California ISO - Department of Market Monitoring
Submitted 07/09/2021, 11:58 am
1.
Please provide a summary of your organization’s comments on the issue paper:
Please see the attached comments.
2.
Please provide a summary of your organization's comments on the workshop presentations and discussion:
3.
Please provide your organization’s comments on RSE design principles as presented during the workshop:
4.
Please provide your organization’s comments on the potential design changes presented by the CAISO:
a) The potential application of intertemporal and/or deliverability constraints to the
capacity test
b) The potential inclusion of the power balance constraint relaxation quantity to the
flexible ramp sufficiency test requirements
c) The potential for the balancing test to be applied to the CASIO
d) The potential for outside of the market actions, as taken by system operators,
in tight system conditions to be considered within the RSE
5.
Please provide your organization’s comments on the specific enhancements to improve RSE accuracy presented by the EIM entities:
a) The potential application of intertemporal constraints that limit bid range
availability to the maximum achievable values within the real-time market
horizon
b) The potential consideration of requiring intertie schedule e-tags prior to
scheduled interchange being included as available capacity in the RSE
c) The potential consideration of including operator bias in the requirements for the
capacity and/or the flexible ramp sufficiency tests
d) The potential consideration of forecast error, beyond what is captured in the
uncertainty requirement, to the capacity and flexible ramp sufficiency tests
6.
Should capacity that is temporally stranded by commitment decisions made in prior intervals be available to be shown as bid range for the purpose of passing the capacity test?
a) Would the exclusion of this capacity create adverse bidding incentives, or reduce
the benefit of EIM participation due to changes in base scheduling practices
7.
Please provide your organization’s comments on the types of demand response resources that should be considered by the RSE:
8.
Please provide your organization’s comments on the potential forms of financial consequences and/or opportunities for EIM energy assistance as presented during the workshop:
a) Please provide your organization’s comments on if the proposed changes to the
resource sufficiency evaluations bid range capacity test eliminate the need for
consideration of additional financial consequences. To the extent that your
organization believes consequences are appropriate, please describe potential
paths for implementation
b) Please provide your organization’s comments on potential bases for financial
consequences that could be assessed due to failure of the RSE
c) Please provide your organization’s comments on the revenue allocation and
funding of potential financial consequences.
d) Please provide your organization’s comments on the appropriateness of
previously cleared EIM transfers being reduced, or having a financial
consequences applied as a result of failing the RSE
e) Please provide your organization’s comments on bid range trading
appropriateness as a means to solve capacity shortfalls
f) Please provide your organization’s comments on the potential for consequences
that proactively limit EIM transfers as a result of systemic RSE failures
9.
Please provide your organization's comments on the objectives of additional data transparency as presented in the workshop
a) What types of data should be available to individual EIM entities, the EIM
governing body, or the EIM as a whole?
10.
Please provide your organization's comments on the correct confidence interval that should be used to calculate the intertie deviation between the RSE conducted at T-40 and T-20 e-tagging deadline:
11.
Please provide any additional comments on the EIM RSE Enhancements initiative that have not previously been addressed:
NV Energy
Submitted 07/09/2021, 12:52 pm
1.
Please provide a summary of your organization’s comments on the issue paper:
NV Energy appreciates the CAISO’s attention to this critical issue. NV Energy is supportive of the comments being presented by the Salt River Agricultural Improvement and Power District as well as the concepts on enhanced transparency, reporting, oversight, and developing a test that is accurate (including appropriate reflection of an EIM Entity’s demand response program), effective and equitably applied as presented by the EIM Entities. We offer a few additional thoughts at this initial stage of the initiative.
At the workshop, the CAISO indicated that the purpose of the initiative was to explore additional improvements to the EIM resource sufficiency evaluation (RSE) including consideration of: (1) applying the balancing test to the CAISO balancing authority area (BAA); (2) modifications to the capacity test; (3) modifications to the flexible ramping sufficiency test, (4) accounting for emergency operator actions within the RSE, and (5) financial consequences for failure of either the capacity or ramp sufficiency test.
NV Energy would recommend including within the scope of the initiative market design enhancements that improve the accuracy of the test and the ability of EIM Entities to participate and pass the test with their resources and demand response programs.
2.
Please provide a summary of your organization's comments on the workshop presentations and discussion:
NV Energy would like to thank the CAISO Staff and the EIM Entity panelists for the time and effort in putting together these informative presentations. In addition, to the issues presented, NV Energy would recommend that the Straw Proposal consider:
- Reviewing use-limited resource opportunity cost adders. By limiting the total costs attributed to startup and opportunity costs, EIM Entities are restricted in offering in their full portfolio of resources to the EIM market. For example, quick start peaking units would bring significant value in aiding certain EIM Entities in passing hourly resource sufficiency tests. However, if such units are under strict environmental and/or start up limitations, significant cost adders need to be allowed, beyond those currently available, if such units are to be bid into the market. If the RSE is to be a true measure of an EIM Entities available capacity or if EIM Entities are going to be financially penalized for not passing hourly resource sufficiency tests, they should have the ability to offer in their full amount capacity while being able to manage start-up constraints.
- Accounting for demand response load reduction. Currently, the CAISO does not account for demand response in the short-term load forecast, unless the demand response schedule is greater than five percent of system load. Even without meeting the five percent threshold currently in place, EIM Entities still have significant demand response programs (150-200 MW in NV Energy’s case) yet the hourly load forecast does not account for the load reduction. This has significant impacts on the EIM Entities’ ability to pass hourly sufficiency tests as loads, and thus sufficiency test requirements, are set to higher levels over evening peak periods that are not representative of the effects of demand response.
- Provide the EIM Entity’s Participating Resource Scheduling Coordinator (PRSC) additional visibility and access to hourly resource sufficiency test data. Ultimately the PRSC is responsible for submitting bid ranges each hour, yet restrictions remain in place for the PRSC to access hourly test requirements, advisory test results, and final test results. The CAISO should identify ways to allow the PRSC to have access to specific data related to testing requirements and results.
- Revisit the timing disconnect that exists between the CAISO HASP market and EIM bid and base schedule submission deadlines. The recent day ahead export priority changes have resulted in significant challenges for non-CAISO entities who are subjected to the RUC scheduling process. On high load days, non-CAISO entities are left with RUC day ahead export schedules that have been reduced from the IFM award, yet remain financially committed to rebid the award in real-time and wait until T-57 from the start of the flow hour to determine what the final schedule will be. With EIM bids due by T-75, this presents significant challenges for EIM Entities in submitting appropriate and accurate bid ranges to the market. Additionally, subsequent to HASP awards being published, e-tags still must ultimately be adjusted and approved for the updated schedules to be pulled into EIM Entity balancing software. This leaves minimal time for the EIM Entity to update base schedules in time to allow for passing of the hourly resource sufficiency tests which are locked by T-40.
3.
Please provide your organization’s comments on RSE design principles as presented during the workshop:
NV Energy supports the following principles with respect to the EIM RSE:
- It should prevent leaning on the capacity of other EIM Entities. Participants in the EIM should come with sufficient capacity and ramping capabilities to meet their expected load.
- The consequences of failure should not cause operational or reliability issues; and
- It is not meant as a substitute for long-range resource adequacy or integrated resource plans in individual balancing authority areas.
The RSE is to provide reasonable confidence that an EIM Entity is able meet their demand with their own net-supply prior to engaging in transfers with other EIM Entities through the EIM in the real-time market. The test should be transparent and predicable. It is important that EIM Entities have accurate and timely information of the appliable requirements to factor in their resource decisions along with weather and load forecasts, system conditions, and ancillary service requirements. Accordingly, the RSE should be consistent with how an EIM Entity would prepare for operations on a stand-alone basis.
Any sudden changes in transfers can have a profound effect on system operations and the ability of EIM participating Balancing Authorities to take compensating actions. The EIM is a voluntary market in which willing participants are more efficiently and effectively engaging in economy energy transactions. The EIM should be an additional tool to foster regional reliability. It is not meant to influence any entities long-range resource planning.
4.
Please provide your organization’s comments on the potential design changes presented by the CAISO:
a) The potential application of intertemporal and/or deliverability constraints to the
capacity test
b) The potential inclusion of the power balance constraint relaxation quantity to the
flexible ramp sufficiency test requirements
c) The potential for the balancing test to be applied to the CASIO
d) The potential for outside of the market actions, as taken by system operators,
in tight system conditions to be considered within the RSE
The RSE should be consistent among all EIM Entities (including CAISO) and produce accurate results. Furthermore, the test must be understood in a timely manner to inform EIM Entity procurement decisions. The test was designed to provide comfort that no entity was leaning on the capacity of others. It was not and should not be designed to account for every conceivable intertemporal issue. Moreover, the CAISO has already added additional capacity responsibilities to account for “uncertainty”.
5.
Please provide your organization’s comments on the specific enhancements to improve RSE accuracy presented by the EIM entities:
a) The potential application of intertemporal constraints that limit bid range
availability to the maximum achievable values within the real-time market
horizon
b) The potential consideration of requiring intertie schedule e-tags prior to
scheduled interchange being included as available capacity in the RSE
c) The potential consideration of including operator bias in the requirements for the
capacity and/or the flexible ramp sufficiency tests
d) The potential consideration of forecast error, beyond what is captured in the
uncertainty requirement, to the capacity and flexible ramp sufficiency tests
6.
Should capacity that is temporally stranded by commitment decisions made in prior intervals be available to be shown as bid range for the purpose of passing the capacity test?
a) Would the exclusion of this capacity create adverse bidding incentives, or reduce
the benefit of EIM participation due to changes in base scheduling practices
7.
Please provide your organization’s comments on the types of demand response resources that should be considered by the RSE:
8.
Please provide your organization’s comments on the potential forms of financial consequences and/or opportunities for EIM energy assistance as presented during the workshop:
a) Please provide your organization’s comments on if the proposed changes to the
resource sufficiency evaluations bid range capacity test eliminate the need for
consideration of additional financial consequences. To the extent that your
organization believes consequences are appropriate, please describe potential
paths for implementation
b) Please provide your organization’s comments on potential bases for financial
consequences that could be assessed due to failure of the RSE
c) Please provide your organization’s comments on the revenue allocation and
funding of potential financial consequences.
d) Please provide your organization’s comments on the appropriateness of
previously cleared EIM transfers being reduced, or having a financial
consequences applied as a result of failing the RSE
e) Please provide your organization’s comments on bid range trading
appropriateness as a means to solve capacity shortfalls
f) Please provide your organization’s comments on the potential for consequences
that proactively limit EIM transfers as a result of systemic RSE failures
8a) NV Energy would support the addition of an optional financial payment. Care would need to be taken regarding the timing of opting into and out of the financial payment as well as the nature of the appropriate payment associated with voluntary supply offers in the EIM.
8c) This will pose potential challenges for EIM Entities as well as CAISO. While the CASIO will assign these on a BAA basis, the EIM Entity may need to sub-allocate the financial responsibility to customers whose shortfalls contributed to the failure.
8d) NV Energy strongly opposes these suggestions. They have the potential to alter the basic market design parameters upon which EIM Entities voluntarily entered the market. As noted in response to question 8(a), NV Energy welcomes continued discussions of improvements that add additional options to the existing failure consequence of freezing the EIM Transfers.
At this point, NV Energy requests that the CAISO consider a phased approach for this initiative that includes monitoring any changes to the RSE before consideration of any modification to failure consequences.
8f) This appears to be a solution in search of a problem. What is meant by “systemic”? We now have almost 7 years of EIM operations. Has this been identified as a problem? In the search for improvements, care must be taken not to harm existing, fundamental design elements. As a Balancing Authority Area, an EIM Entity has specific responsibilities and faces existing penalty programs for non-compliance. Care should be taken not to create unnecessary disincentives to EIM participation. All EIM Entities continue to benefit from the additional EIM Transfer capability brought by the participating EIM Entities, even those that have failed the RSE.
9.
Please provide your organization's comments on the objectives of additional data transparency as presented in the workshop
a) What types of data should be available to individual EIM entities, the EIM
governing body, or the EIM as a whole?
NV Energy supports the PGE presentation around greater transparency between CAISO and the EIM Entity regarding the uncertainty calculation.
10.
Please provide your organization's comments on the correct confidence interval that should be used to calculate the intertie deviation between the RSE conducted at T-40 and T-20 e-tagging deadline:
11.
Please provide any additional comments on the EIM RSE Enhancements initiative that have not previously been addressed:
For an EIM Decisional Classification, the CAISO Policy Staff propose to divide the initiative into two parts: (1) the evaluation tests that will be applied to all BAAs in the EIM, and (2) the financial penalty to be imposed on a balancing authority that fails the test. The Staff appears to propose that the EIM Governing Body would have an advisory role for the first issue and no role with respect to the latter issue. This is a penalty that can be assessed to or paid to EIM Entities.
That the name of the initiative “EIM Resource Sufficiency Evaluation Enhancements” is a clear indication that any and all aspects of the initiative would not exist “but for” the EIM. In addition, the CAISO’s Guidance for Handling Policy Initiatives within the Decisional Authority or Advisory Role of the EIM Governing Body as revised March 27, 2019 also states:
the EIM Governing Body also has primary authority for a proposed change to a market rule that is generally applicable to the entire real-time market, if an issue that is specific to the EIM balancing authority areas is the primary driver for the proposed change.
Under both prongs of the tests for determining decisional classification, this initiative is firmly within the confines of the EIM Governing Body’s primary authority.
Pacific Gas & Electric
Submitted 07/09/2021, 07:03 pm
1.
Please provide a summary of your organization’s comments on the issue paper:
PG&E appreciates the CAISO’s efforts to review the RSE design and the opportunity to explore options to improve the accuracy, transparency, and effectiveness of the RSE tests in CAISO’s real-time EIM. CAISO’s Issue Paper covers a broad range of potential design changes to tests with the RSE and options to implement financial consequences for failure of the test. Given the complexity of the RSE and the broad range of proposed design enhancements offered in the Issue Paper, PG&E asks CAISO to provide more analysis and estimates on the magnitude of the impact of the various design changes as it finalizes the scope of this initiative.
PG&E also asks CAISO to clarify the implications of this initiative as precedent for future EDAM resource sufficiency policies. Resource sufficiency is a critical and evolving issue in not only the EIM, but also EDAM stakeholder discussions. PG&E believes the EIM’s resource sufficiency framework should not be precedent-setting or seen as a baseline for EDAM’s resource sufficient design. Given the significant differences between EIM and EDAM, PG&E requests CAISO to clarify to stakeholders that resource sufficiency policies in EIM should not be assumed to carry over into future EDAM resource sufficiency policy.
Finally, the Issue Paper also notes several recent corrections and enhancements to the RSE[1] and additional changes to be implemented in the coming months that are intended to improve the accuracy of the RSE.[2] In light of the steps already taken but not yet fully understood or implemented, PG&E encourages CAISO to consider their anticipated impact as it evaluates the need for additional reforms.
A summary of PG&E’s additional comments on the Issue Paper follows below.
- RSE Design Principles: Clarifying the definition of leaning
The RSE’s purpose to discourage leaning is cited as a foundational design element of the EIM. PG&E understands the positions of certain EIM entities advocating for stronger rules discouraging leaning, but would request additional discussion on the market and reliability implications of the CAISO allowing too much (or too little) leaning. From that foundation, PG&E would welcome additional discussion on whether it would benefit the EIM to differentiate among varying degrees and kinds of leaning. For example, the RSE does not currently distinguish between excessive, leaning during normal conditions and shortfalls of limited duration, frequency, and magnitude during emergency conditions.
EIM transfers benefit from the diversity of resources and load patterns around the region and “leaning” can occur between states even on a “blue sky” day, on an intra-day basis, depending on the seasonal and time-of-day variability in resource production.[3] This flexibility of the EIM is a benefit to all parties and does not (on its own) indicate a failure of entities to procure sufficient resources.
It seems worthwhile to distinguish between what could be considered acceptable leaning (representing the gains from trade among entities with diverse resource mix, weather and load patterns) versus the potential for impermissible leaning that materializes if an entity has under-procured or consistently fails to secure sufficient capacity to meet its needs during times of overall system stress.
In summary, PG&E encourages CAISO to revisit how leaning is defined, whether any “leaning” should be permissible, and when the consequences of impermissible leaning should apply. Please see PG&E’s answer to question 3 for further comments.
- Potential design enhancements to improve accuracy of existing tests: Trade-offs between accuracy and additional complexity
PG&E appreciates CAISO’s efforts to improve the accuracy of calculations within the RSE, but recognizes the trade-offs between counting for the exact availability of resources and the possibility of errors and unintended consequences from additional modeling complexities in RSE tests. Therefore, PG&E encourages CAISO to consider design changes that are most likely to offer the greatest improvement while simplifying other constraints. Moreover, some proposed design changes require certain market information that will not be known by the time the RSE results are finalized. Finally, PG&E requests that CAISO synthesize a timeline which specifies the steps of the RSE alongside the required information that would be included in the RSE tests.
- Financial consequences for RSE failure should be targeted and minimize incentives for gaming and withholding
PG&E believes it is worthwhile to explore targeted financial consequences for failure of the RSE in some circumstances. The Issue Paper describes financial consequences as potential additional consequences that may be needed because the current operational consequences are not severe enough to deter leaning. PG&E wonders if the question should instead be whether new financial consequences should replace, rather than supplement, the current operational consequences.
During normal conditions, it appears that the current operational penalties can work against the EIM’s purpose to leverage regional diversity and allow entities to trade residual capacity that is voluntarily offered into the market. DMM has noted that “limiting transfers between balancing areas when an area fails a resource sufficiency test will often decrease the overall efficiency of the EIM market dispatch.”[4] PG&E supports further discussion of how well-designed financial consequences could deter inappropriate leaning and offer improved market efficiency and reliability benefits to the EIM as opposed to the current operational penalty.
PG&E would also like to better understand the importance of the current operational penalties in preventing cascading reliability challenges, and whether moving away from operational penalties and toward financial consequences could cause unacceptable reliability challenges. If financial consequences are pursued, PG&E believes they should be targeted, incorporated into the market optimization process, and that the revenue allocation methodology should minimize opportunities for gaming or the incentive to withhold.
- Transparency and reporting: Sensitive information should continue to be protected
PG&E generally supports efforts to give EIM entities more insight into the calculations, inputs and outputs of their RSE tests and the associated market outcomes. In addition to the regular reports already provided by the DMM and CAISO, more readily available information and analysis about the frequency and magnitude of test failures and the impact of test failure consequences on reliability and prices would foster better understanding of the performance of the RSE.
At the same time, PG&E would like to raise risks related to market power or manipulation that could come into play depending on the nature and timing of additional public data reporting. PG&E urges CAISO to continue to protect sensitive information that could be used by sellers to take advantage of RSE test results in an inappropriate way.
[1] Recently implemented RSE changes include: 1) Software corrections related to outages, derates, and mirror resources (Feb 2021), and 2) Adding the uncertainty requirement to the capacity test (June 2021)
[2] RSE changes awaiting implementation include: 1) Updating the calculation of the Uncertainty values by using a quantile regression approach rather than the current histogram approximation. (CAISO estimates this will be implemented in Spring 2022), and 2) Moving the final base schedule submission from T-40 to T-30 (expected to start in Fall of 2021)
[3] CAISO DMM Energy imbalance market pricing presentation. EIM Body of State Regulators, Monthly update
July 9, 2021. https://www.westernenergyboard.org/wp-content/uploads/EIM-BOSR-2021-jul-9-muc-agenda.pdf
[4] “Comments on Market Enhancements for Summer 2021 Readiness Stakeholder Workshops January 12-13, 2021.” CAISO Department of Market Monitoring. January 21, 2021. Pg. 5. http://www.caiso.com/Documents/DMMCommentsonMarketEnhancementsSummer2021Readiness-Jan12-13Workshops-Final.pdf
2.
Please provide a summary of your organization's comments on the workshop presentations and discussion:
Clarifying the role of the RSE to maintain reliability
PG&E believes it is important for CAISO to clarify the role of the RSE to maintain reliability. The Joint EIM Entity presentation[1] listed as its first principle for the RSE: “Maintain reliability while discouraging leaning,” while the CAISO’s Issue Paper explains that the “resource sufficiency evaluation does not determine if a balancing authority area is able to meet its individual reliability requirements…”
PG&E’s understanding is that the RSE was not intended as a measure to maintain reliability and shares the CAISO’s view that “the consequences of resource sufficiency evaluation failures should not cause operational or reliability issues.” The RSE should be consistent with the purpose of the EIM to enable better economic outcomes for EIM participants in the real-time market, while reliability should be addressed by resource adequacy and other reliability measures taken by individual BAs.
Recognizing the differences between CAISO and non-CAISO BAs in application of the RSE
A key theme in CAISO’s workshops was the implication that the RSE is inequitably applied to the CAISO BAA and provides unfair advantages to the CAISO BA over non-CAISO EIM entities and participants. The CAISO BA is unique in the EIM, and PG&E agrees it is important to recognize and reconcile asymmetries that exist between CAISO’s organized markets and the markets in other EIM areas to ensure equitability.
As opposed to the concern that the RSE design favors the CAISO BA, however, there are instances in which the opposite may be true. For example, in some cases, the CAISO BA lacks the flexibility and visibility into the RSE that non-CAISO LSEs seem to have. Some of the differences between CAISO BA and non-CAISO BAs that affect the RSE include:
- Voluntary participation of generation and transmission assets by non-CAISO entities
- For CAISO, no action is taken between T-75/T-55 and T-40 to cure any RSE test failures[2]
- CAISO’s automated market deters opportunistic over- or under-scheduling in the CAISO BA
- Responsibility for passing the RSE is diffuse and uncoordinated among multiple LSEs
PG&E believes that any design changes made in the name of equitability should be considered holistically and while recognizing the inherent differences among EIM entities.
[1] EIM Resource Sufficiency Workshop. Presentation by Arizona Public Service, Bonneville Power Administration, Portland General Electric, Powerex. June 25 & 28 2021. Slide 3 at http://www.caiso.com/InitiativeDocuments/JointEIMEntity-CombinedPresentation-EIMRSEEnhancementsWorkshop-Jun25-28-2021.pdf
[2] Resource Sufficiency Evaluation Bid Range Capacity Test presentation. March 30, 2021. Slide 4. http://www.caiso.com/InitiativeDocuments/Presentation-ResourceSufficiencyEvaluationAnalysis-Mar30-2021.pdf
3.
Please provide your organization’s comments on RSE design principles as presented during the workshop:
The RSE’s purpose to discourage leaning is cited as a foundational design element of the EIM. PG&E understands the positions of certain EIM entities advocating for stronger rules discouraging leaning, but would request additional discussion on the market and reliability implications of the CAISO allowing too much (or too) little leaning. From that foundation, PG&E would welcome additional discussion on whether it would benefit the EIM to differentiate among varying degrees and kinds of leaning. For example, the RSE does not currently distinguish between excessive, leaning during normal conditions and shortfalls of limited duration, frequency, and magnitude during emergency conditions.
EIM transfers benefit from the diversity of resources and load patterns around the region and “leaning” can occur between states even on a “blue sky” day, on an intra-day basis, depending on the seasonal and time-of-day variability in resource production.[1] This flexibility of the EIM is a benefit to all parties and does not (on its own) indicate a failure of entities to procure sufficient resources.
Currently, the prohibition on leaning penalizes EIM BAAs for any failure of the RSE by limiting transfers, regardless of when the failure occurred, the amount of the shortfall, or the reason for the failure. Penalizing BAAs by limiting transfers following a test failure can reduce the benefits of the EIM to leverage regional diversity and facilitate economically efficient transactions between EIM participants. DMM has noted that “limiting transfers between balancing areas when an area fails a resource sufficiency test will often decrease the overall efficiency of the EIM market dispatch.”[2]
CAISO highlighted in the Issue Paper that RSE test “failures largely did not correspond to stressed system conditions. The failures may be more attributable to the mechanics of the test, market software changes by the CAISO, or EIM participation strategies, then a deficiency in forward procurement decisions or an intent to lean on the EIM for incremental energy.”[3]
It seems worthwhile to distinguish between what could be considered acceptable leaning (representing the gains from trade among entities with diverse resource mix, weather and load patterns) versus the potential for impermissible leaning that materializes if an entity has under-procured or consistently fails to secure sufficient capacity to meet its needs during times of overall system stress.
Clarifying the definition of leaning is particularly important as CAISO considers implementing new financial consequences to RSE test failures, which introduces the potential for large, unexpected financial costs to EIM BAs. PG&E appreciates CAISO’s suggestion in the Issue Paper that enhanced consequences could apply only during certain system conditions[4] and encourages the CAISO to further explore the ramifications of changing the nature of the RSE failure consequences and the circumstances under which they apply.
[1] CAISO DMM Energy imbalance market pricing presentation. EIM Body of State Regulators, Monthly update. July 9, 2021. https://www.westernenergyboard.org/wp-content/uploads/EIM-BOSR-2021-jul-9-muc-agenda.pdf
[2] “Comments on Market Enhancements for Summer 2021 Readiness Stakeholder Workshops January 12-13, 2021.” CAISO Department of Market Monitoring. January 21, 2021. Pg. 5. http://www.caiso.com/Documents/DMMCommentsonMarketEnhancementsSummer2021Readiness-Jan12-13Workshops-Final.pdf
[3] CAISO “EIM Resource Efficiency [sic] Evaluation Enhancements Issue Paper.” May 28, 2021. Pg. 23 http://www.caiso.com/InitiativeDocuments/IssuePaper-EIMResourceEfficiencyEvaluationEnhancements.pdf
[4] Ibid
4.
Please provide your organization’s comments on the potential design changes presented by the CAISO:
a) The potential application of intertemporal and/or deliverability constraints to the
capacity test
b) The potential inclusion of the power balance constraint relaxation quantity to the
flexible ramp sufficiency test requirements
c) The potential for the balancing test to be applied to the CASIO
d) The potential for outside of the market actions, as taken by system operators,
in tight system conditions to be considered within the RSE
PG&E appreciates CAISO’s efforts to improve the accuracy of calculations within the RSE, but recognizes the trade-offs between counting for exact availability of resources and modeling complexities in RSE tests. Therefore, PG&E encourages CAISO to consider design changes that are most likely to improve the effectiveness of the tests while simplifying other constraints. Moreover, some proposed design changes require certain market information that will not be known by the time the RSE results are finalized. PG&E requests that CAISO synthesize a timeline which specifies the steps of the RSE alongside the required information that would be included in the RSE tests.
a) The potential application of intertemporal and/or deliverability constraints to the capacity test deliverable resource capacities
It is reasonable to consider resources’ physical availability in the next hour. Considering the short time frame and the complexity of adding inter-temporal constraints, providing bids‘ commitment status could be considered as a starting point.
One important consideration, as noted by the DMM, is any displacement of internal resource commitments in the short-term unit commitment (STUC) or RTPD commitment processes by EIM transfers.[1] It would be problematic to exclude units from the RSE test calculations that would otherwise be available and committed in the real-time market, if not for EIM transfers.
Similarly, changes in forecasts may cause resources that could have been available but were not committed to be excluded from the capacity test. An EIM BA may be deficient and penalized based on the exclusion of resources that were not committed because of earlier forecasts that were later increased, requiring more capacity.
b) The potential inclusion of the power balance constraint relaxation quantity to flexible ramp sufficiency test requirements
PG&E asks CAISO to clarify whether the infeasibility defined below (from the Issue Paper) is the same as the under/over schedules induced from power balance constraint relaxation:
“The initial reference point may need to be adjusted in order to remove the potential for infeasible operating schedules to be used in the flexible sufficiency test. The infeasibility of the scheduled could be added to the initial reference point. This infeasibility would be defined as the forecasted demand during that interval, minus the supply offered as part of the base schedule or show in a market schedule.”
Is this infeasibility only applied to the initial reference point the current interval (T-7.5), but not to all the 15-minute intervals in the next hour (T+7.5, T+22.5, T+37.5, and T+52.5)? This might understate the ramping requirements during the time when the power balance constraint is relaxed in the sequential hours, and cause false passing of the flexible ramping test.
- Is this infeasibility applied only to the last run of RSE (T-40), or to all the runs (T-75, T-55, and T-40)?
c) The potential for the balancing test to be applied to the CAISO
PG&E believes that CAISO’s current market process and RA program should be responsible to ensure accurate and sufficient base schedules; any shortage of base schedules is reflected through higher market prices. If the balancing test were applied to the CAISO, the test should also be reformed to ensure equivalency between CAISO and non-CAISO BAs by considering the changes in the DAME (Day-Ahead Market Enhancement) initiative. For example, under DAME, Imbalance Reserves (IR) will be included in CAISO’s day-ahead base-schedule, while other EIM entities’ base schedules do not have IR or similar products.
d) The potential for outside of the market actions, as taken by system operators, in tight system conditions to be considered within the RSE
PG&E supports the efforts to improve the accuracy of the RSE test. In general, PG&E understands that the RSE is designed to encourage LSEs to obtain energy out of the market. As such, counting out of market procurement by system operators in the RSE would appear to be required based on the goals of the test.
PG&E also notes the challenge of incorporating out-of-market (OOM) actions that usually happen in real time into the last RSE run at T-40. Please provide more details on modeling of out-of-market (OOM) actions, especially related to the timing of operator actions that would be included in the RSE.
[1]“Comments on Market Enhancements for Summer 2021 Readiness Stakeholder Workshops January 12-13, 2021.” CAISO Department of Market Monitoring. January 21, 2021. Pg. 4. http://www.caiso.com/Documents/DMMCommentsonMarketEnhancementsSummer2021Readiness-Jan12-13Workshops-Final.pdf
5.
Please provide your organization’s comments on the specific enhancements to improve RSE accuracy presented by the EIM entities:
a) The potential application of intertemporal constraints that limit bid range
availability to the maximum achievable values within the real-time market
horizon
b) The potential consideration of requiring intertie schedule e-tags prior to
scheduled interchange being included as available capacity in the RSE
c) The potential consideration of including operator bias in the requirements for the
capacity and/or the flexible ramp sufficiency tests
d) The potential consideration of forecast error, beyond what is captured in the
uncertainty requirement, to the capacity and flexible ramp sufficiency tests
a) The potential application of intertemporal constraints that limit bid range availability to the maximum achievable values within the real-time market horizon
Repeating our comments on item 4(a), PG&E believes it would improve the capacity tests’ accuracy by considering resources’ physical availability in the next hour. However, given the short time frame and the complexity of adding inter-temporal constraints, providing bids‘ commitment status could be considered as a starting point.
One important consideration, as noted by the DMM, is any displacement of internal resource commitments in the short-term unit commitment (STUC) or RTPD commitment processes by EIM transfers.[1] It would be problematic to exclude from the RSE test calculations units that would otherwise be available and committed in the real-time market, if not for EIM transfers.
b) The potential consideration of requiring intertie schedule e-tags prior to scheduled interchange being included as available capacity in the RSE
PG&E is concerned that requiring intertie schedule e-tags for capacity to be included in the RSE would be out of step with the existing NERC/WECC tagging timeline.
PG&E suggests treating any missing tags, or modified tag values similar to the process in the Intertie Deviation Settlement[2] process: If a tag is reduced because an upstream BAA curtailed flows for reliability reasons (per the WECC curtailment rules) then the sink BAA should be held harmless. For missing tags and reduced tags however, PG&E suggests that the CAISO not remove these MWs from the sufficiency test, but instead impose penalties for not delivering as expected. These costs would have to first go to the sink BAA, which would then be able to allocate them per their OATT.
If the NERC/WECC tagging deadlines were set earlier, then PG&E could fully support intertie schedule e-tags prior to scheduled interchange being included as available capacity in the RSE. Under current tagging deadline, it is not possible for the CAISO to evaluate sufficiency for all intervals in the hour. If the Transmission Profiles tagging deadline was moved forward (e.g. T-20 min, before the final RSE test), then the CAISO could reasonably exclude untagged imports from the sufficiency evaluation.
c) The potential consideration of including operator bias in the requirements for the capacity and/or the flexible ramp sufficiency tests
Repeating our comments on item 4(b) and (d), PG&E requests the CAISO to provide more details on modeling of the bias in RSE tests, including (i) when to include those bias, (ii) to which interval, and (iii) whether the demand forecasts are high confidence forecasts.
d) The potential consideration of forecast error, beyond what is captured in the uncertainty requirement, to the capacity and flexible ramp sufficiency tests
PG&E appreciates the comments of CAISO staff during the workshop to further investigate whether systemic forecast errors exist to justify considering such a change.
[1] http://www.caiso.com/Documents/DMMCommentsonMarketEnhancementsSummer2021Readiness-Jan12-13Workshops-Final.pdf
[2] https://stakeholdercenter.caiso.com/StakeholderInitiatives/Intertie-deviation-settlement
6.
Should capacity that is temporally stranded by commitment decisions made in prior intervals be available to be shown as bid range for the purpose of passing the capacity test?
a) Would the exclusion of this capacity create adverse bidding incentives, or reduce
the benefit of EIM participation due to changes in base scheduling practices
PG&E shares the concern identified from August 2020 that the capacity of a large multi-stage generator resource that was still coming back from outage was included in the RSE despite being unavailable. While such a scenario should be addressed, PG&E also shares CAISO’s concern that overly strict measures to exclude resources in certain situations from the RSE could reduce the benefits of EIM participation and create incentives to self-schedule rather than place economic bids.
PG&E asks CAISO to present more information and analysis about scenarios of temporally stranded capacity and the potential MW impact of excluding such capacity from the RSE.
7.
Please provide your organization’s comments on the types of demand response resources that should be considered by the RSE:
PG&E supports the status quo on the types of demand response resources that should be considered by the RSE, unless stakeholders provide data that identifies a problem for specific types of demand response resources.
8.
Please provide your organization’s comments on the potential forms of financial consequences and/or opportunities for EIM energy assistance as presented during the workshop:
a) Please provide your organization’s comments on if the proposed changes to the
resource sufficiency evaluations bid range capacity test eliminate the need for
consideration of additional financial consequences. To the extent that your
organization believes consequences are appropriate, please describe potential
paths for implementation
b) Please provide your organization’s comments on potential bases for financial
consequences that could be assessed due to failure of the RSE
c) Please provide your organization’s comments on the revenue allocation and
funding of potential financial consequences.
d) Please provide your organization’s comments on the appropriateness of
previously cleared EIM transfers being reduced, or having a financial
consequences applied as a result of failing the RSE
e) Please provide your organization’s comments on bid range trading
appropriateness as a means to solve capacity shortfalls
f) Please provide your organization’s comments on the potential for consequences
that proactively limit EIM transfers as a result of systemic RSE failures
a) Please provide your organization’s comments on if the proposed changes to the resource sufficiency evaluations bid range capacity test eliminate the need for consideration of additional financial consequences. To the extent that your organization believes consequences are appropriate, please describe potential paths for implementation
PG&E supports exploring whether targeted financial penalties should replace the current operating limits (i.e., limiting transfers to the previous interval) in the event of RSE failures. The current operating limit is flat and does not reflect the magnitude of the requirements violation. Financial penalties could be designed to charge the failing EIMs in accordance with their base-schedule inaccuracy, which has two benefits: (1) deter greater under-scheduling with a higher penalty, thus guiding the market schedules; (2) allocate cost of under-scheduling to its responsible BAs. Furthermore, deploying financial penalties, instead of operating limits, would enhance EIM’s benefits by allowing BAs with residual supply to support BAs failing the tests, which is consistent with the design principles of efficient markets.
Among three existing proposals from stakeholders in the issue paper (i.e., (i) Apply a sufficiently high parameter price for relaxing the Deficiency Transfer Limit constraint within the market optimization process.(ii) Apply a capacity deficiency charge outside of the market clearing process, and (iii) Apply a financial consequence to EIM transfers into a balancing authority area in excess of the diversity benefit for failure of the capacity test.), the first proposal is most consistent with CAISO’s price formation through market parameters and could be easily integrated into the existing market optimization process.
The second proposal settles penalties based on capacity deficiency for an entire summer and ignores the price difference across time. Under this proposal, one BA that is deficient of supply during a time of a high price will pay the same amount of penalty as another BA that fails the test during a time of a lower price. Therefore, this proposal cannot provide effective signals of market conditions for BAs to schedule accordingly.
The third proposal is essentially the natural outcome of FERC 831. Under Order 831, import bids to a BA lacking supply are likely to be priced near or at the bid cap. One risk of this proposal is that the penalty to supply-deficient BAs will be directly funded to sellers of imports, which may create an incentive to withhold. While the first and third proposals both penalize supply deficiency with market prices, the first proposal has an additional pricing component at the BA level.
c) Please provide your organization’s comments on the revenue allocation and funding of potential financial consequences.
PG&E opposes revenue allocation from financial penalties directly to an individual seller. Returning revenue directly to individual sellers could create adverse incentives for physical withholding and “prices” paid to generators that would inconsistent with their dispatch. PG&E would support other ways to allocate revenue to benefit EIM participants, such as by offsetting EIM uplift costs or other market inefficiencies, that would not create adverse incentives.
9.
Please provide your organization's comments on the objectives of additional data transparency as presented in the workshop
a) What types of data should be available to individual EIM entities, the EIM
governing body, or the EIM as a whole?
PG&E generally supports efforts to give EIM entities more insight into the calculations, inputs and outputs of their RSE tests and the associated market outcomes. More readily available information and analysis about the frequency and magnitude of test failures and the impact of test failures on reliability and prices would foster better understanding of the performance of the RSE.
At the same time, PG&E would like to raise risks related to market power or manipulation that could come into play depending on the nature and timing of additional public data reporting. PG&E strongly urges CAISO to continue to protect sensitive information that could be leveraged by sellers to take advantage of RSE test failures or results in an inappropriate way. After-the-fact, aggregated data releases could help inform market participants about the performance of RSE without creating market power or manipulation concerns.
10.
Please provide your organization's comments on the correct confidence interval that should be used to calculate the intertie deviation between the RSE conducted at T-40 and T-20 e-tagging deadline:
PG&E requests clarification on magnitude of the issue this question would address.
11.
Please provide any additional comments on the EIM RSE Enhancements initiative that have not previously been addressed:
Public Generating Pool
Submitted 07/09/2021, 10:46 am
1.
Please provide a summary of your organization’s comments on the issue paper:
The Public Generating Pool (PGP[1]) appreciates the opportunity to comment on the EIM RSE Enhancements Issue Paper and Workshop. PGP takes great interest in this initiative as there are PGP members who are (or will be) EIM participants that will be directly impacted by the outcome of this initiative. PGP is very supportive of this initiative and look forward to helping make this effort a success.
One area mentioned in the issue paper that is not addressed in this template is the decisional classification of this initiative. The issue paper is inconsistent on the proposed role of the EIM Governing Body. On pages 26 and 26[2], the proposal indicates twice that the EIM Governing Body will have advisory authority on enhancements to the EIM RSE and any associated financial penalties for failure, but the proposal also mentions that the EIM Governing Body would have primary authority. PGP believes that the EIM Governing Body should have primary authority over these enhancements and penalties.
[1] PGP represents eleven consumer-owned utilities in Washington and Oregon that own almost 8,000 MW of generation, approximately 7,000 MW of which is hydro and over 97% of which is carbon free. Four of the PGP members operate their own balancing authority areas (BAAs), while the remaining members have service territories within the Bonneville Power Administration’s (BPA) BAA. As a group, PGP members also purchase over 45 percent of BPA’s preference power.
[2] http://www.caiso.com/InitiativeDocuments/IssuePaper-EIMResourceEfficiencyEvaluationEnhancements.pdf
2.
Please provide a summary of your organization's comments on the workshop presentations and discussion:
3.
Please provide your organization’s comments on RSE design principles as presented during the workshop:
Both CAISO and EIM Entities presented principles for what the EIM RSE is trying to achieve, and it is good to see that there is alignment. However, PGP would like CAISO and EIM Entities to consider two additional principles that are important and would help guide further decisions on EIM RSE enhancements:
- EIM RSE tests should be applied as consistently and equally as possible to all market participants.
- EIM RSE tests should not count the contribution of any resource or load that requires an emergency declaration to access unless they have been base scheduled and are available for market dispatch.
PGP believes it is important that CAISO and EIM Entities receive equal and unbiased treatment from the Market Operator. PGP recognizes that are some instances of differences between how CAISO and EIM Entities’ loads and resources are treated in the EIM RSE. For example, for the determination of infeasible base schedules, an advisory power flow analysis is used for EIM Entities while existing market processes use a security constrained economic dispatch to resolve transmission constraints within CAISO. PGP believes that implementing measures whenever possible to more closely align the treatment of CAISO and EIM Entities in the EIM RSE tests will result in more equitable market outcomes.
PGP agrees with the point made by EIM Entities over the past several months that an entity in an emergency condition is, by definition, not resource sufficient. PGP believes that this is a fundamental point that helps distinguish when a market participant may be “leaning” and that this should be specifically captured as a principle.
4.
Please provide your organization’s comments on the potential design changes presented by the CAISO:
a) The potential application of intertemporal and/or deliverability constraints to the
capacity test
b) The potential inclusion of the power balance constraint relaxation quantity to the
flexible ramp sufficiency test requirements
c) The potential for the balancing test to be applied to the CASIO
d) The potential for outside of the market actions, as taken by system operators,
in tight system conditions to be considered within the RSE
- Balancing Test Modifications: PGP supports the application of the balancing test and the associated penalties to the CAISO. As discussed in the issue paper, CAISO market practices can produce schedules that are not balanced when the power balance constraint is relaxed. In order to ensure equal treatment between CAISO and EIM Entities, this test and any resulting penalties should be applied to CAISO as well. During the discussion at the June 25th workshop, CAISO staff indicated that implementation of this enhancement should be straightforward and that there were no notable downsides to making this enhancement.
- Consideration of Inter-temporal Constraints and Deliverability: PGP agrees that consideration of inter-temporal constraints is important in improving the accuracy of the EIM Entities have previously identified as area that needs improvement. In the 2021 Summer Readiness Initiative, CAISO identified this as an issue to be addressed, but could not develop a workable solution in time for Summer 2021. However, the Market Surveillance Committee advised caution on implementing these constraints due to concern about unforeseen consequences. In order to minimize the risk of unforeseen consequences, PGP supports a simple and straightforward approach, such as the proposal by the EIM Entities to exclude offline or derated resources with a start-time that extends beyond the Real-Time Unit Commitment process.
Regarding deliverability, CAISO asked in the Issue Paper whether or not base schedules should be free from transmission constraint violations for the purpose of passing the EIM RSE. This issue was not sufficiently discussed at the workshop for PGP to have a view on this question.
- Adjustment of the initial reference point to account for power balance constraint relaxation: PGP supports the adjustment of the initial reference point used in the Flexible Ramping test when there are known differences between the Real-Time Pre-Dispatch (RTPD) market solution from the previous hour and the actual reference point at T-7.5. CAISO’s proposal specifically identifies the relaxation of the power balance constraint as a source of the difference between the RTPD market solution and the actual reference point, but it would be helpful for CAISO to articulate whether or not there may be other sources of differences between initial and actual reference points.
- Consideration of emergency operator actions: PGP does not support the inclusion of any load or resource that requires an emergency declaration in the EIM RSE tests unless they have been base scheduled and are available for market dispatch. PGP agrees with the point made by EIM Entities over the past several months that an entity in an emergency condition is, by definition, not resource sufficient. PGP believes that this is a fundamental point that helps distinguish when a market participant may be “leaning”.
5.
Please provide your organization’s comments on the specific enhancements to improve RSE accuracy presented by the EIM entities:
a) The potential application of intertemporal constraints that limit bid range
availability to the maximum achievable values within the real-time market
horizon
b) The potential consideration of requiring intertie schedule e-tags prior to
scheduled interchange being included as available capacity in the RSE
c) The potential consideration of including operator bias in the requirements for the
capacity and/or the flexible ramp sufficiency tests
d) The potential consideration of forecast error, beyond what is captured in the
uncertainty requirement, to the capacity and flexible ramp sufficiency tests
- Identifiable Imports: PGP agrees with the EIM Entities that imports should be identifiable and that the inclusion of speculative supply increases the risk to reliability and inefficient market outcomes during tight conditions. E-Tags are one way to identify these imports, but PGP is open to hearing other ideas.
- Solar forecast error: EIM Entities presented that there is systemic over-stating of solar capacity and that this overstatement is not correctly captured in the forecast error methodology. PGP believes that all forecast error should be quantified as accurately as possible and encourages CAISO to investigate this matter and implement any improvements.
- Consideration of load conformance: PGP agrees with EIM Entities that the manual adjustment of load by operators should be captured in the BRCT.
- Consistent application of Demand Response: PGP agrees with the EIM Entities that the treatment of demand response in the EIM should be consistently applied to all market participants. While many market participants have demand response programs, there is no standard way for participants to count demand response as part of the RSE or reflect in base schedules, load forecasts and market dispatched. PGP agrees that this results in market participants potentially having to procure more capacity than they need and is not appropriately valued in the market. However, PGP wonders if the broad scope of the Demand Response issues is beyond EIM RSE Enhancements and may warrant a dedicated stakeholder initiative.
6.
Should capacity that is temporally stranded by commitment decisions made in prior intervals be available to be shown as bid range for the purpose of passing the capacity test?
a) Would the exclusion of this capacity create adverse bidding incentives, or reduce
the benefit of EIM participation due to changes in base scheduling practices
PGP believes that the BRCT should only include capacity that is achievable over the duration of the test. Any capacity that is not achievable, whether it results from prior intervals’ dispatch or some other reason, should not be included in the BRCT.
7.
Please provide your organization’s comments on the types of demand response resources that should be considered by the RSE:
PGP believes that demand response resources that are dispatchable by the market and are visible to the operators should be considered in the RSE. Conversely, demand response resources that require manual intervention or are not visible to the operators should not be considered in the RSE test.
8.
Please provide your organization’s comments on the potential forms of financial consequences and/or opportunities for EIM energy assistance as presented during the workshop:
a) Please provide your organization’s comments on if the proposed changes to the
resource sufficiency evaluations bid range capacity test eliminate the need for
consideration of additional financial consequences. To the extent that your
organization believes consequences are appropriate, please describe potential
paths for implementation
b) Please provide your organization’s comments on potential bases for financial
consequences that could be assessed due to failure of the RSE
c) Please provide your organization’s comments on the revenue allocation and
funding of potential financial consequences.
d) Please provide your organization’s comments on the appropriateness of
previously cleared EIM transfers being reduced, or having a financial
consequences applied as a result of failing the RSE
e) Please provide your organization’s comments on bid range trading
appropriateness as a means to solve capacity shortfalls
f) Please provide your organization’s comments on the potential for consequences
that proactively limit EIM transfers as a result of systemic RSE failures
PGP has consistently held the view that the current approach of freezing EIM transfers is not a strong enough incentive to discourage leaning. The CAISO EIM RSE Issue Paper summarized, at a high level, three different proposals for financial consequences that have been submitted by stakeholders: a fixed hurdle rate, a fixed $/MW payment, and a fixed capacity payment. During the workshop, the EIM Entities presented a proposal to maintain the frozen EIM transfer level, but gradually decrease the amount of over time for successive RSE failures. The EIM Entities also proposed a concept called “EIM Energy Assistance” which would allow a market participant that requires assistance to access additional EIM transfers beyond the frozen EIM Transfer limit.
At this time, PGP has no position on which of these approaches are appropriate. Indeed, as can be seen in the issue paper and discussed at the workshops, there are a number of unanswered questions for each approach that need to be explored more fully. PGP does agree, however, with the comment made at the workshop that it may be better to defer decisions on additional failure consequences until a later stage of this initiative when the impact of EIM RSE Enhancements on EIM market participants’ ability to pass the EIM RSE is better understood.
9.
Please provide your organization's comments on the objectives of additional data transparency as presented in the workshop
a) What types of data should be available to individual EIM entities, the EIM
governing body, or the EIM as a whole?
PGP wholeheartedly agrees that improved transparency and reporting is necessary to ensure that the EIM RSE is accurate and consistently applied. In addition to clarity on the data elements of the uncertainty calculation that PGE identified at the workshop, PGP recommends that the EIM Entities identify any other data that is needed and encourages CAISO to be responsive in supplying this data.
PGP also supports the development of metrics and routine reporting to the EIM Governing Body. PGP believes that the proposed EIM Governing Body Market Expert is the ideal body to develop these metrics and reports in order to ensure that needs of the entire market footprint are considered.
10.
Please provide your organization's comments on the correct confidence interval that should be used to calculate the intertie deviation between the RSE conducted at T-40 and T-20 e-tagging deadline:
PGP believes that the confidence interval should be the same for all statistical evaluations used to develop the EIM RSE tests. It is PGP’s understanding that this confidence interval is currently 95%, which PGP believes is a sufficient level of confidence. However, it is worth checking the confidence intervals that are used in other RTOs/ISOs to see if there is an industry best practice that should be adopted.
11.
Please provide any additional comments on the EIM RSE Enhancements initiative that have not previously been addressed:
It is worth mentioning that the RSE EIM tests are only going to be as accurate as the underlying data. All EIM market participants are expected to provide accurate load and resource information and that any pattern of an EIM market participant providing inaccurate data in order to pass the EIM RSE tests is another form of "leaning". While PGP is not aware of any such patterns with the current EIM RSE, the accuracy of load and resource information should be monitored as the RSE tests become more accurate and consequences for failure become more substantive.
Public Power Council
Submitted 07/09/2021, 03:46 pm
1.
Please provide a summary of your organization’s comments on the issue paper:
PPC appreciates the CAISO taking on this important initiative. The Resource Sufficiency test is a foundational piece of the Energy Imbalance Market and is intended to encourage more equitable results in the EIM through ensuring that participating Balancing Authority Areas (BAA) are not allowed to lean on other participants. Important questions around the accuracy, transparency, and equity of the Resource Sufficiency Evaluation (RSE) have been raised in various forums and the CAISO's issue paper is a good first step in addressing those concerns. The scope of this initiative as described in the CAISO's issue paper, if expanded to include the additional issues highlighted by the EIM Entities in their presentation, is an appropriate starting point for this initiative. This scope may need to be expanded in the future, particularly as additional information on the performance of the RSE during tight systems conditions becomes available.
PPC addresses some specific aspects of the CAISO's proposal below and looks forward to engaging with the CAISO and other stakeholders to further develop these issues in subsequent proposals. PPC would like to particularly emphasize the importance of improving the transparency and accuracy of the resource sufficiency test as quickly as possible. Inaccurate RSE results may already be negatively impacting EIM participants, and this must be corrected. Additional transparency on performance of the tests will also be important for identifying potential issues with the RSE and critical for identifying effective and efficient solutions.
2.
Please provide a summary of your organization's comments on the workshop presentations and discussion:
Please see above response. In addition, PPC found the presentations from stakeholders at these first workshops very helpful. Thank you to the CAISO for providing this platform and to those entities that shared analysis and proposals related to the RSE.
3.
Please provide your organization’s comments on RSE design principles as presented during the workshop:
Generally, PPC agrees with the RSE design principles presented by the CAISO and the EIM Entities at the workshop. Both sets of principles reference leaning and PPC strongly agrees that the RSE should be designed to discourage leaning. We would note that leaning is a result not only of entities participating in the EIM with insufficient capacity and flexibility to serve their own loads, but also entities providing capacity and flexibility to the market without proper compensation. This is an important distinction that could help better inform and shape solutions developed during this process.
We would also like to emphasize the EIM Entities' principle #4 - "Full transparency and ongoing review" which was not included in the principles set forth by CAISO. The continued expansion of the EIM as well as ongoing changes to the broader CAISO market design (such as changes to the day-ahead market and HASP) and the interrelated nature of the two, provide a very complex and dynamic context for the RSE. This furthers the need for additional transparency and ongoing assessment of RSE performance to ensure both the design and implementation of these tests are meeting their intended objectives now and in the future.
4.
Please provide your organization’s comments on the potential design changes presented by the CAISO:
a) The potential application of intertemporal and/or deliverability constraints to the
capacity test
b) The potential inclusion of the power balance constraint relaxation quantity to the
flexible ramp sufficiency test requirements
c) The potential for the balancing test to be applied to the CASIO
d) The potential for outside of the market actions, as taken by system operators,
in tight system conditions to be considered within the RSE
- The potential application of intertemporal and/or deliverability constraints to the capacity test
PPC agrees with CAISO's identification of both intertemporal and deliverability constraints as potential areas for improvement for the RSE. As described at the June workshops by both CAISO staff and the EIM Entities, the lack of intertemporal considerations in the current capacity test results in an assessment which assumes capacity is available to the market that is not physical capable of performing. To include capacity that is not capable of performing in real-time in the capacity test is inconsistent with the CAISO's principle, "Leaning is participation in the EIM without sufficient capacity and ramping capability to meet expected load." It is not possible to know whether all of the capacity counted towards passing the RSE is actually capable of meeting expected load and uncertainty without accounting for intertemporal constraints. The same is true for deliverabilty. Improvement in these two areas is critical to meeting the principles for the RSE test laid out by CAISO staff and by the EIM Entities. While we understand these changes would add additional complexity to the RSE, we believe incorporating these important elements would significantly improve the RSE and are worthwhile to pursue. We look forward to exploring specific solutions in more detail with CAISO and other stakeholders in future RSE Enhancement workshops.
- The Potential Inclusion of the Power Balance Constraint Relaxation Quantity to the Flexible Ramp Sufficiency Test Requirements
For the RSE test to be meaningful and meet the principles set out by CAISO staff and EIM Entities, the test should accurately reflect the resources available to meet demand within each BAA and the amount of demand (including uncertainty) that each participating BAA needs to meet. Both sides of this equation are equally important in assessing resource sufficiency. Relaxation of the power balance constraint impacts the balance of these two sides of the equation and has impacts on whether the CAISO BAA is actually resource sufficient. PPC looks forward to more discussion on this issue, but initially offers the opinion that the impacts of a relaxation of the power balance constraint on the available supply of capacity and flexibility should be included in all elements of the RSE.
- The potential for the balancing test to be applied to the CAISO
PPC appreciated the additional context provided during the June workshops on why the balancing test was not initially applied to the CAISO BAA. We understand the assumptions that led to this design; however, in order to ensure equitable application of the RSE the balancing test should be applied to the CAISO. The application of this test should account for changes between availability of resources and load forecasts between market runs in the day-ahead and what is actually occurring in real-time. This change is an important improvement to the equity of the RSE.
- The potential for outside of the market actions, as taken by system operators, in tight system conditions to be considered within the RSE.
Generally, PPC supports the RSE being as accurate as possible to reflect real-time conditions in the RSE. We look forward to more discussions on the trade-offs between accuracy and ease of implementation, but initially are inclined to agree that out of market actions should be considered in the RSE.
5.
Please provide your organization’s comments on the specific enhancements to improve RSE accuracy presented by the EIM entities:
a) The potential application of intertemporal constraints that limit bid range
availability to the maximum achievable values within the real-time market
horizon
b) The potential consideration of requiring intertie schedule e-tags prior to
scheduled interchange being included as available capacity in the RSE
c) The potential consideration of including operator bias in the requirements for the
capacity and/or the flexible ramp sufficiency tests
d) The potential consideration of forecast error, beyond what is captured in the
uncertainty requirement, to the capacity and flexible ramp sufficiency tests
General Response to EIM Entities' Proposals
PPC supports the EIM Entities' objective of improving the RSE through developing a more accurate accounting of the resources and load considered in the RSE. We also generally support the principle that capacity included in the RSE should be capable of performing in real-time. We appreciate the EIM Entities' proactive work identifying solutions which appear well reasoned and which are a good starting point for improvements in the upcoming RSE Enhancements straw proposal. We offer the following initial comments on specific aspects of the EIM Entities proposals.
A) The potential application of intertemporal constraints that limit bid range availability to the maximum achievable values within the real-time market horizon
Again, PPC is inclined to support changes to the RSE to make the test more accurate. Making assumptions about resource performance that is not physically feasible is problematic and undermines stakeholders' confidence in the RSE, creates the potential for leaning in the EIM and raises concerns regarding equity. The information presented by the EIM Entities was compelling and while we look forward to additional discussions on the details of this change, including implementation challenges, we agree with the EIM Entities that this important improvement to the RSE should be pursued.
B) The potential consideration of requiring intertie schedule e-tags prior to scheduled interchange being included as available capacity in the RSE
PPC looks forward to more discussion on this issue. This proposal from the EIM Entities would address concerns about the deliverability of capacity supplied in the RSE and should be further explored in this initiative.
C) The potential consideration of including operator bias in the requirements for the capacity and/or the flexible ramp sufficiency tests
The analysis presented by the EIM Entities showed that this inclusion would result in meaningful improvements to the RSE and PPC is inclined to support this change.
d) The potential consideration of forecast error, beyond what is captured in the uncertainty requirement, to the capacity and flexible ramp sufficiency tests
PPC looks forward to additional discussion and analysis on this proposal. Based on the information presented so far, this change could result in meaningful improvements to both the capacity and flexible ramp sufficiency tests.
6.
Should capacity that is temporally stranded by commitment decisions made in prior intervals be available to be shown as bid range for the purpose of passing the capacity test?
a) Would the exclusion of this capacity create adverse bidding incentives, or reduce
the benefit of EIM participation due to changes in base scheduling practices
PPC looks forward to additional discussion with stakeholders to better understand the potential reduction of EIM benefits from this change. Generally, PPC supports the EIM Entities principle that "Capacity should be capable of performing in real-time" which is not consistent with crediting entities for capacity that is temporarily "stranded."
7.
Please provide your organization’s comments on the types of demand response resources that should be considered by the RSE:
No comment at this time.
8.
Please provide your organization’s comments on the potential forms of financial consequences and/or opportunities for EIM energy assistance as presented during the workshop:
a) Please provide your organization’s comments on if the proposed changes to the
resource sufficiency evaluations bid range capacity test eliminate the need for
consideration of additional financial consequences. To the extent that your
organization believes consequences are appropriate, please describe potential
paths for implementation
b) Please provide your organization’s comments on potential bases for financial
consequences that could be assessed due to failure of the RSE
c) Please provide your organization’s comments on the revenue allocation and
funding of potential financial consequences.
d) Please provide your organization’s comments on the appropriateness of
previously cleared EIM transfers being reduced, or having a financial
consequences applied as a result of failing the RSE
e) Please provide your organization’s comments on bid range trading
appropriateness as a means to solve capacity shortfalls
f) Please provide your organization’s comments on the potential for consequences
that proactively limit EIM transfers as a result of systemic RSE failures
The information presented at the workshop and initial discussions on potentially establishing financial consequences to the RSE were a good starting point and we look forward to offering additional comments on potential financial consequences after more robust discussions. There is likely a need for financial consequences in addition to the current consequences of "freezing" an entities’ level of participation in the EIM as is done today.
"Freezing" the level of net EIM transfers of an entity may help avoid reliability impacts that could occur if participation levels were reduced as a result of failing the RSE. However, one consequence of this approach is that during tight system conditions, "freezing" allows an EIM Entity that was already importing through the EIM at the time of RSE failure to continue to rely on the EIM to help meet load despite the failure, whereas an EIM Entity that was not already importing through the EIM would not have the same opportunity. It seems likely that the consequences of RSE test failure may therefore be greater for EIM entities that do not regularly import large quantities of energy through the EIM (and are thus less likely to be EIM importers at the time of failure), than for EIM Entities that consistently import large amounts through the EIM (and are more likely to be EIM importers at the time of failure and would be able to continue to rely on imports through the EIM to meet demand). Instituting a financial consequence may be one way to address the inequitable outcomes caused by leaning. PPC supports further exploration of additional financial consequences and looks forward to more discussion on the appropriate level and application of that penalty.
9.
Please provide your organization's comments on the objectives of additional data transparency as presented in the workshop
a) What types of data should be available to individual EIM entities, the EIM
governing body, or the EIM as a whole?
PPC enthusiastically supports the efforts to make the RSE test more transparent. The proposals set forth by the EIM entities in the initial workshops would be helpful in providing that transparency.
10.
Please provide your organization's comments on the correct confidence interval that should be used to calculate the intertie deviation between the RSE conducted at T-40 and T-20 e-tagging deadline:
No comment at this time.
11.
Please provide any additional comments on the EIM RSE Enhancements initiative that have not previously been addressed:
PPC would like to confirm that the correct decision-making classification for the first issue being addressed in this initiative (changes to the resource sufficiency test and any financial penalty that will be assessed to a balancing authority that fails the test) is EIM Governing Body primary authority. The RSE Enhancements Issue Paper states, “The primary driver is to address an issue specific to EIM balancing authority areas.”[1] PPC agrees, and this description nearly verbatim matches the second criteria for initiatives that are under the primary authority of the EIM Governing Body according to the updated Governing Body charter revised in 2019.[2] Despite this description, the RSE Enhancements Issue Paper identifies the issue as being under the advisory authority of the EIM Governing Body. We assume this inconsistency was an error and appreciate clarification. PPC supports primary authority for the Governing Body on this issue.
PPC also supports efforts to improve the visibility and transparency of the uncertainty calculation in the RSE. PGE’s presentation poses questions that should be addressed in CAISO’s upcoming RSE Enhancement Straw Proposal. We look forward to engaging in discussion on specific solutions to improve the uncertainty calculation.
[1] CAISO Resource Sufficiency Enhancements issue paper, page 27 http://www.caiso.com/InitiativeDocuments/IssuePaper-EIMResourceEfficiencyEvaluationEnhancements.pdf
[2] Charter for Energy Imbalance Market Governance, page 3 https://www.westerneim.com/Documents/CharterforEnergyImbalanceMarketGovernance.pdf
Salt River Project
Submitted 07/09/2021, 04:01 pm
1.
Please provide a summary of your organization’s comments on the issue paper:
Salt River Project Agricultural Improvement and Power District (SRP) appreciates the CAISO’s efforts to enhance the EIM resource sufficiency evaluation (RSE). In addition to supporting the joint comments filed by the EIM Entities and comments submitted by NV Energy, SRP requests the CAISO consider the following comments on this initiative.
The CAISO issue paper provides a good overview of concerns and a framework for further discussion. SRP recognizes the complexity of this issue and appreciates CAISO’s collaborative tone.
SRP recommends that the CAISO take an incremental approach to this initiative. SRP requests the CAISO first focus on improving the accuracy and transparency of the RSE, which will be critical to the success of this initiative. SRP is encouraged by recent data and analysis that the CAISO provided. SRP looks forward to working with other stakeholders on this initiative to further improve EIM Entities’ ease of use and access to data.
2.
Please provide a summary of your organization's comments on the workshop presentations and discussion:
SRP supports the CAISO’s objective of exploring improvements to the EIM RSE with stakeholders and appreciates the presentations from CAISO and the EIM entities. SRP also supports the EIM entities’ and CAISO’s slides reminding stakeholders of the principles of RSE, including the principle of “no leaning” that is an integral part of the EIM design.
SRP is aligned with the ideas presented by the EIM Entities on enhanced transparency, reporting and oversight, and developing a capacity test that is accurate, effective, and equitably applied.
SRP would like to continue participating in discussions with CAISO and other EIM Entities regarding RSE failure consequences that avoid operational and reliability challenges, but priority should be given to ensure that the RSE is properly assessing each Balancing Authority’s ability to meet its obligations on a stand-alone basis and that the capacity test is accurate, effective, and equitably applied.
3.
Please provide your organization’s comments on RSE design principles as presented during the workshop:
SRP supports the general principles offered by the EIM entities at the CAISO’s June 25 and 28 EIM Resource Sufficiency Evaluation Enhancements Workshop. These principles were centered around the need for the resource sufficiency test to be accurate, transparent, and simple, meaning that that the results can be easily reproducible. SRP also supports the fair and uniform application of the RSE.
4.
Please provide your organization’s comments on the potential design changes presented by the CAISO:
a) The potential application of intertemporal and/or deliverability constraints to the
capacity test
b) The potential inclusion of the power balance constraint relaxation quantity to the
flexible ramp sufficiency test requirements
c) The potential for the balancing test to be applied to the CASIO
d) The potential for outside of the market actions, as taken by system operators,
in tight system conditions to be considered within the RSE
- Application of Intertemporal and/or Deliverability Constraints to the Capacity Test:
SRP does not support the consideration of intertemporal constraints in the capacity test because actual resource availability is already captured through the flexible ramping test and adding such constraints to the capacity test will make the test more complicated and less transparent.
As discussed during the workshop, applying intertemporal constraints to the capacity test enhancements appear to make the test more complex and have potential unintended consequences (e.g., failure that results from following a market dispatch) that would affect the entire EIM community.
Real time capability would be better represented if the resources that could come online in two to four hours of real time are considered in a capacity test. This method would more accurately reflect real-time capability of resources and would not include resources on outage.
- Inclusion of the Power Balance Constraint Relaxation Quantity Flexible Ramp Sufficiency Test :
SRP has no specific comments on this topic at this time but is interested to hear input from other stakeholders.
- Applying the Balancing Test to the CAISO:
SRP has no specific comments on this topic at this time but is interested to hear input from other stakeholders.
- Outside of Market Actions:
SRP supports comments provided by EIM Entities under “Inclusion of Emergency Actions” and looks forward to further stakeholder discussion on this topic.
5.
Please provide your organization’s comments on the specific enhancements to improve RSE accuracy presented by the EIM entities:
a) The potential application of intertemporal constraints that limit bid range
availability to the maximum achievable values within the real-time market
horizon
b) The potential consideration of requiring intertie schedule e-tags prior to
scheduled interchange being included as available capacity in the RSE
c) The potential consideration of including operator bias in the requirements for the
capacity and/or the flexible ramp sufficiency tests
d) The potential consideration of forecast error, beyond what is captured in the
uncertainty requirement, to the capacity and flexible ramp sufficiency tests
- Application of Intertemporal Constraints:
SRP does not support the inclusion of intertemporal constraints in the capacity test. Considering the intertemporal constraints in the capacity test will make it more complex. Additionally, intertemporal constraints are already accounted for in the flexible ramp sufficiency test.
The flexible ramp sufficiency test ensures balancing authority areas have sufficient ramping capabilities to meet load forecast change and uncertainty inherent to both load and renewable resource performance.
- Requiring Intertie Schedule E-Tags:
SRP supports using interval T-30 or T-35 to calculate Intertie Deviation for the RSE test. This would be much closer to the T-20 deadline for tagging and would ensure minimal tagging occurs from T-30 to T-20.
Only firm energy should be included in the test (i.e., non-firm, virtual energy should not be included). Moving the final RSE test to T-30 timeline would also provide the opportunity to capture more valid e-tags in the test. This could alleviate the issue of pending e-tags that may inflate the capacity, if they do not materialize.
- Including Operator Bias:
SRP supports consideration of a test requirement based on persistent use of load conformance. As explained in the EIM Entities comments, careful consideration would be necessary to avoid unintended consequences.
- Forecast Error:
SRP encourages the CAISO to consider enhancements that address errors in hour-ahead forecasts for renewable resources. Such enhancements would more accurately reflect the capacity contribution of these resources.
6.
Should capacity that is temporally stranded by commitment decisions made in prior intervals be available to be shown as bid range for the purpose of passing the capacity test?
a) Would the exclusion of this capacity create adverse bidding incentives, or reduce
the benefit of EIM participation due to changes in base scheduling practices
SRP finds that this question could be interpreted in a few different ways. If the CAISO is referring to capacity from a unit being in a specific configuration other than the one needed to pass the test or referring to the inclusion of intertemporal constraints in the capacity test, SRP initially does not support this. As stated in comments for item 4(a), inclusion of intertemporal constraints in the capacity test would make it more complex. Changes resulting from this stakeholder process should not further complicate the RSE.
SRP suggests consideration of further test refinement to provide incentive to follow market instructions in those configurations that can lead to failures. If this question is not referring to intertemporal constraints or units in specific configurations, SRP requests that the CAISO provide clarification.
7.
Please provide your organization’s comments on the types of demand response resources that should be considered by the RSE:
SRP supports enhancements to the RSE that would allow EIM Entities to accurately reflect demand response. Inclusion of demand response, implemented via the correct tools, would provide future benefits to SRP and other entities with growing demand response programs. The CAISO’s minimum 5 percent load threshold exceeds the size of many demand response programs and results in the inability for entities with smaller programs to account for demand response in the RSE. Smaller demand response programs (e.g., 60-100 MW) can be valuable, and EIM Entities should have the opporuntity to account for them. Any enhancement should include a mechanism for accountability that entities are implementing it correctly.
8.
Please provide your organization’s comments on the potential forms of financial consequences and/or opportunities for EIM energy assistance as presented during the workshop:
a) Please provide your organization’s comments on if the proposed changes to the
resource sufficiency evaluations bid range capacity test eliminate the need for
consideration of additional financial consequences. To the extent that your
organization believes consequences are appropriate, please describe potential
paths for implementation
b) Please provide your organization’s comments on potential bases for financial
consequences that could be assessed due to failure of the RSE
c) Please provide your organization’s comments on the revenue allocation and
funding of potential financial consequences.
d) Please provide your organization’s comments on the appropriateness of
previously cleared EIM transfers being reduced, or having a financial
consequences applied as a result of failing the RSE
e) Please provide your organization’s comments on bid range trading
appropriateness as a means to solve capacity shortfalls
f) Please provide your organization’s comments on the potential for consequences
that proactively limit EIM transfers as a result of systemic RSE failures
SRP strongly believes that failure consequences should be designed such that there is no impact on reliability due to test failure. Consistent with the EIM Entities’ comments on failure consequences, SRP requests the CAISO consider a phased approach for this initiative that includes monitoring any changes to the RSE before developing additional physical or financial failure consequences.
9.
Please provide your organization's comments on the objectives of additional data transparency as presented in the workshop
a) What types of data should be available to individual EIM entities, the EIM
governing body, or the EIM as a whole?
SRP concurs with the EIM Entities detailed comments on additional data and transparency. Data accuracy and transparency are critical to the success of this initiative.
SRP supports the concept of a third-party organization, such as the EIM Governing Body Market Expert, monitoring RSE performance. The third-party would report to the EIM Governing Body. This information would support the principles of the EIM Entities to have a fair, transparent, accurate, and simple RS test in place. Additionally, a third party would be able to provide advice to the EIM Governing Body on how to improve the RSE over time as the market evolves, and to act as technical market expert when questions arise. This information would be provided to the EIM Governing Body by the third party and shared with the CAISO, EIM Entities, and the Board of Governors to resolve any potential conflicts, or address market evolution and enhancement questions.
Data used for the test should be available to each Balancing Authority Area to access the cause of any failure. The current method for sharing data requires EIM Entities to query several CAISO applications to acquire the relevant data, making it cumbersome to reproduce or validate the test results.
10.
Please provide your organization's comments on the correct confidence interval that should be used to calculate the intertie deviation between the RSE conducted at T-40 and T-20 e-tagging deadline:
SRP would like the confidence interval to be one that does not make the RSE more restrictive and complicated and does not generate increased test failures. This topic requires additional discussion during the stakeholder process.
11.
Please provide any additional comments on the EIM RSE Enhancements initiative that have not previously been addressed:
The issue paper discusses decisional classifications for two distinct groups of possible rule changes: 1) adjustments to the EIM RSE and possible financial penalties and 2) how to allocate any penalties that are assessed among market participants. The issue paper states rules in the first group would be “generally applicable rather than EIM-specific and fall within the primary authority of the EIM Governing Body.” SRP agrees with this interpretation and recommends the EIM Governing Body have primary authority over this part of the policy initiative. The EIM RSE would not exist “but for” the EIM, and rules for the EIM RSE are in Section 29 of the CAISO Tariff.
SRP has no comment on the decisional classification of the second group of possible rule changes that concern the allocation among market participants of any penalty that is assessed to the CAISO balancing authority.
Six Cities
Submitted 07/13/2021, 03:34 pm
Submitted on behalf of
Cities of Anaheim, Azusa, Banning, Colton, Pasadena, and Riverside, California
1.
Please provide a summary of your organization’s comments on the issue paper:
In general, the Six Cities observe that the Issue Paper provides a rather high degree of granularity in terms of the potential proposals it describes. At the same time, much of the workshop discussion of overarching design principles for resource sufficiency testing was very general. It appears that there is a degree of alignment between the design principles proposed by the CAISO and EIM entities, and, as outlined below, the Six Cities generally support most of these principles. However, while the CAISO appears eager to delve into the particulars regarding the existing test design and possible modifications and improvements, the EIM entities’ proposals for RSE design are rather short on specifics in certain instances, and the Six Cities are concerned that the EIM entities may not have fully considered the impacts of the proposals from the perspective of CAISO entities. It seems that while there may be some consensus around the broader design principles, it is not clear that there is consensus or understanding regarding the impacts of some of the changes proposed by the EIM entities. Stakeholders may benefit from an additional workshop to explore these topics.
2.
Please provide a summary of your organization's comments on the workshop presentations and discussion:
Please refer to the comments provided above.
3.
Please provide your organization’s comments on RSE design principles as presented during the workshop:
The Six Cities agree with the following design principles as outlined by the CAISO:
- Leaning is participation in the EIM without sufficient capacity and ramping capability to meet expected load;
- The resource sufficiency evaluation should measure the capacity and ramping capability of a balancing authority area over an appropriate time horizon;
- The consequences of resource sufficiency evaluation failures should not cause operational or reliability issues; and
- The resource sufficiency evaluation does not dictate resource adequacy or integrated resource plans in individual balancing authority areas.
The Six Cities also agree with the following design principles as outlined by the EIM entities:
- Maintain reliability while discouraging leaning;
- Develop a Capacity Test that is accurate, effective, and equitably applied;
- Ensure the RSE is properly assessing each Balancing Authority’s ability to meet its obligations on a stand-alone basis, net of its diversity benefit; and
- Full transparency and on-going review.
The Six Cities do not at this time agree with the EIM entities that failure consequences require enhancement, so they do not support the EIM entities’ final “principle.” In particular, the Six Cities are concerned that EIM entities may be better able to mitigate penalty risks from failure of the RSE than the CAISO, due to these entities’ voluntary participation in the EIM.
4.
Please provide your organization’s comments on the potential design changes presented by the CAISO:
a) The potential application of intertemporal and/or deliverability constraints to the
capacity test
b) The potential inclusion of the power balance constraint relaxation quantity to the
flexible ramp sufficiency test requirements
c) The potential for the balancing test to be applied to the CASIO
d) The potential for outside of the market actions, as taken by system operators,
in tight system conditions to be considered within the RSE
On the issue of whether intertemporal and/or deliverability constraints should be incorporated into the capacity test, the Six Cities take no affirmative position at this time. The Six Cities agree that, all things being equal, incorporating these elements into the test would seem to enhance its accuracy. At the same time, the Six Cities are concerned by the CAISO’s statements that these elements would increase the complexity of the test and may not materially impact the results. It would be worthwhile to explore whether the test could be modified to include intertemporal constraints and/or deliverability constraints while managing the increase in complexity.
With respect to item (c), it is not clear that the balancing test should be applicable to the CAISO for the reasons discussed in the Issue Paper – namely, that the structure of the CAISO markets obviates the need for this test and does not provide the CAISO with an opportunity to engage in “gaming” opportunities by submitting over- or under-scheduled base schedules. While proponents of applying this test to the CAISO are focused on the concept of equitability for its own sake, these entities do not grapple with the different incentives that may be present for the CAISO versus other EIM entities. Additionally, the Six Cities are concerned that application of this test may expose CAISO entities to enhanced penalties for scheduling that is a function of CAISO market algorithms.
As to items (b) and (d), the Six Cities take no position at this time.
5.
Please provide your organization’s comments on the specific enhancements to improve RSE accuracy presented by the EIM entities:
a) The potential application of intertemporal constraints that limit bid range
availability to the maximum achievable values within the real-time market
horizon
b) The potential consideration of requiring intertie schedule e-tags prior to
scheduled interchange being included as available capacity in the RSE
c) The potential consideration of including operator bias in the requirements for the
capacity and/or the flexible ramp sufficiency tests
d) The potential consideration of forecast error, beyond what is captured in the
uncertainty requirement, to the capacity and flexible ramp sufficiency tests
Please refer to the comments provided elsewhere related to the management of intertemporal constraints within the RSE.
With respect to item (d), the Six Cities would like to better understand the implications of increasing the consideration of forecast error in the capacity and flexible ramp sufficiency tests. Have assessments of forecast error for EIM entities other than the CAISO been conducted?
The Six Cities take no position on items (b) and (c) at this time. The Six Cities believe that the implications of item (b) in particular require further discussion among stakeholders.
6.
Should capacity that is temporally stranded by commitment decisions made in prior intervals be available to be shown as bid range for the purpose of passing the capacity test?
a) Would the exclusion of this capacity create adverse bidding incentives, or reduce
the benefit of EIM participation due to changes in base scheduling practices
This is a difficult issue, and the Six Cities urge the CAISO to continue exploring with stakeholders if there is a way to fairly account for temporally stranded resources in the RSE. On the one hand, the Six Cities appreciate that such resources may not actually be available in a given interval due to prior dispatch decisions. On the other hand, it does not seem reasonable to exclude capacity that could otherwise be available but for prior-interval economic dispatch decisions. As the CAISO and stakeholders consider this issue, it would be helpful to understand whether this is a concern that relates primarily to the CAISO or whether the concern pertains to all EIM entities.
7.
Please provide your organization’s comments on the types of demand response resources that should be considered by the RSE:
The Six Cities do not have comments on this topic at this time.
8.
Please provide your organization’s comments on the potential forms of financial consequences and/or opportunities for EIM energy assistance as presented during the workshop:
a) Please provide your organization’s comments on if the proposed changes to the
resource sufficiency evaluations bid range capacity test eliminate the need for
consideration of additional financial consequences. To the extent that your
organization believes consequences are appropriate, please describe potential
paths for implementation
b) Please provide your organization’s comments on potential bases for financial
consequences that could be assessed due to failure of the RSE
c) Please provide your organization’s comments on the revenue allocation and
funding of potential financial consequences.
d) Please provide your organization’s comments on the appropriateness of
previously cleared EIM transfers being reduced, or having a financial
consequences applied as a result of failing the RSE
e) Please provide your organization’s comments on bid range trading
appropriateness as a means to solve capacity shortfalls
f) Please provide your organization’s comments on the potential for consequences
that proactively limit EIM transfers as a result of systemic RSE failures
As an initial matter, it is not obvious to the Six Cities what the impetus for an enhanced penalty structure is or why the proponents of penalties believe that they are needed to incent passage of the RSE. Stakeholder discussions around penalties appear to have focused on the CAISO Balancing Authority Area either not passing tests or engaging in putative “leaning” on the EIM. It would be informative to explore other instances where non-CAISO EIM entities did not pass the RSE so as to fully evaluate if enhanced penalty structures are necessary or appropriate.
Integral to any penalty discussion must be the nature of each EIM participant’s exposure to the EIM. While EIM entities other than the CAISO are able to self-manage the various risks of EIM participation by electing to reduce their transactions in the EIM and may therefore have the ability to mitigate the risk of exposure to penalties, the CAISO is unable to withdraw or minimize participation in its own markets. Thus, the CAISO and its market participants may have higher exposure to penalties and greater risks resulting from the CAISO’s failure of the RSE tests than other entities in the EIM. This risk differential should be accounted for in the development of any penalty structure.
With respect to the particulars of the potential alternatives described in the CAISO Issue Paper, the Six Cities offer the following initial positions:
- The Six Cities concur that, if enhanced penalties associated with RSE failures are appropriate, which has not been demonstrated at this point, the penalties should be limited to financial measures and not include limiting participation in markets. (See Issue Paper at 20.)
- On the timing of implementation, the Six Cities question why the CAISO proposes to bifurcate the topic of failure consequences and advance it for implementation in Q3 or Q4 of 2021, ahead of the other elements of this initiative. (See Issue Paper at 20 & n.17.). To the contrary, the Six Cities suggest that it may be more appropriate to defer consideration of additional failure consequences until after implementation of any enhancements to the resource sufficiency test, so that data regarding anticipated incidence of failures will be available.
- In terms of the stakeholder proposals that are summarized on page 21 of the Issue Paper, the Six Cities urge the CAISO to consider what conduct the CAISO is attempting to incent through each of these types of penalties. Is the intention to motivate conduct, be punitive, effect a transfer of revenues as among EIM participants to provide compensation for services by parties using those services, or some combination of these factors?
- As among the proposals for a fixed hurdle fee, a fixed payment, or a fixed capacity payment, the Six Cities take no supporting position at this time. With respect to the concept of the fixed capacity payment, this approach appears to be inappropriate, as EIM is not intended to constitute a capacity market. The concepts of a hurdle rate and/or fixed fee appear to be in greater alignment with the nature of the EIM. (See generally Issue Paper at 22-23.) Additionally, the Six Cities do not support the cost of new entry (“CONE”) as the measure for any capacity payments that are imposed as part of an RSE-related penalty structure. (Id.)
- The Six Cities take no position at this time on the allocation of potential revenue from RSE-related financial penalties. (See Issue Paper at 24.) The Six Cities likewise take no position at this time on whether penalties should be recovered within the CAISO from metered demand or from load-serving entities based on “failure[s] to meet their prescribed capacity procurement targets as specified within the resource adequacy program.” (Issue Paper at 25.) With respect to the latter proposal, the Six Cities note that local regulatory authorities are responsible for establishing capacity procurement targets, not the CAISO. Assessing penalties for failure to meet LRA-imposed procurement targets may result in an uneven distribution of penalties.
9.
Please provide your organization's comments on the objectives of additional data transparency as presented in the workshop
a) What types of data should be available to individual EIM entities, the EIM
governing body, or the EIM as a whole?
The goal of providing enhanced transparency is constructive, and the Six Cities generally support making more data available rather than less, subject to the need to preserve confidentiality regarding sensitive market data or information that should otherwise remain non-public. The Six Cities will carefully consider any proposals the CAISO may issue regarding additional data that it proposes to provide. The Six Cities urge the CAISO to ensure that any enhanced transparency measures that it adopts in this initiative do not create preferences or advantages for any particular entities or classes of market participants. For example, if data regarding EIM entities is supplied only to other EIM entities, does that create a transparency problem in that the EIM entities, which are themselves individual utilities engaging in market and bilateral transactions, would receive access to information that may be unavailable to other CAISO market participants, such as the Six Cities? Enhanced measures for data and information transparency should not create unfair competitive advantages for any categories of market participants.
The Six Cities do not object to the CAISO providing individual EIM entities with data or information relating to their own performance in the EIM, nor do they object to providing enhanced data transparency to the EIM Governing Body, again subject to confidentiality protections if appropriate. Such information should likewise be available to the CAISO Board of Governors.
10.
Please provide your organization's comments on the correct confidence interval that should be used to calculate the intertie deviation between the RSE conducted at T-40 and T-20 e-tagging deadline:
The Six Cities do not have comments on this issue at this time.
11.
Please provide any additional comments on the EIM RSE Enhancements initiative that have not previously been addressed:
Not applicable.
