Comments on Final Proposal

1. Please provide your organization’s overall position on the Hybrid Resources final proposal:

2. Provide a summary of your organization's comments on this proposal:

Avangrid Renewables appreciates the opportunity to comment on the Revised Draft Final Proposal. Avangrid Renewables has three primary concerns with the CAISO’s Revised Draft Final proposal.  

1. The Revised Draft Final proposal gives preferential treatment to hybrid resources over the Co-Located model for storage participation in an ITC constrained paradigm. Avangrid Renewables supports the CAISO’s efforts to implement rules for hybrid resource market participation and the flexibility offered to those resources through the dynamic limits tool and requests fair and equal treatment be offered to the Co-Located model. This would include allowing Co-Located storage to deviate from its Dispatch instructions under limited circumstances and also exempting Co-Located storage projects from the MOO and RAAIM. If the CAISO will not allow Co-Located projects to deviate, then similar to hybrid resources, Co-Located projects should have access to the dynamic limits tool to manage ITC constraints.
2. The CAISO has not fully considered the implications of its proposal as developers choose one market participation model over the other.  The CAISO stated at the onset of this initiative that it viewed the Co-Located model as optimal for market participation. This proposal will ensure that many projects convert and/or select the Hybrid Resource participation model at least through the ITC constrained period of the project which may result in less operational flexibility for the CAISO.
3. There continues to be a high level of uncertainty specific to RA value and additional design considerations for hybrid resources. This level of uncertainty is highly problematic for developers and off takers that have entered into contracts for future projects for these critical resources. The CAISO must prioritize resolution of the UCAP accounting methodology for hybrid resources and resolve other outstanding issues as soon as possible. 

3. Provide your organization’s feedback on the forecasting proposal, as described in the final proposal:

No comment

4. Provide your organization’s feedback on the dynamic limit tool proposal, as described in the final proposal:

Avangrid Renewables supports the dynamic limit tool proposal and the elimination of the use of outage cards for hybrid resources. However, the use of the dynamic limit tool, which the CAISO noted can be used to manage ITC constraints, gives the hybrid model a clear advantage over Co-Located structures. The CAISO must offer the same flexibility to Co-Located projects. 

5. Provide your organization’s feedback on the proposal to allow co-located storage resources to deviate from dispatch instructions to allow for offsetting VER variation, as described within the final proposal:

This specific issue will be the deciding factor that will shift developers and off takers to the hybrid model in lieu of Co-Located.

Avangrid Renewables requests the CAISO to reconsider its position towards allowing Co-Located storage to deviate from its Dispatch Instructions when the Co-Located VER is generating less than anticipated. This flexibility is critical to avoid unnecessary grid charging for the Co-Located storage resource. The CAISO noted that if it were to allow this flexibility it would create operational concerns due to storage resources having a lower state of charge than anticipated by the market software. This outcome is no different than what the CAISO will experience from resources that have adopted the hybrid structure by allowing them to communicate the lower state of charge through the Dynamic Limit Tool. It is unclear how these two outcomes are operationally different and why the CAISO is offering preferential treatment to hybrid resources over Co-Located resources in this instance.

6. Provide your organization’s feedback on the resource adequacy topic, as described in the final proposal:

The CAISO has exempted hybrid resources from MOO and RAAIM while to the contrary, the solar portion of a Co-Located resources is exempt from MOO and RAAIM but the storage resource is not. The CAISO stated that it has exempted hybrid resources from MOO and RAAIM because RA counting rules already reduce hybrid capacity to account for variable generation. The same point holds true for Co-Located resources and therefore the same exemptions should apply to this resource type as well.

Avangrid Renewables will reserve further comments on UCAP and RA counting criteria for the future RA Enhancements initiative since no decisions will be made here. Again, it is critical the CAISO prioritize resolving RA counting rules for hybrid resources to provide stability to the market.

7. Provide any additional comments on the final proposal for the Hybrid Resources initiative:

1. Please provide your organization’s overall position on the Hybrid Resources final proposal:

2. Provide a summary of your organization's comments on this proposal:

AWEA appreciates CAISO’s continued efforts to implement rules for hybrid resource participation and to provide different options for mixed-fuel resources to structure their participation in the CAISO market. While we recognize the need to move quickly in approving provisions for Hybrid resource participation, we also are concerned that CAISO has not adequately considered the implications of its proposal and the incentives it will create for resource owners and Scheduling Coordinators hat must select between the Hybrid and Co-Located participation models. Most notably, CAISO’s decision to not allow for additional, limited circumstances in which Co-Located storage can deviate from its Dispatch Instruction will drive projects (and already has driven some projects) to the Hybrid Resource participation model, rather than the Co-Located structure. At the same time, CAISO’s ongoing Resource Adequacy (RA) Enhancements initiative leaves significant uncertainty with respect to the ultimate RA value of Hybrid Resources, given CAISO’s continued insistence on treating Hybrid Resources materially differently than Co-Located Resources in calculating their UCAP. The level of uncertainty is highly problematic for developers and offtakers of this next generation of resources which are poised to provide critical new capacity to the CAISO grid in the coming years. Given that CAISO’s Final proposal is certain to incentivize resources to use the Hybrid participation model, the need to provide certainty around these resources’ RA value is critical. As part of putting forward this proposal for Board approval, CAISO should commit to modifications to the UCAP accounting for Hybrids which will put them on “equal footing” with Co-Located resources and eliminate double-counting issues.

3. Provide your organization’s feedback on the forecasting proposal, as described in the final proposal:

4. Provide your organization’s feedback on the dynamic limit tool proposal, as described in the final proposal:

AWEA appreciates that CAISO has streamlined the different tools and submittals required for Hybrid Resources in the latest version of the proposal. Reliance on the Dynamic Limit Tool alone, rather than a combination of the Dynamic Limit Tool and Outage Cards, should provide reliability benefits and reduce administrative burdens for Scheduling Coordinators and the CAISO itself. Elimination of the use of Outage Cards for non-mechanical outages for Hybrids is a significant improvement to the proposal. As AWEA noted in prior comments, the use of outage cards could have unnecessarily restricted CAISO’s ability to rely on resources that are available in real-time, simply because they were not expected to be available based on day-ahead forecasts and, thus, an outage card was submitted. Transitioning to the use of a Dynamic Limit Tool only, will help reduce the chances that the output of Hybrid’s is stranded or curtailed simply because of day-ahead expectations.

While the elimination of outage cards is a positive step, concerns remain. Most notably, CAISO is proposing to use Dynamic Limit Tool limitations to calculate Hybrid Resource’s UCAP. Previously, CAISO had proposed to use outage card submissions in that calculation. While the “counting mechanism” for assessing Hybrid’s UCAP has changed, the underlying concern of double counting has not. This issue is discussed more in AWEA’s response to Question #6.

5. Provide your organization’s feedback on the proposal to allow co-located storage resources to deviate from dispatch instructions to allow for offsetting VER variation, as described within the final proposal:

AWEA-California greatly appreciates that CAISO has been willing to incorporate some flexibility into the Co-Located model. However, due to operational concerns, CAISO has been unwilling to add incremental, limited circumstances to the instance in which Co-Located storage can deviate from its Dispatch Instructions. Stakeholders have advocated for limited additional allowances for Co-Located storage to charge less than its Dispatch Instruction, when the Co-Located VER is generating less than anticipated. Allowing for these types of downward VER deviations to be offset by reduced co-located resource charging deviations would help avoid unnecessary (and unwanted) grid charging for Co-Located storage resource. Without this capability, resources that have ITC-related charging restrictions are highly likely to abandon the Co-Located model, given that there is effectively no method to prevent inadvertent grid charging using the Co-Located model as currently proposed. Therefore, resources with grid charging restrictions will instead employ the Hybrid model.

CAISO has repeatedly stated that it would prefer resources to use the Co-Located structure. But by not incorporating the ability for downward VER deviations to be offset by reduced charging of a Co-Located storage facility, CAISO will end up with mostly (if not entirely) Hybrid resources at least until ITC-charging restrictions roll off. In fact, some projects that had previously planned to move forward as Co-Located are now in the process of evaluating changing to Hybrid following CAISO’s decision on this matter. AWEA-California urges CAISO to consider what is best for it operationally and to reconsider its position on this additional ability for Co-Located storage to deviate from Dispatch Instructions.

CAISO has stated that it cannot implement this request because the “functionality could result in storage resources with a lower state of charge than anticipated by the market software and could have potential reliability consequences.” But, when these Co-Located resources transition to the Hybrid participation model, the resource itself will address the lower state of charge by communicating such to the CAISO through the Dynamic Limit Tool. It is not clear what additional operational challenges CAISO foresees in having this same resource participate as a Co-Located storage resource that can, in limited instances, have the storage component charge less than its Dispatch Instructions. We urge CAISO to reconsider its position on this limited element of the proposal.

At a minimum, CAISO should recognize that its decision on this issue will likely be the deciding factor for many future resources that are opting whether to participate as a Hybrid or Co-Located Resource. And CAISO is likely to see the vast majority of new solar/storage or wind/storage resources on its system opt for the Hybrid model. As discussed below, this make providing certainty on the RA treatment of these resources even more critical. AWEA reiterates its request that, as part of the package seeking approval of the Hybrid Resources proposal, CAISO commit to modifications in the RA Enhancements initiative which will not discriminate against the Hybrid resource configuration by double counting the limitations of these resources in their UCAP calculation.

6. Provide your organization’s feedback on the resource adequacy topic, as described in the final proposal:

Utilizing the Dynamic Limit Tool to calculate a Hybrid Resource’s UCAP will double count derates to Hybrid Resource’s RA value in a multitude of ways. All of these double counting issues stem from the fact that Hybrid’s Qualifying Capacity (QC) will already be reduced by virtue of the CPUC’s QC methodology. The CPUC’s QC methodology for hybrids already accounts for VER forced outages (as part of the ELCC for the VER resource), VER-intermittency (again as part of the ELCC for the VER resource), and the limitations on storage injections (via the CPUC’s QC methodology for hybrid/co-located resources with charging restrictions). Yet, under CAISO’s UCAP proposal, Hybrid Resources would have those same limitations further reduce their QC when they are submitted via Dynamic Limit Tool submissions. Thus, Hybrid Resources would be disadvantaged by having these characteristics double counted under UCAP.

While CAISO has indicated that its proposal for calculating Hybrid’s UCAP assumes that the QC would equal the Pmax of the Hybrid resource, that is not how the CPUC’s QC methodology for Hybrids works today. We appreciate that CAISO has recognized the need for “regulatory coordination” on this topic, but additional details on the plan for changing the existing Hybrid QC methodology are necessary. And yet CAISO has not provided any information or specific plans for coordinating with the CPUC on this important issue. Plans for addressing this could be provided to stakeholders and the implementation of this UCAP approach for Hybrids must be conditioned on successful modification of the existing CPUC QC methodology.

Additionally, as part of the receiving approval for the Hybrid Resources proposal from its Board, CAISO should commit that it will make modifications to the UCAP accounting for Hybrids in the RA Enhancement initiative which will put Hybrid’s UCAP on “equal footing” with Co-Located resources and which will not double count forced outages, VER intermittency, and storage charging restrictions.

7. Provide any additional comments on the final proposal for the Hybrid Resources initiative:

1. Please provide your organization’s overall position on the Hybrid Resources final proposal:

2. Provide a summary of your organization's comments on this proposal:

CalCCA reiterates its appreciation of the CAISO’s continued efforts to develop and refine market participation rules for hybrid resources and co-located resources. CalCCA’s comments focus primarily on the following issues:

1. Improving CAISO’s ability to optimize storage resources in the real time market:

CalCCA continues to encourage CAISO to redouble its efforts to identify a better real time solution for optimizing the storage component than the proposed minimum charge requirement. If it is not feasible to have a longer RTD time horizon than 65 minutes, CAISO should consider one or two reruns of the DAM prior to the beginning of each day and/or prior to the start of the daily storage charging hours.

2. Addressing downward VER deviations for co-located resources:

CalCCA is disappointed that CAISO is not willing to allow downward VER deviations to be offset by reduced co-located resource charging deviations to avoid unnecessary grid charging. These deviations are necessary to allow storage resources with Investment Tax Credit (ITC) charging restrictions to choose the co-located configuration without risking inadvertent grid charging that can occur because of VER forecast error between the time storage resource bids must be submitted and energy is produced by the VER in real-time. CAISO should reconsider its position on this issue.

3. Ensuring hybrid resource RA counting is appropriate when UCAP is implemented:

CalCCA is concerned that if hybrid resource UCAP is reduced for instances in which the dynamic limit tool is used to communicate VER-related availability, hybrid resources will be unfairly disadvantaged. The CAISO needs to ensure that its UCAP calculations do not derate hybrid resources for the same types of resource outages that already have been accounted for by the CPUC RA counting methodology.

3. Provide your organization’s feedback on the forecasting proposal, as described in the final proposal:

CalCCA supports the CAISO’s proposal “to offer forecasting services for the wind or solar component(s) of the hybrid resources, similar to what is provided to stand-alone variable resources today. These forecasts will only be for the variable (solar or wind) component of the hybrid resource and are not meant to provide a forecast for the entire output of the full hybrid resource. These forecast services will be optional, and resource owners can elect not to receive and pay for this ISO service.”

4. Provide your organization’s feedback on the dynamic limit tool proposal, as described in the final proposal:

CalCCA appreciates CAISO’s clarification in the Revised Final Proposal that outage cards will not need to be submitted to signal reductions in output capability of hybrid resources due to fuel (e.g. wind or insolation) unavailability. Instead, in the Day Ahead Market, Scheduling Coordinators for hybrid resources will express the expected availability of their resources via their bids, and in real time will be able, though not required, to use the dynamic limit tool. CalCCA appreciates CAISO’s clarification on the stakeholder call that hybrid resources that submit bids for the full range of their resource adequacy obligations need not utilize the dynamic limit tool if they prefer to reflect the amount of capacity available in their bids. For example, a hybrid resource with a solar forecast to produce at a consistent output of 80 MW for several hours that plans to use a 50 MW portion of that output to charge the on-site battery if prices are below a given level, but is willing to deliver the full 80 MW to the grid if prices are above a given level, would not need to submit an outage card for 50 MW, nor use the dynamic limit tool to limit the output to 30 MW, for the VER component. Similarly, for the storage component, if there is available stored energy and the resource bids reflect a willingness to discharge the full 50 MW associated with the storage component if prices exceed a given level, no outage card nor dynamic limit tool would be needed even if the resource operator plans to charge the storage resource.

5. Provide your organization’s feedback on the proposal to allow co-located storage resources to deviate from dispatch instructions to allow for offsetting VER variation, as described within the final proposal:

As noted in CalCCA’s comments on the Draft Final Proposal, while the proposal to allow co-located storage resources to deviate from dispatch instructions to allow for offsetting VER variation described in the  Revised Final Proposal is a step in the right direction, it falls short. CAISO also should allow for downward VER deviations to be offset by reduced co-located resource charging deviations. These deviations are necessary to allow storage resources with Investment Tax Credit (ITC) charging restrictions to choose the co-located configuration without risking inadvertent grid charging that can occur because of VER forecast error between the time storage resource bids must be submitted and energy is produced by the VER in real-time. Figure 1 attached to CalCCA’s comments on the Draft Final Proposal illustrates how these forecast error deviations would occur if CAISO does not allow co-located storage resources to deviate from their Dispatch Instructions under the circumstance in which the co-located VER deviates in the downward direction below the level of charging Dispatch Instruction for the co-located storage resource. The inadvertent grid charging that would result either will reduce the ITC benefits of the storage resource or will motivate resource operators to schedule their co-located resources in such a manner that CAISO will not have as much storage capacity available to it or will have more upward uninstructed imbalance energy from VER resources. Neither outcome is desirable.

CalCCA urges CAISO to allow the co-located storage resource to deviate from its charging schedule as necessary to avoid inadvertent grid charging due to real-time market VER forecast error. We understand that there may be a concern that this will result in the co-located storage resource having a reduced state of charge for subsequent use. We believe that this concern does not acknowledge the likelihood that either i) some other storage resource that is providing regulation up will provide the energy needed to charge the co-located storage resource whose companion VER is producing less than forecast, or ii) a thermal regulating resource may provide the imbalance energy, resulting in increased GHG emissions. Either result is not desirable. Figure 2 of CalCCA’s comments on the Draft Final Proposal illustrates that rather than charging from the grid, the unexpected downward deviation in solar output is offset with reduced storage charging in that interval. The result is that for the co-located resource shown, the state of charge is lower than was expected by the 5-minute forecast, however another storage regulation resource likely will have retained its state of charge to offset this deviation. Note that by allowing the storage resource to deviate from its charge schedule when solar output is lower than expected, the actual output at the point of interconnection (POI) for the co-located resource is closer to the expected schedule if downward deviations are allowed, and the amount of VER production and storage resource charging from the co-located resource is the same with or without the downward deviation rule.

CAISO should reconsider its position on this issue.

6. Provide your organization’s feedback on the resource adequacy topic, as described in the final proposal:

CalCCA remains concerned that should a hybrid resource operator use the dynamic limit tool to reflect limitations in output related to the VER component of the hybrid resource, doing so will negatively affect the UCAP for the resource, even though the CPUC’s hybrid counting rules already discount the VER portion in the ELCC calculations and for expected storage charging. The CAISO appears to be assuming that the CPUC will change its methodology to align with CAISO’s approach, but if that does not happen, hybrid resources will not receive the appropriate RA credit. The CAISO needs to ensure that its UCAP calculations do not derate hybrid resources for the same types of resource outages that already have been accounted for by the CPUC RA counting methodology.

7. Provide any additional comments on the final proposal for the Hybrid Resources initiative:

As noted in CalCCA’s comments on the Draft Final Proposal, CalCCA is concerned that CAISO’s “optimization” of hybrid resources in the day-ahead market will be suboptimal, since it will be limited by the collective educated guesses of the hybrid resource operators about which hours will be preferred for charging and discharging of the storage component. Because hybrid operators could face the risk of infeasible day-ahead discharge schedules, we anticipate that these operators may choose to essentially self-schedule day-ahead a potentially significant portion of their combined hybrid resource capability. Unfortunately, this result may be an unavoidable aspect of the hybrid structure, but it points up the importance of making the co-located configuration as attractive as possible for resource owners. This is because the co-located configuration allows the CAISO to optimize each component of the co-located resource. We therefore urge the CAISO to reconsider its decision to not allow co-located storage resources to deviate from dispatch instructions when necessary to avoid inadvertent grid charging as further described in our response to Question 6 in our comments on the Draft Final Proposal.

CalCCA reiterates its comments on the RA Enhancements 5^th Revised Straw Proposal that CalCCA continues to be concerned about CAISO’s inability to optimize storage resources in the real-time market. The examples in Tables 14 and 15 of the RA Enhancements 5th Revised Straw Proposal illustrate the inefficiencies that will be created by this failure. For example, Table 15 shows that 50 MWh of available bid-in storage energy that otherwise would have cleared the RTM for HE18 is blocked by the 80 MWh minimum charge requirement and then none of the energy that was being preserved by the minimum charge requirement clears any of the subsequent intervals. This outcome will result in increased costs for consumers and increased risks for generators. The minimum charge requirement is a poor substitute for a better optimized real-time market solution with a longer time horizon to avoid the suboptimal result illustrated by Table 15.

CalCCA encourages CAISO to redouble its efforts to identify a better real time solution. If it is not feasible to have a longer RTD time horizon than 65 minutes, CAISO should consider one or two reruns of the DAM prior to the beginning of each day and/or prior to the start of the daily storage charging hours. The results of the DAM rerun(s) would have the benefit of much better-informed load and VER forecasts, additional information regarding generation and transmission outages, and more up-to-date storage state of charge information from the RTM. The DAM rerun could then be used to set minimum charge requirements that would be better aligned with RTM conditions for the remainder of the RTM intervals.

1. Please provide your organization’s overall position on the Hybrid Resources final proposal:

2. Provide a summary of your organization's comments on this proposal:

CESA supports and appreciates the ISO’s efforts to provide clarity and certainty regarding the market integration of hybrid and co-located resources. Generally, CESA is supportive of this initiative’s intent; nevertheless, CESA is also concerned with the?following elements:? 

• The determination of treating all co-located storage deviations from dispatch as uninstructed imbalance energy (UIE).?? 

• The prohibition to co-located storage devices from deviating from dispatch when providing ancillary services.?? 

• The lack of clarity regarding the?interaction of this initiative’s proposal to use the dynamic limit tool (DLT) to inform unavailability?calculations as they relate to?the unforced capacity (UCAP) methodology considered in the Resource?Adequacy (RA) Enhancements?Initiative.?? 

• The regulatory uncertainty caused by the ISO’s significant modification of the proposals included within this initiative as it reaches its scheduled conclusion.  

3. Provide your organization’s feedback on the forecasting proposal, as described in the final proposal:

CESA supports the ISO’s proposal on forecasting for hybrid and co-located resources. As drafted, the proposal states hybrid resources would be required to provide forecast, topographical, meteorological, and telemetry data to the ISO. Additionally, hybrid and co-located resources would need to provide the high sustainable limit (HSL) of their underlying variable energy resource (VER) component. These requirements are reasonable given the ISO’s intent to maintain reliability and understand the expected generation of VER components in order to avoid the issuance of unfeasible dispatch instructions.  

CESA is also supportive of the ISO’s determination to offer forecasting services for hybrid and co-located resources. Considering the ISO currently offers forecasting services for standalone VERs, this decision eases compliance with the established requirements and can potentially lessen the administrative burden associated with said requirements.  

4. Provide your organization’s feedback on the dynamic limit tool proposal, as described in the final proposal:

CESA supports the ISO’s proposal to use the DLT to limit dispatch instructions in order to ensure their operational feasibility. More specifically, CESA recognizes the ISO for incorporating the feedback of stakeholders within this initiative to reevaluate the use of outage cards to reflect unavailability due to ambient or charging conditions. Allowing resource operators to reflect these types of unavailability through the DLT instead of outage cards would substantially improve their ability to optimize the underlying components of hybrid resources, enabling them to provide maximum value to the grid. Despite this valuable modification, CESA still considers further clarity is needed regarding the potential impact the DLT could have on UCAP calculations. CESA addresses this issue within Section 6 of these comments.  

5. Provide your organization’s feedback on the proposal to allow co-located storage resources to deviate from dispatch instructions to allow for offsetting VER variation, as described within the final proposal:

CESA supports the spirit of this modification, as it allows further operational flexibility, and it could potentially maximize the utilization of renewable energy within the ISO’s footprint. While supportive of the inclusion of this topic in the Final?Proposal, CESA is still concerned with the ISO’s intent to?consider any deviation as?UIE, thus attributing it flexible ramping charges.?This treatment?is contrary to the one currently applied to standalone VERs. Currently, variations from dispatch from VER resources are not considered UIE. In this sense, the ISO’s proposal here is inconsistent with the net impact of co-located storage deviation. If a solar or wind standalone asset deviates from its forecasted dispatch,?this is not considered UIE?because?the usage of renewable energy has been maximized. In the case encompassed by this proposal, the net effect is the same: the storage modifies its behavior downward in order to maximize grid usage of renewable assets. As such, CESA considers it would be both counterproductive and contradictory to consider storage deviations as UIE?without modifying the treatment of the same behavior for standalone VERs. Thus, CESA urges the ISO to revise this proposal and?either?exempt?co-located storage?deviations from UIE treatment until the settlement process modifications are done?to ensure a netted settlement can be applied, or treat standalone VER deviations in the same manner, as UIE.??? 

? 

Moreover, CESA is concerned with the ISO’s blanket prohibition of utilizing this feature when the co-located storage asset is providing ancillary services. It is clear that some ancillary services could be affected if a storage resource opts to use this feature; nevertheless, it is not reasonable to completely prohibit this case, as different types of ancillary services would be more or less compatible with this feature depending on the situation. As such, CESA urges the ISO to revisit this assumption.?? 

6. Provide your organization’s feedback on the resource adequacy topic, as described in the final proposal:

CESA supports, with caveats, the proposal outlined by the ISO within the Section 4.13 of the Final Proposal. While CESA agrees with the ISO’s decision to (1) establish must-offer obligations via the use of the DLT and (2) exempt hybrid resources from the resource adequacy availability incentive mechanism (RAAIM); CESA does not support the ISO’s determination to push the clarification of the treatment of hybrid resources within the UCAP framework to the RA Enhancements initiative.  

In 4.13, the ISO states that, while it intends to retain the methodology that was outlined by the California Public Utilities Commission (CPUC) with regards to capacity counting for hybrid resources, it is also concurrently working on incorporating the UCAP methodology within the resource adequacy (RA) enhancements initiative, which will be in place for the 2023 resource adequacy year. This tension highlighted by the ISO must be understood in conjunction with the determination made within Section 4.3 of the Final Proposal to incorporate DLT data to inform the UCAP value of hybrid assets. In this context, stakeholders sought clarification from the ISO with regards to the actual usage of DLT data within the UCAP framework. During the October 15 stakeholder meeting, ISO staff stated these decisions will be addressed in the RA Enhancements initiative. CESA considers this decision is inadequate, as it would only increase the regulatory uncertainty surrounding the market valuation of the capacity provided by hybrid resources.  

As California advances to meet its decarbonization objectives, hybrid resources are well-positioned to enable this transformation. As the ISO itself notes within the Final Proposal, 1.5 GW of hybrid resources are set to interconnect by the end of 2021.1 Considering hybrid resources make up the majority of the interconnection queue, it is necessary to ensure these resources can determine clear revenue streams that would allow them to successfully integrate and provide much-needed capacity. As such, the need for market and regulatory clarity is urgent and must not be deferred to yet another stakeholder process. In light of the transition to the UCAP framework, the ISO is uniquely positioned to provide this certainty. Thus, CESA urges the ISO to include a proposed methodology for UCAP calculations applicable to hybrid resources within this initiative.  

7. Provide any additional comments on the final proposal for the Hybrid Resources initiative:

CESA respectfully requests that the ISO consider the regulatory uncertainty derived from the substantial modifications included within the Final Proposal relative to the Draft Final Proposal. While CESA is supportive of several of these modifications, it is necessary to emphasize that significant changes within this proposal, particularly with regards to the use of the DLT and the application of RA rules, have created confusion for developers which are on the fence about participating as either a hybrid or co-located resource.  

This uncertainty is not a minor concern for developers. The constant change of expected rules and provisions results in iterative revisions over revenue forecasts and, ultimately, bids and offers. Moreover, considering the substantial flexibility now afforded to hybrid resources via the use of the DLT, the ISO might have created the conditions for several projects to opt to modify their proposed participation scheme. As a result, the vagueness surrounding the “end-state” of regulation could result in increased administrative burden for the ISO, as resources are likely to switch back and forth between participation schemes in order to meet their financial requirements.  

1. Please provide your organization’s overall position on the Hybrid Resources final proposal:

Please see comments from DMM here:

http://www.caiso.com/Documents/DMMComments-HybridResourcesPhase2FinalProposal-Oct302020.pdf

2. Provide a summary of your organization's comments on this proposal:

Please see link in Section 1.

3. Provide your organization’s feedback on the forecasting proposal, as described in the final proposal:

Please see link in Section 1.

4. Provide your organization’s feedback on the dynamic limit tool proposal, as described in the final proposal:

Please see link in Section 1.

5. Provide your organization’s feedback on the proposal to allow co-located storage resources to deviate from dispatch instructions to allow for offsetting VER variation, as described within the final proposal:

Please see link in Section 1.

6. Provide your organization’s feedback on the resource adequacy topic, as described in the final proposal:

Please see link in Section 1.

7. Provide any additional comments on the final proposal for the Hybrid Resources initiative:

Please see link in Section 1.

1. Please provide your organization’s overall position on the Hybrid Resources final proposal:

2. Provide a summary of your organization's comments on this proposal:

Introduction:  EDF-Renewables (EDF-R) appreciates the opportunity to comment on the CAISO’s latest proposals in this initiative.  Our comments are divided between: (1) process comments (summarized below); and (2) substance comments (summarized below and explained further in the remainder of this document).    

(Please note that these acronyms are used to reference the two mixed-fuel project configurations:

CLR = Co-located Resource; HR = Hybrid Resource.)

Process comments:  EDF-R is disappointed that the CAISO did not respond in the Revised Final Proposal to many comments it and others submitted on the Draft Final Proposal.  Traditionally, the CAISO has, in successive initiative proposals, discussed comments received on the prior version and, where those comments were not incorporated, explained why the CAISO did not do so.  That practice informs stakeholders that the CAISO has received and considered their comments, and it helps them understand the CAISO’s reasons where those comments were not adopted.

EDF-R repeats many of those earlier comments in this submittal.  If the CAISO does not accept these recommendations, EDF-R requests that the CAISO explain why.

That request leads us to an additional process recommendation.  Unlike CAISO initiative standard practice, the CAISO has already issued a “Final Proposal” and a “Revised Final Proposal,” and it is accepting stakeholder comments on the latter.  To avoid confusion, the CAISO should issue one more “Final Proposal” with the final proposals it intends to take to the CAISO Board and file at FERC, as well as the explanations of stakeholder comments rejected in that final, final version.

Substance comments:  EDF-R supports many elements of the revised Final Proposal (though with some caveats), opposes one element, and recommends more information and clarification for several.

• Support with caveats

• Adoption of EDF-R’s earlier CLR storage flexibility proposal; however, we have concerns with some proposed restrictions, most notably the prohibition against CLRs providing Ancillary Services using this flexibility.  This is one area where EDF-R provided comments on the Draft Final Proposal not addressed in the Revised Final Proposal.

• HR “24 x 7” Must-Offer Obligation:  The CAISO clarified on the latest stakeholder call that HR MOOs would not require bids for the full NQC value, which would obviously be problematic in hours when VER components may provide some portion of that NQC but are unavailable.  However, the CAISO’s proposal that there be no set MWs for HR MOOs at all is not reasonable and unduly discriminates against mixed-fuel projects in CLR configurations.  HR MOOs should be the same as stand-alone and CLR MOOs for the same technologies.

• Oppose:  The proposed HR RAAIM exemption, unless this exemption to is extended to CLR storage; otherwise, this provision would constitute undue discrimination against CLR resources. 

• More information and explanation needed

• HRs providing Regulation:  This is another area where EDF-R and others provided comments on the Draft Final Proposal that were not addressed in the Final Proposal.  The CAISO should clearly explain any problems in this area in the final written document recommended above.

In fact, EDF-R opposes allowing HRs to provide Ancillary Services before Fall 2021, when CLRs operating under an Aggregate Capability Constraint (ACC) can also do so. 

• Terminology:  The CAISO has cleaned up its Hybrid Resource and Co-located Resource definitions in the Revised Final Proposal, with the definitions now matching the tariff language for Phase 1.  However, the lack of clarity continues in other areas. 

• Default Energy Bids (DEBs):  The Revised Final Proposal Sections 4, 4.12, and 4.13 include cryptic statements about HR Default Energy Bids that should be explained. 

3. Provide your organization’s feedback on the forecasting proposal, as described in the final proposal:

High Sustainable Limit (HSL):  EDF-R continues to have concerns about the proposed HSL, specifically,

project HSLs itself (which EDF-R continues to believe that the CAISO has the tools and information that each HR and Co-located VER will submit its own HSL calculations.  Those calculations could be based on whatever factors they choose, perhaps including but not limited to the CAISO’s VER forecast, met data, etc., and there is no guarantee that each resource HSL calculations will perform those calculations in the same way. 

So, it seems problematic and somewhat hazardous for the CAISO to rely on HSL data submitted by HR projects.  Instead, the CAISO should: (1) use the information it already possesses (e.g., met data and outage/availability reports) to calculate to do); or (2) provide standard HSL calculation algorithms it wants projects to use.

4. Provide your organization’s feedback on the dynamic limit tool proposal, as described in the final proposal:

The CAISO should provide more information about the DL Tool, and reconsider whether it is even needed for some or all of the information that it would provide.

Additional information:  Stakeholders continue to have unanswered questions about the design and use of this tool, and the CAISO should address them in a further revised document.  For example:

• WPTF asked on the most recent stakeholder call whether the DL Tool could be used to prevent grid charging, for HRs with ITC limitations.  The CAISO at first said yes but then said it would consider this issue further and follow up with stakeholders.  However, the Revised Final Proposal provides no clarification on this question.  EDF-R believes that the DL Tool should not be used in this manner or, if it is, that storage CLRs also be allowed to use this or another tool to control grid-charging risk.

• SCE asked whether the resource owner, as well as the Scheduling Coordinator, would be able to submit availability information through the DL Tool.  The CAISO gave a general opinion that it might be more convenient for “only one party” to submit such data but did not answer the question.  This information is important for developers that are trying to complete projects and must negotiate agreements with SCs now or in the near future.

Use of and need for DL Tool:  The CAISO should take a step back and reconsider its approach to VER-storage HRs and the use of the DL Tool, and either narrow the purposes of this tool or reconsider whether it is needed at all.  Fundamentally, VER-storage HRs are simply a VER resource and a storage resource, and there is no need for the DL Tool to provide functionality the CAISO already has for these resource types. 

EDF-R is concerned that the CAISO conceived of the DL Tool originally when it feared that it would have no visibility into HRs, but its proposals in those areas have significantly evolved to provide the needed visibility.  Most notably:

• VER component availability can be determined the same as for a stand-alone or Co-located VER resource.  HR VER output can be forecasted to the same extent, and it has the same benefits and limitations, as those other VER resources.  The CAISO will have the same data for the VER component as those other VER resources – met data, and separately telemetered and metered data.

• Storage component availability (State of Charge (SOC)) can be determined the same as for a stand-alone or Co-located storage resource.  Use of HR storage is effectively the same as those other storage resources, and it has the same benefits and limitations.  The CAISO will have the same data for the storage component as those other storage resources – SOC data, and separate charging and discharging telemetered and metered data.

So, the CAISO can readily ascertain both VER and storage availability from data it will already have, just as it does for stand-alone and Co-located resources with the same technologies.  There should be no need for a DL Tool to determine real-time availability of these resources.

Thus, the only need for a DL Tool might be to inform the CAISO when capacity is not available because the VER component is charging the storage component.  Even then, however, the CAISO should be able to calculate that storage availability without use of a DL Tool. 

For example, if the meter at the POI is not registering any energy deliveries from the grid and the storage SOC is increasing at 5 MW per 5-minute interval, then the energy must be coming from the VER component.  So, the CAISO will know in real time that 5 MW of VER capacity is being used to charge the storage component, and it can adjust its Dispatch Instructions accordingly.

In other words, the CAISO will have all the data needed to determine the three elements that determine HR availability – VER availability, storage SOC, and VER capacity used to fill storage. 

The only one of these three elements that even requires any new functionality is the third, and as noted above, that should be derivable using simple math.   If some time is needed to design and install this functionality, then the CAISO could perhaps install a DL Tool for that limited purpose and timeframe.  There is no need for such a tool for the other two elements. 

EDF-R has supported data requirements for HRs that reflect their respective technologies, but it makes no sense for HRs to provide the same data as stand-alone and Co-locate resources if the CAISO does not actually make full use of those data.

5. Provide your organization’s feedback on the proposal to allow co-located storage resources to deviate from dispatch instructions to allow for offsetting VER variation, as described within the final proposal:

EDF-R is pleased that the CAISO has adopted the stakeholder CLR storage flexibility proposal, but it continues to have concerns with some proposed restrictions, most notably the “blanket” prohibition against CLRs using the proposed storage flexibility while they are also providing Ancillary Services. 

This is another area where detailed comments were provided on the Draft Final Proposal but not acknowledged or responded to in the Revised Final Proposal.  We again offer those comments in the hope that the CAISO will consider them this time.

The CAISO’s proposal in Section 4.7 would allow co-located storage resources to produce less than dispatch under the following circumstances:

1. The co-located VER resource must be producing above dispatch.
2. The co-located resource would otherwise be producing above POI limits.
3. The co-located resource may not be providing ancillary services.
4. The CLRs bear the burden of all information sharing necessary for the arrangement.
5. All energy deviations from dispatch would be charged as Uninstructed Imbalance Energy (UIE.)

Our comments about these conditions are below.

• Condition #3 – A/S prohibition:  This “blanket” prohibition is unnecessary and should be revised to simply provide that exercise of this flexibility cannot impair the ability of either resource to comply with any A/S awards. 

For example, a 100 MW storage CLR scheduled to provide 80 MW of energy and 20 MW of Regulation Up could reduce its output from 80 MW to 70 MW to allow an additional 10 MW of solar Resource ID production.  The 20 MW of “headroom” needed to provide the Regulation Up service would not be impaired in any way; in fact, because the storage SOC would be higher than otherwise, the storage Resource ID could be better able to provide that service.

In other words, it is certainly possible for the storage CLR to exercise this flexibility while providing A/S, and the CAISO should remove this prohibition.

• Condition #2 – production “above POI limits:”  Consistent with our comments on Condition #3 above, this condition should be refined to clarify that the capacity at the POI be fully committed for either Energy or Ancillary Services, and not necessarily just for producing Energy at the POI limit.   

For example, a 100 MW ACC containing 100 MW solar and 50 MW storage CLRs might have a solar Resource ID schedule of 50 MW of Energy and a storage Resource ID schedule of 40 MW of Energy and 10 MW of Regulation Up (headroom that must be left open at the POI to provide that service).  If the solar Resource ID can produce 60 MW in real time, the storage Resource should be allowed to reduce its Energy discharge to 30 MW to accommodate the additional solar production, leaving the 10 MW unloaded at the POI to preserve its ability to provide the Regulation Up service.

• Condition #5 – UIE vs. Instructed Imbalance Energy (IIE):  On the stakeholder call for the Draft Final Proposal, CAISO seemed uncertain about whether VER CLR production above DOT is considered UIE or IIE.  If this VER CLR production is considered IIE, then storage CLR actions to accommodate the added VER CLR production should be considered IIE also.

6. Provide your organization’s feedback on the resource adequacy topic, as described in the final proposal:

HR Must-Offer Obligations (MOOs):  The CAISO position has been that HRs providing Resource Adequacy would have “24 x 7 MOOs” in both the Day Ahead (DA) and Real-Time (RT) Markets, but it had not previously stated the amount of capacity that must be offered.  Other non-VER RA Resources, for example, generally must offer up to the level of their Net Qualifying Capacity (NQC); however, HRs cannot offer the full NQC in hours when the VER capacity is not available, if some of their NQC comes from the VER capacity.  (For example, solar-storage VERs where the solar capacity is providing some NQC cannot offer the full resource NQC at night.)

The CAISO clarified on the stakeholder call that it is proposing that there be no set MOO for HRs, i.e., they would be required to offer all their expected available capacity but not their NQC level, and the CAISO will not insert “proxy bids” for the difference between NQC and bid capacity. 

This provision would address the above concern about a MOO associated with unavailable capacity.  However, it goes too far in accommodating this issue, as CES said in the stakeholder meeting, to the point where it unduly discriminates against both stand-alone resources and CLRs using the same technologies, both of which have more defined MOOs.

This is particularly important in the Day Ahead market, where most energy is scheduled and the CAISO seeks to procure 100% of its Ancillary Services need.  Consistent with EDF-R’s proposal very early in this initiative, HR MOOs should be the combined MOOs of stand-alone and CLR resources with the same technologies, e.g., for storage-VER HRs, the storage NQC.

RAAIM applicability to HRs:  The Revised Final Proposal says the Resource Adequacy Availability Assessment Mechanism (RAAIM) will not apply to HRs.  This change was made due to these reasons:

• The ELCC-based methodology adopted by the CPUC already reduces VER QCs to reflect both the intermittent/variable nature of the technology and the ITC-related need to charge the storage with on-site VER energy – i.e., applying RAAIM to the VER portions of HRs would double-count those reductions; and

• RAAIM will likely be replaced by a new Unforced Capacity (UCAP) measure in 2023, so the complex changes to apply RAAIM only to the HR storage component wouldn’t be worthwhile.

However, the CAISO is not proposing to exempt other storage resources – stand-alone or CLRs – from RAAIM.

EDF-R strongly believes that exempting HRs from RAAIM, but not storage CLRs, would unduly discriminate against mixed-fuel resources in CLR configurations.    Thus, the CAISO should not exempt HRs from RAAIM unless it also exempts storage CLRs.

7. Provide any additional comments on the final proposal for the Hybrid Resources initiative:

Problems with HRs providing Ancillary Services

This is another area where detailed comments were provided on the Draft Final Proposal but not acknowledged or responded to in the Revised Final Proposal.  We again offer the comments below in the hope that the CAISO will consider them this time.

At the stakeholder meeting on the Draft Final Proposal, WPTF raised an issue concerning the current CAISO practices for certifying VER-storage HRs to provide Regulation.  WPTF said that one of its members discovered that the CAISO would only consider the regulating range of the storage component and not the range for the entire resource.

The reason for this problem was not explained, and the CAISO could not say how or if the problem could be fixed. 

As we said before, it is highly problematic for such a critical issue to surface so late in this process.  EDF-R asked in those earlier comments that the CAISO issue, as soon as possible (i.e., before the Final Proposal) a clear explanation of the Regulation problem, along with confirmation that the problem does not exist for Spinning or Non-Spinning Reserve.  The CAISO did not do so in the Revised Final Proposal, but it should finally do so in a final document in this initiative.

More fundamentally, however, EDF-R believes that HRs should be prohibited from offering Ancillary Services until CLRs are able to offer such services – currently expected in Fall 2021.  The CAISO has chosen to fix its Master File problem through the cumbersome ACC mechanism, and it is unduly discriminatory to allow HRs to participate in A/S markets before CLRs have an equal opportunity to do so.

Terminology

The CAISO has cleaned up its Hybrid Resource and Co-located Resource definitions in the Revised Final Proposal, with the definitions now matching the tariff language for Phase 1.  However, the lack of clarity continues in other areas. 

For example, the CAISO continues to use the term “hybrid resources” (no capitalization), presumably to refer to what it previously defined as “Mixed-Fuel Resources,” as well as the term “mixed-fuel resources” (no capitalization), and “hybrid energy storage resources” (no capitalization).  All three terms are used in the first paragraph of the Revised Draft Final Proposal. 

To avoid confusion, EDF-R urges the CAISO to:

• Stop using this imprecise terminology (e.g., use of the same terms with and without capitalization to refer to different things); 

• Adopt the defined term Mixed-Fuel Resource as a generic term that includes resources with different technologies in either CLR or HR configurations; and

• Adopt defined terms for other key elements of this framework, e.g., Dynamic Limit Tool and High Sustainable Limit.

Default Energy Bids (DEBs)

The CAISO states in Revised Final Proposal Sections 4, 4.12, and 4.13 that “ITC resources may receive special modeling considerations in DEB,” but “these will only be granted for resources that cannot recover costs from economically bidding into the market.” There is no explanation for this statement, and the CAISO should clarify it in the final document in this initiative.

1. Please provide your organization’s overall position on the Hybrid Resources final proposal:

2. Provide a summary of your organization's comments on this proposal:

Introduction:  The Large-scale Solar Association (LSA) and the Solar Energy Industries Association (SEIA) (collectively, LSA/SEIA) appreciate the opportunity to comment on the CAISO’s latest proposals in this initiative.  Our comments are divided between: (1) process comments (summarized below); and (2) substance comments (summarized below and explained further in the remainder of this document).    

(Please note that these acronyms are used to reference the two mixed-fuel project configurations:

CLR = Co-located Resource; HR = Hybrid Resource.)

Process comments:  Traditionally, the CAISO discusses comments received on the prior version and, where those comments were not incorporated, explained why the CAISO did not do so.  That practice informs stakeholders that the CAISO has received and considered their comments, and it helps them understand the CAISO’s reasons where those comments were not adopted.

LSA/SEIA are disappointed that the CAISO did not respond in the Revised Final Proposal to many comments they and others submitted on the Draft Final Proposal.  LSA/SEIA repeat many of those earlier comments in this submittal.  If the CAISO does not accept these recommendations, then LSA/SEIA request that the CAISO explain why.

That request leads us to an additional process recommendation.  The CAISO usually issues a Draft Final Proposal (and sometimes one or more Revised Draft Final Proposals) before taking policy proposals to the CAISO Board.  Notably, the CAISO has already issued a “Final Proposal” and a “Revised Final Proposal” for this initiative, and it is accepting stakeholder comments on the latter. 

LSA/SEIA strongly recommend that, to avoid confusion, the CAISO issue one more “Final Proposal” with the final proposals it intends to take to the CAISO Board and file at FERC, as well as the explanations of stakeholder comments rejected in that final, final version.

Substance comments:  LSA/SEIA support many elements of the revised Final Proposal (though with some caveats), oppose one, and recommend more information and clarification for several. 

     Support with caveats:

• Adoption of our earlier CLR storage flexibility proposal; however, we have concerns with some proposed restrictions, most notably the “blanket” prohibition against CLRs providing Ancillary Services using the proposed storage flexibility.  This is one area where LSA/SEIA provided comments on the Draft Final Proposal that were not addressed in the Revised Final Proposal.

• The proposed HR RAAIM exemption; however, the CAISO should extend this exemption to CLR storage in order to avoid undue discrimination against those resources. 

• HR “24 x 7” Must-Offer Obligation:  LSA/SEIA appreciate the CAISO’s clarification on the latest stakeholder call that HR MOOs would not require bids for the full NQC value, which would obviously be problematic in hours when VER components may provide some portion of that NQC but are unavailable.  However, the proposal needs additional clarification - see below.

     Oppose (strongly):   The proposed HR Resource Adequacy framework, in particular counting unavailability submittals through the Dynamic Limit (DL) Tool against the proposed UCAP framework (proposed in the RA Enhancements Initiative but also discussed in the Final Proposal).    This is another area where LSA/SEIA and others provided comments on the Draft Final Proposal that were not addressed in the Revised Final Proposal.   As LSA/SEIA have noted in earlier comments in both initiatives, this proposed treatment is both inconsistent with CPUC RA policy and unduly discriminatory against resources in the HR configuration, compared to the same technologies in stand-alone and CLR configurations. 

     More information and explanation needed

• HRs providing Regulation:  This is another area where LSA/SEIA and others provided comments on the Draft Final Proposal that were not addressed in the Final Proposal.  In the stakeholder meeting on the Draft Final Proposal, WPTF raised the very serious issue of possible restrictions on the HR Regulation range.  This was a subject of considerable discussion in that meeting, and LSA/SEIA and others submitted comments seeking clarification about any such restrictions and how they could be removed quickly.  The CAISO should clearly explain problems in this area in the final written document recommended above.

• HR 24 x 7 HR MOO proposal:  The CAISO stated in the latest stakeholder call that HRs would be generally required to bid “all available capacity” into CAISO markets but would not have a set MOO MW bid level.  The CAISO should clearly state that position in the final written document recommended above.

• Terminology:  The CAISO has cleaned up its Hybrid Resource and Co-located Resource definitions in the Revised Final Proposal, with the definitions now matching the tariff language for Phase 1.  However, other terms required clarification. 

• Default Energy Bids (DEBs):  The CAISO should clarify statements about HR DEBs in Revised Final Proposal Sections 4, 4.12, and 4.13.   

3. Provide your organization’s feedback on the forecasting proposal, as described in the final proposal:

HR classification:  LSA/SEIA continue to object to the CAISO proposal to not classify Hybrid Resources as non-Variable Energy Resources (VERs) – Non-Generating Resources (NGRs) – even where the storage capacity is small relative to the solar capacity. 

The Revised Final Proposal states in Section 4.4 that natural gas resources with small amounts of storage would still be treated as natural gas resources and not NGRs.  The CAISO has not explained the apparent discriminatory treatment of VERs with small amounts of storage, an issue we raised in comments on the last two proposal versions that was not addressed in the Revised Final Proposal.

LSA/SEIA’s position continues to be that the VER portions of HRs should be considered VERs, as should HRs those with only small amounts of storage.  The CAISO should allow that portion of the resource to participate in PIRP, including schedule submission and real-time dynamic adjustments to the forecast and schedule during real time.

High Sustainable Limit (HSL):  LSA/SEIA also continue to have concerns about the proposed HSL, specifically, that each HR and Co-located VER will submit its own HSL calculations.  Those calculations could be based on whatever factors they choose, perhaps including but not limited to the CAISO’s VER forecast, met data, etc., and there is no guarantee that each resource HSL calculations will perform those calculations in the same way. 

So, it seems problematic and somewhat hazardous for the CAISO to rely on HSL data submitted by HR projects.  Instead, the CAISO should: (1) use the information it already possesses (e.g., met data and outage/availability reports) to calculate project HSLs itself (which LSA/SEIA continue to believe that the CAISO has the tools and information to do); or (2) provide standard HSL calculation algorithms it wants projects to use.

4. Provide your organization’s feedback on the dynamic limit tool proposal, as described in the final proposal:

LSA/SEIA continue to strongly oppose the use of DL Tool submittals against HR UCAP values.  LSA/SEIA also believe that the CAISO should provide more information about the DL Tool, and reconsider whether it is even needed for some or all of the information that it would provide.

Additional information:  Stakeholders continue to have unanswered questions about the design and use of this tool; the CAISO should address them in a further revised document.  For example:

• WPTF asked on the most recent stakeholder call whether the DL Tool could be used to prevent grid charging, for HRs with ITC limitations.  The CAISO at first said yes but then said it would consider this issue further and follow up with stakeholders.  However, the Revised Final Proposal provides no clarification on this question. 

• SCE asked whether the resource owner, as well as the Scheduling Coordinator, would be able to submit availability information through the DL Tool.  The CAISO gave a general opinion that it might be more convenient for “only one party” to submit such data but did not answer the question.  This information is important for developers that are trying to complete projects and must negotiate agreements with SCs now or in the near future.

Use of and need for DL Tool:  LSA/SEIA believe that the CAISO should take a step back and reconsider its approach to VER-storage HRs and the use of the DL Tool, and either narrow the purposes of this tool or reconsider whether it is needed at all.  Fundamentally, VER-storage HRs are simply a VER resource and a storage resource, and there is no need for the DL Tool to provide functionality the CAISO already has for these resource types. 

LSA/SEIA are concerned that the CAISO conceived of the DL Tool originally when it feared that it would have no visibility into HRs, but its proposals in those areas have significantly evolved to provide the needed visibility.  Most notably:

• The VER component is essentially the same as a stand-alone or Co-located VER resource.  Its output can be forecasted to the same extent, and it has the same benefits and limitations as those other VER resources.  The CAISO will have the same data for the VER component as those other VER resources – met data, and separately telemetered and metered data.

• The storage component is essentially the same as a stand-alone or Co-located storage resource.  Its use is effectively the same as those other storage resources, and it has the same benefits and limitations.  The CAISO will have the same data for the storage component as those other storage resources – State of Charge (SOC) data, and separate charging and discharging telemetered and metered data.

So, the CAISO can readily ascertain both the VER availability and storage SOC from data it will already have, just as it does for stand-alone and Co-located resources with the same technologies.  There should be no need for a DL Tool to determine real-time availability of these resources.

Thus, the only need for a DL Tool might be to inform the CAISO when the solar capacity is not available because it is charging the storage component.  Even then, however, the CAISO should be able to calculate that storage availability without use of a DL Tool. 

For example, if the meter at the POI is not registering any energy deliveries from the grid and the storage SOC is increasing at 5 MW per 5-minute interval, then the energy must be coming from the VER component.  So, the CAISO will know in real time that 5 MW of VER capacity is being used to charge the storage component, and can adjust its Dispatch Instructions accordingly.

In other words, the CAISO will have all the data needed to determine the three elements that determine HR availability – VER availability, storage SOC, and VER capacity used to fill storage. 

The only one of these three elements that even requires any new functionality is the third, and that should be derivable using simple math.   If some time is needed to design and install this functionality, then the CAISO could perhaps install a DL Tool for that limited purpose and timeframe.  There is no need for such a tool for the other two elements.  LSA/SEIA have supported data requirements for HRs that reflect their respective technologies, but it makes no sense for HRs to provide the same data as stand-alone and Co-locate resources if the CAISO does not actually make full use of those data.

5. Provide your organization’s feedback on the proposal to allow co-located storage resources to deviate from dispatch instructions to allow for offsetting VER variation, as described within the final proposal:

LSA/SEIA are pleased that the CAISO has adopted their CLR storage flexibility proposal, but they continue to have concerns with some proposed restrictions, most notably the “blanket” prohibition against CLRs using the proposed storage flexibility while they are also providing Ancillary Services. 

This is another area where detailed comments were provided on the Draft Final Proposal but not acknowledged to responded to in the Revised Final Proposal.  We again offer those comments below in the hope that the CAISO will consider them this time.

The CAISO’s proposal in Section 4.7 would allow co-located storage resources to produce less than dispatch under the following circumstances:

1. The co-located VER resource must be producing above dispatch.
2. The co-located resource would otherwise be producing above POI limits.
3. The co-located resource may not be providing ancillary services.
4. The CLRs bear the burden of all information sharing necessary for the arrangement.
5. All energy deviations from dispatch would be charged UIE.

Our comments about these conditions are below.

• Condition #3 – A/S prohibition:  This “blanket” prohibition is unnecessary and should be revised to simply provide that exercise of this flexibility could not impair the ability of either resource to comply with any A/S awards. 

For example, a 100 MW storage CLR scheduled to provide 80 MW of energy and 20 MW of Regulation Up could reduce its output from 80 MW to 70 MW to allow an additional 10 MW of solar Resource ID production.  The 20 MW of “headroom” needed to provide the Regulation Up service would not be impaired in any way; in fact, because the storage SOC would be higher than otherwise, the storage Resource ID could be better able to provide that service.

In other words, it is certainly possible for the storage Resource ID to exercise this flexibility while providing A/S, and the CAISO should remove this prohibition.

• Condition #2 – production “above POI limits:” Consistent with our comments on Condition #3 above, this condition should be refined to clarify that the capacity at the POI be fully committed for either Energy or Ancillary Services, and not necessarily producing Energy at the POI limit.   

For example, a 100 MW ACC containing 100 MW solar and 50 MW storage CLRs might have a solar Resource ID schedule of 50 MW of Energy and a storage Resource ID schedule of 40 MW of Energy and 10 MW of Regulation Up (headroom that must be left open at the POI to provide that service).  If the solar Resource ID can produce 60 MW in real time, the storage Resource should be allowed to reduce its Energy discharge to 30 MW to accommodate the additional solar production, leaving the 10 MW unloaded at the POI to preserve its ability to provide the Regulation Up service.

• Condition #5 – UIE vs. IIE:  On the stakeholder call for the Draft Final Proposal, the CAISO seemed uncertain about whether VER Resource ID production above DOT is considered UIE or IIE.  If this production is considered IIE, then logically storage Resource ID actions to accommodate the additional VER production should be considered IIE also.

6. Provide your organization’s feedback on the resource adequacy topic, as described in the final proposal:

HR Must-Offer Obligations (MOOs):  The CAISO position has been that HRs providing Resource Adequacy would have “24 x 7 MOOs” in both the Day Ahead (DA) and Real-Time (RT) Markets, but it had not previously stated the amount of capacity that must be offered.  Other non-VER RA Resources, for example, generally must offer up to the level of their Net Qualifying Capacity (NQC); however, HRs cannot offer the full NQC in hours when the VER capacity is not available, if some of their NQC comes from the VER capacity.  (For example, solar-storage VERs where the solar capacity is providing some NQC cannot offer the full resource NQC at night.)

The CAISO clarified on the stakeholder call that there would be no set MOO for HRs, i.e., they would be required to offer all their expected available capacity but not their NQC level, and the CAISO will not insert “proxy bids” for the difference between NQC and bid capacity.  However, the Revised Final Proposal does not contain either of these clarifications.  LSA/SEIA urge the CAISO to issue a revised document containing them.

RAAIM applicability to HRs:  The Revised Final Proposal says the Resource Adequacy Availability Assessment Mechanism (RAAIM) will not apply to HRs.  This change was made due to these reasons:

• The ELCC-based methodology adopted by the CPUC already reduces VER QCs to reflect both the intermittent/variable nature of the technology and the ITC-related need to charge the storage with on-site VER energy – i.e., applying RAAIM to the VER portions of HRs would double-count those reductions; and

• RAAIM will likely be replaced by a new Unforced Capacity (UCAP) measure in 2023, so the complex changes to apply RAAIM only to the HR storage component wouldn’t be worthwhile.

LSA/SEIA agree with the CAISO that this outcome is consistent with the CPUC ELCC methodology.  In addition, applying RAAIM to HRs would unduly discriminate against HR VER capacity (which would otherwise have been subject to RAAIM) compared to stand-alone and CLR VERs (which are not subject to RAAIM).

However, the sensible solution of exempting HRs from RAAIM causes undue discrimination in the opposite fashion.  This is because storage CLRs would still be subject to RAAIM, while HR storage components would not.

Thus, while the HR RAAIM exemption is needed, the CAISO should also exempt storage CLRs as well to avoid undue discrimination.

UCAP applicability to HRs:  The RA Enhancements Initiative Fifth Revised Straw Proposal would not apply UCAP reductions for forced outages, intermittency, or on-site VER charging to VER stand-alone or Co-located Resources, i.e., UCAP for those resources would equal NQC. 

However, even where VERs account for some portion of HR NQCs, the RA Enhancements Initiative proposal would apply UCAP to HRs, for unavailability from both:

• Outage-card submittals for forced outages/de-rates (see above); and

• DL Tool submittals, to reflect VER intermittency, storage charging by on-site VERs, and storage SOC below the maximum level.

The Proposal and meeting slides repeated this RA Enhancements proposal, and there was a considerable discussion on this topic at the meeting.  Several stakeholders – LSA/SEIA, EDF-R, CalCCA, SDG&E, AWEA, CES, and WPTF – argued that that the CAISO HR UCAP proposal:

• Is inconsistent with Proposal recognition (see above) that UCAP should equal NQC for VER capacity, since ELCC-based solar QCs/NQCs already reflect forced outages, VER variability, and use of on-site VER generation to fill storage due to ITC restrictions.

• Unduly discriminates against HRs, compared to proposed treatment of CLRs with the same resource composition and ITC operating limitations. 

• Is contrary to CPUC RA policy, which has determined that RA treatment of mixed-fuel resources should not differ based on HR vs. CLR configuration.

The CAISO’s HR UCAP proposals fail to recognize that the main rationale for exempting HRs from RAAIM – double-counting between RAAIM and the CPUC’s ELCC-based RA QC methodology for VER capacity – applies in exactly the same way to CAISO’s UCAP proposal.  

These issues have been raised in several rounds of comments in the RA Enhancements Initiative, but the CAISO has not acknowledged or responded to those comments, or reflected them in successive proposals.  (That initiative is on its 5^th Revised Straw Proposal.) 

The CAISO has indicated in additional discussions that its RA Enhancements Initiative HR UCAP proposals – repeated in the Revised Final Proposal in this initiative – is intended to apply only if the CPUC revises its recently adopted RA QC methodology in some way that eliminates the double-counting problems described above.  However, if true, that clarification is not stated in the Revised Final Proposal; at a minimum, the CAISO could save itself a lot of trouble and argument if it would simply state this position in a further revised version of the Final Proposal and also in future RA Enhancements Initiative documents.

7. Provide any additional comments on the final proposal for the Hybrid Resources initiative:

Possible problems with HRs providing Ancillary Services

This is another area where detailed comments were provided on the Draft Final Proposal but not acknowledged or responded to in the Revised Final Proposal.  We again offer the comments below in the hope that the CAISO will consider them this time.

At the stakeholder meeting on the Draft Final Proposal, WPTF raised an issue concerning the current CAISO practices for certifying VER-storage HRs to provide Regulation.  WPTF said that one of its members discovered that the CAISO would only consider the regulating range of the storage component and not the range for the entire resource.

The reason for this problem was not explained, and the CAISO could not say how or if the problem could be fixed.  Since stand-alone and CLR VER and storage projects can be certified to provide Regulation, it wasn’t clear why combining those technologies into a single Resource ID would cause problems, or why the Regulation range for one of the technologies would be disregarded. 

The CAISO did say that it believed that this unexplained problem could be fixed for provision of Operating Reserve (Spinning and Non-Spinning Reserve), so there shouldn’t be an issue with provision of those services by HRs.  However, HRs are expected to offer Regulation, and restrictions on their ability to provide this valuable service would be to the detriment of these resources and also the CAISO market as a whole.

As we stated before, it is highly problematic for such a critical issue to surface so late in this process.  We had asked in those earlier comments that the CAISO issue, as soon as possible (i.e., before issuance of the Final Proposal) a clear explanation of the Regulation problem and the options for quickly resolving it, along with confirmation that the problem does not exist for Spinning or Non-Spinning Reserve.  The CAISO did not do so in the Revised Final Proposal, but it should finally do so in a final document in this initiative.

Terminology

The CAISO has cleaned up its Hybrid Resource and Co-located Resource definitions in the Revised Final Proposal, with the definitions now matching the tariff language for Phase 1.  However, clarifications are required in other areas. 

For example, the CAISO continues to use the term “hybrid resources” (no capitalization), presumably to refer to what it previously defined as “Mixed-Fuel Resources,” as well as the term “mixed-fuel resources” (no capitalization), and “hybrid energy storage resources” (no capitalization).  All three terms are used in the very first paragraph of the Revised Draft Final Proposal. 

To avoid confusion, LSA/SEIA urge the CAISO to:

• Stop using this imprecise terminology (e.g., use of the same terms with and without capitalization to refer to different things); 

• Adopt the defined term Mixed-Fuel Resource as a generic term that includes resources with different technologies in either CLR or HR configurations; and

• Adopt defined terms for other key elements of this framework, e.g., Dynamic Limit Tool and High Sustainable Limit.

Default Energy Bids (DEBs)

The CAISO states in Revised Final Proposal Sections 4, 4.12, and 4.13 that “ITC resources may receive special modeling considerations in DEB,” but “these will only be granted for resources that cannot recover costs from economically bidding into the market.” There is no explanation for this statement, and the CAISO should clarify it in the final document in this initiative.

1. Please provide your organization’s overall position on the Hybrid Resources final proposal:

no comment

2. Provide a summary of your organization's comments on this proposal:

no comment

3. Provide your organization’s feedback on the forecasting proposal, as described in the final proposal:

no comment

4. Provide your organization’s feedback on the dynamic limit tool proposal, as described in the final proposal:

The CAISO’s current proposal for the Dynamic Limit tool gives hybrid resource owners/operators significant power over how their bids are used in the markets. By allowing hybrid resources to input and adjust their upper and lower economic limits on a 5-minute basis, the CAISO is availing hybrids with functionality that other generators do not possess. For example, a stand-alone battery utilizing the end-of-hour state-of-charge parameter (being introduced in the ESDER4 initiative) has far less control over how the CAISO uses its resource than a hybrid using the Dynamic Limit tool.

PG&E recommends that the CAISO consider restricting the use of the Dynamic Limit tool during hours of the day where it doesn’t make sense to offer it. This mainly applies to solar + storage hybrids during non-solar hours. After the sun goes down, a solar + storage hybrid resource is essentially a battery. Therefore, by allowing it to adjust its upper and lower economic limits on a more granular basis than a comparable stand-alone battery, it could benefit from an unfair market advantage. The same wouldn’t apply to a wind + storage resource, for example, since the intermittent VER production continues throughout the nighttime hours.

5. Provide your organization’s feedback on the proposal to allow co-located storage resources to deviate from dispatch instructions to allow for offsetting VER variation, as described within the final proposal:

PG&E requests that the CAISO provide more clarification on what is meant by “allowing” co-located storage resources to deviate from dispatch instructions. PG&E understands from the proposal that: (1) even in acceptable circumstances, a co-located storage resource will still receive uninstructed energy charges for any deviation from dispatch and (2) any communications/controls required for deviations is the sole responsibility of the resource owner (see excerpt below).

“The ISO understands that there may be a need for automated communications and controls to take advantage of this functionality. If a co-located storage resource wants to use this functionality, they are solely responsible for managing these communications and controls and must demonstrate to the ISO’s satisfaction that these controls will functional properly.”

If these two points are correct, is the intent of this functionality to be allowable in terms of Tariff compliance, or is it strictly related to physical operations? If indeed it is Tariff related, PG&E requests that the CAISO reference the applicable sections/rules. This clarification is important for co-located resources who, due to ITC considerations, have made commitments for the storage component to only charge from on-site renewable generation. While such resources may be willing to pay uninstructed energy charges for storage deviations, they would not want to violate Tariff rules in doing so. 

6. Provide your organization’s feedback on the resource adequacy topic, as described in the final proposal:

On Page 8 of the October 15^th presentation, the CAISO explains how Hybrid resources should specify availability in the day ahead market through market bids. Specifically, “ISO will not commit hybrid resources for capacity beyond day ahead bids in the RUC market, as additional capacity may be unavailable.” Considering this statement, combined with the recent modification that Hybrids will no longer be subject to Resource Adequacy Availability Incentive Mechanism (RAAIM) penalties, PG&E asks what implication this has on must-offer obligations (MOOs). If the real-time MOO is tied to the Dynamic Limit, and VER output is much less than originally forecasted, is the CAISO comfortable with a Hybrid resource not bidding up to its full day ahead/RUC obligation in real-time? Due to the intermittent nature of VERs, even committed capacity from day ahead bids in the RUC market may not be available.

7. Provide any additional comments on the final proposal for the Hybrid Resources initiative:

PG&E recognizes the CAISO’s need for High Sustainable Limit (HSL) data, however certain details are left out in the Final White Paper. For example, since HSL data does not flow into settlement calculations, into which data collection systems will the CAISO store the information, and will this data be accessible to the resource owner and/or scheduling coordinator? Also, how will outages and/or communication delays be handled whenever the resource fails to provide the CAISO with real-time HSL data? It is important to provide these details to stakeholders so that they fully understand the requirements of this new feature.

Another important point is that the requirement for new interconnection customers with VERs to provide HSLs should be communicated/published beyond the Hybrid initiative to include other CAISO market stakeholders who may be affected. There are likely VER resources in the interconnection queue who are unaware of this new obligation.

1. Please provide your organization’s overall position on the Hybrid Resources final proposal:

2. Provide a summary of your organization's comments on this proposal:

SDG&E generally supports the CAISO’s proposal for hybrid resources with the exception of the resource adequacy section of the proposal.

3. Provide your organization’s feedback on the forecasting proposal, as described in the final proposal:

SDG&E supports the proposal for the high sustainable limit (HSL) in order to allow the CAISO to have better forecasting capability for the variable energy resource portion of the hybrid resource.  While it seems unnecessary for co-located resources to also include the HSL reporting capability at this time, it does not appear to be a detriment for the CAISO to receive such information in order to improve its forecasting capability in the future, especially if the CAISO expects to require all variable energy resources to report the HSL in the future.

4. Provide your organization’s feedback on the dynamic limit tool proposal, as described in the final proposal:

SDG&E appreciates the CAISO’s reconsideration to not require hybrid resources to submit outage cards into the CAISO’s outage management system (OMS) for limitations due to solar output.  SDG&E believes the dynamic limit tool (DLT) will help scheduling coordinators to notify the CAISO of the resource’s output capability in real time based on the state of charge and the variable energy resource’s forecasted output.  The CAISO is not currently proposing any limitations on how the DLT may be used and as a result SDG&E recommends the CAISO to monitor the usage of the DLT to ensure resources are not withholding capacity from the CAISO real-time market.

5. Provide your organization’s feedback on the proposal to allow co-located storage resources to deviate from dispatch instructions to allow for offsetting VER variation, as described within the final proposal:

While SDG&E understands the CAISO’s proposal to limit deviation of the co-located storage is to ensure the storage resource has sufficient energy for a later award, SDG&E hopes the CAISO will reconsider this limitation in the future.  Storage resources are very flexible resources and can act very quickly to help with reliability needs.  If storage resources are not able to dispatch in real time to meet unexpected demand because of this limitation, events such as the stage 3 emergency that occurred on August 15, 2020 when wind generation decreased by nearly 1,200 MWs may be more easily repeated.  In the future, impacts of such scenarios may be reduced or potentially avoided by allowing batteries to dispatch if such deviation limitations are not in place.  SDG&E recommends the CAISO to revisit these limitations as more storage resources come online.

6. Provide your organization’s feedback on the resource adequacy topic, as described in the final proposal:

SDG&E does not agree with the proposed resource adequacy (RA) topic.  First, the net qualifying capacity (NQC) value of hybrid resources is set using the effective load carrying capability (ELCC) methodology applied to the variable portion of capacity for the resource.  The NQC of wind and solar resources are also based on ELCC values.  In the RA Enhancements initiative, the CAISO is proposing to establish the wind and solar resources’ NQC values based on the ELCC values as such information already takes into consideration outages.  SDG&E believes the CAISO needs to reconsider the unforced capacity (UCAP) value for hybrid resources since the ELCC values also take into consideration outage values of the hybrid resource.  Applying a UCAP onto the ELCC value effectively creates a double penalty for the same outage.

SDG&E also does not believe the CAISO should utilize the DLT information to determine the UCAP value because the DLT captures more information than traditional outage information.  Specifically, the DLT information is based on the output limitation of the variable energy resource; this is very similar information to the ELCC values for the variable energy resource.  Applying the DLT information on top of the ELCC value creates a double penalty for the same output limitation.

SDG&E does not believe the CAISO should exempt hybrid resources from the resource adequacy availability incentive mechanism (RAAIM).  In the RA Enhancements proposal, the CAISO has stated that RAAIM does not create sufficient incentives for scheduling coordinators to provide substitute capacity.  Yet, in this initiative the CAISO is actively choosing to exempt hybrid resources from RAAIM and making the situation worse.  While SDG&E understands RAAIM may retire in 2023, there is no guarantee that the CAISO’s UCAP replacement will be implemented by then.  SDG&E believes that the CAISO should not increase reliability risks by creating a RAAIM exemption for hybrid resources.

7. Provide any additional comments on the final proposal for the Hybrid Resources initiative:

1. Please provide your organization’s overall position on the Hybrid Resources final proposal:

Consistent with the comments set forth below, the Six Cities oppose the CAISO's Final Proposal with a number of caveats.  

2. Provide a summary of your organization's comments on this proposal:

The Six Cities have two primary concerns with the CAISO’s Final Proposal.  First, the CAISO’s proposed treatment of hybrid resources appears, in several respects, to advantage the hybrid resource model over the co-located resource model.  Whether intended or not, the availability of the dynamic limit tool for hybrid resources, the exemption from the Resource Adequacy Availability Incentive Mechanism (“RAAIM”), and the absence of a viable means for co-located resources to mitigate grid charging risks will incent dual technology type resources to adopt the hybrid resource model.  The Six Cities are concerned, as is discussed in more detail below, that the policy decisions the CAISO is making here may result in reduced storage capacity being made available to the CAISO markets, as market participants that have procured storage resources to come online in the near term seek to manage these risks while preserving the eligibility of their resources for financing that is dependent upon application of the Investment Tax Credit (“ITC”). 

More fundamentally, the Six Cities are concerned that the CAISO needs to undertake a more comprehensive initiative to ensure that storage resources can be fully integrated and optimized within the CAISO’s markets.  At this time, the CAISO’s real-time markets are not capable of fully and effectively optimizing storage resources, and the Six Cities are unaware that the CAISO has plans to rectify this.  Given the vast quantity of storage resources currently in the CAISO’s interconnection queue, the CAISO and its stakeholders should be thinking deeply about how best to integrate these resources into its markets so that storage resources can perform the full array of functions they are capable of providing, which will provide benefits to the reliability and operability of the CAISO transmission system and energy markets.  Development of piecemeal solutions in this and other, related initiatives may afford a minimal level of functionality for storage resources, but may not result in the best solutions possible.  For these reasons, the Six Cities urge the CAISO to continue to refine its tariff policies relating to storage resources in the near term, including development of a mechanism for optimizing storage within the real-time market under both the hybrid and co-located resource participation models as well as for stand-alone storage resources. 

3. Provide your organization’s feedback on the forecasting proposal, as described in the final proposal:

The Six Cities do not oppose the CAISO’s proposal regarding forecasting, including the requirement that both hybrid and co-located resources provide high sustainable limit data to the CAISO. 

The CAISO also states in the Final Proposal that the “high sustainable limit may also be used in the future by the ISO to construct dynamic limits.  This proposal includes allowing dynamic limits to be submitted by hybrid scheduling coordinators to the ISO, but in the future the ISO may prefer if this were an automated function of state of charge and high sustainable limit.”  (Final Proposal at 9.)  The Six Cities support automation of the dynamic limit tool, but understand that the inability to adopt this automated functionality in the near term is due to resource constraints within the CAISO.  If at this time the CAISO does not foresee having sufficient resources to implement automation for this feature, the Six Cities support automating this functionality at a later time. 

4. Provide your organization’s feedback on the dynamic limit tool proposal, as described in the final proposal:

The Six Cities are generally supportive of the CAISO’s proposal for a dynamic limit tool for hybrid resources.  It is a preferable way for resources to manage their availability as compared with outage cards as previously proposed.  However, the same or a similar tool should be equally available to co-located resources.  Presently, the dynamic limit tool is the most viable means for resources to manage their compliance with ITC restrictions on grid charging, and there does not appear to be a valid reason for co-located resources to be precluded from use of this tool.

5. Provide your organization’s feedback on the proposal to allow co-located storage resources to deviate from dispatch instructions to allow for offsetting VER variation, as described within the final proposal:

The Six Cities are disappointed that the CAISO has declined to implement the dispatch deviation policy to permit storage components of co-located resources to deviate from dispatch instructions in response to downward VER production resulting from forecast error.  Absent adoption of a dynamic limit tool for co-located resources, this feature is necessary to ensure that co-located resources that are unable or are limited in their ability to charge from the grid as a result of ITC requirements do not inadvertently engage in grid charging should the co-located VER resource experience a reduction in production capability.  Without the dispatch deviation functionality or a dynamic limit tool that is available to co-located resources, it is likely that resources with both VER and storage components will be compelled to either adopt the CAISO’s hybrid resource participation model or remove the storage component of a co-located resource entirely from its RA plan (i.e., so as to prevent the possibility of grid charging while accommodating the risk of reduced VER production).  Such a negative outcome will clearly result in less storage capacity from co-located resources being made available to the CAISO markets.  At a time when the CAISO faces increased needs for resources to provide flexibility and to replace generating facilities that may be retiring, this is not a desirable or beneficial outcome

Load-serving entities that have storage resources coming online in the next two to three years likely contracted for those resources within the past approximately two years.  These entities were more readily familiar with what has now become the CAISO’s co-located resource model, and presumably developed contract terms for these resources’ power purchase agreements under the assumption that the co-located resource model would be implemented by the CAISO in a way that would acknowledge that the financing for these resources hinges on their qualification for the ITC – indeed, the hybrid resource construct as currently structured is new relative to the co-located resource model, which is more aligned with the CAISO’s historic treatment of and market participants’ early expectations as to resources with dual technologies.  The CAISO’s adoption of unduly restrictive limitations on dispatch deviations for the co-located resource model forces these resource owners into a choice: either revise existing contracts to adopt the hybrid resource model, or stay with the co-located model and engage in conservative scheduling practices to avoid any possibility of grid charging. 

During the stakeholder meeting to discuss the Final Proposal, the CAISO advised that it was rejecting stakeholders’ requests to allow storage resources to deviate from dispatch instructions by reducing their charging in response to reductions in VER production because of a concern that storage resources might then not be charged to the level that was anticipated for subsequent dispatches.  The Six Cities question whether this concern also exists with respect to hybrid resources that use the dynamic limit tool.  If so, it raises the question as to why the CAISO is willing to tolerate some degree of state of charge uncertainty for resources using the dynamic limit tool, but not for co-located resources with dispatch deviation functionality.  Further, the Six Cities believe that the risk of this condition arising and posing a problem operationally is lower than the broader risk to the CAISO markets of diminished storage capacity being made available, which will be the consequence if co-located resources are unable to mitigate grid charging risks.  The CAISO’s “encouragement” of resources to offer into the market is unrealistic (see Final Proposal at 24), at least during the initial five years of ITC-eligible resources’ operations, and the examples provided by the CAISO attempting to capture relative cost of grid-charging versus the ITC do not address all of the relevant considerations, including contract restrictions on grid charging. 

In the event that the CAISO concludes it will not implement the co-located resource model such that downward dispatch deviations by the storage component are permissible, then the Six Cities request that the CAISO commit to initiate a subsequent stakeholder initiative in 2021 to re-evaluate this rule. 

6. Provide your organization’s feedback on the resource adequacy topic, as described in the final proposal:

The CAISO’s requirements for storage resources to provide RA are, as noted by the CAISO, included in the scope of the RA Enhancements initiative.  In that initiative, the CAISO proposes a must offer obligation that depends upon the minimum state of charge requirement, which provides that resources are obligated to maintain for the real-time market the state of charge needed in order to adhere to day-ahead schedules.  (See RA Enhancements, 5^th Revised Straw Proposal at 74, 76.)  Based upon the CAISO’s proposals in this initiative, its proposals in the RA Enhancements initiative, and whatever the outcome of the CPUC RA proceeding may be regarding hybrid and storage resources, parties that have developed storage resources face considerable uncertainty regarding how such resources will be evaluated for RA capacity counting and what market rules will be applicable to hybrid resources, co-located resources, and stand-alone storage.  Given the quantity of storage resources expected to become operational in the coming years, the CAISO should engage in a focused effort to evaluate all aspects of how storage resources will interact with its markets and form rules that will allow both the CAISO and market participants to take full advantage of the additional capacity and flexibility these resources are capable of offering. 

The CAISO notes that the RA counting rules for hybrid resources are pending consideration of counting rules and related issues by the CPUC.  While the Six Cities acknowledge there is a need for consistency between the CPUC’s RA policies and the CAISO’s tariff rules and requirements, entities that have procured storage capacity to provide RA in future years require some measure of certainty from the CAISO regarding counting rules as well as associated operational requirements (such as the applicable must offer obligation) sooner rather than later, especially if differences between the co-located resource model and the hybrid resource model may necessitate contracts to be reopened in response to new rules and requirements. 

The Six Cities agree that waiving the RAAIM penalties for Hybrid Resources may be appropriate.  However, the Six Cities are concerned that similar treatment is not available for dual resource configurations that adopt the co-located resource model.  Although it is the Six Cities’ understanding that the CAISO’s RAAIM exemption for the variable energy resource (“VER”) component of co-located resources will remain in place, the Six Cities likewise understand that the storage component of such resources will have no RAAIM exemption, unlike hybrid resources.  This differential treatment will create incentives for resource owners to use the hybrid resource model, particularly when coupled with the heightened risk of inadvertent grid charging under the co-located model as described above.  Again, this reinforces the need for the CAISO to comprehensively consider all elements of storage resource RA participation, ideally in one initiative.  More immediately, however, the CAISO’s proposal raises concerns regarding whether the proposed differential treatment between hybrid and co-located resources in terms of their exemption (or non-exemption) from RAAIM is unduly discriminatory.   

7. Provide any additional comments on the final proposal for the Hybrid Resources initiative:

The Six Cities have no additional comments at this time.

1. Please provide your organization’s overall position on the Hybrid Resources final proposal:

Please see attached.

2. Provide a summary of your organization's comments on this proposal:

3. Provide your organization’s feedback on the forecasting proposal, as described in the final proposal:

4. Provide your organization’s feedback on the dynamic limit tool proposal, as described in the final proposal:

5. Provide your organization’s feedback on the proposal to allow co-located storage resources to deviate from dispatch instructions to allow for offsetting VER variation, as described within the final proposal:

6. Provide your organization’s feedback on the resource adequacy topic, as described in the final proposal:

7. Provide any additional comments on the final proposal for the Hybrid Resources initiative: