Comments on 2022 draft policy roadmap and revised catalog

1. Please provide your organization's comments on the draft 2022 draft policy initiatives roadmap:

CDWR asks the CAISO to:

• Articulate the difference between its EDAM design from the Southwest Power Pool (SPP) Markets+ design.  CAISO and SPP are recruiting the same participants (generation and transmission) to join their own centralized Day-Ahead Market.  Can these two competing markets effectively co-exist in the same region?   Will there be a coordinated effort between the CAISO and SPP to complement each other’s strengths and weaknesses to have a more efficient and reliable region?

2. Provide your organization's comments on the 2022 revised draft catalog:

CDWR continues to highly support these catalog initiatives:

• 7.1.23 Pumped Storage with Multiple Pumping Levels (D)

CDWR supports the CAISO’s exploration of ways to further accommodate resources with limitations in the CAISO’s markets.

• 7.1.57 Aggregated Pumps and Pumped Storage (D)

Along with 7.1.23, CDWR fully supports CAISO in conducting a study on what improvements could be made to participating load functionality and to explore this untapped potential that can benefit grid reliability.

• 7.2.2 Congestion Revenue Rights Revenue Sufficiency (D)

CDWR recommends the following new text to replace the existing text: 

• • Existing text:

CRR Allocation. CDWR requested this initiative in a previous catalog process that the CAISO introduce revise the Counter-flow CRR methodology used for allocating CRRs sourced at the trading hubs, as the current methodology is insufficient and contributes to revenue imbalance of the CRR balance account.

• • New proposed text:

CRR Allocation. CDWR requests the CAISO to revise the Counter-flow CRR methodology used for allocating CRRs sourced at the trading hubs, as the current methodology is insufficient and contributes to revenue imbalance of the CRR balancing account.

• 7.3.2 Resource Adequacy Enhancements (D)

CDWR appreciates the CAISO proposal to address local RA obligation capping issue in the Central Procurement Entity Implementation initiative. CDWR anticipates that CAISO will address the second RA issue with flexible RA allocation attributed to negative load ramps.

1. Please provide your organization's comments on the draft 2022 draft policy initiatives roadmap:

2. Provide your organization's comments on the 2022 revised draft catalog:

In light of the CAISO’s postponing the Resource Adequacy Enhancements (RAE) Phase 2 Initiative to February 2022 (see market notice at http://www.caiso.com/Documents/ScheduleUpdateResourceAdequacyEnhancementsPhase2Initiative.html#search=enhancements%20phase%202), MRP respectfully urges the CAISO to take up in RAE Phase 2 an issue MRP brought to the CAISO’s attention in its October 26, 2021 comments in this initiative.

That issue is to allow Scheduling Coordinators to submit substitute capacity at the time they request a planned outage instead of waiting for the CAISO T-29 RASC process to run and require the SC submitting the planned outage to provide substitute capacity. 

In its December 17, 2020 Draft Final Proposal – Phase 1 and Sixth Revised Straw Proposal in its RA Enhancements initiative,[1] the CAISO listed, at page 14, six objectives and principles that should inform any changes to its planned outage provisions.   Those objectives and principles are: 

• Encourage resource owners to enter outages as early as possible
• Avoid cancellation of any approved planned outages to the extent possible
• Identify specific replacement requirements for resources requiring replacement
• Allow owners to self-select, or self-provide, replacement capacity
• Include development of a CAISO system for procuring replacement capacity
• Minimize or eliminate the need to require substitute capacity to greatest extent possible

Allowing scheduling coordinators to submit replacement capacity at the time when they request the planned outage satisfies the first four of these objectives and principles. 

Moreover, in the CAISO’s transmittal letter accompanying the proposed tariff modifications to require scheduling coordinator to provide substitute capacity for planned outages, the CAISO observed that its proposal to require substitute capacity was just and reasonable because it “…(1) reduces the burdens on the CAISO of administering a process that tends to produce the same answer each time, and (2) eliminates providing what is likely to be an unrealistic assumption that the CAISO can approve RA resource planned outages without substitution.”  (Transmittal Letter to March 29, 2021 submittal in ER21-1551 at page 5).   While requiring substitute capacity for all planned outages may reduce burdens on the CAISO, it does not reduce the burden on the scheduling coordinators that must provide substitute capacity if they have to wait until a predefined, short window – which could occur over a weekend - within the CAISO’s planned outage process to provide the substitute capacity that they already know they have to provide. 

MRP therefore requests that the CAISO include within the scope of the RAE Phase 2 initiative modifications to CAISO processes that allow scheduling coordinators to submit substitute capacity at the time they request the planned outage.  This will provide greater certainty for the CAISO and for the scheduling coordinator requesting the planned outage and reduce the burden on the scheduling coordinator. 

Relevant excerpt from MRP’s October 26, 2021 RA Enhancements comments:

During summer 2021, the CAISO implemented its new planned outage substitution obligation process in which substitute capacity must be provided in order for the CAISO to not reject an approved planned outage at a later time.  The current substitution process limits scheduling coordinators to submit substitute capacity for planned outages submitted prior to T-45 only within a 24-hour window after the CAISO’s T-29 RASC process runs.  Additionally, the substitution approval must also be received within CIRA within the same 24-hour period.  This process creates unnecessary timing challenges for scheduling coordinators especially if planned outages were submitted well in advance of T-45 and the scheduling coordinator already has substitute capacity available.  MRP requests the CAISO to enhance this process so that substitute capacity can be submitted any time after submitting the planned outage to 24 hours after the T-29 RASC process.  While MRP understands that the CAISO may not know whether a resource on planned outage would be an RA resource until after the T-45 timeframe, the scheduling coordinator of the resource does know; allowing them to submit replacement capacity starting when the outage is requested provides additional time for the scheduling coordinator to coordinate and request approval from third party scheduling coordinators.  Moreover, allowing a scheduling coordinator to submit and receive approval from a third-party scheduling coordinator prior to the T-29 RASC process should not harm the CAISO or any other market participants, but only improve the outage coordination process. 

[1] This document is available at http://www.caiso.com/InitiativeDocuments/DraftFinalProposal-SixthRevisedStrawProposal-ResourceAdequacyEnhancements.pdf. 

1. Please provide your organization's comments on the draft 2022 draft policy initiatives roadmap:

While NV Energy appreciates the CAISO’s desire to take on a number of important market initiatives, priority should be given to those that can have an immediate beneficial impact for critical summer 2022 and 2023 reliable regional operations.  These include:

1. Obtaining FERC approval of an extension of the Summer 2021 wheel-though approach for the summers of 2022 and 2023;
2. Developing and providing sufficient notice prior to implementation of a durable, long-term wheeling approach;
3. Resource sufficiency enhancements that do not require excessive procurement and makes available voluntary supply bid into the EIM market with an appropriate scarcity price; and
4. Reforms to the CAISO Day-Ahead market so that non-California purchases can have confidence in their market awards and are not left with price exposure when that award is rescinded in RUC only to, on most but not all occasions, be re-awarded closer to real-time.

2. Provide your organization's comments on the 2022 revised draft catalog:

Initiative 6.6 is entitled “Price Formation Enhancements”.  It will explore several topics related to price formation in the CAISO markets focused on real-time market pricing.  The CAISO plans to address the following topics in the Price Formation Enhancement initiative:

• Further real-time market scarcity pricing enhancements to better reflect tight supply conditions;
• Consideration of fast-start pricing;
• Enhancements to the how the real-time market uses advisory prices to dispatch resources;
• Limited bid cost recovery changes focused on storage resource interaction with the real-time market’s multi-interval optimization; and
• Examine system-level market power mitigation.

The catalogue lists the EIM Governing Body’s role for this initiative as “advisory”.  That is clearly incorrect. Under the current decisional classifications, this pricing will affect EIM Entities as their role as participants in the EIM, therefore should be classified as “joint” authority.

Initiative 6.10 is entitled “Hybrid Resource Evolution”.  The catalogue lists the EIM Governing Body’s role for this initiative as “advisory”.  NV Energy has hybrid resources that can participate in the real-time market through the EIM. Thus, under the current decisional classifications, this pricing will affect EIM Entities as their role as participants in the EIM and should be under “joint” authority.

1. Please provide your organization's comments on the draft 2022 draft policy initiatives roadmap:

PG&E appreciates the opportunity to provide comments on the 2022 Draft Policy Roadmap and catalogue. PG&E is concerned that timing of a number of overlapping and interrelated initiatives may complicate the market design development process, for both stakeholders and the CAISO which must manage limited resources Additionally, the complexity of the proposals also may cause implementation issues.

IT Implementation Concerns

The number of major initiatives scheduled for IT implementation in 2023 is concerning due to the large scope of CAISO and Market Participant changes required for the success of the policy initiatives. There are 5 major initiatives that are expected to be implemented concurrently in 2023, which could be problematic if the implementation of those initiatives share dependencies. If there are dependencies, PG&E suggests restructuring the timing of initiatives to ensure timely IT implementation.

PG&E requests that the CAISO communicate with stakeholders early and often when it encounters regulatory, IT implementation, or other issues that may negatively affect stakeholder processes and/or IT implementation timelines.

2. Provide your organization's comments on the 2022 revised draft catalog:

1. Please provide your organization's comments on the draft 2022 draft policy initiatives roadmap:

Please see Powerex's comments available at CAISO Revised 2022 Policy Initiatives Catalog Comments

2. Provide your organization's comments on the 2022 revised draft catalog:

Please see Powerex's comments available at CAISO Revised 2022 Policy Initiatives Catalog Comments

1. Please provide your organization's comments on the draft 2022 draft policy initiatives roadmap:

The CAISO cites three primary drivers for the draft 2022 policy initiatives roadmap: increased resource and load variability, increasing amounts of storage resources, and economic and reliability benefits of greater integration of Western markets.  PPC wants to highlight the importance of coordinating the timing related to initiatives related to the third driver identified by the CAISO - the greater integration of Western markets.  While the Extended Day Ahead Market (EDAM) initiative is clearly a central focus of the CAISO’s effort to achieve a greater integration of Western markets, that initiative will not stand on its own.  There are several important initiatives not under the Extended Day-Ahead Market umbrella that will critically shape the day-ahead market design that would serve as the foundation of an expanded CAISO day-ahead market.  The outcome of these initiatives will help determine whether EIM Entities will ultimately choose to participate in an extension of the CAISO day-ahead market.  These initiatives include Day Ahead Market Enhancements, Price Formation, Resource Sufficiency Evaluation, and Transmission Services & Market Scheduling Priorities.

As shown on slide 18 of the CAISO’s presentation, the first two of these initiatives are not included in the “regional markets” grouping of initiatives.  While it is appropriate to include these initiatives in the “market design” grouping as shown, it is also important to recognize that these initiatives will also impact the likelihood of achieving a more widely integrated Western market through EDAM.  PPC notes that several of the initiatives listed will not be resolved prior to the planned conclusion of EDAM.  While this may potentially be workable, given the plan to have all these initiatives implemented concurrently, PPC is concerned this timeline is at risk given recent delays in CAISO initiatives.  If the four initiatives identified above are not resolved before entities are asked to commit to an Extended Day Ahead Market, entities would be put in the position to commit to participation in a market without knowing critical details about how that market will operate, and – at least as currently proposed in the latest EDAM principles – entities that choose to participate would be required to expose all their loads and resources to that unknown market design with no immediate remedy to avoid exposure to market rules to which they potentially do not agree.  It will be critical for the success of EDAM that CAISO keeps these timelines coordinated and does not allow those initiatives that are related to, but not under the official umbrella of EDAM to be delayed beyond the conclusion of the EDAM discussions. 

2. Provide your organization's comments on the 2022 revised draft catalog:

In the 2022 revised draft catalog CAISO has updated the Day Ahead Market Enhancements initiative to reflect that the decision classification is under “Joint Authority.”  The CAISO explains:

Imbalance reserves will also have an important role in the extended day-ahead market (EDAM).  They will allow EDAM to optimize across the EDAM footprint the scheduling of capacity reserved to meet real-time ramping needs. They will also ensure EDAM transfers have a high and constant degree of reliability. Finally, they will likely be a part of the EDAM’s resource sufficiency evaluation, which ensures each BAA is making sufficient supply available to the market.[1]

PPC agrees and supports changing the decision classification to “Joint Authority.” 

There are two other initiatives in the catalog which should be changed to Joint Authority both under existing rules and following the reasoning explained above.

First, the Price Formation initiative, which “will explore several topics related to price formation in the CAISO markets focused on real-time market pricing.”[2]  This initiative is currently identified as being under the EIM Governing Body’s “Advisory” authority.  According to the updated decision classification rules for the EIM Governing Body:

The EIM Governing Body will have joint authority with the Board of Governors to approve or reject a proposal to change or establish a tariff rule applicable to the EIM Entity balancing authority areas, EIM Entities, or other market participants within the EIM Entity balancing authority areas, in their capacity as participants in EIM.[3]

Given that changes to real-time pricing will affect settlements for both those in the CAISO BAA and EIM Entities, per the updated decision classification rules, the Price Formation initiative should be under the Joint Authority of both the CAISO Board of Governors and the EIM Governing Body.  To the extent that day ahead market prices are also discussed during this initiative, similar to DAME, these discussions will be foundational for the day ahead market – applied to both those in CAISO’s BAA and EDAM Entities – and thus ought to be under joint authority.

Second, the Transmission Services and Market Scheduling Priorities which “focuses on the development of a long-term, durable, framework for establishing scheduling priorities in the market for load, export, and wheel-through transactions”[4]  Following the same reasoning as DAME, it would be appropriate to have the decision on this initiative under Joint Authority.  Changes made under TSMSP will impact relative priority of different uses of the transmission system in both the day ahead and real time market.

Thank you for the opportunity to comment on the 2022 revised draft catalog and for all the work that CAISO staff continues to do on these important initiatives.

[1] CAISO 2022 Revised Draft Policy Initiatives Catalog, pg. 16 http://www.caiso.com/InitiativeDocuments/2022RevisedDraftPolicyInitiativesCatalog.pdf

[2] Id.

[3] Charter for Energy Imbalance Market Governance, pg. 3 https://www.westerneim.com/Documents/CharterforEnergyImbalanceMarketGovernance.pdf

[4] CAISO 2022 Revised Draft Policy Initiatives Catalog, pg. 15

1. Please provide your organization's comments on the draft 2022 draft policy initiatives roadmap:

REV Renewables supports CAISO’s proposed roadmap for the 2022 draft policy initiatives. REV understands CAISO has several competing priorities and agrees with CAISO’s suggested timeline. REV suggests that the Reform of the Deliverability Assessment Methodology initiative should be addressed in 2022/23 after the CPUC finalizes its Resource Adequacy reforms.

2. Provide your organization's comments on the 2022 revised draft catalog:

REV Renewables supports the 2022 revised draft catalog. REV appreciates the CAISO’s timely attention to improving storage integration into the market in the Energy Storage Enhancements initiative. Storage resources are a rapidly growing and important part of the system’s resource portfolio and ensuring the right market signals and rules are in place will help these resources integrate.

REV also supports CAISO addressing the initiative to Reform of the Deliverability Assessment Methodology as proposed by CalWEA and CESA. While this is listed as a discretionary initiative, REV suggests CAISO could address this in a timely manner in the existing Resource Adequacy Enhancements initiative. This initiative should also be aligned with the CPUC’s Resource Adequacy reforms as they are finalized.

1. Please provide your organization's comments on the draft 2022 draft policy initiatives roadmap:

Salt River Project Agricultural Improvement and Power District (SRP) appreciates the opportunity to comment on the California Independent System Operator (CAISO) Revised Draft 2022 Policy Initiatives Catalog (Catalog) and 2022 Draft Policy Initiative Roadmap. SRP understands that the CAISO’s policy focus for the next three years will be high profile initiatives, such as the Extended Day-Ahead Market (EDAM) and Resources Adequacy Enhancements. SRP recognizes these initiatives will require significant time from CAISO staff and interested stakeholders; however, we are concerned with the growing backlog of discretionary initiatives and the absence of a plan to consider these incremental improvements to the CAISO’s existing markets. SRP requests that the CAISO provide resources to evaluate two to five smaller initiatives each year. The discretionary initiatives list includes potentially valuable suggestions made by diverse members of CAISO’s stakeholder community. The CAISO’s inattention to these initiatives may discourage future active stakeholder engagement. SRP would like to see the CAISO implement an inclusive and transparent stakeholder process for ranking discretionary initiatives to be considered each year.  Due to the concerns identified above, SRP requests that CAISO consider the stakeholder initiative process be revised where it is driven by stakeholders and not solely by CAISO staff.

2. Provide your organization's comments on the 2022 revised draft catalog:

SRP is providing the following comments on specific Catalog initiatives:

SRP appreciates the CAISO’s consideration of these comments.

1. Please provide your organization's comments on the draft 2022 draft policy initiatives roadmap:

See attached. 

2. Provide your organization's comments on the 2022 revised draft catalog:

See attached. 

1. Please provide your organization's comments on the draft 2022 draft policy initiatives roadmap:

2. Provide your organization's comments on the 2022 revised draft catalog: