Comments on Comments on RAMPD Track 1 Stakeholder Workshop 6/11

1. Please provide your organization’s feedback on Updating CAISO’s Default Resource Adequacy Rules element of the straw proposal. Additionally, include any specific changes your organization would like the CAISO to consider regarding the proposal’s design and process, along with the rationale for these suggested changes.

CAISO’s proposed default standards are unlikely to be adopted by the California Public Utilities Commission (CPUC) because the CPUC already has its own process to determine qualifying capacity and the planning reserve margin (PRM). Therefore, AReM limits its commentary to the straw proposal’s consistency with the CPUC.

AReM supports increasing consistency between the CPUC and CAISO. However, CAISO’s proposal diverges from the CPUC’s adopted methods in many ways despite a stated goal of coordination. If local regulatory authorities (LRA) adopt CAISO’s proposed default resource counting and PRM-setting methods, setting backstop procurement allocation methods in Track 3B of this initiative will only become more difficult.  AReM hopes that seemingly minor differences such as the differences in unforced capacity (UCAP) seasonal definition and annual weighting factors can be aligned after further coordination. Other differences are more concerning, especially the straw proposal’s use of average effective load carrying capability (ELCC) methodology for valuing wind, solar, hydro, and battery storage resources after the CPUC has now implemented slice-of-day. The average ELCC method proposed is not granular enough to capture the added value of long-duration storage compared to the four-hour storage durations common on the grid today because the straw proposal simply sets one ELCC value for all storage regardless of duration. The CPUC has specifically directed procurement of long-duration storage, and so AReM recommends, at a minimum, this be accommodated in any CAISO methodology. AReM does not recommend the CAISO adopt a resource counting framework that diverges from the CPUC approach until Track 3B is completed and stakeholders are assured it will not lead to divergent compliance outcomes for load-serving entities’ (LSE) resource adequacy showings to CAISO and the CPUC.

2. Please provide your organization’s feedback on the Accounting for RA Resource Capabilities during Peak Conditions element of the straw proposal including the following elements: a. Should CAISO continue to develop a standardized/minimum verification process to account for ambient derates? b. If yes, how should the verification design be modified or applied? Would a single calculation based on an annual analysis be sufficient, if applied only to key summer months (e.g. July-September)? Or would a monthly/seasonal calculation and verification process be preferable?

AReM is also concerned by lack of consistency between the straw proposal treatment of ambient derates and the CPUC’s UCAP proposal, which includes ambient derates. AReM sees no value in having the CAISO and CPUC apply ambient derates under two different methodologies. It makes it more difficult for LSEs to discern resource net qualifying capacity values needed for their planning and procurement. AReM encourages further coordination to resolve these differences.

A seasonal derate design would be preferable to the straw proposal’s fixed annual derate. The seasonal differentiation would better reflect the impact of hot weather on generating plant performance, which is a well-known issue that should be accounted for.

3. Please provide any additional comments on the straw proposal.

AReM has no further comments at this time.

1. Please provide your organization’s feedback on Updating CAISO’s Default Resource Adequacy Rules element of the straw proposal. Additionally, include any specific changes your organization would like the CAISO to consider regarding the proposal’s design and process, along with the rationale for these suggested changes.

The California Community Choice Association (CalCCA) appreciates the opportunity to provide comments on the California Independent System Operator’s (CAISO’s) Track 1 Straw Proposal. The CAISO proposes to allow for relatively frequent loss-of-load expectation (LOLE) studies to inform the default planning reserve margin (PRM) and counting rules. The CAISO also proposes to use average effective load carrying capability (ELCC) for wind, solar, energy storage, and dispatchable hydro and an unforced capacity (UCAP) methodology for thermal and demand response resources. CalCCA appreciates the CAISO’s intention to develop its UCAP methodology in parallel with the California Public Utilities Commission (CPUC). The direction local regulatory authorities (LRA) take in implementing counting rules such as UCAP will necessarily impact CAISO processes such as its application of the resource adequacy availability incentive mechanism (RAAIM). The CAISO should therefore reevaluate its default counting rules, and other related processes such as RAAIM, once its coordination with the CPUC and other LRAs concludes to ensure holistic alignment on counting rules and availability incentives.

2. Please provide your organization’s feedback on the Accounting for RA Resource Capabilities during Peak Conditions element of the straw proposal including the following elements: a. Should CAISO continue to develop a standardized/minimum verification process to account for ambient derates? b. If yes, how should the verification design be modified or applied? Would a single calculation based on an annual analysis be sufficient, if applied only to key summer months (e.g. July-September)? Or would a monthly/seasonal calculation and verification process be preferable?

The CAISO should modify its proposal to:

(1)  Allow resources to demonstrate, through testing, capabilities not reflected in historical data;

(2)  Ensure that the CAISO has a full 20 days of data for each resource where the only outage reported is reflective of an ambient derate; and

(3)  Reflect resource capability with sufficient granularity informed by historical data, recognizing ambient derates are more likely in hot summer months rather than cooler non-summer months.

The CAISO proposes to use historical performance data to create “capability values” as part of the existing net qualifying capacity (NQC) process to represent each resource adequacy (RA) resource’s capabilities which often correlate with high ambient temperatures. CalCCA supports using a historical performance approach, but the CAISO should modify its proposal to ensure it accurately reflects resource capabilities. First, the CAISO should allow scheduling coordinators (SCs) to demonstrate their resource’s capability through testing when the historical data is disputed or otherwise not reflective of the resource’s capabilities. RA is a very important, and therefore valuable, product. If a SC can demonstrate its derate based on historical data is not reflective of its capabilities, then it should be able to revise its capability value. The CAISO has unit testing processes in place for other products such as ancillary services, suggesting that adopting one for the purpose of informing capability values, only when necessary to improve accuracy, should not be prohibitively burdensome.

Second, the CAISO should calculate capability values by obtaining a sufficient sample without overlapping outages. The CAISO proposes to assess the 20 days with the highest hourly peak load over the last two years, and then only use the lowest ten of those 20 days to calculate capability values. The Straw Proposal highlights that one drawback to this approach is that other types of forced outages can overlap with ambient derates. To address this, the CAISO could evaluate the 20 highest peak load days and select the lowest 10 days without overlapping outages. If the 10 days that do not have overlapping outages within the 20-day sample are not available, the CAISO should evaluate at the 21^st highest peak load day, and so on, until it obtains 10 days without overlapping outages.

Third, the methodology for creating capability values should be sufficiently granular to accurately reflect resource capability by month. CalCCA’s understanding is that ambient derates due to temperature typically occur during the peak summer months at times when ambient temperatures exceed certain limits. The CAISO can determine the level of granularity (e.g., seasonal, monthly, July-September) necessary to accurately reflect capabilities by evaluating historical data.

3. Please provide any additional comments on the straw proposal.

CalCCA has no additional comments at this time.

1. Please provide your organization’s feedback on Updating CAISO’s Default Resource Adequacy Rules element of the straw proposal. Additionally, include any specific changes your organization would like the CAISO to consider regarding the proposal’s design and process, along with the rationale for these suggested changes.

The straw proposal outlines the objective of revising default qualifying capacity (QC) methodologies, the default planning reserve margin (PRM), and adds a new mechanism for improving the accounting of capacity resource capabilities during peak load conditions to ensure an accurate reflection of real-world resource performance. CDWR appreciates CAISO’s continued recognition of LRAs’ ability to adopt their own PRMs and counting criteria. 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 recognizes that it and other LRAs use the default PRM and criteria as a guide to their own PRMs and counting criteria, so CDWR provides the following comments on the proposed defaults, which will help CDWR provide the most reliability to the CAISO grid without unduly increasing costs to water users.

Default QC methodologies:

1. Dispatchable hydro (Hydro + Run-of-River): CAISO proposes to use average expected load carrying capability (ELCC) method based on average hydro conditions (adjusted within the year if conditions are drastically different). It is essential that the method adopted for the hydro-electric resources of water management systems such as CDWR should be flexible enough to account for hydrological changes in the short term so that increased capacity can be counted for these resources. If updates to monthly QC values are allowed, it will ensure increased capacity (due to better hydrology) would be reflected in the “monthly capability” of resources (if monthly capability determination applies to hydro resources). This can be achieved by allowing updates to QC values monthly for these systems as is done today. Unpredictable hydrology can result in significant difference in resource availability and allowing to update those conditions reflecting the operational availability will improve reliability and reduce cost.

For the monthly capability (if applicable) of resources used in the monthly showing processes, CDWR suggests the capacity forecasted to be generating (based on current hydrology) as provided by the resource in the latest round of forecast (as close to the month as possible) would be a better option than historical. Forecast of hydro capacity closer to the month most likely will be accurate than historical values. For monthly capability (if applicable) in annual showings, if forecast is available for the compliance year, using the forecast of generating capacity could be a better option than historical, in case of hydro resources.

2. Participating Load: Participating Load (PL) is currently listed as a standalone resource type in the CAISO default tariff provision like other resources such as Proxy Demand Resource (PDR) and Reliability Demand Resource Resources (RDRR). Apparently, the proposal considers all the demand response resources under one bucket (“supply side demand response”).

CDWR suggests creating a standalone provision for a PL resource for the following reasons:

i) CDWR’s PL resources are different compared to other types as it is generally a wholesale water pumping load operating under a Participating Load Agreement (PLA) signed with the CAISO.

ii) PLA is signed by the CAISO and the PL entity, and the terms of the agreement are agreed upon by both parties.

iii) The PLA sets criteria for capability of the PL resource to provide RA with the CAISO tested and certified non-spin capability. The tariff default provision and the PLA provision for RA should align.

iv) A PLA entity, such as CDWR, may be subject to the load curtailments under the Operating Procedure (4420: System Emergency) where load can be curtailed significantly as conditions permit, beyond the RA capacity offered. CAISO can reach out to California Water Agencies such as CDWR to verify if pump load schedules can be reduced during supply-constrained hours. This indicates willingness and the ability to drop the load (as the priority among loads) under the Operating Procedure 4420. This sets apart how PL demand is treated compared to retail loads.

v) PL resources providing RA and acting under the CAISO Operating Procedure 4420 load curtailments contribute to the systemwide 0.1 LOLE target. Historically, in many instances, the load curtailments in stressed grid conditions under this procedure have enabled CAISO to prevent exacerbation of those conditions.

The default criteria for Participating Load should base the QC value on the CAISO certified non-spin capability. The monthly capability (if applicable) should be based on the PLA capacity for a month (if monthly capability determination applies), With this approach, PL resources will continue to provide RA based on the CAISO certified capacity and continue to provide load curtailments under the Operating Procedure 4420 based on the monthly capability.

CAISO proposes, a) not including a numeric default PRM in the tariff itself but instead allowing for relatively frequent LOLE studies to inform the default rules., and b) on an informational basis, post CAISO default QC list that would allow for LRAs to draw from the CAISO default QC list as a part of their annual engagement in the current tariff Section 40.4 NQC list process. CDWR has concerns with CAISO’s proposal to update the PRM and default counting rules based on periodic 0.1 LOLE studies. LRAs need certainty and stability in PRMs and counting rules to do effective long-term planning. It is difficult to plan if the PRM and other rules are changing frequently, which would be a concern if CDWR were to become subject to the default rules. This is another reason why PRMs should be determined by the LRA as they are now, so that factors such as affordability can be considered. If CAISO moves forward with this proposal for the default PRM and counting rules, the following items should be clarified at the outset: a) when and where the PRM values are posted so LRAs can refer to the PRM numbers. b) what happens if an LRA uses its own QC values (that differ from the default QC values) in the annual QC process? c) Given the annual default QC values reference driven by LOLE study, how is the monthly QC update going to be impacted?

2. Please provide your organization’s feedback on the Accounting for RA Resource Capabilities during Peak Conditions element of the straw proposal including the following elements: a. Should CAISO continue to develop a standardized/minimum verification process to account for ambient derates? b. If yes, how should the verification design be modified or applied? Would a single calculation based on an annual analysis be sufficient, if applied only to key summer months (e.g. July-September)? Or would a monthly/seasonal calculation and verification process be preferable?

If the “monthly capability” determination is applicable only to thermal resources, the proposal should clearly state that no other resources would be subject to this assessment as part of NQC process for those resources.

3. Please provide any additional comments on the straw proposal.

No further comments.

1. Please provide your organization’s feedback on Updating CAISO’s Default Resource Adequacy Rules element of the straw proposal. Additionally, include any specific changes your organization would like the CAISO to consider regarding the proposal’s design and process, along with the rationale for these suggested changes.

Comments on Resource Adequacy Modeling, Default Rules, and Ambient Derates (Track 1) Straw Proposal

Department of Market Monitoring

June 25, 2025

Overview

The Department of Market Monitoring (DMM) appreciates the opportunity to comment on the Resource Adequacy Modeling, Default Rules, and Ambient Derates (Track 1) Straw Proposal and Straw Proposal Meeting dated June 6 and 11, respectively.[1]^,[2] In these comments, DMM adds to our previous comments in response to the ISO, Resource Adequacy Modeling and Program Design (RAMPD) Working Group dated March 13, 2025.[3] DMM includes additional comments on the following two issues:

• Default accounting rules. DMM continues to support the default accounting rules, and recommends the ISO incorporate resource-level accounting for storage resources.
• Accounting for ambient derates. Ambient derates should be self-reported by the resource through the outage management system, and the must offer obligation should remain unchanged as long as interdependent policies (e.g., availability or performance incentives) are improved.

Comments

Default accounting rules

DMM continues to support the development of default qualifying capacity methodologies. The ISO is proposing to develop default net qualifying capacity (NQC), and planning reserve margin (PRM) methods to meet a 0.1 loss of load expectation (LOLE) across the default values. DMM understands that NQC and PRM values established by the local regulatory authority (LRA) will take precedent where such values exist. However, the default accounting rules would establish these values where not established by the LRA. The default accounting rules would create a framework and structure for the ISO to ensure there may be equitable procurement across the LRAs within the CAISO footprint by ensuring each LRA meets the 0.1 LOLE threshold. DMM believes the robust default PRM, and default resource accounting, will create a vetted process for equitable backstop, and provide for greater transparency moving forward in the case of any future backstop procurement.

Default net qualifying capacity rules

The development of the default NQC values vary across resource types, whereby some resources will be assessed at a resource class-level, and other resources will be assessed at the unit-level. DMM supports variable energy resources to be assessed their effective load carrying capability (ELCC). DMM also supports an ELCC approach for hydro resources, which have additional constraints on the resource such as instream flow requirements. Additionally, DMM supports dispatchable resources (e.g., thermal resources) to have their qualifying capacity (QC) assessed at their unforced capacity (UCAP) value because it will incentivize the dispatchable resources to plan and coordinate their outages to increase their NQC valuation.

DMM suggests further demonstration from the ISO that the storage ELCC approach is preferred to a UCAP valuation for storage resources. A UCAP valuation incentivizes resources to improve performance and maximize capacity available to the resource adequacy (RA) market, whereas the current formulation of the ELCC approach does not. The ISO’s current proposal would use one QC value multiplier for all storage resources. A strength of the ELCC methodology is that it includes an energy sufficiency test in the valuation of the storage resources. However, this step could also be included in a UCAP framework. DMM recommends the UCAP framework, or a mechanism to adjust the ELCC valuation such that it can reflect resource-specific availability to incentivize increased system reliability.

To incentivize improved resource availability and performance for demand response (DR), DMM supports the development of a performance based UCAP approach. The ISO proposal would assess the performance based UCAP at the provider level, which DMM agrees will incentivize improved portfolio-level performance. DMM agrees that the ISO should not replace the work the California Energy Commission (CEC) and the California Public Utilities Commission (CPUC) are undertaking in their development of a new DR accreditation methodology that would replace the DR load impact protocols (LIP). The performance based UCAP for DR would be the default value, whereas the CEC and CPUC DR accreditation methodology will take precedent for CPUC-jurisdictional contracted DR.

Lastly, for resource accounting, DMM recommends the ISO reconsider the current rule for resources partially shown by multiple LSEs that are subject to different local regulatory authority (LRA) accreditation programs. Currently, the NQC provided to the resource is the highest NQC value provided by the different LRAs. This provision could incentivize a resource to freely sell additional capacity if the valuations vary widely. For example, take a 100 MW storage resource that has a valuation of 75 MW under the ISO’s default ELCC values, but 95 MW under the CPUC’s UCAP. The resource would then be able to freely sell an additional 20 MW of RA to a CPUC jurisdictional LSE if they were already supplying 75 MW of RA to an LRA under the ISO’s default values. DMM recommends exploring a method to weigh RA accreditation across LRAs to avoid this issue of gaming LRA rules for RA.

Accounting for RA resource capabilities during peak conditions

The ISO has proposed to account for ambient derates separately from the UCAP accounting framework. DMM continues to support this approach.[4] DMM previously recommended the ISO require resources to self-report their available capacity after accounting for ambient derates from their known thermodynamic limits.[5] The ISO is proposing to calculate the ambient derates from the outage management system (OMS), which is also self-reported data, and aligns with this recommendation. Additionally, if the resource is taking overlapping outages, and there is no available OMS data, the ISO is proposing the scheduling coordinator (SC) can submit their own qualifying capacity values.[6]

Currently, the CAISO tariff includes a must-offer obligation (MOO) for resources up to their shown RA capacity values. DMM understands the resulting NQC of a resource after ambient derate accounting and UCAP will be the result of taking deliverable qualifying capacity, adjusting to reflect ambient derates, and then the UCAP percentage adjustment will be made.

If ambient derate accounting does not reflect real-time conditions, and a resource must take an ambient derate above the derated capacity accounted for in this policy, the ISO should make explicit the interaction with the UCAP mechanism and the additional derate. In these conditions, the resource will be unable to meet their MOO, and thus there could be a potential UCAP impact of the additional derate.

As a part of the interdependencies in the RAMPD stakeholder initiative, if the resource has misrepresented their maximum operating limit, and cannot reach their true maximum output, the resource would owe availability or performance payments. Sufficiently strong availability or performance penalties would dissuade resources from misrepresenting their available capacity. This includes maintaining the current MOO, which requires the resource to bid the resource to their shown RA value. The interdependent outage policies from a well-designed UCAP mechanism—and availability or performance incentives—would incentivize accurate self-reporting of available capacity. Furthermore, maintaining incentives to perform beyond a resource’s shown RA (i.e., MOO) will encourage resources to perform at their maximum capability.

[1] Resource Adequacy Modeling, Default Rules, and Ambient Derates (Track 1) Straw Proposal, California ISO, June 6, 2025: https://stakeholdercenter.caiso.com/InitiativeDocuments/Track1StrawProposal-ResourceAdequacyModelingandProgramDesign-June62025.pdf

[2] Resource Adequacy Modeling and Program Design: Track 1, California ISO, June 11, 2025: https://stakeholdercenter.caiso.com/InitiativeDocuments/Presentation-ResourceAdequacyModelingandProgramDesign-Jun112025.pdf

[3] Comments on Resource Adequacy Modeling and Program Design Working Group, Department of Market Monitoring, March 13, 2025: https://www.caiso.com/documents/dmm-comments-on-resource-adequacy-modeling-and-program-design-working-group-mar-13-2025.pdf

[4] Ibid.

[5] Comments on Resource Adequacy Modeling and Program Design Issue Paper, Department of Market Monitoring, December 6, 2024: https://www.caiso.com/documents/dmm-comments-on-resource-adequacy-modeling-and-program-design-issue-paper-dec-06-2024.pdf

[6] Resource Adequacy Modeling, Default Rules, and Ambient Derates (Track 1) Straw Proposal, California ISO, June 6, 2025: https://stakeholdercenter.caiso.com/InitiativeDocuments/Track1StrawProposal-ResourceAdequacyModelingandProgramDesign-June62025.pdf

2. Please provide your organization’s feedback on the Accounting for RA Resource Capabilities during Peak Conditions element of the straw proposal including the following elements: a. Should CAISO continue to develop a standardized/minimum verification process to account for ambient derates? b. If yes, how should the verification design be modified or applied? Would a single calculation based on an annual analysis be sufficient, if applied only to key summer months (e.g. July-September)? Or would a monthly/seasonal calculation and verification process be preferable?

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

3. Please provide any additional comments on the straw proposal.

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

1. Please provide your organization’s feedback on Updating CAISO’s Default Resource Adequacy Rules element of the straw proposal. Additionally, include any specific changes your organization would like the CAISO to consider regarding the proposal’s design and process, along with the rationale for these suggested changes.

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

The June 6, 2025, Straw Proposal does not explicitly include a proposed default accreditation method for participating load; namely, hydrological pumping loads that can be bid into the California Independent System Operator Corporation (CAISO) energy markets.[1]  The California Department of Water Resources (CDWR) previously commented that the CAISO could base participating load default accreditation on the relevant participating load agreement.[2]  In the next draft proposal, the CAISO should propose a default accreditation method for participating load and describe how the CAISO would consider the value of participating load in the CAISO’s loss of load expectation study to support the default planning reserve margin.

In addition, CDWR requested that, if participating load uses Unforced Capacity (UCAP) accreditation, a resource on forced outage “should be defined clearly as it is not a generating resource.”[3]  If the CAISO proposes an accreditation method for participating load using UCAP, the CAISO should describe in the next draft proposal how it would determine participating load forced outages.

[1] The Straw Proposal categorizes a number of resource types to consider respective default qualifying capacity (QC) methodologies but does not explicitly include participating load.  CAISO, Resource Adequacy Modeling, Default Rules, and Ambient Derates (Track 1) Straw Proposal, June 6, 2025 (Straw Proposal) at 9.  Available at: https://stakeholdercenter.caiso.com/InitiativeDocuments/Track1StrawProposal-ResourceAdequacyModelingandProgramDesign-June62025.pdf.

[2] CDWR, Comments of the California Department of Water Resources, March 5, 2025 (CDWR March Comments) at Section 3.  Available at: https://stakeholdercenter.caiso.com/Comments/AllComments/a06ca1e0-f50f-4780-b24b-ec300d9c7cce#org-dcdbe3ce-a815-4a8d-8fbd-56f3cc358d3d.  See also CDWR, Comments of the California Department of Water Resources, December 5, 2024 at Section 5.  Available at: https://stakeholdercenter.caiso.com/Comments/AllComments/bdcf8a8d-f2dc-4aad-b662-53d5edc8f45f#org-032969f7-f439-4c72-a982-0af1cd251004.

[3] CDWR March Comments at Section 4.

2. Please provide your organization’s feedback on the Accounting for RA Resource Capabilities during Peak Conditions element of the straw proposal including the following elements: a. Should CAISO continue to develop a standardized/minimum verification process to account for ambient derates? b. If yes, how should the verification design be modified or applied? Would a single calculation based on an annual analysis be sufficient, if applied only to key summer months (e.g. July-September)? Or would a monthly/seasonal calculation and verification process be preferable?

Cal Advocates generally supports discounting net qualifying capacity (NQC) to account for ambient derates[1] of thermal resources.[2]  NQCs that accurately reflect the availability of generation resources help ensure that day-ahead and real-time markets award sufficient supply to meet expected load conditions.

Below, Cal Advocates outlines several concerns and provides suggestions to improve ambient derate accounting and application to NQCs.

Data Quality Concerns

The CAISO proposes to use historic outage data to inform resource-specific volumes of ambient derates and potentially decrease a thermal resource’s NQC accordingly.[3]  The CAISO would include “ambient derates due to temperature” types of outages in its proposed calculation of ambient derates.[4]  Scheduling Coordinators (SC) will continue to use the CAISO’s Outage Management System (OMS) to self-report all types of forced outages.  The CAISO proposes to assess volumes of ambient derate outages on ten of the highest hourly peaks over the past two years.[5]

Ambient derate volumes on assessed hours is the primary input variable for CAISO’s proposed calculation.[6]  It is paramount that ambient derate data from OMS are accurate in order to correctly adjust a resource’s NQC.  However, it remains unclear if SC-reported data have been, and will continue to be, accurately reported.  Unreported ambient derates would cause any potential decrease to a resource’s NQC to be undercounted.  In the next workshop of this initiative or the draft final proposal, the CAISO should provide an estimate of the proportion of ambient derate outages that are unreported.[7]  If unreported outages are substantial enough to harm the accuracy of resource-specific ambient derates, the CAISO and stakeholders must pursue a solution before the CAISO implements the proposed ambient derate framework.

Gaming Concerns

The CAISO’s proposed use of ambient derate data also creates an incentive for SCs to under-report or mis-report ambient derates.  Specifically, that report could cause a reduction of the resource’s NQC and thus lower the resource’s value.  If the CAISO does not mitigate the incentive to under-report or mis-report, the CAISO’s proposed ambient derate framework would not be accurate

The CAISO should clarify if any consequences and protections currently exist to prevent such gaming.  If suitable protections do not exist or cannot be developed, the CAISO should use an alternative approach to account for ambient derates, such as resource testing.[8]

Annual or Monthly/Seasonal Design

The CAISO proposes to apply ambient derates to the NQC of a resource for all months of the year despite assessing only days of peak load conditions.[9]  This approach maximizes the amount of data that the CAISO can assess since peak load conditions from the full year would inform the NQC.  However, ambient derates are caused by high ambient temperatures, which tend to occur more frequently in summer months than in other seasons.  Accordingly, it would be inappropriate to reduce a resource’s NQC in a winter month based on ambient derate effects in summer.  Reduction of a resource’s NQC in a non-summer month due to a generally summer-based phenomenon would unnecessarily reduce Resource Adequacy (RA) supply volumes and would require load-serving entities to perform additional procurement to make up the difference.

The CAISO should modify its ambient derate approach to create month-specific ambient derate calculations to apply to resource NQCs.  Since NQCs are monthly and California’s weather generally follows monthly patterns, this approach would be more accurate and suitable for RA resources.  However, Cal Advocates acknowledges that there is less ambient derate data available in OMS on a monthly basis than annual.[10]  If OMS data is not sufficient to support a monthly ambient derate calculation, the CAISO should consider calculations on a multi-month or seasonal basis. 

The CAISO should also determine and explain in this initiative if ambient derates are substantial in non-summer months.  If reported ambient derates are negligible in certain months, such as winter months when ambient temperatures are typically low, the CAISO should consider not applying ambient derate NQC effects to those months.[11]

Alternative Approaches to Ambient Derate Accounting

Cal Advocates’ concerns above are specific to the use of historical outage data to determine any ambient derate effects to resource NQCs.  The CAISO could avoid data accuracy and gaming concerns by using a resource-specific NQC testing program to determine resource availability and the impacts of ambient weather on generation.  If the CAISO cannot address the data-related concerns of stakeholders such as Cal Advocates, then the CAISO should re-evaluate its decision to not pursue a testing-based program to account for ambient derates in NQCs.[12]

If the CAISO does not address data-related concerns and the CAISO approves the data-based ambient derate framework, then the CAISO should develop a routine audit or verification method for outage data to ensure the integrity of reported data.  For example, the CAISO could review monthly or annual ambient derate data of similar resource types located in similar geographic or climatic areas and investigate any values that deviate from average.[13]  If the CAISO’s investigation finds a discrepancy in reported data, then the CAISO should work with the resource owner and SC to determine if intentional abuse of data reporting occurred, and the CAISO should apply any appropriate consequences.

[1] “Ambient derates” are a type of fractional forced outage caused by the phenomenon of thermal-based generation becoming less efficient due to the ambient weather temperature of the area which the generating resource exists.  This can prevent a thermal resource from providing its full generation capacity.  For more information, see CPUC, Proposal for Derating Thermal Power Plants based on Ambient Temperature, January 20, 2023 at 2, 4-8.  Available at: https://www.cpuc.ca.gov/-/media/cpuc-website/divisions/energy-division/documents/resource-adequacy-homepage/r21-10-002/4_ed-proposal-for-phase-3-derates.pdf.

[2] The proposal would only apply to “thermal resources” meaning gas, oil, coal, nuclear, biomass, geothermal, and biogas fuel types.  The proposal would not apply to thermal solar generation.  Staff Proposal at 18.

[3] Staff Proposal at 18-20.

[4] Staff Proposal at 18-19.

[5] The CAISO proposes to use the lower ten values of the twenty highest hourly peak load days are used to avoid using data for extreme conditions.  Staff Proposal at 19.

[6] Straw Proposal at 20.

[7] Previously, the CAISO acknowledged that unreported outages have created challenges in the Congestion Revenue Rights framework and caused impacts associated revenues.  CAISO, Tariff Amendments to Increase Efficiency of Congestion Revenue Rights Auctions: Declaration of Guillermo Bautista Alderete on Behalf of the California Independent System Operator Corporation, April 11, 2018 at 14-15 (page 100-101 of the primary document).  Available at: https://www.caiso.com/documents/apr11_2018_tariffamendment-crrauctionefficiencytrack1a_er18-1344.pdf.

[8] The CAISO states that challenges and administrative burden of developing an NQC testing program has caused it to not move forward with such a test-based proposal.  At least one other grid operator does employ such a testing program.  Staff Proposal at 16-17.

[9] The “Capability Value” derived from those assessed peak load days would apply to “each month’s QC value” and the lower of the two values would inform the NQC for the whole year.  Straw Proposal at 19.

[10] For example, if a resource is on a full outage for a month, no ambient derate data would be available for that month for that resource.

[11] Cal Advocates notes that a recent CAISO assessment reported relatively negligible ambient derate volumes outside of summer months.  CAISO, 2025 Summer Loads and Resources Assessment: Technical Appendix, May 5, 2025 at 7.  Available at: https://www.caiso.com/documents/2025-summer-loads-and-resources-assessment-technical-appendix.pdf.

[12] Staff Proposal at 16-17.

[13] Investigation should lead to a determination that supports such a deviation (possibly due to unique resource characteristics that mitigate ambient derates) or that indicates potential reporting abuse has occurred.

3. Please provide any additional comments on the straw proposal.

Cal Advocates provides no additional comments at this time.

1. Please provide your organization’s feedback on Updating CAISO’s Default Resource Adequacy Rules element of the straw proposal. Additionally, include any specific changes your organization would like the CAISO to consider regarding the proposal’s design and process, along with the rationale for these suggested changes.

No Comment

2. Please provide your organization’s feedback on the Accounting for RA Resource Capabilities during Peak Conditions element of the straw proposal including the following elements: a. Should CAISO continue to develop a standardized/minimum verification process to account for ambient derates? b. If yes, how should the verification design be modified or applied? Would a single calculation based on an annual analysis be sufficient, if applied only to key summer months (e.g. July-September)? Or would a monthly/seasonal calculation and verification process be preferable?

Calpine appreciates CAISO's consideration of a standard approach to reflect ambient de-rates in QCs. We offer the following initial comments on the primary proposal:

• Calpine is concerned about potential inconsistency or overlap with potential CPUC UCAP QC counting rules and would prefer that the CAISO not develop its own methodology at this juncture. 
• To the extent that the CAISO develops and applies its own methodology, Calpine supports the proposal for monthly granularity.  A single annual ambient derate based on summer peak conditions would inappropriately reduce the capacity that suppliers are able to sell outside of peak summer months.  In addition to unreasonably resticting sales of valuable and relaible capacity, this would decrease the amount of reliable replacement capacity available during increasingly restrictive outage seasons in the fall and spring.  

3. Please provide any additional comments on the straw proposal.

Calpine offer these further comments on the primary proposal:

• First, any implementation should afford suppliers reasonable opportunity to adjust contracting for resources if necessary.  For example, we understand that the CPUC is not planning implementiaton of UCAP before 2028.
• In identifying the assessment hours, the Straw Proposal refers to both days of the the highest hourly “net load” and “peak load.”  Given that reliability is at highest risk during the net peak (load minus wind and solar), Calpine would support the use of net load metrics.  
• Calpine does not understand the fundamental mechanics of the calculation and requests that if the CAISO moves forward, that a specific example be included in the next draft.  For example, once the annual top 20 net-peak load days are assembled and the days 11-20 are evaluated, would ambient derates  in all hours of each day be evaluated?  Would only the net-peak hours be reviewed? Is it the intention of the CAISO to use average ambient derates in the selected 10 days and apply them to all months regardless of in which months they occur? 
• Calpine would like to understand the basis of reviewing the the top twenty net-load days and then only using the last 10 of the twenty.  This represents about 2.7 percent of the days in a year.  Is this intended to represent average derates, or some other target such as derates under unusual or extreme circumstances?  
• Calpine supports the application of a MOO to the capacity that is sold.  If NQC is reduced by application of ambient derates,  the quantity of eligible RA capacity would presumptively decrease as well.  A MOO for more than the ambient-adjusted NQC (e.g. up to Pmax) would systematically expose the resource to performance penalties.  
• If the CAISO were to adopt the primary proposal for ambient derates, Calpine would support the development of a dispute process in which the CAISO could allow additional information to be considered in the creation of NQC values. 

Finally, while Calpine still has reservations about double-counting of outages between UCAP and an additional ambient adjustment, we do support the alternative proposal.  That proposal would allow SCs the opportunity to represent the ambient adjusted capability to the resource independently, as it is today.  The CAISO could prescribe the conditions under which NQC should be adjusted from a reliability perspective and the SC could produce ambient-adjusted capability.  This proposal would allow SCs to include information not represented in historical data – including major maintenance items that improve performance during higher ambient conditions. 

1. Please provide your organization’s feedback on Updating CAISO’s Default Resource Adequacy Rules element of the straw proposal. Additionally, include any specific changes your organization would like the CAISO to consider regarding the proposal’s design and process, along with the rationale for these suggested changes.

Microsoft appreciates CAISO’s continued leadership in modernizing the Resource Adequacy (RA) framework to better reflect system reliability needs in a changing resource mix. The Track 1 Straw Proposal reflects thoughtful progress on several fronts, and we offer the following comments.

Microsoft supports CAISO’s proposed approach to updating the default Planning Reserve Margin (PRM). Moving away from a fixed 15% default PRM and instead anchoring the default PRM in a probabilistic LOLE study represents an innovative improvement. This proposed LOLE based framework will be more effective because it allows for periodic updates based on system conditions and resource mix changes. It also better aligns with the reliability outcomes the RA program is required to achieve (CA Pub. Utils Code sec. 380). 

While we are supportive of the PRM framework, we do have concerns regarding the alignment of the default qualifying capacity (QC) methodologies, particularly the proposal to apply a UCAP-style derate to thermal and pump-hydro resources while applying an average ELCC for wind, solar, storage, and run-of-river hydro resources. The UCAP proposal bases capacity on historical availability during "supply cushion" hours while average ELCC reflects a forward-looking, system-integrated reliability value based on probabilistic modeling and LOLE hours which might not be the same as supply cushion hours. We are concerned applying these two default QC methods introduces a conceptual misalignment within the default rules.

We believe that maintaining a coherent, reliability-based framework requires alignment between the methods used to determine PRM and the methods used to accredit resources. A fully probabilistic ELCC-based approach for all resource types, including thermal and pump-hydro, may offer greater consistency, transparency, and fairness—especially if paired with CAISO’s proposed capability value adjustment in the NQC process to account for real-world derates during peak conditions.

2. Please provide your organization’s feedback on the Accounting for RA Resource Capabilities during Peak Conditions element of the straw proposal including the following elements: a. Should CAISO continue to develop a standardized/minimum verification process to account for ambient derates? b. If yes, how should the verification design be modified or applied? Would a single calculation based on an annual analysis be sufficient, if applied only to key summer months (e.g. July-September)? Or would a monthly/seasonal calculation and verification process be preferable?

None

3. Please provide any additional comments on the straw proposal.

Microsoft would like to highlight the importance of system reliability modeling as an essential foundation of Track 1. To date, Track 1 has encompassed both program design and reliability modeling, with a focus on near- and mid-term (2-4 years out) modeling for the modeling efforts. The Straw Proposal for Track 1 does not address modeling directly, and we want to ensure that the modeling track remains an active and visible component of the broader initiative. Specifically, we are interested in when CAISO might conduct LOLE modeling for the 2026 and 2027 RA years. Please clarify if modeling has been moved outside of Track 1 or remains in Track 1 but will not be contemplated in the proposal. Additionally, does the CAISO anticipate making progress on mid-term (2-4 years out) modeling? Legislation was passed last year (AB 2368) to ensure that CAISO would have the mid-term procurement data necessary to complete mid-term modeling.

1. Please provide your organization’s feedback on Updating CAISO’s Default Resource Adequacy Rules element of the straw proposal. Additionally, include any specific changes your organization would like the CAISO to consider regarding the proposal’s design and process, along with the rationale for these suggested changes.

Resource accreditation is a very important topic.  This topic, coupled with the derivation of a Planning Reserve Margin (“PRM”) that sets resource procurement targets that achieve the right level of reliability on a planning basis (which itself depends on proper resource accreditation), form the backbone of a reliable Resource Adequacy (“RA”) program. 

MRP agrees that CAISO should have a set of default resource accreditation methodologies that supports a fungible capacity product and treats equally all resources in the measurement of reliability capacity each resource can provide.  The CAISO proposes to use the Effective Load-Carrying Capability (“ELCC”) methodology for certain resources, including use-limited resources, and to use supply cushion Unforced Capacity (“UCAP”) methodology for other, primarily non-use-limited resources.  MRP believes this creates an inefficient and unequal measurement of reliability between different resources.

MRP understands the CAISO will be calculating the ELCCs of various resources based on forward-looking load forecasts and the supply mix for that compliance year.  Additionally, that supply mix will be tuned monthly to achieve a 1-in-10-year Loss of Load Expectation (“LOLE”).  This LOLE analysis would surface the critical hours of need and result in a monthly ELCC value for such resources.  MRP understands that the CAISO is not proposing to use a single annual ELCC value for resource accreditation.

While certain resources are accredited using forward-looking ELCC methodologies, the CAISO proposed to accredit other resources using supply cushion UCAP methodology, which is a backwards-looking methodology.  The CAISO is proposing to use UCAP mostly for non-use limited resources such as thermal, biomass, nuclear, etc.  This UCAP method uses the past three years of performance data and is based on actual real-time loads, which can be greater than the 1-in-2-year demand forecast that’s applied in the ELCC methodology.  This backwards-looking dataset does not correlate to the same forward-looking critical hours that are used in the ELCC methodology.  This mismatch creates different treatment for different resources and would not make capacity fungible. 

As shown by the CAISO during the February stakeholder meeting, the CAISO evaluated the LOLE of the 2024 shown RA fleet and noted it that it was not anywhere close to the 1-in-10-year reliability metric.  This means that the “critical hours” reflect the capacity procured and shown by LSEs and do not align with true critical hours.  Had Local Regulatory Authorities (“LRAs”) set their RA programs to meet the 1-in-10-year reliability metric, it would be appropriate to assume the lowest 20 percent supply cushion hours would be different. 

Consequently, MRP advocates using the ELCC methodology as the default capacity accreditation for all resources for the CAISO’s default RA program rules so that all resources can be accredited equally. 

While CAISO focuses on the default counting criteria in Track 1, it is unclear how impactful the CAISO’s default counting rules will be within the grand scheme of the CAISO RA program because the CAISO will continue to defer to LRA-specific counting rules.  The main underlying question that needs discussion is how the CAISO ensures the RA resources shown to it achieve the 1-in-10 year reliability metric on a planning basis if LRAs choose their own accreditation and PRMs.  If various LRAs use the CAISO’s default PRM but then also use the CPUC’s Qualifying Capacity (“QC”) accreditation methodologies in part or whole, how can the CAISO ensure that LRA programs maintain a 0.1 LOLE?  Should the CAISO require LRAs to show how their specific RA programs with unique resource accreditation values and PRMs meet the 0.1 LOLE?  This is a necessary discussion topic that doesn’t necessarily fit into Track 2.

With regards to UCAP, MRP recommends the following:

1. Eliminate opportunity outages from the calculation.
2. Provide a definition of each term in the formula
3. Provide numerical examples for the calculations so that stakeholders have a better understanding of the proposed formula.

First, MRP interprets opportunity outages as short-notice opportunity outages.  These outages were approved to not require substitution by the CAISO because such outages would not create reliability issues.  To include such outages in the formula for supply cushion would penalize resources that have been granted and taken such outages because the CAISO has determined they would not affect reliability.   

Second, the CAISO should provide definitions of each term to provide clarity.  For instance, what is meant by daily shown RA?  Is this RA value based on the month-ahead supply plan or the value that is in CIRA for the day?  There could be a difference depending on whether the resource provided substitute capacity while on outage. Moreover, what types of planned outages are included?  MRP notes that CAISO excludes planned outages from its ELCC calculations, but includes them in UCAP, Should the ELCC calculations include the same planned outages under UCAP?  What opportunity, urgent and forced outages should be included?

Third, it would be helpful to have a numerical example of the calculations.  The CAISO notes that UCAP value will be calculated for the top 20% of tightest supply cushion hours in the peak and non-peak months.  How is that distribution different from the top 20% of tightest hours on an annual basis?  In other words, could the top 20% of tightest supply cushion hours all occur in the peak months and not in the non-peak months, but the CAISO is electing to choose the top 20% of hours in each season simply to make it even?  Could one method statistically skew the outcome unintentionally?

2. Please provide your organization’s feedback on the Accounting for RA Resource Capabilities during Peak Conditions element of the straw proposal including the following elements: a. Should CAISO continue to develop a standardized/minimum verification process to account for ambient derates? b. If yes, how should the verification design be modified or applied? Would a single calculation based on an annual analysis be sufficient, if applied only to key summer months (e.g. July-September)? Or would a monthly/seasonal calculation and verification process be preferable?

a. Should CAISO continue to develop a standardized/minimum verification process to account for ambient derates?

No, MRP does not believe the CAISO should develop a standardized verification process to account for ambient derates.  Some LRAs may wish to account for ambient derates in their RA programs in their PRMs and, in that case, CAISO should not reduce QC values.  Additionally, if an LRA elects to incorporate its own ambient methodology, but that results in capacity values higher than CAISO’s proposed values, then it’s unclear whether the CAISO will override the LRA’s values.  It would seem discriminatory for CAISO to approve one LRA’s QC accreditation methodology simply because it creates capacity values that are lower than the CAISO’s values, but then not approve another LRA’s accreditation methodology that results in higher capacity values than the CAISO’s values if both LRA programs can maintain a 1-in-10-year LOLE.  CAISO, therefore, should focus on how each LRA’s RA program ensures a 1-in-10-year LOLE with their resource accreditation and PRMs instead.

b. If yes, how should the verification design be modified or applied? Would a single calculation based on an annual analysis be sufficient, if applied only to key summer months (e.g. July-September)? Or would a monthly/seasonal calculation and verification process be preferable? *

Unless the weather data indicates that the weather conditions across all summer months will be the same, MRP Is skeptical that an annual or seasonal approach would work – there would be too much weather variation across that period to adopt a single “ambient derate” value.

3. Please provide any additional comments on the straw proposal.

MRP strongly supports the CAISO’s intent to use its modeling capabilities to guide future resource needs to maintain reliability.  That being said, resource accreditation is only one part of the RA program – a part that is intrinsically linked with to the PRM.  MRP looks forward to additional opportunities to review and discuss CAISO’s LOLE studies.  MRP also recommends that the CAISO publish default NQC values and default PRMs so that stakeholders can have better clarity and transparency regarding the CAISO’s annual resource needs.

1. Please provide your organization’s feedback on Updating CAISO’s Default Resource Adequacy Rules element of the straw proposal. Additionally, include any specific changes your organization would like the CAISO to consider regarding the proposal’s design and process, along with the rationale for these suggested changes.

NCPA understands that CAISO is re-evaluating default counting rules and PRMs that have been unchanged for approximately 20 years. NCPA appreciates CAISO’s continued recognition that the default rules only apply in cases where LRAs (including the CPUC) have not established their own criteria and that an LRA has ultimate authority over its own RA program. Although NCPA emphasizes that CAISO should keep the default counting rules and PRM as default rules for LRA inaction, it is nevertheless important to get these default rules right because they often serve as a guide for LRAs when adopting their own criteria (which is how NCPA has used the default rules).

NCPA notes that it is somewhat difficult to comment on the proposed rules without knowing CAISO’s plans for track 3. Several stakeholders have raised contentions about supposed “leaning” on the system by entities setting their own criteria, although there has been no evidence presented that such leaning occurs, has caused problems or is widespread. There seems to be a suggestion that LRAs setting their own criteria might be subject to some kind of adjustment in the MURA or RSE arena, the details of which are not known here. NCPA reserves the right to re-assess comments here in light of new information in other tracks.

Although CAISO points to NCPA’s tentative support for most elements of proposal 1 with respect to adoption of an average ELCC methodology for variable energy resources, it ignores NCPA’s contentions that resource owners must have the opportunity to show that an individual resource has the ability to perform better than a class average. Some resources simply provide more capability than others of the same type, and not permitting such demonstrations risks leaving badly-needed megawatts on the table, and does not incent entities to make investments that may allow a specific unit to operate at a level that is better than the class average. The default resource counting rules should not de-rate capable resources for no good reason other than uniformity and administrative simplicity.  NCPA therefore supports default rules in which QC is based on, or appropriately adjusted to reflect, unit-specific historical performance.

NCPA continues to generally support a UCAP methodology that accounts for ambient derates and potentially Forced Outages during tight supply conditions that mostly align with current Availability Assessment Hours. Whatever administrative benefits or conceptual simplicity probabilistic methodologies may offer, those do not outweigh the failure to account for actual operating characteristics of individual resources. Given the stakes and financial investments involved, this unit-specific accuracy cannot be sacrificed. Moreover, using class average-based approaches raises concerns about undue discrimination—both between resources subject to that methodology and other resources, and between differently situated resources grouped within the same class (e.g., different duration of storage, solar with different characteristics or geography, etc.).

NCPA strongly opposes setting must offer obligations higher than UCAP values and appreciates that CAISO’s proposal does not include a change to the must offer rules. NCPA understands the potential concern that the difference is intended to account for unavailability, but NCPA feels that that methodology creates an unfair balance of risk and reward. NCPA looks forward to continued refinement of the UCAP design with CAISO and stakeholders.  

NCPA has commented at length on the need for stability in planning reserve margins. Given that it takes several years to plan and construct resources and the necessary transmission, a moving target PRM makes effective planning impossible and could increase costs without increasing reliability.  While a 0.1 LOLE evaluation provides good data for setting a PRM, a mechanistic application of PRM, particularly if performed frequently, would prevent consideration of other factors such as affordability, a subject with increasing resonance in California. NCPA can attest to the affordability concerns raised by its own customer ratepayers. These concerns demonstrate why it is important for LRAs (including the CPUC) to maintain the ability to set a PRM that considers all factors relevant to ratepayers.  NCPA is currently studying a PRM based on a 0.1 LOLE approach. While NCPA recognizes that it is appropriate to reevaluate counting rules from time to time, to ensure they are in-line with current system needs, NCPA also believes that default counting rules need to be stable to encourage investment.    

2. Please provide your organization’s feedback on the Accounting for RA Resource Capabilities during Peak Conditions element of the straw proposal including the following elements: a. Should CAISO continue to develop a standardized/minimum verification process to account for ambient derates? b. If yes, how should the verification design be modified or applied? Would a single calculation based on an annual analysis be sufficient, if applied only to key summer months (e.g. July-September)? Or would a monthly/seasonal calculation and verification process be preferable?

NCPA supports CAISO developing a process for monitoring generator performance and persistent deviations from must offer obligations and dispatch operating targets, to the extent such a process does not already exist. Ambient derate testing could be challenging and costly without commensurate benefits, particularly in summer months when the grid could be experiencing stressed conditions.    

3. Please provide any additional comments on the straw proposal.

No additional comments at this time.

1. Please provide your organization’s feedback on Updating CAISO’s Default Resource Adequacy Rules element of the straw proposal. Additionally, include any specific changes your organization would like the CAISO to consider regarding the proposal’s design and process, along with the rationale for these suggested changes.

PG&E continues to support revision to the CAISO default qualifying capacity rules and planning reserve margin in the CAISO tariff.  The default counting rules (QC values) should reflect the relative contribution of different resource types and individual resources to maintain BAA-wide and local reliability.  The default PRM should be designed alongside counting rules to create a coherent set of RA standards. 

PG&E recommends transparency in the CAISO default values calculation and encourages CAISO to provide concrete examples on the default QC, PRM and UCAP derates as soon as possible. 

PG&E suggests the CAISO provide a clear timeline specifying when the CAISO will conduct the annual LOLE analysis to determine the default QCs and associated monthly PRM (including UCAP and ambient due to temperatures derates) and when the final results will be published. LSEs need visibility in those values far in advance to not delay any procurement decisions.  

On UCAP, PG&E still recommends a strong alignment of the CAISO and the CPUC methodologies especially on the following components: UCAP assessment hours, the forced outage types, the number of years and the year weighting factor considered in the UCAP calculation, the treatment of new resources, etc. 

2. Please provide your organization’s feedback on the Accounting for RA Resource Capabilities during Peak Conditions element of the straw proposal including the following elements: a. Should CAISO continue to develop a standardized/minimum verification process to account for ambient derates? b. If yes, how should the verification design be modified or applied? Would a single calculation based on an annual analysis be sufficient, if applied only to key summer months (e.g. July-September)? Or would a monthly/seasonal calculation and verification process be preferable?

PG&E supports a resource-specific assessment, and the seven steps of the assessment process developed in the straw proposal instead of a costly unit testing approach. PG&E suggests adding one additional step “verification step by resource owners” allowing resource owners to review CAISO proposed derated values. 

PG&E supports the seven-step verification process to be calculated on a monthly basis. 

3. Please provide any additional comments on the straw proposal.

No comments. 

1. Please provide your organization’s feedback on Updating CAISO’s Default Resource Adequacy Rules element of the straw proposal. Additionally, include any specific changes your organization would like the CAISO to consider regarding the proposal’s design and process, along with the rationale for these suggested changes.

SDG&E encourages CAISO to coordinate with the CPUC and, to the extent possible, ensure that CAISO’s default rules are consistent with CPUC rules. 

2. Please provide your organization’s feedback on the Accounting for RA Resource Capabilities during Peak Conditions element of the straw proposal including the following elements: a. Should CAISO continue to develop a standardized/minimum verification process to account for ambient derates? b. If yes, how should the verification design be modified or applied? Would a single calculation based on an annual analysis be sufficient, if applied only to key summer months (e.g. July-September)? Or would a monthly/seasonal calculation and verification process be preferable?

SDG&E is supportive of CAISO’s efforts to account for ambient derate impacts. Given that ambient derates vary throughout the year, as noted in the problem statement and by workshop participants who discussed seasonal and geographic impacts, SDG&E recommends that a capability value for each resource be calculated for each month of the year. A seasonal or annual value would not be granular enough to accurately reflect each resource’s capabilities.

3. Please provide any additional comments on the straw proposal.

No comment. 

1. Please provide your organization’s feedback on Updating CAISO’s Default Resource Adequacy Rules element of the straw proposal. Additionally, include any specific changes your organization would like the CAISO to consider regarding the proposal’s design and process, along with the rationale for these suggested changes.

Please see attached document

2. Please provide your organization’s feedback on the Accounting for RA Resource Capabilities during Peak Conditions element of the straw proposal including the following elements: a. Should CAISO continue to develop a standardized/minimum verification process to account for ambient derates? b. If yes, how should the verification design be modified or applied? Would a single calculation based on an annual analysis be sufficient, if applied only to key summer months (e.g. July-September)? Or would a monthly/seasonal calculation and verification process be preferable?

Please see attached document

3. Please provide any additional comments on the straw proposal.

Please see attached document

1. Please provide your organization’s feedback on Updating CAISO’s Default Resource Adequacy Rules element of the straw proposal. Additionally, include any specific changes your organization would like the CAISO to consider regarding the proposal’s design and process, along with the rationale for these suggested changes.

Six Cities’ Comments:  The Six Cities support the CAISO’s proposal to preserve the current structure of including default—rather than required minimum RA program elements—in the CAISO Tariff, and continuing to acknowledge that determining planning reserve margins (“PRMs”) and qualifying capacity (“QC”) counting rules is the responsibility of local regulatory authorities (“LRAs”).  However, the Six Cities have concerns regarding the default criteria that the CAISO has proposed, as discussed below.  Additionally, as discussed in response to question no. 2, the Six Cities are concerned that the CAISO’s default rules may, through the exercise of the CAISO’s proposal for changing how the CAISO determines net qualifying capacity (“NQC”), undermine deference to LRAs in establishing RA program requirements. 

The Six Cities are not opposed to the CAISO’s proposal to conduct periodic loss of load expectation (“LOLE”) studies and support evaluation of LOLE on a monthly basis for informational purposes.  However, the Six Cities remain concerned that adoption of a 0.1 LOLE target as the basis for fixing the default PRM may be counter-productive.  The Straw Proposal contains no analysis of the practical feasibility of meeting a PRM based on the 0.1 LOLE target under current capacity market conditions.  As the Six Cities have documented in this stakeholder proceeding, there currently are significant challenges to procuring additional RA capacity, including delays in commercial operation of developing resources due to supply chain issues, congestion in the interconnection queue, and deliverability limitations.  Adopting a default PRM that is unattainable as a practical matter will do nothing to enhance reliability.  The Six Cities reiterate their previous suggestions that the CAISO consider transitional or phase-in steps in modifying the default PRM as well as near-term adoption of practical measures to expand the pool of resources eligible to supply RA capacity.

The Six Cities also have concerns with the “supply cushion UCAP” methodology the CAISO proposes to apply as a default approach for establishing default QC values for thermal and pumped hydro resources.  Focusing the calculation of UCAP values on “supply cushion hours” appears to result in double counting, or at least overlapping, the impacts of stressed system conditions.  Moreover, combining such an approach with a rigid 0.1 LOLE target may result in default procurement targets that are overly conservative and unduly expensive, especially in view of current RA market conditions noted above.

With respect to the periodic study processes, the Six Cities urge the CAISO to consider ways in which to ensure an appropriate degree of transparency in these processes.  For example, LOLE studies are highly sensitive to inputs and assumptions, and it is likely that stakeholders will request opportunities for input into this periodic process.  Therefore, if the rules for conducting periodic updates are included in Business Practice Manuals (see, e.g., Straw Proposal at 8, explaining that the process overview will be included in the Tariff, but the CAISO will include study methodologies in the BPMs), the CAISO’s proposed process to provide stakeholders with feedback opportunities (see id.) will be important.

The Six Cities also have concerns with the indefinite cadence for this study process that is discussed in the Straw Proposal.  For example, the CAISO states that it will update the default PRM based on the LOLE study on an “annual or otherwise” basis and suggests that it may undertake “relatively frequent” LOLE studies.  (See Straw Proposal at 7.)  However, these studies should take place no more frequently than annually, and the default PRM may not need to be updated as frequently as annually.  LRAs that elect to use the default criteria need to be able to rely for planning and procurement purposes on requirements that have some durability and are not moving targets.  Moreover, given the CAISO’s proposal to conduct a form of a stakeholder process for the LOLE study, conducting these studies frequently or more often than once per year could tax CAISO and stakeholder resources and undermine meaningful participation in the study.

For the default QC methodologies discussed on page 9 of the Straw Proposal, the Six Cities request clarification as to whether there are any default requirements proposed for new resources’ QCs. 

2. Please provide your organization’s feedback on the Accounting for RA Resource Capabilities during Peak Conditions element of the straw proposal including the following elements: a. Should CAISO continue to develop a standardized/minimum verification process to account for ambient derates? b. If yes, how should the verification design be modified or applied? Would a single calculation based on an annual analysis be sufficient, if applied only to key summer months (e.g. July-September)? Or would a monthly/seasonal calculation and verification process be preferable?

Six Cities’ Comments:  The CAISO process of accounting for ambient derates should apply as a default methodology rather than as a standardized or minimum methodology, consistent with the CAISO’s proposal to develop and implement default RA rules applicable in circumstances where an LRA does not adopt an RA program and related capacity eligibility requirements.  Although the CAISO describes its proposed process of accounting for ambient derates as deferring to LRA accreditation methods (6/11/25 presentation at Slide 35), that characterization does not appear to be accurate.  To the contrary, it appears that the CAISO’s proposal to apply standardized derate calculations effectively would override LRA procurement and accounting policies.

Application of a one-size-fits-all derate calculation would be inappropriate for multiple additional reasons.  The Six Cities oppose application of a single derate factor across all months of the year.  As noted during the 6/11/25 discussion, the impacts of ambient conditions vary significantly on a seasonal basis throughout the CAISO footprint, and derate factors should reflect such monthly or at least seasonal variation.  Further, applying a fixed derate factor to UCAP values based on supply cushion hours could triple the impact of stressed conditions.  In addition, as noted during the 6/11/25 discussion, effects of ambient conditions on resources also vary among different geographic locations (e.g., desert versus northern coast locations).  LRAs should have the authority to establish monthly or seasonal values for the peak capability of their RA resources based on their experience with the factors that affect resource capability, including both ambient conditions and deliverability experience. 

The Six Cities do not oppose the CAISO’s recommendation to forgo a generally applicable resource testing program (Straw Proposal at 18).  However, an optional and/or targeted testing program would provide an approach for bridging potential inconsistencies between LRA and CAISO assessments of resource capabilities.  For example, if a capability value for a resource established by an LRA was not supported by actual performance of the resource, it would be reasonable for the CAISO to request a test.  Or if, contrary to the Six Cities’ recommendation, the CAISO proposes to override LRA-established capability values, LRAs should have the option of supporting higher capability values for resources through either testing or documentation of resource performance.

The Six Cities support the CAISO’s proposals (1) to not change the Must-Offer Obligation for RA resources, and (2) to not include an unforced capacity (UCAP) mechanism as part of the NQC process.

3. Please provide any additional comments on the straw proposal.

Six Cities’ Comments:  The foregoing concerns related to the removal of LRA discretion through the application of rules affecting the NQC determination extend to the CAISO’s application of the NQC process for Maximum Import Capability (“MIC”) and deliverability requirements.  The Six Cities understand that due to MIC and the CAISO’s deliverability rules, resources are unable to be shown for RA in amounts that exceed the NQC, even if an LRA may have established different rules or requirements for deliverability.  For example, if an LSE installs a resource that is behind its metered boundaries with the CAISO and the resource is smaller than the LSE’s load in the area where the resource is located, as might be the case with a 10 MW solar resource that is located behind a municipal utility’s meter with the CAISO where the LSE load is 200 MWs, it is unreasonable to preclude the LSE from counting the resource as RA supply when the LSE’s load is expected to be capable of absorbing the resource’s output in all conditions.  The Six Cities request that the CAISO make clear that LRAs are not bound by the CAISO’s NQC determinations if the LRA has adopted an alternative counting methodology.

1. Please provide your organization’s feedback on Updating CAISO’s Default Resource Adequacy Rules element of the straw proposal. Additionally, include any specific changes your organization would like the CAISO to consider regarding the proposal’s design and process, along with the rationale for these suggested changes.

Western Power Trading Forum (WPTF) appreciates the CAISO’s effort to update the default resource adequacy (RA) rules to better reflect the reliability contributions of different resource types through a more probabilistic framework. The move toward effective load carrying capability (ELCC) and loss-of-load expectation (LOLE) analysis is a welcome development and aligns with a forward-looking view of system needs. However, we have some questions and recommendations regarding the design and application of the proposed qualifying capacity (QC) methodologies, particularly with respect to the proposed supply cushion UCAP framework for thermal and pump-hydro resources.

CAISO’s decision to apply average ELCC for wind, solar, storage, and run-of-river hydro while assigning a backward-looking UCAP approach to thermal and pump-hydro resources introduces inconsistency in the counting framework across resource types. If the goal of the default rules is to predict each resource’s contribution to reliability, particularly in the context of achieving a 0.1 LOLE, then applying a common, probabilistic standard across all major resource types is both logical and necessary. In this light, we recommend that CAISO reconsider the application of the proposed supply cushion UCAP method and instead use average ELCC, potentially with embedded adjustments for ambient derates or performance variability.

WPTF is also concerned about the supply cushion method presented and the idea that the supply cushion hours themselves may not align well with the actual LOLE-contributing hours identified in CAISO’s planning models. We encourage CAISO to analyze and publish comparative data showing the degree of alignment, or misalignment, between these hour sets. If they diverge materially, using supply cushion hours as the basis for UCAP will not produce an accurate or useful proxy for reliability value.

We are also concerned that the proposed UCAP approach effectively penalizes past performance rather than incentivizing future improvements. A resource operator who plans to make capital or operational investments to improve reliability may be discouraged if the resource’s QC is permanently discounted based on three years of historical performance. The result is a misalignment between policy incentives and the grid’s actual reliability needs. Instead, we believe that a forward-looking ELCC framework, calibrated with reasonable performance assumptions and updated annually, is more consistent with the purpose of RA and more effective at maintaining future reliability.

Additionally, while we understand the desire to align with the CPUC’s evolving and yet to be settled upon UCAP framework, we caution against pursuing alignment solely for the sake of possible but not assured harmonization. The jurisdictional boundaries, modeling frameworks, and showings processes differ between CAISO and CPUC, making true alignment operationally and conceptually difficult. The artificial alignment will likely add complexity without improving outcomes and could create confusion for resources serving both CPUC and non-CPUC load-serving entities (LSEs). The CAISO default rules should be designed for program coherence and grid reliability—not to mirror external frameworks that may shift over time.

2. Please provide your organization’s feedback on the Accounting for RA Resource Capabilities during Peak Conditions element of the straw proposal including the following elements: a. Should CAISO continue to develop a standardized/minimum verification process to account for ambient derates? b. If yes, how should the verification design be modified or applied? Would a single calculation based on an annual analysis be sufficient, if applied only to key summer months (e.g. July-September)? Or would a monthly/seasonal calculation and verification process be preferable?

WPTF supports CAISO’s effort to better reflect ambient temperature-related derates in their internal processes and agrees that doing so is important for improving the reliability value of RA values during summer peak conditions. However, we do not believe the CAISO should seek any additional authority to modify the NQC beyond deliverability and that any significant changes would confusingly overlap with UCAP being developed by the CPUC. WPTF believes the most direct and simple way to address the issue is to have a summer and non-summer Pmax value added to the masterful if there is evidence that resources are in fact derating their resources throughout entire months. We believe this is an area CAISO can provide data so we can make an informed decision. We support the request on the call from CalCCA for CAISO to present monthly data around ambient d-rates to get a better sense of how they overlap with system conditions.

3. Please provide any additional comments on the straw proposal.