Comments on EDAM governance revised proposal

1. The WEIM Governance Review Committee appreciates the stakeholder engagement and comments received on its Phase Three (EDAM) straw proposal (July 15, 2022). In response to the GRC’s Phase Three (EDAM) revised proposal (October 31, 2022), and in preparation for the GRCs final proposal, do you have any additional comments on the following items?

1. Delegation of authority; 2. Size and composition of the Governing Body; 3. Stakeholder engagement and policy development; 4. CAISO’s responsibility to consider regional stakeholders; 5. Timing for approval and implementation of GRC proposals.

Recommendations regarding the Delegation of Authority for Market Rules to the Governing Body

The GRC has understandably struggled with the scope of joint authority.  It is essential, however, that the EDAM begin on a footing where the delineation of proposals is reasonably predictable.  Bonneville appreciates the GRC’s intention in suggesting designation based on direct effect on locational marginal prices for products common to the overall WEIM or EDAM markets, and agrees that such issues should be under joint authority.  However, the concept seems difficult to apply with consistency and requires foreknowledge of market price impacts. 

Our concern is supported by the table of illustrative joint authority designations.  In several instances, the designations identified in the table under the “applies to” test depend on future decisions or more analysis, including further developments of policies and related tariff framework.  See e.g., Section 11 and 17.  It may not be obvious at the beginning of an initiative whether—or to what extent—the proposed solution will include revisions to tariff sections applicable to EDAM.  We are also concerned that limiting joint authority to “direct” impacts creates an unnecessarily ambiguous higher bar. The final proposal should describe how effects on market prices will be analyzed to guide the decisional classification process. However, Bonneville is concerned that there will be a burden of additional analysis required on many future decisions to determine whether there is an impact on LMP.

Therefore, Bonneville urges the GRC to conclude the final proposal with the principle of being broadly inclusive for joint authority for all proposals in the day-ahead or real-time market.  Decisional classification would then proceed by exception; that the basis for exclusion from joint authority is because the proposals would change or establish tariff rules applicable only to the CAISO balancing authority area or to the CAISO-controlled grid.

Size and Composition of the Governing Body

Bonneville continues to support maintaining the size of the Governing Body at its current five members.  Bonneville also agrees with the recommendation to consider the enhanced responsibilities of the Governing Body in reappointing sitting members. The proposal to evaluate compensation of the Governing Body relative to similar bodies is reasonable.

Bonneville reiterates its comment that identifiable additional costs associated with EDAM should be bifurcated and only passed on to EDAM participants, and not spread across all EIM participants. 

Options for Enhancing Stakeholder Engagement in Policy Development

Phase 3 of the WEIM/EDAM governance design comes as the Phase 2 decision is still being implemented.  The Regional Issues Forum (RIF) is assuming a new scope of review to include issues that are actively under consideration in CAISO stakeholder initiatives.  Both the GRC and the Governing Body have encouraged the RIF to enhance its advisory function while respectfully avoiding being overly directive.

The GRC should state clear support in the final proposal for the RIF to effectively present the diverse perspectives of its sector representatives.  It will be most valuable for the RIF to describe points of disagreement and the reasoning of sector representatives for differing opinions, allowing the Governing Body and the Board of Governors to consider those perspectives in their decisions. 

The GRC should provide similar support for working groups that the CAISO may form to advise on policy initiatives.  Bonneville encourages greater use of sector-based working groups for advisory functions.  Such working groups should not be constrained by a perceived objective of consensus recommendations.  The value of working groups will be in their presentation of well-reasoned, if diverging, perspectives.

Bonneville supports requesting the RIF to host a roundtable discussion among sector representatives to discuss priorities for CAISO stakeholder initiatives.  The Governing Body and the Board of Governors should ensure that CAISO management reports regularly to the RIF on the status of the stakeholder initiatives that were selected for the policy roadmap. 

Clarifying CAISO’s Responsibility to Consider the Interests of Regional Stakeholders

Bonneville continues to support the proposed Bylaws amendments to clarify that the CAISO and its Board of Governors have obligations to the interests of all stakeholders in the extended market footprint.

Timing for Approval and Implementation of GRC Proposals

Bonneville supports the recommended approach for the Board of Governors and the Governing Body to have joint authority over the decision on EDAM market design, with the final EDAM governance proposal becoming effective once the Federal Energy Regulatory Commission has conclusively accepted the market design. 

1. The WEIM Governance Review Committee appreciates the stakeholder engagement and comments received on its Phase Three (EDAM) straw proposal (July 15, 2022). In response to the GRC’s Phase Three (EDAM) revised proposal (October 31, 2022), and in preparation for the GRCs final proposal, do you have any additional comments on the following items?

1. Delegation of authority; 2. Size and composition of the Governing Body; 3. Stakeholder engagement and policy development; 4. CAISO’s responsibility to consider regional stakeholders; 5. Timing for approval and implementation of GRC proposals.

The California Community Choice Association (CalCCA) appreciates the opportunity to comment on the EDAM governance revised straw proposal. CalCCA supports the Governance Review Committee’s (GRC’s) proposal to extend the joint authority model currently used for the Western Energy Imbalance Market (WEIM) to an Extended Day-Ahead Market (EDAM).

The revised straw proposal would add to the scope of joint authority the ability to “approve or reject a proposal to change or establish any tariff rule for the day-ahead or real-time markets that directly establishes or changes the formation of any locational marginal price(s) for a product that is common to the overall WEIM or EDAM market.”[1] The proposal indicates that the GRC finds this rule change to be clear and well-defined. However, the proposal introduces ambiguity by remaining silent on how this change would impact governance over penalty parameters, a topic discussed at length during the November 7, 2022 GRC meeting. The CAISO uses penalty parameters to (1) establish the conditions under which constraints may be relaxed, and (2) set the market prices when such constraints are relaxed. Relaxing constraints in the market through penalty parameters is the CAISO Balancing Authority’s (BA’s) way of prioritizing the use of transmission and generation for various products (e.g., energy, ancillary services, exports, wheel-throughs, etc.) when conditions are tight and there is not enough to meet every requirement.

Under EDAM, each BA will retain its BA reliability functions and rely on its own operational tools to resolve reliability events.[2] The relaxation of constraints clearly falls within the CAISO’s reliability function as a BA, and while different than those in other BAAs without a market, is one tool the CAISO BA has to maintain reliable operations for its area. Therefore, the scope of joint authority should only include penalty parameters to the extent they impact LMPs for products common to the CAISO and EDAM. Joint authority should not apply when penalty parameters are strictly setting priorities under which constraints are relaxed.

For the same reasons joint authority should not apply to penalty parameters setting scheduling priorities, CalCCA agrees with the GRC that transmission access or priority should not be included within joint authority. Transmission access and priority remain BA functions each BA establishes for itself as transmission priorities impact the CAISO BA’s ability to reliability serve its load.

[1]             Revised Straw Proposal at 17.
[2]             EDAM Draft Final Proposal at 21.

1. The WEIM Governance Review Committee appreciates the stakeholder engagement and comments received on its Phase Three (EDAM) straw proposal (July 15, 2022). In response to the GRC’s Phase Three (EDAM) revised proposal (October 31, 2022), and in preparation for the GRCs final proposal, do you have any additional comments on the following items?

1. Delegation of authority; 2. Size and composition of the Governing Body; 3. Stakeholder engagement and policy development; 4. CAISO’s responsibility to consider regional stakeholders; 5. Timing for approval and implementation of GRC proposals.

The California Municipal Utilities Association (CMUA) appreciates the opportunity to provide comments to the GRC on its Phase Three (EDAM) Draft Revised Proposal of October 31, 2022.  CMUA is generally supportive of the GRC Proposal.

1. Delegation of Authority

CMUA has long supported the Joint Authority model of governance for EIM, and now for the potential EDAM.  We also supported, and continue to support, the “applied to” test for ascertaining what tariff provisions are subsumed under Joint Authority, as it provides a more helpful delineation of the scope of Joint Authority, in contrast to an “impact” test which could sweep in a broad array of issues.

CMUA supports the clarification in the Draft Revised Proposal that seeks to include direct price formation issues within Joint Authority.  It is our understanding that the scope of this additional language is not intended to sweep in tools that are used to set relative priorities for export transactions.

2. Size and composition of the Governing Body

CMUA supports keeping the current size and composition of the Governing Body until such time as the more comprehensive governance changes are considered.  The symmetry of size of the Board and Governing Body seems appropriate at this time.

3. Stakeholder Engagement and Policy Development

CMUA continues to support an inclusive stakeholder process that is transparent to the public and open to all stakeholders.  We agree that a larger role and profile for the RIF would be helpful to move toward a structure whereby stakeholders take more ownership of the initiative process and the recommendations made on market design issues.

4. CAISO Responsibility to Consider Regional Stakeholders

Ultimately, the CAISO’s tariff is subject to FERC’s jurisdiction under the Federal Power Act, and as such, it seems self-evident that the Board’s consideration must include a wide array of stakeholders both inside and outside of California.  Nevertheless, CMUA has no concerns with changes proposed by the GRC in this area.

5. Timing for approval and implementation of GRC proposals.

CMUA has no concerns with the GRC proposals on this matter.

1. The WEIM Governance Review Committee appreciates the stakeholder engagement and comments received on its Phase Three (EDAM) straw proposal (July 15, 2022). In response to the GRC’s Phase Three (EDAM) revised proposal (October 31, 2022), and in preparation for the GRCs final proposal, do you have any additional comments on the following items?

1. Delegation of authority; 2. Size and composition of the Governing Body; 3. Stakeholder engagement and policy development; 4. CAISO’s responsibility to consider regional stakeholders; 5. Timing for approval and implementation of GRC proposals.

1. Delegation of Authority

As explained in previous comments, Staff supports the GRC’s proposal to maintain the existing paradigm, that is, using the “applies to” test, but expanding it to the EDAM, as follows:

“Joint authority”: The WEIM/EDAM Governing Body will have joint authority with the Board of Governors to approve or reject a proposal to change or establish a tariff rule applicable to the WEIM/EDAM Entity balancing authority areas, WEIM/EDAM Entities, or other market participants within the WEIM/EDAM Entity balancing authority areas, in their capacity as participants in the WEIM/EDAM. The scope of this joint authority excludes, without limitation, any proposals to change or establish tariff rule(s) applicable only to the CAISO balancing authority area or to the CAISO controlled grid. 

However, in the recent Revised Proposal, the GRC has proposed to significantly expand the joint authority model.  The GRC proposes the expansion of the authority to include the following language (underlined):

“Joint Authority”: The WEIM/EDAM Governing Body will have joint authority with the Board of Governors to approve or reject a proposal to change or establish a tariff rule 17 applicable to the WEIM/EDAM Entity balancing authority areas, WEIM/EDAM Entities, or other market participants within the WEIM/EDAM Entity balancing authority areas, in their capacity as participants in the WEIM/EDAM. The WEIM/EDAM Governing Body will also have joint authority with the Board of Governors to approve or reject a proposal to change or establish any tariff rule for the day-ahead or real-time markets that directly establishes or changes the formation of any locational marginal price(s) for a product that is common to the overall WEIM or EDAM market. The scope of this joint authority excludes, without limitation, any other proposals to change or establish tariff rule(s) applicable only to the CAISO balancing authority area or to the CAISO-controlled grid.

The GRC explains that this addition was intended to directly address NV Energy’s concerns about any CAISO-specific market power mitigation that could affect the WEIM/EDAM:

This addition is designed to address the concern raised by NV Energy about the direct and immediate impact that any potential future CAISO balancing-authority-area-specific market power mitigation rule for WEIM or EDAM products could have on market outcomes for the entire WEIM or EDAM footprint. By covering any rule that “directly establishes or changes the formation” of a locational marginal price for a WEIM or EDAM product, the proposed addition includes both market power mitigation rules and any other potential price-formation rules that may similarly change locational marginal prices for these products. (Emphasis added.)

First, Staff object to this proposed expansion over market power mitigation that CAISO might impose in its own BAA. For example, CAISO currently requires that resources within its BAA must cost-justify before they are allowed to bid over the current soft-offer cap. The rules for external entities bidding imports into the CAISO market are different. However, Staff believes that it would be inappropriate for joint authority to be exercised over bidding rules imposed on resources within CAISO’s BAA. This is an even more important issue because, unlike most other BAAs with vertically integrated utilities under cost-of-service rates, the California market is largely deregulated and, thus, market power mitigation is critical for ensuring just and reasonable rates for CAISO’s California customers, since increased energy costs paid by load are not netted against the increased revenues, as they are with vertically integrated utilities.

In this regard, it would be helpful if the GRC could explicitly indicate whether joint authority would be granted over current rules regarding the ability of internal generators to bid above the soft-offer cap and the cost justification to be able to do so?

Second, Staff is concerned that while this proposal may have been intended to address NV Energy’s specific concerns, it could have unintended consequences and expand joint authority over areas that are critical to the reliability of the CAISO grid for CAISO’s California customers (e.g., penalty parameters that address critical reliability needs).  The GRC indicates that it believes the expansion “identifies a clear and well-defined set of potential tariff rules that would be subject to joint authority” and “does not use any subjective terms or concepts that could produce ambiguous outcomes or debates about proper classification.” However, when asked about penalty parameters during the last stakeholder meeting, the GRC was not able to answer definitively or substantively about whether penalty parameters would be under joint authority or why this would be the case.  Thus, Staff does believe that the scope of this expansion language and the attendant joint authority are yet “clear and well-defined.”

In this regarding, it would be helpful for the GRC to answer the following three sets of questions:

• Does the GRC believe that joint authority would apply to the penalty parameters addressed in CAISO’s tariff filing ER-21-1790, Load, Exports and Wheeling Amendments that govern the relative priority of day-ahead and real-time price taker (PT) and low price taker (LPT) exports?
  • Does the GRC believe that these penalty parameters “directly establish or change the formation” of a locational marginal price? Please explain why or why not.
  • Does the GRC believe that these penalty parameters “directly establish or change the formation” of a locational marginal price for a product that is common to the overall WEIM or EDAM market?  Please explain why or why not.

• Does the GRC believe that joint authority would apply to the penalty parameters addressed in CAISO’s tariff filing ER-21-1790, Load, Exports and Wheeling Amendments that govern the relative priority of low-priority and high-priority wheeling transactions?
  • Does the GRC believe that these penalty parameters “directly establish or change the formation” of a locational marginal price? Please explain why or why not.
  • Does the GRC believe that these penalty parameters “directly establish or change the formation” of a locational marginal price for a product that is common to the overall WEIM or EDAM market?  Please explain why or why not.

• Does the GRC believe that joint authority would apply to the penalty parameters addressed in CAISO’s tariff filing ER-22-1246, Intertie Constraint Penalty Prices that govern the relative priority of intertie constraints?
  • Does the GRC believe that these penalty parameters “directly establish or change the formation” of a locational marginal price? Please explain why or why not.
  • Does the GRC believe that these penalty parameters “directly establish or change the formation” of a locational marginal price for a product that is common to the overall WEIM or EDAM market?  Please explain why or why not.

Third, in its Revised Proposal, the GRC explains what it understands to be under joint authority in the following manner:

The proposal is also consistent with the general concept of parity of treatment across balancing authority areas that various stakeholders have embraced. There are three contexts in which a proposal for a tariff rule on price formation for locational marginal prices for a WEIM/EDAM product could arise. The rule could be proposed: (1) for the entire WEIM/EDAM footprint; (2) only for one or more non-CAISO balancing authority areas within the WEIM/EDAM footprint (i.e., the WEIM/EDAM Entity balancing authority areas); or (3) only for the CAISO balancing authority area. In the first two scenarios, the proposed rule would be subject to joint authority under the apply to test because the rule would apply to the WEIM/EDAM Entity balancing authority areas. By contrast, such a proposed rule that focuses only on the CAISO balancing authority area would be excluded from joint authority under the apply to test because the apply to test does not include CAISO balancing-authority-area-only rules, even though those rules apply to a product common to the WEIM/EDAM. The addition we are proposing here would add such a CAISO balancing-authority-area-only rule to joint authority. In filling this gap, this targeted rule would create parity of treatment across the balancing authority areas by ensuring that the joint authority approval process is used regardless of whether the proposed tariff rule would apply only to any subset of the balancing authority areas within the WEIM/EDAM or to the entire WEIM/EDAM footprint.

While the GRC indicates that this expansion would not apply to “non-WEIM/EDAM rules regarding transmission access or priority within joint authority, it would be helpful to explain precisely how the proposed language excludes these rules.

In this regard, Staff understands that penalty parameters, which govern the priority for wheels and exports, could arguably “change the formation of locational marginal prices,” so clarification why and these rules do not affect the formation of locational marginal prices for a product that is common to the overall WEIM or EDAM market” would be critical for Staff and all parties to understand.

In addition, given that this language is new and untested, unlike the “apply to” rule, Staff request that the GRC identify three discreet areas (other than market power mitigation) that would not fall within joint authority using the “apply to” test, but would fall within joint authority because of the new rule (i.e., “The WEIM/EDAM Governing Body will also have joint authority with the Board of Governors to approve or reject a proposal to change or establish any tariff rule for the day-ahead or real-time markets that directly establishes or changes the formation of any locational marginal price(s) for a product that is common to the overall WEIM or EDAM market.”)

While Staff does not yet support the expansion of the joint authority, if the scope of authority for joint governance is expanded beyond the “apply to” test, then the WEIM GRC must put in place an exception for issues that impact the reliability of the California ISO BAA, such as the following:

• • Reliability Exception:  If the WEIM GRC expands the scope of authority to include all issues that impact the Locational Marginal Price, then there should be an exception to both the “applies to” test and “impacts LMP” test that reserves issues that impact California reliability to the authority of the CAISO Board of Governors. 

Staff appreciates the WEIM GRC’s attempt to follow principles of parity.  However, these rules do not seem to attain parity, because while joint authority is potentially granted over reliability issues critical to the California BAA, it does not appear that joint authority extends to reliability decisions of the other WEIM/EDAM entities.

2. Size and Composition of the Governing Body

Staff has no comments on this portion of the revised proposal.

3. Stakeholder Engagement and Policy Development

Staff has no comment on this portion of the revised proposal.

4. CAISO’s Responsibility to Consider Regional Stakeholders

The GRC proposes that CAISO’s governance documents be amended to “positively stating in its governance documents that CAISO’s public benefit purpose extends to all stakeholders.” 

Specifically, we recommended CAISO add statements to its Bylaws, which is the document the Board would consult to determine its own obligations, that would formalize an obligation to consider the public interest of the entire footprint. The Bylaws currently state that CAISO’s corporate purpose is “to ensure efficient use and reliable operation of the” CAISO-controlled grid.  We proposed that CAISO clarify the role of the regional market and fair treatment of regional stakeholders in pursuing this purpose and that considering the interests of all stakeholders is consistent with CAISO’s obligations as a nonprofit public benefit corporation. Together, these changes would result in a clause that reads:

Consistent with its status as a nonprofit public benefit corporation, and to enhance the efficient use and reliable operation of the ISO Controlled Grid, the Corporation will consider the interests of all stakeholders within the footprint of the markets that it administers, including the Corporation’s balancing authority area, EDAM balancing authority areas and WEIM balancing authority areas.

We proposed that the Bylaws should also clarify that individual Board Governors share the same obligation.

Staff believes that the GRC’s proposed expansion of the CAISO’s corporate governance documents is unnecessary, given CAISO counsel’s determination in Appendix A that it already has an affirmative obligation to be independent, and that this unnecessary change could cause confusion, given that CAISO is also a BAA with unique and direct responsibility for reliability for its California customers, as is the case with other BAAs that may join EDAM.

5. Timing for Approval and Implementation of GRC Proposals

In its Revised Proposal, the GRC proposes that its revised governance structure “would become effective once FERC has conclusively accepted CAISO’s section 205 filing for the market design.”  Staff does not support this proposal and supports the joint authority becoming effective:  1) after a critical mass of EDAM entities have joined the EDAM, as suggested by Southern California Edison in earlier comments and/or 2) when EDAM is implemented by CAISO (i.e., the go-live date).

Staff’s proposal is premised on the fact that it would not make sense to have joint authority if only one or two small entities joined the EDAM, given the substantial authority that the GRC is proposing would be in the ambit of the EIM/EDAM Governing Body.  In addition, there could be considerable delay between when FERC approves the EDAM structure and when the EDAM is implemented, and it would not make sense to provide joint authority over potentially very consequential matters in the interim. This is especially true with the expansion of joint authority to “approve or reject a proposal to change or establish any tariff rule for the day-ahead or real-time markets that directly establishes or changes the formation of any locational marginal price(s) for a product that is common to the overall WEIM or EDAM market," the parameters of which Staff does not yet fully understand.

In this regard, what if CAISO had a change it needed to make to the day-ahead market - would this be under joint authority prior to when EDAM is operating, or in the event that only one small BAA (besides CAISO) were participating in EDAM? Clarification regarding this particular issue is critical for Staff to understand the scope of this expansion and how the proposed governance regime will apply in this interim time period or in the event that there is limited external BAA participation, especially given the significant expansion in scope of the joint authority model.

1. The WEIM Governance Review Committee appreciates the stakeholder engagement and comments received on its Phase Three (EDAM) straw proposal (July 15, 2022). In response to the GRC’s Phase Three (EDAM) revised proposal (October 31, 2022), and in preparation for the GRCs final proposal, do you have any additional comments on the following items?

1. Delegation of authority; 2. Size and composition of the Governing Body; 3. Stakeholder engagement and policy development; 4. CAISO’s responsibility to consider regional stakeholders; 5. Timing for approval and implementation of GRC proposals.

A. Delegation of authority: 

            In the GRC’s Phase Three revised proposal, the GRC reaffirms its support for the joint authority construct as the best model for EDAM as it allows both bodies and all stakeholders to come together to weight the arguments and concerns in a common public forum.  As Idaho Power stated in prior comments, this joint governance model would not prevent it from joining the EDAM. However, Idaho Power emphasizes that the joint authority model would not be sufficient for purposes of a multi-state regional transmission organization. Given the significant difference between voluntary participation in markets like EIM or EDAM and any future regional market expansion in the West, further market expansion will require an independent governance model in order to satisfy Idaho Power and its customers, the state commissions that regulate Idaho Power, and FERC.[1]  Idaho Power appreciates the GRC’s recognition that the joint authority model would not be sufficient for a potential full RTO in the future. 

            Additionally, Idaho Power emphasizes that joint authority must apply to all aspects of EDAM and is supportive of the changes to the scope of authority that provides the WEIM/EDAM Governing Body joint authority with the Board of Governors to approve or reject proposals that “directly establishes or changes the formation of any locational marginal price(s) for a product” that is common to overall WEIM or EDAM markets.

B. Size and composition of the Governing Body:

Idaho Power does not have further comment on the size and composition of the governing body.

C. Stakeholder engagement and policy development: 

Idaho Power remains supportive of the stakeholder engagement framework and again encourages the ability of individual stakeholders to have involvement independent of the RIF.   

D. CAISO’s responsibility to consider regional stakeholders:

Idaho Power continues to support the GRC’s recommendation that the Bylaws be amended such that CAISO should give equal value to all stakeholders and market participants and that no state or stakeholder should be favored over any others. 

E. Timing for approval and implementation of GRC proposals:

 Idaho Power does not have any comment on the timing for approval and implementation of GRC proposals.   

[1] FERC has held that the principle of independence is the bedrock upon which the ISO must be built. FERC has also held that governance must be independent in both reality and perception. See Regional Transmission Organizations, Order No. 2000, FERC Stats. & Regs. ¶ 31,089, at 31,047 (1999) (cross-referenced at 89 FERC ¶ 61,285) order on reh'g, Order No. 2000-A, FERC Stats. & Regs. ¶ 31,092 (2000) (cross-referenced at 90 FERC ¶ 61,201), aff'd sub nom. Pub. Util. Dist. No. 1 v. FERC, 272 F.3d 607 (D.C. Cir. 2001).

1. The WEIM Governance Review Committee appreciates the stakeholder engagement and comments received on its Phase Three (EDAM) straw proposal (July 15, 2022). In response to the GRC’s Phase Three (EDAM) revised proposal (October 31, 2022), and in preparation for the GRCs final proposal, do you have any additional comments on the following items?

1. Delegation of authority; 2. Size and composition of the Governing Body; 3. Stakeholder engagement and policy development; 4. CAISO’s responsibility to consider regional stakeholders; 5. Timing for approval and implementation of GRC proposals.

The Balancing Authority of Northern California (BANC) and Los Angeles Department of Water and Power (LADWP) (jointly referred to as “Joint Commenters”) are pleased to provide these supportive comments in response to the GRC’s Phase Three (EDAM) Revised Proposal of October 31, 2022 (Revised Proposal).  Joint Commenters support proposals of the GRC as a package and also believe the GRC has crafted reasonable approaches to applying Joint Authority given the unique challenges of EDAM, namely the implementation of a Day-Ahead Market in a non-RTO, voluntary construct, in which EDAM Entities will maintain Balancing Authority Area responsibilities.  These unique circumstances must be kept in mind when assessing the reasonableness of the GRC’s Revised Proposal.

1. Delegation of Authority

As indicated in prior comments, Joint Commenters support the Joint Authority model for EDAM governance as fostering the needed collaboration to ensure sound EDAM decision-making, while reflecting the fact that certain facets of the CAISO market are specific in application to California or EDAM Entity BAAs.  Joint Commenters also support the proposal that “any tariff rule for the day-ahead and real-time markets that directly establishes or changes the formation of any locational margin prices(s) for a product that is common to the overall WEIM or EDAM market” be included in Joint Authority. Joint Commenters agree that this bridges the gap between an “impact test” that could sweep in a host of issues that indirectly affect EDAM, and reflect the legitimate interest of EDAM Entity on matters that directly establish prices, which are matters reasonably part of Joint Authority.

2. Size and Composition of the Governing Body

Joint Commenters support the current size and composition as initially satisfactory to meet the objectives of EDAM.  We would also be supportive of efforts to comprehensively reassess composition, size, and compensation of the Governing Body in light of the expanded obligations inherent in EDAM.

3. Stakeholder Engagement and Policy Development

Joint Commenters support the proposals of the GRC to engage the Regional Issues Forum (RIF) directly on the front-end of the annual “roadmap” to develop initiative priorities.  We further support the GRC’s encouragement of the RIF to self-direct improvements to the RIF that would allow meaningful discussion on market design issues and increase the value of the RIF as a supporting entity to the EIM Governing Body.  In its current configuration and role, Joint Commenters see value of the RIF in formulating issue statements and clearly articulating, in a balanced way, the pros and cons of various design choices to aid in the Governing Body decisional process.  We hold out hope that in the future the RIF can be a body that can forge consensus on issues, but the augmentations above would be an extremely valuable service to the market as a whole.

4. CAISO’s Responsibility to Consider Regional Stakeholders

In practice, Joint Commenters are of the view that the interests of regional stakeholders are considered by the CAISO and its Board of Governors.  That said, we also support modifying applicable language and use of the phrase “weigh” to clarify and describe how regional stakeholder interests are considered. 

5. Timing and Approval for Implementation of GRC Proposals

Joint Commenters support the concept that the GRC proposals are triggered upon the real eventuality of EDAM, since the changes to governance and decision-making are significant. This could be FERC acceptance of EDAM tariff language, the execution of an implementation agreement (similar to the implementation mechanism in EIM), or other trigger that reflects that EDAM is real and is moving forward.  It is important that Joint Authority not be triggered by a hypothetical possibility of EDAM, but also important to early adopters that Joint Authority be put in as early as appropriate and practicable.

1. The WEIM Governance Review Committee appreciates the stakeholder engagement and comments received on its Phase Three (EDAM) straw proposal (July 15, 2022). In response to the GRC’s Phase Three (EDAM) revised proposal (October 31, 2022), and in preparation for the GRCs final proposal, do you have any additional comments on the following items?

1. Delegation of authority; 2. Size and composition of the Governing Body; 3. Stakeholder engagement and policy development; 4. CAISO’s responsibility to consider regional stakeholders; 5. Timing for approval and implementation of GRC proposals.

NV Energy thanks the members of the Governance Review Committee (GRC) for their continued hard work in developing the proposed EDAM governance structure. We know that this effort continues with heavy hearts over the tragic passing of Therese Hampton, who performed in an exemplary manner as the GRC Chair. Therese approached each contested issue as an opportunity. She brought together diverse parties, recognizing that compromise and cooperation are the only possible paths forward. She will be greatly missed.

NV Energy, the only participating EIM Entity with a mandate to seek RTO participation, advocated for the independent EIM Governing Body to have primary authority over the day-ahead and real-time market operations. We continue to support the independent governance of the EIM and EDAM markets as our Company views participation in a day-ahead market as a potential interim step on a path to participation in an independently governed RTO by 2030. Nevertheless, we understand that most stakeholders supported the continuation of the joint authority model. Within the joint authority framework, NV Energy recognizes that the changes in the most recent proposal to expand the scope of the joint authority to include issues that effect LMPs and to provide the resources to the Governing Body to prepare a statement of opposition to FERC if there is a division between the two decisional bodies are significant enhancements.

NV Energy continues to support the proposed changes to the governing documents to clarify that it is CAISO’s responsibility to consider the interests of all regional stakeholders and to expressly contradict any concern that the CAISO will pursue the benefit of California load exclusively. NV Energy also supports the proposal that the new governance changes will take effect once FERC has accepted the CAISO’s section 205 filing for the market design.

1. The WEIM Governance Review Committee appreciates the stakeholder engagement and comments received on its Phase Three (EDAM) straw proposal (July 15, 2022). In response to the GRC’s Phase Three (EDAM) revised proposal (October 31, 2022), and in preparation for the GRCs final proposal, do you have any additional comments on the following items?

1. Delegation of authority; 2. Size and composition of the Governing Body; 3. Stakeholder engagement and policy development; 4. CAISO’s responsibility to consider regional stakeholders; 5. Timing for approval and implementation of GRC proposals.

PG&E appreciates the opportunity to comment on the Governance Review Committee (GRC) Phase Three Revised Straw Proposal of October 31, 2022.  PG&E broadly supports the proposal and provides the following comments to highlight areas where further refinement would help clarify and document the intent of the GRC, in order to ensure that future governance of EDAM remains consistent with the GRC’s intent.

1. Delegation of authority: The GRC in its revised straw proposal adds language to identify a specific type of rule change that would fall under the joint authority (above and beyond the “applies to” test):

The WEIM/EDAM Governing Body will also have joint authority with the Board of Governors to approve or reject a proposal to change or establish any tariff rule for the day-ahead or real-time markets that directly establishes or changes the formation of any locational marginal price(s) for a product that is common to the overall WEIM or EDAM market. (p. 16)   

PG&E understands that the language in this sentence is intended to create a narrow exception to the principle that rules governing CAISO BAA market products are and should remain subject to the exclusive authority of the CAISO Board of Governors over those rules that “directly” impact prices used in the regional WEIM and EDAM markets.  However, PG&E believes that the language as currently written may be overly broad and open to expansive interpretation in the future.  Therefore, PG&E requests that the GRC add to the above section (perhaps via a footnote) to define more specifically what is meant by “directly”, and identify some changes that are not intended to be captured by this exception:

By “directly establishes or changes” price formation, we do not intend to include rules governing the many non-price parameters and constraints that are used within the CAISO BAA, nor the rules which govern products unique to the CAISO BAA (and therefore not common throughout the WEIM or EDAM market), such as those governing Resource Adequacy, Ancillary Services, and Congestion Revenue Rights.  For these rules, and all other rules necessary to ensure reliable operation of the CAISO grid, the CAISO Board of Governors shall retain exclusive authority. 
 

1. The WEIM Governance Review Committee appreciates the stakeholder engagement and comments received on its Phase Three (EDAM) straw proposal (July 15, 2022). In response to the GRC’s Phase Three (EDAM) revised proposal (October 31, 2022), and in preparation for the GRCs final proposal, do you have any additional comments on the following items?

1. Delegation of authority; 2. Size and composition of the Governing Body; 3. Stakeholder engagement and policy development; 4. CAISO’s responsibility to consider regional stakeholders; 5. Timing for approval and implementation of GRC proposals.

PacifiCorp appreciates the opportunity to comment on the Western EIM Governance Review – Phase 3 EDAM (“Phase 3 Proposal”).  A primary recommendation of the Governance Review Committee (“GRC”) in the Phase 3 Proposal is an affirmation of its support for the joint authority construct but expanded to include rules that directly set or adjust the formation of Locational Marginal Prices (“LMP”).  PacifiCorp continues to support the joint authority construct, along with the expansion to include rules that directly set or adjust LMP.  Moreover, PacifiCorp appreciates the GRC’s acknowledgement that for the West to have a multi-state Regional Transmission Organization, an independent board free from the influence of any one state will be required.  PacifiCorp offers additional comments to the questions posed by the GRC below.

1. Delegation of Authority:

In its August 15, 2022, comments to the July 15, 2022 “Straw Proposal,” PacifiCorp voiced its support for the joint authority construct as striking an appropriate balance between the explicit issues and oversight needs of the CAISO’s incremental markets (i.e., the WEIM and eventual EDAM) and the more expansive responsibilities tied to the oversight and operations of the CAISO and its membership. PacifiCorp supports the Phase 3 Proposal’s continued recommendation of the joint authority construct.

With respect to expanding the scope of the joint authority, the Straw Proposal proposed two approaches: (1) develop a set of specifically identified topics to be decided under the joint authority (in addition to those topics covered by the apply to test), or (2) extend the joint authority to all real-time and day-ahead market rules (with defined exceptions or exclusions). The Phase 3 Proposal recommends further expanding the joint authority construct to include rules that directly set or adjust the formation of LMP. While PacifiCorp would have preferred expanding the joint authority to include all real-time and day-ahead market rules (for reasons discussed in its August 15, 2022 comments), it also supports the Phase 3 Proposal as a means to address the impact that any future CAISO balancing-authority-area-specific market power mitigation rule for WEIM or EDAM products could have on market outcomes for the entire WEIM or EDAM footprint.

Similarly, PacifiCorp supports the proposed expansion of the Advisory Authority of the Governing Body, which will enable the Governing Body the ability to engage outside counsel or consulting assistance in the event the Board pursues a filing at the FERC that is unsupported by the Governing Body.  The Phase 3 Proposal specifically asked if stakeholders supported a super-majority vote of the Board to proceed with a FERC filing if the Governing Body does not support a proposal.  PacifiCorp supports such a requirement; in the event that the Governing Body does not support a FERC filing, the FERC may very well not accept such a filing.  The Board, therefore, should give careful consideration to whether it desires to spend the time and resources in pursuing such a filing.  Requiring a super-majority vote will help enforce such consideration by the Board.

2. Size and composition of the Governing Body

The Phase 3 Proposal recommends the size of the Governing Body remain at five for the time being.  PacifiCorp supports the Phase 3 Proposal recommendation. 

3. Stakeholder engagement and policy development

The Straw Proposal recommended the CAISO expand its use of working groups, similar to those used in the EDAM initiative, in the development and consideration of policy options.  The Phase 3 Proposal continues this recommendation.  PacifiCorp supports the proposal for the expansion of working groups.

4. CAISO’s responsibility to consider regional stakeholders

The Phase 3 Proposal continues to recommend the CAISO governance documents include affirmative language that the CAISO’s public benefit purpose extends to all stakeholders.  The Phase 3 Proposal proposes a minor change in the affirmative language that revises “the Corporation will consider the interests of all stakeholders…” to “the Corporation will weigh the interests of all stakeholders…”  The GRC believes this change more closely reflects its intent, which is that CAISO should be striving to achieve results in the interests of the entire footprint, as best it can.  PacifiCorp supports the proposed change in language.

5. Timing for approval and implementation of GRC proposals.

Two timing issues are addressed in the Phase 3 Proposal: (1) when the EDAM governance proposal should go before the Board and Governing Body for approval relative to the decision on the EDAM market design proposal, and (2) when the EDAM governance changes should become effective.  Regarding the first issue, the GRC continues to believe that the Governing Body should have joint authority over the decision about the EDAM market design. PacifiCorp continues to support this approach as well. 

With regard to the second timing issue, the GRC is disinclined to recommend a formal approval and implementation of EDAM governance before the decision on EDAM market design. The Phase 3 Proposal recommends, assuming the two bodies approve the EDAM market design and the EDAM governance, the EDAM governance proposal become effective once the FERC has conclusively accepted the CAISO’s section 205 filing for the EDAM market design.  PacifiCorp supports this recommendation and agrees with the GRC that this approach will ensure that the entities who are committing to this new market have full assurance that the governance will go into effect in a timely manner during the transitional implementation period.

1. The WEIM Governance Review Committee appreciates the stakeholder engagement and comments received on its Phase Three (EDAM) straw proposal (July 15, 2022). In response to the GRC’s Phase Three (EDAM) revised proposal (October 31, 2022), and in preparation for the GRCs final proposal, do you have any additional comments on the following items?

1. Delegation of authority; 2. Size and composition of the Governing Body; 3. Stakeholder engagement and policy development; 4. CAISO’s responsibility to consider regional stakeholders; 5. Timing for approval and implementation of GRC proposals.

The Public Generating Pool (PGP) appreciates the continued efforts of the Governance Review Committee (GRC) to develop a governance framework that creates a successful foundation for the extended day-ahead market (EDAM) and future potential regionalization efforts.  PGP recognizes that the revised proposal issued on October 31, 2022 is a reflection of the challenge in threading a needle to balance stakeholder interests and create rules that can be applied consistently and logically.  Nonetheless, as will be further explained below, to ensure the durability of the governance proposal, the GRC should reconsider its decision not to adopt a default or general rule that creates a preference for joint authority where there is ambiguity.

As a threshold matter, as the GRC acknowledges and PGP and many other stakeholders have noted, until the CAISO board appointment process is free from the influence of any one state (i.e. until legislative change is made such that the California governor no longer appoints the CAISO board members), any governance framework will not be fully independent. PGP appreciates the GRC’s recognition of this challenge, the acknowledgment that additional changes to governance may be warranted in the future, and that the GRC’s work is not meant to foreclose work by others to address governance related matters, including potentially through legislative change. PGP’s comments, likewise, offer perspective on the GRC’s proposed enhancements to governance for EDAM that are within scope for this effort, while also recognizing that other key changes are needed that fall outside the scope of the GRC’s work and likely are only possible through legislative change.

Scope of Joint Authority

PGP recognizes that the proposal to expand the scope of joint authority from the “apply to” test to issues that “directly set or adjust” locational marginal prices is intended to avoid the potential for unproductive and unending disputes about the proper classification of future policy initiatives.  PGP appreciates the move to address the concern raised by NV Energy about the direct and immediate impact that any potential future CAISO balancing-authority-area-specific market power mitigation rule for WEIM or EDAM products could have on market outcomes for the entire WEIM or EDAM footprint.  PGP further appreciates that recognition of parity concepts raised by PGP and other stakeholders and working toward establishing a scope that reflects those concepts and principles.  PGP’s perspective is that applying the new rule to the issues identified as ambiguous or contentious (market power mitigation and transmission scheduling priorities) results in the correct classification of each of those initiatives. 

However, even while PGP supports the manner in which currently ambiguous or contentious issues will be classified, PGP is concerned with the durability of this proposal for addressing future issues without a clearer default presumption for joint authority or more clearly articulated principles of addressing future ambiguity.  While the test does not appear to use any subjective terms or concepts, it is likely that there will be debate around which rules “directly set or adjust” locational marginal prices.  As borne out by the discussion at the November 7 workshop, there may be rules that influence or affect LMPs but that do not directly set or adjust those prices.  While attempting to set a bright line, PGP is concerned that this line will not be so clearly defined in implementation. There also may be future issues or concerns or gray areas and PGP is concerned the proposed approach will not clarify how to resolve these issues.

While continuing to believe that a better approach would be to start with the premise that all day-ahead and real-time market rules are under joint authority, PGP recognizes that this may be unpalatable for some stakeholders.  However, PGP urges the GRC to reconsider its proposal to decline to adopt a general or default rule that would apply a default assumption that joint authority applies when there is ambiguity on the proper classification.  PGP urged movement toward joint authority as the best approach for ambiguous issues as the joint authority framework itself is designed to resolve ambiguity and work toward the fair resolution of disputed issues. 

PGP disagrees that a default presumption or preference for joint authority would lead to stakeholders tending to argue that there is ambiguity rather than focusing on substantive issues and applying the appropriate test.  This presumes a motive from stakeholders to work to expand the scope of joint authority regardless of whether there is a substantive justification for doing so.  PGP disagrees with this premise because it seems to affirm an assumption that the joint authority versus no joint authority will remain an ‘us versus them’ contest as opposed to a concerted effort by stakeholders participating in a highly integrated market who are interested in achieving balanced outcomes.  Joint authority makes sense for ambiguous issues because it reflects the highly integrated nature of the market, recognizes that ambiguity in the scope of joint authority on some issues is likely to persist, and is consistent with the obligations of both the EIM GB and the BOG to weigh the interests across the market footprint.  It also should be clarified that issues that are contentious and impactful issues may not be ambiguous—PGP’s support for a default assumption or other weighing toward joint authority should not be seen as simply a different manner of getting at some type of impact test.  PGP continues to support moving away from principles of ‘impact’ to principles of ‘parity’ across market participants in determining where joint authority is appropriate.

Expansion of Advisory Authority

PGP supports the GRC’s proposal to expand the nature of the WEIM Governing Body's advisory authority to require two additional components when the Governing Body advises against adoption of a proposal.  The GRC's proposal to require that input be provided and discussed in joint general session of both bodies is a sensible way to drive 'face to face' discussion of potentially controversial issues and PGP is supportive of encouraging this type of direct discussion and debate.  PGP does not have an opinion at this time as to whether requiring a super-majority vote of the Board of Governors when there is a negative advisory opinion from the WEIM Governing Body is warranted

Change to Bylaws

PGP Supports the proposed changes to the CAISO's governance documents to formalize the CAISO and CAISO Board of Governors' obligation to consider the public interest of the entire footprint.  PGP further supports the modification to apply the term "weigh" in lieu of "consider" as initially proposed. 

PGP appreciates that the overriding goal of the proposal is to expressly contradict any concern that the company will pursue the benefit of California load exclusively and notes that the same basic concept applies to the EIM GB – that the EIM GB is not to pursue the benefit of entities outside of California exclusively.  The obligations of both bodies to each weigh or consider the interests of the entire footprint should theoretically lead to an expansive scope for joint authority since the risks associated with over-inclusiveness should be very low.  However, it is clear that at least some stakeholders do not appear to agree with this, given arguments that expanding joint authority to certain types of rules may somehow implicate California’s reliability.  Other stakeholders may believe that, regardless of direction in governance documents, the CAISO’s basic governance structure will, even unconsciously, translate into a greater weighing of California load at the expense of external stakeholders.  PGP appreciates the good work done by the GRC and believes that the joint authority framework, changes to governance documents, and incrementally expanded scope for joint authority are important foundations for additional ‘trust work’ that needs to be done to enable the full realization of these governance principles.

1. The WEIM Governance Review Committee appreciates the stakeholder engagement and comments received on its Phase Three (EDAM) straw proposal (July 15, 2022). In response to the GRC’s Phase Three (EDAM) revised proposal (October 31, 2022), and in preparation for the GRCs final proposal, do you have any additional comments on the following items?

1. Delegation of authority; 2. Size and composition of the Governing Body; 3. Stakeholder engagement and policy development; 4. CAISO’s responsibility to consider regional stakeholders; 5. Timing for approval and implementation of GRC proposals.

Western Resource Advocates (WRA), the Sustainable FERC Project, Renewable Northwest and the Northwest Energy Coalition (collectively “Joint Commenters”) appreciate the opportunity to provide comments to the Western EIM (WEIM) Governance Review Committee (GRC) on the GRC’s Phase Three (EDAM) Revised Proposal dated October 31, 2022 (“Revised Proposal”).^[1]  The Joint Commenters are very supportive of the Revised Proposal and specifically support the changes made to the last version of the proposal with some minor caveats.[2]  The Joint Commenters acknowledge and appreciate that the current proposal reflects a willingness of the CAISO and its stakeholders to evolve the governance structure of the market as new market offerings are developed.  We commend the GRC members’ commitment to this process and responsiveness to stakeholders.

The Joint Commenters strongly support regional coordination efforts, especially organized wholesale market options like CAISO’s Extended Day-ahead Market (EDAM).  A day-ahead market, like EDAM, has the potential to improve reliability and decrease electricity costs and is an essential tool for implementing state clean energy policies.  A recently released study shows substantial benefits for both California and other Western states through participation in the EDAM.[3]  

The previous comments of the Joint Commenters on the GRC’s Straw Proposal continue to represent our views on the governance issues contained therein.[4]  The comments herein are focused on the revisions made to the prior proposal and are organized around the GRC’s comment template.

1. Delegation of authority.

The Joint Commenters support the GRC’s recommendations as articulated in the Revised Proposal in regard to the scope of joint authority.  The GRC continues to recommend the “applies to” test for the Governing Body’s joint authority.  However, as articulated in the Revised Proposal the GRC recommends increasing the Governing Body’s joint authority as follows: “The WEIM/EDAM Governing Body will also have joint authority with the Board of Governors to approve or reject a proposal to change or establish any tariff rule for the day-ahead or real-time markets that directly establishes or changes the formation of any locational marginal price(s) for a product that is common to the overall WEIM or EDAM market.”[5] This modification was prompted by some stakeholders who requested an expansion of joint authority.

The Joint Commenters generally support this modification. We conclude that the GRC evaluated this proposed expansion of joint authority with the five criteria suggested in our previous comments: (1) the extent of the expansion; (2) the potential for other paths of influence; (3) balancing the interests of all participants; (4) a clear, objective and easy to administer standard; and (5) enhancing joint authority with other avenues.6]   However, some questions about the application of the additional language were raised at the November 7, 2022 stakeholder meeting.  For example, it is not clear if penalty parameters would fall within the scope of joint authority. The GRC is proposing another round of stakeholder comments to provide additional opportunity for feedback and clarification on the newly proposed enhancements to joint authority. The scope of joint authority is a central component of the EDAM governance proposal; therefore, we support as much clarity as possible.  An additional round of stakeholder process to achieve as broad of consensus as possible is a reasonable path forward.  

The GRC also recommends making two changes to the process for exercising the Governing Body’s advisory authority.[7]  The Joint Commenters support these changes. Advisory authority complements joint authority and the combination is a good solution that appropriately balances stakeholder interests.

2. Size and composition of the Governing Body.

The Joint Commenters support the GRC’s recommendations as articulated in the Revised Proposal in regard to the size of the Governing Body, the process for nominating Governing Body members and compensation of the Governing Body members.[8]  We especially appreciate the recommendation for CAISO management to arrange for a study in 2023 to evaluate the compensation of the Governing Body members.   We propose that the GRC’s recommendation include the following suggestion for consideration by management: In addition to reviewing the compensation based on a part-time commitment, the compensation review could explore other options, such as, compensation based on the full-time commitment of the Chair and Vice Chair if justified by the workload. 

3. Stakeholder engagement and policy development.

The Joint Commenters support the GRC’s recommendations as articulated in the Revised Proposal in regard to endorsing CAISO’s overall engagement model, the judicious use of working groups as part of the stakeholder process and the Regional Issues Forum (RIF) roundtable.[9]  We also support the recommendation that CAISO staff support the RIF as it evolves from an educational forum to include more of an advisory role.  In this regard, we strongly support the following statement: “We believe the RIF itself is best positioned to determine exactly how to approach this in a way that is feasible given the demands on its liaisons and other participating stakeholders, and the arrangements necessary for participating stakeholders to authorize comments or other advocacy on their behalf.”[10]

The Joint Commenters also agree with the GRC’s proposed disposition of the public interest groups and consumer advocate groups sector’s appointment of liaisons.  Given the self-governing nature of the RIF this should be resolved internally.[11] 

Finally, consideration of an additional RIF liaison to represent a newly-formed EDAM sector is an example of a potential change to ensure that the RIF adequately represents the range of stakeholders impacted by the EIM and EDAM.  While additional details need to be explored, the Joint Commenters are generally supportive of ongoing refinement of the sectors to ensure that diverse perspectives, representing the full range of stakeholders, are included on the RIF.  As the market continues to grow and evolve, the RIF sectors and sector definitions should be reviewed periodically to reflect significant changes in the market or engaged stakeholders. We recommend that the GRC confirm that additional flexibility is built into the RIF structure to continue to refine stakeholder sectors as the market and participation evolve. For example, large clean energy buyers have become increasingly engaged in market design and governance and may warrant more representation in future Western wholesale market structures.

4. CAISO’s responsibility to consider regional stakeholders.

The Joint Commenters support the GRC’s recommendations as articulated in the Revised Proposal in regard to changing CAISO’s corporate governance documents.[12]  The Joint Commenters also appreciate and support the slight language change. We agree that the word “weigh” in place of “consider” more precisely articulates the intent of the provision.  We also note that this language change was prompted by one of the commenters and is one of many examples of the GRC’s responsiveness to stakeholders throughout this process.

5. Timing for approval and implementation of GRC proposals.

The Joint Commenters support the GRC’s recommendations as articulated in the Revised Proposal in regard to the timing for approval and implementation of the GRC’s proposals.[13]  We agree that the process for adopting the bylaws necessary to implement the EDAM governance proposals should begin immediately after the Federal Energy Regulatory Commission (FERC) issues an order approving the EDAM market design.  This timing ensures that the governance changes are not put into effect before it is reasonably certain that EDAM will come to pass but also that the entities who are committing to this new market have full assurance that the governance will go into effect in at timely manner during the transitional implementation period.  

We also strongly agree that the Governing Body should have joint authority over the decision about the EDAM market design.[14]  According to the Revised Proposal this classification is anticipated in the “near future.”[15]

6.  Other: The governance review process.

The Joint Commenters continue to commend the GRC and CAISO on a thorough and inclusive process.  Multiple design efforts are underway in the Western Interconnection and many stakeholders, such as public interest organizations, have limited resources. The process undertaken by the GRC and CAISO not only assists stakeholders in their efforts to be educated and informed, but also encourages this. For example, the GRC has included summaries of stakeholder comments and the basis for their recommendations in each of their written proposals and verbally during stakeholder meetings. In addition, the GRC is providing another round of stakeholder comments to provide additional opportunity for feedback and clarification on the newly proposed enhancements to joint authority. These are two key examples of the GRC’s review process that provide stakeholders with the opportunity to more effectively engage.

The Joint Commenters appreciate this opportunity to provide comments on the GRC’s revised recommendations for Phase Three (EDAM) of the governance review.

[1] CAISO, Western EIM Governance Review– Phase Three (EDAM) Governance Review Committee Revised Proposal (October 31, 2022), available at:  http://www.caiso.com/InitiativeDocuments/EDAM-Governance-Revised-Proposal-WEIM-Governance-Review-Committee-Phase-3.pdf, (“Revised Proposal”).

[2] CAISO, Western EIM Governance Review– Phase Three (EDAM) Governance Review Committee Straw Proposal (July 15, 2022), available at: http://www.caiso.com/InitiativeDocuments/EDAM-Governance-Straw-Proposal-WEIM-Governance-Review-Committee-Phase-3.pdf (“Straw Proposal”).

[3] CAISO and Energy Strategies, CAISO EDAM Benefits Study: Estimating Savings for California and the West Under EDAM Market Scenarios (November 4, 2022), available at: http://www.caiso.com/Documents/Presentation-CAISO-Extended-Day-Ahead-Market-Benefits-Study.pdf.

[4] Joint Comments of Public Interest Organizations and Large Clean Energy Customers on Governance Review Committee’s Phase Three (EDAM) Straw Proposal (August 15, 2022), available at:   https://stakeholdercenter.caiso.com/Comments/AllComments/98cd6610-81b4-4ba8-a4c6-a3afe372eecf#org-41cf7037-1a9f-4a11-b701-f38b3854bd0e, (“Joint Comments on Straw Proposal”)

[5] Revised Proposal at p. 17.

[6] See Joint Comments on Straw Proposal at p. 5.

[7] Revised Proposal at p. 18.

[8] Revised Proposal at pp. 25-26.

[9] Revised Proposal at pp. 27-28, 29-30.

[10] Revised Proposal at p. 28.

[11] Revised Proposal at p. 31.

[12] Revised Proposal at pp. 33-34.

[13] Revised Proposal at pp. 35-36.

[14] Revised Proposal at p. 35.

[15] Revised Proposal at p. 35.

1. The WEIM Governance Review Committee appreciates the stakeholder engagement and comments received on its Phase Three (EDAM) straw proposal (July 15, 2022). In response to the GRC’s Phase Three (EDAM) revised proposal (October 31, 2022), and in preparation for the GRCs final proposal, do you have any additional comments on the following items?

1. Delegation of authority; 2. Size and composition of the Governing Body; 3. Stakeholder engagement and policy development; 4. CAISO’s responsibility to consider regional stakeholders; 5. Timing for approval and implementation of GRC proposals.

PPC appreciates the opportunity to comment on the Governance Review Committee's latest EDAM governance proposal. We continue to appreciate the hard work of GRC members to improve on the EIM governance structure to provide a more robust governance for EDAM. As described below the GRC has worked to create real improvements throughout this process; however, as acknowledged by the GRC itself, the resulting governance is not fully independent. Any potential participant in EDAM, or any organized day ahead market, will have to weigh the risks and benefits of that market's design and governance. For many PPC members, the current governance structure as defined in the GRC's proposal presents too much risk compared to the potential benefits of EDAM. This is not due to the efforts of the GRC, which have been persistent throughout the multiple phases of the governance review process. Instead, the greatest concerns come from the elements of the governance which cannot be revised without legislative change. Again, while the proposal falls short of true independent governance, the GRC has made meaningful improvements to the government structure in its latest proposal.

Scope of authority

One of the areas of greatest improvement in the latest proposal is the proposed expansion of joint authority. PPC and other stakeholders have repeatedly advocated for the broadest application of joint authority, and the latest proposal is a step in the right direction. The GRC had proposed that all rules that apply to EDAM/EIM entities in their role as EDAM/EIM entities fall under joint authority. In addition, the GRC now proposes that all rules impacting the locational marginal prices for any products offered in the EDAM and EIM markets will also be under joint authority. This change better reflects rules that may meaningfully impact EIM and EDAM participants and we strongly support the extension of joint authority to include these issues. PPC asks that the GRC consider specifying that the expansion of this scope should also include penalty pricing, as that penalty pricing drives market outcomes, including having impacts on prices in the real-time and day ahead markets.

PPC also supports the expanded scope of advisory authority to include all other issues. The EIM Governing Body should be able to provide its opinion to the CAISO Board of Governors in all instances. It is reasonable to allow the EIM Governing Body members to inform the CAISO Board of Governors on any potential impacts to EIM/EDAM participants in the market on any issue they deem necessary.

Size and Composition of the EIM Governing Body

PPC does not have any concerns with the current size and composition of the EIM Governing Body. That said, if the EIM Governing Body ever indicates that additional Governing Body members would be helpful to shoulder the workload of the Body, PPC does not necessarily oppose potential expansion beyond the current five members.

Stakeholder Engagement and Policy Development

PPC is supportive of additional ways that the CAISO could continue to enhance the role of stakeholders in the policy development process. More regular use of working groups is a good example of one such opportunity. Additionally, continuing to develop the role of the RIF consistent with its expanded purview under the EIM governance improvements is another potential avenue for enhancing stakeholder engagement. The concept of having the RIF host a round table to discuss the priority of various CAISO initiatives is a good first step. PPC appreciates the opportunity to participate in further evolution of the RIF through staff's participation as a liaison for the COU sector.

CAISO's Responsibility to Consider Regional Stakeholders

PPC is supportive of the proposed changes to the bylaws which would clarify the CAISO is to operate for the benefit of all market participants. While PPC appreciates this proposed change and the message that it conveys to entities outside of California about stakeholders’ desires to develop a greater regional market, the changes to the bylaws do not supersede the existing CAISO statues which require the market to be for the benefit of California ratepayers. As explained in Appendix A prepared by CAISO legal staff, these interests do not need to be at odds and there are many examples of market changes which benefit all participants. However, there are some market changes that benefit some market participants at the expense of others. To the extent that the interests of participants outside of California conflict with interests of parties within California, these bylaw changes provide limited comfort that impacts to all market participants would be reliably considered equally.

Timing for Approval and Implementation of GRC's Proposals

Throughout this process PPC has advocated that the EDAM market design and governance must be considered as a package.  This could be accomplished if both are evaluated concurrently in a joint session of the EIM Governing Body and the CAISO Board of Governors for approval.  It is critical that the decision to approve EDAM is made by both the CAISO Board of Governors and the EIM Governing Body. 

While CAISO could wait for one or more participants to join EDAM prior to implementing the changes in the GRC's proposal, there are meaningful improvements that would benefit the current EIM governance - such as the proposed expansion of Joint Authority - and thus PPC recommends putting those changes in to place as soon as approved.

Additional Consideration Regarding the Dual Role of the CAISO

One of the challenges that has become more evident throughout this process relates to the dual role played by the CAISO as both a BAA - which makes them a market participant, and as a market operator. In initiative discussions it can be difficult to understand which objectives CAISO is pursuing in its role as a BAA, which objectives are related to its role as a market operator and how CAISO is balancing those roles in developing its recommendations. PPC offers for the GRC's consideration, that it would be helpful to ask that CAISO staff clearly and separately identify considerations it is making in its role as an individual BAA/market participant, and which are being made in its role as a market operator. We are hopeful that such an approach would provide benefits to broader stakeholder community by allowing the CAISO to more clearly advocate on behalf of interests within its BAA, to demonstrate that it is acting as an independent and unbiased market operator - despite being a participant in the market, and to provide additional transparency to all stakeholders on how CAISO is balancing its dual roles. If this is outside the purview of the GRC, we appreciate consideration of this recommendation by CAISO staff as a potential improvement to its regular initiative processes.

Conclusion

PPC appreciates the opportunity to comment and again thanks the GRC, CAISO staff and other stakeholders for the active engagement and thoughtful recommendations throughout this process.

1. The WEIM Governance Review Committee appreciates the stakeholder engagement and comments received on its Phase Three (EDAM) straw proposal (July 15, 2022). In response to the GRC’s Phase Three (EDAM) revised proposal (October 31, 2022), and in preparation for the GRCs final proposal, do you have any additional comments on the following items?

1. Delegation of authority; 2. Size and composition of the Governing Body; 3. Stakeholder engagement and policy development; 4. CAISO’s responsibility to consider regional stakeholders; 5. Timing for approval and implementation of GRC proposals.

Puget Sound Energy (PSE) appreciates the considerable work that has been done by this committee to attempt to take into consideration long-standing concerns of the non-CAISO west with the existing Western Energy Imbalance Market (WEIM) governance model. PSE acknowledges the work done by the Governance Review Committee (GRC) in Phase 1 and 2 took an incremental step toward a governance model for WEIM that moved toward independent authority for non-California entities in the WEIM. PSE believes the changes in Phase 3 of this proposal, which extends the authority over the EDAM, and day-ahead markets, have made incremental improvements, however, the proposal continues to limit independent authority of non-California entities over tariff changes that could directly or indirectly impact those entities and their customers in the West. In short, while the proposal provides some incremental improvements, it fails to solve PSE’s overall governance concerns related to both WEIM and EDAM.

PSE appreciates the GRC’s attempt to capture the specific tariff items, known today, that would fall within the proposed joint authority, and the examples provided to help stakeholders review specific circumstances. PSE respectfully offers these comments on the WEIM Governance Review Committee’s (GRC’s) Phase Three Revised Straw Proposal dated October 31, 2022.

Delegation of Authority

Type of authority

With respect to the type of shared authority proposed – the joint authority model – PSE agrees that this model is an improvement on the primary authority model and reduces instances where the CAISO Board of Governors (Board) may have unilateral and unchecked authority. Additionally, the joint authority model may encourage public accountability of the joint body that could foster greater collaboration. A full regional transmission organization (RTO) model would certainly demand a more autonomous form of governance. But even absent a full-RTO, entities in the EDAM will be subjecting significantly more transmission, energy, and capacity to the control of a centralized operator. All entities in the footprint benefit from these resources and the entities providing them should have an equal decision-making seat at the table.

Scope of the Governing Body’s shared authority

PSE is concerned that the “apply to” test, as written, may still exclude rules that will affect entities participating in the WEIM and EDAM. The locational marginal price (LMP) test in some cases may be an expansion of joint authority, but many other provisions in the tariff may advantage or disadvantage some entities or may impact the value of those entity’s assets without “directly” establishing or changing the formation of LMPs. PSE appreciates the LMP test was developed in response to NVE’s similar concern, using the example of market power mitigation rules. But LMPs, while significant, are only one of several ways an entity’s assets could be devalued in a centralized market. PSE considered the “parity” concept proposed by Six Cities[1], which extends limited joint authority over broader CAISO day-ahead and real-time market tariff changes only if that joint authority also applies to comparable provisions in WEIM/EDAM entity tariffs, as well as that proposed by PGP, which extends joint authority over the broader day-ahead and real-time markets but excludes tariff changes specific to the CAISO BAA provided that comparable rules for WEIM/EDAM BAAs were solely under the authority of those BAAs. While those proposals offer promise, but PSE recognizes such a proposal would create complex evaluations of comparable entity tariff provisions and would require much more extensive consideration. Of the options currently under consideration, disregarding PSE’s other objections with the fundamental governance structure, PSE prefers the approach of extending the joint authority to all real-time and day-ahead market rules and creating a defined set of exceptions or exclusions for subjects that would remain subject to the Board’s sole approval.

Procedural issues related to the delegation of authority

Decisional classification process

The decisional classification process is the root of authority in this proposed model, and while this issue is classified as a “procedural” issue, it reflects the core of the issue stakeholders have with WEIM or EDAM governance – CAISO, and California – retain ultimate authority. Under the proposal, the Board holds the tie-breaking vote when the Governing Body and the Board are tied on deciding the classification of authority. In the proposal, CAISO staff will issue an initial decisional classification, after which, a stakeholder process is held and a final decisional classification is offered to the chair of the Governing Body and the Board. If either chair objects, the classification is put before the two bodies as a “committee of the whole” for a vote, with a majority approval constituting approval of the classification. But if the “committee of the whole” results in a tie, the chair of the Board holds the tie-breaking vote.

The proposal further states that to date, the chairs have either always been able to agree with staff’s proposed decisional classification, or been able to resolve questions, and have not sent an item to the “committee of the whole” for a vote. While this may be true, a much greater scope of activities will come into scope in EDAM, including the priority, treatment, and valuation of transmission rights. It is conceivable there will be a greater frequency of disagreement over these classifications with significantly more at stake for entities, and as the joint authority model is tested in the new market. Furthermore, the Board members all have a perceived bias toward California, due to their own geographic location, whereas the chair of the Governing Body does not necessarily have a perceived bias toward any state in the WEIM/EDAM. Regarding a tie in the decisional classification process, or in the process for resolving disagreements between the Governing Body and the Board on whether to approve a proposal within their joint authority, PSE supports the prior proposal by some commenters for a “tiebreaker” rule in which the vote rotates between the Governing Body and the Board.

Process for Resolving Disagreements Between the Governing Body and the Board on Whether to Approve a Proposal Within Their Joint Authority

As stated above, regarding a tie in the decisional classification process, or in the process for resolving disagreements between the Governing Body and the Board on whether to approve a proposal within their joint authority, PSE supports the prior proposal by some commenters for a “tiebreaker” rule in which the vote rotates between the Governing Body and the Board. The constituents of the Governing Body – WEIM and EDAM participants have as great an interest in the integrity of the market as the constituents of the Board - CAISO members. There is no reason why the Board should be granted unilateral authority to approve a proposal in the case of such disagreements.

Size and Composition of the Governing Body

Re-nomination process

The composition of the Governing Body will be an important consideration as the scope of authority widens and body members responsibility increases. PSE does not agree that an additional step should be added when a sitting member of the Governing Body seeks an additional term. That consideration should be part of the natural evaluation process the nominating committee will make when deciding whether to re-nominate a sitting candidate without interviewing other candidates. Additionally, adding this step could create a requirement, in perpetuity, that will outlive its usefulness once the EDAM has been operational for a period of time. PSE does agree that it will be important for the nominating committee to develop a set of objective qualifying criteria for evaluating any candidate for EDAM – either a sitting WEIM Governing Body member, or a new candidate – PSE does not believe it is necessary to include this criteria in the Selection Policy beyond the requirements included in section 3.5 regarding the Executive Search Criteria.

Size of Governing Body

With regard to the size of the Governing Body, PSE believes that the current configuration of five members is symmetrical to that of the Board and sufficiently represents the diversity of the footprint in its current configuration. As the footprint grows it may be necessary to reassess if more members are necessary.

Compensation

PSE does not object to the GRC’s recommendation for a study to be conducted in 2023 to evaluate whether compensation of the Governing Body is commensurate with similar bodies and whether compensation could be an obstacle to finding qualified candidates in the future. A qualitative summary of the results of this study should be made available to stakeholders. If the study finds compensation levels of the Governing Body members are out of range, PSE would support adjustments being made to current and offered compensation packages for the purposes of remaining competitive and attracting qualified candidates.

Stakeholder Engagement and Policy Development

Use of working groups

PSE is fully supportive of expanding the use of working groups as a means of enhancing the stakeholder engagement process. These groups are smaller, more focused, and will promote greater engagement in policy development. A ‘judicial’ approach to prevent over subscription is sensible. The use of best judgement may be sufficient as a mechanism to balance the number of groups created.

Prioritizing initiatives

A Regional Issues Forum (RIF) advisory process is crucial to ensuring that sector interests and minority interests are fairly represented. PSE supports the evolution of the RIF as an advisory authority issuing more formal opinions to the Board and Governing Body and initiating an annual roundtable prioritization of initiatives. PSE expects CAISO staff to consult the RIF when forming its list of discretionary initiatives, but believes CAISO staff should not have sole discretion over the list of initiatives. The RIF should have the ability to introduce additional initiatives, within reason, to the catalog before it goes before the Governing Body and the Board. The sector liaisons of the RIF provide a view into the varied interests in the WEIM and EDAM market. PSE also believes it will be important for the RIF, when initiating this roundtable, to consult with the Body of State Regulators to ensure the state regulatory perspective is captured at the outset of the process. PSE encourages attendance by at least one Governing Body and Board member at these roundtable discussions. This will help expand the influence of the RIF and facilitate engagement while reducing the possibility of quorum complications.

CAISO’s responsibility to consider regional stakeholders

Amendment to bylaws

PSE is supportive of the proposed refinement to replace “consider” with “weigh” as a means of reducing the likelihood of the CAISO pursuing the benefit of CA load exclusively. While this does not represent a guarantee in any form, PSE believes that including this clause in the charter will mark an incremental improvement and a step towards a more autonomous and independent structure. Use of the word “weigh” implies that many of these considerations may be transposed into a more quantifiable metric and subsequently documented. This accountability will be vital to shaping the future evolution of the EDAM governance structure. While this amendment does not negate (or reprioritize) the CAISO’s legal obligation to protect its balancing authority area, the formalization of this intent is likely to impart stakeholders with a sense of positive assurance, a welcomed disposition as it pertains to regional matters in the western interconnection.

Timing for approval and implementation of GRC proposals

PSE recognizes this move to a new governance structure in tandem with tariff changes required to implement the market subject to that governance structure represents a unique timing and authority issue. PSE supports the GRC’s recommendation for Joint Authority for approval of the EDAM market design with full EDAM governance taking effect upon FERC acceptance of CAISO’s section 205 filing for the market design. Southern California Edison’s concerns[2] about granting Joint Authority over a market that may have impacts on California entities and for which non-California participation is unknown is valid. But PSE believes that non-California entities in the EDAM footprint will have a considerable interest in the success of that market at the point at which a 205 filing has been accepted.

[1] August 15, 2022, submitted on behalf of the Cities of Anaheim, Azusa, Banning, Colton, Pasadena, and Riverside, California. California ISO - All comments (caiso.com)

[2] Submitted August 15, 2022, California ISO - All comments (caiso.com)

1. The WEIM Governance Review Committee appreciates the stakeholder engagement and comments received on its Phase Three (EDAM) straw proposal (July 15, 2022). In response to the GRC’s Phase Three (EDAM) revised proposal (October 31, 2022), and in preparation for the GRCs final proposal, do you have any additional comments on the following items?

1. Delegation of authority; 2. Size and composition of the Governing Body; 3. Stakeholder engagement and policy development; 4. CAISO’s responsibility to consider regional stakeholders; 5. Timing for approval and implementation of GRC proposals.

Salt River Project Agricultural Improvement and Power District (SRP) would like to thank the Governance Review Committee (GRC) for their focused hard work and ability to bring diverse stakeholders together in developing the Phase Three Extended Day Ahead Market (EDAM) governance revised proposal.  

SRP has the following comments regarding the five (5) items within the GRC’s EDAM governance revised proposal:

1.    Delegation of Authority:
SRP advocates for the inclusion of the formation of any locational marginal prices (LMPs) for a product that is common to WEIM or EDAM to be under joint authority.  Joint Authority should apply to any LMP formation, not just those that are “directly” impacted because secondary impacts may occur such as with penalty pricing.  Changes to such market products, even if only effectuated in one Balancing Authority Area (BAA), may have wider market impacts, which need to be weighed carefully by both the EIM Governing Body and the Board of Directors.  SRP advocates for penalty parameters to be included under the joint authority delegation proposal due to their impact on LMP formation.  SRP supports the inclusion of this enhanced joint authority language with the exclusion of the word “directly”:

    “The WEIM/EDAM Governing Body will also have joint authority with the Board of Governors to approve or reject a proposal to change or establish any tariff rule for the day-ahead or real-time markets that directly establishes or changes the formation of any locational marginal price(s) for a product that is common to the overall WEIM or EDAM markets.”

Additionally, SRP advocates for the inclusion of requiring a super-majority vote of the Board of Governors, rather than a simple majority, when the Governing Body does not support a proposal subject to its Advisory Authority.  It is SRP’s opinion that there are greater risks associated with under-inclusion of the Governing Body for Advisory Authority issues, as this can result in potentially underinformed decisions by the Board of Governors should the Board choose to disregard the opinion of the Governing Body.  These circumstances can lead to an erosion of trust and confidence between the two entities. Requiring a super-majority vote of the Board of Governors instead promotes careful deliberation and discussion of these concerns and assures stakeholders that the opinion of the Governing Body is heard, and that any following vote was carried with that opinion in mind.  Advisory Authority under this paradigm has real weight, giving the Governing Body a more meaningful role in the deliberative process while also retaining decision-making authority with the Board.  This dynamic strikes a better balance between the two bodies and promotes more meaningful collaboration to identify alternative solutions that can be mutually supported in a way not achieved by maintaining a simple majority vote.  This change would also be consistent with the principles outlined in the GRC’s proposed amendments to the CAISO bylaws, which formalize CAISO’s obligation to consider the public interest of the entire footprint.

2.    Size and Composition of the Governing Body:
SRP supports the GRC’s proposal to maintain five Governing Body members, to consider the enhanced responsibilities associated with EDAM when reappointing a sitting Governing Body member, and to evaluate the compensation of the Governing Body in 2023.

3.    Stakeholder Engagement and Policy Development:
SRP advocates for minority opinions to be heard as part of these enhancements in order for diverse stakeholder voices to be represented.  SRP supports the GRC’s proposal to utilize working groups and enhance the Regional Issues Forum (RIF) engagement on the prioritization of the policy roadmap and functional support to allow geographic diverse and differing stakeholders’ voices to be heard and considered by CAISO staff, Governing Body, and Board of Governors.  

Additionally, regarding market analyses and impacts for Balancing Authority Areas and the broader market, SRP requests that both the market experts from the CAISO and the WEIM Governing Body provide their viewpoints and share them with market participants. This would provide stakeholders with multiple lenses when evaluating these impacts, allowing the Governing Body and Board of Governors, as well as the WEIM and EDAM entities, to make a more informed decision.

4.    CAISO’s Responsibility to Consider Regional Stakeholders:
SRP supports the GRC’s proposal to amend the Bylaws as stated in the proposal.

5.    Timing for Approval and Implementation of GRC Proposals:
SRP advocates for approval, with the caveats stated in our comments above, of the GRC Phase Three proposal to implement the Board of Governors and Governing Body expanded joint authority over the EDAM market design decision and to precede any consideration of the EDAM market design.  SRP encourages the GRC, the Board of Governors and Governing Body to implement the GRC Phase Three proposal immediately.
 

1. The WEIM Governance Review Committee appreciates the stakeholder engagement and comments received on its Phase Three (EDAM) straw proposal (July 15, 2022). In response to the GRC’s Phase Three (EDAM) revised proposal (October 31, 2022), and in preparation for the GRCs final proposal, do you have any additional comments on the following items?

1. Delegation of authority; 2. Size and composition of the Governing Body; 3. Stakeholder engagement and policy development; 4. CAISO’s responsibility to consider regional stakeholders; 5. Timing for approval and implementation of GRC proposals.

The Six Cities’ comments on key elements of the GRC’s Phase 3 Revised Proposal are set forth below.  The Six Cities provide qualified support to the GRC’s proposals regarding joint authority, and they support or do not oppose remaining elements of the Revised Proposal. 

1. Delegation of authority

The Six Cities agree with the Committee’s proposal to extend the existing joint authority model to include matters within the scope of the day ahead market as outlined in the Revised Proposal at pages 16-17.  The EDAM represents an incremental step toward greater market integration between the CAISO and other areas of the West but falls short of a full regional transmission organization (“RTO”) or independent system operator (“ISO”) structure.  For this reason, the Six Cities concur with the Committee’s conclusion that the existing test, which provides for joint authority between the EIM Governing Body and the CAISO Board of Governors when proposed market rule changes “apply to” EIM and/or EDAM balancing authorities in their respective capacities as participants in the EIM or EDAM, reflects an appropriate balancing of interests among market participants.  Retention of the existing test (as extended into the day ahead market) provides opportunities for collaboration between the Governing Body and Board of Governors, properly aligns with the principle of parity endorsed by the Six Cities and other stakeholders during the Committee’s September 23^rd meeting, and minimizes subjectivity in determining whether a rule is subject to joint or advisory authority. 

Additionally, the Six Cities do not oppose the proposal to include within the shared authority of the EIM Governing Body and the CAISO Board of Governors “proposal[s] to change or establish any tariff rule for the day-ahead or real-time markets that directly establishes or changes the formation of any locational marginal price(s) for a product that is common to the overall WEIM or EDAM market.”  (Revised Proposal at 17.)  The Six Cities observe that proposals pertaining to price formation in the day ahead or real-time markets could—but may not always—fall under joint authority pursuant to the existing “apply to” test.  In formulating its Draft Final Proposal, the Six Cities request that the Committee consider, and potentially evaluate with CAISO staff, whether there is the possibility, within the either the real-time market or the day ahead market, of locational marginal prices for common products where the pricing impacts resulting from a new or revised tariff rule would be confined to the CAISO balancing authority area and would not cause pricing impacts to propagate to other areas.  If it could be determined with confidence that the impact of a potential new tariff rule or rule change affecting prices for common products would be limited to the CAISO area and would not affect pricing in other areas, then it would be appropriate for the Board of Governors to retain authority to approve such tariff provisions.  

With respect to the Committee’s proposals relating to the Governing Body’s exercise of its advisory authority, the Six Cities do not oppose these modifications, including to ensure that the Governing Body has opportunities to explain during a joint general session its opposition to tariff or market rule changes within the scope of its advisory authority and may prepare written statements of position to be submitted in response to CAISO tariff filings that are subsequently submitted to FERC.  (See Revised Proposal at 18.)  Opposition by the Governing Body to tariff or market rule changes within the scope of its advisory authority should not trigger revised voting rules for the Board of Governors, however. 

With respect to the Committee’s discussion of the Transmission Service and Market Scheduling Priorities initiative (see Revised Proposal at 18), the Six Cities oppose inclusion of that initiative within joint authority and agree with the Committee’s “inclin[ation]” to exclude this initiative from joint authority (id.).  First, this initiative does not fit within the scope of the “apply to” test articulated above under any reasonable application of this test.  Second, as the Committee correctly points out, tariff rules relating to transmission rates, terms, and conditions of access, including transmission scheduling priorities (which merely implement access and service rules), are not elements of the market optimization.  Third, there is no suggestion that other EIM or potential EDAM participants subject counterpart provisions of their tariffs to any degree of authority within the EIM or EDAM governance structure, and there is no justifiable basis for assertions that CAISO transmission rules must follow special approval requirements to afford heightened protections to a subset of CAISO transmission customers.  Further, as with any other EIM or EDAM entity that is FERC-jurisdictional (or has filed a reciprocity tariff), the CAISO’s tariff requirements relating to transmission rates, terms, and conditions of access are subject to FERC oversight and FERC’s open access policies.    

Finally, the Six Cities support the Committee’s decision not to advance a proposal to implement “presumptions” for or against joint authority or implement tie-breaker requirements (see Revised Proposal at 23), on the basis that such changes might engender additional controversy over classification, which largely has not occurred thus far, and potentially make classification of proposed tariff changes more difficult and subjective. 

2. Size and composition of the Governing Body

The Six Cities support the Committee’s proposals to (i) adjust the nomination criteria for Governing Body members consistent with implementation of a day ahead market; and (ii) retain the current size of the Governing Body.  See generally Revised Proposal at 25-26. 

3. Stakeholder engagement and policy development

The Six Cities continue to support retention of the CAISO’s existing stakeholder process, with continuing use of working groups where appropriate.  They also support the proposed modifications related to the role and responsibilities of the Regional Issues Forum (“RIF”) in fostering discussion regarding stakeholder priorities in connection with the annual policy roadmap process.  See Revised Proposal at 26. 

Although the Six Cities support the existing stakeholder process and believe that it provides meaningful access and opportunities for input by interested parties, the Six Cities note that, within the context of some CAISO policy initiatives, it can be difficult to discern proposal elements that the CAISO may be advancing in its capacity as market operator, which necessarily should reflect and address the interests of the market as a whole, versus interests and positions that arise from the CAISO’s role as a balancing authority area and transmission service provider for its ISO footprint.  Sometimes, these interests may be in conflict.  As the governance structure of the EIM and EDAM continues to evolve (see, e.g., Revised Proposal at 26, noting that a subsequent review of governance must begin before June 2026), the Six Cities urge consideration of measures to enable the CAISO to effectively function as the market operator while ensuring that the interests of the CAISO balancing authority area and transmission footprint are also advanced.  Reconciling the tension between these different CAISO roles would foster increased confidence among the wider stakeholder community in the CAISO’s policy choices as the market operator.  See also Comments by Pacific Gas and Elec. Co., Extended Day Ahead Market, Question No. 36 (June 16, 2022).  

4. CAISO’s responsibility to consider regional stakeholders

As discussed in their comments on the Committee’s Straw Proposal, the Six Cities do not oppose the proposed revision to the CAISO’s corporate governance documents, consistent with the discussion in the Revised Proposal.  See Revised Proposal at 33-34.  The Committee’s confirmation that the interests of the CAISO balancing authority area are not intended to be subordinated to the interests of stakeholders in other balancing authority areas is noted.  Id. at 34.

The Six Cities also recommend that the GRC consider proposing an amendment to the EIM Governance Charter to include a parallel obligation by the EIM Governing Body to “weigh the interests of all stakeholders within the footprint of the markets …” (see Revised Proposal at 34) in exercising its joint and advisory authority.  The addition to the EIM Governance Charter of language mirroring the obligation of the CAISO Board of Governors to weigh all stakeholder interests would promote uniformity in each body’s oversight roles and heighten confidence that both bodies will continue to afford due consideration to the interests of entities throughout the EIM and (eventual) EDAM market footprints.  Inclusion of this language in the EIM Governance Charter is also consistent with existing provisions of the charter, which provide for the Governing Body to consider the interests of all participants in the CAISO’s real-time market, including those in the CAISO and EIM entity balancing authority areas.  See, e.g., EIM Governance Charter at 2.1. 

5. Timing for approval and implementation of GRC proposals

The Six Cities do not oppose the proposals for timing and implementation of the proposed governance changes. 

1. The WEIM Governance Review Committee appreciates the stakeholder engagement and comments received on its Phase Three (EDAM) straw proposal (July 15, 2022). In response to the GRC’s Phase Three (EDAM) revised proposal (October 31, 2022), and in preparation for the GRCs final proposal, do you have any additional comments on the following items?

1. Delegation of authority; 2. Size and composition of the Governing Body; 3. Stakeholder engagement and policy development; 4. CAISO’s responsibility to consider regional stakeholders; 5. Timing for approval and implementation of GRC proposals.

SCE appreciates the opportunity to provide comments on the Governance Review Committee (GRC) Phase 3 Revised Proposal.   SCE would like to thank the GRC on the progress made with developing governance for the implementation of the Extended Day-Ahead Market (EDAM).

SCE is generally supportive of the framework put forth in the GRC Phase 3 Revised proposal but has some comments below.

1. DELEGATION OF AUTHORITY –

As stated in previous comments SCE is supportive of the Joint Authority Model and believes it fosters a more collaborative and efficient process.  In particular, the Joint Authority Model includes a meeting with all members from both governing bodies and allows them to have open discussions before voting on various initiatives.  The collaborative nature of the Joint Authority Model ensures that members fully understand the topics discussed and the perspectives of all stakeholders before voting on an issue. 

The Revised proposal expands Joint Authority to items that “directly establishes or changes the formation of any locational marginal price(s) for a product that is common to the overall WEIM or EDAM market.”

While SCE is generally supportive of this expansion, the CAISO has utilized various optimization techniques to ration and, at times, manage reliability.  In particular “parameters” operate behind the scenes.  And while these may impact formation of locational marginal prices, they may be intended to primarily ensure reliability or a feasible solution for the optimization.   It would not be appropriate to give Joint Authority to tools that the CAISO needs to maintain reliability in its BAA.  The proposal should clarify that such parameters or other optimization tools whose primary purpose is to maintain reliability in the CAISO BAA would not be included under Joint Authority.  

Such parameters are used, in part, to ensure low priority exports/wheel-throughs are curtailed prior to CAISO load or high priority exports/wheel-throughs.

While these reliability related items may already be excluded under the proposal because 1) they do not “directly establish or change” LMPs, and 2) they are not for a common product, but rather for CAISO BAA reliability.  Stakeholders would benefit from additional clarity on this topic.   

2. SIZE AND COMPOSITION OF THE GOVERNING BODY

SCE supports the revised proposal to maintain the current size of the Governing Body.  We note both the CAISO Board and the Governing Body currently have 5 members and SCE supports this structure at this time.

3. STAKEHOLDER ENGAGEMENT AND POLICY DEVELOPMENT

SCE fully supports engaging stakeholders in the policy development process and believes a robust, transparent, and inclusive process increases stakeholder confidence in the decision-making processes.  SCE supports additional RIF discussion and adding a new RIF section liaison for EDAM entities as the CAISO prioritizes initiatives.  

4. CLARIFYING CAISO’S RESPONSIBILITIES:

This section was intentionally left blank. 

5. TIMING AND APPROVAL OF GRC PROPOSALS

The revised proposal would implement the expansion of Joint Authority “once FERC has conclusively accepted the CAISO’s filing for the market design.”   SCE would prefer that new rules be implemented only after 1)FERC has conclusively accepted, and 2) at least one entity has formally committed to joining the EDAM.

1. The WEIM Governance Review Committee appreciates the stakeholder engagement and comments received on its Phase Three (EDAM) straw proposal (July 15, 2022). In response to the GRC’s Phase Three (EDAM) revised proposal (October 31, 2022), and in preparation for the GRCs final proposal, do you have any additional comments on the following items?

1. Delegation of authority; 2. Size and composition of the Governing Body; 3. Stakeholder engagement and policy development; 4. CAISO’s responsibility to consider regional stakeholders; 5. Timing for approval and implementation of GRC proposals.

Vistra provides our comments on the GRC Revised Straw Proposal below. 

Section III.B - Type of Shared Authority

Vistra supports the Governance Review Committee (GRC) maintaining a joint authority model. Vistra hopes that all stakeholders interested in this topic understand the context for the “shared authority”. Section III.1 Powers of the Corporate Bylaws allows the Board of Governors to delegate authority but “at its ultimate direction”[1]. In Section IV.1 Establishment and Powers of the Energy Imbalance Market Governing Body state, “Pursuant to Article III, Section 1 of these bylaws, the Governing Board shall delegate to the EIM Governing Body joint authority over certain market rules, as defined in the charter established by the Governing Board.”[2] Vistra hopes all stakeholders understand the meaning of this is that any delegation whether called primary or joint will always be at the Board of Governor’s ultimate direction pursuant to the Corporate Bylaws.

In practice, one can see this play out in the development of the dispute resolution process because if resolution is not achieved the Board of Governor’s alone may authorize a FERC filing if certain conditions are met[3]. In the Charter there is more deference given the EIM Governing Body for dispute process for classification, although in practice it will result in limited impact because even if the Chair of the Governing Body has the authority to break any tie and designate an initiative Joint Authority[4], under Joint Authority if the Governing Body disagrees with a Board of Governors vote to approve it and even after the dispute process there is still an impasse, the Governing Body does not have the authority to file alone at FERC under Section 205 to stop the CAISO’s 205 filing. Pointedly, the WEIM Governing Body are a party to the FERC filing that can protest or comment the same as any other stakeholder.  

We do not believe the GRC has the authority to cure this because of Section III.1 of the Corporate Bylaws, which dictates that any delegated authority is at the ultimate direction of the Board of Governors. Thus it is Vistra’s understanding that, under the Corporate Bylaws, there is no ability to create a “primary authority” or extend a 205 filing right to the Governing Body, since it’s not the public utility.

However, we do believe there is flexibility to increase the Governing Body’s authority when it disagrees with the Board of Governors. Vistra requests the GRC propose a jump ball provision be added to the Charter. Jump ball provision would allow the WEIM Governing Body the right to have its alternative proposal included in the Section 205 filing with the CAISO’s proposal, so that FERC can, decide which proposal (or portion of a proposal) is “just and reasonable and preferable.” In New England, a jump ball provision is included in their governing documents to allow the New England Pool (NEPOOL) to include an alternative proposal in the filing[5]. This allows FERC to perform a more flexible review where FERC will not be required to consider whether the then-existing filed rate is unlawful[6], and may adopt any or all the ISO’s proposal or the alternate proposal as it finds, in its discretion, to be just and reasonable and preferable[7]. A jump ball provision in the Charter would allow the FERC to evaluate the Board of Governor approved proposal and Governing Body approved alternate proposal at the time of filing and apply the just and reasonable and preferable standard to its review. This would provide the Governing Body with sufficient authority under EDAM.

Section III.C – Joint Authority Scope

Vistra appreciates the GRC providing the illustrative mapping of Tariff sections under Joint Authority or Advisory Authority in Appendix B. Vistra is in the process of reviewing these illustrative designations and will provide feedback on them in the next iteration. Stakeholder discussion conceptually on the illustrative designations can serve to aid CAISO Staff in its classification process under implementation.

Vistra supports the GRC proposal to revise the Joint Authority scope to include with a minor revision in underline:

“The WEIM/EDAM Governing Body will also have joint authority with the Board of Governors to approve or reject a proposal to change or establish any tariff rule for the day-ahead or real-time markets that directly establishes or changes the formation of any locational marginal price(s) for a product that is common to the overall WEIM or EDAM market.”[8]

Vistra recommends the GRC propose that the threshold used for the above proposed language should be consistent with that used to evaluate which rules or policies must be codified in the CAISO Open Access Transmission Tariff based on FERC’s policy[9] that if it meaningfully impacts price formation the rule or policy must be included in the Tariff.

Vistra opposes the discussion in the Revised Straw Proposal that implies that the Transmission Service and Market Scheduling Priorities initiative is not under Joint Authority.

• First, this discussion prejudges the classification process and appears to provide GRC guidance on an open question in the stakeholder process. This is inappropriate and we request the GRC remove this discussion from the next iteration so as not to interfere with the classification discussion ongoing in the stakeholder process.
• Second, to the extent the GRC seeks to make a determination now, GRC errs in arriving to the conclusion that TSMSP initiative does not directly impact WEIM Entities. The Market Scheduling Priority elements would directly impact scheduling and curtailment priorities in the real-time market that impacts EIM participation. These priorities drive different scheduling run results, which directly impacts prices set in the subsequent pricing run. Under EDAM, this direct impact to prices will be extended to the day-ahead market via the priorities used in the market.
• Third, the Capacity Benefit Margin or Transmission Reliability Margin that the CAISO proposes to include in its daily Available Transmission Calculation or hourly Available Transmission Calculations will also directly impact the amount of transmission modeled to support EIM or EDAM transfers, and if it does not respect FERC open access principles then it will directly harm the ability of WEIM/EDAM entities and the market participants within them to participate.

It is not in the best interest of a well-functioning stakeholder process for this proposal to be used to prejudge an on-going authority debate under existing authority, which Vistra believes without changes makes this initiative Joint Authority[10].

Section III.C – Advisory Authority Scope

The GRC proposal advances necessary changes to governance, but not sufficient. Vistra strongly agrees that when the Governing Body disagrees with the Board of Governor’s approval of a proposed Tariff amendment that it must have the ability to hire outside counsel to allow it to intervene and comment at FERC. We do not think it goes far enough and there should be a jump ball provision to include an alternate proposal that it supports in the CAISO filing.

Section III.D – Procedural Issues Related to the Delegation of Authority

No specific comments other than procedural issues raised on other sections.

Section IV - Size and Composition of the Governing Body

None.

Section V.A – Stakeholder Engagement

Vistra respectfully reiterates that we disagree with the conclusions the GRC has reached that the CAISO stakeholder model is “inclusive and provides for equal access”. We have this perspective because Vistra brings its products and services to market in 20 states and the District of Columbia, including six of the seven[11] competitive wholesale two-settlement markets in the U.S. and the Western Energy Imbalance Market. Vistra’s experience across the other five ISO/RTOs is that the CAISO model results in asymmetrical access to CAISO Staff and Leadership. While this does not appear to meet the independence characteristics envisioned for an ISO/RTO, the GRC has indicated its unwillingness to address the fundamental flaws in the CAISO’s stakeholder model.

The proposals to support more working groups fails to address the fundamental concerns with the CAISO stakeholder engagement model. Vistra believes an indicative sector-weighted stakeholder vote is necessary to create the incentive for CAISO and stakeholders to constructively strive towards compromise. It is unclear to us what value the working groups bring to motivate CAISO or other stakeholders to engage in meaningful efforts to seek common ground. For example, Vistra’s experience in the EDAM working groups was that the working groups did not provide a meaningful incentive for CAISO or stakeholders to strive towards a compromised solution.

Section V.A - Role of the RIF

The GRC should require the CAISO stakeholder process to recognize and integrate the sector concept. Without this, the RIF lacks context for CAISO and its staff. In the future, RIF sector liaisons should share with the RIF their sectors perspectives and concerns on key topics, such as transmission access and market development and design considerations. While the RIF knowledge-sharing presentations have been informative, the true value of the RIF may be in its ability to facilitate difficult conversations between stakeholders with different perspectives, which the standard CAISO stakeholder process is not effective at allowing. The RIF should consider evolving to a forum that engages not only with the Governing Body but also with the CAISO Board of Governors, given the evolution of the joint authority model, as both bodies could benefit from direct interaction with the RIF sectors and their liaisons in a less formal, more open format than is provided at either bodies’ general meetings.

Section V.B – Process for Developing the Policy Roadmap

Vistra supports the RIF holding a policy catalogue and subsequent policy roadmap roundtable(s) to discuss the two deliverables within the annual policy roadmap process – the catalogue update and the roadmap. We question what accountability mechanism is available to ensure CAISO Staff meaningfully weighs the RIF roundtable discussion(s) in its updates to the policy catalogue and the development of the policy roadmap.  GRC should propose a mechanism to impose accountability to do so. There must be a procedural proposal to ensure there is accountability or else the roundtable(s) will be largely performative. For example, should CAISO Staff in its briefing to the Governing Body and Board of Governors be required to address whether and how they decided to address RIF sectors’ perspectives or not respectively?

Section V.C – RIF Liaisons

We support the GRC revising its proposal to no longer propose “sub-sectors” in the Public Interest and Consumer Advocates sector. However, we oppose the GRC revising its proposal to introduce a new sector – EDAM Entity BAA sector. EDAM market participants will be represented in all of the current sectors.  Any change to the sectors is premature and based on hypothesizing the interest of BAAs to participate in various ways in WEIM or EDAM, rather than waiting for the BAAs to commit to that participation. Vistra expects most if not all WEIM/EDAM BAAs, including CAISO, will opt to participate in both EDAM and EIM markets, rendering this proposal moot and unnecesary.

Section VI – CAISO’s Responsibility to Consider Interests of Regional Stakeholders

Vistra supports the revised proposal inclusion of Public Generating Pool’s suggestion to replace “consider” with “weigh”.

Vistra wants to clarify that regardless of what is included in the corporate governance documents there are FERC rules established in Order 2000[12] that require the CAISO to operate as an independent entity. In Order 2000 FERC reaffirmed:

"[P]rinciple of independence is the bedrock upon which the ISO must be built "and emphasized that this principle must apply to all RTOs, whether they are ISOs, transcos or variants of the two. We also stated that "[a]n RTO needs to be independent in both reality and perception."[13]

The CAISO holds the obligation to be independent as an administrator of an Energy Imbalance Market or Extended Day Ahead Market as one of its Independent System Operator functions. We are concerned with the concern raised because it appears to indicate a lack of confidence in CAISO’s independence. This should be an unnecessary change because under FERC rules CAISO is not to be partial to any group or select stakeholder.

Section VII - Timing

Vistra supports stakeholders who requested GRC to revise its proposal to bring the GRC proposal for approvals prior to the EDAM and its associated efforts of Transmission Service and Market Scheduling Priorities and Day-Ahead Market Enhancements scheduled for the Jan-Feb meetings.

We believe there is a compromise path forward that addresses all the concerns the GRC weighed. The GRC should revise its proposal on timing to:

• Bring the GRC proposal to the Board’s December meeting, or if necessary to allow GRC to produce a Final Proposal a special meeting in early January 2023, for approval.
• GRC should recommend an effective date as soon as it receives approval from the Governing Body and Board of Governors, contingent on a sunset date set at the date of a Federal Energy Regulatory Commission’s decision issuance if the FERC denies the Extended Day-Ahead Market Tariff Amendment.
• Alternatively, if the FERC approves the EDAM make permanently effective on that date.

GRC should revise its proposal accordingly to better address the diverse views of stakeholders.

[1] See Corporate Bylaws last amended by the Board of Governors on November 3, 2021, Section III.1, Page 1, http://www.caiso.com/Documents/ISO-Corporate-Bylaws-amended-and-restated.pdf.

[2] Id, Section IV.1, Page 8.

[3] See Charter for Energy Imbalance Market Governance last amended by the Board of Governors on September 23, 2021, Section 2.2.2, Page 4.

[4] Authority under Section 2.2.3, Page 5.

[5] See Section 11.1.5 Alternative Committee Market Rule Proposal for additional context, available at https://www.iso-ne.com/static-assets/documents/2015/10/parts_agree.pdf.

[6] FERC review of section 205 filings only require it to find the filing just and reasonable where protests must defend and support that it is unjust and unreasonable, which is a much higher bar to meet than the J&R standard. FERC does not reject 205 filing rights just because there is a “preferred” proposal that was not filed.

[7] The jump ball provision allows FERC to introduce preference to its review but only between the proposal and alternate proposal filed in a single Tariff Amendment by the ISO.

[8] Revised Straw Proposal at Page 17.

[9] The Commission has stated that “[d]ecisions as to whether an item should be included in a tariff or in a business practice manual are guided by the Commission’s rule of reason policy, under which provisions that ‘significantly affect rates, terms, and conditions’ of service, are readily susceptible of specification, and are not generally understood in a contractual agreement must be included in a tariff.” N.Y. Indep. Sys. Operator, Inc., 170 FERC ¶ 61,054, at P 35 (2020) (citing Energy Storage Assoc. v. PJM Interconnection, L.L.C., 162 FERC ¶ 61,296, at P 103 (2018); City of Cleveland v. FERC, 773 F.2d 1368 at 1376; Pub. Serv. Comm’n of N.Y. v. FERC, 813 F.2d 448, 454 (D.C. Cir. 1987)).

[10] Vistra acknowledges that whether CAISO adopts a forward reservation process is under Advisory Authority, but the calculation of CBM, TRM, and enforcement of scheduling and reservation priorities in the markets are joint authority even today.

[11] Vistra does not participate in the Southwest Power Pool market and such cannot speak for the relative effectiveness of SPP versus the CAISO.

[12] Docket No. RM99-2-000; Order No. 2000, 89 FERC ¶ 61,285, Regional Transmission Organizations, December 20, 1999. See minimum requirements of a RTO – Independence at https://www.ferc.gov/sites/default/files/2020-06/RM99-2-00K_1.pdf.

[13] Id at 193.

1. The WEIM Governance Review Committee appreciates the stakeholder engagement and comments received on its Phase Three (EDAM) straw proposal (July 15, 2022). In response to the GRC’s Phase Three (EDAM) revised proposal (October 31, 2022), and in preparation for the GRCs final proposal, do you have any additional comments on the following items?

1. Delegation of authority; 2. Size and composition of the Governing Body; 3. Stakeholder engagement and policy development; 4. CAISO’s responsibility to consider regional stakeholders; 5. Timing for approval and implementation of GRC proposals.

Please see attached. 

1. The WEIM Governance Review Committee appreciates the stakeholder engagement and comments received on its Phase Three (EDAM) straw proposal (July 15, 2022). In response to the GRC’s Phase Three (EDAM) revised proposal (October 31, 2022), and in preparation for the GRCs final proposal, do you have any additional comments on the following items?

1. Delegation of authority; 2. Size and composition of the Governing Body; 3. Stakeholder engagement and policy development; 4. CAISO’s responsibility to consider regional stakeholders; 5. Timing for approval and implementation of GRC proposals.

Comments on Behalf of the EIM Regional Issues Forum on the

Western EIM Governance Review – Phase 3 (EDAM) Revised Proposal

November 18, 2022

The Energy Imbalance Market (“EIM”) Regional Issues Forum (“RIF”) liaisons, on behalf of the RIF, hereby provide their comments on the Governance Review Committee’s (“GRC”) Governance Review Phase Three Revised Proposal ( “Revised Proposal”).[1]  As provided for under Section 7 of the EIM Charter, the RIF is authorized to undertake discussion of topics that are pending in ongoing stakeholder proceedings, and the function of the RIF is to facilitate discussion and provide educational or informational content regarding such topics and to produce documents and opinions of the RIF. 

Overview of RIF-Related Elements of the Revised Proposal

The comments set forth below address the elements of the Revised Proposal pertaining to the role and responsibilities of the RIF under an Extended Day Ahead Market (“EDAM”).  As set forth in the Revised Proposal, the Governance Review Committee addresses the following RIF-related topics:

• Stakeholder Engagement and the Role of the RIF:  The Revised Proposal encourages the RIF to continue its transition from a largely educational body to one that is capable of providing advisory input, including to offer opinions on issues that are part of an ongoing stakeholder process.  The Revised Proposal proposes to defer to the RIF in determining how best to implement this authority.  See Revised Proposal at 26-28.
• Prioritizing Initiatives – The Process for Developing the Policy Roadmap:  The Revised Proposal proposes implementation of annual stakeholder discussion, referred to as a “roundtable,” that would occur at an early stage of the CAISO’s annual policy roadmap process and would entail discussion among stakeholders regarding the prioritization of discretionary policy initiatives.  According to the Revised Proposal, each RIF sector liaison, working in cooperation with the liaison’s sector, would determine how best to represent the perspectives of the sector as to the prioritization of policy initiatives by the CAISO.  See Revised Proposal at 28-30.
• RIF Liaisons:  Pursuant to the RIF Operating Guidelines, the public interest groups and consumer advocate groups sector will include one liaison from organizations that represent end-use customers and one liaison from organizations that represent other public interests.^[2]  Historically, the entire sector has voted on each liaison. The GRC previously proposed the following: one liaison chosen by representatives of state-sanctioned utility consumer advocates and large consumer representatives and the other liaison chosen by the public interest groups within the sector.  See Revised Proposal at 30.  The Revised Proposal now reflects that this sector will address the appointment of sector liaisons within the sector itself and confirms that no changes are needed to the Charter to formalize the sector appointment of liaisons.  Id. at 31.  Additionally, the Revised Proposal now proposes to add a new sector for EDAM entities, while retaining the current sector for EIM entities, recognizing that not all participants in the EIM will elect to participate in the EDAM, at least initially upon EDAM implementation.  See id. at 31.

Comments

On behalf of the RIF, the RIF liaisons acknowledge the efforts of the GRC in formulating a detailed and thoughtful proposal regarding the role, responsibilities, and composition of the RIF under the EDAM.  The Revised Proposal includes carefully-designed proposals to enable the RIF to serve as an effective component of the proposed EDAM governance structure and empower the RIF to represent and communicate the diverse viewpoints of EIM and EDAM stakeholders.  The value proposition of the RIF comes from its ability to represent the regional, organizational, and sector diversity that exists among EIM and EDAM stakeholders.  The RIF liaisons support the efforts of the GRC to ensure this diversity is sufficiently represented on the RIF through the changes made in Phase 2 of the Governance Review process and in the potential changes contemplated in the Revised Proposal. 

Stakeholder Engagement and the Role of the RIF:  With respect to the GRC’s comments regarding the continuing transition in the role of the RIF, the RIF liaisons support the approach set forth in the Revised Proposal, which encourages the RIF to continue to consider ways in which to implement the revised authority resulting from the changes adopted in Phase 2 of the Governance Review process.  The RIF liaisons agree that the “RIF itself is best positioned to determine exactly how to approach this.”  See Revised Proposal at 28.  The RIF liaisons concur with the GRC that there are various ways to accomplish implementation of the RIF’s revised authority and will continue to consider how best to apply this new authority in a way that is constructive and helpful to the governance process.[3] 

Prioritizing Initiatives – The Process for Developing the Policy Roadmap:  The RIF liaisons support the proposal by the GRC to include a RIF roundtable discussion as an element in the Policy Roadmap process.  If this element of the Revised Proposal is adopted, the RIF liaisons will caucus and determine how best to organize and implement the roundtable based on input from stakeholders within the sectors.  In terms of sector representation in the roundtable discussion, the RIF liaisons believe each individual sector should coordinate and determine how best to represent its sector’s views during the discussion.  The RIF liaisons also agree that the discussion should be open to stakeholders for public participation and that sufficient time during the roundtable should be allotted for public stakeholder comments.  The RIF liaisons do not take a position on whether a representative from the Body of State Regulators (“BOSR”) should participate in the roundtable discussion in any formal capacity, but would welcome the views of the BOSR and BOSR representatives. 

RIF Liaisons:  The consideration of an additional RIF liaison to represent a newly-formed EDAM sector is an example of a potential change to ensure that the RIF adequately represents the range of stakeholders impacted by the EIM and EDAM.  While additional details—including, in particular, the timing for this potential change and any corresponding changes to other sectors—need to be explored, the RIF liaisons are generally supportive of ongoing refinement of the sectors to ensure that diverse perspectives, representing the full range of stakeholders, are included on the RIF.  We recommend that the GRC confirm that additional flexibility is built into the RIF structure to continue to refine stakeholder sectors as the market and participation evolve.  The RIF liaisons also support the Revised Proposal with respect to the public interest and consumer advocate sector. 

The liaisons listed below have communicated with their respective sectors regarding the comments provided above.  Consistent with the Operating Guidelines of the RIF, members of the RIF are not restricted in taking any position before FERC or any other forum concerning matters related to the EIM or the CAISO, and these comments should not be construed as superseding or supplanting any comments by individual stakeholders on the Revised Proposal.  Rather, these comments represent a consensus of the RIF stakeholder sectors as to the issues addressed herein.  In the event that either the EIM Governing Body or the GRC has questions or would like to further discuss the comments provided on behalf of the RIF, the RIF liaisons welcome and encourage outreach by members of the Governing Body and/or the GRC. 

Sector Liaisons for the Western EIM Entities:

Lindsey Schlekeway, NV Energy - lindsey.schlekeway@nvenergy.com

Josh Walter, Seattle City Light - Josh.walter@seattle.gov 

Sector Liaisons for the CAISO Participating Transmission Owners:

Matt Lecar, Pacific Gas and Electric Company - melj@pge.com

Margaret McNaul, Thompson Coburn LLP for the Six Cities - mmcnaul@thompsoncoburn.com

Sector Liaisons for the Consumer-Owned Utilities Located within an EIM Balancing Authority Area:

Lauren Tenney Denison, Public Power Council - tenney@ppcpdx.org

Doug Boccignone, Flynn Resource Consultants Inc. - dougbocc@flynnrci.com

Sector Liaisons for the Public Interest Groups and Consumer Advocate Groups:

Vijay Satyal, Western Resource Advocates - Vijay.satyal@westernresources.org

Jaime Stamatson, Montana Consumer Counsel - jstamatson@mt.gov

Sector Liaisons for the Independent Power Producers and Marketers:

Cathleen Colbert, Vistra - Cathleen.colbert@vistracorp.com

Ian White, Shell Energy North America - Ian.d.white@shell.com

Sector Liaison for the Federal Power Marketing Administrations:

Alex Spain, Bonneville Power Administration - ajspain@bpa.gov

[1] The RIF is a stakeholder body organized under Section 7 of the Charter for Energy Imbalance Market Governance (“EIM Charter”) for the purpose of facilitating discussion of issues related to the EIM.  Under the Charter, meetings of the RIF are organized and facilitated by liaisons selected by stakeholder sectors, which include EIM entities, CAISO Participating Transmission Owners, consumer-owned utilities located within an EIM balancing authority area that are not included in another sector, public interest and consumer advocate groups that are actively involved in energy issues within the EIM footprint, independent power producers and marketers that engage in transactions within the EIM footprint, and the federal power marketing administrations. 

[2] Operating Guidelines Energy Imbalance Market Regional Issues Forum, Composition and Governance, § 1a(iv) (rev’d Sept. 2021), available at: https://www.westerneim.com/Documents/OperatingGuidelines-EIMRegionalIssuesForumRevisedSep2021.pdf.

[3] The RIF liaisons are not articulating a consensus position on the GRC’s proposal to retain the existing CAISO stakeholder model, which is also discussed at pages 27-28 of the Revised Proposal, and defer instead to comments provided by individual stakeholders on this element of the Revised Proposal.