Comments on straw proposal

1. Please provide a summary of your organization’s comments on the straw proposal.

ACP-California greatly appreciates the work that the CAISO has put into the development of a new approach to PTO participation through the Subscriber PTO initiative. The existence of new options, such as the Subscriber PTO model, to bring diverse clean energy resources online and deliver them to CAISO load is critical to meet the state’s decarbonization goals. Therefore, ACP-California supports development of the Subscriber PTO model to help transmission projects like TransWest Express, and other similarly situated proposed transmission lines, reach commercial operation. We also appreciate the formal stakeholder process and development of a Straw Proposal to review the proposed approach to Subscriber PTOs with stakeholders.

The Subscriber PTO model offers an alternative path for transmission developers, clean energy resource developers, and Load Serving Entities (LSEs) to use to bring diverse resources, and the transmission needed to deliver them, online – potentially in a timelier manner than other options (such as getting a transmission project approved through the typical Transmission Planning Process or “TPP”). Given the growing need for rapid development/capital deployment to deliver resources and meet increasing electricity demands, ACP-California applauds CAISO for working on this option and putting the Subscriber PTO proposal forward.

ACP-California does not offer comments on each element of the proposal, but primarily focuses these comments on the question the CAISO posed as to whether network upgrades necessitated by a Subscriber PTO line should be reimbursed, as they are for internal resources and as they are proposed to be for resources connecting to neighboring systems that require network upgrades within CAISO. As discussed in these brief comments, CAISO should maintain a consistent policy for Subscriber PTOs as it does for other types of interconnection customers and, therefore, should reimburse network upgrades necessitated by a Subscriber PTO interconnection. We also urge CAISO to build in flexibility to the Subscriber PTO model to help it be well situated for potential future use beyond the immediate case of TransWest Express.

2. Please provide your organization’s comments on the proposed use of encumbrances, as described in the straw proposal.

ACP-CA requests that, as CAISO develops the Subscriber PTO model, it considers a broader suite of potential configurations for Subscriber PTOs. To that end, we request that CAISO provide more information on the proposed treatment of third-party transmission rights, or entitlement rights, across non-CAISO BAs and how they would be treated in the Subscriber PTO model. The Subscriber PTO model should be scoped to accommodate Subscriber PTO-owned facilities that are not directly connected to the CAISO BA, but can show access to, or contractual rights to, long-term firm transmission service between the Subscriber PTO-owned facilities and the CAISO BA, whether that transmission access or rights are controlled directly by the Subscriber PTO or by underlying subscribers to the Subscriber PTO facilities.  Accommodating this scenario would maximize the potential for the utilization of the Subscriber PTO model in the West. We note that this treatment of entitlement rights will require coordination with other western BAs and suggest the proposal and associated documentation be written in a way to accommodate this coordination.

3. Please provide your organization’s comments on the proposed transmission charges overall, in the straw proposal.

No comments at this time. 

4. Please provide your organization’s comments on the proposed cost to subscriber’s process, as described in the straw proposal.

No comments at this time. 

5. Please provide your organization’s comments on the proposed cost to non-subscriber’s as described in the straw proposal.

No comments at this time. 

6. Please provide your organization’s comments on the proposed Generator Interconnection Process, as described in the straw proposal.

No comments at this time. 

7. Please provide your organization’s comments on the issue of reimbursement for network upgrades, as discussed in the straw proposal.

CAISO’s current policy provides for the reimbursement of network upgrades to interconnection customers that interconnect to the CAISO internal system. Additionally, CAISO has proposed (in Docket ER23-941) to also reimburse external interconnection customers (i.e. those connecting to a neighboring balancing authority) who finance network upgrades within CAISO in order to maintain reliability. CAISO stated in its filing that it believed this proposal to reimburse generators interconnecting to neighboring systems was just and reasonable. CAISO pointed to FERC precedent that network upgrades represent improvements to the integrated transmission system as part of its justification for this new proposal for interconnection customers in neighboring systems that must finance upgrades within CAISO. It would be inconsistent for CAISO to NOT provide reimbursements for network upgrades on the CAISO system that are required to reliably allow a Subscriber PTO to interconnect. Those upgrades on the CAISO system will also provide improvements to the integrated CAISO transmission system, just as they would if the Subscriber PTO were a neighboring BA. Therefore, CAISO should provide for reimbursement of network upgrades necessitated by the interconnection of the Subscriber PTO.

8. Please provide your organization’s comments on the proposed Transmission Planning Process and Transmission Issues, as described in the straw proposal.

No comments at this time.  

9. Please provide your organization’s comments on the proposed Deliverability Allocation Process, as described in the straw proposal.

ACP-California understands that Subscriber PTO applicants will go through the CAISO generator interconnection and deliverability allocation process, whereas generation interconnecting outside the CAISO BAA that is seeking to provide RA to CAISO LSEs, will require a MIC allocation in order to count for resource adequacy. Both processes are used to convey deliverability of a certain resource type (internal and external) to load within CAISO. 

The proposal to require the generation associated with the Subscriber PTO to go through the interconnection and deliverability allocation process, just like any other generator, appears reasonable and should serve to preserve the existing Maximum Import Capability (MIC) in the region, which is important, especially in this particular instance.

However, ACP-California suggests that the CAISO consider or ensure the process used for Subscriber PTO deliverability allocation is flexible enough to allow for the transition of MIC to “Subscriber PTO enabled” deliverability. In other words, the process should provide some ability to preserve deliverability if a Subscriber PTO applicant first secures MIC but then later enters the interconnection queue to become a Subscriber PTO as part of the CAISO BAA. That capacity should be able to be transitioned from MIC to “Subscriber PTO enabled” deliverability. We recognize this may require some revisions to the current MIC processes, but hope the CAISO is open to scoping the Subscriber PTO model in a way to allow for this type of transition.

1. Please provide a summary of your organization’s comments on the straw proposal.

The California Community Choice Association (CalCCA) appreciates the opportunity to comment on the subscriber participating transmission owner (PTO) model straw proposal. When developing the model, the California Independent System Operator (CAISO) should keep in mind that the policy developed here will apply not only to TransWest Express, but also any future projects that elect to use the subscriber PTO model. In that vein, CalCCA recommends the CAISO further solidify the rules around cost recovery outside of the subscriptions. CalCCA understands that because the TransWest Express line is fully subscribed, there will be no capital costs left to recover after the subscriptions end. Therefore, only going forward operations and maintenance costs will go into the Transmission Access Charge (TAC) after the subscriptions end. The CAISO should make clear in its proposal that capital costs from projects using the subscriber PTO model will not go in the TAC, meaning the capital costs of the project are fully recovered by the subscribers. Otherwise, projects using the subscriber PTO model could circumvent the Transmission Planning Process and still get a portion of its capital costs recovered through the TAC.   

2. Please provide your organization’s comments on the proposed use of encumbrances, as described in the straw proposal.

CalCCA has no additional comments at this time.

3. Please provide your organization’s comments on the proposed transmission charges overall, in the straw proposal.

CalCCA has no additional comments at this time.

4. Please provide your organization’s comments on the proposed cost to subscriber’s process, as described in the straw proposal.

CalCCA has no additional comments at this time.

5. Please provide your organization’s comments on the proposed cost to non-subscriber’s as described in the straw proposal.

CalCCA has no additional comments at this time.

6. Please provide your organization’s comments on the proposed Generator Interconnection Process, as described in the straw proposal.

CalCCA has no additional comments at this time.

7. Please provide your organization’s comments on the issue of reimbursement for network upgrades, as discussed in the straw proposal.

CalCCA has no additional comments at this time.

8. Please provide your organization’s comments on the proposed Transmission Planning Process and Transmission Issues, as described in the straw proposal.

CalCCA has no additional comments at this time.

9. Please provide your organization’s comments on the proposed Deliverability Allocation Process, as described in the straw proposal.

CalCCA has no additional comments at this time.

1. Please provide a summary of your organization’s comments on the straw proposal.

The California Department of Water Resources State Water Project (SWP) generally supports CAISO’s development of the Subscriber PTO model. This model is particularly well-suited for the TransWest Express transmission project, which was not selected in the CAISO Transmission Planning Process (TPP) and therefore should not be paid for through the CAISO TAC. As discussed in more detail in these comments, SWP urges the CAISO to clarify certain aspects of the Straw Proposal to ensure that CAISO load-serving entities do not bear the risk of additional costs that should properly be allocated to a project’s subscribers.

2. Please provide your organization’s comments on the proposed use of encumbrances, as described in the straw proposal.

The Straw Proposal indicates that subscribers of a Subscriber PTO project will be exempt from bid cost recovery allocation, offsets and IFM congestion allocation, consistent with the exemption for other holders of encumbrances.

SWP does not believe that a subscriber that chooses not to bid in the day-ahead market and then subsequently causes a redispatch in real-time should be exempt from the resulting uplift charges. SWP urges CAISO to evaluate whether it would be appropriate to require subscribers to bid in the day-ahead market in order to be eligible for the exemption from uplift. SWP expects that most subscribers will be resource adequacy resources and will already have a day-ahead bidding obligation. So a new requirement for subscribers to bid in the day-ahead market would apply to only a subset of subscribers that are not resource adequacy resources.

SWP also requests that CAISO confirm that non-subscribers will not be exempt from bid cost recovery allocation and offsets.

3. Please provide your organization’s comments on the proposed transmission charges overall, in the straw proposal.

SWP strongly supports the principle that the costs of a Subscriber PTO project will not be included in CAISO TAC. Entities that choose to use the transmission capacity of the project, either as a Subscriber or a Non-Subscriber, will pay for that use in accordance with a FERC-approved tariff. But CAISO load that does not use that capacity should not bear any additional cost.

SWP urges CAISO to clarify whether there are any circumstances in which the costs of a Subscriber PTO project could, in the future, be included in the CAISO TAC. SWP understands that after a Subscriber PTO’s Transmission Service Agreements terminate (which is expected to be 30 or more years into the future), the transmission capacity will be treated as unsubscribed capacity subject to a Subscriber Wheeling Charge that will be paid by non-subscribers that choose to use that capacity. CAISO should clarify that such unsubscribed capacity will not be included in the CAISO TAC in the future.

SWP also understands that the entire capacity of a Subscriber PTO project will be included as existing transmission in future TPPs. CAISO should clarify whether a Subscriber PTO will be permitted, in future TPPs, to seek to include any unsubscribed capacity in the CAISO TAC. And if that is permitted, CAISO should clarify how it will evaluate such a request.

4. Please provide your organization’s comments on the proposed cost to subscriber’s process, as described in the straw proposal.

 See comments on Question 3.

5. Please provide your organization’s comments on the proposed cost to non-subscriber’s as described in the straw proposal.

 See comments on Question 3.

6. Please provide your organization’s comments on the proposed Generator Interconnection Process, as described in the straw proposal.

SWP believes that, consistent with the principle that CAISO TAC should not increase as the result of a Subscriber PTO project, any generator interconnecting to a Subscriber PTO project should be responsible for any deliverability network upgrades that are required as part of the generator interconnection request and study process. That is, CAISO TAC customers should not reimburse a generator for deliverability network upgrades, if that generator is interconnecting with a Subscriber PTO project. Because the CAISO will have determined in the TPP that the Subscriber PTO project is not a least-cost project to meet a CAISO reliability, economic, or policy need, a generator interconnecting to that Subscriber PTO project should be fully financially responsible for any upgrades to the CAISO grid needed for deliverability.

7. Please provide your organization’s comments on the issue of reimbursement for network upgrades, as discussed in the straw proposal.

 See comments on Question 6.

8. Please provide your organization’s comments on the proposed Transmission Planning Process and Transmission Issues, as described in the straw proposal.

No comment.

9. Please provide your organization’s comments on the proposed Deliverability Allocation Process, as described in the straw proposal.

No comment.

1. Please provide a summary of your organization’s comments on the straw proposal.

The Energy Division of the California Public Utilities Commission (CPUC) develops and administers energy policy and programs to serve the public interest, advise the Commission, and ensure compliance with CPUC decisions and statutory mandates.  The Energy Division provides objective and expert analyses that promote reliable, safe, and environmentally sound energy services at just and reasonable rates for the people of California.^[1]   Further, the Energy Division advocates on behalf of California ratepayers at the Federal Energy Regulatory Commission (FERC).

CPUC Energy Division Staff (Staff) appreciate the opportunity to provide comments on the new process for transmission cost recovery proposed by CAISO, the Subscriber Participating Transmission Owner Model (Subscriber PTO Model). 

Recognizing Potential Benefits for Resource Planning

One reason CAISO is developing this new model is to accommodate FERC’s subscriber-funded transmission development approach.[2]  Energy Division appreciates the potential benefits of a subscriber-funded transmission approach for procuring out-of-state resources that contribute to diversity in options for resource technologies and geographic locations.  As stated in our comments on the December 5, 2022, meeting and Update Paper,[3] a recent CPUC decision, Decision 22-02-004, included 1,500 MW of out-of-state resources as part of the preferred system plan. The decision emphasized the CPUC’s expectation that it will continue to evaluate the need for out-of-state resources from Wyoming, Idaho, and New Mexico.

Summary of Energy Division Comments

Staff comments on the February 7, 2023, Straw Proposal and February 15, 2023, Stakeholder meeting on the Subscriber PTO Model address:

• Traditional transmission planning under the CAISO Transmission Planning Process (TPP) compared to this new model,
• The procedural process for stakeholder scrutiny of transmission lines developed under the Subscriber PTO Model,
• How CAISO will evaluate whether excess capacity exists, hedging and congestion, non-subscriber charges,
• Potential cost impacts to Load Serving Entity (LSE) customers and the Transmission Access Charge (TAC) if a Subscriber PTO line is later converted to a CAISO asset and a subscription service agreement ends before the line has been fully paid for, and
• Potential cost impacts to LSE and utility ratepayers of generator interconnection-related network upgrades. 

[1] More information about the CPUC Energy Division is available at: https://www.cpuc.ca.gov/about-cpuc/divisions/energy-division. 

[2] Deb Le Vine, et. al., Subscriber Participating TO Model Straw Proposal (2023) (Straw Proposal), pp. 3-5.    

[3] Available at (accessed on February 23, 2023): http://www.caiso.com/InitiativeDocuments/CPUC-Energy-Division-Comments-Subscriber-Participating-Transmission-Owner-Model-Dec52022.pdf.

2. Please provide your organization’s comments on the proposed use of encumbrances, as described in the straw proposal.

While recognizing the potential benefits for resource planning, Energy Division is concerned that the proposed Subscriber PTO Model may result in less efficient regional and interregional transmission planning and lead to suboptimal use of utility ratepayer funding.  Energy Division understands that under this new model, a transmission project would undergo a FERC-approved open solicitation process to find a subscriber(s) to pay for it, but the project would be treated as an assumed project under the CAISO TPP.  Energy Division is concerned that if the CAISO simply assumes in the TPP that transmission lines proposed under the Subscriber PTO Model already exist, the value of the CAISO TPP may be diminished, and/or that future improvements in the interregional transmission planning process may not allow for full consideration of more efficient and cost-effective alternatives.  Importantly, as discussed in more detail below, non-subscribers, potentially including utility ratepayers in the CAISO BAA, could be held responsible for the cost of projects developed under the Subscriber PTO Model, along with wheeling and other charges related to such projects.   

Energy Division is also concerned that projects approved under a Subscriber PTO Model would be subject to significantly less scrutiny by the CAISO and stakeholders than projects approved using the CAISO TPP. For example, given that projects approved under the Subscriber PTO model will be treated as assumed, instead of being evaluated for need prior to construction under the CAISO TPP, it is unclear how, and to what extent, the CAISO will evaluate whether the excess capacity exists in the first place. [1]  The straw proposal remarkably states that the CAISO is taken “out of the decision-making process with respect to resource procurement, allowing the load serving entities or other contracting parties to determine the most economic and best fit for their own portfolios.”[2]  The CPUC, however, respectfully submits that the CAISO must be an integral part of the approval process for transmission projects developed under the Subscriber PTO Model, and, specifically, that prior to the CAISO deciding whether to execute and submit to FERC the Applicant Participating Transmission Owner Agreement, the CAISO must adequately scrutinize the terms of the proposed agreement and the underlying transmission project. 

It is also not clear to Energy Division whether stakeholders will have adequate, if any, opportunities to review transmission projects proposed for development under the Subscriber PTO Model.  By contrast, the CAISO TPP provides stakeholders an opportunity to evaluate transmission limitations and reliability concerns that cause a need for new transmission.  Stakeholders in the TPP are also, to varying extents, able to evaluate the efficiency and cost-effectiveness of particular transmission projects.  The CPUC urges the CAISO to provide stakeholders meaningful opportunities to review and provide input on proposed transmission projects to be developed under the Subscriber PTO Model.

The straw proposal states that on a case-by-case basis agreements between transmission owners and their service customers that do not qualify for the Subscriber PTO Model will be considered and treated as encumbrances.[3]  Energy Division requests more information about this process. 

The straw proposal explains that it will honor subscriber rights as encumbrances because “[i]f subscriber rights are not recognized through Encumbrances, it is likely that subscriber-funded transmission projects” will not be built.[4]  CAISO also states that existing rights holders are held “harmless from the cost of transmission and congestion because they have already paid for the transmission service…”[5]  Additionally, the proposal states that subscriber rights will “receive the ‘perfect hedge’ and scheduling priority since the contract rights holder will pay for the transmission under its transmission service agreement.”[6]  Energy Division understands a "perfect hedge" for subscribers refers to CAISO’s proposal not to collect congestion revenues for the injection points associated with a subscriber line.  Energy Division asks whether revenue inadequacy could result, meaning the amount of congestion revenues collected could be less than the amount of Congestion Revenue Rights (CRR) issued by the CAISO.  CAISO would need to accurately reflect the absence of congestion revenues in its modeling, essentially forecasting the amount of congestion at certain points in the system.  Accurately forecasting congestion could be challenging for a new transmission line because there is no history of transmission flows.  Energy Division believes more evaluation is needed regarding the potential consequences of exempting subscribers from paying for congestion costs. 

Energy Division requests a response to the following questions:

• What criteria will CAISO use to evaluate projects that are eligible for the Subscriber PTO Model?
• How does CAISO evaluate whether there is actually excess capacity (unsubscribed capacity) on the transmission lines?  Will Subscriber PTO projects undergo the same kind of engineering and modeling scrutiny that CAISO performs under the TPP?
• Will CAISO initiate a stakeholder process for each project proposed under the Subscriber PTO Model?  Will applications for Subscriber PTO agreements be reviewed in a CAISO-facilitated stakeholder process prior to submission at FERC? 
• What criteria will CAISO use to evaluate projects that are eligible for the Subscriber PTO Model?
• Would CAISO move forward with a Subscriber PTO project that is not fully subscribed? 
• Under the Subscriber PTO Model, will stakeholders be provided the same kind of data that is available about transmission projects that are reviewed under the CAISO TPP before construction? As noted, Energy Division understands that projects in the Subscriber PTO Model will be added to the TPP’s inputs and assumptions as assumed projects.
• How will CAISO evaluate agreements that are treated as encumbrances and do not qualify under the Subscriber PTO Model? Will each proposed agreement for a new PTO under the Subscriber PTO Model be evaluated through a stakeholder process?  What will be the deciding factors to accept such agreements?
• Could CAISO explain the full implications of the perfect hedge treatment of congestion costs for subscribers?  Specifically, could CRR holders be at greater risk of revenue inadequacy as a result of adding new encumbrances to the CAISO system? 

[1] Straw Proposal, p. 5 (explaining that under the proposed Subscriber PTO Model, the PTO would turn over operational control of their project to CAISO to allow excess capacity to enter the CAISO markets).

[2] Id. at p. 4.

[3] Straw Proposal, footnote 10. 

[4] Id. at p. 6.

[5] Id.

[6] Id.

3. Please provide your organization’s comments on the proposed transmission charges overall, in the straw proposal.

Energy Division understands potential charges for subscribers and non-subscribers can be summarized by the following table.  Note that transmission interconnection and generator interconnection costs are not represented.    

Energy Division is concerned about the transparency of development of access charges for non-subscribers.  For example, TransWest will develop Subscriber Wheeling Charges (SWC), access charges that will be included in the Transmission Access Charge (TAC), and Wheeling Access Charges (WAC) for use of transmission capacity that will be charged to non-subscribers. Will their general methodology to develop these charges be disclosed to stakeholders?  Energy Division understands that minimal information is available in CAISO’s application to FERC for TransWest (FERC number ER23-823). 

Energy Division is also concerned about the potential conversion of costs that had originally been borne by subscribers but could eventually be added to the CAISO TAC.  In the February 15, 2023, meeting, stakeholders asked about costs later being included in the TAC.  CAISO indicated that Subscriber PTO operations and maintenance costs could be recovered through the CAISO TAC after the subscription service agreement ended.  Load Serving Entities (LSE) are very concerned that projects would start out under the Subscriber PTO Model and then responsibility would later shift to load customers throughout the CAISO for associated TAC charges in the event subscribers could not honor their commitments.  Further, in the straw proposal the CAISO states in response to a question from Cal CCA that:

[o]nce the subscription ends, then like other Participating TOs, the Subscriber Participating TO will need to establish a regional access charge for any remaining costs (e.g., of upgrades to the initial facilities) and ongoing costs after the term of the subscriptions to be recovered through the ISO’s TAC if the line is still within the ISO balancing area.[1]

However, the straw proposal also states that for projects developed under the Subscriber PTO Model, “excess transmission would be available for the ISO markets.”[2]  Energy Division seeks the CAISO’s confirmation that in the event that a subscriber(s) defaults on its Transmission Service Agreement or otherwise fails to meet its commitments under the agreement that any excess transmission would be available in the CAISO markets.

During the February 15, 2023 meeting, the CAISO also indicated that the goal of the program would be for the transmission lines to be fully depreciated and the full revenue requirement to be recovered by the subscriber arrangement, but did not describe any program parameters that would prevent TAC charges in the event subscription service arrangements end prematurely.  Energy Division recommends CAISO put in place guardrails requiring subscription service arrangements to be maintained for the life of the projects, or until the transmission line is fully depreciated.  For example, in the straw proposal, the CAISO states that “[i]n the case of TransWest, [CAISO] understands that the Transmission Service Agreements resulting from the FERC-approved solicitation will be for 30 years with a single opportunity to extend the agreement for five years.”[3] [Emphasis added.] To help ensure that the cost of projects developed under the Subscriber PTO Model will not be prematurely recovered through the TAC, Energy Division recommends that the CAISO expressly require that Transmission Service Agreements include a provision that specifies an adequate contract term (e.g., “of no less than thirty years”).  Energy Division also recommends that both the CAISO Tariff amendment to implement the Subscriber PTO Model, and the Transmission Control Agreements executed between the CAISO and the PTOs, expressly provide that the PTOs “assume the full financial risk” for the transmission project at issue,[4] thereby ensuring that project costs will not be recovered through the TAC in the event that a subscriber defaults on its Transmission Service Agreement or otherwise fails to meet its commitments before the transmission line is fully depreciated or before the agreement ends.  

More broadly, Energy Division is concerned that ratepayers of utilities and LSEs in the CAISO BAA could potentially end up being responsible for construction costs, operations and maintenance, and generator interconnection and network upgrade costs if conditions change and parties to subscription service agreements are no longer able to honor their commitments.  At the same time, CAISO has indicated since the Subscriber PTO Model concept was first introduced, that the intent of the program is to avoid recovering the cost of new transmission projects through the TAC.  If the intent of the Subscriber PTO Model is to avoid cost recovery though the TAC, then the model should include guardrails to help ensure that the TAC will not be used in the future to recover the initial cost of transmission lines developed under the model or any subsequent upgrades or interconnection costs.  As discussed below, Energy Division recommends CAISO put in place guardrails that prevent future upgrades and interconnection costs from being recovered through the TAC. 

[1] Straw Proposal, p. 9 (emphasis added). 

[2] Id. at p. 5.

[3] Id. at p. 7 (emphasis added).

[4] See e.g., Transmittal Letter for Filing of Applicant Participating Transmission Owner Agreement with TransWest Express, LLC, Service Agreement No. 7587, Docket No. ER23-838-000 (Jan. 13, 2023) at 5 (emphasis added) (where the CAISO explains that “TransWest . . . stated in its application that the costs of the Project would not be included in the CAISO’s Transmission Access Charge; rather, TransWest intends that the transmission capacity will be paid for by its transmission customer (i.e. PCW).”); TransWest Express LLC, 174 FERC ¶ 61,160 at P 10 (2021) (where FERC explains that “TransWest states that it has assumed and will continue to assume the full financial risk for the TWE Project.”).

4. Please provide your organization’s comments on the proposed cost to subscriber’s process, as described in the straw proposal.

Energy Division has no comments on this issue at this time.

5. Please provide your organization’s comments on the proposed cost to non-subscriber’s as described in the straw proposal.

Energy Division believes that any costs that are charged to non-subscribers should be equitable.  During the February 15, 2023, meeting, stakeholders asked about non-subscribers, such as WEIM participants and whether the reciprocity rule applied.  CAISO indicated that off-takers (subscribers) in the CAISO BAA would pay the subscriber charge but transfers to non-CAISO BAA WEIM entities through the WEIM real-time market would not be charged because of the reciprocity rules in WEIM.  

CAISO indicated that it is still considering whether EDAM participants would pay because subscribers utilizing their rights is akin to a self-schedule where participants would be charged the applicable transmission charges.  Energy Division believes that this approach seems more equitable.  Energy Division asks, would a non-subscriber EDAM participant be able to utilize the transmission, and would there be a charge?    

6. Please provide your organization’s comments on the proposed Generator Interconnection Process, as described in the straw proposal.

The CPUC previously commented on the topic of out-of-state customers being allocated the cost of network upgrades. The CPUC also commented on the generation interconnection-related upgrades and the impact to California ratepayers. CAISO’s response was that “subsequent network upgrade allocation would be contingent upon the reason for the upgrade”[1] and any upgrade triggered by generator interconnections are already recovered through an allocation method deemed just and reasonable by FERC (i.e., the TAC).[2]  Energy Division reiterates the issue that out-of-state customers still stand to benefit from California customers if generation interconnection upgrades are automatically added to the TAC.  

Further, Energy Division recommends CAISO put in place guardrails that prevent future generator interconnection-related upgrades costs from being automatically recovered through the TAC.    Given that projects developed under the Subscriber PTO Model would be treated as assumed under the CAISO TPP projects and implemented independent of stakeholder scrutiny in the TPP, CAISO should be more cautious and do more to ensure low costs for LSE and utility ratepayers in the CAISO BAA.  If the intent of the Subscriber PTO model is to avoid cost recovery for transmission projects developed under the model through the TAC, then generator interconnection-related upgrades to such projects should also not be recovered through the TAC. 

[1] Straw Proposal, p. 10.

[2] Id. at p. 14.

7. Please provide your organization’s comments on the issue of reimbursement for network upgrades, as discussed in the straw proposal.

Stakeholders, including Flynn RCI, at the February 15, 2023, stakeholder meeting suggested that PTOs should not be reimbursed for network upgrades under the Subscriber PTO Model.  Energy Division agrees and recommends that network upgrades should not be automatically reimbursed for projects developed under the Subscriber PTO Model.  Given that these projects would be treated as assumed under the CAISO TPP and implemented independent of stakeholder scrutiny in the TPP, the CAISO should be more cautious and do more to ensure low costs for LSE and utility ratepayers in the CAISO BAA.  If the intent of the Subscriber PTO Model is to avoid recovering the cost of projects developed under the model through the TAC, then the cost of network upgrades to such projects should also not be recovered through the TAC.  Like with generator interconnection-related upgrades, Energy Division recommends that CAISO put in place guardrails that prevent network upgrade costs from being automatically recovered through the TAC. 

8. Please provide your organization’s comments on the proposed Transmission Planning Process and Transmission Issues, as described in the straw proposal.

As discussed above in Section 2, Energy Division is concerned that the proposed Subscriber PTO Model may result in less efficient regional and interregional transmission planning and lead to suboptimal use of utility ratepayer funding.  Energy Division understands that under this new model, transmission projects are treated as assumed projects under the CAISO TPP.  CAISO has stated the Subscriber PTO is a unique “category of transmission [being] placed under the ISO’s operational control”[1] and that once the Subscriber PTO Model is approved by the CAISO Board, it will “execute the Applicant Participating Transmission Owner Agreement requiring the Subscriber Participating TO to fully participate in the TPP and generator interconnection process in advance of turning over operational control of their transmission facilities to the ISO.”[2]  

Energy Division believes the TPP is an important tool used to assess projects’ feasibility and utility before project construction begins, not just before turning over operational control to CAISO.  Energy Division recommends additional scrutiny before accepting Subscriber PTO projects for inclusion in the CAISO system. 

Please also refer to comments in section 2. 

[1] Straw Proposal, p. 15.

[2] Id. at p. 15.

9. Please provide your organization’s comments on the proposed Deliverability Allocation Process, as described in the straw proposal.

Energy Division has no comments on this issue at this time.

1. Please provide a summary of your organization’s comments on the straw proposal.

Clearway Energy Group (Clearway) appreciates the opportunity to comment on the straw proposal. Clearway supports the Subscriber PTO model as a route to get regional transmission built on the scale and timeline that California needs. The Subscriber PTO concept is complex, and elements of the straw proposal would benefit from further clarification, including the treatment of congestion revenue rights and interactions with EIM and EDAM.

At this stage, Clearway’s specific comments on the straw proposal are limited to the question of reimbursement for network upgrades. As a developer and owner-operator of generating resources both in California and across the West, Clearway believes it is very important to maintain a level playing field as the CAISO moves to integrate more out-of-state resources. The generators connecting to the Subscriber PTO line should be treated equitably to other generators and should therefore be eligible for reimbursement of any network upgrades triggered on the existing CAISO system, since those upgrades will benefit all users of the CAISO system.

2. Please provide your organization’s comments on the proposed use of encumbrances, as described in the straw proposal.

3. Please provide your organization’s comments on the proposed transmission charges overall, in the straw proposal.

4. Please provide your organization’s comments on the proposed cost to subscriber’s process, as described in the straw proposal.

5. Please provide your organization’s comments on the proposed cost to non-subscriber’s as described in the straw proposal.

6. Please provide your organization’s comments on the proposed Generator Interconnection Process, as described in the straw proposal.

7. Please provide your organization’s comments on the issue of reimbursement for network upgrades, as discussed in the straw proposal.

Clearway's position is that network upgrades (NUs) on the ISO’s existing system triggered by a subscriber resource should receive the same cost allocation and reimbursement treatment as an NU triggered by any other resource interconnecting into the CAISO’s balancing area and should be reimbursable through the TAC.

In addressing this question, Clearway recommends that the CAISO draw a clearer distinction between the transmission line and its subscriber generators. Most of the unique features of the Subscriber PTO model pertain to the transmission line itself, not the generators that connect to it; the subscriber generators will apply for interconnection and seek power purchase agreements with load-serving entities just like other generators. Ensuring fair treatment of these generators in the interconnection process will be important to making the Subscriber PTO model viable.

Developing new transmission without increasing the TAC is one of the primary objectives of this initiative, and the Subscriber PTO model as laid out in the straw proposal meets this objective, since it excludes from the ISO TAC both (1) the costs of the transmission line itself and (2) any network upgrades on the Subscriber PTO facility triggered by a subscriber. By contrast, NUs that may be triggered on the existing CAISO system by the generators interconnecting to the Subscriber PTO facility through the interconnection process are costs associated with the generators, not the transmission line.

Any network upgrade on the ISO’s existing system triggered by a resource on the Subscriber PTO project should receive the same cost allocation and reimbursement treatment as an NU triggered by any other resource. For example, if a resource in Wyoming that is subscribed to a Subscriber PTO facility triggers an NU on an existing CAISO PTO’s facility in Cluster 15 (e.g. Eldorado 500 kV), then it should be treated as an affected PTO NU and should be eligible for reimbursement through the TAC. The benefits of an NU in this case would not be limited to the generators subscribing to the Subscriber PTO project; they would be shared by other generation resources serving CAISO load and would also improve reliability of a major path serving CAISO load from resources within the CAISO BAA. This is the same logic behind reimbursement of NUs anywhere on the CAISO system.

8. Please provide your organization’s comments on the proposed Transmission Planning Process and Transmission Issues, as described in the straw proposal.

9. Please provide your organization’s comments on the proposed Deliverability Allocation Process, as described in the straw proposal.

1. Please provide a summary of your organization’s comments on the straw proposal.

EDF-R appreciates this opportunity to comment on the Subscriber Participating TO Model Straw Proposal as discussed on the Feb 15 stakeholder meeting. EDF-R is in favor of regionalization and recognizes that the magnitude of new transmission needed to meet future renewables goals will require novel thinking for transmission development.

In the comments below EDF-R requests CAISO address several items in the next paper iteration:

• In the event Subscriber PTOs exercises their encumbrance rights in RT but not DA, how are congestion and resettlement costs settled?
• Clarify the ISO TAC vs Subscriber Regional TAC confusion on page 8 and 9 of the paper, and mock up a draft of the new TPP process flowchart
• Identify if Subscriber PTO boundary changes can affect existing locked in MIC allocations, and if so, how will that be handled?

2. Please provide your organization’s comments on the proposed use of encumbrances, as described in the straw proposal.

3. Please provide your organization’s comments on the proposed transmission charges overall, in the straw proposal.

4. Please provide your organization’s comments on the proposed cost to subscriber’s process, as described in the straw proposal.

 EDF-R encourages CAISO to provide additional analysis and consideration on the uplift issue discussed on the call. In CAISO’s Subscriber PTO model, the CAISO plans to give subscribers encumbrances equivalent to their subscription level, so from a transmission planning process modeling perspective that encumbrance is just excluded from the ISO’s model. On to market modeling considerations, the whole of the transmission must be modeled in the market model, and then in subscriber can schedule on the encumbrance in any and all market runs. Ideally, the Subscriber would schedule energy on their encumbrance consistently in the Day Ahead (DA) Market and the Real Time (RT) markets. However, it seems there is that the Subscriber PTO is able to increase or decrease their schedule between DA and RT. EDF-R understands the Subscriber PTO uplift question to be, “How are things going to be settled with respect to schedule discrepancies between DA and RT?”  For example, if a 200 MW Subscriber Resource schedules 120 MW in the DA, its remaining 80 MW encumbrance is released and scheduled on by Non-Subscribing Resources. Then the Subscriber Resource (who is entitled to scheduling priority) changes their strategy and schedules 200 MW in the RT. Transmission avaliablity has changed between DA and RT and it could then be that the DA was not optimally optimized and that the RT schedule increase creates congestion and resettlement costs. How are congestion and resettlement costs settled in this scenario?

The conversation for this topic is still ongoing in the context of EDAM and details are still to be worked out. EDF-R requests CAISO include consideration of this scenario in the next iteration of this proposal. CAISO’s straw proposal simply states that Subscribers will be "excluded from bid cost recovery", but it is not clear if this real time congestion offset scenario applies or not.

5. Please provide your organization’s comments on the proposed cost to non-subscriber’s as described in the straw proposal.

6. Please provide your organization’s comments on the proposed Generator Interconnection Process, as described in the straw proposal.

7. Please provide your organization’s comments on the issue of reimbursement for network upgrades, as discussed in the straw proposal.

8. Please provide your organization’s comments on the proposed Transmission Planning Process and Transmission Issues, as described in the straw proposal.

EDF-R requests that with the next proposal iteration the CAISO provide an update to the Transmission Planning Process flow chart to outline new subscriber PTO process. The conversation on the Feb 15 meeting was a productive one, also illustrative that discussing this new process with existing terminology is resulting in some confusion. The current flow chart is in the BPM for Transmission Planning Process, section 8. 

EDF-R supports the notion that as additional generation projects seek to interconnect to the Subscriber Participating TO line, any upgrades triggered by the new interconnection should be recoverable by the customer. EDF-R requests clarification on CAISO’s interchanging use of “ISO TAC” and “Subscriber Regional TAC” on this matter:

• On the last paragraph of page 8 and first paragraph of page 9 CAISO indicates that future new interconnection costs will be reimbursed from a newly established Subscriber Regional TAC
• On page 9 CAISO’s Transmission Charge table indicates that non-subscribers will be reimbursed from “Subscriber develops an Access Charge to cover these additional costs and costs are added to the ISO TAC.”

Given that the whole Subscriber model is meant to allow for transmission projects to deliver renewable generation from out-of-state resource developers to California without increasing the ISO TAC, EDF-R assumes the page 9 table is a typo and that a new transmission planning flowchart would look something like this:

9. Please provide your organization’s comments on the proposed Deliverability Allocation Process, as described in the straw proposal.

EDF-R agrees that the process for establishing new boundary points is adequately covered by existing CAISO procedure. However, additional discussion is needed on MIC boundary points to identify if the boundary point changes caused by the addition of a Subscriber PTO could change or  eliminate existing boundary points, and if yes, what happens to the locked in MIC allocations at those boundary points? Locked in MIC allocations support existing power contracts and the creation of the Subscriber PTO process should not be allowed to jeopardize those contracts. It is possible some sort of legacy handling process will be needed to handle this scenario.

1. Please provide a summary of your organization’s comments on the straw proposal.

2. Please provide your organization’s comments on the proposed use of encumbrances, as described in the straw proposal.

3. Please provide your organization’s comments on the proposed transmission charges overall, in the straw proposal.

4. Please provide your organization’s comments on the proposed cost to subscriber’s process, as described in the straw proposal.

5. Please provide your organization’s comments on the proposed cost to non-subscriber’s as described in the straw proposal.

6. Please provide your organization’s comments on the proposed Generator Interconnection Process, as described in the straw proposal.

7. Please provide your organization’s comments on the issue of reimbursement for network upgrades, as discussed in the straw proposal.

8. Please provide your organization’s comments on the proposed Transmission Planning Process and Transmission Issues, as described in the straw proposal.

9. Please provide your organization’s comments on the proposed Deliverability Allocation Process, as described in the straw proposal.

1. Please provide a summary of your organization’s comments on the straw proposal.

LS Power has no comment at this time.

2. Please provide your organization’s comments on the proposed use of encumbrances, as described in the straw proposal.

LS Power has no comment at this time.

3. Please provide your organization’s comments on the proposed transmission charges overall, in the straw proposal.

LS Power has no comment at this time.

4. Please provide your organization’s comments on the proposed cost to subscriber’s process, as described in the straw proposal.

  In Section 3.3.1 Cost to Subscribers, the straw proposal states that the subscriber rights for an ISO load serving entity gets the transaction to Eldorado Substation. This is inconsistent with the current configuration of the TWE Project and the graphic depicted in Section 3.3.2. Subscriber rights should extend only to the point of interconnection of the new SPTO facilities and the existing ISO-controlled transmission system, in this case a new substation on the Harry Allen – Eldorado line. CAISO TAC and congestion charges between this interconnection and Eldorado Substation should still apply.

5. Please provide your organization’s comments on the proposed cost to non-subscriber’s as described in the straw proposal.

  LS Power has no comment at this time.

6. Please provide your organization’s comments on the proposed Generator Interconnection Process, as described in the straw proposal.

  LS Power has no comment at this time.

7. Please provide your organization’s comments on the issue of reimbursement for network upgrades, as discussed in the straw proposal.

  LS Power supports applying the existing policy for PTO reimbursement of network upgrades on the CAISO system resulting from SPTO facilities and subsequent generator interconnections.  As CAISO noted in the Interconnection Process Enhancement (IPE) 2021 initiative[1], network upgrades, regardless of their cause, benefit the local ratepayers, and therefore should be included in the relevant transmission revenue requirement, similar to any other upgrade. Further, the timing of such upgrades (Cluster 15 subscribers vs. later subscribers vs. non-subscribers) should not impact their eligibility for repayment.

[1] IPE 2021 Final Proposal, Section 5.2 - http://www.caiso.com/InitiativeDocuments/FinalProposal-InterconnectionProcessEnhancements2021Phase2.pdf

8. Please provide your organization’s comments on the proposed Transmission Planning Process and Transmission Issues, as described in the straw proposal.

  In prior discussions, CAISO indicated that TWE is already modeled in the TPP and the only difference is that it will be considered inside CAISO BAA versus outside the BAA.  LS Power requests CAISO clarify the rules for including new SPTO lines in the TPP base cases.  What is the milestone such new SPTO line has to meet to be included in a base case?

9. Please provide your organization’s comments on the proposed Deliverability Allocation Process, as described in the straw proposal.

  Given that CAISO has the ability to transfer MIC deliverability to internal resources, LS Power requests clarification on whether or not CAISO intends to do so in this case.  Deliverability allocation for resources connecting to SPTO facilities should not degrade existing MIC.  Because the project is connecting to an existing intertie, it is reasonable to believe the resulting MIC in the area will be affected as the additional injection will contribute to the same downstream constraints.  Consistent with the current practice followed by CAISO, existing MIC and MIC expansion in current TPP should retain priority above the deliverability allocation for the resources connecting to SPTO facilities that enter future CAISO queue clusters.

1. Please provide a summary of your organization’s comments on the straw proposal.

NextEra Energy Resources, LLC (NextEra Resources) subsidiaries own and operate wind facilities, solar facilities, transmission assets, and battery energy storage systems in more than 20 counties across the state, representing approximately $7.8 billion in capital investment in California. We are a leader in clean energy with our own Real Zero™ goal – an industry-leading goal to eliminate carbon emissions from our operations by no later than 2045, while leveraging low-cost renewables to drive energy affordability for customers. As a renewable developer, NextEra Resources favors transmission construction and interconnection policies that serve California’s clean energy goals and support grid resiliency and reliability. To that end, NextEra supports development of a subscriber-based transmission model that is workable for customers and developers of renewable resources.

2. Please provide your organization’s comments on the proposed use of encumbrances, as described in the straw proposal.

Please see attachment. 

3. Please provide your organization’s comments on the proposed transmission charges overall, in the straw proposal.

Please see attachment. 

4. Please provide your organization’s comments on the proposed cost to subscriber’s process, as described in the straw proposal.

Please see attachment. 

5. Please provide your organization’s comments on the proposed cost to non-subscriber’s as described in the straw proposal.

Please see attachment. 

6. Please provide your organization’s comments on the proposed Generator Interconnection Process, as described in the straw proposal.

Please see attachment. 

7. Please provide your organization’s comments on the issue of reimbursement for network upgrades, as discussed in the straw proposal.

Please see attachment. 

8. Please provide your organization’s comments on the proposed Transmission Planning Process and Transmission Issues, as described in the straw proposal.

Please see attachment. 

9. Please provide your organization’s comments on the proposed Deliverability Allocation Process, as described in the straw proposal.

Please see attachment. 

1. Please provide a summary of your organization’s comments on the straw proposal.

Northern California Power Agency (NCPA) applauds the CAISO for developing the subscriber participating transmission owner (“SPTO”) model. The CAISO has taken into account stakeholder comments regarding the skyrocketing cost of transmission and has done a tremendous job to strike a balance between meeting the State’s renewable generation goals while controlling the increasing Transmission Access Charge by ensuring subscribers pay for the transmission, energy, losses, and congestion up to the point where the SPTO line connects to the existing CAISO grid. NCPA supports the SPTO having a separate TAC Area and not including its TRR in the CAISO’s TAC.

2. Please provide your organization’s comments on the proposed use of encumbrances, as described in the straw proposal.

No comment at this time.

3. Please provide your organization’s comments on the proposed transmission charges overall, in the straw proposal.

See our comment on Question 1.

4. Please provide your organization’s comments on the proposed cost to subscriber’s process, as described in the straw proposal.

 No comment at this time.

5. Please provide your organization’s comments on the proposed cost to non-subscriber’s as described in the straw proposal.

 No comment at this time.

6. Please provide your organization’s comments on the proposed Generator Interconnection Process, as described in the straw proposal.

As discussed in our comment on Question 7, NCPA believes that any Interconnection Customer that seeks to interconnect to an SPTO project must go through the CAISO’s generator interconnection process, and if network upgrades are required, that Interconnection Customer should not be reimbursed for the network upgrades. In particular, any out-of-state wind projects that seek to interconnect to the CAISO-controlled grid, including the TransWest Express project, should be studied as part of a Cluster Interconnection Process. Such projects should not be exempt from the CAISO’s regular interconnection process.

Nor should the CAISO de facto exempt those projects from the interconnection process by including out-of-state wind resources at El Dorado Substation in the assumptions for the current or future Transmission Planning Process (“TPP”). Including assumptions in the TPP about resources that may interconnect with the TransWest Express project would be inconsistent with the SPTO model, because those assumptions may cause CAISO to approve projects in the TPP (that would be funded by CAISO load) instead of more appropriately treating those projects as interconnection network upgrades (which under the SPTO model, would be funded by subscribers).

7. Please provide your organization’s comments on the issue of reimbursement for network upgrades, as discussed in the straw proposal.

The straw proposal page 7 states “With respect to congestion, The ISO understands that PCW intends to go through the ISO’s generator interconnection process and, if additional deliverability network upgrades are required to ensure deliverability to ISO load, PCW intends to incur the costs of those additional transmission facilities without reimbursement by the existing Participating TOs consistent with the principle of the Subscriber PTO Model that connecting the facilities will not increase the TAC.”

NCPA endorses this aspect of the straw proposal—the Interconnection Customer should incur the cost of network upgrades without reimbursement and the interconnection should not increase the CAISO TAC.

8. Please provide your organization’s comments on the proposed Transmission Planning Process and Transmission Issues, as described in the straw proposal.

Please see our comment on Question 6.

9. Please provide your organization’s comments on the proposed Deliverability Allocation Process, as described in the straw proposal.

No comments at this time.

1. Please provide a summary of your organization’s comments on the straw proposal.

PG&E is still in the process of evaluating the straw proposal and reserves the right to provide further comments on any concerns in the future.

2. Please provide your organization’s comments on the proposed use of encumbrances, as described in the straw proposal.

3. Please provide your organization’s comments on the proposed transmission charges overall, in the straw proposal.

4. Please provide your organization’s comments on the proposed cost to subscriber’s process, as described in the straw proposal.

5. Please provide your organization’s comments on the proposed cost to non-subscriber’s as described in the straw proposal.

6. Please provide your organization’s comments on the proposed Generator Interconnection Process, as described in the straw proposal.

7. Please provide your organization’s comments on the issue of reimbursement for network upgrades, as discussed in the straw proposal.

8. Please provide your organization’s comments on the proposed Transmission Planning Process and Transmission Issues, as described in the straw proposal.

9. Please provide your organization’s comments on the proposed Deliverability Allocation Process, as described in the straw proposal.

1. Please provide a summary of your organization’s comments on the straw proposal.

Pattern Energy supports further development of the Subscriber Participating Transmission Owner (sPTO) concept as an option for future transmission development to serve CAISO.  Enabling multiple transmission business models will facilitate the development of more transmission – and thus greater resource diversity and improved reliability – on the system.   

We appreciate the CAISO’s creativity and transparency on this approach. 

Pattern does not comment on every element of the straw proposal here; we do address the use of encumbrances, the generator interconnection process (GIP), reimbursement for network upgrades, transmission planning, and deliverability allocations. 

2. Please provide your organization’s comments on the proposed use of encumbrances, as described in the straw proposal.

Pattern supports the proposed use of encumbrances as described in the straw proposal; however, we expect more questions to emerge depending on the specific application of the sPTO model.  Pattern looks forward to continued definition as the straw proposal develops.  To that end, Pattern also encourages ongoing coordination with other western BAAs on this approach to ensure agreement and understanding around how other non-CAISO facilities or resources will be treated under the sPTO model, especially in consideration of Western EIM and EDAM participation models. 

3. Please provide your organization’s comments on the proposed transmission charges overall, in the straw proposal.

No comments at this time.

4. Please provide your organization’s comments on the proposed cost to subscriber’s process, as described in the straw proposal.

No comments at this time.

5. Please provide your organization’s comments on the proposed cost to non-subscriber’s as described in the straw proposal.

No comments at this time.

6. Please provide your organization’s comments on the proposed Generator Interconnection Process, as described in the straw proposal.

Pattern appreciates the significant efforts the CAISO has taken to address the constraints around interconnection queue processing through the Interconnection Process Enhancements Initiative, which we hope will improve for future interconnection clusters.  We understand the interest in accommodating sPTO projects in the interconnection process, however we also request more information about how CAISO expects future sPTO requests to impact the processing of future clusters.  In addition to the “normal” (non-sPTO) interconnection requests, Pattern would like to better understand how the CAISO will prepare for and process sPTO interconnection requests on a timeline that aligns with the sPTO’s subscription process and financing.   

7. Please provide your organization’s comments on the issue of reimbursement for network upgrades, as discussed in the straw proposal.

Pattern supports reimbursement for network upgrades within the CAISO BAA.? We understand that the current policy provides for the reimbursement of network upgrades to interconnection customers that interconnect to the CAISO system, as well as reimbursement for external interconnection customers who finance reliability network upgrades within CAISO. CAISO should maintain a consistent policy for sPTOs and other types of similarly situated customers and facilities and should reimburse network upgrades associated with a sPTO interconnection. 

8. Please provide your organization’s comments on the proposed Transmission Planning Process and Transmission Issues, as described in the straw proposal.

Pattern agrees that this is a critical time for ensuring new opportunities for delivery of out-of-state resources, which complement California’s in-state generation and provide significant additional reliability benefits during extreme weather events. It is reasonable to require the sPTO to fully participate in the TPP once approved by the ISO Board.  However, as noted above, Pattern respectfully requests more information from CAISO regarding the details and requirements of such participation.

9. Please provide your organization’s comments on the proposed Deliverability Allocation Process, as described in the straw proposal.

As noted throughout these comments on the straw proposal, Pattern requests more detail from CAISO on how the GIDAP process will work for these projects in order to better understand the expected timeline for processing interconnection requests for Cluster 15 and beyond.   

Pattern understands that with the addition of sPTO facilities the CAISO BAA will expand and the generation interconnected to the sPTO facilities will no longer need a MIC allocation to count for Resource Adequacy if, as currently proposed, they have also obtained deliverability through the GIDAP.  Recognizing that some sPTO subscribers may already have MIC allocations associated with out-of-state resources, it would be very useful if the sPTO design included a mechanism providing for the efficient transition from MIC to “sPTO-enabled” deliverability.  

CAISO should consider accommodating scenarios where subscribers (and/or their off-takers) that already have MIC can either preserve their MIC as they transition to sPTO or transition their MIC to “sPTO enabled” deliverability.  As one example, CAISO could consider a process whereby consecutive MIC allocations to LSEs for out-of-state resources can effectively be utilized to provide deliverability and avoid having to go through a formal interconnection study process. In effect, deliverability could be awarded once the connection is made between a resource subscribed to a sPTO and the off-taker's existing MIC allocation.    

1. Please provide a summary of your organization’s comments on the straw proposal.

Introduction and Summary of Comments

Power Company of Wyoming LLC (“PCW”) recognizes the California Independent System Operator’s (“CAISO”) tremendous work in formulating the Subscriber Participating Transmission Owner (“SPTO”) model and preparing the related Straw Proposal published on February 7, 2023 (“Straw Proposal”).  PCW appreciates the opportunity to participate in the CAISO’s stakeholder process and to provide comments on the Straw Proposal.

The SPTO model is an important new transmission initiative that can facilitate the development of much-needed transmission infrastructure in the western United States.  PCW fully supports the direction of the Straw Proposal in the following areas: (a) the use of encumbrances; (b) not including the cost of constructing the TransWest Express Transmission Project (the “TWE Project”)[1] in the CAISO’s Transmission Access Charge (“TAC”); (c) the transmission charges for subscribers and non-subscribers; and (d) the CAISO’s reliance on the existing transmission planning process, generator interconnection process, and deliverability allocation process.

The main focus of PCW’s comments is whether generators who have subscribed for transmission service on a transmission project that would join the CAISO as an SPTO should be eligible under the CAISO Tariff for reimbursement of downstream network upgrades.  PCW believes that all generator interconnection customers – whether they are interconnecting to existing CAISO facilities or planned additions to the CAISO network such as the TWE Project – should be treated consistently under the CAISO Tariff with respect to network upgrade costs.  Allowing SPTO subscriber generators to recover downstream network upgrade costs pursuant to the CAISO’s Tariff is entirely consistent with the CAISO’s existing policy and Federal Energy Regulatory Commission (“FERC”) precedent.  CAISO network upgrades provide system reliability and economic benefits to the entire CAISO system, and the cost responsibility for these upgrades must be handled in a fair and non-discriminatory manner that recognizes this diffuse system benefit.

Background on PCW and the TransWest Express Line

PCW is the developer of the Chokecherry and Sierra Madre Wind Energy Project, a 3,000 MW-plus capacity wind farm located south of Sinclair and Rawlins in Carbon County, Wyoming.  The wind energy project’s long-term surface disturbance is estimated to be less than 1,500 acres of a 320,000-acre ranch.  The project offers a reliable, competitively priced supply of renewable electricity with a wind production factor that is unmatched in the West.  The output from the project will reduce greenhouse-gas emissions, provide reliability through the diversification of energy sources, and meet the growing demand for clean energy in California.

In 2021, FERC granted negotiated rate authority and approved TransWest’s use of an open solicitation process to allocate the TWE Project’s north-to-south transmission capacity from Wyoming to Nevada.  PCW obtained the award of all the capacity available in the north-to-south direction in the open solicitation.  Excess north-to-south capacity not used by PCW will be administered by the CAISO and made available to the market.  The south-to-north capacity on the TWE Project will also be administered by the CAISO and made available to the market for entities seeking to export or wheel power out of the CAISO system. 

In connection with the award of north-to-south capacity to PCW, PCW and TransWest entered into Customer Agreements that serve as precedent agreements to the Transmission Service Agreements.  Under the Customer Agreements, PCW and TransWest have negotiated rates for transmission service.  These rates are based on a series of assumptions, including the amount of contracted capacity, the cost to build and operate the TWE Project, and other factors.  As a result, PCW and TransWest expect that these negotiated rates may be adjusted over time to account for current market conditions.   

Under the SPTO model, PCW’s affiliate TransWest Express LLC (“TransWest”) will pay to construct and interconnect 732-mile interregional transmission system facilities to the CAISO’s network facilities in Nevada.  This will result in the addition of over $3.5 billion in transmission assets being made available to the CAISO system with no impact on the CAISO’s TAC.  

PCW would be the first subscriber generator under the SPTO model.  PCW will enter into offtake agreements with California LSEs to provide much needed Renewables Portfolio Standard (“RPS”)-eligible energy and capacity to the California market. PCW plans to recover its transmission service costs on the TWE Project through these offtake agreements.   

Out-of-State Wind Procurement Is Necessary to Achieve California’s Climate Goals

California must accelerate the integration of new resources if it is to meet its ambitious renewable resource needs.  Access to Wyoming wind will bring a geographically diverse resource that complements CAISO load shapes and the existing California renewable resource base.  Wyoming wind will reduce greenhouse gas emissions and help curtail the use of natural gas, most notably, during evening hours.  Across the Western Electricity Coordinating Council (“WECC”), loads are growing, RPS mandates are increasing, and climate change is negatively impacting hydro-electric systems.  California must hasten the integration of new renewable resources and transmission to ensure future supply and price certainty.

The CAISO’s 20-Year Transmission Outlook demonstrates California’s unprecedented need for new renewable resources.[2]  Meeting California greenhouse gas objectives will require over 24 GW of new wind generation, approximately half of which is projected to come from offshore wind.  Capacity factors for Wyoming wind are comparable to those of California offshore wind at a fraction of the capital cost.  In reality, California’s offshore wind resources will take a decade or more to develop and will require an expensive land-based transmission buildout.  Conversely, PCW has 3,000 MW of Wyoming wind under construction now, and the TWE Project is a shovel-ready transmission solution to deliver these resources to California LSEs. 

The need for out-of-state wind resources has been clearly defined by the CPUC and the CAISO.  The CPUC’s February 2023 Integrated Resource Planning base case portfolio now includes 4,828 MW of out-of-state wind on new transmission by 2030.  Notably, this forecast predates the enactment SB 1020 (September 2022), which accelerated California’s climate goals to require renewable energy and zero-carbon resources to supply 90% of all retail electricity sales by 2035, 95% of all retail electricity sales by 2040, and 100% of electricity procured to serve all state agencies by 2035.  Beyond California’s internal resource planning needs, markets like the Extended Day-Ahead Market and a potential regional market will also benefit from developments like the TWE Project through integration with other utility systems in the WECC.

The Wyoming wind power delivered to California on the TWE Project aligns with California’s planning objectives.  The SPTO model can enable access to Wyoming wind resources as early as 2027.  Integrating the TWE Project through the SPTO model will be but an important step toward meeting the CAISO’s out-of-state wind needs.  Establishing the SPTO paradigm will also provide a model to incorporate future out-of-state and offshore renewable resources.

[1] See TransWest Express LLC’s Application for Participating Transmission Owner dated July 14, 2022, for a full description of the TWE Project.

[2] CAISO, 20-Year Transmission Outlook (May 2022), at 2, accessible at: http://www.caiso.com/InitiativeDocuments/20-YearTransmissionOutlook-May2022.pdf

2. Please provide your organization’s comments on the proposed use of encumbrances, as described in the straw proposal.

PCW supports the proposed use of encumbrances to administer market operations while honoring and facilitating the contracts PCW and TransWest executed to provide transmission service on the TWE Project. This proposal is consistent with how the CAISO administers market operations while honoring and facilitating similar contracts by other Participating Transmission Owners ("PTOs").  Treating all similar existing contracts the same will avoid the need to develop and administer another mechanism to honor and facilitate SPTO contractual rights.

3. Please provide your organization’s comments on the proposed transmission charges overall, in the straw proposal.

PCW supports the proposed transmission charges.  TransWest will be funding the cost to build and operate the TWE Project, similar to all other PTOs.  However, unlike the existing PTOs, TransWest will not be receiving any payments from the TAC and/or WAC and will need to charge both subscribers (including PCW) and non-subscribers for transmission services on the TWE Project.  The Straw Proposal accommodates these requirements in a fair and equitable manner consistent with both open access and the general concept in FERC-regulated transmission that the “beneficiary pays”.

4. Please provide your organization’s comments on the proposed cost to subscriber’s process, as described in the straw proposal.

PCW supports the proposed cost to subscriber’s process.  Please see response to item 3.

5. Please provide your organization’s comments on the proposed cost to non-subscriber’s as described in the straw proposal.

PCW supports the proposed cost to subscriber’s process.  Please see response to item 3.

6. Please provide your organization’s comments on the proposed Generator Interconnection Process, as described in the straw proposal.

PCW supports the proposed generator interconnection process, with the exception of the network upgrade issue outlined in response to item 7.

7. Please provide your organization’s comments on the issue of reimbursement for network upgrades, as discussed in the straw proposal.

The Straw Proposal seeks stakeholder comments on how deliverability network upgrades to the internal CAISO grid[1] that are required as a result of generator interconnection requests should be paid for under the SPTO model.  Generators, like PCW, who have subscribed for and are paying for transmission service on an SPTO transmission project should be treated the same as any other generator interconnection customer.  The cost responsibility of these generators for downstream network upgrade costs should be handled consistent with the existing CAISO Tariff, which applies to all generator interconnection customers seeking interconnection and deliverability allocations on the existing CAISO network. 

The revenues from subscribing generators for transmission service are intended to provide the funds necessary for TransWest to construct the transmission project and interconnect transmission facilities to the CAISO network.  In the case of the TWE Project, that means over $3.5 billion of transmission assets added to the CAISO’s facilities with no impact on the CAISO’s TAC.  But it would not be fair to require the subscriber generators (and their customers, including California LSEs who choose to buy Wyoming wind) to also cover the entire cost of reliability upgrades to the CAISO network, because all CAISO system users will benefit from these system upgrades. Treating all generators consistently would avoid imposing additional financial risk on SPTO subscriber generators and their customers.  This policy would maintain the CAISO’s policy of non-discrimination for interconnecting generators and be consistent with the existing cost allocation principles for network upgrades that provide system reliability benefits to all the CAISO’s users.

The CAISO recently addressed the question of reimbursement for network upgrades in proposed Tariff amendments to implement interconnection process enhancements when the CAISO is an affected system.[2]  The CAISO proposed that external interconnection customers be eligible for repayment of amounts advanced for network upgrades consistent with the CAISO’s existing rules for internal interconnection customers (i.e., external interconnection customers must finance network upgrades internal to the CAISO to maintain reliability, and then transmission owners reimburse them within five years of commercial operation).[3]  The CAISO explained that “[FERC] precedent is clear that ‘network upgrades represent improvements to the integrated transmission system, and [their] benefits to the transmission system are considered independent from any benefits customers may receive as a result of generation that interconnects to the system.’”[4]  The CAISO’s reimbursement policy also “ensures network upgrades are rightsized to mitigate the specific impact and removes any incentive to use affected system mitigation to replace or defer other upgrades for the utility’s benefit and at the developer’s expense.”[5] 

Though the circumstances of the SPTO model differ slightly from affected system mitigation, the CAISO’s rationale for using its existing policy to reimburse the costs for network upgrades applies with equal force here and will lead to a just and reasonable outcome.  Under the SPTO model, the merchant transmission developer will be fully responsible for the costs of its transmission facilities; however, generators that are seeking to interconnect on these new transmission facilities may need to pay for downstream network upgrade costs to obtain deliverability status and Resource Adequacy capacity.  The reliability benefits of these downstream network upgrades will be enjoyed by all CAISO network participants, and thus the cost responsibility for such upgrades should be shared among all CAISO participants.

The alternative – to exclude the SPTO generator subscribers from reimbursement of costs for network upgrades internal to the CAISO system – would contravene CAISO cost allocation policy and discriminate against certain classes of generators Such an allocation of network upgrade costs solely to a subset of users when the network upgrades stand to benefit all CAISO users would depart from the central tenet that costs be allocated in a manner that is roughly commensurate with the estimated benefits.[6]    

The Straw Proposal emphasizes that the SPTO subscriber generators will be required to complete the generator interconnection process “like any other generator.”[7]  The subscriber generators “will sign the three-party Generator Interconnection Agreement and be governed by the tariff and business practice manuals like any other generator in the ISO balancing authority area.”[8]  Thus, the subscriber generators, which will be treated like all other interconnecting generators for purposes of determining network upgrade costs, should not be singled out to pay for CAISO system upgrades that provide diffuse benefits to the entire system.  Network upgrade costs should be treated in a manner consistent with the CAISO Tariff and existing FERC precedent.

[1] “Internal to the CAISO grid” is meant to refer to the currently existing CAISO grid or downstream from the point where the TWE Project will connect with the existing CAISO network. 

[2] Straw Proposal at 13.

[3] CAISO, Tariff Amendment to Implement Interconnection Process Enhancements, FERC Docket No. ER23-941 (January 26, 2023), at 10.

[4] Id. (quoting California Independent System Operator Corp., 160 FERC ¶ 61,047 at P 34 (2017)).

[5] Id.

[6] See FERC Order 1000.  Additionally, in the Motion to Intervene and Comments of NextEra Energy Resources, LLC (“NextEra”) in FERC Docket No. ER23-838-000, NextEra explains that:

FERC precedent requires that cost of transmission facilities be allocated in a manner that is at least roughly commensurate with the estimated benefits. Transmission Planning and Cost Allocation by Transmission Owning and Operating Public Utilities, 136 FERC ¶ 61,051 at P 586, FERC Docket No. RM10-23 (Issued July 21, 2011).  Under this standard, reviewing courts have held that “the [FERC] generally may not single out a party for the full cost of a project, or even most of it, when the benefits of the project are diffuse.”

[7] Straw Proposal at 13.

[8] Straw Proposal at 14.

8. Please provide your organization’s comments on the proposed Transmission Planning Process and Transmission Issues, as described in the straw proposal.

PCW supports the proposed transmission planning process and transmission issues.

9. Please provide your organization’s comments on the proposed Deliverability Allocation Process, as described in the straw proposal.

PCW supports the proposed deliverability allocation process.

1. Please provide a summary of your organization’s comments on the straw proposal.

The Public Advocates Office at the California Public Utilities Commission (Cal Advocates) is supportive of the Subscriber Participating Transmission Owner Model and commends the CAISO for taking a proactive, creative approach to expanding transmission capacity while minimizing the impact on the Transmission Access Charge (TAC). The subscriber model will be a necessary tool to contain transmission costs as the CAISO approves significant amounts of new transmission.[1]

In particular, Cal Advocates supports the development of a Subscriber Participating Transmission Owner Model that is financially sustainable, and that can be used by entities with various degrees of investor support. The model should not just be available to entities like TransWest, which has benefitted from the consistent backing of its parent corporation.[2]

However, Cal Advocates recommends that the development of a financially sustainable model be balanced with the CAISO’s stated goal of using subscriber-based lines to increase transmission capacity without increasing the Transmission Access Charge (TAC).[3] In these comments, Cal Advocates presents two concerns related to the ability of this model to limit TAC escalation. The first concern, addressed in our response to Question 8, is whether a subscriber-based project could “switch” to a TAC-funded project during its useful life. This “switch” would undermine the ratepayer benefits of the subscriber-based model, and Cal Advocates recommends that the CAISO disallow subscriber-based transmission lines from applying for traditional TAC funding for the life of the line.

The second issue is the reimbursement for network upgrades, which Cal Advocates discusses in Question 7. The course of action that is most consistent with the CAISO’s goal of not increasing the TAC is to not reimburse interconnecting generators for upgrades they cause. However, should the CAISO adopt a policy of reimbursing generators, then Cal Advocates recommends that the CAISO protect against a scenario in which CAISO-based ratepayers fund an upgrade associated with a generator and off-taker that are both outside of the CAISO Balancing Authority Area (BAA).

[1] The CPUC’s Integrated Resource Planning (IRP) process has indicated that $11.9 billion in new transmission will be necessary to integrate the resources needed to reach California’s renewable energy goals in 2035. The CAISO will be considering these projects in the current and subsequent transmission planning cycles. (For a more detailed analysis see Cal Advocates’ Comments in Response to the Administrative Law Judge’s Ruling Seeking Comments on Electricity Resource Portfolios for the 2023-24 Transmission Planning Process.  R. 20-05-003. October 31, 2022. P. 2. Available at https://docs.cpuc.ca.gov/PublishedDocs/Efile/G000/M498/K071/498071336.PDF.)

[2] TransWest Express LLC is wholly owned by the Anschutz Corporation, originally an oil and gas company that has been supporting the development of the TransWest Express line since 2008. More information is available at https://www.transwestexpress.net/about/history.shtml.

[3] The ISO proposes to develop a model for transmission projects to deliver renewable generation from out-of-state resource developers to California without increasing the Transmission Access Charge (“TAC”), and without selecting a specific project through the Transmission Planning Process (“TPP”). (Subscriber Participating Transmission Owner Model. Straw Proposal. February 2023. P. 3.)

2. Please provide your organization’s comments on the proposed use of encumbrances, as described in the straw proposal.

Cal Advocates has no comment at this time.

3. Please provide your organization’s comments on the proposed transmission charges overall, in the straw proposal.

Cal Advocates has no comment at this time.

4. Please provide your organization’s comments on the proposed cost to subscriber’s process, as described in the straw proposal.

Cal Advocates has no comment at this time.

5. Please provide your organization’s comments on the proposed cost to non-subscriber’s as described in the straw proposal.

Cal Advocates has no comment at this time.

6. Please provide your organization’s comments on the proposed Generator Interconnection Process, as described in the straw proposal.

Cal Advocates has no comment at this time.

7. Please provide your organization’s comments on the issue of reimbursement for network upgrades, as discussed in the straw proposal.

Cal Advocates recommends that, consistent with the CAISO’s goal of “deliver[ing] renewable generation from out-of-state resource developers to California without increasing the Transmission Access Charge (“TAC”), and without selecting a specific project through the Transmission Planning Process (“TPP”),”[1] the CAISO not reimburse any generators associated with subscriber-based projects for network upgrades their generation requires.[2] As the CAISO has noted, subscriber-based projects were not approved by the CAISO TPP,[3] and as such, it is reasonable to not treat them in the same manner as CAISO-approved, TAC-funded projects when it comes to reimbursing connecting generators.

However, should the CAISO decide to allow for the reimbursement of upgrades initiated by connecting generators, the CAISO should specifically disallow a scenario in which CAISO-based ratepayers fund an upgrade associated with a generator and an off-taker that are both outside of CAISO territory. Put another way, if the CAISO allows for the reimbursement of upgrade costs, the CAISO should assess whether the generator causing the upgrade will be serving CAISO-based ratepayers. If not, the generator should not be reimbursed. This will protect CAISO-based ratepayers from funding upgrades that will not benefit them.

[1] Subscriber Participating Transmission Owner Model. Straw Proposal. February 2023. P. 3.

[2] The CAISO has stated that the subscriber of the TransWest Express line – the Power Company of Wyoming – will pay for network upgrades required to interconnect their generation. (Subscriber Participating Transmission Owner Model. Update Paper. December 2022. P. 8.)

[3] See slide 17. Subscriber Participating TO Model Straw Proposal. February 15, 2023 Presentation.

8. Please provide your organization’s comments on the proposed Transmission Planning Process and Transmission Issues, as described in the straw proposal.

Currently, it appears that it would be possible for TransWest Express LLC(TransWest) to, in perhaps 5-10 years, apply again for approval as a policy-driven transmission project at the CAISO. The CAISO could, at that point, approve the line as a policy-driven project, at which point TransWest could file for cost recovery at the Federal Energy Regulatory Commission (FERC) and become a traditional, TAC-funded project.

This would have a significant impact on CAISO-based ratepayers. The capital cost of the TransWest Line, per the CAISO 2021-22 TPP, is about $2.76 billion.[1] The CAISO’s Transmission Access Charge Forecast Model estimates that, with a 2026 in-service date, the annual revenue requirement associated with the project could be over $300 million in 2036.[2] If the CAISO and FERC approve the line as a policy-driven project at that point, that revenue would be incorporated into the TAC.

This is a hypothetical scenario, but one that the CAISO should address when developing the Subscriber Participating Transmission Owner Model. Cal Advocates 1) requests feedback as to whether, in the CAISO’s estimation, this scenario is possible and/or probable, and 2) recommends that, to maintain benefits to ratepayers, subscriber-based lines be prohibited from seeking TAC funding.

[1] CAISO 2021-2022 Transmission Plan, March 17, 2022, p. 305.

[2] The CAISO’s Transmission Access Charge Forecast Model is available at http://www.caiso.com/planning/Pages/TransmissionPlanning/Default.aspx.

9. Please provide your organization’s comments on the proposed Deliverability Allocation Process, as described in the straw proposal.

Cal Advocates has no comment at this time.

1. Please provide a summary of your organization’s comments on the straw proposal.

As a general matter, the Six Cities continue to be open to exploration with the CAISO and stakeholders whether development of the Subscriber Participating Transmission Owner (“PTO”) model may provide a viable path for the development of new transmission projects without increases to the CAISO’s Access Charge rates.  The Six Cities support the CAISO’s decision to provide a stakeholder forum to explore issues related to the implementation of the Subscriber PTO model and raise below questions and concerns for the CAISO’s consideration as this process moves forward.  The Six Cities look forward to further discussions in this initiative. 

2. Please provide your organization’s comments on the proposed use of encumbrances, as described in the straw proposal.

If the Subscriber PTO model is implemented, the Six Cities do not have a concern with application of the encumbrance structure to implement the rights of the subscriber and its offtakers to use of capacity on the relevant facilities.  Conceptually, the use of the existing structure and treatment for encumbrances appears to align with the objectives of the SPTO model.  However, the Six Cities reiterate the need to clearly define and better conform the applicable terminology in reference to the Subscriber PTO model so the rights and obligations of the subscriber(s), offtakers, and other impacted parties, including CAISO transmission customers, CAISO wheeling customers, and non-offtakers that may periodically use the project assets, are clearly delineated.  For example, if the Subscriber—i.e., the Power Company of Wyoming (“PCW”)—is the holder of the Encumbrance, how are the rights and obligations of the offtakers characterized?  Are the offtakers also Subscribers, and will the offtakers likewise hold Encumbrances for the duration of their contracts with the Subscriber?  In certain respects, the terminology that has been used in the stakeholder process appears to sometimes conflate the role, rights, and obligations of the Subscriber with the prospective offtakers.  Clarifying the applicable terms as well as the roles and responsibilities of the relevant parties would likely aid stakeholders in their understanding of the CAISO’s envisioned structure.

The Six Cities encourage the CAISO to provide additional examples to illustrate the details of how the Subscriber PTO model, including the encumbrance structure, will be implemented.  While the Straw Proposal provides some background regarding the “perfect hedge” afforded by use of an encumbrance to reflect the rights of the Subscriber and/or offtakers in the CAISO, detailed examples would aid stakeholders in their understanding of the proposed model and help them evaluate its viability.  For example, if an offtaker located within the CAISO purchased 100 MW of wind output from PCW and paid for corresponding transmission rights on the TransWest Express project, would the seller then be delivering 100 MW of said wind energy to the CAISO grid at Ferris or Wyoming?  After accounting for transmission line losses, the “delivered quantity” at Eldorado would only be 90 MWs.  Would the Scheduling Coordinator for the CAISO offtaker be scheduling 100 MW at Ferris/Wyoming or 90 MW at Eldorado?  The Six Cities request that the CAISO describe in additional detail the charges that would apply to the offtaker after accounting for the “perfect hedge”.  Additionally, how and at what location would the quantity of energy delivered into the CAISO be determined for purposes of generating RECs?  How would losses be determined and allocated?

The same questions would be beneficial to cover from the perspectives of a non-CAISO offtaker and an external entity. 

3. Please provide your organization’s comments on the proposed transmission charges overall, in the straw proposal.

The Six Cities encourage the CAISO to provide additional examples of how the non-subscriber charges for use of the Subscriber PTO project assets will be determined (to the extent known) and allocated.  During the stakeholder discussion on February 15^th, there were a number of questions regarding the contemplated rate structure that would benefit from further consideration. 

With respect to the implementation of the Subscriber Wheeling Charge, will the CAISO have a mechanism in place to administer this charge so that it is accurately assessed to either CAISO entities or external parties depending on the use by such non-subscribers?  What will trigger assessment of the Subscriber Wheeling Charge and, if the non-subscriber use of the project is by a CAISO entity, will it be directly assigned to that entity?  For example, if one of the Cities scheduled a transaction in the CAISO market that had a source and sink corresponding to the use of project assets, would that trigger application of the Subscriber Wheeling Charge?  Are there other conditions under which application of the Subscriber Wheeling Charge could be triggered?  What about use by a non-subscriber that is external to the CAISO?  With respect to use by external non-subscribers, it is important that the CAISO implement a mechanism to directly assign the charges for such use by the applicable entity, and not to users of the CAISO transmission system.

Moreover, while this may arguably delve into arrangements between PCW and its prospective offtakers that the CAISO does not intend to address through the Subscriber PTO model, there should be a mechanism for PCW to provide a credit or pass-through of recovered Wheeling revenues from the Subscriber Wheeling Charge to the offtakers that are paying for the project.  Unless accounted for in the rates that the Subscriber charges to its offtakers, the Subscriber may overcollect its revenue requirement. 

With respect to the costs for network upgrades on the existing CAISO system that are needed to interconnection the Subscriber’s generation and the transmission facilities (as discussed on page 13 of the Straw Proposal), the Six Cities support what they understood the CAISO’s original proposal to be—namely, that the required upgrades on the CAISO system be funded by the Subscriber and its offtakers as part of the project’s initial development costs. 

With respect to the allocation of the costs for new network upgrades that are needed to interconnect future generation projects, further discussion is necessary.  The Six Cities understand the CAISO’s proposal to be that such network upgrades will be (1) up front funded by the Interconnection Customer, consistent with existing tariff provisions; and (2) subject to reimbursement, also consistent with existing tariff provisions, with the reimbursed cost then being reflected in the CAISO’s Transmission Access Charge (“TAC”) via the Subscriber PTO’s Regional Transmission Revenue Requirement (“TRR”).  Subscribers—or, rather, offtakers—would not be assessed any portion of the cost of the Subscriber PTO’s TRR, at least not in their capacity as offtakers, on the theory that they are presumed not to benefit from the necessary upgrades to interconnect these resources, even though the upgrades may comprise a used and useful part of the Subscriber PTO facilities.  The Six Cities question whether the CAISO’s proposal to insulate the Subscriber, or its offtakers, from such costs is appropriate, or whether the Subscriber or its offtakers should be expected to contribute to the cost of these upgrades.  Allocating the full cost to CAISO transmission customers does not appear to be appropriate under the circumstances, notwithstanding the CAISO’s newly-adopted policy regarding the cost allocation for Affected System mitigation. 

Additionally, the Six Cities request that the CAISO clarify how the costs for network upgrades associated with a newly-interconnecting resource would be handled, if the offtaker for that new resource is a non-CAISO entity?  Again, it does not seem appropriate in this scenario to require CAISO transmission customers to fund upgrades on a line they cannot use for the benefit of a resource procured by a non-CAISO entity.  On the other hand, the Six Cities understand the CAISO’s proposal to be that non-CAISO, non-Subscriber offtakers of subsequently-interconnected resources would contribute to a share of the cost of any network upgrades through assessment of the CAISO Wheeling Access Charge (“WAC”).  If this understanding is not correct, the Six Cities request clarification in the CAISO’s next proposal.  Relatedly, would a non-subscriber user of both the original subscribed facilities and subsequently networked facilities interconnected to subscriber facilities pay both the Subscriber WAC for the original facilities and the CAISO WAC for new upgrades, or would there be some apportionment?  Further examples would aid stakeholders in their understanding of how this scenario will work. 

Finally, the Six Cities request clarification and further stakeholder discussion and examples regarding the applicable cost allocation for the Subscriber, offtakers, and non-subscribers, both internal and external to the CAISO, in light of the transmission availability and compensation rules under the EIM and in EDAM. 

4. Please provide your organization’s comments on the proposed cost to subscriber’s process, as described in the straw proposal.

 Please refer to the comments provided in response to question no. 3.

5. Please provide your organization’s comments on the proposed cost to non-subscriber’s as described in the straw proposal.

Please refer to the comments provided in response to question no. 3.

6. Please provide your organization’s comments on the proposed Generator Interconnection Process, as described in the straw proposal.

Please refer to the comments provided in response to question no. 3.  Additionally, the Six Cities do not have a conceptual concern with the study of subsequently-interconnecting resources through the CAISO’s Generator Interconnection Process, provided concerns regarding the cost allocation for upgrades are addressed. 

7. Please provide your organization’s comments on the issue of reimbursement for network upgrades, as discussed in the straw proposal.

Please refer to the comments provided in response to question no. 3.

8. Please provide your organization’s comments on the proposed Transmission Planning Process and Transmission Issues, as described in the straw proposal.

The Six Cities do not have comments on this element of the Straw Proposal. 

9. Please provide your organization’s comments on the proposed Deliverability Allocation Process, as described in the straw proposal.

The Six Cities do not have comments on this element of the Straw Proposal, provided concerns regarding the cost allocation for upgrades, including those necessary to attain full capacity deliverability status within the CAISO, are resolved.   

1. Please provide a summary of your organization’s comments on the straw proposal.

Please see attached document.

2. Please provide your organization’s comments on the proposed use of encumbrances, as described in the straw proposal.

Please see attached document.

3. Please provide your organization’s comments on the proposed transmission charges overall, in the straw proposal.

Please see attached document.

4. Please provide your organization’s comments on the proposed cost to subscriber’s process, as described in the straw proposal.

Please see attached document.

5. Please provide your organization’s comments on the proposed cost to non-subscriber’s as described in the straw proposal.

Please see attached document.

6. Please provide your organization’s comments on the proposed Generator Interconnection Process, as described in the straw proposal.

Please see attached document.

7. Please provide your organization’s comments on the issue of reimbursement for network upgrades, as discussed in the straw proposal.

Please see attached document.

8. Please provide your organization’s comments on the proposed Transmission Planning Process and Transmission Issues, as described in the straw proposal.

Please see attached document.

9. Please provide your organization’s comments on the proposed Deliverability Allocation Process, as described in the straw proposal.

1. Please provide a summary of your organization’s comments on the straw proposal.

The Bay Area Municipal Transmission group (BAMx) ^[1] appreciates the opportunity to comment on the California Independent System Operator (CAISO)’s straw proposal on the Subscriber Participating Transmission Owner (SPTO) Model, dated February 7, 2023, and subsequent presentation (February 15 meeting, hereafter) discussed during the February 15, 2023 stakeholder meeting.

BAMx strongly supports the SPTO concept and the CAISO’s willingness to amend its Transmission Control Agreement (TCA) to facilitate TransWest Express LLC's (TWE) proposed vehicle to accommodate this concept. Besides reducing the impact on the CAISO-wide Transmission Access Charge (TAC), it promotes cost causation as a recovery mechanism for those projects needed to deliver generation from out-of-State (OOS) and offshore wind (OW) projects. BAMx believes such a mechanism will send appropriate price signals to encourage the purchasing entity to buy power from the most cost-effective projects. In addition to Sunzia and TWE projects, which are being developed on a subscriber basis, BAMx believes that the CAISO should encourage other OOS as well as offshore wind project developers to consider the subscriber model projects. If this model were applied, it would have a tremendous impact on containing the cost of the ever-growing TAC.  BAMx’s analysis indicates that if all the transmission projects needed to access OOS wind envisioned in the CAISO 20-year outlook elected the subscriber model, nearly $9.95 billion of transmission costs would not be recovered via CAISO-wide TAC. As a result, the projected CAISO-wide HV TAC in 15-20 years from now would reduce by as much as $7/MWh. The transmission costs needed to deliver the power from the OOS or offshore wind projects would instead be recovered from the parties electing to procure the output of those projects, thus enabling them to consider the full costs of those projects in comparison to other projects that don’t require as much transmission investment.

BAMx endorses the Subscriber PTO concept, but cautions against the straw proposal being narrowly focused on the TransWest Express case. In particular, BAMx has two concerns related to the ability of the SPTO Model to curb the CAISO-wide TAC escalation. The CAISO needs to ensure that the costs associated with transmission facilities opting for an SPTO model cannot be later included in the CAISO TAC. (see BAMx response to Q.8 below). Secondly, the subscribers of the SPTO facilities should not be allowed to be reimbursed for the transmission upgrade cost they trigger on the existing CAISO system.  These projects have not been included in the CAISO’s Transmission Planning Process and, thus, should not be treated the same as projects that have gone through that process. (see BAMx response to Q.7 below).

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

2. Please provide your organization’s comments on the proposed use of encumbrances, as described in the straw proposal.

 No comments at this time.

3. Please provide your organization’s comments on the proposed transmission charges overall, in the straw proposal.

BAMx supports that the costs of the Subscriber Participating TO transmission projects (capital and O&M) will not be included in the CAISO TAC.[1] BAMx does not oppose allowing the Subscriber PTO to seek other mechanisms for recovering the transmission cost from parties that benefit from that transmission, such as through a Subscriber Wheeling Access Charge (SWAC). These costs should not be recovered from the TAC or the CAISO’s regional WAC, nor should they be allowed to be included in the historical transmission revenue recovery element of the Extended Day Ahead Market.

[1] Straw Proposal, p.8

4. Please provide your organization’s comments on the proposed cost to subscriber’s process, as described in the straw proposal.

No comments at this time.

5. Please provide your organization’s comments on the proposed cost to non-subscriber’s as described in the straw proposal.

No comments at this time.

6. Please provide your organization’s comments on the proposed Generator Interconnection Process, as described in the straw proposal.

No comments at this time.

7. Please provide your organization’s comments on the issue of reimbursement for network upgrades, as discussed in the straw proposal.

BAMx opposes allowing reimbursement of the cost of the CAISO network upgrades needed to support the SPTO transmission facilities.  While the CAISO tariff currently requires the interconnection customer (or the PTO) to upfront finance those upgrades, subject to later reimbursement by the affected PTO, SPTO facilities are not similarly situated since they would not have been approved through the TPP process. Therefore, the subscriber(s) for the SPTO facilities should be responsible for the costs of the transmission interconnection and deliverability network upgrades without reimbursement, as stated in the Straw Proposal (p.7).

“With respect to congestion, The ISO understand that PCW intends to go through the ISO’s generator interconnection process, and if additional deliverability network upgrades are required to ensure deliverability to ISO load, PCW will incur the costs of those additional transmission facilities without reimbursement by the existing Participating TOs consistent with the principle of the Subscriber PTO Model that connecting the facilities will not increase the TAC.”

BAMx is also concerned about the potential for the CAISO TPP to exempt the SPTO facilities subscriber(s) from paying their share of the network upgrade costs needed to accommodate their projects. For instance, the CAISO 2022-2023 Transmission Plan base case includes 1,062MW of Wyoming/Idaho wind delivered at Eldorado, which includes resources that would be accessed via TWE.  If the CAISO approves the 2022-2023 Transmission Plan with this assumption, when the PCW/TWE-related generation projects are studied in Cluster 15, the potential delivery network upgrades that they would have triggered would be modeled as pre-project facilities. This would result in CAISO approving upgrades that will be funded by CAISO ratepayers, rather than by the PCW/TWE subscribers. There needs to be a mechanism to allocate those upgrade costs back to the PCW/TWE subscribers. BAMx strongly encourages the CAISO to ensure that, consistent with the underlying SPTO principles, the SPTO project does not add to CAISO TAC. Furthermore, the CAISO tariff must clearly lay out the methodology to separate the network upgrade costs needed to accommodate the SPTO project in every cluster study versus those not subject to the SPTO model.

In addition, if subsequent non-subscriber generators desire to interconnect to SPTO transmission facilities after those facilities are part of the CAISO-controlled grid, any expansion of the SPTO facilities or new facilities external to the CAISO grid, and any network upgrades needed on the non-SPTO portion of the CAISO grid to accommodate the interconnecting generators, should be financed by the non-subscriber generators without TAC-funded reimbursement.

8. Please provide your organization’s comments on the proposed Transmission Planning Process and Transmission Issues, as described in the straw proposal.

CAISO must ensure that the costs associated with transmission facilities opting for an SPTO model cannot later be included in the CAISO TAC. This should include both the capital costs and the operation and maintenance costs for the life of the SPTO facilities. There needs to be a regulatory guardrail established in the CAISO tariff to ensure that any transmission facility initially opting for the SPTO model does not have the ability to rely on the CAISO TAC-based recovery at any time.

9. Please provide your organization’s comments on the proposed Deliverability Allocation Process, as described in the straw proposal.

No comments at this time.

1. Please provide a summary of your organization’s comments on the straw proposal.

Introduction and Summary of Comments

TransWest Express LLC (“TransWest”) recognizes the California Independent System Operator’s (“CAISO”) tremendous work in formulating the Subscriber Participating Transmission Owner (“SPTO”) model and preparing the related Straw Proposal published on February 7, 2023 (“Straw Proposal”).  TransWest appreciates the opportunity to participate in the CAISO’s stakeholder process and to provide comments on the Straw Proposal.

The SPTO model is an important new transmission initiative that can facilitate the development of much-needed transmission infrastructure in the western United States.  TransWest fully supports the direction of the Straw Proposal in the following areas: (a) the use of encumbrances; (b) not including the cost of constructing the TransWest Express Transmission Project (the "TWE Project) in the CAISO’s Transmission Access Charge (“TAC”); (c) the transmission charges for subscribers and non-subscribers; and (d) the CAISO’s reliance on the existing transmission planning process, generator interconnection process, and deliverability allocation process.

The main focus of TransWest’s comments is whether generators who have subscribed for transmission service on a transmission project that would join the CAISO as a SPTO should be eligible under the CAISO Tariff for reimbursement of downstream network upgrades.  TransWest believes that all generator interconnection customers – whether they are interconnecting to existing CAISO facilities or planned additions to the CAISO controlled grid such as the TWE Project – should be treated consistently under the CAISO Tariff with respect to network upgrade costs.  Allowing SPTO subscriber generators to recover downstream network upgrade costs pursuant to the CAISO’s Tariff is entirely consistent with the CAISO’s existing policy and Federal Energy Regulatory Commission (“FERC”) precedent.  CAISO network upgrades provide system reliability and economic benefits to the entire CAISO system, and the cost responsibility for these upgrades must be handled in a fair and non-discriminatory manner that recognizes this diffuse system benefit.

Background on TransWest and the TransWest Express Line

In 2008, TransWest acquired the development rights to the TransWest Express Transmission Project (the “TWE Project”) and has pursued its development since that time.  The TWE Project will be a new 732-mile interregional transmission system that has been designed to connect renewable resources in Wyoming with load serving entities (“LSEs”) in the west, predominantly LSEs located in California.

The TWE Project consists of transmission facilities located in Wyoming, Colorado, Utah, and Nevada with three linked segments: (1) a 405-mile, 3,000 MW, high-voltage direct current (“HVDC”) system between Wyoming and Utah; (2) a 278-mile, 1,500 MW, 500 kV high-voltage alternating current (“HVAC”) transmission line between Utah and Nevada; and (3) a 49-mile, 1,500 MW, 500 kV HVAC transmission line in Nevada.[1]

The TWE Project is an addition to the bulk transmission system and will connect all three planning regions in the Western Electricity Coordinating Council (“WECC”).  The TWE Project will also interconnect and increase transfer capacity between some of the largest balancing authorities in the WECC, including PAC East, LADWP, NV Energy and the CAISO.  The TWE Project will facilitate the exchange of energy in the Energy Imbalance Market, Energy Day Ahead Market, and broader regional markets.

On July 14, 2022, TransWest applied to become a Participating Transmission Owner (“PTO”) in the CAISO system, which prompted the CAISO’s development of the SPTO model.  Under the SPTO model, TransWest will pay to construct and interconnect the TWE Project facilities to the CAISO’s network facilities in Nevada.  This will result in the addition of over $3.5 billion in transmission assets being made available to the CAISO system with no impact on the CAISO’s TAC.

In 2021, FERC granted TransWest negotiated rate authority and approved TransWest’s use of an open solicitation process to allocate the TWE Project’s north-to-south transmission capacity from Wyoming to Nevada.  The open solicitation resulted in an award of all the capacity available in the north-to-south direction to Power Company of Wyoming LLC (“PCW”), an affiliate of TransWest.  Excess north-to-south capacity not used by PCW will be administered by the CAISO and made available to the market.  The south-to-north capacity on the TWE Project will also be administered by the CAISO and made available to the market for entities seeking to export or wheel power out of the CAISO system.

In connection with the award of north-to-south capacity to PCW, TransWest and PCW entered into Customer Agreements that serve as precedent agreements to the Transmission Service Agreements.  Under the Customer Agreements, PCW and TransWest have negotiated rates for transmission service.  These rates are based on a series of assumptions, including the amount of contracted capacity, the cost to build and operate the TWE Project, and other factors.  As a result, TransWest and PCW expect that these negotiated rates may be adjusted over time to account for current market conditions.  TransWest will also seek FERC approval of the transmission rates to be offered to non-subscribers for the use of south-to-north capacity as well as any available north-to-south capacity not used by PCW.

PCW intends to enter into offtake agreements with California LSEs to provide much needed Renewables Portfolio Standard (“RPS”)-eligible energy and capacity to the California market. PCW plans to recover its transmission service costs on the TWE Project through these offtake agreements.

The Benefits of Out-of-State Wind and Interregional Transmission

The need for and value of new transmission has increased markedly in recent years.  A report released last month by the Lawrence Berkeley National Laboratory demonstrated that transmission values are high, particularly for regional and interregional transmission, and that building this additional transmission will provide substantial economic benefits to consumers.[2]  The report suggests that transmission planning generally understates the economic value of new transmission infrastructure like the TWE Project.

Connecting the TWE Project to the CAISO controlled grid using the SPTO model will also further the California Public Utilities Commission’s (“CPUC”) Integrated Resource Planning (“IRP”) objectives.  The TWE Project will give LSEs the opportunity to procure out-of-state wind resources as RPS Category 1 resources, provide Resource Adequacy benefits to the state, and help improve the reliability and geographic diversity of California’s renewables mix.

The procurement of out-of-state wind resources has been included in both transmission and resource planning.  Specifically, as the CPUC’s Energy Division pointed out in its December 19, 2022, stakeholder comments on the SPTO model, CPUC Decision (D.) 22-02-004 included 1,500 MW of out-of-state resources with full capacity deliverability status as part of the Preferred System Plan.[3]  D.22-02-004 also highlighted the CPUC’s expectation that out-of-state resources, including Wyoming wind resources, will play an important role in future planning decisions.  Similarly, in the recent IRP decision approved by the CPUC at its February 23, 2023, business meeting, the base case portfolio to be used by the ISO for its 2023-2024 Transmission Planning Process now includes 4,828 MW of out-of-state wind, from Wyoming and New Mexico, on new transmission for 2030.

As the CAISO notes, TransWest submitted multiple study requests into the ISO’s transmission planning process for the TWE Project; however, it was not selected for a number of reasons. While the TWE Project was not selected through transmission planning, the Wyoming wind power that the new line capacity will be used to deliver to California is squarely within the state’s planning objectives.  It is imperative that the CAISO implement the SPTO model to ensure that California LSEs have access to these Wyoming wind resources.  This same model could also be used to incorporate other large out-of-state resource additions that are assumed in planning.

[1] See TransWest Express LLC’s Application for Participating Transmission Owner dated July 14, 2022, for a full description of the TWE Project.

[2] Dev Millstein, Ryan H Wiser, Seongeun Jeong, Julie Mulvaney Kemp, The Latest Market Data Show That the Potential Savings of New Electric Transmission Was Higher Last Year Than at Any Point in the Last Decade (February 7, 2023), available at https://eta-publications.lbl.gov/sites/default/files/lbnl-transmissionvalue-fact_sheet-2022update-20230203.pdf

[3] Rulemaking 20-05-003, Decision Adopting 2021 Preferred System Plan, D.22-02-004 (February 15, 2022), available at https://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M451/K412/451412947.PDF

2. Please provide your organization’s comments on the proposed use of encumbrances, as described in the straw proposal.

TransWest supports the proposed use of encumbrances to administer market operations while honoring and facilitating the contracts TransWest and PCW executed to provide transmission service on the TWE Project. This proposal is consistent with how the CAISO administers market operations while honoring and facilitating similar contracts by other PTOs.  Treating all similar existing contracts the same will avoid the need to develop and administer another mechanism to honor and facilitate the SPTO contractual rights.

3. Please provide your organization’s comments on the proposed transmission charges overall, in the straw proposal.

TransWest supports the proposed transmission charges. TransWest will be funding the cost to build and operate the TWE Project, similar to all other PTOs. However, unlike the existing PTOs, TransWest will not be receiving any payments from the TAC and/or WAC and will need to charge both subscribers and non-subscribers for transmission services on the TWE Project. The Straw Proposal accommodates these requirements in a fair and equitable manner consistent with both open access and the general concept in FERC-regulated transmission that the “beneficiary pays”.

4. Please provide your organization’s comments on the proposed cost to subscriber’s process, as described in the straw proposal.

TransWest supports the proposed cost to subscriber’s process. Please see response to item 3.

5. Please provide your organization’s comments on the proposed cost to non-subscriber’s as described in the straw proposal.

TransWest supports the proposed cost to subscriber’s process. Please see response to item 3.

6. Please provide your organization’s comments on the proposed Generator Interconnection Process, as described in the straw proposal.

TransWest supports the proposed generator interconnection process, with the exception of the network upgrade issue outlined in response to item 7.

7. Please provide your organization’s comments on the issue of reimbursement for network upgrades, as discussed in the straw proposal.

The Straw Proposal seeks stakeholder comments on how deliverability network upgrades to the internal CAISO grid[1] that are required as a result of generator interconnection requests should be paid for under the SPTO model.  Generators who have subscribed for and are paying for transmission service on an SPTO transmission project should be treated the same as any other generator interconnection customer.  The cost responsibility of these generators for downstream network upgrade costs should be handled consistent with the existing CAISO Tariff, which applies to all generator interconnection customers seeking interconnection and deliverability allocations on the existing CAISO network.

The revenue commitments from subscribing generators for transmission service are intended to secure the financing necessary for TransWest to construct the transmission project and interconnect transmission facilities to the CAISO network.  In TransWest’s case, that means over $3.5 billion of transmission assets added to the CAISO’s controlled grid with no impact on the CAISO’s TAC.  But it would not be fair to require the subscriber generators (and their customers, including California LSEs who choose to buy Wyoming wind) to also cover the entire cost of reliability upgrades to the CAISO network, because all CAISO system users will benefit from these system upgrades. Treating all generators consistently would avoid imposing additional financial on SPTO subscriber generators and their customers.  This policy would maintain the CAISO’s policy of non-discrimination for interconnecting generators and be consistent with the existing cost allocation principles for network upgrades that provide system reliability benefits to all the CAISO’s users.

The CAISO recently addressed the question of reimbursement for network upgrades in proposed Tariff amendments to implement interconnection process enhancements when the CAISO is an affected system.[2]  The CAISO proposed that external interconnection customers be eligible for repayment of amounts advanced for network upgrades consistent with the CAISO’s existing rules for internal interconnection customers (i.e., external interconnection customers must finance network upgrades internal to the CAISO to maintain reliability, and then transmission owners reimburse them within five years of commercial operation).[3]  The CAISO explained that “[FERC] precedent is clear that ‘network upgrades represent improvements to the integrated transmission system, and [their] benefits to the transmission system are considered independent from any benefits customers may receive as a result of generation that interconnects to the system.’”[4]  The CAISO’s reimbursement policy also “ensures network upgrades are rightsized to mitigate the specific impact and removes any incentive to use affected system mitigation to replace or defer other upgrades for the utility’s benefit and at the developer’s expense.”[5]

Though the circumstances of the SPTO model differ slightly from affected system mitigation, the CAISO’s rationale for using its existing policy to reimburse the costs for network upgrades applies with equal force here and will lead to a just and reasonable outcome.  Under the SPTO model, the merchant transmission developer will be fully responsible for the costs of its transmission facilities; however, generators that are seeking to interconnect on these new transmission facilities may need to pay for downstream network upgrade costs to obtain deliverability status and Resource Adequacy capacity.  The reliability benefits of these downstream network upgrades will be enjoyed by all CAISO network participants, and thus the cost responsibility for such upgrades should be shared among all CAISO participants.

The alternative – to exclude the SPTO generator subscribers from reimbursement of costs for network upgrades internal to the CAISO system – would contravene CAISO cost allocation policy and discriminate against certain classes of generators.  Such an allocation of network upgrade costs solely to a subset of users when the network upgrades stand to benefit all CAISO users would depart from the central tenet that costs be allocated in a manner that is roughly commensurate with the estimated benefits.[6]

The Straw Proposal emphasizes that the SPTO subscriber generators will be required to complete the generator interconnection process “like any other generator.”[7]  The subscriber generators “will sign the three-party Generator Interconnection Agreement and be governed by the tariff and business practice manuals like any other generator in the ISO balancing authority area.”[8]  Thus, the subscriber generators, which will be treated like all other interconnecting generators for purposes of determining network upgrade costs, should not be singled out to pay for CAISO system upgrades that provide diffuse benefits to the entire system.  Network upgrade costs should be treated in a manner consistent with the CAISO Tariff and existing FERC precedent

[1] “Internal to the CAISO grid” is meant to refer to the currently existing CAISO grid or downstream from the point where the TWE Project will connect with the existing CAISO network. 

[2] Straw Proposal at 13.

[3] CAISO, Tariff Amendment to Implement Interconnection Process Enhancements, FERC Docket No. ER23-941 (January 26, 2023), at 10.

[4] Id. (quoting California Independent System Operator Corp., 160 FERC ¶ 61,047 at P 34 (2017)).

[5] Id.

[6] See FERC Order 1000.  Additionally, in the Motion to Intervene and Comments of NextEra Energy Resources, LLC (“NextEra”) in FERC Docket No. ER23-838-000, NextEra explains that:

FERC precedent requires that cost of transmission facilities be allocated in a manner that is at least roughly commensurate with the estimated benefits. Transmission Planning and Cost Allocation by Transmission Owning and Operating Public Utilities, 136 FERC ¶ 61,051 at P 586, FERC Docket No. RM10-23 (Issued July 21, 2011).  Under this standard, reviewing courts have held that “the [FERC] generally may not single out a party for the full cost of a project, or even most of it, when the benefits of the project are diffuse.”

[7] Straw Proposal at 13.

[8] Straw Proposal at 14.

8. Please provide your organization’s comments on the proposed Transmission Planning Process and Transmission Issues, as described in the straw proposal.

TransWest supports the proposed transmission planning process and transmission issues.  TransWest and the CAISO executed an Applicant PTO Agreement in January that includes requirements for TransWest to participate in the transmission planning process and generator interconnection process in advance of turning over operational control of the TWE Project facilities to CAISO.

9. Please provide your organization’s comments on the proposed Deliverability Allocation Process, as described in the straw proposal.

TransWest supports the proposed deliverability allocation process.