Comments on Draft Tariff and BPM Language

1. Provide a summary of your organization’s comments on the draft tariff and BPM language (optional):

Direct Energy Business (“DEB”) is a $4 billion Direct Energy subsidiary providing electricity and natural gas to nearly 240,000 businesses in North America.    DEB performs commodity hedging and risk management functions on behalf of our retail customers as well as provides commodity solutions and market intelligence to wholesale customers like community choice aggregators (CCAs).  DEB has been an Electric Service Provider (ESP) in California for many years and is active in procuring MIC and RA to serve our Direct Access (DA) load.

DEB has reservations with the draft language presented in Section 40.4.6.2.2.4 due to the inconsistency it creates relative to the RA Enhancements initiative and the CPUC RA requirements for LSEs. 

2. Provide your organization’s comments on draft tariff language section 40.4.6.2.1 Available Import Capability Assignment Process:

No comments

3. Provide your organization’s comments on draft tariff language section 40.4.6.2.2 Bilateral Import Capability Transfers and Registration Process and all related subsections:

The draft language for Section 40.4.6.2.2.4 includes the following (emphasis added):

LSEs may reserve an import allocation for the term of the New Use Import Commitment by showing an applicable New Use Import Commitment, signed by May 15th of the applicable RA year, if the New Use Import Commitment (1) identifies a specific resource or an aggregation of specific resources that will provide capacity or energy and (2) meets all the requirements herein as well as those described in the appropriate Business Process Manual.

In providing justification for requiring resource specific contracts to lock multi-year MIC allocations, CAISO staff stated the following in the Draft Final Proposal for Maximum Import Capability Stabilization (emphasis added):

Therefore the ISO is proposing that new contracts used to lock MIC allocations to branch group should be associated with source specified import resources (either resource specific or an aggregation of specific resources). This design is consistent with the proposed import RA rules and maintains alignment with RAE must offer obligation rules.  (Maximum Import Capability Stabilization Draft Final Proposal, p. 25)

While the proposal to require resource specific contracts is consistent with proposed CAISO rules, neither the CPUC in the RA Docket (R.17-09-020) nor CAISO as part of the RA Enhancements program has finalized rules that would require LSEs to only use resource specific RA import contracts.  Therefore, by requiring resource specific contracts to lock multi-year MIC allocations in 2021, the language in this tariff is creating a new restriction on LSEs that is currently not in place in any other CPUC or CAISO proceeding.  The proposed tariff language is now creating a misalignment between other RA rules and should not be adopted until other proceedings adopt a similar requirement.  Only by waiting on a requirement to use resource specific imports for multi-year MIC until similar requirements are adopted in other proceedings can the language of the proposal to “maintain alignment” be satisfied.

DEB proposes the following alternative tariff language:

LSEs may reserve an import allocation for the term of the New Use Import Commitment by showing an applicable New Use Import Commitment, signed by May 15th of the applicable RA year, if the New Use Import Commitment (1) identifies a specific resource or an aggregation of specific resources that will provide capacity or energy and (2) meets all the requirements herein as well as those described in the appropriate Business Process Manual.  A specific resource or an aggregation of specific resources that will provide capacity or energy will be required to reserve an import allocation for the term of the New Use Import Commitment once a similar requirement is mandated through the RA Enhancement process and CPUC RA Rulemaking.

In summary, moving forward with the resource-specific requirement would not be “consistent” with the timing of the final CAISO RA Enhancements proposal nor what the CPUC currently finds permissible for Import RA.  CAISO staff instead should align this tariff language timing with the CAISO RA Enhancement work and the CPUC Import RA rules and allow non-resource specific contracts to lock multi-year MIC until the point that CAISO RA Enhancements recommendations are finalized and the CPUC requires resource-specific contracts for Import RA. 

4. Provide your organization's comments on Appendix A – Tariff Definitions:

No comments

5. Provide your organization’s comments on the draft BPM language section 6.1.3.7 Requirements for New Use Import Commitments in order to reserve Remaining Import Capability at the branch group level Hourly Shaping Factor:

No comments

6. Additional comments on the Maximum Import Capability Stabilization and Multi-Year Allocation draft tariff and BPM language:

1. Provide a summary of your organization’s comments on the draft tariff and BPM language (optional):

PG&E provides one comment on the draft tariff language requesting CAISO to specify in the tariff language the phased approach to implementation related to the applicable contracts to lock MIC on a branch group on a multi-year basis (question 2). 

2. Provide your organization’s comments on draft tariff language section 40.4.6.2.1 Available Import Capability Assignment Process:

PG&E believes that the Tariff language should reflect the phased approach to implementation related to the applicable contracts to lock MIC on a branch group on a multi-year basis. 

CAISO has changed this part of the proposal after the Draft Final Proposal was issued and discussed with stakeholders, proposing two phases for implementation as explained in the CAISO Board meeting memo held on September 30 and October 1st, 2020 (page 4). 

“Phased approach to implementation: 

As a first step the ISO proposes to allow only contracts for pseudo-ties and resource specific dynamic scheduled resources to be relied upon to start locking multi-year import capability at the branch group level for RA year 2022. Currently only these resources have ISO master file data that proves they are resource specific and they are also allowed to count as import RA under CPUC decision D.19-11-016. 

Later, potentially for RA year 2023 and beyond, other types of resource specific resources or aggregations thereof may be added through changes to the applicable business practice manual as long as they meet ISO tariff and revised business practice manual specifications.” 

PG&E also believes the CAISO should perform and publish an assessment of the first phase allowing only contracts for pseudo-ties and resource specific dynamic scheduled resources to lock multi-year import capability at the branch group level for RA year 2022. Such an assessment should provide an overview of the import capability locked multi-year per branch group with such contracts. This assessment analysis should also be reflected in the Tariff language.   

3. Provide your organization’s comments on draft tariff language section 40.4.6.2.2 Bilateral Import Capability Transfers and Registration Process and all related subsections:

No comments.

4. Provide your organization's comments on Appendix A – Tariff Definitions:

No comments.

5. Provide your organization’s comments on the draft BPM language section 6.1.3.7 Requirements for New Use Import Commitments in order to reserve Remaining Import Capability at the branch group level Hourly Shaping Factor:

No comments.

6. Additional comments on the Maximum Import Capability Stabilization and Multi-Year Allocation draft tariff and BPM language:

No additional comments.

1. Provide a summary of your organization’s comments on the draft tariff and BPM language (optional):

The Six Cities have limited comments on the draft tariff and proposed BPM language, as outlined below.  Additionally, it may be constructive during the stakeholder meeting to discuss the proposed tariff and BPM revisions to spend some time walking through an example of the MIC allocation steps outlined in the tariff and BPM updates, with an emphasis on the changes in Steps 4 and 5. 

2. Provide your organization’s comments on draft tariff language section 40.4.6.2.1 Available Import Capability Assignment Process:

As noted, detailed review of the proposed tariff revisions including, in particular, the changes in this section and an example of the MIC allocation steps would aid in understanding how the revised process will work.

Additionally, and, as a matter of drafting, the Six Cities find the word “reiterate” as used in the added language for Step 5 to be confusing.  As the Six Cities understand the relevant sentence, “re-perform” may be clearer. 

3. Provide your organization’s comments on draft tariff language section 40.4.6.2.2 Bilateral Import Capability Transfers and Registration Process and all related subsections:

First, in Section 40.6.2.2.4, the Six Cities find the choice of the word “curtailment” to be unclear – does it imply somehow curtailment of the resource associated with the MIC?  Or, as the Six Cities surmise, is the reference actually meant to refer to the MIC allocation that should be reduced in the event of a reduction in Load Share Quantity?

Second, the Six Cities question the CAISO’s proposal that “any change in contractual terms … will result in the loss of status as New Use Import Commitment.”  It does not seem appropriate that changes to contactual terms that are not material to the MIC allocation should result in the loss of status; rather, such a restriction should really only apply to changes that would materially impact the amount, duration, or location of the MIC allocation, and not to other contract changes having no relevance to MIC.  Relatedly, why does the CAISO propose to provide an exception to permit contract changes to the scheduling intertie?   

4. Provide your organization's comments on Appendix A – Tariff Definitions:

The Six Cities have no comments on this portion of the proposed tariff revisions at this time.

5. Provide your organization’s comments on the draft BPM language section 6.1.3.7 Requirements for New Use Import Commitments in order to reserve Remaining Import Capability at the branch group level Hourly Shaping Factor:

The Six Cities have no comments on the proposed revisions to the BPM at this time, except to note that, consistent with the comment provided above regarding Section 40.4.6.2.2.4, the BPM language should be revised consistent with the Six Cities’ comment on the materiality of changes to contract terms that would result in loss of New Use Import Commitment status.

The Six Cities also note that the use of the word “curtailment” in this section is unclear, consistent with the comment on Section 40.4.6.2.2.4 above. 

6. Additional comments on the Maximum Import Capability Stabilization and Multi-Year Allocation draft tariff and BPM language:

The Six Cities have no additional comments at this time.

1. Provide a summary of your organization’s comments on the draft tariff and BPM language (optional):

SouthWestern Power Group (SWPG) offers a number of clarifying/clean up recommendations in accompanying files submitted with these comments.  SWPG also requests a means to reconsider the 120% off peak cap, given that the SunZia-delivered NM wind peaks outside of the summer months and in excess of 120% of the summer month deliveries.

2. Provide your organization’s comments on draft tariff language section 40.4.6.2.1 Available Import Capability Assignment Process:

Please see attached mark up. 

3. Provide your organization’s comments on draft tariff language section 40.4.6.2.2 Bilateral Import Capability Transfers and Registration Process and all related subsections:

Please see attached mark up. 

4. Provide your organization's comments on Appendix A – Tariff Definitions:

SWPG does not have comments on the tariff definitions although some of the drafted BPM language (namely section 6.1.3.7 seems to contradict with the definition of New Use Import Commitment).

5. Provide your organization’s comments on the draft BPM language section 6.1.3.7 Requirements for New Use Import Commitments in order to reserve Remaining Import Capability at the branch group level Hourly Shaping Factor:

SWPG asks the CAISO to consider some means to revisit the proposed 120% summer month cap applied to non-summer months, as this cap would likely cap an LSE’s ability to use MIC to get credit for NM wind deliveries.  NM wind delivered over SWPG’s SunZia transmission project peaks outside the summer months and can peak more than 120% of the summer month’s production.  A cap limited to 120% would harm the LSEs procuring NM wind by not allowing them to get long-term MIC for those non-summer months’ deliveries. 

We ask that during the first year when the MIC lock is active the CAISO revisit this cap given actual data from dynamic transfers for RA imports to determine if some LSEs may be harmed by an inability to lock MIC sufficient to cover delivers from resources that peak outside the summer months.

6. Additional comments on the Maximum Import Capability Stabilization and Multi-Year Allocation draft tariff and BPM language: