Include redlined comments using tariff language in Word document posted on the initiative webpage and attach below.
PG&E appreciates the opportunity to provide the following comments on the revised draft tariff language.
EIM Coordination and Resource Sufficiency Test Review
PG&E supports the CAISO’s proposed change to “implement a feature to disable the Uncertainty Requirement in the capacity test portion of the resource sufficiency evaluation.“1 This change would be in line with the Market Surveillance Committee’s recent recommendation2 to implement such a feature to protect against adverse and unintended outcomes resulting from the new requirement.
However, we ask for additional discussion of the proposal to activate this feature “upon Market Notice of at least three (3) Business Days.” If adverse consequences related to the changes to the capacity test were discovered during emergency conditions, it seems possible that the notice period of 3 business days may prevent the CAISO from taking immediate and timely action. There are other sections of the Tariff that do not require 3-day advance notice to deactivate specific sections, such as the suspension of convergence bidding. Please explain the rationale and any implications for market participants of the 3-day notice period.
Allocation of Make Whole Payments Costs
PG&E understands that CAISO is proposing a policy change to exclude EIM balancing authority areas from the allocation of uplift costs from the make-whole payments. The rationale for this change is that it would be inequitable to allocate the costs to EIM transfers out of the CAISO when those costs are triggered only when the CAISO balancing authority anticipates or is experiencing a shortage of operating reserves.
We ask for CAISO’s consideration of the following scenarios in which hourly block import schedules may end up serving load in external balancing areas during the conditions under which the make-whole payments apply:
Wheeling schedules: In the case of an hourly block import tied to a similar hourly block export, this change would allocate any make-whole payments to CAISO load while sending the resulting power on through to another BAA without benefit to CAISO load. Because this process can occur when the CAISO Operators just anticipate shortages, this could end up applying the uplift costs entirely to the CAISO BAA without cause.
Changes in assumptions and imbalance energy needs between the HASP and FMM: Consider a scenario such as August 16, 2020 when voluntary load reductions contributed to significant price drops between the HASP and FMM. In certain hours on that day, it is our understanding that system requirements changed significantly enough to allow for the HASP Import energy to be used against another BAA’s load, all because there was sufficient voluntary load reductions within CAISO to render their HASP forecasts largely inaccurate when moving into the later markets. In this case, hourly block imports awarded during HASP may be reshuffled out to another BAA, possibly even back to the source BAA, during the FMM and/or RTD EIM awards.
Under such circumstances, we believe it would be equitable and consistent with cost causation principles to include transfers to the external EIM balancing areas in the allocation of uplift costs.
Scarcity pricing enhancements
PG&E requests the CAISO to clarify whether our understanding of the following points is correct. It is stated in the revised Tariff language,
“If Contingency Only reserves are dispatched through the RTCD, which as described in Section 34.5.2 only Dispatches in the event of a Contingency, such Dispatch and pricing will be based on the original Energy Bids. If Contingency Only or other scheduled reserves are dispatched in response to a System Emergency that has occurred because the CAISO has run out of Economic Bids when no Contingency event has occurred, the RTED will Dispatch such Contingency Only reserves using maximum Bid prices as provided in Section 39.6.1 as the Energy Bids for such reserves and will set prices accordingly.”
The released capacity bids during load arming will be inserted in RTED and does not affect the RT unit commitment.
There was a typo that contingency only reserves will be released at their maximum bid price through RTCD, and has been corrected.
1 “ISO Responses to Stakeholder Comments - Market Enhancements for Summer 2021 Readiness Draft Tariff Language.” March 11, 2021. http://www.caiso.com/InitiativeDocuments/ISOResponses-StakeholderComments-MarketEnhancementsforSummer2021ReadinessDraftTariffLanguage.pdf
2 “Opinion on Market Enhancements for Summer 2021 Readiness.” Members of the Market Surveillance Committee of the California ISO. March 8, 2021. http://www.caiso.com/Documents/MSCOpiniononMarketEnhancementsfor2021SummerReadiness-Mar8_2021.pdf