Provide your organization’s comments on the proposed energy storage resource model, as described in the revised straw proposal:
Provide your organization’s comments on the proposed reliability enhancements for storage resources, as described in the revised straw proposal:
Provide your organization’s comments on the proposed co-located enhancements, as described in the revised straw proposal:
LSA’s comments below both: (1) Provide feedback for the specific features in the Proposal; and (2) request CAISO responses to earlier clarification requests for current market rules and LSA/SEIA reform proposals.
FEEDBACK ON SPECIFIC PROPOSALS IN THE REVISED STRAW PROPOSAL
Grid-charge management for CLR MFRs - mechanics
As noted under #1 above, LSA mainly supports the mechanics of the CAISO’s proposal for grid-charging management. The reasons for these positions, along with suggested modifications and clarifications, are explained further below.
The proposed mechanism would have the following elements, for participating MFR CLRs:
- Storage CLR charging schedules will not be set above VER CLR output schedules
- Storage CLRs real-time charging may deviate down from scheduled/dispatch levels to match VER CLR real-time output, to the extent that the latter is less than the “forecast”
- Deviations by both CLRs would be subject to Imbalance Energy charges
- Storage CLRs must submit outage cards indicating unavailability when they are depleted and unable to charge based on renewable CLR output levels (subject to RAAIM provisions)
This framework seems reasonable generally, but LSA suggests clarifications and modifications below.
Element #1: The CAISO should clarify how this provision will work if the storage CLR bids into the Day Ahead Market (as it is required to do, if it is a Resource Adequacy (RA) Resource) but the VER CLR does not schedule until the real-time market (as it is not required to do even if it is an RA Resource).
Element #2: This element is ambiguous. It would make sense if the reference was to the scheduled or dispatch levels, but the reference to the “forecast” is not clear. For one thing, the MFR resource owner or Scheduling Coordinator might not know the “forecast” output for the VER CLR if the renewable CLR is in the Participating Intermittent Resources Program (PIRP), since the CAISO forecasts output levels for such resources and adjusts them during the hour in real time.
Also, the treatment of downward dispatches of the renewable CLR pursuant to real-time economic bids is not clear. The CAISO should not discourage such real-time economic bids from VER CLRs, so the storage CLR should be allowed to reduce real-time charging activity to match any VER CLR dispatches downward resulting from real-time economic bids.
Element #3: LSA does not have any comments.
Element #4: LSA does not understand how this approach would be practical. For example, the VER CLR output may be insufficient to support storage CLR charging in one interval but then increase in the next interval to allow such charging. This element requires more detail to show that it is feasible, or modification to make it so.
Grid-charge management for CLR MFRs - eligibility
LSA has significant concerns about the CAISO’s new proposed eligibility requirements and recommends revisions in this area.
The earlier Straw Proposal included an election mechanism, with eligibility based on:
“…documentation that the associated storage resource is part of an energy project eligible and planning to apply for investment tax credits and the expected window that the facility will be eligible to receive investment tax credits (i.e., 5 years). At that time the ISO will implement this logic for the specified eligibility timeframe of the investment tax credit.”
The eligibility criteria in the Proposal are much more stringent and narrower, and internally inconsistent. The Proposal also does not acknowledge or respond to LSA comments on that proposal, which related to granularity of the election and failure to address the property-tax issue.
Below, LSA first addresses concerns with the new eligibility requirements and then repeats its concerns and suggestions about the last proposal that are still applicable to this one.
New eligibility requirements
The Proposal states, at p.25:
This functionality will only be allowed for resources that have contractual investment tax credit implications or property tax implications, that were in place prior to this policy being implemented. Eligible resources must be participating on the grid prior to this time. Resources that strike contracts prohibiting grid charging or resources that begin participating in the ISO market after this policy goes live, will not be eligible for this functionality. This functionality will not be made available to any resource that has been participating on the grid for five years or more.
The Proposal requires “contractual investment tax credit implications or property tax implications” and otherwise references “contracts prohibiting grid charging.” It appears that resources with ITC limitations on grid charging would only be eligible if they have a PPA prohibiting grid charging, and not to the more general situation as in the Straw Proposal. (See further discussion of property-tax issues below.)
The CAISO should allow a resource to qualify under the more general ITC provisions in the Straw Proposal, i.e., remove the “contractual” and “contracts” provisions from this proposal. Resources with ITC limitations have such limitations even if their PPAs do not explicitly prohibit grid charging, or if they do not have a PPA at all. These resources are largely dependent on the federal ITC for their financial feasibility, and the CAISO’s disagreement with the federally established ITC policies does not justify practices that would undermine them.
- The new Proposal now has a strict 5-year limit, instead of the more flexible Straw Proposal framework allowing a demonstration of the required timeframe. The CAISO should reinstate the former framework, to avoid federal or state rules that could modify tax rules going forward.
- The new Proposal is internally inconsistent, referring to eligibility based on:
- “Contractual implications” “that were in place prior to this policy being implemented,” with resources “that strike contracts prohibiting grid charging…after this policy goes live” ineligible for the new option; and
- “Participat[ion] on the grid prior to” implementation of this policy, with “resources that begin participating in the ISO market after this policy goes live” ineligible for the new option.
These statements are muddled at best, i.e., it is not clear whether eligibility is based on contracts executed before the new policy is implemented, project operation (Commercial Operation?) before the new policy is implemented, or both. LSA opposes a contractual condition for eligibility, as discussed above, but any policy that includes a contractual eligibility condition must recognize that contracts are executed many years before a project begins operating.
Prior comments that continue to apply to the CAISO’s proposal
LSA’s comments on that proposal are still applicable here and thus repeated below.
- The electability of the new option should be more granular, or contain a real-time override for the CLR owner or SC (besides the CAISO’s override in element #2 – see below). The concept assumes that the grid-charging election is an all-or-nothing prospect, i.e., storage CLRs can elect only unlimited grid charging or none at all.
However, as the CAISO’s proposals have recognized, limited grid charging could be economic under certain circumstances, and not all PPAs prohibit it. (In fact, LSA assumes that the CAISO is hoping that offering this grid-charging management tool to prevent such prohibitions in future PPAs, and/or encourage already-contracted parties to loosen such restrictions via contract modifications.)
Thus, LSA recommends that the CAISO include in the concept design some ability to disable this feature, e.g., on an hourly basis or based on market parameters (e.g., market energy prices below a specified level).
- The eligibility rules should also consider property-tax issues. While the Proposal (current and earlier versions) mention property-tax issues, the eligibility requirements do not consider them.
Rather than have the CAISO immerse itself in local property-tax issues, LSA recommends eligibility-requirement modifications to allow participation extension beyond 5 years based on significant property-tax issues, perhaps with a materiality threshold.
- Forward scheduling issues: The Revised Straw Proposal said the new concept would apply to the “day-ahead and real-time markets” but only mentions real-time operational and settlement issues, e.g., Dispatch Instructions, deviations from them, and resulting settlements impacts. LSA asks that CAISO clarify whether/how this proposal would apply to forward schedules in either Day Ahead or Real Time markets, e.g., how the Day Ahead market would be affected.
- Exceptions: The Straw Proposal said the market would override the VER-storage balancing concept when the CAISO is issuing Dispatch Instructions “to economically curtail output from VER because there is more supply on the system than demand.” This statement is confusing, because ere are two reasons CAISO would be curtailing the VER CLR in real time.
The first is resource-specific, i.e., if the VER CLR is being curtailed pursuant to an economic bid submitted for the resource (including any Ancillary Services bids, though A/S certification is not common for VERs). This type of curtailment is usually called “economic curtailment” in CAISO documents (e.g., presentations at Market Planning & Performance Forums).
The second is reliability-related, i.e., if the CAISO has run out of economic bids and is curtailing VER (and other) resources that submitted self-schedules, for either congestion or over-generation reasons. This type of curtailment is usually called “self schedule” or “uneconomic curtailment” in CAISO documents.
However, based on the discussion at the last stakeholder meeting, it appears that the CAISO is referring to the second kind of curtailment as “economic” for some reason, and that the concept does not address the first kind of curtailment at all. The CAISO should provide this important clarification.
The CAISO should also clarify whether the recently implemented Minimum State of Charge (MSOC) feature would provide another exception to exercise of this concept. The MSOC ensures that storage CLR capacity is charged sufficiently to meet Day Ahead discharge schedules, so the CAISO should clarify whether the MSOC would override any charging reductions due to the proposed concept above.
Pseudo Tie (PT) MFR eligibility for ACCs
As noted above, LSA supports the proposed Pseudo Tie eligibility for ACCs. The reasons for this support, along with suggested modifications and clarifications for the grid-charge management proposal, are explained further below. The Proposal would allow PT MFRs in CLR configurations (PT MFR CLRs) the same access to ACCs as inside-CAISO resources, with the CAISO clarification that both Resource IDs “must be in the same BAA.” (We interpret to mean that both the VER and storage CLRs are Pseudo Tied to the CAISO BAA, but CAISO should clarify that.)
As noted in our Workshop presentation and earlier comments, PT MFR CLRs have exactly the same need for ACCs – i.e., risks of “stranding” large amounts of capacity needed for both project economic viability and CAISO market needs – as inside-CAISO MFR CLRs. Use of ACCs is completely compatible with PT firm-transmission requirements; that requirement is based on interconnection service capacity and maximum simultaneous output at the point of interconnection, not installed generation/storage capacity behind the interconnection.
In addition, as noted before, this change is needed to correct a serious process violation. The current prohibition against MFR PT Resource use of ACCs: (1) Was never addressed in the Hybrid Resource Initiative stakeholder process; and (2) was not prohibited in the tariff language, only mentioned in the FERC filing cover note. LSAbelieves that it therefore should never have been included in the filing cover note and support the CAISO’s proposed “fix” in this initiative.
CAISO RESPONSES REQUESTED TO OTHER LSA CLARIFICATION REQUESTS AND RECOMMENDATIONS
LSA’s earlier clarification requests for current market rules
In LSA’s earlier workshOp presentation, LSA requested that the CAISO clarify whether certain grid-charging management tools that may be available now, under current market rules for MFRs in a CLR configuration; these questions were based on lack of clarity of past CAISO statements on this issue.
LSA summarizes those requests below – modified slightly in light of the Proposal content – and asks again that the CAISO please provide the requested clarifications in this initiative.
- MFR CLR use of their own “limiting schemes” (software or physical limitations) to limit grid charging, based both on long-standing guidance below in the CAISO’s 2016 Technical Bulletin on MFRs and subsequent statements in the Hybrid Resources Initiative Straw Proposal and Revised Straw Proposal.
- CAISO Technical Bulletin (2016): Projects with multiple Resource IDs could have “all options,” including charging “from on-site generation only.” (p.12) (Table also included in Hybrid Resource Initiative Revised Straw Proposal.)
- Hybrid Resources Initiative Straw Proposal & Revised Straw Proposal: “Metering” sections included information for facilities configured as CLRs charging only from on-site generation, saying “A limiting scheme must be in place to prevent charging from the grid.”
- Aggregate Capability Constraint (ACC) minimum setting at zero. As stated in LSA/SEIA’s last comments, this solution would allow storage CLRs to fully offer their entire positive and negative operating range in CAISO markets (even where not required by their Must-Off Obligations (MOOs)) without fear that doing so would expose them to large grid-charging risks. This option can be accommodated within the current ACC functionality, without any tariff or software changes.
LSA’s other grid-charge management tool suggestions
LSA recommended consideration of other tools as well, including (but are not limited to) those listed below. LSA again requests that the CAISO consider these suggestions and respond to them, including explanations for why the CAISO did not include them in the Proposal.
- Additional Master File options, e.g., separate storage CLR Pmin parameters for physical limitations and market-dispatch limitations. For example, the former could apply during System Emergencies and the latter could apply at all other times.
- Expanded storage CLR flexibility, since the Minimum State of Charge (MSOC) ensures availability for subsequent hourly schedules (and, presumably, any MSOC replacement would do the same). For example, the CAISO could:
- Revise real-time dispatch software so that storage CLRs could elect to have CAISO Dispatch Instructions reflect the storage flexibility already allowed, i.e., automatically increase storage CLR charging or reduce discharging where real-time VER output is above schedule.
- Allow storage CLRs to exercise storage flexibility (in both directions) in intervals when providing A/S, subject to the MSOC.
Provide your organization’s comments on the proposed WEIM classification for this initiative, as described in the revised straw proposal: