Comments on 2/26 DAME Configurable Parameters Working Group

1. Please provide a summary of your organization's comments on the February 26, 2026 DAME Configurable parameters implementation working group discussion.

The California Energy Storage Alliance (CESA) appreciates the opportunity to discuss the 2/26 DAME Configurable Parameters Working Group.  CESA acknowledges the significant work CAISO staff has performed in evaluating the impact of imbalance reserve market design parameters.  Unfortunately, the poor quality of market simulation data does not support any conclusions on the appropriateness of market parameters. 

Stakeholders pushing the CAISO to take actions to reduce perceived prices and reduce perceived costs fail to recognize that imbalance reserves are procured using a demand curve.  The demand curve is the exact mitigation measure needed to address concerns of excess costs.  Regardless of any market parameter, if the cost of procuring an additional MW of imbalance reserves is greater than the real-time benefit, the market optimization will forgo additional procurement of imbalance reserves. 

Lastly, if system operators across the EDAM have low confidence in the availability of imbalance reserves to be dispatched as energy in the real-time market, system operators will continue to bias the residual unit commitment (RUC) load forecast.  A key benefit of imbalance reserves was to move RUC biases into the integrated forward market (IFM).  This allows the co-optimization of energy, ancillary services, and imbalance reserves to be co-optimized to provide transparency in the cost of managing uncertainty between the day-ahead and real-time market. 

2. Please provide a summary of your organization’s comments regarding the proposal to implement the following configuration for Parallel Operations: enforcing flowgates and nomograms, reducing envelope multipliers to 60%, and lowering deployable factors to 60%

CESA recognizes the system performance impact caused by the number of constraints included in the imbalance reserve deployment scenarios.  CAISO should at a minimum enforce the same constraints that can be implemented in the real-time market for the flexible ramping product.

CESA is concerned that reducing the envelope multipliers to 60% will expose storage resources to deviation settlements with the flexible ramping product.  While the price of the flexible ramping product is usually zero, when the price is non-zero storage resources would be exposed to a cost resulting from a CAISO market design decision that awards excessive imbalance reserves to storage.  This is another example where CAISO market is creating the need for a real-time make whole payment for storage.  Storage could reflect the cost for flexible ramping product deviation settlement in its imbalance reserve bids or not bid the full 30-minute ramp certified quantity to address the real-time settlement risk.  However, both justifiable actions are counter to the intended outcome of reducing the envelope multiplier.

CESA does not support lowering the deployable factors to 60%.  A long-standing issue with the flexible ramping product has been the market optimization seeking out undeliverable resources to award the flexible ramping product.  This undermines the benefits of the products.  This decision will result in awards that are known at the time of the day-ahead market run to be undeliverable.  Thus, resources may be paid for a day-ahead product that cannot be dispatched for energy in real-time.

3. Please provide a summary of your organization’s comments regarding the ISO’s proposed two-phase approach for establishing configurable parameters, with the first phase serving as a ramp-in period for Go-Live using a more conservative configuration

CESA disagrees with the characterization of the first phase “using a more conservative configuration.”  The first phase configurable parameters are not conservative from a reliability standpoint.  The lower envelope multipliers and deployable factors increase the probability that imbalance reserves will be awarded to resources that will not be available for real-time dispatch of energy.   

4. Please provide a summary of your organization’s comments regarding the proposal to include lower imbalance reserve requirements as part of the Phase One Go-Live approach.

CESA does not believe a lower imbalance reserve requirement is necessary since the demand curve will not procure incremental imbalance reserves when the cost exceeds the real-time benefit of the must-offer obligation. 

5. Please provide a summary of your organization’s comments regarding the duration of the first phase of the two-phase approach.

No comment. 

1. Please provide a summary of your organization's comments on the February 26, 2026 DAME Configurable parameters implementation working group discussion.

Comments on Day-Ahead Market Enhancements Configurable Parameters

Working Group Presentation on February 26, 2026

Department of Market Monitoring

March 12, 2026

Summary

The Department of Market Monitoring (DMM) appreciates the opportunity to comment on the Day-Ahead Market Enhancements - Configurable Parameters Implementation Working Group presentation on February 26, 2026.[1]

DMM supports the ISO’s proposal to use lower envelope multiplier and deployment imbalance reserve (DIR) factor values at go-live, along with reduced imbalance reserve (IR) requirements, to help minimize the risks associated with implementing a new product in a new market structure. DMM recommends the ISO utilize the lowest possible values for all three parameters and only consider increasing these values if market results demonstrate a clear need or value to do so.

Although DMM has recommended caution when interpreting simulation results based on unrealistic input data, the ISO’s analysis in both the market simulation and parallel operations resulted in IR prices that do not seem consistent with the actual costs of providing the product. The ISO’s analysis also indicates that certain parameter values may further increase IR prices without clear evidence of improving real-time deliverability of IR schedules.

To limit risk at go-live, DMM recommends the ISO use values lower than 60 percent for the envelope multiplier and DIR factor, as lower parameter values would reduce the risk of unnecessarily constraining IR supply and driving prices above efficient levels. DMM also supports using lower IR requirements at go-live. This will allow the ISO to gain operational experience while managing risk of unintended market outcomes and procuring higher levels of IR only if needed. DMM recommends the ISO only consider increasing configurable parameter values and IR requirements after go-live if operational data shows a need for procuring additional IR capacity or improving real-time deliverability. If market results reveal deliverability concerns, DMM further recommends the ISO conduct analysis to confirm that increasing the envelope multiplier or DIR factor would effectively address those concerns at a justifiable cost.

Comments

DMM recommends using lowest possible configurable parameter values until the ISO can demonstrate these parameters are necessary and capable of improving deliverability

DMM supports the ISO’s proposal to use lower values for the DIR factor and envelope multiplier parameters at go-live to reduce the risk of inefficiently high IR prices with potentially little to no benefit in return. DMM recommends the lower parameter values remain in place until further analysis determines (1) whether it is necessary to improve real-time deliverability of IR; (2) whether either of these parameters can effectively address deliverability in real-time; and (3) whether the value of that improved deliverability justifies the resulting higher IR prices.

DMM recommends the ISO use values less than 60 percent for the envelope multiplier and DIR factor to minimize the risks at go-live. While the ISO’s results suggest the envelope multiplier had less impact on IR prices in parallel operations, there are a variety of other explanations for why the results in parallel operations during this week in February are different than the October day studied in market simulation.[2] DMM recommends caution in underestimating the impact the envelope multiplier could have on IR prices at go-live, and suggests the ISO start with a value less than 60 percent for both the envelope multiplier and the DIR factor in order to minimize risk.

DMM continues to recommend weighing any increase in parameter values against their costs.[3] Because real-time deliverability of IR awards cannot be evaluated until after go-live, DMM recommends the ISO only consider changing the original parameter values once there is sufficient operational data to determine whether improvements are needed and whether these parameters can effectively address them. It is unclear to DMM whether the envelope multiplier and DIR factor can meaningfully increase real-time deliverability. Even a 100 percent DIR factor does not guarantee deliverability in real-time, and a higher envelope multiplier does not ensure adequate state-of-charge in real-time. DMM therefore recommends the ISO only consider gradually increasing these values after go-live if market results indicate that there are real-time deliverability concerns that will be addressed efficiently with adjustments to these two parameters.

DMM supports the ISO’s proposal to reduce imbalance reserve requirements

DMM supports the ISO’s plan to reduce IR requirements at go-live as DMM agrees this could be an additional avenue for mitigating risk. Lowering the IR requirement could allow the ISO to assess the market’s capability of efficiently procuring IR at more incremental levels, rather than enforcing the full requirement at go-live. DMM recommends the ISO use lower IR requirements at go-live and only consider increasing the requirements if market results indicate a need to procure additional IR capacity.

As previously noted by DMM, there are a number of options other than IR procurement that can address net load uncertainty between day-ahead and real-time markets. Due to these other options, DMM believes that starting go-live with lower requirements could protect against inefficiently high IR prices without creating much risk that uncertainty between day-ahead and real-time will be unable to be met. This would allow the ISO to gather and analyze market data to determine whether increasing the requirements is necessary for market efficiency and reliability.

Similar to other stakeholders, DMM is concerned about the frequency and cost of demand curve procurement in both the market simulation and parallel operations under fairly low load conditions. DMM is specifically concerned about what this frequency of demand curve procurement implies about the availability and cost of IR capacity under relatively low load conditions. The increased dependence on demand curve procurement to meet higher IR requirements reflects insufficient capacity to meet these requirements at a cost less than that of demand curve procurement. Therefore, using a lower requirement at go-live would mitigate market risk by reducing the overall level and cost of IR procurement, including demand curve procurement and associated cost, while affording an opportunity to assess available IR capacity in live market conditions at varied load levels.

[1]  Day-Ahead Market Enhancements: Configurable Parameters Implementation Working Group presentation, California ISO, February 26, 2026: https://stakeholdercenter.caiso.com/InitiativeDocuments/Presentation-Day-Ahead-Market-Enhancements-(DAME)-Configurable-Parameters-Implementation-Working-Group-Feb-26-2026.pdf

[2]  Ibid, p 49

[3]  Comments on Day-Ahead Market Enhancements Configurable Parameters Working Group Presentation on November 20, 2025, Department of Market Monitoring, December 10, 2025: https://www.caiso.com/documents/dmm-comments-on-day-ahead-market-enhancements-configurable-parameters-implementation-nov-20-2025-working-group-dec-10-2025.pdf

2. Please provide a summary of your organization’s comments regarding the proposal to implement the following configuration for Parallel Operations: enforcing flowgates and nomograms, reducing envelope multipliers to 60%, and lowering deployable factors to 60%

Please see the PDF attached below the final question for DMM's fully formatted complete set of comments. For the reader's convenience, the complete text of the comments is pasted in response to #1, but there may be some formatting errors.

3. Please provide a summary of your organization’s comments regarding the ISO’s proposed two-phase approach for establishing configurable parameters, with the first phase serving as a ramp-in period for Go-Live using a more conservative configuration

Please see the PDF attached below the final question for DMM's fully formatted complete set of comments. For the reader's convenience, the complete text of the comments is pasted in response to #1, but there may be some formatting errors.

4. Please provide a summary of your organization’s comments regarding the proposal to include lower imbalance reserve requirements as part of the Phase One Go-Live approach.

Please see the PDF attached below the final question for DMM's fully formatted complete set of comments. For the reader's convenience, the complete text of the comments is pasted in response to #1, but there may be some formatting errors.

5. Please provide a summary of your organization’s comments regarding the duration of the first phase of the two-phase approach.

Please see the PDF attached below the final question for DMM's fully formatted complete set of comments. For the reader's convenience, the complete text of the comments is pasted in response to #1, but there may be some formatting errors.

1. Please provide a summary of your organization's comments on the February 26, 2026 DAME Configurable parameters implementation working group discussion.

Energy Division staff (ED staff or staff) of the California Public Utilities Commission (CPUC) develops and administers energy policy and programs to serve the public interest, advises the CPUC, and ensures compliance with CPUC decisions and statutory mandates. ED staff provides objective and expert analyses that promote reliable, safe, and environmentally sound energy services at just and reasonable rates for the people of California. 

ED staff appreciates the opportunity to submit comments on the Day-Ahead Market Enhancements (DAME) configurable parameters implementation working group. ED staff also appreciates the considerable amount of material analyzed and released for discussion as the working group has progressed over the last several months.  

As stated in previous comments, ED staff continues to be concerned that the imbalance reserve requirements may be set too high and may prove costly, given the preliminary results from Market Simulation and Parallel Operations.

ED staff is concerned that the Imbalance Reserve product, as designed, will cause CAISO customers to double-pay for capacity resources that must bid into CAISO markets: once through capacity contracts for resource adequacy (RA) resources that have day-ahead and real-time must offer obligations, and a second time for those same capacity resources when they are selected as Imbalance Reserves. Ultimately, the Imbalance Reserve design must ensure that CAISO customers do not double-pay for reliability capacity.

Thus, ED staff supports CAISO’s proposal to adjust the configurable parameters for go-live on May 1^st. In addition, ED supports CAISO reducing the imbalance reserve requirements for go-live to limit potentially large costs that will be incurred by CAISO customers associated with the imbalance reserve requirement.

2. Please provide a summary of your organization’s comments regarding the proposal to implement the following configuration for Parallel Operations: enforcing flowgates and nomograms, reducing envelope multipliers to 60%, and lowering deployable factors to 60%

As noted above, ED staff supports CAISO’s proposal to reduce the envelope multiplier to 60% and to lower the deployment factor to 60% in parallel operations. However, because parallel operations, is currently, omitting thousands of MWs of imports and storage resources (CAISO staff is working on correct this), ED staff is concerned that the results from parallel operations should be viewed with caution and should be validated when the full bid stack is included in parallel operations. ED staff also recommends that CAISO test other, lower values, and provide this information to stakeholders.  As a result of this analysis, CAISO should consider lower values at go-live, based on this analysis with the complete bid set (e.g., 35% deployment factors and envelope multipliers). More importantly, ED staff recommends that CAISO consider lowering the imbalance reserve requirements (e.g., at the 50% or 75% level), as discussed in response to Question 4 below.

3. Please provide a summary of your organization’s comments regarding the ISO’s proposed two-phase approach for establishing configurable parameters, with the first phase serving as a ramp-in period for Go-Live using a more conservative configuration

ED staff supports CAISO’s proposal to use more conservative values for the configurable parameters in parallel operations and go-live, and recommends that CAISO consider potentially lower values based on analysis in parallel operations using the full bid set (currently thousands of MW of imports and storage are missing, which potentially clouds the results of these changes).

4. Please provide a summary of your organization’s comments regarding the proposal to include lower imbalance reserve requirements as part of the Phase One Go-Live approach.

ED staff supports CAISO lowering the imbalance reserve requirements (e.g., at the 50% or 75% level).[1]  ED staff has consistently argued the 97.5% percentile of uncertainty being used for imbalance reserve procurement is too high.  The experience in the current market design illustrates that using the 97.5% percentile of uncertainty unnecessarily leads to excess procurement of imbalance reserves, which leads to higher costs for ratepayers without necessarily providing commensurate reliability benefits. Analysis from DMM about the current market has shown that the 97.5% percentile of uncertainty has not been used in recent years for the RUC adjustment, for a variety of reasons, and notably, there have been many days/hours with no adjustment at all.[2]

CAISO’s Department of Market Monitoring (DMM) published the chart below illustrating RUC adjustments in 2024 (below). [3]

When these values are converted to hourly figures, the results for 2024 show that CAISO used a 97.5% percentile uncertainty adjustment in only 3% of the hours.

More recently, CAISO has reduced its RUC adjustments even further, as shown in the slide below, demonstrating that the 97.5% uncertainty level is too high.

[4]

Further, results from parallel operations (shown below for March 3, 2026) demonstrate just how large the imbalance reserve requirements are, as shown in the table below. 

On this day, on average, the imbalance reserve up (IRU) requirement is 6 percent of load and the imbalance reserve down (IRD) requirement is 9 percent of load. In some hours, the requirement is exceptionally large compared to load. For example, in hour ending 17 (i.e., 4 pm to 5 pm), the IRU requirement is 4,428 MW (or 20% of load) and the IRD requirement is 5,651 MW (or 26% of load), or nearly a combined 10,000 MW of upward and downward reserves in an hour when the load forecast is merely 21,987 MW.

This requirement seems excessive on its face and even more so, when one considers that this is in addition to ancillary service requirements, that it is occurring on an exceptionally low load day, that the chance that 10,000 MW of uncertainty arises is very unlikely, and that CAISO might need to commit additional thermal resources to meet IRU and that this could lead to additional bid cost recovery (BCR) and other uplift charges.

In addition, the imbalance reserve costs are potentially very high.  On this day, March 3, the costs for imbalance reserves up were ~$266,000 and the costs for imbalance reserve down were ~$332,000.  Annualized, this magnitude of costs incurred on a daily basis would be roughly $97 million and $121 million, or $218 million combined. While the IRU and IRD prices and costs could be lower depending on the bid stack, they could also be higher during higher load conditions. Further, removal of a large amount of capacity from the bid stack could also increase overall energy prices in the day-ahead market, especially during higher load conditions.

ED staff appreciate CAISO laying out a process during the February 6^th MSC call to reduce the threshold of uncertainty used to procure reserves. A lower percentile of uncertainty will reduce ED staff’s concerns about over procurement of a duplicative product.

[1] The percentile of uncertainty for imbalance reserve procurement is tied to CAISO’s Business Practice Manual. Per pg. 73, of the CAISO DAME-EDAM Tariff Amendment August, 2023, Aug22-2023-DAME-EDAM-Tariff-Amendment-ER23-2686.pdf

[2] Pg. 121, Department of Market Monitoring Quarter 2 Report on Market Issues and Performance, 2025-second-quarter-report-on-market-issues-and-performance.pdf

[3] Pg. 259, 2024 Department of Market Monitoring Annual Report, 2024-annual-report-on-market-issues-and-performance-aug-07-2025.pdf

[4] Slide 38, Market Performance and Planning Forum, MarketPerformance-PlanningForum-Jan-27-2026

5. Please provide a summary of your organization’s comments regarding the duration of the first phase of the two-phase approach.

ED staff recommends that CAISO keep these more conservative configurable parameters and lower imbalance reserve requirements through September and only make changes after through discussions with stakeholders and the CAISO’s Market Surveillance Committee (MSC).  ED staff support this approach for two reasons. First, large changes should not be made in August or September, which can be high load months and it does not make sense to be making untested changes during this time, with the potential for unintended results.  In addition, consultation with the MSC would allow further input on these important parameters before they are implemented in the market and would provide an opportunity for CAISO and stakeholders to assess the parameters and requirements and the effects on market efficiency and costs more broadly.

1. Please provide a summary of your organization's comments on the February 26, 2026 DAME Configurable parameters implementation working group discussion.

PG&E appreciates the opportunity to provide comments on the latest working group discussion and would like to thank the ISO for being responsive to stakeholder feedback with its conservative, phased-in approach for implementation of the configurable parameters. PG&E’s feedback can be summarized as follows:

• PG&E supports the two-phase implementation and believes the duration of Phase 1 should be through at least September.
• PG&E believes the ISO should test the functionality of lowering the imbalance reserve requirement prior to Go-Live.
• PG&E requests the ISO outline a “Plan of Action” in the event of market challenges at launch  (we could add this: Specifically, we would like to know what conditions are being monitored, the indicators of those conditions, the solutions the ISO would propose, and when they would be implemented.)

2. Please provide a summary of your organization’s comments regarding the proposal to implement the following configuration for Parallel Operations: enforcing flowgates and nomograms, reducing envelope multipliers to 60%, and lowering deployable factors to 60%

PG&E supports this new approach, and would like to thank the ISO for being responsive to stakeholder feedback by implementing this more conservative configuration in Parallel Operations.

3. Please provide a summary of your organization’s comments regarding the ISO’s proposed two-phase approach for establishing configurable parameters, with the first phase serving as a ramp-in period for Go-Live using a more conservative configuration

PG&E appreciates the ISO for being responsive to stakeholder feedback and using a two-phase approach for establishing the configurable parameters. We see this “ramp-in period” as a time in which the ISO closely monitors the effects of the parameters and provides market participants information about how well they are performing (as well as the promised reports on EDAM performance overall).  As indicated on slide 68, if there's any evidence that the parameter values are still too high, we'd expect ISO to evaluate further relaxations of the values.

4. Please provide a summary of your organization’s comments regarding the proposal to include lower imbalance reserve requirements as part of the Phase One Go-Live approach.

PG&E thanks to the ISO for being responsive to stakeholder feedback with the proposal to include lower imbalance reserve requirements as part of Phase One. While we don’t believe it is necessary to lower the requirements before Go-Live, we request that the ISO at least test the functionality of doing so before then. In addition, PG&E requests the ISO outline a “Plan of Action” in the event of market challenges at launch.

5. Please provide a summary of your organization’s comments regarding the duration of the first phase of the two-phase approach.

PG&E would like to thank the ISO for the opportunity to provide feedback on the duration of the first phase of the two-phase approach. We support the concept of an initial implementation period extending through the end of September and further suggest that along with PG&E and PacifiCorp, Portland General Electric should be considered in evaluating the timetable, as otherwise there's a possibility that their go-live date would coincide with significant volatility due to changes in the parameter values.

1. Please provide a summary of your organization's comments on the February 26, 2026 DAME Configurable parameters implementation working group discussion.

San Diego Gas and Electric (SDG&E) considers the tuning and testing of the parameters the most critical challenge of this working group and offers the following comments on the February 26 working group discussion and proposals. At a high-level SDG&E:

• Supports the proposal to implement the revised configuration for parallel operations;
• Offers feedback on how to maximize use of the limited time left in parallel operations for reporting to stakeholders on the impact to market efficiency from the revised values; and
• Supports the proposal to include lower imbalance reserve parameters as part of the phase one go-live approach, although any revisions should be data-driven and discussed with the stakeholder community.

2. Please provide a summary of your organization’s comments regarding the proposal to implement the following configuration for Parallel Operations: enforcing flowgates and nomograms, reducing envelope multipliers to 60%, and lowering deployable factors to 60%

SDG&E supports further analysis of the proposed revised parameters in parallel operations (envelope constraint multiplier, deployed imbalance reserve factor, set of enforced transmission constraints) as described during the February 26 working group. Evaluation and analysis of the lower values for the envelope constraint multiplier and deployed imbalance reserve factor, as well as the use of different enforced constraints, is critical information for stakeholders to use and understand when considering how to refine these values or adjust the level of procurement for imbalance reserves.

To the extent that CAISO is able, preliminary reporting of the market impact of these newly implemented parameter values should be provided in the bi-weekly DAME, EDAM, EDAM ISO BAA PR Market Sim meetings. SDG&E understands that there are many priority items for discussion on the agenda of that hour-long meeting and that in-depth analysis and discussion of the parameters is reserved for the working group, but considering the limited time for participants to test prior to go-live, additional discussion of the market impact associated with use of these alternative values is warranted. While SDG&E believes alignment between the market sim and configurable parameters meetings is useful to stakeholders, should CAISO opt not to include discussion of the preliminary results from these revised values in those meetings, SDG&E suggests additional configurable parameters workshops to review impacts of the new parallel operations configurations.

3. Please provide a summary of your organization’s comments regarding the ISO’s proposed two-phase approach for establishing configurable parameters, with the first phase serving as a ramp-in period for Go-Live using a more conservative configuration

Given the temporal limitations for testing in STAGE with revised parameter values, SDG&E is supportive of the proposed two-phase approach for establishing reasonable configurable parameter starting values for production. However, SDG&E’s support for this plan does not preclude the need for emergency PRRs to revise these parameters should the outcomes in production warrant changes prior to the conclusion of the three-month evaluation period described in the February 26 presentation. We also urge CAISO to be cautious if it is considering further revisions to the parameter values prior to go-live. It will be critical to weigh the benefits of further revision with the operational importance of testing the market and understanding what to expect in terms of outcomes prior to the 5/1 go-live date. That is not to say that further adjustment in parallel operations should be completely counted out, but there is very limited time to test and analyze these values and their impacts on the market, and this is certainly a consideration for SDG&E.

4. Please provide a summary of your organization’s comments regarding the proposal to include lower imbalance reserve requirements as part of the Phase One Go-Live approach.

SDG&E supports this proposal and thanks CAISO for including this as part of the phase one go-live approach. However, SDG&E notes that any changes to the requirements should be data-driven and follow robust discussions with stakeholders.

5. Please provide a summary of your organization’s comments regarding the duration of the first phase of the two-phase approach.

No further comments.

1. Please provide a summary of your organization's comments on the February 26, 2026 DAME Configurable parameters implementation working group discussion.

The Six Cities acknowledge the CAISO’s proposal to adjust certain parameters for the parallel operations process and to use the results of these analyses to inform initial values at go-live, as discussed below.  The Six Cities also support the proposal to phase in changes to the initially-applied parameter values, as discussed during the February 26^th working group meeting. 

The Six Cities also support the recommendation by a representative of the CPUC during the February 26^th meeting for the CAISO to include in its analyses scenarios involving higher loads.  Such analyses could inform the timing for phase 2 changes under the implementation plan the CAISO has developed. 

Finally, the Six Cities have previously raised concerns regarding the need for the CAISO to act quickly, including to develop and file tariff changes with the Federal Energy Regulatory Commission (“FERC”), in the event that the configurable parameters (such as the parameter values for the bid cap and the default bid) that are in the CAISO Tariff merit adjustment prior to Phase 2 of the CAISO’s implementation plan. 

2. Please provide a summary of your organization’s comments regarding the proposal to implement the following configuration for Parallel Operations: enforcing flowgates and nomograms, reducing envelope multipliers to 60%, and lowering deployable factors to 60%

The Six Cities support the CAISO’s proposal to assess lower values for the envelope constraint multipliers and the deployable imbalance reserve factor as part of Parallel Operations. 

3. Please provide a summary of your organization’s comments regarding the ISO’s proposed two-phase approach for establishing configurable parameters, with the first phase serving as a ramp-in period for Go-Live using a more conservative configuration

The Six Cities support the phased approach for establishing configurable parameters and agree with the need to consider the timing for any adjustments as part of Phase 2 (which the CAISO currently estimates for September 2026) given that several months of Phase 1 operations may mean that revised requirements may be implemented during the late summer period.  For this reason, depending on the results of the Phase 1 analysis, the CAISO should remain flexible in its timing for Phase 2 adjustments.  For example, it could become necessary to adjust parameters to correct issues that emerge after go-live and, if so, those corrections should be implemented promptly.  Alternatively, it may make sense to hold off on adjustments in September due to concerns about impacts during unusually hot weather or tight supply conditions. 

The Six Cities also support the CAISO’s proposal to engage with stakeholders on a monthly basis during the remainder of the parallel operations process and post-go-live. 

4. Please provide a summary of your organization’s comments regarding the proposal to include lower imbalance reserve requirements as part of the Phase One Go-Live approach.

The Six Cities strongly encourage the CAISO to proceed with its proposal of including lower imbalance reserve requirements in the Phase 1 go-live approach. 

5. Please provide a summary of your organization’s comments regarding the duration of the first phase of the two-phase approach.

As noted above, the Six Cities agree with the need for flexibility in the start date for the second phase to avoid introduction of changes during summer conditions, unless adjustments are needed to correct urgent problems. 

1. Please provide a summary of your organization's comments on the February 26, 2026 DAME Configurable parameters implementation working group discussion.

Southern California Edison (SCE) supports CAISO’s proposed conservative, phased approach to setting DAME configurable parameters and appreciates the continued stakeholder dialogue on how these settings will be implemented during Parallel Operations and go-live. Overall, SCE supports the proposed Parallel Operations configuration—including enforcing flowgates and nomograms while reducing envelope multipliers and imbalance reserve (IR) deployable factors to 60%—as a reasonable starting point that preserves critical constraints and limits unintended congestion and storage state-of-charge impacts during the ramp-in period. SCE also supports establishing a two-phase framework for parameter implementation, but emphasizes that progression from Phase One to Phase Two should be guided by clearly defined objectives, success metrics, and transparent checkpoints informed by observed market and operational performance. In addition, SCE supports exploring lower IR requirements for Phase One, particularly for the CAISO balancing authority area, to better align procurement with reliability needs and mitigate the risk of redundant and costly procurement during initial implementation. Finally, SCE recommends that Phase One extend at least through the end of September to capture summer peak conditions, supported by regular stakeholder updates so that any needed parameter adjustments are evidence-based and can be made before moving to more aggressive settings.

2. Please provide a summary of your organization’s comments regarding the proposal to implement the following configuration for Parallel Operations: enforcing flowgates and nomograms, reducing envelope multipliers to 60%, and lowering deployable factors to 60%

SCE is supportive of the proposed Parallel Operations configuration parameter settings put forth in the February 26, 2026, meeting.  CAISO mentioned that it will consider adjusting three configurable parameters: Enforced Constraints, Envelope Multiplier, Imbalance Reserves (IR) Deployment Factor.     

CAISO’s proposed setting for Enforced Constraints appropriately balances the need to preserve critical network constraints with the need to limit unintended consequences associated with more aggressive storage and IR deployment factor assumptions. Therefore, SCE supports the exclusion of contingency constraints during Parallel Operations, as this reduces unnecessary complexity during an already transitional phase and focuses attention on the most operationally relevant constraints.  

With regards to the Envelope Multiplier constraint, CAISO’s sensitivity analysis highlighted that having higher envelope multipliers, in this case 85% relative to 60%, significantly increases the risk of infeasible awards and excessive early depletion of storage capability. With this Analysis, SCE believes the proposed 60 percent value is a more appropriate starting point that should limit the over-commitment of storage without impacting the CAISO’s ability to meet imbalance needs.    

Lastly, lowering the IR Deployment Factor to 60% should alleviate potential congestion costs realized when the IR Deployment Factor is set to 100%.    

Collectively, implementing these parameters at the aforementioned proposed levels are reasonable and will support continuous learning while also limiting unintended consequences. 

3. Please provide a summary of your organization’s comments regarding the ISO’s proposed two-phase approach for establishing configurable parameters, with the first phase serving as a ramp-in period for Go-Live using a more conservative configuration

SCE supports the CAISO’s phase-in proposal for establishing configurable parameters and the two-phase approach for go-live. The phased approach is essential given how certain DAME settings could significantly impact IR prices and awards for storage resources.  However, SCE emphasizes that the value of a two-phase framework depends on clearly articulated objectives, evaluation criteria, and feedback mechanisms. SCE recommends that CAISO should not treat the transition from Phase One to Phase Two as automatic or time-based, but rather as contingent on demonstrated performance. SCE recommends that the ISO explicitly define the constitution of success for Phase One, including metrics related to cost impacts, deliverability of procured imbalance reserves, storage state-of-charge behavior, and regional reliability outcomes to name a few. Utilizing these and other metrics will ensure that parameter adjustments for Phase Two will be evidence-based. SCE therefore encourages the ISO to frame the two-phase approach as an adaptive process, with formal checkpoints and stakeholder transparency, rather than as a predetermined escalation of parameter aggressiveness.

4. Please provide a summary of your organization’s comments regarding the proposal to include lower imbalance reserve requirements as part of the Phase One Go-Live approach.

SCE supports the concept of including lower Imbalance Reserve (IR) requirements as part of the Phase One Go-Live approach, particularly for the CAISO BAA. Going-live with potentially high requirements, set at the 97.5th percentile to cover uncertainty, discounts the existence of California’s robust Resource Adequacy framework and corresponding must-offer obligations that already ensure substantial real-time capability. SCE views the high percentile requirement as likely resulting in the procurement of IR that is likely redundant and costly.  SCE recommends that the CAISO consider lower IR requirements for CAISO BAA in Phase One, while allowing other regions to assess their own risk preferences based on local market structures and obligations. This approach would better align procurement with actual reliability needs and reduce unnecessary cost exposure during the initial DAME implementation period.

5. Please provide a summary of your organization’s comments regarding the duration of the first phase of the two-phase approach.

SCE recommends that the first phase of the two-phase approach extends through, at a minimum, to the end of September to encompass the full summer peak period. SCE believes it would be premature to transition to the originally proposed parameter settings before the CAISO and market participants would have observed system performance under peak load and stress conditions. In addition to extending Phase One through the peak season, SCE recommends that the ISO establish structured interim check-ins—such as bi-weekly stakeholder updates—during Phase One to share preliminary observations and identify any emerging issues. This approach would allow the ISO to distinguish between minor tuning needs and more fundamental design concerns before committing to Phase Two changes. Overall, SCE views a longer, well-monitored Phase One as essential to building confidence in the DAME framework.