Comments on Straw proposal

1. Please provide a summary of your organization’s comments on the capacity procurement mechanism (CPM) enhancements track 1 straw proposal:

The California Community Choice Association (CalCCA) appreciates the opportunity to comment on the California Independent System Operator Corporation’s (CAISO’s) CPM enhancements track 1 straw proposal. These comments focus on proposals 4.1 and 4.2, which would modify the CAISO’s Capacity Procurement Mechanism (CPM) authority to:  

1. Allow the CAISO to reduce megawatts (MW) of a significant event CPM award in the event a resource receives another commitment to the CAISO; and  

2. Allow the CAISO to reduce the term of a significant event CPM in the event the CPM capacity has another commitment later in the month that is not visible to the CAISO.  

In summary, CalCCA supports both of these changes, as they will allow the CAISO to more efficiently access CPM capacity needed to maintain system reliability.  

2. Provide your organization’s comments on section 4.1: reducing the volume (MW) of significant event CPM designations when the designated capacity is committed and visible to the ISO:

The CAISO proposes to have the authority to reduce the volume (in MW) of significant event CPM designations when the designated capacity is otherwise committed to the CAISO (e.g., through a Resource Adequacy (RA) contract, Reliability Must-Run (RMR) designation, or monthly CPM designation). The CAISO already has this flexibility for exceptional dispatch CPMs and this proposal would extend this flexibility to significant event CPMs. CalCCA supports this change.  Allowing the CAISO to shape the MW amount of the designation to the uncontracted capacity both before and after the generator accepts the CPM award will allow the CAISO to most efficiently designate CPM capacity to meet the reliability need triggering the significant event. 

3. Provide your organization’s comments on section 4.2: reducing the term of significant event CPM designations when the designated capacity is already committed but not visible to the ISO:

The CAISO proposes to have the authority to reduce the term of significant event CPM designations when the designated capacity is already committed but not visible to the CAISO (e.g., capacity contracted to an entity outside the CAISO balancing authority area). Under this proposal, the CAISO would continue to offer CPM designations to generators for 30-day terms, but generators would be able to voluntarily accept significant events for less than 30 days when the designated capacity has already been committed for the upcoming month. This authority does not already exist for any CPM type, and the CAISO proposes to extend it for only the significant event CPM. 

CalCCA supports this proposal as it could unlock uncommitted capacity that is currently inaccessible to the CAISO due to the length of the CPM term and, in turn, could lower CPM costs if lower-cost resources unavailable for a 30-day term are available for the shorter term. To further extend the benefits of this proposal, the CAISO should extend this proposal to exceptional dispatch CPMs. 

4. Provide your organization’s comments on section 4.3: CPM reporting via OASIS:

CalCCA has no comments on this topic at this time. 

5. Provide your organization’s comments on section 4.4: CPM market notices:

CalCCA has no comments on this topic at this time. 

6. Provide your organization’s comments on section 4.5: CPM notifications to scheduling coordinators:

CalCCA has no comments on this topic at this time. 

7. Please provide additional comments on the CPM enhancements track 1 straw proposal not mentioned above:

CalCCA has no additional comments at this time.

1. Please provide a summary of your organization’s comments on the capacity procurement mechanism (CPM) enhancements track 1 straw proposal:

The CAISO proposal (of reducing the volume of significant event CPM designations when the designated capacity is committed and visible to the CAISO and the term of significant event CPM designations when the designated capacity is already committed but not visible to the CAISO) may enhance the reliability as well as cost efficiency.

2. Provide your organization’s comments on section 4.1: reducing the volume (MW) of significant event CPM designations when the designated capacity is committed and visible to the ISO:

Reduction of CPM capacity for the overlapping of CPM designation and RA commitment is an efficient approach which reduces cost to all market participants.

3. Provide your organization’s comments on section 4.2: reducing the term of significant event CPM designations when the designated capacity is already committed but not visible to the ISO:

Allowing a resource to accept less than 30 days CPM may improve reliability and cost efficiency for the market and provide flexibility to the resource.

4. Provide your organization’s comments on section 4.3: CPM reporting via OASIS:

No comment.

5. Provide your organization’s comments on section 4.4: CPM market notices:

The proposal in section 4.4 will ensure the CAISO has sufficient time to collect the information needed for the market notice, undertake the proper reviews, obtain necessary approvals, and issue the market notice in a timely manner.

6. Provide your organization’s comments on section 4.5: CPM notifications to scheduling coordinators:

CDWR agrees that it will be helpful to make the resource scheduling coordinator contact information directly visible and editable in CIRA to avoid CPM designation notifications being sent to an outdated contact.

7. Please provide additional comments on the CPM enhancements track 1 straw proposal not mentioned above:

No further comments.

1. Please provide a summary of your organization’s comments on the capacity procurement mechanism (CPM) enhancements track 1 straw proposal:

Please see the PDF attached below the final question for DMM's complete set of comments.

2. Provide your organization’s comments on section 4.1: reducing the volume (MW) of significant event CPM designations when the designated capacity is committed and visible to the ISO:

Please see the PDF attached below the final question for DMM's complete set of comments.

3. Provide your organization’s comments on section 4.2: reducing the term of significant event CPM designations when the designated capacity is already committed but not visible to the ISO:

Please see the PDF attached below the final question for DMM's complete set of comments.

4. Provide your organization’s comments on section 4.3: CPM reporting via OASIS:

Please see the PDF attached below the final question for DMM's complete set of comments.

5. Provide your organization’s comments on section 4.4: CPM market notices:

Please see the PDF attached below the final question for DMM's complete set of comments.

6. Provide your organization’s comments on section 4.5: CPM notifications to scheduling coordinators:

Please see the PDF attached below the final question for DMM's complete set of comments.

7. Please provide additional comments on the CPM enhancements track 1 straw proposal not mentioned above:

Please see the PDF attached below the final question for DMM's complete set of comments.

1. Please provide a summary of your organization’s comments on the capacity procurement mechanism (CPM) enhancements track 1 straw proposal:

The Public Advocates Office (Cal Advocates) at the California Public Utilities Commission (CPUC) is California’s independent consumer advocate with a mandate to obtain the lowest possible rates for utility services consistent with reliable and safe service levels, and the state’s environmental goals.

Cal Advocates generally supports the July 28, 2022, Track 1 Straw Proposal (Straw Proposal).  One aspect of the Straw Proposal would reduce the volume and term length of Significant Event Capacity Procurement Mechanisms (CPM) to provide the CAISO flexibility to honor any contractual commitments for Resource Adequacy (RA) and obligations that resources have in other Balancing Authority Areas.  The Straw Proposal would modify the CAISO Tariff to clearly and publicly implement these new processes.  A clear description of these proposed processes will inform resource owners and load-serving entities (LSEs) of how CPM designations and their costs would adjust due to intramonthly contract issues that conflict with Significant Event CPMs as currently designed.  Cal Advocates also agrees with the CAISO that extending the CPM designation market notice deadline to five business days from the execution of the designation would improve the accuracy of the information in those notices.  Lastly, providing CPM reports in the CAISO’s Open Access Same-time Information System (OASIS) would facilitate public access to CPM information. Cal Advocates provides recommendations to further improve public access to CPM information below in topic 4.

2. Provide your organization’s comments on section 4.1: reducing the volume (MW) of significant event CPM designations when the designated capacity is committed and visible to the ISO:

The Straw Proposal includes recommendations to reduce the volume and/or term length of a Significant Event CPM if the designated resource has an RA contract or similar obligations during the CPM designation.[1]  If adopted, these two recommendations would enable the CAISO to adjust Significant Event CPM designations if the designated resource’s owner shows that the resource has obligations to provide capacity on an RA plan during the term of the CPM.[2]  Cal Advocates supports the recommendations to adjust the volume and term length of CPM designations with respect to other obligations.[3]  If adopted, these recommendations would provide reasonable solutions to prevent CPM designations from procuring unavailable capacity and creating unnecessary ratepayer costs.

However, in certain situations implementing these recommendations could harm LSE procurement efforts and RA compliance.  A Significant Event CPM has an initial term of 30 days but may be extended for an additional 60 days.[4]  A 90-day term would enable the CAISO and CPUC to allocate RA credits to LSEs for up to the next three months since LSEs must submit their RA supply plan 45 days before the compliance month.[5]  If the volume and term length of a CPM is modified after the CPM designation is made in accordance with the Straw Proposal, then the RA credits that were allocated to LSEs would be altered.  If those RA credits are altered after the LSEs have submitted their supply plans, the LSEs would be unable to remedy any deficiency created by the alteration of the RA credits.  The CAISO could then allocate any backstop costs to those LSEs who submitted compliant showings but then became deficient due to the CPM credit adjustment.[6]

Significant Event CPMs with 90-day terms are relatively rare, and a CPM adjustment that occurs before RA supply plans are due would give LSEs time to adjust their showings.  However, the CAISO should clarify whether a CPM term or volume adjustment could in fact make an LSE deficient on RA showings that the LSE has previously submitted.  In the next draft proposal, the CAISO should describe what actions the CAISO would take if CPM credits were modified during the CPM designation and clarify the impacts to any resulting LSE RA deficiencies.

[1] The Straw Proposal appears to consider RA and other obligations that may exist before or after the designation is made.  “… if capacity that receives a significant event designation becomes RA capacity or receives a monthly CPM designation or receives an RMR contract as of a certain date, then the significant event CPM designation shall be reduced by the amount of the new RA capacity, monthly CPM designation, or RMR contract from that date through the rest of the CPM designation term.”  Straw Proposal, p. 7.  See also Straw Proposal, p. 8.  Available at: http://www.caiso.com/InitiativeDocuments/StrawProposal-CapacityProcurementMechanismEnhancements-Track1.pdf.

[2] Capacity shown on a Resource Adequacy plan are not eligible to participate in the CPM procurement process.  See CAISO Tariff 43A.4.2.4 and 43A.4.2.5.

[3] These two proposals are described at Sections 4.1 and 4.2 of the Straw Proposal, respectively.

[4] CAISO Tariff 43A.3.5.

[5] CAISO Tariff 43A.9.

[6] Depending on the type of CPM designation, backstop costs may be applied pro rata to the magnitude of the LSE’s deficiency.  CAISO Tariff 43A.8.

3. Provide your organization’s comments on section 4.2: reducing the term of significant event CPM designations when the designated capacity is already committed but not visible to the ISO:

Please see Cal Advocates’ response to topic 2.

4. Provide your organization’s comments on section 4.3: CPM reporting via OASIS:

Currently, the CAISO publishes CPM designation reports on its website that include information according to the CAISO’s Tariff.[1]  The CAISO’s Straw Proposal recommends replacing publication to the CAISO website with publication of the same information in the OASIS to enable more efficient reporting.[2]  Cal Advocates does not oppose this recommendation but offers the following additional recommendations to improve the quality of CPM reporting and access to historical information.

The CAISO should modify its recommendation to require its designation reports to include the actual total cost of each CPM designation.  Currently, the designation reports include the price and volume of CPM designations, which enables an estimation of total costs, but do not include any penalty charges or other adjustments made in the CAISO settlements process that would be shown in the actual cost of designations.[3]  Including the actual costs of CPM designations would provide superior information and allow parties to track the costs of CPMs that ultimately flow to ratepayers.  Actual costs could be added to the CPM report following completion of the settlement process for the CPM.

Secondly, most OASIS reports show a range of data up to one month at most.  This limitation would make it difficult to review past CPM reports efficiently, since a user would need to check each month individually to see if a CPM occurred.  Currently, CPM reports of recent years are organized as individual files and listed together by year.[4]  Cal Advocates recommends that the CAISO allow the CPM reports in OASIS to list all CPMs on a single page by either removing a date range as a condition of the OASIS report or extending the date range limitation to at least one year.  If OASIS is unable to display more than a single month at once, then the CAISO should consider maintaining its current process of listing individual reports on a single web page to maintain ease of review.

[1] Straw Proposal, p. 9.

[2] Straw Proposal, p. 9.

[3] For example, 2021 intra-monthly CPM costs are reported as estimates in the 2021 report.  2021 Annual Report on Market Issues & Performance, July 27, 2022, p. 271.  Available at: http://www.caiso.com/Documents/2021-Annual-Report-on-Market-Issues-Performance.pdf.

[4] CPM designation reports are located here: http://www.caiso.com/Pages/documentsbygroup.aspx?GroupID=33EB5656-7056-4B8E-87B2-3EA3D816DA62.

5. Provide your organization’s comments on section 4.4: CPM market notices:

Cal Advocates has no comment on this topic at this time.

6. Provide your organization’s comments on section 4.5: CPM notifications to scheduling coordinators:

Cal Advocates has no comment on this topic at this time.

7. Please provide additional comments on the CPM enhancements track 1 straw proposal not mentioned above:

Cal Advocates has no further comments at this time.

1. Please provide a summary of your organization’s comments on the capacity procurement mechanism (CPM) enhancements track 1 straw proposal:

Middle River Power LLC (MRP) generally supports the CAISO’s CPM enhancements (CPME) initiative.  MRP offers several recommendations below to improve the transparency of the CPM designations.  As decribed below, MRP does not support the CAISO's proposal to extend the time that CAISO has to issue a CPM designation notice to five business days.  

2. Provide your organization’s comments on section 4.1: reducing the volume (MW) of significant event CPM designations when the designated capacity is committed and visible to the ISO:

MRP generally supports the CAISO’s request to reduce the volume of significant event CPM designations due to other situations (e.g., new RA capacity, monthly CPM designation or RMR contract).  MRP recommends the CAISO also consider a scenario in which the resource may have export capacity in the following month but may not be for the full resource NQC.  This is similar to the CAISO’s concept in section 4.2 in which such export capacity would impact the amount of capacity available to the CAISO to CPM. 

3. Provide your organization’s comments on section 4.2: reducing the term of significant event CPM designations when the designated capacity is already committed but not visible to the ISO:

MRP understands that the CAISO proposes to allow generators to voluntarily accept significant event CPM designations for fewer than 30 days.  Under the current exceptional dispatch CPM rules, generators can decline an exceptional dispatch CPM designation and receive supplemental revenues if the capacity subject to the CPM designation was not offered into the intra-monthly competitive solicitation process.[1]  MRP recommends the CAISO consider whether generators can have a similar option for significant event CPM designations rather than modifying tariff provisions to allow generators to accept a fewer-than-30-day designation.  If the CAISO accepts MRP’s modifications to section 4.1, then modifying the tariff to allow for a generator to accept a CPM designation of fewer than 30 days may not be necessary.  Alternatively, the ability for a resource to receive supplemental revenue if it declines a 30 day CPM designation may also make this proposal moot.  Finally, MRP recommends the CAISO consider allowing generators to indicate to the CAISO that they have capacity contracts to export RA through a supply plan process so that the CAISO can utilize the proposal in section 4.1.

[1] CAISO Tariff 43A.2.5.3

4. Provide your organization’s comments on section 4.3: CPM reporting via OASIS:

MRP does not object to the CAISO reporting CPM designations via OASIS.  However, OASIS CPM designation information should be clear, transparent and easy to search.  First, if a significant event CPM designation had variable daily capacity quantities, as proposed in section 4.1, then the OASIS report should display such granular information.  Second, MRP recommends the CAISO load information for all historical CPM designations, currently available only in CIRA, into OASIS, rather than only including in OASIS only future CPM information.  Doing so, which MRP expects would involve only a one-time translation and MRP hopes would not be burdensome,would create a very useful and accessible source of CPM information. 

5. Provide your organization’s comments on section 4.4: CPM market notices:

MRP does not support the proposal to extend the time for posting CPM designations to five business days as this more than doubles the amount of time until the designation notice is issued.  Under the five business day proposal, if the CAISO issued a CPM designation on Wednesday, then the market notice may not be sent out until the following Wednesday assuming no holidays occur in between.  Given that, under a well-functioning RA program, the number of CAISO backstop procurements should be infrequent, and further given that timely backstop procurement information helps give market participants and regulators a clear understanding of what designation occurred and why it occured, if the CAISO insists on extending the notification period, then MRP recommends the CAISO consider extending the notification period to only three business days. 

6. Provide your organization’s comments on section 4.5: CPM notifications to scheduling coordinators:

MRP does not oppose this proposal. 

7. Please provide additional comments on the CPM enhancements track 1 straw proposal not mentioned above:

MRP believes the CAISO should consider the 24-Slice RA framework issues being discussed in the CPUC’s RA Reform Track workshops to assess whether there will be any impacts to the CAISO’s CPM authority and process. For example, the details of how the CAISO will validate RA showings under the new 24-slice framework may affect how the CAISO determines whether these is a need for a CPM designation and exercises its CPM backstop authority.  While the CPUC’s RA proceeding is not expected to finalize the new design of the RA program until Q1 2023, proposals for the 24-Slice framework implementation are due in November 2022.  MRP believes the CAISO should be willing to add additional scope and time to track 1 of this initiative as needed based on the progress of the RA Reform Track so that the CAISO has the authority and tools needed to manage a reliable grid.

1. Please provide a summary of your organization’s comments on the capacity procurement mechanism (CPM) enhancements track 1 straw proposal:

The CAISO is proposing five specific enhancements to the Capacity Procurement Mechanism (CPM) designation process. Two of the enhancements allow CAISO more flexibility in Significant Event CPM designations. These enhancements are expected to reduce the constraints that restrict CAISO’s ability to designate resources and should increase the proportion of resources that are available to accept Significant Event CPM designations. Three of the enhancements improve the transparency and communication of CPM designations.  

In the comments below, PG&E offers support for these proposed changes as they can increase transparency and communication. Additionally, PG&E suggests including historic CPM changes data in OASIS reporting.

2. Provide your organization’s comments on section 4.1: reducing the volume (MW) of significant event CPM designations when the designated capacity is committed and visible to the ISO:

The CAISO’s first proposed adjustment to the CPM process will allow for a mid-term reduction of Significant Event CPM capacity if the designated capacity receives an RA capacity, monthly CPM designation, or RMR contract. PG&E understands that situations can arise where resources’ capacity obligations change, during the 30-day term of a Significant Event CPM, and those resources are no longer available for the full term of a CPM designation. This proposed flexibility already exists for Exceptional Dispatch CPM designations and is a reasonable modification to Significant Event CPM rules. The enhancement should expand the feasible set of generators that can meet the requirements, i.e., increasing the feasible supply. In other words, this may allow a larger portion of resources to offer capacity into the CPM competitive solicitation process and accept monthly CPM designations in addition to RA and RMR contracts. PG&E supports this proposal as it will confer a greater level of flexibility to the CAISO to address the circumstances in which a Significant Event CPM designation would be needed. 

In order to more thoroughly understand how this change, and the change proposed in section 4.1, will impact the CPM process, the CAISO should provide a hypothetical example of how shorter-term CPM capacity will be designated and reported. For example, will the designation be broken up into two designations with different quantities (MW) and terms (days)?

3. Provide your organization’s comments on section 4.2: reducing the term of significant event CPM designations when the designated capacity is already committed but not visible to the ISO:

The second proposed enhancement would give the CAISO the ability to reduce the term (days) of Significant Event CPM designations when there is a conflict with other capacity commitments not visible to the ISO. Similar to issues addressed by Section 4.1, PG&E understands that under existing rules, conflicts can arise that limit the amount of capacity offered into the CPM competitive solicitation process because resources may be unavailable for the full 30-day term. The enhancement should expand the feasible set of generators that can accept the Significant Event CPM designation, i.e., increasing the feasible supply. This increased flexibility should have the effect of reducing CPM costs.

In order to more thoroughly understand how this change, and the change proposed in section 4.2, will impact the CPM process, the CAISO should provide a hypothetical example of how shorter-term CPM capacity will be designated and reported.

PG&E supports this proposal as it believes it will increase the feasible supply of CPM resources able to accept CPM designations.

4. Provide your organization’s comments on section 4.3: CPM reporting via OASIS:

PG&E supports this enhancement and believes it will enhance transparency and increase access to CPM data. However, while reporting via OASIS may be more efficient, it should not entirely supplant the existing market report.  Removing this existing reporting mechanism may limit access to CPM information for some users or market participants who do not use OASIS. Rather, the CAISO should add this proposed enhancement to the existing reporting mechanism.

PG&E requests that CAISO (1) attempt to include historic CPM data in addition to future designations; and (2) provides examples on how designations that are modified, per 4.1 and 4.2 of the proposal, will be represented in OASIS.

5. Provide your organization’s comments on section 4.4: CPM market notices:

PG&E supports the CAISO’s proposal to allow an extra three (3) days for the CAISO to report the designations.

6. Provide your organization’s comments on section 4.5: CPM notifications to scheduling coordinators:

PG&E supports the CAISO’s proposal to improve CIRA to allow more efficient communication with Scheduling Coordinators.  

7. Please provide additional comments on the CPM enhancements track 1 straw proposal not mentioned above:

None.

1. Please provide a summary of your organization’s comments on the capacity procurement mechanism (CPM) enhancements track 1 straw proposal:

SCE appreciates the opportunity to provide comments on the Capacity Procurement Mechanism (CPM) Enhancements Track 1 Straw Proposal.   The five proposed operational and process enhancements are improvements that make the CPM process more flexible. We support the proposed changes on the Track 1 straw proposal and have no further comments.

2. Provide your organization’s comments on section 4.1: reducing the volume (MW) of significant event CPM designations when the designated capacity is committed and visible to the ISO:

SCE does not have any additional comments.  

3. Provide your organization’s comments on section 4.2: reducing the term of significant event CPM designations when the designated capacity is already committed but not visible to the ISO:

SCE does not have any additional comments.  

4. Provide your organization’s comments on section 4.3: CPM reporting via OASIS:

SCE does not have any additional comments.  

5. Provide your organization’s comments on section 4.4: CPM market notices:

SCE does not have any additional comments.  

6. Provide your organization’s comments on section 4.5: CPM notifications to scheduling coordinators:

SCE does not have any additional comments.  

7. Please provide additional comments on the CPM enhancements track 1 straw proposal not mentioned above:

SCE does not have any additional comments.  

1. Please provide a summary of your organization’s comments on the capacity procurement mechanism (CPM) enhancements track 1 straw proposal:

Vistra supports the CAISO’s proposals for track 1. We are encouraged by the CAISO commitment and engagement to explore enhancements to the Capacity Procurement Mechanism design including soft offer cap, and ideally also CPM offer rules that allow market participants to seek FERC review for offers above the soft offer cap. We believe this is a critical policy issue on RA and will engage collaboratively with CAISO and other stakeholders in track 2.

2. Provide your organization’s comments on section 4.1: reducing the volume (MW) of significant event CPM designations when the designated capacity is committed and visible to the ISO:

Vistra supports the CAISO proposal. Extending the practice for exceptional dispatch CPM designations being adjusted to reflect shown RA obligations in future periods by the CAISO to significant event CPM seems appropriate. Can the CAISO make clear that the only reason the CPM designation would adjust month over month is if the resource shows RA on a RA supply plan or is converted to a Reliability Must Run unit by the CAISO. Are there any other circumstances that the value would be adjusted? Can the CAISO provide additional context for how the CPM resource receives notification and whether it must acknowledge the adjusted designation amount proactively?

3. Provide your organization’s comments on section 4.2: reducing the term of significant event CPM designations when the designated capacity is already committed but not visible to the ISO:

Vistra supports the CAISO proposal. We understand the proposal as only the Scheduling Coordinator can take the action to reduce the term and amount of capacity it will accept prior to the CPM designation being confirmed. Can you confirm this understanding is correct and further clarify that once the CPM designation is confirmed that the term and amount of capacity cannot be further revised.

4. Provide your organization’s comments on section 4.3: CPM reporting via OASIS:

Vistra is neutral on how the CAISO makes these reports available. Either a downloadable excel document or OASIS report will meet our needs and be seen as an improvement to the current reporting approach. If the CAISO prefers OASIS, that will be acceptable.

5. Provide your organization’s comments on section 4.4: CPM market notices:

Vistra is neutral on the proposal to provide additional business days for the CAISO to be required to issue market notices with CPM designations. We request the CAISO not revise the proposal to any length longer than 5 business days.

6. Provide your organization’s comments on section 4.5: CPM notifications to scheduling coordinators:

Vistra strongly supports adding the Scheduling Coordinator contact information directly to CIRA. We think this will help ensure reliable communications between the CAISO and the best point of contact within our organizations. We appreciate the CAISO making this process improvement.

7. Please provide additional comments on the CPM enhancements track 1 straw proposal not mentioned above:

No comments at this time.