 days prior to the start of each month of the year.[3]  If the CPUC’s RA program required 100% year-ahead showings for all months, LSEs would lose procurement flexibility to meet the last 10% of their RA requirements through procurement up to the compliance month showing deadline.  Requiring a 100% showing on a year-ahead basis may also prevent LSEs from showing new resources on their RA plans since new resources may not be eligible for RA at the time of the year-ahead compliance showing.[4] 

[1] MRP, Why I Hate POSO, March 13, 2024 (MRP Presentation) at 5.  Available at: https://www.caiso.com/InitiativeDocuments/MRPPresentation-ResourceAdequacyModeling-ProgramDesign-Mar13-2024.pdf.

[2] MRP Presentation at 5. 

[3] CPUC, 2021 Resource Adequacy Report, April 2023 at 2-3.  Available at: https://www.cpuc.ca.gov/-/media/cpuc-website/divisions/energy-division/documents/resource-adequacy-homepage/2021-ra-report---update-011624.pdf.

[4] The CAISO requires new resources to have met their Commercial Operation Date or Commercial Operation for Markets, as well as receive their NQC rating, in order to be eligible for CAISO RA supply plans.  CAISO, Comments of the California Independent System Operator Corporation on Track 1 Proposals, March 8, 2024 at 9; filed in CPUC Rulemaking (R.) 23-10-011, Order Instituting Rulemaking to Oversee the Resource Adequacy Program, Consider Program Reforms and Refinements, and Establish Forward Resource Adequacy Procurement Obligations.  Available at: https://docs.cpuc.ca.gov/PublishedDocs/Efile/G000/M526/K922/526922075.PDF.

5. Provide your organization’s comments on Problem Statement 2: Applicable Sub-Issues: Planned Outage Substitution: Current rules requiring substitute capacity for all planned outages on RA capacity were designed assuming there was excess capacity available at commercially reasonable prices and may require revisiting. As a result, today planned outages often cannot find substitution which risks the health of the resource if this results in potential delays in performing maintenance. In addition, current substitution rules for planned outages may be overly burdensome.

Do you agree that the problem statement/sub-issue is ready to move forward to policy development? If not, please describe why the problem statement is incomplete or inaccurate, and if applicable your suggested edits and additional information and analysis required to move forward. (Note: In the policy develop phase for all the items included in these questions, CAISO staff recognizes that additional analysis and refinement of the problem statements/recommendations/goals will likely take place.)

Cal Advocates recommends changes to this problem statement/sub-issue.[1]  The assertion that “planned outages often cannot find substitution” has not been demonstrated in this initiative.  MRP demonstrated the complexity of substitute capacity procurement at the March 13 working group but did not demonstrate that substitute capacity is often unavailable.[2]  The CAISO has shown that unsubstituted planned outages for RA resources significantly reduced since POSO was adopted in June 2021.  For the fewer instances of unsubstituted planned outages for RA resources since POSO, the CAISO did not show that substitution RA was unavailable.[3]

Cal Advocates recommends the following edits to Problem Statement 2: Applicable Sub-Issues: Planned Outage Substitution:

Planned Outages: Current rules requiring substitute capacity for all planned outages on RA capacity were designed assuming there was excess capacity available at commercially reasonable prices and may require revisiting.  Disallowing a planned outage due to a failure to procure substitution risks the health of the resource if this results in potential delays in performing maintenance. In addition, current substitution rules for planned outages may be overly burdensome.

[1] CAISO, Resource Adequacy Modeling and Program Design Working Group, March 13, 2024 (March 13 Presentation) at 11.  Available at: https://www.caiso.com/InitiativeDocuments/Presentation-Resource-Adequacy-Modeling-and-Program-Design-Working-Group-March13-2024.pdf.

[2] MRP Presentation at 3.

[3] March 13 Presentation at 22.

6. Provide your organization’s comments on the recommendations for Problem Statement 2: Applicable Sub-Issues: Planned Outage Substitution: Through a stakeholder policy development process the ISO should consider the following options as a part of a holistic solution to outage and substitution issues: 1) Address outages up front (PRM, Resource counting (e.g., UCAP)), 2) Replace RASC with a pool of RA resources for substitution, and 3) Portfolio assessment with backstop.

Do you agree that the recommendation is ready to move forward to policy development? If not, please describe why the recommendation is incomplete or inaccurate, and provide your suggested edits and additional information and analysis required to move forward.

Cal Advocates agrees with the recommendation to move forward to policy development.  However, the recommendation should be modified to include an option to repeal the current POSO and re-adopt the structure used for planned outage substitution prior to the adoption of POSO.  The CAISO’s original objectives in modifying its planned outage provisions included “Minimize or eliminate the need to require substitution capacity to greatest extent possible”[1] yet the POSO did exactly the opposite in requiring every single planned outage to procure substitution capacity.[2]

Prior to the adoption of POSO in June 2021, RA resources could request planned outages without substitution, subject to CAISO approval based on an evaluation of system needs during the requested outage.[3]  This pre-POSO planned outage structure mitigated the need to always procure substitute RA, allowing resource holders to avoid costly and complex procurement when the CAISO itself determined that grid conditions supported it on a case-by-case basis.  Rolling back POSO now would be consistent with the planned outage substitution sub-issue of Problem Statement 2 which states “current substitution rules for planned outages may be overly burdensome.”[4]  Removing POSO would also avoid potential ratepayer costs associated with the other recommendation options to establish a resource pool or increase the PRM.[5]

Cal Advocates recommends the following edit to the Problem Statement 2: Applicable Sub-Issues: Planned Outage Substitution: Possible Recommendations:

Through a stakeholder policy development process the ISO should consider the following options as a part of a holistic solution to outage and substitution issues:

• Address outages up front
  • PRM
  • Resource counting (e.g., UCAP)
• Replace RASC with a pool of RA resources for substitution
• Portfolio assessment with backstop
• Replacement of current POSO rules with the previous planned outage substitution policy

[1] CAISO Resource Adequacy Enhancements Final Proposal – Phase 1, February 17, 2021 (RA Enhancements Final Proposal) at 15.  Available at: https://www.caiso.com/InitiativeDocuments/ResourceAdequacyEnhancements-Phase1FinalProposal.pdf.

[2] RA Enhancements Final Proposal at 17-18.

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

[4] Removal of POSO and re-adoption of pre-POSO planned outage substitution rules would be consistent with the planned outage substitution sub-issue as presented by the CAISO and as recommended to be modified by Cal Advocates in its response to Question 5.  March 13 Presentation at 49.

[5] March 13 Presentation at 50.

7. Provide your organization’s comments on the edits to Problem Statement 1: • Updating the CAISO’s Default Planning Reserve Margin: The CAISO’s default PRM is outdated and has not kept pace with changes in the RA landscape resource mix and reliability needs. • Updating the CAISO’s Default Counting Rules: The CAISO’s default counting rules have not kept pace with changes in the RA resource mix and reliability needs.

Do you agree that the problem statement/sub-issue is ready to move forward? If not, please describe why the problem statement is incomplete or inaccurate, and if applicable your suggested edits and additional information and analysis required to move forward.

Cal Advocates agrees that this problem statement sub-issue is ready to move forward.

8. Provide your organization’s comments on the recommendations for Problem Statement 1: Updating the CAISO’s Default Planning Reserve Margin: The ISO’s default PRM and default counting rules should meet a 0.1 LOLE at the ISO BAA level

Do you agree that the recommendation is ready to move forward? If not, please describe why the recommendation is incomplete or inaccurate, and provide your suggested edits and additional information and analysis required to move forward.

Cal Advocates disagrees that this recommendation is ready to move forward.  Any proposal to alter the default PRM and/or default counting rules to meet a 0.1 LOLE standard must be paired with a holistic LOLE study design proposal.  The CAISO has not presented the potential inputs and assumptions that would inform a LOLE study to identify the appropriate PRM for the CAISO Balancing Authority Area (BAA).  The working group process (rather than the policy development stage) would be more appropriate for soliciting stakeholder comments on study design, inputs, and assumptions.  Cal Advocates is concerned that too many crucial study design choices may be made without a transparent process if the CAISO moves this topic immediately to the policy development stage. 

The complexity of stochastic studies to determine LOLE, and the lack of state or federal standards and definitions that parameterize these studies makes it imperative that stakeholders understand the study process and build towards consensus to support a LOLE study and policy changes that may result.  The parameters and design of a CAISO LOLE study should be transparent and vetted by LSEs since the LOLE study results could lead to backstop procurement, increasing the costs of service for LSE ratepayers.  For example, the CPUC published its draft inputs and assumptions document to drive its upcoming RA year 2026 LOLE study, with a formal opportunity for parties to provide comments and feedback.[1]  At a minimum, the CAISO should provide the same opportunity for feedback on its own LOLE study inputs and assumptions.  Facilitating broad stakeholder participation is particularly important for the CAISO because it has an even larger stakeholder community than the CPUC itself, and each local regulatory authority (LRA) stakeholder has its own integrated resource planning (IRP) processes that would likely impact the assumptions of a CAISO study.  One critical input for achieving an accurate and equitable LOLE estimate in the CAISO’s LOLE study—especially for the mid-term—is other LRAs’ IRP procurement.  Estimating LOLE at the BAA level can lead to free-riding by other LRAs if the CPUC-jurisdictional LSEs' ongoing IRP procurement is found to be sufficient to meet the CAISO’s LOLE standard even without other LRAs' conducting their fair share of incremental need. 

[1] CPUC, Proposed Inputs and Assumptions SERVM 2024 Data Updates in Support of Resource Adequacy (RA) and Integrated Resource Planning (IRP), March 18, 2024; filed in CPUC R.23-10-011.  Available at: https://docs.cpuc.ca.gov/PublishedDocs/Efile/G000/M527/K361/527361341.PDF.

9. Provide your organization’s comments on the edits to Problem Statement 2: Applicable Sub-Issues: Availability and Performance Incentives: In light of a tight RA market, high RA prices, and market incentives -- the current CAISO mechanism for incentivizing capacity to be available, the Resource Adequacy Availability Incentive Mechanism (RAAIM), may be: insufficient and incentivize less reliable generation to be contracted, discourage showing of all RA resources, not reflect/incentivize real time performance/availability and/or actions to increase availability particularly during critical periods. Additionally, it creates operational backstop challenges for the ISO resulting in reliability risks.

Do you agree that the problem statement/sub-issue is ready to move forward? If not, please describe why the problem statement is incomplete or inaccurate, and if applicable your suggested edits and additional information and analysis required to move forward.

Cal Advocates does not at this time provide a response to the edits to Problem Statement 2.

10. Provide your organization’s comments on the recommendations for Problem Statement 2: Applicable Sub-Issues: Availability and Performance Incentives: RAAIM should be assessed to see if it is meeting its intended objectives, if its objectives should be revisited, or if a new mechanism is needed to incent availability and/or performance. The need for either RAAIM reform or RAAIM elimination as well as any exploration of a new availability and performance mechanism should be done in concert/consideration of any counting rule changes to encourage all RA-eligible resources to be shown.

Do you agree that the recommendation is ready to move forward? If not, please describe why the recommendation is incomplete or inaccurate, and provide your suggested edits and additional information and analysis required to move forward.

Cal Advocates does not challenge the problem statement as incomplete or inaccurate.  However, in the working group process, the CAISO should explain all consequences that scheduling coordinators are currently subject to for resource underperformance or lower-than-expected availability.[1]  The CAISO should also analyze, either in the working group process or in the proposal process, whether those performance and availability consequences have effectively incentivized availability and performance.  A solution to improve availability and/or performance incentives cannot be effective without first understanding existing underperformance/availability consequences and their effectiveness.

[1] Cal Advocates has made requests for explanations of exiting performance and availability incentives and their efficacy in previous comments at greater detail.  RAMPD February 13, 2024 Working Group Comments of the Public Advocates Office, February 27, 2024 at Section 2.

11. Provide your organization’s comments on the edits to Problem Statement 2: Applicable Sub-Issues: Resource Accreditation: Current PRMs and counting rules may not accurately reflect forced outage rates or performance and availability which has the potential to result in a less efficient system. In light of changing regulatory structures at the CPUC (including the scoping of UCAP), the ISO has an opportunity to partner with the CPUC, other LRAs and stakeholders to create a more effective counting design and eliminate/redefine availability and performance incentives.

Cal Advocates does not provide a response for this topic at this time.

12. Provide your organization’s comments on the recommendations for Problem Statement 2: Applicable Sub-Issues: Resource Accreditation: • The ISO should prioritize data transparency and reporting on forced outage rates and resource availability required to calculate PRMs and resource accreditation.• The ISO should explore an updated default PRM and counting to reflect reliability needs and resource contribution to reliability in coordination with the CPUC, CEC, other LRAS and stakeholders (see edits to PS 1) • The ISO should explore a UCAP mechanism to reflect resource availability, in collaboration with the CPUC and with other LRAs, seeking alignment between all resources and LRAs within the ISO BAA. • The ISO should explore resource counting or tariff changes that directly measures/limits accreditation (e.g. ambient derates).

Do you agree that the recommendation is ready to move forward? If not, please describe why the recommendation is incomplete or inaccurate, and provide your suggested edits and additional information and analysis required to move forward.

Cal Advocates agrees that this recommendation is ready to move forward.

13. Please provide your organizations recommendation of grouping and/or sequencing of the issues identified above.

Cal Advocates does not recommend specific prioritization of the issues identified above.

14. Please provide any additional comments not captured above.

Cal Advocates does not provide additional comments at this time.

1. Provide a summary of your organization’s comments on the 3/13 RAMPD working group discussion:

Microsoft appreciates the CAISO initiating a Resource Adequacy Working Group and the CAISO’s effort to focus on reliability and update the Resource Adequacy program. Microsoft has been focused on the reliability of the electric grid as a top priority for our engagement in California. We have been an active participant in the CPUC’s Resource Adequacy proceedings where we have focused on the need to set a planning reserve margin (PRM) transparently based on Loss of Load Expectation (LOLE).

As a significant component of its business platform, Microsoft constructs, owns, and operates data centers around the world and has a growing presence in California. These facilities serve individuals, organizations and industries based in the state, including critical services to hospital systems, government agencies, Fortune 500 companies, and SMB representing every segment of the economy. Data centers empower the way we work, learn, shop, bank, and even access medical care; enabling the apps, platforms, and the services we increasingly rely on every day. A reliable and resilient energy supply is the core input for datacenters and further enables local economic development opportunities. 

Microsoft is also committed to meeting its industry leading sustainability commitments: (1) by 2025, 100% of Microsoft’s energy supply will be 100% renewable for all of its operations, and (2) by 2030, 100% of Microsoft’s electricity consumption, 100% of the time, will be matched by zero carbon energy purchases. These sustainability goals require a reliable and effective system of electricity production and transmission to support substantial increases in renewable generation across California and the West.

Microsoft’s existing footprint in California relies heavily on the state’s electric grid, and an unreliable electric grid is extremely detrimental for Microsoft’s operations and customers, who include first-responders and emergency services, among many other California-based agencies and businesses.  

Microsoft sees a clear path for the mature issues of modeling, default PRM, and default counting rules to be advanced together in a stand-alone stakeholder process 

Loss of Load Expectation (LOLE) modeling, resource default counting rules, and the default Planning Reserve Margin (PRM) are natural to partner together in a stakeholder process, and Microsoft supports this happening in a timely manner. These topics have reached a level of maturity where they can more effectively be addressed through collaborative engagement in a dedicated stakeholder process. There is consensus amongst stakeholders on the need to update the default PRM to meet a 1-in-10 LOLE standard, thereby enhancing system reliability. The output from LOLE modeling together with resource counting rules will inform the updated default PRM, ensuring its accuracy and efficacy in meeting the system’s resource adequacy needs. This stakeholder process could run in tandem with the RA Working Group allowing modeling and an updated PRM to make progress while the working group focuses on less clearly developed problem statements.

It also appears CAISO is ready to advance these topics. In an exchange with Middle River Power at the March 13 working group, Aditya from the CAISO laid out a clear path to LOLE modeling implying it could be done now. Notably, he also said the modeling results could be shared with the CPUC and other LRAs. This would be a very positive step towards fostering transparency, coordination, and collaboration among key stakeholders. Transparent communication and information sharing can enhance alignment and effectiveness in addressing critical issues related to resource adequacy and enhance the CAISO and CPUC’s ability to assess grid reliability.

2. Provide your organization’s feedback on the outage and substitution topic, including the discussion on background, mechanics, analysis, and planned-to-forced outage and PRR 1122. Please also provide any suggestions for analysis that you believe would help refine the problem statement, recommendations, or prioritization.

No comment

3. Provide your organization’s feedback on the DMM presentation on planned-to-forced outages:

No comment

4. Provide your organization’s feedback on the panel discussion on outage and substitution and performance availability incentives:

No comment

5. Provide your organization’s comments on Problem Statement 2: Applicable Sub-Issues: Planned Outage Substitution: Current rules requiring substitute capacity for all planned outages on RA capacity were designed assuming there was excess capacity available at commercially reasonable prices and may require revisiting. As a result, today planned outages often cannot find substitution which risks the health of the resource if this results in potential delays in performing maintenance. In addition, current substitution rules for planned outages may be overly burdensome.

Do you agree that the problem statement/sub-issue is ready to move forward to policy development? If not, please describe why the problem statement is incomplete or inaccurate, and if applicable your suggested edits and additional information and analysis required to move forward. (Note: In the policy develop phase for all the items included in these questions, CAISO staff recognizes that additional analysis and refinement of the problem statements/recommendations/goals will likely take place.)

No comment

6. Provide your organization’s comments on the recommendations for Problem Statement 2: Applicable Sub-Issues: Planned Outage Substitution: Through a stakeholder policy development process the ISO should consider the following options as a part of a holistic solution to outage and substitution issues: 1) Address outages up front (PRM, Resource counting (e.g., UCAP)), 2) Replace RASC with a pool of RA resources for substitution, and 3) Portfolio assessment with backstop.

Do you agree that the recommendation is ready to move forward to policy development? If not, please describe why the recommendation is incomplete or inaccurate, and provide your suggested edits and additional information and analysis required to move forward.

Microsoft appreciates the thoughtful discussion on outage and substitution issues at the working group. Microsoft questions whether the CAISO can move forward on issue (1) unilaterally because the counting rules (e.g. UCAP) and PRM establishment (not CAISO default PRM) are currently within the jurisdictional authority of Local Regulatory Authorities and not the CAISO. Issue 2 and issue 3 have not been developed sufficiently within the Working Groups for Microsoft to comment on.

7. Provide your organization’s comments on the edits to Problem Statement 1: • Updating the CAISO’s Default Planning Reserve Margin: The CAISO’s default PRM is outdated and has not kept pace with changes in the RA landscape resource mix and reliability needs. • Updating the CAISO’s Default Counting Rules: The CAISO’s default counting rules have not kept pace with changes in the RA resource mix and reliability needs.

Do you agree that the problem statement/sub-issue is ready to move forward? If not, please describe why the problem statement is incomplete or inaccurate, and if applicable your suggested edits and additional information and analysis required to move forward.

No comment

8. Provide your organization’s comments on the recommendations for Problem Statement 1: Updating the CAISO’s Default Planning Reserve Margin: The ISO’s default PRM and default counting rules should meet a 0.1 LOLE at the ISO BAA level

Do you agree that the recommendation is ready to move forward? If not, please describe why the recommendation is incomplete or inaccurate, and provide your suggested edits and additional information and analysis required to move forward.

 Yes, Microsoft agrees this topic is ready to move forward.

9. Provide your organization’s comments on the edits to Problem Statement 2: Applicable Sub-Issues: Availability and Performance Incentives: In light of a tight RA market, high RA prices, and market incentives -- the current CAISO mechanism for incentivizing capacity to be available, the Resource Adequacy Availability Incentive Mechanism (RAAIM), may be: insufficient and incentivize less reliable generation to be contracted, discourage showing of all RA resources, not reflect/incentivize real time performance/availability and/or actions to increase availability particularly during critical periods. Additionally, it creates operational backstop challenges for the ISO resulting in reliability risks.

Do you agree that the problem statement/sub-issue is ready to move forward? If not, please describe why the problem statement is incomplete or inaccurate, and if applicable your suggested edits and additional information and analysis required to move forward.

No comment

10. Provide your organization’s comments on the recommendations for Problem Statement 2: Applicable Sub-Issues: Availability and Performance Incentives: RAAIM should be assessed to see if it is meeting its intended objectives, if its objectives should be revisited, or if a new mechanism is needed to incent availability and/or performance. The need for either RAAIM reform or RAAIM elimination as well as any exploration of a new availability and performance mechanism should be done in concert/consideration of any counting rule changes to encourage all RA-eligible resources to be shown.

Do you agree that the recommendation is ready to move forward? If not, please describe why the recommendation is incomplete or inaccurate, and provide your suggested edits and additional information and analysis required to move forward.

No comment

11. Provide your organization’s comments on the edits to Problem Statement 2: Applicable Sub-Issues: Resource Accreditation: Current PRMs and counting rules may not accurately reflect forced outage rates or performance and availability which has the potential to result in a less efficient system. In light of changing regulatory structures at the CPUC (including the scoping of UCAP), the ISO has an opportunity to partner with the CPUC, other LRAs and stakeholders to create a more effective counting design and eliminate/redefine availability and performance incentives.

Microsoft supports the CAISO partnering with the CPUC, other LRAs, and stakeholders to establish counting rules and PRMs that lead to a reliability standard of at least 1-in-10 LOLE. 

12. Provide your organization’s comments on the recommendations for Problem Statement 2: Applicable Sub-Issues: Resource Accreditation: • The ISO should prioritize data transparency and reporting on forced outage rates and resource availability required to calculate PRMs and resource accreditation.• The ISO should explore an updated default PRM and counting to reflect reliability needs and resource contribution to reliability in coordination with the CPUC, CEC, other LRAS and stakeholders (see edits to PS 1) • The ISO should explore a UCAP mechanism to reflect resource availability, in collaboration with the CPUC and with other LRAs, seeking alignment between all resources and LRAs within the ISO BAA. • The ISO should explore resource counting or tariff changes that directly measures/limits accreditation (e.g. ambient derates).

Do you agree that the recommendation is ready to move forward? If not, please describe why the recommendation is incomplete or inaccurate, and provide your suggested edits and additional information and analysis required to move forward.

As outlined in question 1, the ISO is ready to move forward with “an updated default PRM and counting to reflect reliability needs and resource contribution to reliability in coordination with the CPUC, CEC, other LRAS and stakeholders.” Within the stakeholder initiative, stakeholders can be thoughtful and determine the best counting rules to measure resource reliability contribution, which may or may not include a UCAP structure.  

The CAISO and stakeholders have not sufficiently demonstrated that UCAP as a counting methodology will ensure forward reliability at a minimum of a 1-in-10 LOLE standard. Working group presentations discussed that the previously proposed UCAP methodology relied on historical forced outages during specific time periods to set a thermal resource’s capacity value. However, the CAISO data presented by DMM shows that forced outage rates have consistently increased year-over-year. Had this UCAP methodology been used previously, the CAISO would have over-valued the contribution of thermal capacity to reliability. Microsoft encourages the CAISO, within a separate initiative, to develop coordinated, conservative, and robust default RA rules that if relied on would lead to meeting a 1-in-10 LOLE reliability standard with a high level of confidence. 

13. Please provide your organizations recommendation of grouping and/or sequencing of the issues identified above.

As described in question 1, Microsoft supports starting a stakeholder process to focus on modeling, default counting rules, and updating the default PRM.

14. Please provide any additional comments not captured above.

No comment

1. Provide a summary of your organization’s comments on the 3/13 RAMPD working group discussion:

Please see MRP's comments below.

2. Provide your organization’s feedback on the outage and substitution topic, including the discussion on background, mechanics, analysis, and planned-to-forced outage and PRR 1122. Please also provide any suggestions for analysis that you believe would help refine the problem statement, recommendations, or prioritization.

MRP's presented its thoughts on this topic at the March 13 workshop.  MRP appreciates the opportunity to make this presentation.  

3. Provide your organization’s feedback on the DMM presentation on planned-to-forced outages:

MRP believes the CAISO should help generators to procure substitute capacity for planned and forced outages because this would improve communication and planning for the CASIO.

4. Provide your organization’s feedback on the panel discussion on outage and substitution and performance availability incentives:

MRP appreciates the opportunity to present both its perspectives on this topic and a set of high-level options for consideration (including changes to the showing process, a centralized market for daily replacement capacity, and a planned outage buffer in the Planning Reserve Margin.  MRP looks forward to CAISO feedback and thoughts on this particular topic.   

5. Provide your organization’s comments on Problem Statement 2: Applicable Sub-Issues: Planned Outage Substitution: Current rules requiring substitute capacity for all planned outages on RA capacity were designed assuming there was excess capacity available at commercially reasonable prices and may require revisiting. As a result, today planned outages often cannot find substitution which risks the health of the resource if this results in potential delays in performing maintenance. In addition, current substitution rules for planned outages may be overly burdensome.

Do you agree that the problem statement/sub-issue is ready to move forward to policy development? If not, please describe why the problem statement is incomplete or inaccurate, and if applicable your suggested edits and additional information and analysis required to move forward. (Note: In the policy develop phase for all the items included in these questions, CAISO staff recognizes that additional analysis and refinement of the problem statements/recommendations/goals will likely take place.)

MRP offers these proposed edits to the problem statement:

Current rules requiring substitute capacity for all planned outages on RA capacity were designed assuming there was excess capacity require revisiting.  Substitute capacity is different than RA compliance capacity because substitute capacity may not be needed for all days of the month.  The bilateral market mechanism does not transact substitute capacity efficiently.  As a result, today generator owners taking planned outages often cannot find substitute capacity substitution which risks the health of the resource if this results in potential delays in performing maintenance or exposes the generator owner to enforcement action if the generator owner, acting in their best judgment, takes a forced outage to perform the needed maintenance. In addition, current substitution rules for planned outages may be overly burdensome.

With these edits, MRP believes this problem statement is ready to move to the policy development phase. 

6. Provide your organization’s comments on the recommendations for Problem Statement 2: Applicable Sub-Issues: Planned Outage Substitution: Through a stakeholder policy development process the ISO should consider the following options as a part of a holistic solution to outage and substitution issues: 1) Address outages up front (PRM, Resource counting (e.g., UCAP)), 2) Replace RASC with a pool of RA resources for substitution, and 3) Portfolio assessment with backstop.

Do you agree that the recommendation is ready to move forward to policy development? If not, please describe why the recommendation is incomplete or inaccurate, and provide your suggested edits and additional information and analysis required to move forward.

MRP believes this issue is ready for further development.

7. Provide your organization’s comments on the edits to Problem Statement 1: • Updating the CAISO’s Default Planning Reserve Margin: The CAISO’s default PRM is outdated and has not kept pace with changes in the RA landscape resource mix and reliability needs. • Updating the CAISO’s Default Counting Rules: The CAISO’s default counting rules have not kept pace with changes in the RA resource mix and reliability needs.

Do you agree that the problem statement/sub-issue is ready to move forward? If not, please describe why the problem statement is incomplete or inaccurate, and if applicable your suggested edits and additional information and analysis required to move forward.

MRP agrees this problem statement is ready to move forward to the policy development phase.  MRP previously provided an additional problem statement for a minimum PRM which the CAISO should include as a design element both in this problem statement as well as in the CAISO backstop problem statement.[1]  MRP submits that, to determine the right amount of backstop procurement needed, the CAISO must first understand the right amount of capacity necessary to ensure 0.1 LOLE. 

[1] From MRP’s November 20, 2023 comments:

“MRP, therefore, proposes to insert a new Problem Statement 0 as the first Problem Statement.
“There is a need for the CAISO to ensure the collective ability of the RA programs within its footprint meet the 0.1 LOLE metric.  If the RA programs within the CAISO footprint do not meet this metric, then the CAISO shall engage in backstop procurement, regardless of whether the shown RA fleet is sufficient to meet the LSE requirements.

Sub-issue: There is a need for additional information regarding the sufficiency of the LRA RA programs to meet 0.1 LOLE.”

8. Provide your organization’s comments on the recommendations for Problem Statement 1: Updating the CAISO’s Default Planning Reserve Margin: The ISO’s default PRM and default counting rules should meet a 0.1 LOLE at the ISO BAA level

Do you agree that the recommendation is ready to move forward? If not, please describe why the recommendation is incomplete or inaccurate, and provide your suggested edits and additional information and analysis required to move forward.

MRP strongly agrees this problem statement is ready to move forward to the policy development phase.  MRP believes that the default PRM should ensure 0.1 LOLE at the ISO BAA level annually as capacity counting and load forecasts change.

9. Provide your organization’s comments on the edits to Problem Statement 2: Applicable Sub-Issues: Availability and Performance Incentives: In light of a tight RA market, high RA prices, and market incentives -- the current CAISO mechanism for incentivizing capacity to be available, the Resource Adequacy Availability Incentive Mechanism (RAAIM), may be: insufficient and incentivize less reliable generation to be contracted, discourage showing of all RA resources, not reflect/incentivize real time performance/availability and/or actions to increase availability particularly during critical periods. Additionally, it creates operational backstop challenges for the ISO resulting in reliability risks.

Do you agree that the problem statement/sub-issue is ready to move forward? If not, please describe why the problem statement is incomplete or inaccurate, and if applicable your suggested edits and additional information and analysis required to move forward.

In MRP’s view, the last statement – “...it [RAAIM] creates operational backstop challenges for the ISO resulting in reliability risks” – warrants additional context or explanation specifically describing the operational challenges and resulting reliability risks.

As noted in MRP’s earlier comments. MRP encourages the CAISO to consider when any perceived deficiencies in the RAAIM mechanism may be attributable to the fact that RAAIM applies to a fraction of the capacity that counts towards meeting RA requirements.

MRP would also recommend adding to the proposed statement as follows:

Applicable Sub-Issues: Availability and Performance Incentives: In light of a tight RA market, high RA prices, and market incentives -- the current CAISO mechanism for incentivizing capacity to be available, the Resource Adequacy Availability Incentive Mechanism (RAAIM), as it is currently applied only to a fraction of the overall RA fleet, may be: insufficient and incentivize less reliable generation to be contracted, discourage showing of all RA resources, not reflect/incentivize real time performance/availability and/or actions to increase availability particularly during critical periods. Additionally, it creates operational backstop challenges for the ISO resulting in reliability risks.

In MRP’s view, this issue may be ready to proceed to the policy development phase if the CAISO is open to considering expanding the application of this or some other RA availability incentive mechanism to more of the resource fleet that counts towards meeting RA requirements.  MRP believes that policy development related to the problem statement cannot achieve the desired goal if the CAISO is not open to expanding the applicability of such a mechanism. 

10. Provide your organization’s comments on the recommendations for Problem Statement 2: Applicable Sub-Issues: Availability and Performance Incentives: RAAIM should be assessed to see if it is meeting its intended objectives, if its objectives should be revisited, or if a new mechanism is needed to incent availability and/or performance. The need for either RAAIM reform or RAAIM elimination as well as any exploration of a new availability and performance mechanism should be done in concert/consideration of any counting rule changes to encourage all RA-eligible resources to be shown.

Do you agree that the recommendation is ready to move forward? If not, please describe why the recommendation is incomplete or inaccurate, and provide your suggested edits and additional information and analysis required to move forward.

MRP supports reassessing the RAAIM mechanism while keeping bid insertion and must-offer obligations in place. MRP believes this problem statement is ready to move to the policy development phase.

11. Provide your organization’s comments on the edits to Problem Statement 2: Applicable Sub-Issues: Resource Accreditation: Current PRMs and counting rules may not accurately reflect forced outage rates or performance and availability which has the potential to result in a less efficient system. In light of changing regulatory structures at the CPUC (including the scoping of UCAP), the ISO has an opportunity to partner with the CPUC, other LRAs and stakeholders to create a more effective counting design and eliminate/redefine availability and performance incentives.

MRP is concerned that there is a mismatch between forced outage data used as inputs in the current LOLE studies that derive the PRM and the forced outage data presented by the CAISO in its Outage Management System (OMS).   This mismatch should be discussed when CAISO moves into policy development phase for Problem Statement 1, which is intended to inform and develop the CAISO’s own LOLE study process.  WIth that, MRP believes this problem statement is ready to move to the policy development phase.

12. Provide your organization’s comments on the recommendations for Problem Statement 2: Applicable Sub-Issues: Resource Accreditation: • The ISO should prioritize data transparency and reporting on forced outage rates and resource availability required to calculate PRMs and resource accreditation.• The ISO should explore an updated default PRM and counting to reflect reliability needs and resource contribution to reliability in coordination with the CPUC, CEC, other LRAS and stakeholders (see edits to PS 1) • The ISO should explore a UCAP mechanism to reflect resource availability, in collaboration with the CPUC and with other LRAs, seeking alignment between all resources and LRAs within the ISO BAA. • The ISO should explore resource counting or tariff changes that directly measures/limits accreditation (e.g. ambient derates).

Do you agree that the recommendation is ready to move forward? If not, please describe why the recommendation is incomplete or inaccurate, and provide your suggested edits and additional information and analysis required to move forward.

MRP offers these comments on this proposed problem statement. 

First, all other problem statements use the term “RA capacity counting rules” (or, in MRP’s view, should use that term) rather than "accreditation”.  If the CAISO means “RA capacity counting rules” when it says “accreditation”, MRP recommends using one term or the other, but not both.  If the CAISO means something else by "accreditation", MRP requests the CAISO explain what it means by that term. 

Second, MRP is uncomfortable that this problem statement stands isolated from the problem statement regarding the CAISO’s default RA capacity counting rules.  Keeping this statement as a standalone statement implies that default capacity counting rules are a separate, distinguishable topic from other RA capacity counting rules, a concept with which MRP disagrees.  If the CAISO never uses its default RA capacity counting rules because all the LRAs within its footprint have determined their own RA capacity counting rules, but those RA capacity counting rules overstate RA capacity values, then updating the CAISO’s default capacity counting rules will have no bearing on reliability. 

Third, MRP strongly agrees that ANY CAISO investigation of a UCAP framework must be closely coordinated with any similar investigation of a UCAP framework by the CPUC.  

Finally, MRP offers that the CAISO should review default RA capacity counting methodologies for all resources, not simply apply UCAP as a default caounting rule only for thermal resources.  If the CAISO is seeking to update its default RA program, then the counting methodologies for all technologies should be reviewed to ensure all CAISO methodologies are up to date.

13. Please provide your organizations recommendation of grouping and/or sequencing of the issues identified above.

Given the inter-related nature of all these issues (e.g., PRM and capacity counting rules), MRP is concerned that trying to "sequence" issues could lead to "locking in" solutions that might not be optimal from a program-wide standpoint.  

14. Please provide any additional comments not captured above.

MRP has no other comments.  

1. Provide a summary of your organization’s comments on the 3/13 RAMPD working group discussion:

• NCPA urges CAISO to adopt Planned Medium Notice Opportunity RA Outages and Planned Advanced Notice Forced RA Outages.

• NCPA urges CAISO to respect the jurisdictional rights of all LRAs (and their respective LSEs), including the right of LRAs to establish RA qualifying capacity counting rules. 

• NCPA does not support changing the default PRM or counting rules at this time.

• NCPA does not support subjecting PRMs to .1 LOLE requirements.

• NCPA does not believe there is a resource surplus being suppressed by RAAIM during summer months nor that there is enough meaningful surplus to support an RA substitution pool in most months.

2. Provide your organization’s feedback on the outage and substitution topic, including the discussion on background, mechanics, analysis, and planned-to-forced outage and PRR 1122. Please also provide any suggestions for analysis that you believe would help refine the problem statement, recommendations, or prioritization.

NCPA was one of the entities that disputed PRR 1122 and argued that “submitting a forced outage request that is substantially similar to a previously rejected planned outage request (a “planned-to-forced” outage) is not, without more, a violation of the CAISO Tariff or FERC’s market rules.”[1] The fact that some planned-to-forced outages are unlawful does not render all planned-to-forced outages unlawful. In fact, most planned-to-forced outages are necessary actions.  As soon as SCs become aware of a GO/GOP’s plans to take a unit offline, the SC is required to report the outage to CAISO even if it is prior to the forced outage period. But resources should not be penalized for outages needed for vital plant maintenance just because they know about them before the forced outage time frame. However, when such a maintenance outage is requested in the planned outage time frame, and the generator cannot fulfil a subsequent substitution obligation, the CAISO will automatically reject the outage without consulting with the SC first. When that happens, the SC has no alternative other than to resubmit the same outage as a forced outage. The current system lacks a means for generators to communicate to CAISO that certain planned outages are “do or die”, thus forcing everyone into the dance of planned-to-forced outages.    

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

NCPA also suggests creating “Planned Medium Notice Opportunity RA Outages” whereby SCs could submit requests between T-30 and T-7 days for discretionary outages limited to five days or less in duration without a substitution obligation. CAISO would have discretion to approve or deny such outages based on system conditions similar to the Forced Short Notice Opportunity RA Outages. This would open up additional opportunities for generators to perform short-term maintenance when it is prudent to do so.

[1] NCPAStakeholderBrief-PRR1122-Jan272020.pdf (caiso.com)

[1] NCPAStakeholderBrief-PRR1122-Jan272020.pdf (caiso.com)

3. Provide your organization’s feedback on the DMM presentation on planned-to-forced outages:

Please refer to item 2 response.  

4. Provide your organization’s feedback on the panel discussion on outage and substitution and performance availability incentives:

NCPA shares Vistra’s concerns that planned to forced outage limitations imposed by CAISO do not adequately address scenarios involving urgent outages required to address critical maintenance needs to keep plants operating reliably. NCPA supports the concept of an advanced notice forced outage.

NCPA also suggests allowing for a Planned Medium Notice Opportunity RA Outage.  Please refer to item 2 response.

5. Provide your organization’s comments on Problem Statement 2: Applicable Sub-Issues: Planned Outage Substitution: Current rules requiring substitute capacity for all planned outages on RA capacity were designed assuming there was excess capacity available at commercially reasonable prices and may require revisiting. As a result, today planned outages often cannot find substitution which risks the health of the resource if this results in potential delays in performing maintenance. In addition, current substitution rules for planned outages may be overly burdensome.

Do you agree that the problem statement/sub-issue is ready to move forward to policy development? If not, please describe why the problem statement is incomplete or inaccurate, and if applicable your suggested edits and additional information and analysis required to move forward. (Note: In the policy develop phase for all the items included in these questions, CAISO staff recognizes that additional analysis and refinement of the problem statements/recommendations/goals will likely take place.)

NCPA agrees this problem statement is ready to move forward.  Please refer to item 2 response.

6. Provide your organization’s comments on the recommendations for Problem Statement 2: Applicable Sub-Issues: Planned Outage Substitution: Through a stakeholder policy development process the ISO should consider the following options as a part of a holistic solution to outage and substitution issues: 1) Address outages up front (PRM, Resource counting (e.g., UCAP)), 2) Replace RASC with a pool of RA resources for substitution, and 3) Portfolio assessment with backstop.

Do you agree that the recommendation is ready to move forward to policy development? If not, please describe why the recommendation is incomplete or inaccurate, and provide your suggested edits and additional information and analysis required to move forward.

NCPA believes the best way to address limitations in current substitution rules is to allow for discretionary “Planned Medium Notice Opportunity RA Outages” and Planned non-discretionary “Advanced Noticed Forced Outages”. NCPA does not believe there are currently enough eligible RA resources to support PRMs much higher than 15%, to support an RA substitution pool in most months or to allow for any sort of increased backstop procurement. As stated in recent comments, NCPA does not support previous UCAP proposals that are not flexible enough to capture the varied attributes of individual resources.

7. Provide your organization’s comments on the edits to Problem Statement 1: • Updating the CAISO’s Default Planning Reserve Margin: The CAISO’s default PRM is outdated and has not kept pace with changes in the RA landscape resource mix and reliability needs. • Updating the CAISO’s Default Counting Rules: The CAISO’s default counting rules have not kept pace with changes in the RA resource mix and reliability needs.

Do you agree that the problem statement/sub-issue is ready to move forward? If not, please describe why the problem statement is incomplete or inaccurate, and if applicable your suggested edits and additional information and analysis required to move forward.

NCPA does not support changes to CAISO’s default PRM at this time. 15% is a reasonable number that accounts for operating reserves, forced outages, and load variability and it can actually be accommodated by the RA fleet. In NCPA’s view, the problem is not a lack of resources interested in serving CAISO load, but the inability to interconnect them quickly to the grid. Without fixing the problem of moving resources from proposal to interconnection, tightening the standards just raises prices.

The 0.1 LOLE standard is a variable one which would have to be periodically recomputed. To meet their PRMs, LSEs need to plan and contract out more than a year in advance. LSEs can reasonably plan to a 15% PRM, but they cannot be expected to successfully hit a changing target, especially one that changes unpredictably.

NCPA acknowledges that evaluating an LSE’s PRM against a .1 LOLE could provide useful information that an LSE can use for planning purposes but imposing that standard as an overall PRM introduces a number of other questions and concerns.

The LOLE standard depends a great deal on the assumptions made to develop it, and there is substantial variability in those. It is extremely subjective.[1] There is no industrywide consensus or firm conclusion of its effectiveness. The preliminary results from of this type of analysis have been varying, and do not appear to result in a material change in the PRM (as compared to the standards adopted today). The level of additional detail sought via such a complicated study methodology will not ultimately address the underlying issues that the market is facing today.  Rather, the key focus should be finding ways to enable timelier and more efficient interconnection of new generating capacity to the system.  For so long as new resources remain trapped in a clogged interconnection queue, raising PRMs (if application of such a new standard would in fact raise PRMs) merely allows existing generation owners to charge higher prices for the megawatts they offer, further exacerbating high prices to ratepayers (but not improving reliability). Calculating the .1 LOLE is subjective and requires various assumptions that could bias the result in one way or another.  Rather than expending valuable time and resources simply looking for another method of calculating PRM that will likely not be significantly more effective than what is in place today, CAISO should focus its full effort and attention on addressing the underlying root cause of the current scarcity issues related to new generator siting, interconnection and development.

NCPA has never made a secret of the fact that its LRAs have voluntarily adopted CAISO’s default 15% planning reserve margin for operating reserves, forecast variability, and forced outages. This has served NCPA well for nearly 20 years with limited service interruptions despite several recent extreme heat events described as 1 in 20 or 1 in 30[2]. In any case, NCPA has other strong incentives to be resource adequate. As a load-following Metered Sub-system (MSS), NCPA is required to balance its load and resources in real time and faces severe financial penalties if it fails to do so. The LRAs governing NCPA members are monitoring the CEC proceeding under AB 209 and are continually made aware of any reliability issues. Individual LRAs are in the best position to assess what is needed to support reliability for customers within their jurisdiction.

[1] See, e.g., Brattle Group, Resource Adequacy Requirements: Reliability and Economic Implications (2013), https://www.ferc.gov/sites/default/files/2020-05/02-07-14-consultant-report.pdf.

[2] https://www.caiso.com/Documents/Final-Root-Cause-Analysis-Mid-August-2020-Extreme-Heat-Wave.pdf p.4

8. Provide your organization’s comments on the recommendations for Problem Statement 1: Updating the CAISO’s Default Planning Reserve Margin: The ISO’s default PRM and default counting rules should meet a 0.1 LOLE at the ISO BAA level

Do you agree that the recommendation is ready to move forward? If not, please describe why the recommendation is incomplete or inaccurate, and provide your suggested edits and additional information and analysis required to move forward.

NCPA opposes this problem statement. Please refer to items 7 and 11 comments.  

9. Provide your organization’s comments on the edits to Problem Statement 2: Applicable Sub-Issues: Availability and Performance Incentives: In light of a tight RA market, high RA prices, and market incentives -- the current CAISO mechanism for incentivizing capacity to be available, the Resource Adequacy Availability Incentive Mechanism (RAAIM), may be: insufficient and incentivize less reliable generation to be contracted, discourage showing of all RA resources, not reflect/incentivize real time performance/availability and/or actions to increase availability particularly during critical periods. Additionally, it creates operational backstop challenges for the ISO resulting in reliability risks.

Do you agree that the problem statement/sub-issue is ready to move forward? If not, please describe why the problem statement is incomplete or inaccurate, and if applicable your suggested edits and additional information and analysis required to move forward.

NCPA is prepared to move forward with this discussion. Any adjustment to the RAAIM must be anchored to the cost of new entry of gas resource principles of the CPM soft offer cap. For example, instead of the RAAIM price being set at 60% of the CPM soft offer cap, perhaps the RAAIM price should be set at 80%, or 100%, etc. It must not be linked to current extreme prices or excessively punitive CPUC penalty prices as many LSEs are not CPUC-jurisdictional.

Extreme market prices incent showing of all market resources; especially if the RAAIM price is set too low so the argument that there is not incentive to show resources due to RAAIM does not hold water. Furthermore, the only time any surplus exists is in off-peak months. NCPA restates its opinion that there is no substantial “hidden stash” of RA to magically relieve scarcity in summer months. There could be some hold back of capacity for substitution self-provision, but NCPA believes most “un-shown” RA is capacity that is obligated to support high priority exports and thus not available to support internal RA needs.

Real time performance is incentivized by the market. RA resources are subject to must offer obligations and bid insertion which result in market awards including dispatch operating targets.  Most, if not all, resources are required to follow dispatch operating targets. If resources are not meeting must offer obligations and/or not following DOTs then that is a different issue that CAISO must address.

Any backstop challenges CAISO is experiencing can be directly linked to self-inflicted capacity scarcity in general so efforts must be doubled to relieve generation and transmission interconnection backlogs. 

10. Provide your organization’s comments on the recommendations for Problem Statement 2: Applicable Sub-Issues: Availability and Performance Incentives: RAAIM should be assessed to see if it is meeting its intended objectives, if its objectives should be revisited, or if a new mechanism is needed to incent availability and/or performance. The need for either RAAIM reform or RAAIM elimination as well as any exploration of a new availability and performance mechanism should be done in concert/consideration of any counting rule changes to encourage all RA-eligible resources to be shown.

Do you agree that the recommendation is ready to move forward? If not, please describe why the recommendation is incomplete or inaccurate, and provide your suggested edits and additional information and analysis required to move forward.

Please refer to item 9 response.  

11. Provide your organization’s comments on the edits to Problem Statement 2: Applicable Sub-Issues: Resource Accreditation: Current PRMs and counting rules may not accurately reflect forced outage rates or performance and availability which has the potential to result in a less efficient system. In light of changing regulatory structures at the CPUC (including the scoping of UCAP), the ISO has an opportunity to partner with the CPUC, other LRAs and stakeholders to create a more effective counting design and eliminate/redefine availability and performance incentives.

NCPA is prepared to engage in counting rule discussions with CAISO, CPUC, and other LRAs with the understanding that CAISO must respect the jurisdictional rights of all individual LRAs (and their respective LSEs), including the right of LRAs to establish RA qualifying capacity counting rules.  Non-CPUC jurisdictional LRAs best understand the resources in their jurisdictions and can adopt counting rules that deliver the best RA to the system. Counting rules should be flexible enough to capture the reliability elements of individual resources. They should not be one-size-fits-all by resource class.

12. Provide your organization’s comments on the recommendations for Problem Statement 2: Applicable Sub-Issues: Resource Accreditation: • The ISO should prioritize data transparency and reporting on forced outage rates and resource availability required to calculate PRMs and resource accreditation.• The ISO should explore an updated default PRM and counting to reflect reliability needs and resource contribution to reliability in coordination with the CPUC, CEC, other LRAS and stakeholders (see edits to PS 1) • The ISO should explore a UCAP mechanism to reflect resource availability, in collaboration with the CPUC and with other LRAs, seeking alignment between all resources and LRAs within the ISO BAA. • The ISO should explore resource counting or tariff changes that directly measures/limits accreditation (e.g. ambient derates).

Do you agree that the recommendation is ready to move forward? If not, please describe why the recommendation is incomplete or inaccurate, and provide your suggested edits and additional information and analysis required to move forward.

CAISO should focus on outage reporting enhancements described in above comments.   

13. Please provide your organizations recommendation of grouping and/or sequencing of the issues identified above.

CAISO must address outage issues immediately. NCPA would be happy to submit PRRs for new “Advanced Notice Forced Outage” and substitution exempt “Planned Medium Notice Opportunity RA Outage”.

NCPA is willing to participate in discussions but does not believe any change to PRMs, counting rules (including UCAP) are necessary at this time. CAISO should put all available resources towards addressing resource and transmission queue backlogs.

14. Please provide any additional comments not captured above.

None at this time. 

1. Provide a summary of your organization’s comments on the 3/13 RAMPD working group discussion:

PG&E’s comments can be summarized as follows: 

• PG&E suggests CAISO enhance its analysis to better assess the reliability implications of forced outages lacking replacement capacity. The analysis can be enhanced by quantifying the magnitude of forced outages in MW, categorizing forced outages based on the nature of work, identifying outages as RAAIM exempt and penalized amounts, and determining the MW capacity of forced outages originally designated as planned outages. 

• PG&E believes that the problem statement for questions 5 to 12 requires further analysis before progressing to policy development. While the working group has identified certain issues related to outages in the analysis presented, additional, more granular or precise analysis is necessary to properly diagnose the problem statement before advancing to policy development.  

• PG&E recommends CAISO prioritize the following: 1) addressing the RA Substitute Capacity Rules; 2) exploring Unforced Capacity (UCAP) counting rules and revisions to RAAIM; 3) assessing the necessity of Flex RA; 4) exploring Local Regulatory Authorities LRAs program alignment with CAISO’s RA rules. 

2. Provide your organization’s feedback on the outage and substitution topic, including the discussion on background, mechanics, analysis, and planned-to-forced outage and PRR 1122. Please also provide any suggestions for analysis that you believe would help refine the problem statement, recommendations, or prioritization.

PG&E suggests CAISO provide additional analysis to better assess the planned to forced outage and substitution issues. The analysis provided by CAISO shows that forced outages for RA resources across 5 years have seen an increase in percentage and that unsubstituted planned outages for RA resources have significantly reduced since June 2021. To better assess the magnitude of the planned to forced and RA substitution issues and the impact on system reliability, PG&E suggests CAISO update the analysis as follows:  

• On analysis shown on slides 21 and 22, CAISO should provide analysis that categorizes resources into RAAIM penalized and exempt for both summer months and non-summer months. 

• Provide the analysis in terms of megawatt instead of percentage to better assess the magnitude of the issue. 

• Provide a more granular analysis of force outages by type of work and the time when maintenance requests are submitted for RA resources considering tariff section 9.3.6.4.1(c) – “A request for a Maintenance Outage that is submitted seven days or less prior to the start date for the Outage shall be classified as a Forced Outage.” 

• Provide analysis that shows the MW amount of forced outage RA resources that were originally planned outages. 

Such analysis would help to understand if there is an issue with forced outages definitions or an issue with the timetable associated with forced outages or with the planned to forced migration related to substitution rules. 

3. Provide your organization’s feedback on the DMM presentation on planned-to-forced outages:

See comments to question 2.  

4. Provide your organization’s feedback on the panel discussion on outage and substitution and performance availability incentives:

No comments at this time. 

5. Provide your organization’s comments on Problem Statement 2: Applicable Sub-Issues: Planned Outage Substitution: Current rules requiring substitute capacity for all planned outages on RA capacity were designed assuming there was excess capacity available at commercially reasonable prices and may require revisiting. As a result, today planned outages often cannot find substitution which risks the health of the resource if this results in potential delays in performing maintenance. In addition, current substitution rules for planned outages may be overly burdensome.

Do you agree that the problem statement/sub-issue is ready to move forward to policy development? If not, please describe why the problem statement is incomplete or inaccurate, and if applicable your suggested edits and additional information and analysis required to move forward. (Note: In the policy develop phase for all the items included in these questions, CAISO staff recognizes that additional analysis and refinement of the problem statements/recommendations/goals will likely take place.)

PG&E believes that the problem statement for questions 5 to 12 requires further analysis before progressing to policy development. While the working group has identified certain issues related to outages in the analysis presented at the last working group, additional analysis is necessary to properly diagnose the problem statement before advancing to policy development. This analysis is crucial to develop an effective action plan that will facilitate successful policy development. PG&E recommends that CAISO updates the discussion paper published in September 2022 as follows: 

• Update each problem statement based on stakeholder comments and working groups discussion. 

• For each sub-issues identified under the three problem statements: CAISO to 1) highlight the analysis provided at previous WG; 2) list the complementary analysis needed and requested by stakeholder as either discussed at the WG or highlighted in stakeholder comments. 

• Provide an action plan listing topics that require further discussion at working group level and topics that can move to policy development phase with a timeline. 

6. Provide your organization’s comments on the recommendations for Problem Statement 2: Applicable Sub-Issues: Planned Outage Substitution: Through a stakeholder policy development process the ISO should consider the following options as a part of a holistic solution to outage and substitution issues: 1) Address outages up front (PRM, Resource counting (e.g., UCAP)), 2) Replace RASC with a pool of RA resources for substitution, and 3) Portfolio assessment with backstop.

Do you agree that the recommendation is ready to move forward to policy development? If not, please describe why the recommendation is incomplete or inaccurate, and provide your suggested edits and additional information and analysis required to move forward.

See answer to question 5. 

7. Provide your organization’s comments on the edits to Problem Statement 1: • Updating the CAISO’s Default Planning Reserve Margin: The CAISO’s default PRM is outdated and has not kept pace with changes in the RA landscape resource mix and reliability needs. • Updating the CAISO’s Default Counting Rules: The CAISO’s default counting rules have not kept pace with changes in the RA resource mix and reliability needs.

Do you agree that the problem statement/sub-issue is ready to move forward? If not, please describe why the problem statement is incomplete or inaccurate, and if applicable your suggested edits and additional information and analysis required to move forward.

See answer to question 5. 

8. Provide your organization’s comments on the recommendations for Problem Statement 1: Updating the CAISO’s Default Planning Reserve Margin: The ISO’s default PRM and default counting rules should meet a 0.1 LOLE at the ISO BAA level

Do you agree that the recommendation is ready to move forward? If not, please describe why the recommendation is incomplete or inaccurate, and provide your suggested edits and additional information and analysis required to move forward.

See answer to question 5. 

9. Provide your organization’s comments on the edits to Problem Statement 2: Applicable Sub-Issues: Availability and Performance Incentives: In light of a tight RA market, high RA prices, and market incentives -- the current CAISO mechanism for incentivizing capacity to be available, the Resource Adequacy Availability Incentive Mechanism (RAAIM), may be: insufficient and incentivize less reliable generation to be contracted, discourage showing of all RA resources, not reflect/incentivize real time performance/availability and/or actions to increase availability particularly during critical periods. Additionally, it creates operational backstop challenges for the ISO resulting in reliability risks.

Do you agree that the problem statement/sub-issue is ready to move forward? If not, please describe why the problem statement is incomplete or inaccurate, and if applicable your suggested edits and additional information and analysis required to move forward.

See answer to question 5. 

10. Provide your organization’s comments on the recommendations for Problem Statement 2: Applicable Sub-Issues: Availability and Performance Incentives: RAAIM should be assessed to see if it is meeting its intended objectives, if its objectives should be revisited, or if a new mechanism is needed to incent availability and/or performance. The need for either RAAIM reform or RAAIM elimination as well as any exploration of a new availability and performance mechanism should be done in concert/consideration of any counting rule changes to encourage all RA-eligible resources to be shown.

Do you agree that the recommendation is ready to move forward? If not, please describe why the recommendation is incomplete or inaccurate, and provide your suggested edits and additional information and analysis required to move forward.

See answer to question 5. 

11. Provide your organization’s comments on the edits to Problem Statement 2: Applicable Sub-Issues: Resource Accreditation: Current PRMs and counting rules may not accurately reflect forced outage rates or performance and availability which has the potential to result in a less efficient system. In light of changing regulatory structures at the CPUC (including the scoping of UCAP), the ISO has an opportunity to partner with the CPUC, other LRAs and stakeholders to create a more effective counting design and eliminate/redefine availability and performance incentives.

See answer to question 5. 

12. Provide your organization’s comments on the recommendations for Problem Statement 2: Applicable Sub-Issues: Resource Accreditation: • The ISO should prioritize data transparency and reporting on forced outage rates and resource availability required to calculate PRMs and resource accreditation.• The ISO should explore an updated default PRM and counting to reflect reliability needs and resource contribution to reliability in coordination with the CPUC, CEC, other LRAS and stakeholders (see edits to PS 1) • The ISO should explore a UCAP mechanism to reflect resource availability, in collaboration with the CPUC and with other LRAs, seeking alignment between all resources and LRAs within the ISO BAA. • The ISO should explore resource counting or tariff changes that directly measures/limits accreditation (e.g. ambient derates).

Do you agree that the recommendation is ready to move forward? If not, please describe why the recommendation is incomplete or inaccurate, and provide your suggested edits and additional information and analysis required to move forward.

See answer to question 5. 

13. Please provide your organizations recommendation of grouping and/or sequencing of the issues identified above.

As highlighted in our previous comments, PG&E recommends that CAISO prioritize the following items: 

1. Addressing the RA Substitute Capacity Rules: 

• CAISO to provide further analysis to better assess the magnitude of the RA Substitute Capacity Rules and understand the impact on reliability. Such analysis would help to understand if there is an issue with forced outages definitions or an issue with the timetable associated with forced outages or with the planned to forced migration related to substitution rules. 

2. Exploring Unforced Capacity (UCAP) counting rules and revisions to RAAIM:

• PG&E proposed principles for consideration in the development and adoption of any UCAP methodology.  

• PG&E and stakeholders provided recommendations in comments to previous working groups. CAISO should use these materials to update the discussion paper issued in September 2022 and define an action plan. 

3. Assessing the necessity of Flex RA:

• PG&E suggested in previous working group comments that CAISO conducts a comprehensive assessment of the effectiveness of the three flex categories to understand the necessity and the impact of each category. This analysis is crucial given the use of battery storage across all three Flex RA categories. 

4. Exploring Local Regulatory Authorities LRAs program alignment with CAISO’s RA rules:

• PG&E requests a thorough analysis by CAISO of system Planning Reserve Margin (PRM) alignment to provide a better understanding to stakeholders. While acknowledging CAISO’s overview of PRM set by each LRA, the default PRM rules have not been reviewed since 2006. With changes in the RA landscape and Extended Day-ahead Market (EDAM) implementation, PG&E supports exploring improved PRM alignment considering cost causation principles. 

• PG&E suggests calculating a system PRM for the entire CAISO BAA utilizing LRA requirements and constituent LSE loads for the 2022 and 2023 RA showings. This data is crucial for a comprehensive analysis of the effectiveness of these values in meeting load and system operating requirements adequately. Additionally, CAISO should provide a detailed description of any underlying assumptions and reliability criteria supporting system PRM values different from the default value that operators would accept without initiating procurement actions. 

14. Please provide any additional comments not captured above.

No comments at this time. 

1. Provide a summary of your organization’s comments on the 3/13 RAMPD working group discussion:

SDG&E appreciates the opportunity to submit comments on the March 13^th RAMPD working group discussion. Our comments can be summarized as follows:

• SDG&E is not opposed to enhancing the reporting requirements for forced outages to include additional information on the urgency of repairs, but further details on implementation will need to be worked out to fully assess the practical impacts of DMM’s recommendation.
• SDG&E broadly supports problem statement 1 and 2 but believes the recommendations would benefit from further exploration through working group discussions.

2. Provide your organization’s feedback on the outage and substitution topic, including the discussion on background, mechanics, analysis, and planned-to-forced outage and PRR 1122. Please also provide any suggestions for analysis that you believe would help refine the problem statement, recommendations, or prioritization.

No comment at this time.

3. Provide your organization’s feedback on the DMM presentation on planned-to-forced outages:

SDG&E is appreciative of the data presented by DMM during their presentation on planned-to-forced outages. While we are not opposed to enhancing the reporting requirements to better capture the nature of these outages in theory, we would like to better understand how the determination would be made in practice and under what specific circumstances forced outages might be deferred (i.e., what would constitute imminent system reliability conditions that would warrant a denial). These specifics could be further discussed and evaluated in the policy process.

More broadly, SDG&E advises CAISO to carefully consider the impacts of deferring forced outages. Putting off required maintenance of these resources may reduce their ability to perform as needed during stressed system conditions, potentially resulting in more significant failures of longer duration down the road. Further information on the nature of the outages can better inform any future analysis conducted by either CAISO or DMM, but determinations on outage approval should be made with both the severity of the issue and longer-term viability of the plant in mind.

4. Provide your organization’s feedback on the panel discussion on outage and substitution and performance availability incentives:

No comment at this time. 

5. Provide your organization’s comments on Problem Statement 2: Applicable Sub-Issues: Planned Outage Substitution: Current rules requiring substitute capacity for all planned outages on RA capacity were designed assuming there was excess capacity available at commercially reasonable prices and may require revisiting. As a result, today planned outages often cannot find substitution which risks the health of the resource if this results in potential delays in performing maintenance. In addition, current substitution rules for planned outages may be overly burdensome.

Do you agree that the problem statement/sub-issue is ready to move forward to policy development? If not, please describe why the problem statement is incomplete or inaccurate, and if applicable your suggested edits and additional information and analysis required to move forward. (Note: In the policy develop phase for all the items included in these questions, CAISO staff recognizes that additional analysis and refinement of the problem statements/recommendations/goals will likely take place.)

No comment at this time. 

6. Provide your organization’s comments on the recommendations for Problem Statement 2: Applicable Sub-Issues: Planned Outage Substitution: Through a stakeholder policy development process the ISO should consider the following options as a part of a holistic solution to outage and substitution issues: 1) Address outages up front (PRM, Resource counting (e.g., UCAP)), 2) Replace RASC with a pool of RA resources for substitution, and 3) Portfolio assessment with backstop.

Do you agree that the recommendation is ready to move forward to policy development? If not, please describe why the recommendation is incomplete or inaccurate, and provide your suggested edits and additional information and analysis required to move forward.

No comment at this time. 

7. Provide your organization’s comments on the edits to Problem Statement 1: • Updating the CAISO’s Default Planning Reserve Margin: The CAISO’s default PRM is outdated and has not kept pace with changes in the RA landscape resource mix and reliability needs. • Updating the CAISO’s Default Counting Rules: The CAISO’s default counting rules have not kept pace with changes in the RA resource mix and reliability needs.

Do you agree that the problem statement/sub-issue is ready to move forward? If not, please describe why the problem statement is incomplete or inaccurate, and if applicable your suggested edits and additional information and analysis required to move forward.

SDG&E supports problem statement one and the addition of default counting rules in the issue definition. While we agree that there is sufficient cause to revisit both the default PRM and counting rules in a policy process, any modifications to CAISO’s default PRM and counting rules should consider the impacts of the transition to a Slice of Day RA framework, especially in terms of timing and implementation.

8. Provide your organization’s comments on the recommendations for Problem Statement 1: Updating the CAISO’s Default Planning Reserve Margin: The ISO’s default PRM and default counting rules should meet a 0.1 LOLE at the ISO BAA level

Do you agree that the recommendation is ready to move forward? If not, please describe why the recommendation is incomplete or inaccurate, and provide your suggested edits and additional information and analysis required to move forward.

No comment at this time.

9. Provide your organization’s comments on the edits to Problem Statement 2: Applicable Sub-Issues: Availability and Performance Incentives: In light of a tight RA market, high RA prices, and market incentives -- the current CAISO mechanism for incentivizing capacity to be available, the Resource Adequacy Availability Incentive Mechanism (RAAIM), may be: insufficient and incentivize less reliable generation to be contracted, discourage showing of all RA resources, not reflect/incentivize real time performance/availability and/or actions to increase availability particularly during critical periods. Additionally, it creates operational backstop challenges for the ISO resulting in reliability risks.

Do you agree that the problem statement/sub-issue is ready to move forward? If not, please describe why the problem statement is incomplete or inaccurate, and if applicable your suggested edits and additional information and analysis required to move forward.

No comment at this time.

10. Provide your organization’s comments on the recommendations for Problem Statement 2: Applicable Sub-Issues: Availability and Performance Incentives: RAAIM should be assessed to see if it is meeting its intended objectives, if its objectives should be revisited, or if a new mechanism is needed to incent availability and/or performance. The need for either RAAIM reform or RAAIM elimination as well as any exploration of a new availability and performance mechanism should be done in concert/consideration of any counting rule changes to encourage all RA-eligible resources to be shown.

Do you agree that the recommendation is ready to move forward? If not, please describe why the recommendation is incomplete or inaccurate, and provide your suggested edits and additional information and analysis required to move forward.

No comment at this time.

11. Provide your organization’s comments on the edits to Problem Statement 2: Applicable Sub-Issues: Resource Accreditation: Current PRMs and counting rules may not accurately reflect forced outage rates or performance and availability which has the potential to result in a less efficient system. In light of changing regulatory structures at the CPUC (including the scoping of UCAP), the ISO has an opportunity to partner with the CPUC, other LRAs and stakeholders to create a more effective counting design and eliminate/redefine availability and performance incentives.

SDG&E supports the problem statement on resource accreditation, especially given the changing regulatory structures at the CPUC via the slice-of-day proceeding. There are significant benefits to capturing outages into the RA counting for resources via mechanisms such as UCAP, and SDG&E supports the language on increased coordination and partnership with the CPUC, other LRAs and stakeholders on counting design and its interactions with availability and performance incentives.

12. Provide your organization’s comments on the recommendations for Problem Statement 2: Applicable Sub-Issues: Resource Accreditation: • The ISO should prioritize data transparency and reporting on forced outage rates and resource availability required to calculate PRMs and resource accreditation.• The ISO should explore an updated default PRM and counting to reflect reliability needs and resource contribution to reliability in coordination with the CPUC, CEC, other LRAS and stakeholders (see edits to PS 1) • The ISO should explore a UCAP mechanism to reflect resource availability, in collaboration with the CPUC and with other LRAs, seeking alignment between all resources and LRAs within the ISO BAA. • The ISO should explore resource counting or tariff changes that directly measures/limits accreditation (e.g. ambient derates).

Do you agree that the recommendation is ready to move forward? If not, please describe why the recommendation is incomplete or inaccurate, and provide your suggested edits and additional information and analysis required to move forward.

No comment at this time.

13. Please provide your organizations recommendation of grouping and/or sequencing of the issues identified above.

No comment at this time.

14. Please provide any additional comments not captured above.

No comment at this time.

1. Provide a summary of your organization’s comments on the 3/13 RAMPD working group discussion:

The Six Cities discuss below in response to question nos. 2-4 options for resolving some of the identified issues related to outage substitution and planning as addressed in prior comments and during the March 13^th panel discussion. 

On question nos. 5-12 below, and the development of problem statements and sub-issues within the problem statements more broadly, it would be helpful if the CAISO could publish a document that includes all the problem statements and their various components so that stakeholders can review these holistically.  The question-by-question approach suggests that the list of problem statements is disjointed, includes a fair amount of overlap, and includes options for solutions, which seems contrary to the approach of just defining the issues to be solved.  After the CAISO publishes a problem statement document, it would be helpful to have a working group or stakeholder meeting focused just on the problem statements.  Alternatively, in the interest of moving this process forward in an efficient manner, the CAISO could consider publishing the current set of problem statements in an Issue Paper, having a stakeholder meeting, and taking a last round of comments on the problem statements before proceeding to the policy development phase. 

Finally, for organizational purposes, the Six Cities encourage the CAISO to identify sub-issues with numbers or letters, such as “sub-issue 1(a),” “sub-issue 2(b),” etc.

2. Provide your organization’s feedback on the outage and substitution topic, including the discussion on background, mechanics, analysis, and planned-to-forced outage and PRR 1122. Please also provide any suggestions for analysis that you believe would help refine the problem statement, recommendations, or prioritization.

The Six Cities found the background presented by the CAISO on outage and substitution topics to be helpful in demonstrating a number of the present concerns that both stakeholders and the CAISO have with respect to the current outage and substitution rules.  As resource owners/operators and load-serving entities (“LSEs”), the Six Cities are aware of the challenges in procuring substitute capacity and the misplaced incentives that substitution rules can create for LSEs to hold back some capacity from the resource adequacy (“RA”) showings as insurance against unforeseen substitution needs and, from the supply side, the need to ensure that scheduled and unscheduled maintenance can be carefully planned so as to maximize resource availability and health.  These competing considerations support a broad reassessment of outage and substitution obligations.  The Six Cities have previously suggested incremental changes to existing CAISO processes that may help address these issues:

1. The Six Cities recommend modification of the monthly RA showing process to allow different RA values for internal RA resources for different days of the month, subject to the sum of the RA values for each day satisfying the monthly RA requirement for the LSE submitting the showing.  It is the Six Cities’ understanding that such variable showings currently are permitted for import resources, and the Cities request that the CAISO extend the ability to submit different RA values for a resource for individual days within a month to include not only import RA resources but also RA resources located within the CAISO BAA.  The Six Cities addressed this proposal more fully in their February 27^th comments in this initiative in response to question no. 6. 
2. The Six Cities also support development of proposals for “conditional RA” listings of RA-eligible resources that are not needed by an LSE to meet a monthly RA requirement, but could be shown by an LSE on a conditional basis and subject to compensation if needed by an LSE with an RA deficiency (or potentially to meet a substitution obligation).  The Six Cities discussed this idea during the February 13^th stakeholder meeting, and it is conceptually analogous to the RA pooling idea that has been raised by some parties.  Relatedly, as discussed on March 13^th, LSEs should not be penalized for showing more capacity than they require to meet their minimum PRMs, such as by applying RAAIM penalties to such excess capacity. 

3. Provide your organization’s feedback on the DMM presentation on planned-to-forced outages:

The DMM data, among other conclusions, reinforced that a more comprehensive set of solutions to the “planned-to-forced” outage issue is needed so that market participants are not faced with the potential of incurring damage to generating resources or a potential referral to FERC if a planned outage cannot proceed as planned.  The current approach does not appear to allow an orderly approach to outage planning in all instances, especially where a planned outage is unexpectedly cancelled or extends beyond initially projected timeframes.  The solutions proposed by the Cities, as discussed above, may help LSEs manage planning for these types of outages, and review of the substitution rules to address some of the challenges in procuring substitute capacity also may aid in addressing these challenges. 

4. Provide your organization’s feedback on the panel discussion on outage and substitution and performance availability incentives:

As discussed by the City of Anaheim representative during the March 13^th panel, this initiative should be broadly focused on identifying solutions to current procurement challenges, which include unprecedented increases in the price for RA capacity and resource scarcity.  These dynamics have challenged LSEs such as the Six Cities in procuring resources to meet the needs of their loads and to comply with regulatory obligations, including renewable portfolio standards and capacity requirements.  It is important, as discussed throughout these comments, to consider solutions that will incent LSEs to show all of their RA-eligible capacity to the CAISO so as to maximize the resources available for use.  While not a comprehensive solution to all of the issues that have been discussed in these working groups, the Six Cities remain concerned that there is not comprehensive information available to the CAISO about the full range of capacity that in fact may be available to the CAISO for a given time period. 

Moreover, the Six Cities are not convinced that a complete overhaul to existing RA rules is needed at this time; instead, it may be feasible to focus, especially in the near-term, on “quick fixes” that can be implemented on an expedited basis to deal with procurement challenges that LSEs are facing now.  While some parties may prefer to consider longer-term policy changes, the Six Cities support separately tracking those efforts into a second phase of this initiative that has an extended timetable.

Additionally, proposals such as LSE development of distribution-level resources that do not require deliverability and development of resources that may serve as load offsets should be part of the solution set.  The Six Cities request that the CAISO consider a working group meeting to address current rules related to distribution-level resources that are eligible to count for RA, whether as supply side resources or through crediting, and any applicable CAISO rules related to demand reduction resources that function as an offset to load (and not a supply side resource).

Finally, any solutions in this initiative will be incomplete without consideration of issues relating to maximum import capability (“MIC”).  As the Six Cities have repeatedly discussed, MIC limitations constrain access by CAISO LSEs to RA-eligible capacity located outside of the CAISO.  If the CAISO is considering enhancements to PRMs, changing default counting rules in ways that reduce eligible capacity from existing resources, or augmenting LSE RA obligations through additional substitution requirements and outage restrictions, then the CAISO also should be considering how to increase access to RA supply, including supply located outside of the CAISO footprint, at the same time.

5. Provide your organization’s comments on Problem Statement 2: Applicable Sub-Issues: Planned Outage Substitution: Current rules requiring substitute capacity for all planned outages on RA capacity were designed assuming there was excess capacity available at commercially reasonable prices and may require revisiting. As a result, today planned outages often cannot find substitution which risks the health of the resource if this results in potential delays in performing maintenance. In addition, current substitution rules for planned outages may be overly burdensome.

Do you agree that the problem statement/sub-issue is ready to move forward to policy development? If not, please describe why the problem statement is incomplete or inaccurate, and if applicable your suggested edits and additional information and analysis required to move forward. (Note: In the policy develop phase for all the items included in these questions, CAISO staff recognizes that additional analysis and refinement of the problem statements/recommendations/goals will likely take place.)

The Six Cities agree with this problem statement and concur that it is ready to move forward to policy development.

6. Provide your organization’s comments on the recommendations for Problem Statement 2: Applicable Sub-Issues: Planned Outage Substitution: Through a stakeholder policy development process the ISO should consider the following options as a part of a holistic solution to outage and substitution issues: 1) Address outages up front (PRM, Resource counting (e.g., UCAP)), 2) Replace RASC with a pool of RA resources for substitution, and 3) Portfolio assessment with backstop.

Do you agree that the recommendation is ready to move forward to policy development? If not, please describe why the recommendation is incomplete or inaccurate, and provide your suggested edits and additional information and analysis required to move forward.

The Six Cities concur that this problem statement sub-issue is ready to move forward to policy development, with the understanding that the listed solutions are non-exhaustive and may evolve through further discussion in the policy development phase.  Additionally, changes to the planning reserve margin (“PRM”) to address resource outages or implementation of an unforced capacity (“UCAP”) counting methodology obviously have broader implications for other topics in this initiative, so it may be appropriate to sequence consideration of this sub-issue with other problem statements.  It appears that issues of RA substitution pooling and portfolio assessment with backstop could be somewhat less tied to other issues and might be susceptible to policy development on a more stand-alone basis. 

7. Provide your organization’s comments on the edits to Problem Statement 1: • Updating the CAISO’s Default Planning Reserve Margin: The CAISO’s default PRM is outdated and has not kept pace with changes in the RA landscape resource mix and reliability needs. • Updating the CAISO’s Default Counting Rules: The CAISO’s default counting rules have not kept pace with changes in the RA resource mix and reliability needs.

Do you agree that the problem statement/sub-issue is ready to move forward? If not, please describe why the problem statement is incomplete or inaccurate, and if applicable your suggested edits and additional information and analysis required to move forward.

The Six Cities suggest the following changes to these sub-issues:

The CAISO’s default PRM is outdated and has not kept pace with should be reassessed in light of changes in the RA landscape resource mix used to supply RA capacity and evolving reliability needs within the CAISO BAA.

The CAISO’s default counting rules should be reassessed in light of have not kept pace with changes in the RA resource mix used to supply RA capacity and evolving reliability needs within the CAISO BAA.

As revised, the problem statements do not presuppose outcomes or solutions. 

8. Provide your organization’s comments on the recommendations for Problem Statement 1: Updating the CAISO’s Default Planning Reserve Margin: The ISO’s default PRM and default counting rules should meet a 0.1 LOLE at the ISO BAA level

Do you agree that the recommendation is ready to move forward? If not, please describe why the recommendation is incomplete or inaccurate, and provide your suggested edits and additional information and analysis required to move forward.

While acknowledging that the 0.1 loss-of-load expectation may reflect an industry standard practice, it would be preferable not to focus in a problem statement on a specific metric for outcomes, particularly where the implications of adopting planning reserve margins that are based on the 0.1 LOLE are not known at this time.  The Six Cities suggest the following revisions to this sub-issue:

The ISO’s default PRM and default counting rules should be based on planning standards that provide an adequate level of reliability within the ISO BAA meet a 0.1 LOLE at the ISO BAA level. 

The stakeholder process should propose and consider standards that will provide an adequate level of reliability within the CAISO BAA, while also considering whether the adopted planning standard is one that LSEs are capable of meeting, given the current capacity market dynamics.  For example, if the CAISO decides to utilize the 0.1 LOLE standard to set the default planning reserve margin and counting rules, it is critical that the CAISO evaluate if there is additional capacity available for procurement by LSEs to meet the adopted standards or whether a phase-in period is needed.  While the default values are not necessarily “minimum” requirements, they might nevertheless be considered by local regulatory authorities in setting PRM and capacity counting rules, and so the CAISO and stakeholders should understand if revised default values are realistically achievable. 

Additionally, the CAISO should continue to recognize the role of local regulatory authorities in establishing planning reserve margins and counting rules.  Although the CAISO’s default rules may change, local regulatory authorities retain the discretion to determine PRMs and counting rules that reflect the circumstances of the LSEs that they regulate.

9. Provide your organization’s comments on the edits to Problem Statement 2: Applicable Sub-Issues: Availability and Performance Incentives: In light of a tight RA market, high RA prices, and market incentives -- the current CAISO mechanism for incentivizing capacity to be available, the Resource Adequacy Availability Incentive Mechanism (RAAIM), may be: insufficient and incentivize less reliable generation to be contracted, discourage showing of all RA resources, not reflect/incentivize real time performance/availability and/or actions to increase availability particularly during critical periods. Additionally, it creates operational backstop challenges for the ISO resulting in reliability risks.

Do you agree that the problem statement/sub-issue is ready to move forward? If not, please describe why the problem statement is incomplete or inaccurate, and if applicable your suggested edits and additional information and analysis required to move forward.

This problem statement appears to overlap with the problem statement discussed below in question 10.  The problem statement in question 10 is preferable, because it provides a broader articulation of potential issues and appears oriented to a wider range of possible solutions.  The framing of the issues in this problem statement seems to consist of a list of deficiencies with RAAIM, each of which could largely be addressed under the problem statement below. 

10. Provide your organization’s comments on the recommendations for Problem Statement 2: Applicable Sub-Issues: Availability and Performance Incentives: RAAIM should be assessed to see if it is meeting its intended objectives, if its objectives should be revisited, or if a new mechanism is needed to incent availability and/or performance. The need for either RAAIM reform or RAAIM elimination as well as any exploration of a new availability and performance mechanism should be done in concert/consideration of any counting rule changes to encourage all RA-eligible resources to be shown.

Do you agree that the recommendation is ready to move forward? If not, please describe why the recommendation is incomplete or inaccurate, and provide your suggested edits and additional information and analysis required to move forward.

The Six Cities support the advancement of this problem statement, with a proposed addition taken from the problem statement included in question 9 above:

RAAIM should be assessed to see if it is meeting its intended objectives, if its objectives should be revisited, or if a new mechanism is needed to incent availability and/or performance. The need for either RAAIM reform or RAAIM elimination as well as any exploration of a new availability and performance mechanism should be done in concert/ and in consideration of with any counting rule changes to encourage all RA-eligible resources to be shown. Potential modifications to RAAIM should consider the current RA market, high RA prices, and market incentives.

In conjunction with this problem statement, the Six Cities encourage consideration of phasing of issues.  Incremental improvements to RAAIM may be capable of implementation on a more expedited timeframe while more comprehensive changes are fully stakeholdered.

11. Provide your organization’s comments on the edits to Problem Statement 2: Applicable Sub-Issues: Resource Accreditation: Current PRMs and counting rules may not accurately reflect forced outage rates or performance and availability which has the potential to result in a less efficient system. In light of changing regulatory structures at the CPUC (including the scoping of UCAP), the ISO has an opportunity to partner with the CPUC, other LRAs and stakeholders to create a more effective counting design and eliminate/redefine availability and performance incentives.

The Six Cities conceptually support the advancement of this problem statement, with the following modifications:

The stakeholder initiative should evaluate if and the extent to which Current PRMs and counting rules may not accurately reflect forced outage rates or and resource performance and availability which has the potential to result in a less efficient system. In light of response to potentially changing regulatory structures at the CPUC (including the scoping of UCAP), the ISO has an opportunity to consider establishing partner with the CPUC, other LRAs and stakeholders to create a more effective alternatives to the current resource counting design and eliminate/redefine availability and performance incentives, while acknowledging the authority of local regulatory authorities to establish counting rules.

12. Provide your organization’s comments on the recommendations for Problem Statement 2: Applicable Sub-Issues: Resource Accreditation: • The ISO should prioritize data transparency and reporting on forced outage rates and resource availability required to calculate PRMs and resource accreditation.• The ISO should explore an updated default PRM and counting to reflect reliability needs and resource contribution to reliability in coordination with the CPUC, CEC, other LRAS and stakeholders (see edits to PS 1) • The ISO should explore a UCAP mechanism to reflect resource availability, in collaboration with the CPUC and with other LRAs, seeking alignment between all resources and LRAs within the ISO BAA. • The ISO should explore resource counting or tariff changes that directly measures/limits accreditation (e.g. ambient derates).

Do you agree that the recommendation is ready to move forward? If not, please describe why the recommendation is incomplete or inaccurate, and provide your suggested edits and additional information and analysis required to move forward.

This sub-issue is unclear, and it is not obvious how this problem statement fits with the discussion of the problem statements listed elsewhere.  For example, the sub-issue includes topics relating to data, PRMs, resource counting (including consideration of UCAP) and accreditation.  It also specifies as a foregone conclusion that alignment between the CPUC and other local regulatory authorities is necessary, and suggests that UCAP is the approach (i.e., the only approach?) that should be considered to address resource availability and related topics.  This problem statement sub-issue and the scope of what it is addressing as compared with the other problem statement sub-issues reinforce that publication of a complete set of problem statements for stakeholders to consider holistically would be helpful.  The Six Cities therefore reserve taking a further position on this problem statement at this time.

13. Please provide your organizations recommendation of grouping and/or sequencing of the issues identified above.

As expressed previously, the Six Cities support advancement of topics in phases and suggest that certain proposed revisions to RAAIM and the CAISO’s substitution rules, for example, could be implemented in a relatively short timeframe pending consideration of broader topics, such as whether to adopt use of a UCAP structure and how the UCAP structure should be designed.

Until seeing a complete set of the current problem statements and sub-issues, it is difficult to identify topics that should be grouped or sequenced.

14. Please provide any additional comments not captured above.

The Six Cities have no further comments at this time.