Comments on the November 12 Foundational Workshop

1. The upcoming EDAM stakeholder working groups will further review and vet the EDAM Common Design Principles and Concepts applicable to each of the groups, identifying potential modifications and/or additional principles throughout the discussions. The principles and concepts document is posted on the EDAM web page. To the extent stakeholders would like to share comments on these principles and concepts in advance of the working group discussions, please share your organizations perspective.

The Bonneville Power Administration (Bonneville)[1]  appreciates the opportunity to provide comment on the EDAM Common Design Principles and Concepts posted on October 18, 2021. We also thank the CAISO for providing verbal and written responses to the questions Bonneville submitted prior to the November 12^th EDAM foundational workshop.

While Bonneville understands the details around the Common Design Principles and Concepts will be vetted through the working groups, Bonneville notes a few areas that are particularly important to Bonneville.

Transmission Commitment:

• Bucket 1 transmission should be required to be procured by the time of the day-ahead resource sufficiency test in order for that resource to count towards the RSE. Otherwise reliable transmission may not be available for the resource to be deliverable and/or transmission providers may be harmed by the loss of transmission revenue.
• “Otherwise high priority” or “otherwise highly reliable” transmission should to be clearly defined and measureable to ensure the transmission used by EIM transfers can be relied upon. Bonneville views EIM transfers as being different than deliveries of WSPP Schedule C contracts, which can be tracked back to a specific party with specific contract terms if the energy is not delivered.

Supply Commitment:

• The concept of advisory showings should be evaluated in light of the entirety of the RSE design. The concept should be dropped if unintended consequences (i.e. workload, potential manipulation, etc.) of the advisory showings outweigh or counteract the benefits.
• The day-ahead RSE should set appropriate common requirements that enhance reliability and provide confidence in the market.
• Leaning on the EIM should not become an economic alternative to procuring resources ahead of EDAM and being resource sufficient. This principle should be added to the design of the RSE.

[1] Bonneville is a federal power marketing administration within the U.S. Department of Energy that markets electric power from 31 federal hydroelectric projects and some non-federal projects in the Pacific Northwest with a nameplate capacity of 22,500 MW. Bonneville currently supplies 30 percent of the power consumed in the Northwest. Bonneville also operates 15,000 miles of high voltage transmission that interconnects most of the other transmission systems in the Northwest with Canada and California. Bonneville is obligated by statute to serve Northwest municipalities, public utility districts, cooperatives and then other regional entities prior to selling power out of the region.

2. Please share your organization’s perspective on the scope items or topics that should be considered in the EDAM initiative, as discussed in the workshop. Each of the stakeholder working groups will also further define the market design elements that will need to be considered.

There are a few scope items that were either discussed lightly or not at all in the EDAM Foundational Workshop that Bonneville emphasizes should be considered in the EDAM initiative:

• External resource participation: as mentioned in our questions, Bonneville serves load in other BAAs that may join EDAM and will need to be able to provide energy and imbalance reserves to those loads.
• Intertie bidding: as the CAISO has acknowledged, the ability to participate in the CAISO’s day-ahead market through intertie bidding will need to be addressed for entities who have joined EDAM and for those that have not.
• Virtual bidding: whether this will be considered as part of EDAM and how procurement of additional capacity will be handled. Additionally, if this is not part of EDAM, what seams issues are created between the CAISO and other EDAM entities and are there effective solutions to address them?

3. Please share your organization’s perspective on the stakeholder working group structure and EDAM initiative schedule.

Bonneville recognizes the CAISO is developing a new process that allows for much greater stakeholder involvement in the shaping of the straw proposal. We appreciate this approach. However, the cadence and schedule for the working groups is aggressive and stakeholders will struggle to meaningfully participate in all of the working groups that are important to them. As with any project, the quality of the work is constrained by the project’s resources, deadlines and scope. There is little ability for stakeholders to devote more resources to the EDAM effort, in addition to the other CAISO policy initiatives that will be going on in parallel. The CAISO’s policy staff are constrained as well. We are concerned that with the timelines given to these complex issues, the scope of the EDAM initiative and other CAISO policy initiatives related to EDAM will have to be limited to minimal changes to CAISO’s current day-ahead market rather than fully addressing the concerns of stakeholders.

Bonneville requests the working group meetings be reduced to one two-hour meeting a week to allow for working group members and stakeholders to participate and to produce work products in-between meetings. We ask that there be disciplined facilitation and sharp focus for each meeting with defined objectives and questions to be answered for the straw proposal. Bonneville also urges the CAISO be open to extending the overall timeline for EDAM if policy and market design considerations merit the additional time.

4. Please share your organization’s perspective on any other aspects of the workshop and the EDAM effort.

 Bonneville has no additional comments at this time.

1. The upcoming EDAM stakeholder working groups will further review and vet the EDAM Common Design Principles and Concepts applicable to each of the groups, identifying potential modifications and/or additional principles throughout the discussions. The principles and concepts document is posted on the EDAM web page. To the extent stakeholders would like to share comments on these principles and concepts in advance of the working group discussions, please share your organizations perspective.

The Energy Division (ED) staff of the California Public Utilities Commission (“staff”) appreciates this opportunity to provide comments on the California Independent System Operator’s (CAISO) Extended Day-Ahead Market (EDAM) November 12 foundational workshop. This workshop addressed the EDAM Common Design Principles and Concepts, the initiative scope, stakeholder working groups, and market design timeline.   

2. Please share your organization’s perspective on the scope items or topics that should be considered in the EDAM initiative, as discussed in the workshop. Each of the stakeholder working groups will also further define the market design elements that will need to be considered.

ED staff?supports the proposed scope of the three working groups, which will address 1) Supply Commitment and Resource Sufficiency Evaluation, 2) Transmission Commitment and Congestion Rent Allocation, and, 3) Greenhouse Gas Accounting and Costs.  

3. Please share your organization’s perspective on the stakeholder working group structure and EDAM initiative schedule.

ED staff commends CAISO for its willingness to postpone the launch of the working group meetings to January 2022 in accordance with stakeholder feedback. At the same time, staff seeks clarity on how this delay might impact the initiative timeline for 2022 and beyond.  ? 

4. Please share your organization’s perspective on any other aspects of the workshop and the EDAM effort.

ED staff suggests that the EDAM straw proposal (tentatively slated for publication in March 2022) include a list of overarching principles applicable to EDAM as a whole, one of which should be that the benefits of EDAM must exceed the costs.  

Staff appreciates the opportunity to comment on the EDAM foundational workshop and looks forward to continuing participation in the stakeholder process.  

1. The upcoming EDAM stakeholder working groups will further review and vet the EDAM Common Design Principles and Concepts applicable to each of the groups, identifying potential modifications and/or additional principles throughout the discussions. The principles and concepts document is posted on the EDAM web page. To the extent stakeholders would like to share comments on these principles and concepts in advance of the working group discussions, please share your organizations perspective.

PG&E is supportive of reopening the EDAM stakeholder process and is enthusiastic about the potential economic and reliability benefits to be accessed via an extended day-ahead market.

• To achieve the climate goals of California and other Western States and to reliably deliver energy, a robust energy market with enough transmission and generation is important.
• Following on to the success of the Western Energy Imbalance Market (EIM); The Extended Day-Ahead Market (EDAM) is another positive development toward enhanced regional cooperation and coordination across the west.
• The rapidly evolving energy grid is changing how safe, reliable energy is delivered across the west - EDAM represents another tool to address these changes.

The extended day-ahead market has open questions that must be answered, but with healthy dialogue, trust, and a willingness to work toward shared goals the answers are reachable.

• Governance: the recently approved EIM shared governance developed by the Governance Review Committee shows a willingness to work together and a possible path for EDAM governance.
• Effective market design: create appropriate incentives within an accessible, transparent extended day-ahead market.
• Regional coordination and cooperation: partner with policymakers and state leaders to map a course for success

PG&E supports the principles[1] outlined by the CAISO but realize that these principles do not represent a full market design, where the details will generate significant debate. With respect to the principles, PG&E would like to emphasize two unwritten principles:

1. The goal of the Extended Day-Ahead market is to create benefits to all participants. This isn’t explicitly written in the principles. Without benefits accruing to all participants, the market becomes unsustainable.
2. The principles harmonizing is implicit in the written document and verbal in the recent workshops. This concept of harmonizing is important because it implies striking a balance between discouraging inappropriate leaning and onerous compliance obligations.

[1] https://www.caiso.com/Documents/EDAM-Common-Design-Principles-Concepts.pdf

2. Please share your organization’s perspective on the scope items or topics that should be considered in the EDAM initiative, as discussed in the workshop. Each of the stakeholder working groups will also further define the market design elements that will need to be considered.

PG&E supports the scoped items and topics with one question: are Price Formation changes needed prior to the launch of the Extended Day-Ahead Market? 

The CAISO has previously noted the strong link between the Extended Day-Ahead Market and price formation issues.

• Price formation was discussed in the issue paper, straw proposal, and Common Design Principles and Concepts.
• The CAISO notes that the EIM entities “specifically requested the CAISO to evaluate fast-start pricing and scarcity pricing; so consideration of these design elements is included in [EDAM].”[1]
• CAISO said that it is “committed to exploring fast-start pricing”[2], and
• CAISO plans on the “…price formation design be taken up ahead of, or in parallel with, EDAM design work.”[3]  

Could the CAISO please specify which aspects of price formation (if any) are critical to the launch of the Extended Day-Ahead Market and why? For example, could not be launched without scarcity or fast-start pricing?

Prior to launching the Extended Day-Ahead Market, the CAISO suggests it will have to implement the following changes:

• Imbalance reserves (via the Day-Ahead Market Enhancements)
• Changes to transmission service and market scheduling prioritizations (via the Transmission Service and Market Scheduling Priorities initiative), and
• All the changes needed to support EDAM.

In aggregate this is the biggest market redesign since the Market Redesign and Technology Upgrade. Adding additional and unnecessary scope adds risk to the implementation of all of these initiatives. PG&E would like a better overall understanding of why these efforts need to be completed and what elements of them are critical to EDAM specifically.

[1] See page 5 of Issues Paper  http://www.caiso.com/InitiativeDocuments/IssuePaper-ExtendedDayAheadMarket.pdf

[2] E.g., November 16^th Annual Policy Initiative Roadmap Process, verbally over slide 8, ~10 minutes in.

[3] https://www.caiso.com/Documents/EDAM-Common-Design-Principles-Concepts.pdf

3. Please share your organization’s perspective on the stakeholder working group structure and EDAM initiative schedule.

PG&E appreciates the CAISO’s effort to try a new way to develop market design and structure via the working group structure and hopes it will produce a comprehensive proposal, earlier in the process, that reflects a greater collaboration between CAISO and stakeholders.  

Given our experience so far in the Transmission Service and Market Scheduling Prioritization (TS-MSP) initiative, PG&E would like to provide the following feedback:

1. It would be beneficial to understand the CAISO’s or CAISO’s staff’s perspective(s) more often in the working group process. While we understand the CAISO’s desire to foster conversation among the stakeholders, it is difficult to collaborate with the CAISO without knowing the CAISO’s ideas and opinions in the collaboration process.
2. It could be beneficial to define the decision points more clearly. The working groups in the TS-MSP initiative have been very informative but it might be possible to be more focused and efficient in the process if the decision points were made clear to all stakeholders.

4. Please share your organization’s perspective on any other aspects of the workshop and the EDAM effort.

PG&E has no further comments to add. Thank you for all your hard work on the Extended Day-Ahead Market.

1. The upcoming EDAM stakeholder working groups will further review and vet the EDAM Common Design Principles and Concepts applicable to each of the groups, identifying potential modifications and/or additional principles throughout the discussions. The principles and concepts document is posted on the EDAM web page. To the extent stakeholders would like to share comments on these principles and concepts in advance of the working group discussions, please share your organizations perspective.

Please see Powerex's comments available at www.powerex.com/sites/default/files/2021-12/2021-12-08%20Powerex%20comments%20EDAM%20webinar.pdf

2. Please share your organization’s perspective on the scope items or topics that should be considered in the EDAM initiative, as discussed in the workshop. Each of the stakeholder working groups will also further define the market design elements that will need to be considered.

Please see Powerex's comments available at www.powerex.com/sites/default/files/2021-12/2021-12-08%20Powerex%20comments%20EDAM%20webinar.pdf

3. Please share your organization’s perspective on the stakeholder working group structure and EDAM initiative schedule.

Please see Powerex's comments available at www.powerex.com/sites/default/files/2021-12/2021-12-08%20Powerex%20comments%20EDAM%20webinar.pdf

4. Please share your organization’s perspective on any other aspects of the workshop and the EDAM effort.

Please see Powerex's comments available at www.powerex.com/sites/default/files/2021-12/2021-12-08%20Powerex%20comments%20EDAM%20webinar.pdf

1. The upcoming EDAM stakeholder working groups will further review and vet the EDAM Common Design Principles and Concepts applicable to each of the groups, identifying potential modifications and/or additional principles throughout the discussions. The principles and concepts document is posted on the EDAM web page. To the extent stakeholders would like to share comments on these principles and concepts in advance of the working group discussions, please share your organizations perspective.

No comments at this time, PGP looks forward to further reviewing the principles through the working group process.

2. Please share your organization’s perspective on the scope items or topics that should be considered in the EDAM initiative, as discussed in the workshop. Each of the stakeholder working groups will also further define the market design elements that will need to be considered.

PGP supports the proposed scope of topics that should be considered in the EDAM initiative; we do not at this time identify any other topics that should be included.

3. Please share your organization’s perspective on the stakeholder working group structure and EDAM initiative schedule.

PGP appreciates CAISO’s efforts to enhance the stakeholder engagement process for EDAM. We support the intent of the working group structure, which we understand is intended to allow stakeholders a more active role in developing policy proposals on key issues in the EDAM initiative. However, we are concerned that stakeholders may not have the resources to actively engage in the EDAM working groups and also meaningfully participate in the CAISO’s other major ongoing and planned initiatives as well as other regional work. We believe there are some options on the table that CAISO could consider to address this concern:

1. In addition to the EDAM working groups, consider creating an additional avenue for stakeholders to participate at a higher level. For example, CAISO could host a monthly meeting for stakeholders where it and/or representatives of the working groups provide a high-level briefing on the status of the working groups and allow stakeholders to ask questions and provide input/feedback. This would allow stakeholders who do not have the resources to participate in the working groups to still have an opportunity to meaningfully engage in the policy development process.
2. Extend the timeline for the EDAM initiative and space out the required workgroup meetings. 
3. Use stakeholder comment opportunities judiciously across all CAISO initiatives. For example, it may not be necessary to provide formal opportunities for comment on EDAM working group meetings or technical workshops in other stakeholder processes. 

               

   In addition, PGP offers the following suggestions with respect to timing and sequencing of the deliverables of the working groups:

4. • Suggest that call summaries should be made publicly available within a week or two of each call. 
   • Suggest that the workgroups first consider any input received on the principles that impacts the scope or outcome of the market design work and proposals.
   • Once a design proposal is developed, there then could be an additional opportunity to modify principles if necessary to align them with market design. 

4. Please share your organization’s perspective on any other aspects of the workshop and the EDAM effort.

No additional comments.

1. The upcoming EDAM stakeholder working groups will further review and vet the EDAM Common Design Principles and Concepts applicable to each of the groups, identifying potential modifications and/or additional principles throughout the discussions. The principles and concepts document is posted on the EDAM web page. To the extent stakeholders would like to share comments on these principles and concepts in advance of the working group discussions, please share your organizations perspective.

PPC appreciates the CAISO and members of the EDAM small group addressing our questions at the November 12 meeting.  Based on the responses provided, our impression is that there are many details related to the design of a potential EDAM which will be worked out in future meetings.  We offer these initial comments based on our current understanding of the principles.

In addition to comments on the specific areas noted below, in general we encourage CAISO to continue to refine the EDAM Principles and Concepts based on stakeholder feedback to ensure that they are reflective of the interests of potential participants in the EDAM and inclusive of stakeholder perspectives.  The Principles and Concepts document represents a high-level agreement to concepts sourced from a small group of stakeholders.  In their current form, these principles should not be used as guideposts for the working group efforts.  Either as part of the working groups or prior to the commencement of the working groups, CAISO should endeavor to update and refine these principles based on feedback from EDAM stakeholders more broadly.  Using the existing concepts and principles from a subset of entities without incorporating feedback from the broader stakeholder community could lead to a market design guidepost that is not representative of the potential pool of EDAM participants.

Participation Commitment, Voluntary Participation

The recent EDAMs Principles and Concepts advances a market design where all loads and all resources in participating Balancing Authority Areas (BAAs) would be optimized day-ahead by the market, effectively doing away with the concept of non-participant resources and base schedule transactions as they exist in the EIM.  While entities would be allowed to self-schedule, and this may have similar results in many cases, PPC is concerned there may be some instances where that is not the case – for instance if system supply is very tight.  We are also contemplating the potential implications on this new paradigm on our members’ preference access to delivered federal power and on their efforts to meet greenhouse gas emission goals that have either been established as part of their own strategies or to comply with state mandates.  We look forward to additional discussions on this paradigm.  We hope to see the questions below specifically addressed in working group discussions:

• Where will the “grandfathered” treatment of rights be addressed?
• What consideration, if any, has been given to deliveries of federal power under the proposed paradigm?  This issue is of critical importance to PPC and our members who have preference rights to the delivery of federal power from BPA.
• What considerations have been given to how carbon reporting would work in this paradigm for entities that have to demonstrate delivery of specific resources?

Transmission Commitment

Based on the discussion at the November workshop, including responses to our questions, PPC observes that there are still many details to be worked out regarding the three-bucket transmission proposal, including key details on how transmission is made available for market optimization.  We appreciate the follow-up document responding to stakeholder questions.  This document provided some further insight into the discussion of the small group, but in some instances provided responses that appeared to be inconsistent with the stated principles.  It is possible we have misunderstood these responses and look forward to additional clarity on the starting point for these discussions in advance of the working group meetings. In particular, we are interested in learning what the planned treatment is for Bucket 2 and 3 transmission, and what level of discretion transmission providers and transmission rights holders will have in making transmission available for market optimization.

In addition to clarifying the EDAM small group’s perspective, we ask that the CAISO take additional input from those not included in the small group discussions to further refine these principles prior to the working groups beginning their efforts. 

For instance, there is a stated principle to “maximize the amount of transmission (firm, or otherwise high priority) made available to EDAM, while respecting the existing OATT framework and contractual commitments.”  While PPC agrees with this concept generally, whether the proposal appropriately balances these principles will be heavily contingent on the details.  The current description creates potential concerns on whether the appropriate balance will be struck.  We offer these additional principles that should be met in order to “respect the existing OATT framework”:

• A transmission provider must have the discretion over the amount of transmission made available to the market.
• There must be appropriate compensation to transmission providers and transmission rights holders for making transmission available to the market.
• Transmission used to facilitate EDAM transactions should be firm to provide participants relative certainty that deliverability issues will not drastically impact supply in real-time.

PPC looks forward to more discussion on these topics, specifically as we continue to have questions on how the proposed transmission paradigm would impact existing OATT transmission rights and transmission access.

Supply Commitment

Similar to our comments provided in other forums, such as the discussion on the Resource Sufficiency Evaluation, it is critical to PPC that leaning be prevented.  Preventing leaning should be included under the supply commitment principles.  Further, the definition of leaning should be clarified.  Entities should be able to meet their own needs outside of the organized day-ahead and real-time markets.  To the extent that entities rely on the resources of others to meet their needs, those resources should receive fair compensation for the services they provide.  Given that EDAM would potential exist across a footprint with different resource adequacy programs (including none in some cases) application of a robust resource sufficiency test (or similar evaluation) is needed to ensure equity among participants.

While we appreciate the initial information provided by CAISO and the EDAM small group, much more information is needed on how the proposed concept would prevent leaning.  For instance, PPC would like to better understand how the CAISO plans to “harmonize” the EDAM with existing and potential RA programs.  PPC is not suggesting that EDAM should necessarily result in changes to RA programs existing in the footprint, but without a robust, coordinated RA program across the entire footprint, simply complying with an RA program should not be considered sufficient for ensuring that leaning does not occur.  We look forward to additional details on how EDAM and regional RA programs will “harmonize” while preventing leaning.

Congestion Rent Allocation

The recent EDAM Principles and Concepts paper includes a principle to “hold customers harmless.” PPC notes that this should include maintaining an incentive for customers to purchase OATT transmission on a long-term basis through the equitable allocation of congestion rent to transmission rights holders.  Not maintaining this incentive puts transmission providers at risk of not being able to recover their costs and could result in significant cost shifts for existing rights holders.

We look forward to more discussion informed by examples created by the EDAM small group. Without these examples and based on our current understanding, we are concerned that the proposal may not result in an equitable allocation of benefits.  In particular, PPC would like to see more information justifying the differences in proposed congestion rent allocation between EDAM BAAs and between EDAM BAAs and CAISO. 

Level of Confidence in EDAM Transfers

PPC agrees that transfers in EDAM should be firm.  Under the proposal being considered to allow Bucket 2 transmission to be utilized by the market whether it is donated by the rights holder or not, it is not clear how that use of transmission would be firm since the rights holder could schedule on that right after day ahead optimization, essentially recalling the transmission.  This should be addressed when discussing the treatment of Bucket 2 transmission.

GHG Accounting

PPC generally agrees with the principles laid out for GHG accounting and looks forward to discussions on how those principles could be achieved.

Price Formation

PPC sees price formation as a critical component of the EDAM discussion.  While we understand that price formation has impacts larger than EDAM and thus will be pursued in a separate initiative, PPC will not be able to properly assess the EDAM proposal until price formation issues are resolved.

2. Please share your organization’s perspective on the scope items or topics that should be considered in the EDAM initiative, as discussed in the workshop. Each of the stakeholder working groups will also further define the market design elements that will need to be considered.

PPC will be considering EDAM as part of a package.  This includes both governance and market design.  Market design issues will not be limited to those identified as part of the EDAM initiative but include other related initiatives such as Day Ahead Market Enhancement, Price Formation, Resource Sufficiency Enhancements and Transmission Services and Market Scheduling Priorities.

3. Please share your organization’s perspective on the stakeholder working group structure and EDAM initiative schedule.

The proposed working group structure with three concurrently occurring working groups meeting several hours a week presents a staffing challenge for PPC.  If the CAISO plans on maintaining this cadence of meetings, we request that CAISO periodically provide a summary of workgroup progress to stakeholders.  This should help those that cannot fully staff these workgroups to continue to engage.  Alternatively, pursuing a less aggressive schedule would allow for more participation from stakeholders, which would better achieve the objective for an inclusive stakeholder process that CAISO has been describing.

4. Please share your organization’s perspective on any other aspects of the workshop and the EDAM effort.

During these workshops, it will be very helpful to clarify what elements of EDAM are up for discussion and which have already been determined by earlier small group discussions.  As described above, it will be most helpful if other stakeholders are able to provide input to refine the established principles and to inform the development of additional market details.  If this is not the case CAISO, should provide clarification.  Staff in organizations across the region are trying to determine how to best allocate their limited time.  If there are specific recommendations made by stakeholders that are non-starters for CAISO, then it should be made clear early on so that all involved can make informed decisions about how to invest staff time and effort on the many initiatives and processes underway across the region.

1. The upcoming EDAM stakeholder working groups will further review and vet the EDAM Common Design Principles and Concepts applicable to each of the groups, identifying potential modifications and/or additional principles throughout the discussions. The principles and concepts document is posted on the EDAM web page. To the extent stakeholders would like to share comments on these principles and concepts in advance of the working group discussions, please share your organizations perspective.

2. Please share your organization’s perspective on the scope items or topics that should be considered in the EDAM initiative, as discussed in the workshop. Each of the stakeholder working groups will also further define the market design elements that will need to be considered.

3. Please share your organization’s perspective on the stakeholder working group structure and EDAM initiative schedule.

4. Please share your organization’s perspective on any other aspects of the workshop and the EDAM effort.