Comments on 2023 draft policy initiatives catalog and 2022 draft final policy initiatives roadmap

1. Please provide your organization's comments on the 2023 draft final policy initiatives roadmap:

The Bay Area Municipal Transmission group (BAMx)^[1] appreciates the opportunity to comment on the Draft 2023 Policy Initiatives Catalog Roadmap issued on February 16, 2023, and the Draft 2023-2025 Policy Initiatives Roadmap was subsequently discussed during the stakeholder meeting on February 21, 2023.

BAMx’s comments pertain to the initiative topic “Generator Connectivity Challenges/Enhancements,” in the Policy Initiatives Roadmap.[2] BAMx was pleased to receive confirmation after participating in the February 21, 2023, stakeholder call that the CAISO is still planning to post a Generator Deliverability Challenges issue paper at the end of March and will hold a stakeholder call shortly after.[3] However, on March 30, 2023, the CAISO announced that it would postpone consideration of its Generator Deliverability Methodology Review initiative to instead address the issue in parallel with the  Interconnect Process Enhancements (IPE) 2023 Track 2 initiative at a date to be determined.[4] BAMx believes that the current situation and the potential importance of deliverability reforms to achieving the state’s policy goals and reliability warrant immediate attention. We, therefore, urge the advancement of the deliverability assessment methodology initiative by providing a detailed timeline with appropriate milestones with workshops or stakeholder calls to adequately evaluate the distinct elements involved in the deliverability assessment methodology. Such advancement of the deliverability assessment methodology initiative should be reflected in the revised Policy Initiatives Catalog and Roadmap for 2023.

[1] BAMx consists of City of Palo Alto Utilities and City of Santa Clara, Silicon Valley Power.

[2] CAISO Draft 2023 2025 Policy Initiatives Roadmap, February 21, 2023, p.17.

[3] See https://stakeholdercenter.caiso.com/StakeholderInitiatives/Generator-deliverability-challenges 

[4] See http://www.caiso.com/Documents/generation-deliverability-methodology-review-update.html

2. Please submit comments on the draft 2023 catalog. You may upload documents using the "attachments" field below:

No additional comment.

1. Please provide your organization's comments on the 2023 draft final policy initiatives roadmap:

The California Community Choice Association (CalCCA)[1] appreciates the opportunity to comment on the California Independent System Operator (CAISO) Draft Final Policy Initiatives Roadmap and Catalog.  

The CAISO should update the roadmap and catalog to include the Energy Storage Resource Participation in Residual Unit Commitment (RUC) catalog submission submitted by Clean Power Alliance (CPA) on February 9, 2023.[2] As CPA explains in its submission, while the CAISO tariff requires RUC availability bids from storage resources providing resource adequacy capacity, the CAISO systems currently do not allow storage resources to receive RUC certification or participate in the RUC process. The CAISO should prioritize an initiative to immediately resolve this inconsistency with the tariff and allow storage resources to bid into RUC and provide RUC capacity.

[1]             California Community Choice Association represents the interests of 24 community choice electricity providers in California: Apple Valley Choice Energy, Central Coast Community Energy, Clean Energy Alliance, Clean Power Alliance, CleanPowerSF, Desert Community Energy, East Bay Community Energy, Energy For Palmdale’s Independent Choice, Lancaster Choice Energy, Marin Clean Energy, Orange County Power Authority, Peninsula Clean Energy, Pico Rivera Innovative Municipal Energy, Pioneer Community Energy, Pomona Choice Energy, Rancho Mirage Energy Authority, Redwood Coast Energy Authority, San Diego Community Power, San Jacinto Power, San José Clean Energy, Santa Barbara Clean Energy, Silicon Valley Clean Energy, Sonoma Clean Power, and Valley Clean Energy.

[2] http://www.caiso.com/InitiativeDocuments/CleanPowerAllianceSubmissionForm-2023DraftPolicyInitiativesCatalog.pdf.

2. Please submit comments on the draft 2023 catalog. You may upload documents using the "attachments" field below:

See response in Section 1. Both the catalog and the roadmap should be updated to include the Energy Storage Resource Participation in Residual Unit Commitment catalog submission.

1. Please provide your organization's comments on the 2023 draft final policy initiatives roadmap:

• No Comments

2. Please submit comments on the draft 2023 catalog. You may upload documents using the "attachments" field below:

• 6.1.14 Transmission Access Charge Structure Enhancements

The CAISO completed its stakeholder process, and the draft final proposal changed the billing determinant for the assessment of TAC to both volumetric and monthly peak demand.  According to the draft 2023 Policy Initiatives Catalog, “This initiative’s draft final proposal is complete and on hold pending policy development of the Extend Day-Ahead Markets to WEIM Entities initiative to ensure the proposed policies have consistent treatment for transmission cost recovery.”

Now that the ISO Board of Governors and WEIM Governing Body have approved the EDAM initiative, CDWR requests further information about the status of TAC structure enhancements including the timelines for revising the TAC billing determinants. For example, would it be implemented concurrently with EDAM?  Would it be subject to further stakeholder engagement?

• 6.2.2 Congestion Revenue Rights Revenue Sufficiency

CDWR recommends that CAISO initiates a Stakeholders’ process to discuss the reasons why the Day-Ahead (DA) CRR Auction Efficiency cannot be met even after the implementation of the Track 1B design feature.

Since the current implementation on April 1^st 2009, the DA CRR design has consistently resulted in higher shortages in the CRR Auction Efficiency, meaning that the auction participants’ benefits are paid by the Load Demand. The shortages in the DA CRR Auction Efficiency amounted to over $1 billion for the 2009-2018 period, with an average of $100 million per year and the highest yearly value of $140 million for 2018.

In 2018, to reduce the shortages in the CRR Auction Efficiency described above, CAISO initiated a stakeholder process.  As a result of the stakeholder process, CAISO implemented Track 0, Track 1A, and Track 1B DA features intended to provide the following improvements to the DA CRR design:

1. Track 0 implemented a better reporting of the scheduled outages and reduced the Available Transmission Capacity for the annual CRR allocation and auction processes from 75% to 65% of the Total Transmission Capacity (TTC).
2. Track 1A eliminated the possibility of nominating CRR from source-to-source locations since CAISO studies presented at the above-mentioned stakeholder process showed that 85% of the Auctioned CRR were source-to-source nominated.
3. Track 1B ensured that Allocated and Auctioned CRR on each path do not get paid more than the congestion rents collected in that path, by introducing derates of the CRR payments based on the transmission constraints on each path.  In theory, Track 1B should have eliminated the shortages in the CRR Auction Efficiency.

After their implementation, the Track 0, Track 1A, and Track 1B DA CRR design features provided relatively good protection to the CRR Auction Efficiency only for the Q1 – Q3 of 2019.  Starting with the 2019 Q4, the shortages in the CRR Auction Efficiency have increased steadily. The CRR Quarterly Market Performance Reports show that for the period Q1-Q4 2022 the shortage in the CRR Auction Efficiency reached the highest levels seen prior to implementation of the above-mentioned CRR design features.

For the reasons described above, the CDWR CRR Team recommends that CAISO initiates a Stakeholders’ process to discuss the reasons why Track 1B cannot provide the designated protection for the CRR Auction Efficiency and determine the root cause of the increasing shortages observed since Q4 2019 and: 1. To investigate if and how Track 1B can be improved, and/or 2. To determine if other CRR design initiatives may be needed to solve this issue.

1. Please provide your organization's comments on the 2023 draft final policy initiatives roadmap:

No comment.

2. Please submit comments on the draft 2023 catalog. You may upload documents using the "attachments" field below:

• 6.1.14 Transmission Access Charge Structure Enhancements

The CAISO completed its stakeholder process, and the draft final proposal changed the billing determinant for the assessment of TAC to both volumetric and monthly peak demand.  According to the draft 2023 Policy Initiatives catalog, “This initiative’s draft final proposal is complete and on hold pending policy development of the Extend Day-Ahead Markets to WEIM Entities initiative to ensure the proposed policies have consistent treatment for transmission cost recovery.”

Now that the ISO Board of Governors and WEIM Governing Board have approved the EDAM initiative, CDWR requests further information about the status of TAC structure enhancements including the timelines for revising the TAC billing determinants. Would it be implemented concurrently with EDAM?  Would it be subject to further stakeholder engagement?

• 6.3.2 Resource Adequacy Enhancements 

CDWR anticipates that CAISO will address the second RA issue with flexible RA allocation attributed to negative load ramps. 

CDWR appreciates the CAISO incorporating it’s September 2022 comments into the catalog.  CDWR continues to support the following discretionary initiatives and encourages the CAISO to prioritize them. 

• 6.1.22 Pumped Storage with Multiple Pumping Levels 

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

• 6.1.56 Aggregated Pumps and Pumped Storage 

Along with 6.1.22, CDWR fully supports CAISO in conducting a study on what improvements could be made to participating load functionality and to explore this untapped potential that can benefit grid reliability. 

• 6.2.2 Congestion Revenue Rights Revenue Sufficiency 

CDWR supports the CAISO’s exploration of ways to revise the counter-flow CRR methodology used for allocating CRRs sourced at the trading hubs, as the current methodology is insufficient and contributes to revenue imbalance of the CRR balancing account.

1. Please provide your organization's comments on the 2023 draft final policy initiatives roadmap:

CalWEA was pleased to receive confirmation after participating in the 2-21-23 stakeholder call that, despite what was reflected in the Draft Catalog, the CAISO is still planning to post a Generator Deliverability Challenges issue paper at the end of March and will hold a stakeholder call shortly after. We are also pleased to see that a timeline has now been posted on the initiative webpage with tentative dates.  We understand that a more detailed timeline will be posted soon.

We trust that the more detailed timeline will reflect the robust process (i.e., Issue Paper, Straw Proposal and Final Proposal, with workshops or stakeholder calls in between) that is necessary to fully explore the numerous distinct elements involved in the deliverability assessment methodology. We also encourage the CAISO to invite stakeholders to make presentations on the issues at the outset of the process.

2. Please submit comments on the draft 2023 catalog. You may upload documents using the "attachments" field below:

No further comment.

1. Please provide your organization's comments on the 2023 draft final policy initiatives roadmap:

EDF-R appreciates the opportunity to provide these comments on the CAISO’s 2023 draft final policy initiatives roadmap discussed with stakeholders on February 21, 2023. EDF-R requests CAISO include the Generation deliverability methodology review initiative on the roadmap, which appears to be planned for 2023 but is not listed in the presentation. (Perhaps this is what is meant by the Interconnection Process Enhancements line on slide 14? There is no IPE 2023 item in the catalog). The deliverability initiative appears to be called the “Reform of the Deliverability Assessment Methodology” in the policy catalog. The policy initiative roadmap is important tool that stakeholders use for planning and to make staff resource decisions. Clarity on these items is very much appreciated. While interconnection and transmission planning related initiatives may not require major IT system changes akin to EDAM or the like, staff resoruces have to be allocated to complete the stakeholder processes required to update the policy, and this leg of the effort is no less taxing on stakeholders time and effort wise. 

EDF-R requests confirmation from CAISO on the plan for implementing tariff changes potentially needed for the FERC Order on Generator Interconnection Enhancements will include a traditionally structured stakeholder process.

EDF-R requests clarification on the proposed Resource Adequacy-Enhancements initiative – is this initiative proposed for 2023 a new initiative, or an extension of the initiative started in 2018? Given how fluid the scope and proposals for the 2018 initiative were over time, and the prolonged timeline, EDF-R requests CAISO create a new initiative for this next undertaking, naming it by year as is done with other recurring initiatives. For example, “Resource adequacy enhancements 2023.” EDF-R also requests the initiative be launched with a completely fresh issue paper to ensure the problem statement is identified clearly right from the start of the effort.

Finally, EDF-R suggests that publishing of the final roadmap version is also a timely opportunity to update the caiso.com policy initiatives page and archive or file as complete initiatives that have been implemented.

2. Please submit comments on the draft 2023 catalog. You may upload documents using the "attachments" field below:

1. Please provide your organization's comments on the 2023 draft final policy initiatives roadmap:

Please see attached comments. 

2. Please submit comments on the draft 2023 catalog. You may upload documents using the "attachments" field below:

1. Please provide your organization's comments on the 2023 draft final policy initiatives roadmap:

Please see below.

2. Please submit comments on the draft 2023 catalog. You may upload documents using the "attachments" field below:

Thank you for the opportunity to provide comments on the California Independent System Operator’s (“CAISO”) 2023 Policy Initiatives Catalog, posted on March 29, 2023. New Leaf Energy, Inc. (“New Leaf Energy”), an independent developer of solar and energy storage, applauds the CAISO for adopting a roadmap for the year ahead that includes so many impactful policy initiatives.

In particular, New Leaf Energy is pleased to see that the CAISO has included the Generation Deliverability Methodology Review among the initiatives that “will soon begin a stakeholder process.” New Leaf Energy commends the CAISO for advancing this important conversation and inviting stakeholders to contribute analysis and ideas. Certain study process reforms could enable more Resource Adequacy capacity to come online at lower ratepayer cost - maintaining or even enhancing reliability.

New Leaf Energy understands that the CAISO has delayed the start of the Generation Deliverability Methodology Review initiative beyond the Q1 2023 commencement noted in the 2023 Policy Initiatives Catalog, in order to align with Track 2 of the Interconnection Process Enhancements Initiative. New Leaf Energy is not concerned with such a modest delay, as long as the initiative can still conclude before the 2023 Transmission Plan Deliverability allocation process. We appreciate the CAISO’s interest in cross-initiative coordination. 

In conclusion, New Leaf Energy thanks the CAISO for its commitment to the Generation Deliverability Methodology Review Initiative as part of its 2023 workplan and looks forward to actively participating in the forthcoming stakeholder process.

1. Please provide your organization's comments on the 2023 draft final policy initiatives roadmap:

2. Please submit comments on the draft 2023 catalog. You may upload documents using the "attachments" field below:

1. Please provide your organization's comments on the 2023 draft final policy initiatives roadmap:

Powerex appreciates the opportunity to submit these comments on CAISO’s Draft 2023 Policy Initiatives Catalog.  As discussed more fully below, Powerex requests that the 2023 Policy Initiatives Catalog and Roadmap include a high-priority stakeholder process to identify the data, metrics, and reporting necessary to objectively evaluate the accuracy of the CAISO’s GHG attributions in the Western EIM.

Powerex believes that accurate GHG attribution is important to achieving short-term and long-term market efficiency and decarbonization goals throughout the west. While Powerex has committed to joining SPP Markets+, Powerex continues to have an interest in accurate GHG attribution in CAISO markets, as it will continue to be a participant in the Western EIM until Markets+ is operational and Powerex expects to have ongoing trade activity with California beyond that time.

1. CAISO needs to follow through on commitments to provide transparency on the accuracy of its GHG framework

Powerex believes that the CAISO’s attribution of greenhouse gas (GHG) emissions for Western EIM imports serving load in California is deeply flawed, and systematically enables California to import electricity from out-of-state coal generators while inaccurately attributing those imports to hydro output that is not dispatched in the EIM at all.  The CAISO has also made this GHG framework a cornerstone of its EDAM design, which would significantly extend the harm caused by the framework’s flaws. 

Powerex is confident in these conclusions based on available data, but it also recognizes that this data is at a BAA level; only the CAISO has access to granular data on each participating resource’s GHG attribution and each participating resource’s incremental EIM dispatch.  In the absence of relevant data or analysis from the CAISO, stakeholders with a genuine interest in evaluating the accuracy of the CAISO’s GHG framework must invest the time and resources to identify and analyze available sources of data.  Powerex has made this investment, and last summer it publicly shared a report containing the results of its analysis, and identifying the type of metrics that the CAISO could provide.[1]  In its letter to the January joint session of the CAISO Board of Governors and the Western EIM Governing Body, Vistra detailed the type of data analysis needed to address critical questions regarding the GHG framework, and urged the joint bodies to direct such data and analyses be provided.[2]  Despite these requests, and despite the CAISO’s statements expressing its commitment to transparency, there remains a critical lack of data or analysis by the CAISO to allow stakeholders to answer the most basic question of the CAISO GHG attribution framework: how well does the CAISO’s attribution of GHGs for imports into California match the generation resources that increased their output in the Western EIM?

There is no reason for stakeholders to continue to be denied the ability to objectively evaluate the performance of the CAISO’s GHG framework.  Powerex therefore strongly encourages the CAISO, the DMM and/or the Western EIM Governing Body to undertake the specific analyses recommended by Vistra.  Identifying the metrics to be provided for both historical periods and on an ongoing basis should be added as a high-priority initiative in the 2023 Policy Initiatives Catalog and Roadmap.

2. Available data continues to highlight the need for more transparency: One of the largest activities occurring in the Western EIM is California imports of electricity from coal resources while attributing those imports to hydro resources that are not dispatched at all

Powerex’s analysis of available data strongly indicates that the CAISO’s attribution of GHGs bears little relationship to the resources that increased their output in the Western EIM.  To the contrary, perhaps the most significant outcome of the Western EIM’s GHG framework has been to enable California to import large quantities of electricity produced by coal-fired generation that is inaccurately attributed to non-emitting hydro resources that do not actually increase their output. 

The following charts show the volume of EIM net exports (black line) during the intervals when California was a net importer of energy in the EIM, and the volume that was “deemed” to serve load in California (blue bars), for the period January 1, 2021 through December 31, 2022.  Over this period, California’s net EIM imports accounted for 56% of all EIM net exports, meaning that a uniform GHG attribution would result in each EIM BAA having “deemed” exports to California for approximately half of its EIM net exports.  But the actual results are very different. 

In particular, the PacifiCorp East (PACE) BAA—which has significant coal and high-emitting natural gas generation—consistently has disproportionately high net exports in the EIM.  The PACE BAA accounts for 12% of the total generation in the EIM Area, but makes up 34% of all EIM net exports when California is importing.  In contrast to its high level of EIM exports, the PACE BAA accounts for just 4% of the “deemed” imports into California.  This is because, under the CAISO’s GHG attribution framework, only 7% of the PACE BAA’s EIM net export volume is “deemed” to be imported into California (versus elsewhere):

At the other end of the spectrum are Northwest hydro BAAs, which comprise approximately 51% of all generation in the EIM Area, and had a volume of EIM net exports somewhat smaller than the PACE BAA.  Unlike the largely fossil-fueled generation in the PACE BAA, more than 100% of the EIM export volume from Northwest hydro BAAs is “deemed” to be imported into California.  The CAISO’s GHG attribution goes far beyond “resource shuffling” and cherry-picking the lowest-emitting incremental supply to be deemed for California; it attributes output that was not dispatched in the EIM at all.  The deemed quantities in excess of actual exports are shown as the yellow shaded area, below:

The remaining EIM entity BAAs, located primarily in the Southwest, also had a similar volume of EIM net exports as the PACE BAA, with approximately half of this volume being “deemed” to be imported into California.  That is, the portion of their EIM net exports deemed to serve California load was in line with the share of total EIM exports consumed by California.

As summarized below, the available data shows a persistent pattern in which the Western EIM:

1. Disproportionately dispatches exports of electricity from the PACE BAA when California is importing; but
2. Attributes the source of those imports as being from BAAs with hydro and other non-emitting resources, often well in excess of the actual exports coming from these BAAs.

This result is not limited to rare instances where imports from high-emitting coal units could arguably be needed to maintain reliability in California BAAs; rather, it is occurring several hours a day, day after day, throughout the year.

[1] The Western EIM’s Approach To Applying California’s Cap and Trade Program To Imports Is Undermining The Program’s Core Objectives. (July 2022) Full paper, and executive summary.

[2] https://www.westerneim.com/Documents/VistraPublicComment-DecisiononExtendedDay-AheadMarket-Jan30-2023.pdf

2. Please submit comments on the draft 2023 catalog. You may upload documents using the "attachments" field below:

See comments above. 

Powerex’s comments are also available at 2023 CAISO Draft Policy Initiatives Catalog Comments.pdf (powerex.com) 

1. Please provide your organization's comments on the 2023 draft final policy initiatives roadmap:

The Public Advocates Office at the California Public Utilities Commission (Cal Advocates) does not have comments on this issue at this time. 

2. Please submit comments on the draft 2023 catalog. You may upload documents using the "attachments" field below:

            The Public Advocates Office at the California Public Utilities Commission (Cal Advocates) recommends that the CAISO undertake a competitive transmission procurement initiative that would, at minimum, remove or lower the voltage thresholds that currently exempt many transmission projects from competitive procurement. That initiative should also consider other changes that would enhance transmission competition. The benefits of these reforms would be twofold: 1) research has shown that competitive procurement can lower the capital cost of transmission projects,[1] and 2) it could help alleviate the backlog of transmission projects at the three investor-owned utilities (IOUs), allowing for more expedient integration of much needed renewable energy.[2]

               FERC Order No. 1000 required transmission providers to remove their exclusive right to construct projects within their service territory (thereby allowing other developers to bid on and construct those projects) but allowed for certain exemptions.[3] The CAISO’s Tariff, which complies with FERC Order No. 1000, states that facilities under 200 kilovolts (kV) and facilities that are additions, upgrades, or improvements to existing facilities are exempt from competitive transmission procurement.[4] 

               Cal Advocates concurs with the California Public Utilities Commission Energy Division in stating that these exemptions – the 200 kV voltage threshold in particular - are arbitrary and have unnecessarily harmed ratepayers.[5] Not only do these restrictions deprive ratepayers of potential cost savings, but research shows that such restrictions can inhibit the “price discovery” and transparency that a competitive process can provide.[6]^, [7] In a competitive process, regulators and stakeholders would have more visibility into how much a transmission project should cost; stakeholders can see the range of bids.

             FERC Order 1000 does not preclude the lowering or removal of voltage thresholds,[8] and policies at other Independent System Operators illustrate that such changes can be beneficial. For example, the New York Independent System Operator (NYISO), does not have voltage restrictions and has seen a more robust competitive procurement process as a result.[9]  The ISOs in New England (ISO-NE) and in the Southwest (SPP) only exempt projects below 100 kV.[10]

            Expanding competitive solicitation eligibility for more projects would also help ameliorate the backlog of transmission projects at the California IOUs. According to the CAISO’s Transmission Development Forum (TDF), there are well over 100 transmission projects that are in some phase of development or construction at the three IOUs. The TDF also indicates that the average difference between when a project is approved by the CAISO and the project has or is projected to even begin construction is over 7 years.[11] This situation is likely to worsen as the CAISO continues to approve more policy-driven transmission projects to access the resources needed to meet California’s renewable energy goals.[12]

           Some stakeholders may argue that increased competition will be an undue burden on the CAISO and that an incumbent utility’s intimate knowledge of its system allows it to construct projects more efficiently. However, there should be a CAISO initiative process to further explore and debate the benefits and constraints of a competitive transmission procurement process.

          The CAISO has seen success with competitive procurement and has been recognized for its leadership in this area.[13] The CAISO should continue its leadership by launching an initiative focused on expanding competitive transmission procurement, which could significantly lower ratepayer costs while advancing California’s renewable energy goals.

[1] A 2019 Report found that competitive procurement led to cost savings of 29% between 2013 and 2019 in CAISO territory. (Cost Savings Offered by Competition in Electric Transmission. The Brattle Group. April 2019. Figure 18. Available at https://www.brattle.com/wp-content/uploads/2021/05/16726_cost_savings_offered_by_competition_in_electric_transmission.pdf.)

[2] See paragraph 6 for description of this backlog.

[3] Transmission Planning and Cost Allocation by Transmission Owning and Operating Public Utilities, Order No. 1000, 136 FERC ¶ 61,051 (2011) at 102. Available at https://www.ferc.gov/electric-transmission/order-no-1000-transmission-planning-and-cost-allocation.

[4] Section 24.4.10 of the CAISO Tariff. states that “A Participating Transmission Owner will have the responsibility to construct, own, finance and maintain any Local Transmission Facility.” Appendix A of the CAISO Tariff defines local transmission projects as those that operate at a voltage below 200 kilovolts (kV) and are located entirely within the footprint of a Participating Transmission Owner’s footprint or service territory. (See http://www.caiso.com/rules/Pages/Regulatory/Default.aspx.)

[5] See the Energy Division’s Initial Comments in the Federal Energy Regulation Commissions Advanced Notice of Proposed Rulemaking (ANOPR) RM21-17, October 2021. P. 25. Available at https://elibrary.ferc.gov/eLibrary/docinfo?accession_number=20211012-5697.

[6] Joskow, Paul. Competition for Electric Transmission Projects in the U.S.: FERC Order 1000. March 2019. Available at https://ceepr.mit.edu/wp-content/uploads/2021/09/2019-004.pdf. P. 49.

[7] In this initiative, the CAISO should also consider actions taken by the Southwest Power Pool to provide oversight over transmission costs. More information is available at https://www.spp.org/documents/15479/cost%20estimation.ppt.

[8] FERC Order 1000 allowed competitive procurement exemptions for “local” facilities but did not define a voltage threshold for local. (FERC Order 1000, Section 318).

[9] "For example, in New York, the competitive process for the “AC Transmission Public Policy Project” provided for the possibility of non-incumbent developers’ utilizing existing utility rights-of-way, thereby enabling broader participation in the process." (Cost Savings Offered by Competition in Electric Transmission. The Brattle Group. April 2019. P. 21.)

[10] Cost Savings Offered by Competition in Electric Transmission. The Brattle Group. April 2019. Figure 7.

[11] These figures – which are limited to projects within the service area of the three IOUs – are drawn from the Transmission Development Forum update in January 2023. More information is available at http://www.caiso.com/Documents/CAISOPresentation-TransmissionDevelopmentForum-Jan25-2023.pdf.

[12] The CAISO dramatically increased the number and scale of policy-driven transmission projects it approves, going from zero policy-driven projects between 2014 and 2021, to 6 projects at $1.5 billion (B) in 2022, to a proposed 22 projects at $7.5B in 2023. (The CAISO’s annual transmission plans are available at http://www.caiso.com/planning/Pages/TransmissionPlanning/Default.aspx.)

[13] “Proportionally, CAISO and NYISO have made a significantly higher share of total transmission investments available to competitive solicitations than the other FERC-jurisdictional planning regions.” (Cost Savings Offered by Competition in Electric Transmission. The Brattle Group. April 2019. P. 21.)

1. Please provide your organization's comments on the 2023 draft final policy initiatives roadmap:

Salt River Project Agricultural Improvement and Power District (SRP) appreciates the opportunity to comment on the California Independent System Operator (CAISO) Draft Final 2023 Policy Initiatives Roadmap and encourages the CAISO to improve the policy initiative process to incorporate stakeholder feedback in a meaningful way. SRP understands that the CAISO’s policy focus is on prioritizing initiatives that are needed to maintain system reliability, efficient market functionality, comply with regulatory requirements, and satisfy the CAISO’s strategic objectives. While SRP supports the prioritization of impactful and high-profile initiatives, concerns remain with the growing backlog of discretionary initiatives, many of which stakeholders proposed because they support maintaining system reliability and efficient market functionality. SRP understands resources are a significant barrier for the CAISO to conduct policy initiatives and requests that the CAISO share its plan to overcome barriers that may prevent the prioritization of policy initiatives that are developed or driven by stakeholders.

Policy Initiative Process Changes

SRP looks forward to the enhanced stakeholder engagement in the policy initiative prioritization process that the CAISO Board of Governors and Western Energy Imbalance Market (WEIM) Governing Body recently approved as part of the Governance Review Committee (GRC) recommendations. SRP is encouraged by the robust discussion during the February 8 Regional Issues Forum (RIF) and plans to collaborate with RIF liaisons and WEIM peers to implement a process for coordinated stakeholder feedback. It will be important for CAISO policy staff to promptly modify the process timeline to incorporate enhanced stakeholder engagement. SRP requests that the CAISO include a placeholder in the roadmap during 2024 and 2025 to recognize that a change in the process could result in stakeholder-driven initiatives being prioritized in future years. As currently presented, the roadmap does not indicate space or resources for incorporating RIF input.

SRP appreciates the CAISO stakeholder engagement effort to obtain additional feedback from stakeholders for improving the catalog and roadmap process. SRP requests the CAISO increase the transparency of the prioritization process by including reasoning for not advancing each discretionary item that the CAISO decides will remain precluded following the stakeholder engagement efforts. SRP also requests that the CAISO consider incorporating verbal commitments that policy staff make to the Board of Governors and WEIM Governing Body into the policy initiatives catalog and roadmap. SRP is not aware of a tracking mechanism for these commitments. Adding these commitments to the catalog and roadmap would increase transparency of the progress on these commitments and provide CAISO staff a place to document and obtain stakeholder feedback on any course changes or constraints that it might encounter while trying to meet a commitment.

SRP supports the suggestion for grouping policy initiatives and requests the CAISO explore this opportunity. Combining related initiatives would make the catalog more manageable for stakeholders and staff and could provide opportunities for greater efficiency for initiatives that are advanced.

Working Groups

SRP appreciates the CAISO’s recent attention to comments of Desert Southwest entities and commitment to establish a working group to address concerns related to managing gas resources. Improved tools for managing gas resources will support maintaining system reliability and market functionality in both WEIM and the Extended Day-Ahead Market (EDAM). SRP requests that the CAISO clarify how input from the working group will be incorporated into the policy initiative roadmap.

As the CAISO evaluates changes to the policy initiative prioritization process, SRP suggests consideration of stakeholder working groups as part of the process. In addition to the anticipated gas resource working group, the CAISO is already facilitating a Multi-Stage Generating Resource (MSG) stakeholder working group. Working groups provide an opportunity to create alignment among multiple stakeholders. SRP recommends the CAISO facilitate and enable working groups to evaluate and recommend grouping opportunities for multiple discretionary initiatives that address related concerns. SRP requests that the roadmap include a placeholder for working group recommendations to become prioritized as policy initiatives. For example, recommendations that the MSG working group develops during 2023 could be shown as an initiative later in 2023 or 2024. If WEIM entities and the CAISO place enough importance on a topic to dedicate resources and staff time to a working group, the roadmap should allow for that topic to be prioritized as a policy initiative. 

Extended Day-Ahead Market

SRP encourages the CAISO to consider initiating the EDAM Enhancements policy initiative group in parallel with the Greenhouse Gas (GHG) Coordination policy initiative. The EDAM Enhancements initiative could be used to address topics such as interaction of Day-Ahead Market Enhancements with EDAM and recommendations of the gas resources working group.

SRP requests that the CAISO update Initiative 5.8 – Extended Day-Ahead Market to reflect joint authority of the Board of Governors and WEIM Governing Body.

Conclusion

SRP recognizes the importance of the policy initiative prioritization process and has previously shared concerns with the CAISO not providing a plan to consider the growing list of stakeholder-proposed discretionary initiatives. SRP is encouraged by the recently approved GRC recommendation for enhanced stakeholder engagement and CAISO policy staff’s willingness to consider suggestions for changes to the process. SRP believes changes that lead to greater transparency and meaningful consideration of stakeholder input will result in continued participation from the CAISO’s diverse stakeholder community.

2. Please submit comments on the draft 2023 catalog. You may upload documents using the "attachments" field below:

1. Please provide your organization's comments on the 2023 draft final policy initiatives roadmap:

SEIA appreciates the opportunity to comment on the draft 2023 CAISO policy initiatives catalog and roadmap. SEIA supports the priorities established under the roadmap including the prioritization of the integration of new resources, strengthening resource adequacy (RA), and enhancements to the western markets. On RA, SEIA agrees that the RA Enhancements Initiative should begin after the CPUC rules on RA reforms to implement the “slice-of-day” methodology.

SEIA is concerned, however, that the Reform of the Deliverability Assessment Methodology (Policy Catalog Item 6.3.1) has been deprioritized. In the Policy Catalog, CAISO states that the Reform of the Deliverability Assessment Methodology initiative will begin after the CPUC finalizes changes to the RA program which is inconsistent with CAISO’s commitment to begin a formal stakeholder review of the deliverability methodology by the end of Q1 2023. While SEIA recognizes the connection between deliverability and RA, SEIA does not believe that RA reforms need to be finalized prior to consideration of enhancements to the deliverability assessment methodology or alternative approaches to extract deliverability from the existing system.

Deliverability is crucial to support the resource development needed to achieve California energy and emissions goals under SB100 and to ensure a reliable system through the RA program. Given the challenges associated with new transmission, it is critical that alternative deliverability approaches be developed for the near-term to support resource development and system reliability. SEIA believes it is worth initiating a stakeholder process to at least determine what, if any, deliverability enhancements can be made independent of the RA reform. The Reform of the Deliverability Assessment Methodology initiative could then be broken into phases to discuss enhancements pre- and post- RA reform. SEIA asserts deliverability should be made a priority for CAISO and stakeholders and recommends that CAISO not delay the Reform of the Deliverability Assessment Methodology initiative and include the Reform of the Deliverability Assessment Methodology initiatives on the roadmap.

2. Please submit comments on the draft 2023 catalog. You may upload documents using the "attachments" field below:

1. Please provide your organization's comments on the 2023 draft final policy initiatives roadmap:

The Six Cities acknowledge the CAISO’s inclusion of an initiative topic, described as “Generator Connectivity Challenges/Enhancements,” on page 15 of the Policy Initiatives Roadmap.  The Six Cities assume that this topic may refer to the “Generation Deliverability Methodology Review” or “GMDR” initiative described in Section 5.12 of the 2023 Policy Initiatives Catalog.  Although this initiative was scheduled to begin this spring, regrettably, the Six Cities understand that the CAISO has recently determined to defer initiation of the GDMR process to an undetermined date in the future, to enable coordination with the 2023 Interconnection Process Enhancements (“IPE”) initiative.

Although the Six Cities understand and appreciate the CAISO’s desire to coordinate the GMDR and IPE initiatives and agree that aspects of these initiatives are linked, reform of the CAISO’s deliverability study methodology, requirements, and criteria for resources to supply resource adequacy (“RA”) capacity is a topic that is of critical importance, and the GMDR initiative should commence promptly rather than awaiting activity under the 2023 IPE process.  Based on the Six Cities’ experience, it has become excessively difficult for load-serving entities (“LSEs”)—particularly smaller LSEs, such as the individual members of the Six Cities—to secure increasingly scarce RA capacity, and this is due in no small part to the criteria and procedures applied by the CAISO with regard to resource deliverability, including deliverability requirements applicable to import RA resources (i.e., the CAISO’s Maximum Import Capability rules).  Unless changes are considered that will simplify the process for and expedite new resource interconnection and qualification to supply RA within the CAISO footprint, the CAISO balancing authority area and its LSEs may find themselves short of the capacity needed to assure regional reliability in 2024 and beyond.  Supply scarcity due to a lack of forward contracted RA supply could also hamper the ability of the CAISO to pass resource sufficiency tests within the EIM and the Extended Day Ahead Market during times of regional supply scarcity and could expose the CAISO footprint to undue RSE failure consequences.  For these reasons, a robust stakeholder process focused on issues of deliverability, including MIC requirements, and RA resource qualification, should be among the CAISO’s highest priorities for 2023 and 2024.  The Six Cities therefore urge the CAISO to revise the Policy Initiatives Catalog and Roadmap for 2023 to reflect advancement of the GMDR initiative, and, to the extent necessary, the 2023 IPE initiative. 

The Six Cities support the recommencement of the Resource Adequacy Enhancements initiative in the second quarter of 2023, as appears to be contemplated in the Policy Initiatives Roadmap at page 12.   

2. Please submit comments on the draft 2023 catalog. You may upload documents using the "attachments" field below:

Please refer to the comments provided above.

1. Please provide your organization's comments on the 2023 draft final policy initiatives roadmap:

SCE appreciates the opportunity to provide comments on the 2023 draft policy initiatives roadmap. 

SCE generally agrees with how the roadmap is organized under the 3 strategic objectives:

1. Reliably and Efficiently Integrate New Resources by Proactively Upgrading Operational Capabilities,
2. Strengthen RA to Meet California’s SB100 Goals through Long-Term Transmission Planning and Effective Coordination with State Agencies, and
3. Build on the Foundation of the Western Energy Imbalance Market to Further Expand Western Market Opportunities. 

SCE suggests expanding objective 1 to include upgrading operational capabilities for both new and existing resources. Neglecting existing resources will increase the backlog of initiatives and restrict the benefits proposed in the CAISO Catalog initiative.

SCE recommends that CAISO perform a comprehensive review of the backlog and categorize similar initiatives together. For instance, SDG&E's "Fractional Megawatt Regulation Award" initiative and the "Ancillary Services de minimis Regulation Awards” initiative could be combined under SCE's "Pay for Performance Accuracy Calculations".  Grouping similar initiatives in this manner can signal which initiatives are of high-importance and demonstrate which initiatives are suitable for inclusion on the roadmap.

2. Please submit comments on the draft 2023 catalog. You may upload documents using the "attachments" field below:

SCE respectfully requests CAISO to provide further explanation of SCE submittals that weren’t included in the catalog.  There appears to be a lack of detail explaining why multiple SCE requests were precluded or ignored.  Please see those submittals below: 

Pay for Performance Accuracy Calculations

CAISO states the "Pay for Performance Accuracy Calculations" initiative in section 3.2 will be precluded from the catalog because it will be incorporated into the "Ancillary Services de minimis Regulation Awards" initiative. However, SCE has raised concerns in its September 2022 comments [1] that the scope of the "Ancillary Services de minimis Regulation Awards" is narrower and the initiative does not address the multiple issues brought up by SCE. While CAISO has acknowledged SCE’s comments, CAISO does not address where the additional scope will reside within the catalog.  SCE requests CAISO to preclude the “Ancillary Services de minimis Regulation Awards” initiative from the catalog and incorporate the initiative in SCE’s “Pay for Performance Accuracy Calculations” due to its larger scope size.  Below is a comparison of what is included in the "Ancillary Services de minimis Regulation Award" and "Pay for Performance Accuracy Calculations" initiatives.

Demand Response 5/15/60 Minimum Bid Option and 100 MW Discrete Cap

In SCE’s September 2022 comments [1], SCE submitted 2 Demand Response (DR) related initiatives to include in the catalog.  However, CAISO did not implement the request stating in the most recent catalog that DR related initiatives are paused due to regulatory uncertainty.  SCE believes CAISO should continue to accept DR requests regardless of uncertainty.  This ensures a transparent process for stakeholders to propose initiatives that would improve processes or rectify inconsistencies.  SCE has observed two major DR issues that should be included in the catalog and has expressed concerns in multiple forums without resolution.  The initiatives are as follows:

1. Requests CAISO to re-visit the inconsistencies in the market rules for Reliability Demand Response Resources (RDRRs) dispatch.  When RDRRs are participating under the 15-minute or 60-minute option, the market dispatches are based on pre-defined start-up times which don’t match the capabilities of the resources.  Instead, RDRRs should be consistent with other resources and be dispatched using the actual start-up time listed in the Resource Data Template (Masterfile). 
2. Requests CAISO to re-evaluate the discrete dispatching cap of 100 MW.  SCE believes the criteria is unrealistic to meet.  California Investor-Owned Unity Demand Response Programs are an aggregation of thousands of customers.   It is not practical to break the aggregation of customers into sub resources to stay under 100 MW limit and doing so excludes single resources that exceed this limit.    

Energy Storage Bid Cap Not Aligned with FERC Order 831

In the most recent draft catalog, CAISO states that SCE’s request to align Energy Storage Resources with FERC Order 831 is an implementation gap that does not belong in the catalog.  However, on the 2023 Revised Policy Initiatives Catalog and Draft Roadmap call dated February 21, 2023, Gabe Murtaugh mentions that CAISO is still deciding which initiative this request should be included in.   If this is true, then CAISO should not remove this request from the catalog.  Furthermore, CAISO should provide to stakeholders a timeline of when this initiative will be completed and SCE believes the CAISO should target implementing a solution before summer 2023 (e.g., when such a solution does not require a tariff modification).   CAISO should also explore leveraging the same methodologies used in the Reliability Demand Response Resource Bidding Enhancements Initiative Track 1 [2] which automatically adjusted bids to the upper threshold of $2000 when cost-based bids can be verified and whether such methodologies are appropriate for other type of resources. 

 [1] See SCE Comments at https://stakeholdercenter.caiso.com/Comments/AllComments/822f5bcd-8a6a-4dd4-8fc0-033d8c482dac#org-6c0cfecc-7d5c-4224-b196-579eaa1879b9

[2] RDRR Bidding Enhancements Track 1 – Draft Final Proposal. January 26, 2022. Pg. 7 at http://www.caiso.com/InitiativeDocuments/DraftFinalProposal-ReliabilityDemandResponseResourceBiddingEnhancements-Track%201.pdf

“The CAISO proposes to automatically adjust the submitted RDRR bids based on the change in energy bid cap by maintaining the percentage of the bid cap originally submitted by the Scheduling Coordinator.”

1. Please provide your organization's comments on the 2023 draft final policy initiatives roadmap:

2. Please submit comments on the draft 2023 catalog. You may upload documents using the "attachments" field below:

1. Please provide your organization's comments on the 2023 draft final policy initiatives roadmap:

Please refer to the attached comments.

2. Please submit comments on the draft 2023 catalog. You may upload documents using the "attachments" field below:

Please refer to the attached comments.

1. Please provide your organization's comments on the 2023 draft final policy initiatives roadmap:

WPTF appreciates the opportunity to submit comments on the CAISO’s 2023 draft policy initiatives catalog and roadmap.  WPTF offers these brief comments on three elements in response to the draft roadmap and suggests the addition of a fourth item (response to #2 below).

1. WPTF strongly encourages the CAISO to prioritize the Price Formation effort. This was an initiative identified a few years ago following analysis by the CAISO. We are encouraged to see it on the roadmap but ask that the CAISO ensure its not delayed any further as addressing existing price formation issues within the market is essential and will be imperative as we look toward an expanded footprint. Additionally, within the Price Formation effort, we ask that the CAISO include the multi-interval optimization topic in the first phase given the impact it has on storage resources participating in the CAISO markets.
2. WPTF strongly encourages the CAISO to prioritize Resource Adequacy Enhancements and provide more clarification on its plan to coordinate with existing CPUC RA proceedings, which would ideally include a list of items that would be addressed under each phase if the CAISO’s plan includes a phased approach.
3. During the recent Day-ahead Market Enhancements (DAME) workshops, the CAISO noted that deliverability of A/S is in the policy catalog but we recognize its not on the current 2023 roadmap. In the event the CAISO moves forward with a nodal approach to imbalance reserves, then the CAISO should prioritize deliverable A/S (assuming analysis supports it being an issue) such that at a minimum nodal IR and deliverable A/S are considered together.  

2. Please submit comments on the draft 2023 catalog. You may upload documents using the "attachments" field below:

WPTF asks that the CAISO include a stakeholder process that includes a targeted analysis of the drivers of CRR shortfall settlement.  This should include an assessment of how to protect CRR holders from shortfall risks that were not contemplated at the time of the Track 1B changes, including shortfalls unrelated to transmission derates such as unsettled flow. We have observed unsettled flow in the IFM can lead to flow reversals in CRR settlements (i.e., when offset is greater than notional value).  CRRs serve to protect supply and demand from unknown congestion costs, but this shortfall can turn an expected hedge into an unexpected liability. This is counter to the purpose of CRRs as a risk mitigation tool.  We ask that the CAISO move urgently to review this market inefficiency. The CAISO analysis, to be conducted this year, can serve to inform policy changes that would align the design of the shortfall allocation with the Track 1B policy changes implemented in 2019.