Comments on Feb. 16, 2022 meeting presentation and discussion

1. Please provide your organization's comments on the analysis track related to the load conformance impact:

Bonneville[1] appreciates the CAISO’s willingness to conduct additional analysis on the impact of load conformance on the EIM RSE. Bonneville reiterates the concern expressed by the EIM Entities in Phase 1 that CAISO’s use of load conformance allows the CAISO to dispatch EIM resources in other BAAs to meet the capacity and flexibility requirements of the CAISO BAA.

Bonneville generally supports the initial high level scope of CAISO’s analysis to:

• Cover a more comprehensive study period of the peak hours on at least the top 5 days based on the peak load levels from both the FMM and HASP.
• Study the other market dynamics that are influenced by the load conformance such as impacts on HASP imports and exports, resulting reduced flexible ramping sufficiency test requirements, and potential counterfactual impacts on CAISO EIM RSE failures.

Bonneville requests the CAISO include analysis of the impact of load conformance on both the capacity test and the flexible ramping sufficiency test and that the CAISO include both peak capacity requirement days and peak flexibility requirements days.

Lastly, while we work towards the best solution for reflecting the significant amount of load conformance occurring in the CAISO BAA in the EIM RSE in the short term, Bonneville urges the CAISO to maintain focus on the long-term solutions for substantially reducing CAISO’s reliance on load conformance to achieve reliable market outcomes.

[1] Bonneville is a federal power marketing administration within the U.S. Department of Energy that markets electric power from 31 federal hydroelectric projects and some non-federal projects in the Pacific Northwest with a nameplate capacity of 22,500 MW. Bonneville currently supplies around 30 percent of the power consumed in the Northwest. Bonneville also operates 15,000 miles of high voltage transmission that interconnects most of the other transmission systems in the Northwest with Canada and California. Bonneville is obligated by statute to serve Northwest municipalities, public utility districts, cooperatives and then other regional entities prior to selling power out of the region.

2. Please provide your organization's comments on the analysis track related to the on the relationship between HASP intertie schedules and EIM transfers:

Bonneville supports the scope of analysis CAISO has proposed for assessing the relationship between HASP intertie schedules and EIM transfers. While it will be helpful to better quantify some of the dynamic between the HASP intertie schedules and EIM transfers, Bonneville believes more policy discussion is needed on the appropriateness of clearing HASP awards in real-time based on EIM advisory transfers, along with potential solutions.

3. Please provide your organization's comments on the analysis track related to the uncertainty and intertie deviation adders performance:

Bonneville thanks the CAISO for including additional analysis of the uncertainty and intertie deviation adders as part of the scope of Phase 1b. We request that the CAISO prioritize providing a detailed description of the quantile regression calculation methodology for the net load uncertainty prior to providing a performance assessment of the proposed approach for uncertainty in the EIM and CAISO areas.

4. Please provide your organization's comments on the analysis track related to other suggested and agreed upon areas:

No comments.

5. Please provide additional comments on the WEIM Resource Sufficiency Evaluation Enhancements Phase 1B initiative not mentioned above:

In the EIM RSE Phase 1, the EIM Entities requested[1] the CAISO (or DMM) provide stakeholders with a counterfactual analysis using HE 17-22 of the 5 highest load days of Summer 2021 to clearly show:

• Capacity counted in the existing capacity test
• Capacity that was not actually operationally available in real-time
• Capacity that would have been counted using the STUC time horizon (i.e. 4.5 hours)
• Capacity that would have been counted using the RTUC time horizon (i.e. 2 hours)

The CAISO verbally agreed to conduct this analysis, however we don’t see it as part of the scope of Phase 1b. Bonneville reiterates its request to include this analysis as part of Phase 1b.

[1] See Joint EIM Entity Comments on CAISO’s website

1. Please provide your organization's comments on the analysis track related to the load conformance impact:

Analysis by the MSC and CAISO has shown no indication of load conformance resulting in leaning

The analysis provided by the CAISO’s Market Surveillance Committee (MSC) disagreed with the concerns raised by some stakeholders that the CAISO’s use of load conformance corrects forecast errors or results in the CAISO BAA leaning on EIM transfers.  The MSC’s opinion concluded there is “no leaning on the rest of the system as a result of using load conformance adjustments in HASP and RTPD; rather, the CAISO loads buy power at high prices in the FMM and sells it back in RTD.  This should be a concern to CAISO ratepayers, but it benefits non-CAISO EIM entities who export power to the CAISO in the FMM.”[1] 

In addition, the initial analysis[2] presented by the CAISO’s Market Analysis and Forecasting group found only a fractional relationship between load conformance and EIM transfers and did not support the claims that load conformance enables leaning.  The CAISO should not add additional complication to the RSE if the CAISO’s use of load conformance is a result of market design features that do not exist in other EIM BAAs.

Additional RSE rules should not create asymmetries or unnecessary complexity

PG&E would be concerned about creating additional asymmetries in the RSE due to counting rules applied differently to the CAISO BAA compared with non-CAISO BAAs participating in the EIM.  Any policy for RSE counting rules that effectively apply only to the CAISO BAA -- and are not designed to be applied equitably across the EIM footprint – would not align with this initiative’s goal of providing equitable administration of the RSE. 

[1] “Opinion on Energy Imbalance Market (EIM) Resource Sufficiency Evaluation Enhancements.” Members of the Market Surveillance Committee of the California ISO. February 2, 2022.  Pg. 20 at  http://www.caiso.com/Documents/MSCFinalOpiniononEIMResourceSufficiencyEvaluationEnhancements-Phase1.pdf

[2] Conclusions from the CAISO’s analysis are that load conformance can 1) reduce the amount of operational EIM transfers that would otherwise be scheduled to the CAISO BAA, and 2) reduce the amount of flexible capacity available to the CAISO BAA to pass the RSE

“Resource Sufficiency Evaluation Performance on July 9, 2021.” Guillermo Bautista Alderete. Director, Market Analysis and Forecasting.   Market Surveillance Meeting General Session. November 19, 2021.  Pg. 32 at http://www.caiso.com/Documents/ResourceSufficiencyEvaluation-Presentation-Nov19-2021.pdf

2. Please provide your organization's comments on the analysis track related to the on the relationship between HASP intertie schedules and EIM transfers:

The interaction between HASP and EIM transfers challenges the CAISO BAA’s ability to pass the RSE compared with other EIM areas and should be addressed quickly

PG&E appreciates the CAISO’s commitment to address the interaction between the exports and imports cleared by HASP and EIM transfers.  CAISO has found that “the interaction between HASP and the RSE during stressed system condition already significantly disadvantages the CAISO in passing the RSE[1]…the HASP process has the potential to award block hourly exports from the CAISO based on the assumed availability of EIM transfers; to the extent this occurs, this adds to the CAISO’s capacity test obligations while not adding to its available supply.”[2]  Addressing this issue quickly is important to ensuring the equitable application of the RSE.

The MSC and CAISO have already identified that the misalignment between the RSE and the HASP process can cause the CAISO BAA to fail the RSE inappropriately.  Addressing this identified issue should be addressed urgently and does not require additional analysis to diagnose it.  Additional analysis could be conducted, in parallel, to better inform policy options needed to address any other disadvantages affecting the CAISO BAA under the current RSE design. 

[1] EIM Resource Sufficiency Evaluation Enhancements Phase 1.  Revised Draft Final Proposal. December 16, 2021. Pg. 15 at http://www.caiso.com/InitiativeDocuments/RevisedDraftFinalProposal-EIMResourceSufficiencyEvaluationEnhancements.pdf

[2]  Ibid. Pg. 14 

3. Please provide your organization's comments on the analysis track related to the uncertainty and intertie deviation adders performance:

PG&E requests clarification on the quantile regression methodology

The CAISO has proposed to analyze RSE uncertainty adders using the proposed quantile regression (QR) methodology.  PG&E asks for clarification of the following issues:

• Computational feasibility: A well-known challenge for the quantile regression method is that it is computationally intensive. PG&E requests the CAISO to clarify its implementation frequency and the sample size used for calculation to confirm that it is feasible to be implemented in real-time.
• Sample selection:  Even though quantile regression estimates data variance and the tail of a distribution much better than the histogram, using independent sample data is still critical.  As mentioned in the MSC opinion,[1] the use of 480 data points only represents 40 independent data points, since every set of 12 data points are within an hour (i.e., covering 12 RTD intervals).  Such a sample adds to the computational burden without providing much benefit. 

To analyze different approaches to sample selections, PG&E offers the following alternatives:

1. Keep sample size at 480: Expanding the sampling period (including more days) and reduce the sample size to 1-2 data points within one hour.
2. Reduce sample size to 40: Reduce the sample size to 1-2 data points within one hour and compare the performance with option 1.
3. Improve the sampling method: Rather than using a set number of previous days, the sampling could be based on similar market conditions.  Market conditions could be based on temperature, gas prices, or base load level in the day-ahead timeframe. This alternative sampling method could be applied to both option 1 and 2.

Calculating the sum of the net load and intertie deviation uncertainty

PG&E requests the CAISO to clarify the purpose of the proposal to assess the relationship between the net load and intertie deviation uncertainties. PG&E understands and supports the MSC’s point that the RSE should not add the net load uncertainties and intertie deviations, each of which may be estimated with the quantile regression method, because the two quantities may be correlated. To resolve this concern, one straightforward approach is to estimate the sum of the two quantities using both data as common regressors.

PG&E also requests the CAISO to publish the performance of the estimated sum of the net load uncertainties and intertie deviation.

[1] Opinion on Energy Imbalance Market (EIM) Resource Sufficiency Evaluation Enhancements.  Members of the Market Surveillance Committee of the California ISO. February 2, 2022.   http://www.caiso.com/Documents/MSCFinalOpiniononEIMResourceSufficiencyEvaluationEnhancements-Phase1.pdf

4. Please provide your organization's comments on the analysis track related to other suggested and agreed upon areas:

5. Please provide additional comments on the WEIM Resource Sufficiency Evaluation Enhancements Phase 1B initiative not mentioned above:

1. Please provide your organization's comments on the analysis track related to the load conformance impact:

Please see Powerex’s comments available at: CAISO February 16 WEIM RSE Enhancements Phase 1B Comments.pdf (powerex.com)

2. Please provide your organization's comments on the analysis track related to the on the relationship between HASP intertie schedules and EIM transfers:

Please see Powerex’s comments available at: CAISO February 16 WEIM RSE Enhancements Phase 1B Comments.pdf (powerex.com)

3. Please provide your organization's comments on the analysis track related to the uncertainty and intertie deviation adders performance:

Please see Powerex’s comments available at: CAISO February 16 WEIM RSE Enhancements Phase 1B Comments.pdf (powerex.com)

4. Please provide your organization's comments on the analysis track related to other suggested and agreed upon areas:

Please see Powerex’s comments available at: CAISO February 16 WEIM RSE Enhancements Phase 1B Comments.pdf (powerex.com)

5. Please provide additional comments on the WEIM Resource Sufficiency Evaluation Enhancements Phase 1B initiative not mentioned above:

Please see Powerex’s comments available at: CAISO February 16 WEIM RSE Enhancements Phase 1B Comments.pdf (powerex.com)

1. Please provide your organization's comments on the analysis track related to the load conformance impact:

Salt River Project Agricultural Improvement and Power District (SRP) supports with caveats the analysis suggested by the CAISO with respect to load conformance impact. The CAISO suggested a study period of at least 5 days and peak hours for analysis. SRP would like CAISO to consider a study period of 7 days and capture the days when the EIM footprint, not just the CAISO, was in tight conditions. SRP’s suggestion for a 7-day study period would allow the CAISO to evaluate scenarios such as winter freeze conditions and gas restrictions, summer peak, summer tight system and shoulder season peak. SRP also requests that the CAISO differentiate each scenario analysis for capacity tight versus flexible ramp tight conditions.

2. Please provide your organization's comments on the analysis track related to the on the relationship between HASP intertie schedules and EIM transfers:

SRP supports with caveats the analysis track related to the relationship between Hour-Ahead Scheduling Process (HASP) intertie schedules and EIM transfers. Like the load conformance analysis, SRP requests the CAISO perform this analysis for 7 days. SRP would also like the CAISO to provide details on market performance with HASP intertie bids, available EIM transfer capability and available dispatchability in real time.

3. Please provide your organization's comments on the analysis track related to the uncertainty and intertie deviation adders performance:

SRP supports with caveats the analysis related to the performance and accuracy of extending the quantile regression methodology developed in the Flexible Ramping Product (FRP) Phase 2 initiative to the RSE, by including a comparison to the histogram approach and further assessment of existing intertie deviation adder logic. SRP requests the CAISO also provide a more detailed description of the methodology to support EIM Entities’ ability to replicate the calculation offline.

4. Please provide your organization's comments on the analysis track related to other suggested and agreed upon areas:

SRP appreciates the CAISO’s flexibility to expand this effort to include additional analysis based on stakeholder feedback.

5. Please provide additional comments on the WEIM Resource Sufficiency Evaluation Enhancements Phase 1B initiative not mentioned above:

SRP appreciates the CAISO’s willingness to undertake the analysis described in its February 16, 2022, presentation. The details of the analysis should be transparent and made available to stakeholders. With respect to the analysis, SRP requests the CAISO also identify any gaps, inaccuracies or inequities that resulted from past performance of the RSE. Following this analysis, the CAISO should continue the stakeholder process to also include possible solutions to correct any RSE flaws identified. Stakeholder input to understand these gaps and provide a common solution will be the key to make this analysis effort successful.