Comments on 4/23 SH Call

1. Please provide a summary of your organization’s overall feedback on the Extended Day-Ahead Market (EDAM) Congestion Revenue Allocation Draft Final Proposal.

ACP-California greatly appreciates the CAISO’s work on this initiative so far and is generally supportive of the refined alternative approach to congestion revenue allocation outlined in the Draft Final Proposal as a meaningful improvement. However, we recommend that some incremental enhancements to the proposal be pursued expeditiously, ideally allowing them to be implemented for EDAM go-live. ACP-California urges CAISO to implement enhancements to the current proposal to allow for direct allocation of congestion revenues from CAISO to transmission customers using their firm transmission rights ahead of the day-ahead market run.  Additionally, to address remaining uncertainties, ACP-California urges CAISO and EDAM Entities to enable transmission schedules submitted before the day-ahead market run to be allowed to be “opted-out” of the market optimization and fully insulated from EDAM prices. This could help address the remaining uncertainty and risk that will exist for transmission customers even under the Draft Final Proposal’s implementation. And as a near-term enhancement, post EDAM go-live, ACP-California strongly supports CAISO enabling economic bidding on firm transmission rights while still allowing this revised congestion revenue allocation approach to apply.

While some parties have advocated for a sunset date for the revised congestion revenue allocation approach proposed by CAISO, after which congestion allocation would revert to what is currently contained in the CAISO tariff, ACP-California opposes any such sunset date. The revised congestion revenue allocation approach is limited in its application to only apply to use of firm transmission rights. These rights will continue to be required within EDAM, at least until major modifications to the market design are made. And, as such, it would be inappropriate to sunset the tariff provisions and, as a result, undermine OATT rights in EDAM areas.

Additionally, ACP-California looks forward to engaging with CAISO on this issue through the proposed working groups prior to EDAM launch and through a future stakeholder initiative to seek to develop a long-term resolution which will continue to recognize that OATT rights will continue to be used in the West unless major design changes are made to EDAM’s structure and scope. And we applaud CAISO for its commitments to these ongoing efforts and to the provision of additional data on this topic as it becomes available.

2. Please provide your organization’s feedback regarding the proposed design to congestion revenue allocation (described in section VII of the Draft Final Proposal).

The proposed design in the Draft Final Proposal represents a significant improvement to the current congestion revenue allocation process in EDAM. And it also addresses some of the concerns around expanded application and unintended consequences that would have resulted from the alternative approach included in the Issue Paper. ACP-California applauds CAISO for listening to stakeholder feedback and working diligently to come up with an improved proposal on a short timeframe. The Draft Final Proposal is appropriately focused on modifying congestion revenue allocation for the use of firm transmission rights within EDAM and is much more in line with EDAM’s intended design, as understood by stakeholders, during the EDAM stakeholder process that took place over the course of 2020-2023. And this approach strikes a much more appropriate balance of allowing EDAM to work in connection with the OATT framework.

While the Draft Final Proposal makes important strides, it still falls short of fully insulating transmission customers with firm rights from financial exposure—including those delivering renewable power across EDAM Entities to CAISO. A foundational principle of the EDAM stakeholder process has been to ensure that these customers are protected and can continue to use their rights much as they do under today’s construct, and the current proposal – while a significant improvement – does not yet fully meet that standard.

The main challenge lies in two areas: the dependence on EDAM Entities to align on congestion revenue allocation methodologies, and the distinction between congestion and transfer revenue allocations. Without standardized approaches to congestion revenue allocation across all participating EDAM BAAs, firm transmission customers face the risk of inconsistent and potentially unfair outcomes. There is no assurance that future EDAM Entities will follow the same methodology as PacifiCorp and Portland General Electric (PGE), the first two entities proposing to join. Additionally, the separate treatment of congestion revenues versus transfer revenues means that transmission customers continue to bear financial risks under the Draft Final Proposal’s current framework, though we concede addressing this issue may be a step beyond what CAISO envisioned for this expedited stakeholder initiative. There are, however, tools within the current CAISO EDAM tariff that could be utilized to help address this concern, if the EDAM Entities avail themselves of this option. To address these shortcomings prior to EDAM’s go-live, ACP-California offers two key recommendations.

First, within the scope of the current initiative, CAISO should facilitate direct settlement of congestion revenues with firm transmission customers submitting balanced schedules. ACP-California recommends that CAISO directly allocate congestion revenues to firm transmission customers who submit balanced schedules, as doing so should be feasible with the information CAISO has and would offer a number of benefits. Direct allocation by CAISO would ensure consistent treatment of these customers across all EDAM Entities, helping to mitigate risk and preserve the value of their transmission rights. It would also enhance transparency and comfort with congestion revenue allocation, by having more revenues allocated by CAISO in its capacity as an independent, and revenue-neutral body. And it would lay the foundation for potential future improvement in how congestion costs are handled for inter-BAA transfer revenue. Ideally, the Final Proposal would also include provisions for CAISO to directly allocate transfer revenues to customers utilizing firm transmission rights, further reducing financial uncertainty. However, ACP-California acknowledges that this may require a broader set of revisions than is currently contemplated and could be addressed in a later phase of EDAM enhancements.

Second, given that the final outcome of the CAISO’s initiative is unlikely to provide the full financial protections for OATT customers scheduling in day-ahead than most stakeholders understood would be enabled in EDAM, it is also critical for CAISO to work with EDAM Entities to enable transmission “opt-outs” for certain eligible transmission schedules. CAISO should encourage EDAM Entities to offer an “opt-out” mechanism within their tariff that allows transmission scheduled before the day-ahead market to remain outside of the market optimization. This would help preserve the priority of firm transmission schedules and shield customers from price volatility and serve the goal of enabling continued use of OATT transmission service, where it is required. It is important that CAISO be ready to support this functionality at market launch and encourage EDAM Entities to build it into their tariffs for interested customers in order to ensure OATT customers are able to continue to transact in a similar manner as they do today.

These recommended changes would significantly enhance the equity and dependability of the congestion revenue allocation process and offer greater certainty to transmission customers relying on firm rights.

Finally, ACP-California also strongly supports CAISO’s proposed enhancements—planned for post go-live—to allocate parallel flow congestion revenue based on economically bid, balanced self-schedules. This improvement would help ensure efficient market outcomes while allowing customers who bid into the market to maintain a congestion hedge using their transmission rights.

3. Please provide your organization’s feedback regarding the future evolution of the design, including the data that will be monitored, transparency measures, and the transitionary period (described in section VII.D of the Draft Final Proposal).

Transitional Nature of the Proposal

ACP-California agrees that it is both reasonable and necessary to revisit the approach to congestion revenue allocation after EDAM has been operational for a period of time. Learning from early market performance can help inform whether a revised framework is warranted for the longer term. ACP-California supports CAISO’s commitment to initiate future stakeholder discussions and working groups to explore potential refinements and durable solutions over time. We look forward to continuing to collaborate with CAISO and other market participants on these important issues.

Opposition to the Introduction of a Sunset Date

Over the course of the stakeholder initiative, several parties proposed introducing a “sunset provision” that would cause the proposed congestion revenue allocation design to lapse after a set timeframe, reverting to existing CAISO tariff rules that allocate all congestion revenues to the EDAM BAA where the constraint occurs. ACP-California strongly opposes this concept. The existing tariff-based approach has proven impractical for transmission customers that depend on OATT rights to support long-distance renewable energy delivery (and for other uses of OATT service). Returning to the model currently in the CAISO tariff after a few years would introduce considerable regulatory and commercial uncertainty for clean energy developers and their utility partners, including California load-serving entities. A sunset provision would set the expectation that, after a few years, there would be significant loss in the value of OATT rights and their ability to be used with relative financial certainty. A predetermined expiration date for the newly proposed framework could create instability and could even deter participation in EDAM.

Moreover, reverting to the current tariff approach would significantly weaken protections for customers relying on OATT transmission. While ACP-California supports the long-term vision of an EDAM that may eventually function independently of OATT rights, the current market structure does not reflect that reality. In the near and medium term, OATT-based delivery remains foundational to the delivery of clean energy across the West. Transitioning away from that framework would demand complex negotiations around cost allocations and broader policy alignment, which cannot reasonably be expected within two to three years. California’s own regulatory requirements, such as the Renewables Portfolio Standard (RPS), mandate that renewable deliveries into CAISO be scheduled using OATT rights—highlighting the importance of maintaining protections for such usage during the initial phases of EDAM. And, moreover, if there are new price risks from EDAM’s implementation associated with the use of firm transmission rights (which would occur if the proposed provisions are expected to sunset in a few years), California entities will see those risks and costs as they contract with remote resources and as they receive power from existing remote resources. It is, therefore, in California entities interest to support a solution that will enable continued use of OATT transmission rights with reasonable price certainty. The CAISO’s Draft Final Proposal, which lacks a sunset date for the congestion revenue provisions, helps achieve that goal, which should offer broad benefits.

For these reasons, ACP-California urges CAISO to reaffirm its intent for the Draft Final Proposal’s congestion revenue allocation design to remain in place unless and until a consensus-based alternative is adopted. The eventual path forward should acknowledge the ongoing importance of transmission rights and provide a predictable, equitable structure to support renewable delivery and regional coordination.

Transparency and Data Provision

CAISO has proposed to monitor and report on a number of data points related to congestion revenue allocation. This data and reporting will be incredibly helpful to stakeholders in assessing the impact of EDAM and in considering the potential for alternative solutions following EDAM go-live and experience with its operations. We encourage CAISO to provide not only the information outlined in the Draft Final Proposal, but also the percent (%) of EDAM transaction by EDAM BAA that are self-scheduled using firm OATT rights and the percent (%)  of congestion revenues attributable to self-scheduled firm OATT rights by EDAM BAA.

Additionally, to the extent that CAISO can provide a subset of the proposed data, with as many caveats as necessary, while it works through market simulation and parallel operations, it should do so. This will assist with the ongoing working group efforts and allow entities to begin to better understand the outcomes and impacts of EDAM’s congestion revenue allocation approach.

4. Please provide your organization’s feedback regarding the decisional classification (described in section VIII.B of the Draft Final Proposal).

Classifying these potential proposed tariff changes as subject to the joint authority of the Board of Governors and the WEM Governing Body is appropriate.  

5. Please provide any additional feedback regarding the Draft Final Proposal and stakeholder workshop discussion and materials (April 23rd).

ACP-California reiterates our appreciation for CAISO’s work on this topic. EDAM is poised to offer significant benefits to the West, but will require ongoing attention to matters like these for those benefits to be realized. And it will require continued work from CAISO and its stakeholders to ensure proper integration of the EDAM’s market functionality with the OATT systems of EDAM participants. We look forward to working collaboratively with CAISO and stakeholders across the West to improve EDAM ahead of go-live and to evolve it over time to offer even more benefits. ACP-California generally supports the Draft Final Proposal’s refined alternative approach to congestion revenue allocation, with the enhancement identified in these comments, and supports the concept of considering longer-term solutions in the years following EDAM’s commercialization.

1. Please provide a summary of your organization’s overall feedback on the Extended Day-Ahead Market (EDAM) Congestion Revenue Allocation Draft Final Proposal.

Overall, AWEC has a preference for the initial draft proposal. This final draft proposal has the potential for leaving retail customers at the mercy of a utility in deciding whether to make a source-to-sink schedule to provide a hedge for its customers. This process can create additional controversies in state-level regulatory processes that could undermine the efficacy of the EDAM and were not present in CAISO’s initial draft proposal.  

2. Please provide your organization’s feedback regarding the proposed design to congestion revenue allocation (described in section VII of the Draft Final Proposal).

As mentioned in our response to question one, AWEC is concerned that the final draft proposal will leave retail utility customers open to the practices of utility companies registering transactions in the day-ahead market to hedge against congestion costs. State-utility regulatory processes are likely the only other option for retail customers to address congestion costs stemming from parallel flow. This can expose customers and utilities to cost recovery disputes during prudency and power cost recovery reviews and can force zero-sum determinations from state utility commissions. These are the same concerns AWEC expressed in its initial comments in the PacifiCorp EDAM FERC filing.

The initial proposal ensured that any congestion costs related to parallel flows were going back to the BAA where the congestion revenue was collected. That proposal was a much more passive process where utility retail customers would see at least some cost protection from congestion costs.

3. Please provide your organization’s feedback regarding the future evolution of the design, including the data that will be monitored, transparency measures, and the transitionary period (described in section VII.D of the Draft Final Proposal).

N/A

4. Please provide your organization’s feedback regarding the decisional classification (described in section VIII.B of the Draft Final Proposal).

AWEC agrees with CAISO Staff that this proposal would be subject to the joint authority of the Governing Body and Board of Governors.

5. Please provide any additional feedback regarding the Draft Final Proposal and stakeholder workshop discussion and materials (April 23rd).

AWEC appreciates the CAISO taking on this initiative in response to PacifiCorp’s FERC filing.

1. Please provide a summary of your organization’s overall feedback on the Extended Day-Ahead Market (EDAM) Congestion Revenue Allocation Draft Final Proposal.

Appian Way appreciates the opportunity to provide these comments on the CAISO’s EDAM Congestion Revenue Allocation Draft Final Proposal (DFP). Appian Way appreciates and supports CAISO and other EDAM members’ efforts to make progress toward a broader regional market, the promise of which will bring greater market efficiency and cost savings for consumers. A well-designed expanded market characterized by optimal transmission usage based on economics and coordinated dispatch should benefit all parties in the West. Simultaneously, EDAM must also accommodate the existing OATT system of physical rights among non-CAISO members; but do so in a way that does not distort biding and participation incentives. Moreover, the allocation of rights to transmission service (i.e. congestion in the EDAM context) must treat all firm or firm-equivalent rights on an equal basis in terms of priority, as this is a fundamental FERC principle for rates to be deemed just and reasonable.

This expedited stakeholder process has exposed two significant flaws in the EDAM design which are not addressed in the DFP and are in fact exacerbated by changes proposed in the DFP. These flaws are likely to make for a problematic and possibly turbulent launch of the EDAM design. Nor is it clear that the proposed changes, as drafted, would or should be ratified by FERC. Broadly:

1. The changes contemplated in the DFP do not provide equal treatment to CAISO firm or firm-equivalent rights as compared to comparable OATT rights in non-CAISO markets.
2. The overlay of physical, use-or-lose OATT rights in the EDAM design will incentivize behaviors that will distort the EDAM market and these distortionary incentives are exacerbated by the DFP. Scott Harvey of the Market Surveillance Committee presented in detail on this concern at the May 2 MSC meeting, and Appian Way also raised the issue in our comments April 7.  

We urge CAISO to immediately begin working with EDAM counterparties toward a system of firm flow entitlements or financial flow entitlements (FFEs) as described by Dr. Harvey. While not the fully orthodox financial rights solution used in most RTOs (i.e. making network transfer capacity available in the form of allocated and auctioned CRRs to allow for non-discriminatory open access), the use of FFEs could be a useful interim step which would fully address both major flaws mentioned above.

Equal Treatment of Firm Rights

In RTO/LMP market design orthodoxy, OATT physical rights for network and point-to-point service are replaced by financial transmission rights or congestion revenue rights (CRRs). CRRs are the financial equivalent of firm transmission in an RTO/LMP market, a point that FERC has reiterated on multiple occasions in different orders. CRR allocations in CAISO are based on load-serving entities’ (LSE’s) network load, with specific designated network resources serving as the source points for CRR contracts. CRRs are allocated to LSEs over the transmission network that LSE ratepayers have paid for in terms of the embedded cost of the transmission grid and moreover CAISO uses a sophisticated Simultaneous Feasibility Test (SFT) to ensure that the allocated CRR transmission rights exactly match the physical network transmission capability, just as OATT point-to-point (PTP) or network integrated transmission service (NITS) rights are allocated so as to match available transmission capacity (ATC). PTP OATT rights are charged a transmission fee based on a pro-rata share of the embedded cost of the relevant transmission owner’s transmission network, and both NITS OATT rights and CRRs are appropriately allocated to LSEs based on the logic of LSE customers paying for the cost of the transmission network used to deliver power from generation to load.

In this way, CRRs in an RTO/LMP market, as the financial equivalent of firm transmission, are exactly analogous to NITS or PTP firm rights in a physical OATT market and should be treated as such in terms of priority with respect to congestion rent allocations in a broader coordinated regional market such as EDAM. 

In the current market, prior to EDAM, OATT rights from external BAAs are able to flow on CAISO’s network without paying for the transmission congestion they cause, and CAISO network flows are able to flow on external BAAs’ networks without paying for the congestion they cause. While not an ideal scenario, all firm rights are treated comparably, without discrimination.

In the current EDAM design, which is based on the congestion allocation model from the WEIM market, all firm rights are again treated comparably, without discrimination. Congestion is allocated to the balancing area authority (BAA) where the congestion occurs. Again, not an ideal scenario, but nevertheless equal treatment of all firm and firm-equivalent rights. However, filers in the Pacificorp EDAM Tariff case noted that their OATT rights might not be able to be fully funded in the case where a Pacificorp firm OATT right flows on a CAISO constraint. The DFP addresses this concern effectively by allocating the congestion rent associated with OATT physical flows to the market where it is collected.

However, the changes proposed in the DFP do not treat all firm or firm-equivalent rights comparably. There are at least two significant problems with the DFP in teams for equivalent treatment of firm rights.

• First, while the DFP allows firm rights to flow over CAISO’s system and be made whole for the congestion they cause, the DFP does not allow CAISO firm rights flows (CRRs) to flow over an external BAAs’ system and be made whole. The proposal could do this but instead chooses to treat the majority of CAISO allocated firm network rights (all CRRs) as subservient/non-firm. There is no mechanism in the DFP for CAISO CRRs to have ANY claim on external BAA congestion – even if the OATT rights do not take up all the transfer capacity on a constraint, as may be the case. Essentially, CAISO is moving from the current scenario of unlimited access for CAISO network flows on external systems (and visa-versa) to one where any, and all, CRR flows over external systems are completely unfunded, while external OATT rights flowing on CAISO’s system are given priority and “perfect hedge” status.

• This leads to a second and even more material instance of unequal treatment of what should be comparable firm rights: the DFP preserves a preferred “perfect hedge” status for external OATT rights over internal CAISO firm-equivalent rights -- even on internal CAISO constraints. Appian Way raised this concern in our April 7 comments, and CAISO’s response in the stakeholder process has confirmed the worst fears.

In particular, CAISO has clarified that in common outage scenarios when not all rights holders can be made whole without uplifts or derates, external OATT rights will be made whole to preserve the “perfect hedge” of OATT rights, whilst CAISO firm rights will be derated not only to cover their pro-rata reduction in the outage-diminished transfer capacity, but also to cover the share of external OATT rights that are given preferential perfect hedge status. In fact, funding of CAISO CRR firm-equivalent rights could conceivably be reduced into negative territory to ensure perfect hedge status of equivalent OATT external rights.

It is fundamentally inequitable for non-CAISO EDAM members to be able to promise their firm transmission customers perfect congestion hedges whilst CAISO’s firm- or firm-equivalent transmission customers are expected to subsidize the firm transmission of neighboring BAAs. In this way, the DFP is patently discriminatory.

EDAM Distortionary Incentives Exacerbated in the DFP

In our April 7 comments, we addressed this concern, reiterated below:

“…Pacificorp’s proposed tariff – which purports to provide a congestion pass-through to firm network and point-to-point transmission customers – may lead to improper incentives and gaming of the rules which would result in an inequitable shift of congestion allocations away from the CAISO market, and potentially worsening CAISO CRR revenue inadequacy, harming CAISO ratepayers. Specifically:

1. 1. With OATT transmission rights being physical use-or-lose, generators that are exposed to congestion will have the incentive to arrange bi-lateral OATT contracts rather than respond to EDAM redispatch economic incentives. If entities can self-schedule bilaterally and be held harmless for congestion, they will follow the prices and go off dispatch. In circumstances where such bi-laterals result in loop flows onto the CAISO system, the existing EDAM design would ensure that external entities pay for the congestion they cause and decrease the incentive for gaming, whereas the proposed alternative approach would, we believe, increase such incentives.
   2. Once locational prices become transparent after EDAM start-up, non-CAISO entities will have incentives to schedule firm transmission to capture economic price spreads, capturing congestion rents away from the CAISO market under the new alternative proposal. As notes above, when the loop flows associated with these new schedules flow on CAISO’s system, the existing EDAM design would allocate congestion to CAISO lessening the incentive. Entities that schedule transmission according to the incentives in the existing EDAM design would have the opportunity to buy CRRs to hedge the loop flow portion of their schedules, but such congestion hedges would be unnecessary in the alternative approach and would represent a harm to CAISO market participants and LSEs.”

The goal of EDAM is to improve market incentives for efficient transmission usage and least-cost dispatch through efficient pricing signals. This cannot be accomplished if entities are incentivized to go off dispatch and self-schedule as soon as they experience congestion, and they could do so easily using their NITS firm service rights. We were pleased to see the Market Surveillance Committee (MSC) take up the mantle of this issue, as it is one that other markets have experience and learned from in the transition from a physical-rights system to an LMP market.

We hope the CAISO will address the concerns raised by the MSC prior to go-live of the EDAM market.

FFEs: An Interim Solution

Ultimately, what is required is for CAISO and neighboring BAAs to work together to agree to a business solution and approach that balances honoring firm transmission rights and allocating congestion rents fairly and efficiently to all market participants. Other RTOs have faced this problem and come up with fair and mutually agreed approaches for allocating FFEs, as described by Dr. Harvey. Representatives for CAISO utilities have inquired in the stakeholder process about why this approach is not being followed, with CAISO stating that this issue would be addressed after EDAM go-live / “Day 2.”

Appian Way believes that the concerns regarding inequitable treatment of rights – exacerbated by the DFP, and the potential for distortionary behavior and misaligned incentives embedded in the DFP approach to congestion allocation, are sufficiently known and material. As such, we believe it is important for CAISO to prioritize moving to a superior congestion allocation approach with immediacy, urgency and more concrete commitments to specific deadlines.

CAISO should organize a business solution amongst EDAM members that is based on 1) congestion rights that are point to point; 2) congestion allocations based on fair division of firm or financial flow entitlement rights (FFEs) that market participants agree to and 3) elimination of distortionary incentives for EDAM generation resources to not follow EDAM economic dispatch.

2. Please provide your organization’s feedback regarding the proposed design to congestion revenue allocation (described in section VII of the Draft Final Proposal).

See comments above.

3. Please provide your organization’s feedback regarding the future evolution of the design, including the data that will be monitored, transparency measures, and the transitionary period (described in section VII.D of the Draft Final Proposal).

See comments above.

4. Please provide your organization’s feedback regarding the decisional classification (described in section VIII.B of the Draft Final Proposal).

See comments above.

5. Please provide any additional feedback regarding the Draft Final Proposal and stakeholder workshop discussion and materials (April 23rd).

See comments above.

1. Please provide a summary of your organization’s overall feedback on the Extended Day-Ahead Market (EDAM) Congestion Revenue Allocation Draft Final Proposal.

APS values the opportunity to provide comments and feedback on the EDAM Congestion Revenue Allocation Draft Final Proposal. While APS recognizes the efforts by CAISO to make incremental changes to the design of congestion revenue allocation, the proposed design still results in an inadequate hedge for OATT transmission customers against parallel flows when they don’t self-schedule. The current proposal provides no significant hedge for those participating in the market (those without self-schedules). Public data suggests costs for EDAM Entities participating under this model are significant and could outweigh the benefits of participating in the market. Participants have requested CAISO to put ranges on the impact for potential participation to more fully evaluate the proposal, but do not yet have alternate estimates. Either way, APS would not choose to participate as a load serving entity in a market with the limited customer protections afforded to participants as being proposed.

APS does not plan to participate in EDAM as a load-serving entity.  Instead, APS anticipates being a transmission customer with service across EDAM Entities transmission systems. APS appreciates the updates CAISO has made to the proposal which do offer basic protections for transmission activities that are self-scheduled in the market.  APS prefers more dynamic ability to use its transmission rights consistent with the current rights to OATT customers instead of self-scheduling in advance of its own market dispatch.  APS recognizes the EDAM Entities have broad authority to exclude transmission and appreciates APS should direct its comments to those EDAM Entities OATT proposals for those dynamic rights.  We appreciate the opportunity to provide comments and hope our comments on this initiative will be informative to CAISO regarding market design principles.

2. Please provide your organization’s feedback regarding the proposed design to congestion revenue allocation (described in section VII of the Draft Final Proposal).

Based on stakeholder comments in the Initial Proposal, including those from APS, CAISO made significant changes to address concerns about the reversal of congestion charges on all schedules in EDAM and the potential cost-shift associated with that reversal. The Draft Final Proposal now focuses more narrowly on allocating congestion revenue to EDAM entities based on firm rights with a balanced self-schedule. APS views this as an improvement in market design from the Initial Proposal because it provides a path for a congestion hedge for transmission customers who have invested in the grid through the purchase of long-term firm transmission rights, aligning with principles in other organized markets.

From a market design perspective, APS remains concerned about the incentive to self-schedule present in the proposal. Only firm transmission rights that are self-scheduled in EDAM are eligible to receive a congestion hedge. Self-schedules diminish much of the value that firm transmission participating in the market would otherwise generate. The explicit choice to use a schedules-based approach rather than a rights-based approach for allocating congestion revenue leads to inefficiencies, including overscheduling. APS continues to encourage CAISO to implement a rights-based approach to congestion revenue allocation instead of a schedule-based approach.

As a transmission customer, APS appreciates the modified proposal as a significant improvement for point-to-point customers accessing remote resources. However, the proposal reduces the value of OATT transmission service by limiting its use to before the market runs. While this is a degradation of benefit, the ability to register and receive a congestion hedge is appreciated, even if it is not the most economic utilization of those rights. APS values CAISO's focus on monthly or greater firm services, which supports the ability to procure remote resources with only some value leakage, as described above.

3. Please provide your organization’s feedback regarding the future evolution of the design, including the data that will be monitored, transparency measures, and the transitionary period (described in section VII.D of the Draft Final Proposal).

APS continues to request that CAISO include long-term principles to guide the future evolution of market design around the allocation of congestion revenue, as outlined in our previous comments, as part of this initiative. Although CAISO mentions that principles may be included in future initiatives, their absence in this initiative creates significant uncertainty, especially given the transitional nature of the proposal. APS recommends that CAISO reconsider the timing of the principles discussion and include them in this initiative.

4. Please provide your organization’s feedback regarding the decisional classification (described in section VIII.B of the Draft Final Proposal).

No comment.

5. Please provide any additional feedback regarding the Draft Final Proposal and stakeholder workshop discussion and materials (April 23rd).

No comment.

1. Please provide a summary of your organization’s overall feedback on the Extended Day-Ahead Market (EDAM) Congestion Revenue Allocation Draft Final Proposal.

BAMx[1] appreciates the opportunity to comment on the April 16 EDAM Congestion Allocation draft final proposal[2] and April 23 presentation[3]. We support refinement of the congestion revenue allocation methodology to achieve a more equitable allocation of congestion revenues. We are concerned, however, that the adoption of this interim method could reduce willingness among some parties to work toward a more permanent solution. BAMx believes a permanent solution to address congestion revenue allocation concerns would involve allocating simultaneously feasible CRRs to entities that fund the transmission systems throughout the EDAM footprint, so that the market dispatch will be delinked from scheduling and bidding incentives, and all EDAM entities will be disincentivized from overselling/over-allocating transmission on their systems. Such an approach cannot be designed, evaluated and implemented prior to the planned EDAM go-live in 2026, so an initial transitional approach needs to be implemented. BAMx requests that the CAISO identify clear deadlines for adoption of a permanent solution to EDAM congestion revenue allocation as part of its final proposal.

[1] BAMx consists of City of Palo Alto Utilities and City of Santa Clara, Silicon Valley Power

[2] California Independent System Operator, “Draft Final Proposal: EDAM Congestion Revenue Allocation” April 16, 2025

[3] California Independent System Operator, “Extended Day Ahead Market (EDAM) Congestion Revenue Allocation Initiative Stakeholder Meeting” April 23, 2025

2. Please provide your organization’s feedback regarding the proposed design to congestion revenue allocation (described in section VII of the Draft Final Proposal).

BAMx supports implementation of the interim solution identified by CAISO in its Draft Final Proposal as a temporary method to improve the allocation of parallel flow congestion revenues in circumstances with binding transmission constraints in neighboring balancing areas. We believe this draft final proposal better aligns with cost-causation principles than the Initial Proposal.

3. Please provide your organization’s feedback regarding the future evolution of the design, including the data that will be monitored, transparency measures, and the transitionary period (described in section VII.D of the Draft Final Proposal).

BAMx recognizes that a more appropriate, permanent revenue allocation approach for the EDAM cannot be implemented until after EDAM go-live in 2026, but that steps can be taken prior to EDAM go-live to develop the permanent revenue allocation approach. We caution that any transitional approach should not be allowed to become a permanent solution but must be a bridge to a more permanent revenue allocation method. To that end, we support the proposal for a monitoring and data collection period to better inform the design of future revenue allocation methods. As part of this process, BAMx requests quarterly updates from the CAISO on data collected, insights gained, and progress toward the development of a permanent EDAM revenue allocation method. BAMx requests that during the proposed three-year interim period, the CAISO perform an analysis comparing the results of the allocation method proposed by CAISO in the draft final proposal and the revenue allocation method proposed by BAMx in our April 7 EDAM congestion allocation comments.[1] This comparison could include calculation of the BAA-level allocations under CAISO’s interim approach and the BAMx proposal to evaluate the equity of real-world allocations under each method. Such an analysis could be used to evaluate adjustments to the CAISO’s allocation approach during the interim period.

Members of the Market Surveillance Committee (MSC) noted at the May 2, 2025, meeting[2] that the CAISO need not wait until EDAM go-live to begin the process of estimating the impact of the interim solution and identifying and prioritizing potential adjustments to the EDAM congestion revenue allocation approach. CAISO can use information it already has to model parallel flow impacts on congestion revenue allocation. BAMx supports beginning this process immediately.

[1] “Bay Area Municipal Transmission Group (BAMx) comments on 3/24 hybrid meeting” Online: https://stakeholdercenter.caiso.com/Comments/AllComments/ff5b4101-8bf9-4eb8-a150-2b0f48497c23#org-f9104bff-b4ad-497a-aae2-f205aab3bddf

[2] California Independent System Operator, Market Surveillance Committee General Session. “Extended Day-Ahead Market Congestion Revenue Allocation” May 2, 2025

4. Please provide your organization’s feedback regarding the decisional classification (described in section VIII.B of the Draft Final Proposal).

BAMx concurs with CAISO staff’s assessment that any proposed tariff changes emerging from this stakeholder process will be subject to the joint authority of the Board of Governors and the WEM Governing Body, since the rules will be applicable to WEIM/EDAM Entity BAAs, WEIM/EDAM Entities and other market participants within the WEIM/EDAM Entity BAAs, in their capacity as participants in the WEIM/EDAM.

5. Please provide any additional feedback regarding the Draft Final Proposal and stakeholder workshop discussion and materials (April 23rd).

No comments at this time.

1. Please provide a summary of your organization’s overall feedback on the Extended Day-Ahead Market (EDAM) Congestion Revenue Allocation Draft Final Proposal.

Bonneville appreciates the opportunity to provide comments and offers the following thoughts and feedback on the EDAM Congestion Rent Allocation Draft Final Proposal.

Bonneville sees the merits in re-evaluating the current parallel flow congestion revenue allocation methodology, especially given the significant level of stakeholder concern raised over the topic. Bonneville believes that changes to the current design could help resolve the issues of congestion revenue allocation from parallel flows, thus enabling a more complete congestion hedge for transmission customers exercising their transmission rights. However, Bonneville has concerns over the aggressive timelines presented by CAISO and the potential for a hasty solution. While Bonneville understands the desire to find an expeditious resolution, stakeholders and CAISO staff must have sufficient time to work through this complex issue to avoid unintended consequences.

Bonneville believes that the Draft Final Proposal appropriately framed the issue and provided relevant examples. The paper explained the current allocation methodology, the transitional alternative from the Issue Paper, and the latest proposed allocation methodology. The proposal would allocate parallel flow congestion revenues to transmission customers exercising their firm point to point (PTP) and Network Integration Transmission Service (NITS) OATT transmission rights, with any remainder being allocated to that balancing area where the constraint is located. Bonneville appreciates that the proposal is based on the exercise of firm PTP and NITS OATT transmission customer rights. The examples in the Draft Final Proposal described well the need for modifications and demonstrated the associated differences in settlement allocations for EDAM BAs resulting from each of the allocation methodologies. This allows stakeholders to evaluate where the congestion occurred and how the congestion revenue is allocated under each methodology.

Bonneville has both loads and generation located in BAAs that have signed EDAM implementation agreements or signaled strong leanings toward EDAM.  These loads are primarily served via NITS, firm PTP transmission reservations, legacy rights, or some combination of all three.  Because of the exposure of these resources and loads to EDAM design, Bonneville expressed concern over the issue of allocating congestion rent resulting from parallel flows. Bonneville is particularly concerned about the equitable treatment between both NT and PTP customers.  After review, the Draft Final Proposal offers a congestion rent allocation methodology that affords NT and PTP transmission customers an improved congestion hedge. However, we continue to remain concerned with potential variations in the suballocations of congestion rents by EDAM BAs, which could undermine the benefits of the proposed allocation in the Draft Final Proposal. For instance, it is Bonneville’s understanding that some EDAM Entity draft Business Practices may not allow for internal NT or PTP transmission rights holders to submit balanced source/sink self-schedules, which is counter to CAISO’s requirement in the Draft Final Proposal that customers self-schedule to exercise their transmission rights. In addition, the CAISO’s requirement that NT and PTP customers submit balanced source/sink self-schedules may result in a greater incentive for transmission customers to self-schedule their rights, which could reduce market efficiency and liquidity. Consequently, given the interconnection between the allocation of congestion revenues by the CAISO, and subsequently, by EDAM BAs, Bonneville believes this may result in unintended consequences or cost-shifts between EDAM BAs that may not align with the intent of the proposal.

Bonneville understands and commends CAISO’s desire to address this issue expediently to achieve a resolution with an equitable structure.  However, we have concerns regarding the longer-term evolution of the design.  Bonneville would like CAISO to develop a long-term solution based on a collaborative stakeholder effort focused on long-term changes to the design. Specifically, considerations of 1) how the EDAM BA suballocation methodology can or should align incentives across the footprint, 2) application in WEIM, 3) potential new incentives, such as self-scheduling, that may be created by this methodology, 4) a longer-term solution that would balance the needs of existing OATT frameworks in the west, 5) whether a carve-out/opt-out of transmission rights from the EDAM would be a solution to protect OATT customers from congestion costs and 6) what potential impacts the design may have on the value of firm rights. Bonneville understands that much of this will be predicated on additional data and experience. Bonneville advocates for as much transparency and collaboration with stakeholders as possible throughout the evolution of this design.

2. Please provide your organization’s feedback regarding the proposed design to congestion revenue allocation (described in section VII of the Draft Final Proposal).

Bonneville appreciates CAISO’s explanation of the current design with detailed examples in section VII of the Draft Final Proposal.  Section VII of the Draft Final Proposal and the appendix clearly outline how transmission rights holders importing, wheeling, and exporting would be allocated parallel flow congestion revenue under the proposed methodology versus other methodologies. The examples allow stakeholders to understand the congestion rent calculation and see how the dollars for congestion rent are allocated to each of the EDAM BAs under the various allocation methodologies.  

However, Bonneville has concerns regarding the proposed design to allocate congestion revenue as described in section VII of the Draft Final Proposal. Bonneville believes the proposed Draft Final Paper allocation methodology, which is based on the exercise of firm transmission rights, is an improvement to the current and transitional alternative designs, but additional refinements are needed to ensure firm transmission rights holders can achieve a more complete congestion hedge without an incentive to self-schedule their rights. The self-scheduling of transmission rights would likely reduce overall market efficiency, which is a concern for Bonneville.  In addition, Bonneville continues to be concerned with the lack of consistency across the proposed Draft Final Proposal allocation methodology and the suballocation of congestion rents by individual EDAM BAs. While the proposed Draft Final Proposal allocation methodology appears to provide a more complete congestion hedge for transmission rights holders, the subsequent suballocation of congestion rent by an EDAM BA could reduce the effectiveness of the congestion hedge, thus offsetting the benefit of the Draft Final Proposal allocation methodology.    

Thus, Bonneville requests that CAISO work with EDAM entities to ensure consistency between the Draft Final Proposal allocation methodology and the EDAM BA suballocation methodologies across the footprint, to further evaluate what potential new incentives, such as self-scheduling, are created by the proposed methodology, and a longer-term solution that would balance the needs of existing OATT frameworks in the west.

3. Please provide your organization’s feedback regarding the future evolution of the design, including the data that will be monitored, transparency measures, and the transitionary period (described in section VII.D of the Draft Final Proposal).

Bonneville agrees with CAISO that the Draft Final Proposal is an initial step towards the evolution of a comprehensive congestion revenue allocation design, but Bonneville believes there is more work to be done to ensure the initial step moves the design in the right direction, without creating significant unintended consequences.

In its previous comments, Bonneville stated that additional transparency was needed around the designation of the solution as transitional.  For example, Bonneville requested that CAISO clearly lay out how this transitional measure would be monitored as well as to state the frequency at which stakeholders would be informed regarding the performance of this measure.  Bonneville also requested that CAISO identify any triggers around the performance of this transitional solution that would cause the reopening of this stakeholder process following implementation and go-live for EDAM. CAISO provided significant clarification on these requests in section VII.D, including, for instance, what data would be monitored and shared.

In addition, the CAISO states that it will establish working groups ahead of EDAM launch to continue working on refinements to the congestion revenue allocation, to monitor and collect data for 1-2 years after EDAM launch, to evaluate and consider a spectrum of potential additional near-term and long-term congestion revenue allocation or congestion hedging mechanisms, which, to the extent possible, could be implemented within 1-3 years of EDAM launch. Bonneville is highly supportive of the establishment of working groups and of data gathering to inform both near-term and long-term policy changes; however, Bonneville recommends that CAISO continue to develop the existing Draft Final Proposal within this stakeholder initiative, with the goal of further improving upon the proposal prior to EDAM launch, not after. For instance, Bonneville would be interested in CAISO exploring the possibility of a congestion rent allocation to EDAM entities based on economically bid balanced source/sink cleared schedules, as stated in Section VII.D, to reduce the incentive to self-schedule, which is of significant concern to Bonneville.

Ultimately, Bonneville believes the proposed congestion rent allocation modifications are being made in a highly expedited fashion and without a full understanding of the impacts to the market or alignment with participant BAA OATTs. Bonneville understands the desire to move quickly, given EDAM implementation timelines and workloads. But Bonneville strongly requests further stakeholder meetings and comment periods to unpack these complex issues and understand what additional issues could arise from implementing the proposed alternative.

4. Please provide your organization’s feedback regarding the decisional classification (described in section VIII.B of the Draft Final Proposal).

Bonneville agrees that under the current WEIM/EDAM governance structure, any changes to the EDAM tariff is subject to the joint authority of the CAISO Board of Governors and the WEIM Governing Body. Bonneville also believes that the current governance structure is inadequate to ensure that impacted stakeholders can publicly communicate their perspective on the final design and decision to the Governing Body and Board of Governors.  While Bonneville believes the final draft proposal is a step in the right direction, it’s not apparent under the current governance structure that all interested and impacted parties will have a representative voice on the final decision under the current governance structure or that the minority opinion will be fully expressed and documented for decision makers. For example, there would not be a voting tally to clearly communicate the breadth of stakeholder perspectives to decision makers. Given the potentially significant number of congestion rent dollars that the EDAM will be settling, Bonneville would request that the CAISO slow the process down to make sure that stakeholders have sufficient time to analyze the impacts of the proposal and evaluate potential alternatives if appropriate.  This may include, but is not limited to, longer-term solutions.

5. Please provide any additional feedback regarding the Draft Final Proposal and stakeholder workshop discussion and materials (April 23rd).

Bonneville found the stakeholder workshop on April 23rd to be both informative and robust. The framing of the problem statement, the steps the CAISO has taken to date, and the various alternatives proposed are thorough. Bonneville appreciates the numerous examples provided, especially those dealing with counterflows that were responsive to previously submitted comments.  This is clearly a complex issue, and the examples provided highlighted that issue. 

As Bonneville has stated previously, given the complexity of the issue we would request stakeholders be given more time to evaluate the proposal, including holding joint forums with EDAM entities to help ensure that the proposal and EDAM Entity OATTs and Business Practices are in alignment with the proposed EDAM tariff changes. As an example of this concern, some EDAM Entity draft Business Practices would imply that transmission rights internal to the EDAM entities BAA, be those NITS or PTP, cannot be self-schedules and would not be eligible for the congestion rent hedge afforded under this proposal.  While the proposal may allow an improved congestion hedge from market tariff perspective, if EDAM Entities don’t also align their tariff and BPs with the EDAM design, the stakeholders may ultimately still end up being disenfranchised. To help mitigate these risks, Bonneville would recommend the following for further consideration:

• That the CAISO participate in EDAM Entities tariff and BP process to ensure alignment with the EDAM tariff, BPMs, and settlement processes.
• Consider settling CRs directly with Market Participants – this would provide for uniform treatment of CRs across all EDAM Entity BAs and reduce their administrative burden.
• As previously requested by other stakeholders, the CAISO should facilitate the ability of those with rights on an EDAM Entities system to carve-out/opt-out their rights to limit their exposure to congestion rents.

1. Please provide a summary of your organization’s overall feedback on the Extended Day-Ahead Market (EDAM) Congestion Revenue Allocation Draft Final Proposal.

CDWR believes that the EDAM Congestion Revenue Draft Final Proposal is an appropriate product. Given the expedited request for this proposal, CDWR agrees with comments from other stakeholders from the previous round, which address the implementation of this proposal as being temporary and not permanent, giving provision for future improvements if needed.

2. Please provide your organization’s feedback regarding the proposed design to congestion revenue allocation (described in section VII of the Draft Final Proposal).

CDWR generally supports the design proposed by CAISO with a caveat. Due to present parallel flows, with the implementation of the final draft proposal, CDWR’s concern is that the CRR revenue adequacy will be impacted in the same manner as it is currently impacted in the Day Ahead CRR product.  In fact, since the EDAM would include a much larger power flows footprint than the DA market, CDWR ’s concern is that applying the Track 1B derates to the EDAM CRR could have a greater impact on the EDAM CRR revenue adequacy than it has on the DA CRR today.

CDWR considers the EDAM market simulation scheduled start date in June 2025 to be a great place for the CAISO and stakeholders to discuss and agree upon what additional studies CAISO needs to perform to determine that the current EDAM CRR settlement presented in the CAISO Draft Final Proposal does not harm the CRR revenue adequacy, as it currently does in the DA CRR Market.

3. Please provide your organization’s feedback regarding the future evolution of the design, including the data that will be monitored, transparency measures, and the transitionary period (described in section VII.D of the Draft Final Proposal).

CDWR agrees with the following CAISO statement:

“The ISO and market participants will continue to work together, through stakeholder working groups, to evaluate and consider a spectrum of potential additional near-term enhancements and long-term congestion revenue allocation or congestion hedging mechanisms that could be considered after the launch of EDAM.”

CDWR considers that the EDAM market simulation scheduled to start in June 2025 is a great opportunity for CAISO and stakeholders to agree upon what studies CAISO needs to perform to ensure the EDAM CRRs do meet the EDAM CRR revenue adequacy once implemented in 2026. 

4. Please provide your organization’s feedback regarding the decisional classification (described in section VIII.B of the Draft Final Proposal).

No comments at this time.

5. Please provide any additional feedback regarding the Draft Final Proposal and stakeholder workshop discussion and materials (April 23rd).

No comments at this time.

1. Please provide a summary of your organization’s overall feedback on the Extended Day-Ahead Market (EDAM) Congestion Revenue Allocation Draft Final Proposal.

Please see the attached comments.

2. Please provide your organization’s feedback regarding the proposed design to congestion revenue allocation (described in section VII of the Draft Final Proposal).

Please see attached comments.

3. Please provide your organization’s feedback regarding the future evolution of the design, including the data that will be monitored, transparency measures, and the transitionary period (described in section VII.D of the Draft Final Proposal).

Please see attached comments.

4. Please provide your organization’s feedback regarding the decisional classification (described in section VIII.B of the Draft Final Proposal).

Please see attached comments.

5. Please provide any additional feedback regarding the Draft Final Proposal and stakeholder workshop discussion and materials (April 23rd).

Please see attached comments.

1. Please provide a summary of your organization’s overall feedback on the Extended Day-Ahead Market (EDAM) Congestion Revenue Allocation Draft Final Proposal.

DC Energy has concerns with the speed at which the CAISO is moving towards a final proposal. At each forum where EDAM Congestion Revenue Allocation has been discussed, there has been substantial stakeholder involvement that has furthered participant education, uncovered additional design flaws and moved the group towards a more robust solution.  The CAISO should continue with these productive discussions rather than rushing to Board approval.

2. Please provide your organization’s feedback regarding the proposed design to congestion revenue allocation (described in section VII of the Draft Final Proposal).

Recent discussions at the Market Surveillance Committee and Regional Issues Forum have uncovered additional issues with the proposed design. DC Energy remains concerned with the proposal’s incentives for self-scheduling and its detrimental effect on economic market dispatch. Market experts at these forums have also noted that this incentive could cause reliability issues during periods of tight market conditions.

Another issue that has come to light in recent discussions is the unequal treatment of OATT rights and their equivalent in the CAISO (i.e., allocated CRRs).  In the proposed design, OATT rights in BAAs outside of the CAISO would be granted congestion revenue from constraints binding in the CAISO.  However, CAISO CRRs would not have a claim to congestion revenues from constraints binding in BAAs outside the CAISO.  In defense of this unequal treatment, it has been argued that the structure of CRRs would remain unchanged with the implementation of EDAM.  However, the pool of revenues that would be utilized to provide funding to CRRs would change.  The size and direction of this change is currently unknown but could have a material adverse impact on CRR funding, which is already inadequate.  This issue has not been discussed sufficiently among participants in the CAISO CRR market, and they should also have a voice in this proposal before it gets final Board approval.

3. Please provide your organization’s feedback regarding the future evolution of the design, including the data that will be monitored, transparency measures, and the transitionary period (described in section VII.D of the Draft Final Proposal).

A key attribute of the draft final proposal is the CAISO’s pledge that it will be a temporary interim solution, subject to incremental improvement in the short-term and inevitable replacement by a long-term solution. Collecting and reporting related data to stakeholders is vital to making incremental improvements and devising a long-term solution.

The CAISO’s proposed monitoring and transparency in the transition period is a good start. DC Energy supports the CAISO’s proposal to collect and report the information below:

• Binding transmission constraints and their frequency across the EDAM footprint;
• Effects of constraints on congestion prices across EDAM balancing areas;
• Allocation of congestion revenues among EDAM balancing areas; and
• Magnitude and frequency of self-scheduling to exercise firm OATT rights.

In regards to the CAISO’s proposed data transparency above, granularity is key. If data is provided on an aggregate basis at the EDAM or BAA level, stakeholders will not have the information and examples they need to understand deficiencies in the market design and how to correct them. For example, the effects of constraints on congestion prices should be provided on a nodal basis for each constraint in the form of shift factors. Additionally, the allocation of congestion revenues among EDAM balancing areas should be provided on a constraint by constraint basis.

Additional information regarding the level and feasibility of OATT rights would be instrumental for EDAM stakeholders in developing a long-term solution. The following information should be collected and shared with stakeholders during the transition period:

• Volume of existing OATT rights in each EDAM balancing area and their current feasibility on binding transmission constraints observed in EDAM;
• Amount of congestion revenue inadequacy on each EDAM binding transmission constraint and the allocation of this underfunding among EDAM balancing areas; and
• Any new OATT rights sold during the transition period in EDAM balancing areas and their feasibility on binding transmission constraints observed in EDAM.

The CAISO's proposal to share information through EDAM operation reports at quarterly Market Planning and Performance Forums is acceptable. If information collected during the transition period points to issues in market design, there should be the flexibility to expand the information collected as well as the frequency of the reports provided.

4. Please provide your organization’s feedback regarding the decisional classification (described in section VIII.B of the Draft Final Proposal).

No comment.

5. Please provide any additional feedback regarding the Draft Final Proposal and stakeholder workshop discussion and materials (April 23rd).

No comment, see above.

1. Please provide a summary of your organization’s overall feedback on the Extended Day-Ahead Market (EDAM) Congestion Revenue Allocation Draft Final Proposal.

The Utah Municipal Power Agency (“UMPA”) and Deseret Generation & Transmission Co-operative, Inc. d/b/a Deseret Power (“Deseret”) appreciate the opportunity to comment on the EDAM Congestion Revenue Allocation Issue Paper.  UMPA/Deseret continue to stress that the discussion surrounding congestion revenue allocation should focus on returning congestion revenue to the correct transmission customer, not the correct balancing authority area.  UMPA/Deseret have long advocated for transmission customers to have a direct settlement relationship with the market operator (CAISO) which would make this determination of which balancing authority area should receive congestion revenue moot because there would be no sub-allocation by EDAM entities. 

The presentation by Dr. Scott Harvey on May 2, 2025, at the Market Surveillance Committee meeting highlighted similar concerns UMPA and Deseret have with PacifiCorp’s process for the sub-allocation of congestion revenue.  The PacifiCorp sub-allocation methodology incents transmission customers to self-schedule based on the transmission customer’s expectations of congestion and not the marginal cost of its generation, and to do so as frequently as hour to hour.  If a transmission customer believes there is no congestion in the direction of its transmission rights, it will economically bid to get a share of the congestion revenues through the Step Two allocation (residual measured demand), whereas if the customer believes it risks congestion exposure, it will self-schedule to receive the source-to-sink congestion revenue via Step One. Also, if the transmission customer believes congestion will be in the opposite direction of its transmission rights, it would economically bid and capture the higher price paid to the source than is charged to the sink and also receive a portion of the Step Two allocation. The resulting incentive structure has significant ramifications that should not be permitted.

The Market Surveillance Committee clearly is concerned with CAISO’s draft final proposal undermining EDAM by incentivizing self-scheduling similar to the PacifiCorp sub-allocation.  If CAISO heeded the Market Surveillance Committee concerns and modified the draft final proposal to eliminate the incentives to self-schedule, this would be in vain since PacifiCorp’s sub-allocation incentivizes self-scheduling.  The CAISO, as the market operator, must take the lead in developing a consistent and coherent congestion revenue allocation across the EDAM footprint.

2. Please provide your organization’s feedback regarding the proposed design to congestion revenue allocation (described in section VII of the Draft Final Proposal).

See above. 

3. Please provide your organization’s feedback regarding the future evolution of the design, including the data that will be monitored, transparency measures, and the transitionary period (described in section VII.D of the Draft Final Proposal).

The transitionary period allows CAISO to continue to not address holistically an EDAM footprint wide design for congestion revenue allocation.  The EDAM policy development has been discussed publicly since October 2019 and the process has not discussed an EDAM congestion allocation design consistent with the goals discussed by the Market Surveillance Committee:

• Be consistent with resource participation in the day-ahead and real-time dispatch, rather than incenting self-scheduling, and without distorting bidding incentives. This applies to resources that could be dispatched either up or down to manage transmission congestion.
• Enable the provision of congestion hedges that are reasonably consistent with the transfer capability of the transmission grid or are supported by the out of merit dispatch of the transmission seller’s generation.
• Enable balancing areas to preserve the rough overall benefit of the bargain for the parties to existing transmission contracts.
• Avoid undue cost shifts among market participants. 

During the three-year period the incentives to excessively self-schedule will distort the monitored data providing limited value.  The CAISO should perform analysis sooner during the market simulation process prior to EDAM go-live by utilizing the existing nodal pricing model.  This analysis could be used to provide an initial simultaneous feasibility test, the congestion impact of parallel flows, and the potential size of flow entitlements or limitations on eligibility for congestion revenue right allocation.

4. Please provide your organization’s feedback regarding the decisional classification (described in section VIII.B of the Draft Final Proposal).

Support 

5. Please provide any additional feedback regarding the Draft Final Proposal and stakeholder workshop discussion and materials (April 23rd).

No additional comment.

1. Please provide a summary of your organization’s overall feedback on the Extended Day-Ahead Market (EDAM) Congestion Revenue Allocation Draft Final Proposal.

Idaho Power appreciates CAISO’s continued engagement on this topic. We also appreciate CAISO addressing the concern Idaho Power and others expressed with the original issue paper’s transitional alternative proposal regarding the inequitable outcome of congestion allocations reflected in the counter-flow example. Idaho Power indicated general support for the initial transitional alternative proposal with the exception of the counter flow issue. An important aspect of Idaho Power’s support was that the transitional alternative would have provided congestion protection for Network Integration Transmission Service (NITS) customers bidding their loads and resources into EDAM as well as for OATT customers (both NITS and point-to-point (PTP)) self-scheduling. Unfortunately, the CAISO’s draft final proposal appears to reverse course, abandoning important equities reflected in the initial transitional alternative.

The draft final proposal only provides congestion protection for OATT customers submitting balanced self-schedules, thereby providing protection solely for those customers that are withholding the optimization ability of their resources and reserved transmission capacity in the market. Instead of protecting NITS customers’ bid-in load from congestion exposure, the draft final proposal would return to the status quo and assign any remaining congestion revenues after providing protection for OATT balanced self-schedules to the EDAM BAA in which the transmission constraint is located.

By removing the previously proposed congestion allocations for bid-in NITS load and generation, the only way for a NITS customer to protect itself is to self-schedule. In this regard the draft final proposal presents the EDAM Entity with a troublesome choice – participate in the market and risk congestion exposure for its loads and resources, or self-schedule and forgo the benefits of co-optimization. EDAM benefits could be significant, but they are not infinite. To participate in EDAM, Idaho Power will incur costs including a large increase in its Grid Management Charge payments. The draft final proposal creates a disincentive to EDAM participation – the incurrence of higher administrative costs to self-schedule in the day ahead.

EDAM is the incremental joining of traditional OATT service on the external EDAM Entities’ systems and the CAISO’s Day Ahead Market. Idaho Power recognizes that, especially at the onset of EDAM, certain customers will want to continue to self-schedule in accordance with existing transactional arrangements. The draft final proposal enhances the current approved EDAM design by offering congestion protection for these customers. However, it does not effectively incentivize robust market participation, which should be key goal of EDAM.

Idaho Power supports the draft final proposal only if it is limited to a Phase 1 interim approach, aimed at facilitating the initial EDAM movers: PacifiCorp, Portland General Electric (PGE), BANC and LADWP. After Phase 1 is completed, CAISO should proceed with a Phase 2 stakeholder process consistent with the initial transitional alternative to provide congestion protection for EDAM Entity NITS bid-in load. Given the complexities of developing an EDAM CRR product or other financial rights methodology, an interim Phase 2 approach could enable timely EDAM expansion beyond the first movers, without waiting for all challenges associated with a financial rights methodology to be resolved.

Idaho Power would support CAISO presenting the draft final proposal to the EIM Governing Body and the Board of Governors in May if the Final Proposal clearly identifies the two specific phases mentioned above.  Phase 1 should include the proposed improvements to balanced self-schedules to support PacifiCorp and PGE entry into EDAM in 2026. Phase 2 should address the increased concerns regarding parallel flow impacts on NITS customers bidding in loads, resources and transmission, starting immediately after CAISO receives a FERC order for tariff changes associated with Phase 1, if not sooner.

2. Please provide your organization’s feedback regarding the proposed design to congestion revenue allocation (described in section VII of the Draft Final Proposal).

See Above

3. Please provide your organization’s feedback regarding the future evolution of the design, including the data that will be monitored, transparency measures, and the transitionary period (described in section VII.D of the Draft Final Proposal).

See Above

4. Please provide your organization’s feedback regarding the decisional classification (described in section VIII.B of the Draft Final Proposal).

No comment

5. Please provide any additional feedback regarding the Draft Final Proposal and stakeholder workshop discussion and materials (April 23rd).

No additional comment

1. Please provide a summary of your organization’s overall feedback on the Extended Day-Ahead Market (EDAM) Congestion Revenue Allocation Draft Final Proposal.

Interwest appreciates CAISO’s efforts to develop an improved approach to EDAM’s congestion revenue allocation under an expedited timeline and with an eye towards keeping EDAM’s go-live timely and successful. The Draft Final Proposal generally represents a meaningful and reasonable compromise that addresses many of the concerns raised by Western stakeholders. If implemented, it will help to better retain the value and transactional price certainty of long-term, firm transmission rights, which will continue to be essential under the EDAM—as they are today—for delivering renewable energy across the West and into California.

While the Draft Final Proposal offers substantial progress, it does not fully resolve the new financial exposure created by EDAM for transmission customers who exercise firm transmission rights and submit balanced schedules prior to the day-ahead market run. There remains residual uncertainty and risk, especially when these transmission schedules cross multiple balancing authority areas (BAAs) and given the very real potential that EDAM Entities may not all adopt consistent settlement practices.

Given this uncertainty and risk, Interwest supports the Draft Final Proposal as a beginning foundation, but we urge CAISO and the EDAM Entities to implement additional enhancements that can deliver more comprehensive financial protection and equitable treatment across the market footprint both in the immediate future and as part of post go-live enhancements. As part of the Final Proposal, Interwest urges CAISO to enable direct settlement with transmission customers who submit balanced self-schedules to exercise their firm transmission rights. CAISO should also work with the EDAM Entities to ensure that, where desired, transmission scheduled on before the day-ahead market can be “opted-out” of the market such that it would not be available for EDAM optimization or subject to day-ahead market settlement.

2. Please provide your organization’s feedback regarding the proposed design to congestion revenue allocation (described in section VII of the Draft Final Proposal).

The congestion revenue allocation design in the Draft Final Proposal is a significant improvement over both the current CAISO tariff provisions and prior proposals. It seeks to address many of the challenges associated with protecting transmission rights within EDAM and responds thoughtfully to stakeholder feedback. It appropriately achieves a middle ground on sharing of congestion revenues between EDAM BAAs and focuses the revisions to the sharing approach on congestion revenues associated with firm transmission schedules.

That said, the proposal still does not ensure complete financial insulation for transmission customers using firm rights—particularly for those delivering renewable energy across multiple BAAs – and this was a core tenant of EDAM’s design over the course of the multi-year EDAM stakeholder process. The core challenge with the Draft Final Proposal’s ability to fully protect eligible transmission customers stems from both the reliance on EDAM Entities to adopt consistent allocation methodologies and from the difference between congestion revenue allocation and transfer revenue allocation. First, without uniformity of congestion revenue allocation approaches across all EDAM BAAs, there is a risk of inconsistent and potentially inequitable outcomes for firm transmission customers because there is no guarantee that other EDAM Entities will use the same congestion revenue allocation approach as that proposed by the first two EDAM Entities (PacifiCorp and PGE). Because congestion revenues and transfer revenues are treated differently, there continues to be financial exposure for firm transmission customers under the Draft Final Proposal’s limited set of revisions.

To strengthen the current approach, Interwest recommends two key improvements, which could be addressed before EDAM go-live:

1. CAISO should enable direct settlement of congestion and transfer revenues with firm transmission customers that submit balanced schedules:
   Interwest urges CAISO to provide direct settlement of congestion revenues with transmission customers who schedule firm transmission rights using balanced schedules. This would:
   • Ensure consistent treatment of transmission customers across all EDAM Entities, thereby reducing risk for these customers and better maintaining the value of their rights.
   • Add transparency and fairness by leveraging CAISO’s centralized, independent, and revenue-neutral role.
   • Lay the groundwork for future enhancements to improve treatment of congestion charges on inter-BAA schedules (i.e., on transfer revenues).
     • Ideally, as part of the Final Proposal, CAISO would also provide direct allocation of transfer revenues to transmission customers who exercise their firm transmission rights, which would help reduce their financial exposure. However, we recognize this enhancement would be a more significant revision than CAISO is currently contemplating and may need to be addressed in a subsequent phase of work.
2. CAISO should collaborate with EDAM Entities to enable the use of transmission “opt-outs” for balanced day-ahead schedules:
   While the decision may be up to individual EDAM Entities, CAISO should encourage EDAM Entities to allow transmission that is scheduled prior to the day-ahead market to be “opted out” of market optimization, preserving the integrity of firm schedules and reducing their exposure to market prices (this is important primarily for transmission schedules that cover multiple BAAs and may not be necessary for transmission within a single BAA). CAISO should ensure it can support this functionality at go-live and encourage EDAM Entities to design their tariffs to allow interested customers to avail themselves of this option.

These enhancements would further improve the fairness and reliability of the congestion revenue allocation framework and further reduce uncertainty for firm transmission customers.

Additionally, as a near-term, post go-live enhancement, Interwest strongly supports CAISO’s proposed enhancements to support the allocation of parallel flow congestion revenue based on economically bid balanced self-schedules. This will further improve economic outcomes and enhance EDAM’s benefits while enabling those that economically bid to use their transmission rights to continue to receive a congestion hedge.

3. Please provide your organization’s feedback regarding the future evolution of the design, including the data that will be monitored, transparency measures, and the transitionary period (described in section VII.D of the Draft Final Proposal).

Interwest agrees that it is appropriate to re-evaluate congestion revenue allocation and potentially adopt a revised approach for the longer-term operation of EDAM, informed by experience gained in EDAM’s early operations. Interwest appreciates CAISO’s commitment to convene future working groups and stakeholder initiatives to explore longer-term solutions and we look forward to continuing to work with CAISO and other stakeholders on issues related to congestion revenue allocation.

During the April stakeholder workshop, some participants advocated for a “sunset provision” that would cause the proposed congestion revenue allocation framework to expire after a defined period and then default back to the current CAISO tariff language, which would allocate congestion revenues entirely to the EDAM BAA in which the relevant transmission constraint is contained. Interwest strongly opposes any such sunset provision. The current approach to congestion revenue allocation is broadly viewed as unworkable for entities that rely on Open Access Transmission Tariff (OATT) rights to deliver across the West, particularly those delivering renewable energy from remote locations. Reverting to the current framework, even after some pre-defined period of time, would introduce significant uncertainty for Western clean energy developers and their load-serving entity counterparties, many of which are California LSEs. Forcing a return to this is likely be viewed as highly problematic by many Western parties, including prospective EDAM Entities, and would undermine OATT rights. While Interwest is supportive of EDAM’s evolution to function in a manner where OATT rights are no longer required to deliver across the footprint, that is not how EDAM was designed for its initial stage of operation. The OATT framework cannot realistically be phased out over a two- or three-year period. Any significant changes to the OATT construct will require significant compromise and negotiation, including on transmission cost shifts that would occur. Furthermore, California’s own policies, such as its RPS, require delivery/scheduling of most renewable resources to CAISO on OATT transmission rights. It is not realistic to expect these issues to be resolved over a three-year period and it is therefore not appropriate to establish a “sunset provision” that would revert back to the current tariff.

Interwest requests that CAISO reaffirm that the Draft Final Proposal will remain in place until such time as a durable replacement is agreed upon. The path forward should reflect the reality of the continuing role of transmission rights in EDAM and support a stable and equitable foundation for renewable energy delivery across the region.

With respect to data and transparency, Interwest appreciates CAISO’s proposal to provide increased transparency and data monitoring on this issue. The reporting metrics outlined in the Draft Final Proposal are a helpful starting point. This data will be essential for evaluating the effectiveness of congestion revenue allocation after EDAM goes live. To the extent practicable, CAISO should also begin sharing preliminary versions of this data during market simulations and parallel operations, even if this data sharing merits caveats. The early visibility would provide valuable insights to stakeholders and help guide working group discussions on longer-term solutions.

Interwest looks forward to participating in these efforts and emphasizes the importance of keeping stakeholders engaged as EDAM moves towards go-live and once it is operational.

4. Please provide your organization’s feedback regarding the decisional classification (described in section VIII.B of the Draft Final Proposal).

Interwest agrees that this initiative falls within the scope of joint authority for the Board of Governors and the WEM Governing Body.  

5. Please provide any additional feedback regarding the Draft Final Proposal and stakeholder workshop discussion and materials (April 23rd).

During the April 23^rd workshop, it was apparent that some stakeholders, primarily those that operate in CAISO, do not fully appreciate the OATT construct and EDAM’s intentional design to retain the OATT construct within EDAM Entity areas, at least initially. While Interwest is supportive of moving beyond EDAM to a Regional Transmission Organization (RTO), and will support the evolution of EDAM to something closer to an RTO, removal of the need for and the underlying value of transmission rights under the OATT is not how EDAM was designed. Therefore, the congestion revenue allocation approach and other design provisions must provide a pathway for entities to continue to transact on their OATT rights in a similar manner to what they do today. There are a variety of ways this can be achieved, and the Draft Final Proposal offers significant improvements over the status quo. However, as described elsewhere in our comments, additional improvements would provide a better approach by enabling continued use of OATT rights with price certainty, This will benefit the utilities that rely on projects using those rights and the customers they serve. Therefore, Interwest supports the implementation of the alternative congestion revenue allocation approach in the Draft Final Proposal and encourages CAISO to implement the improvements discussed in our response to question #2.

1. Please provide a summary of your organization’s overall feedback on the Extended Day-Ahead Market (EDAM) Congestion Revenue Allocation Draft Final Proposal.

NIPPC supports the draft final proposal to revise congestion revenue allocation in EDAM as

a significant improvement to the existing method of congestion revenue allocation.

2. Please provide your organization’s feedback regarding the proposed design to congestion revenue allocation (described in section VII of the Draft Final Proposal).

NIPPC agrees that the proposed Draft Final Proposal represents an improvement over the

current process which allocates all congestion revenue to the BAA where a constraint is

located. Rather, the Draft Final Proposal would allocate congestion revenue to the BAAs

where the congestion revenue materializes (based on the balanced self-schedules of

customers using long-term and monthly transmission rights). This ensures that customers

with transmission rights on parallel paths impacted by a congestion constraint in a

diKerent BAA will have an opportunity to share in congestion revenues collected from the

market.

3. Please provide your organization’s feedback regarding the future evolution of the design, including the data that will be monitored, transparency measures, and the transitionary period (described in section VII.D of the Draft Final Proposal).

NIPPC does not support stakeholders who proposed a 3-year sunset period for the changes in the Draft

Final Proposal. NIPPC does agree that the congestion revenue mechanisms in EDAM should continue to

evolve. NIPPC does support the collection and sharing of data as outlined in the Draft Final Proposal.

Initially, NIPPC supports the proposed three year timeline to collect and analyze data and develop

recommendations for future refinements associated with congestion revenue allocation. NIPPC would

support including consideration of a future conversion of OATT transmission rights to a congestion

revenue or financial transmission rights design for the entire EDAM footprint.

4. Please provide your organization’s feedback regarding the decisional classification (described in section VIII.B of the Draft Final Proposal).

NIPPC agrees that the Board and WEM Governing Body have joint authority over the

changes proposed in the Draft Final Proposal.

5. Please provide any additional feedback regarding the Draft Final Proposal and stakeholder workshop discussion and materials (April 23rd).

No additional comments

1. Please provide a summary of your organization’s overall feedback on the Extended Day-Ahead Market (EDAM) Congestion Revenue Allocation Draft Final Proposal.

See attached.

2. Please provide your organization’s feedback regarding the proposed design to congestion revenue allocation (described in section VII of the Draft Final Proposal).

See attached.

3. Please provide your organization’s feedback regarding the future evolution of the design, including the data that will be monitored, transparency measures, and the transitionary period (described in section VII.D of the Draft Final Proposal).

See attached

4. Please provide your organization’s feedback regarding the decisional classification (described in section VIII.B of the Draft Final Proposal).

NV Energy supports the joint authority classification.

5. Please provide any additional feedback regarding the Draft Final Proposal and stakeholder workshop discussion and materials (April 23rd).

See attached.

1. Please provide a summary of your organization’s overall feedback on the Extended Day-Ahead Market (EDAM) Congestion Revenue Allocation Draft Final Proposal.

PG&E appreciates the opportunity to comment on CAISO’s EDAM Congestion Revenue Allocation (CRA) Draft Final Proposal.

While PG&E recognizes CAISO efforts to create a reasonable proposal, we still see remaining challenges. We offer the following key points:

• PG&E sees the potential to improve the Draft Final Proposal by adding reasonable guardrails, reducing the risk for inequity between participants.
• PG&E supports CAISO’s suggestion to immediately begin working on a long-term solution that is more equitable and, if possible, addresses the self-scheduling incentive.
• The transitional nature of this proposal should be more explicitly defined. Specifically, CAISO should set a concrete goal to develop, and receive BoG and WEM GB approval, of a long-term solution within 12-18 months of EDAM launch.
• The transitional measure should create a bridge between today and a future long-term proposal, which cannot include a full congestion hedge for all current firm point-to-point or NITs customers. All EDAM participants need to start working towards a long-term solution, which could mean immediate changes to the terms and practices in EDAM participants OATT sales.

2. Please provide your organization’s feedback regarding the proposed design to congestion revenue allocation (described in section VII of the Draft Final Proposal).

PG&E sees the potential to improve the Draft Final Proposal by adding reasonable guardrails, reducing the risk for inequity between participants. The Draft Final Proposal allocates congestion dollars to hedge the self-scheduled balanced OATT rights first, then allocating the balance to the BAA with the constraint. In a case where the hedge amount is greater than the net-over collection in OATT right holder’s BAA, the constrained BAA can actually pay ‘out of pocket.’ If this were to happen systematically to one BAA, that BAA could be significantly hurt by the design.

The current proposal relies on the volume of balanced self-scheduled OATT rights in one BAA being roughly equivalent to the number in another (or ETC/TORs in CA) for there to be equity.  In the case that the amount of consequential OATT/NIT rights is disproportionate to another, there could be significant inequity. While OATT rights holders and NITS customers do deserve a significant hedge; their rights do not take priority over customers in other BAAs.

Here are the principles that PG&E has developed. The CRA solution:

• Cannot hurt any one BAA. For CAISO, the EDAM CRA cannot reduce the current funding of Congestion Revenue Rights (CRRs).

• Cannot rely on “rough justice” to achieve equity.
• Should not assume the shift factors will be small and that therefore the problem will be small.

PG&E recommends CAISO put in a guardrail to have some sort on cap how much can be taken from a BAA under the CRA. One possible idea is to average the total amount of dollars paid to CRRs over a given number of years and cap the congestion revenue sharing. Or another possibility would be to calculate how much congestion revenue each BA would have received under the Issue Paper proposal and make that the cap. Even a bad guardrail is better than nothing.

3. Please provide your organization’s feedback regarding the future evolution of the design, including the data that will be monitored, transparency measures, and the transitionary period (described in section VII.D of the Draft Final Proposal).

PG&E supports CAISO’s suggestion to immediately begin working on a long-term solution that is more equitable and, if possible, addresses the self-scheduling incentive.  Furthermore, the transitional nature of this proposal should be more explicitly defined. Specifically, CAISO should set a concrete goal to develop, and receive BoG and WEM GB approval, of a long-term solution within 12-18 months of EDAM launch.

The transitional measure should create a bridge between today and a future long-term proposal, which cannot include a full congestion hedge for all current firm point-to-point or NITs customers. All EDAM participants need to start working towards a long-term solution, which could mean immediate changes to the terms and practices in EDAM participants OATT sales.

4. Please provide your organization’s feedback regarding the decisional classification (described in section VIII.B of the Draft Final Proposal).

No comments

5. Please provide any additional feedback regarding the Draft Final Proposal and stakeholder workshop discussion and materials (April 23rd).

We really appreciate the work that went into developing the examples. These were excellent and greatly appreciated.

1. Please provide a summary of your organization’s overall feedback on the Extended Day-Ahead Market (EDAM) Congestion Revenue Allocation Draft Final Proposal.

Portland General Electric (“PGE”) appreciates the California ISO’s efforts to develop a targeted solution in response to Point-to-Point Transmission Service Customer concerns.  PGE supports both the limited fix and ongoing performance evaluation following EDAM go-live.  PGE believes this proposal is a positive and balanced step towards equitable congestion revenue distribution for both OATT customers and market participants

2. Please provide your organization’s feedback regarding the proposed design to congestion revenue allocation (described in section VII of the Draft Final Proposal).

PGE supports the refined approach, as it provides a targeted solution for managing congestion revenue associated with parallel flows, ensuring fairness across market participants while maintaining operational stability.

3. Please provide your organization’s feedback regarding the future evolution of the design, including the data that will be monitored, transparency measures, and the transitionary period (described in section VII.D of the Draft Final Proposal).

PGE is generally supportive of the efforts to provide an approach that emphasizes fairness, equity and transparency, including ongoing monitoring and evaluation of the transitional proposal. PGE suggests that the CAISO proceed with the design evolution and continue to seek stakeholder input. PGE appreciates the CAISO’s commitment to data-driven improvements, stakeholder participation, and oversight mechanisms which help ensure accountability and market design adaptability.

4. Please provide your organization’s feedback regarding the decisional classification (described in section VIII.B of the Draft Final Proposal).

PGE is generally supportive of the decisional classification.

5. Please provide any additional feedback regarding the Draft Final Proposal and stakeholder workshop discussion and materials (April 23rd).

N/A

1. Please provide a summary of your organization’s overall feedback on the Extended Day-Ahead Market (EDAM) Congestion Revenue Allocation Draft Final Proposal.

Summary

Powerex appreciates the opportunity to comment on the California ISO’s April 16, 2025 EDAM Congestion Revenue Allocation Draft Final Proposal (“Proposal”) and the associated discussion at the April 23 stakeholder meeting.

Powerex believes the Proposal is a significant improvement over the current EDAM tariff, as it:

1. Appears to provide a sufficient congestion revenue allocation to EDAM Entities to enable them to provide a proper source-to-sink congestion hedge for registered monthly or longer firm OATT transmission rights that are self-scheduled in the day-ahead market; and
2. Appears to be consistent with the policy design in the EDAM Final Proposal that was approved by the California ISO’s Board of Governors and the WEIM Governing Body in February 2023. 

The Proposal falls short, however, of providing a more comprehensive and durable solution that would enable EDAM Entities to:

1. Fund proper source-to-sink congestion hedges for monthly or longer firm OATT transmission rights, regardless of whether they are self-scheduled or used to support economic bids (such as the framework developed and adopted by SPP’s Markets+); and
2. Fund such hedges for the duration of OATT investments, which often extend for many years, and even decades.

Powerex nonetheless supports the Proposal’s congestion revenue allocation methodology for self-scheduled firm OATT rights as a step in the right direction.

At the same time, Powerex remains concerned about:

1. The “transitional” nature of the Proposal; and
2. The California ISO’s statements in this stakeholder process and at FERC indicating that it continues to support—and may eventually revert to—a congestion revenue allocation approach that results in charges to OATT firm rights for parallel flow congestion.

The combination of these two elements continues to create immense uncertainty throughout the West, which serves to significantly undermine both longer-term OATT transmission investments and longer-term supply arrangements.

A Durable Commitment By The California ISO To Respect Firm OATT Rights Is Necessary To Restore Confidence

It is critical to bear in mind that, outside of the CAISO BAA, transmission service across the West will continue to be provided under FERC’s pro forma OATT framework for the foreseeable future.  Customers across the West will continue to rely on OATT transmission service—including both existing and new service—to support the power supply arrangements needed to serve load, including to build or contract for new resources.  Transmission providers across the West will similarly continue to rely on the sale of OATT transmission service, under both existing and new service agreements, to provide funding for transmission facilities and for expansion of the transmission grid.  For these reasons, it is vital that all regional programs and markets do not interfere with or degrade transmission service under the OATT framework.  For an LMP-based day-ahead market like EDAM to be compatible with the OATT framework—now and going forward—it must workably reflect the core properties of OATT transmission service, including physical delivery priority and protection from new day-ahead congestion charges.

This stakeholder process was necessary as a result of filings at FERC by PacifiCorp and by Portland General Electric—with the support of the California ISO—to implement EDAM in a manner that fails to provide this vital compatibility with the OATT framework.  As evidenced by the numerous protests filed by a range of differently-situated entities (including supporters of EDAM), these efforts have shaken the confidence of customers across the region, and injected unnecessary uncertainty that impedes entities’ ability to move forward with forward power supply commitments and investments.  Yet as recently as last week, the California ISO still defended the existing EDAM design as just and reasonable, and continues to frame any potential revisions to that design as “transitional.”  Restoring the confidence needed to enable the forward arrangements that help ensure reliable and affordable electricity service to consumers requires more than an interim or partial “fix”; it requires a clear and unequivocal commitment by the California ISO to not degrade the core attributes of transmission service under the OATT framework.  Powerex therefore urges the California ISO to commit in the Final Proposal to ensuring that the core elements of OATT transmission service are accurately reflected in the design of EDAM, and to pursuing future enhancements in a manner consistent with this commitment. 

Limitations Of The Proposal

In Powerex’s view, the Proposal appears to largely address the exposure to parallel flow congestion in the limited circumstances of self-schedules using longer-term firm rights in EDAM. Powerex recognizes, however, that there remain extensive concerns that have been expressed by stakeholders, as well as by the California ISO’s Market Surveillance Committee and the WEM Governing Body’s Independent Market Expert.  These concerns include:

• Uncertainty about the relative magnitude of the congestion revenues potentially at issue, which have not been analyzed by the California ISO;[1]
• Concerns that the Proposal will create incentives to self-schedule supply rather than to participate in economic dispatch, limiting the benefits of EDAM;
• Concerns that the Proposal may fail to provide protection from congestion charges to loads served by EDAM Entities (which are often the dominant load-serving entity in their BAA), since these entities presumably seek to obtain the benefits of economic dispatch of their systems, which is not provided a hedge under the Proposal; and
• Concerns that the Proposal may fail to provide protection to customers in the CAISO BAA, where price separation may also be due to constraints in other EDAM BAAs, but where there is no analog to physical transmission rights that would be associated with self-schedules.

Powerex believes these are all valid concerns that would require further discussion and examination in order to achieve broad support for a new congestion revenue allocation approach.  Further discussion of the proposed approach can reveal and avoid unintended consequences, develop more effective approaches, and build broad stakeholder support for the selected approach.  However, the California ISO has set an aggressive timetable for finalizing a new solution, to avoid undue delay in implementing EDAM, that would appear to preclude substantive examination of these remaining issues and concerns.

The Continued Need For A Limited “Carve Out”

Powerex believes it would be beneficial to “de-link” development of a new, alternative EDAM congestion revenue allocation framework from the timeline for EDAM implementation by the California ISO and interested EDAM Entities.  This could be achieved by addressing the central element of the protests filed at FERC against the PacifiCorp and Portland General Electric amendments directly by providing the requested limited “carve-out,” rather than by forging ahead with an EDAM tariff change that has numerous unresolved stakeholder concerns.  Most if not all of the protests at FERC have requested a limited “carve-out” to enable the use of OATT transmission rights without being forced to do so through EDAM. As explained by Dr. David Patton of Potomac Economics, enabling customers to use their firm OATT rights outside of EDAM would not reduce the efficiency of EDAM or raise any concerns about potential “stranding” of transmission capacity.[2]  A limited “carve out” would also ensure that customers that invest in OATT service do not face barriers to the use of that service to support transactions or activity unrelated to EDAM, or to participate in other regional programs or markets.

A limited “carve out” could resolve the immediate concerns raised in current FERC proceedings for EDAM entrants, allowing EDAM implementation to move forward under the existing approved tariff while freeing the California ISO and stakeholders from artificial time constraints to more fully explore appropriate approaches for allocation of congestion revenues in EDAM. 

[1] In a February 2025 paper, Powerex estimated that west-wide congestion revenues may be between $137 million and $995 million per year, depending on the average price differentials between the Northwest and Southwest, and on the quantity of transfers scheduled between the regions.  See PacifiCorp’s Recent FERC Filing Reveals a Major EDAM Market Design Flaw (February 11, 2025) at 13-14.

[2] See, “Testimony of David B. Patton, Ph.D. on Behalf of Powerex Corp” at 21-27.  Submitted as Attachment B to Powerex’s May 1, 2025 protest of Portland General Electric Company’s proposed OATT amendments, FERC Docket No. ER25-1868.

2. Please provide your organization’s feedback regarding the proposed design to congestion revenue allocation (described in section VII of the Draft Final Proposal).

See above. Comments also attached.

3. Please provide your organization’s feedback regarding the future evolution of the design, including the data that will be monitored, transparency measures, and the transitionary period (described in section VII.D of the Draft Final Proposal).

See above. Comments also attached.

4. Please provide your organization’s feedback regarding the decisional classification (described in section VIII.B of the Draft Final Proposal).

See above. Comments also attached.

5. Please provide any additional feedback regarding the Draft Final Proposal and stakeholder workshop discussion and materials (April 23rd).

See above. Comments also attached.

1. Please provide a summary of your organization’s overall feedback on the Extended Day-Ahead Market (EDAM) Congestion Revenue Allocation Draft Final Proposal.

Salt River Project Agricultural Improvement and Power District (SRP) appreciates the opportunity to comment on the CAISO’s Draft Final Proposal for EDAM Congestion Revenue Allocation. SRP supports the CAISO’s efforts to find a fair and equitable resolution for all stakeholders regarding the allocation of congestion revenues based on parallel flows. The proposed design for congestion revenue allocation described in the Draft Final Proposal attempts to strike that balance by focusing on transmission right holders instead of focusing on the allocation of congestion solely at the balancing authority level.

While supportive of the Draft Final Proposal, SRP reiterates its preference that transmission customers of EDAM Entities have the option to carve their transmission out of EDAM altogether. SRP believes a transmission carve-out would be a more complete solution.

SRP remains concerned about the expedited schedule for this initiative. The concepts being considered here are complicated, and the amount of congestion revenues at stake are potentially significant. The CAISO should take the time necessary to ensure a reasonable and durable outcome.

If the alternative approach is approved, SRP urges the CAISO to keep the approach in place as the baseline framework until more permanent enhancements are adopted through a stakeholder process. In other words, CAISO’s Draft Final Proposal should be considered the “default” policy until potential long-term enhancements are proposed, scoped, and implemented. It is important that firm transmission rights holders on EDAM Entity systems: 1) have confidence in an effective congestion hedge for longer than three years; 2) can count on firm scheduling priority; and 3) can use their Open Access Transmission Tariff (OATT) rights in the market of their choosing. SRP continues to encourage the CAISO to work with stakeholders to develop guiding principles for a long-term approach to congestion revenue allocation.

SRP appreciates the CAISO clarifying the limited scope of this initiative. Because this initiative does not address concerns with intra-day scheduling of firm transmission rights and carve-outs are out of scope, it will be important for SRP to continue to engage in the stakeholder processes of each EDAM Entity and their respective FERC filings.

2. Please provide your organization’s feedback regarding the proposed design to congestion revenue allocation (described in section VII of the Draft Final Proposal).

SRP considers the proposed design for congestion revenue allocation described in the Draft Final Proposal to be a significant improvement to the alternative approach shared in the March 17 Issue Paper. SRP supports the more tailored approach to allocating parallel flow congestion revenues associated with eligible firm Point to Point (PTP) and Network Integrated Transmission Service (NITS) OATT transmission rights that are self-scheduled. SRP is appreciative of the CAISO’s efforts and willingness to listen to customers in that regard and revise its proposal. SRP also supports the revisions that address concerns related to a balancing authority area (BAA) being exposed to congestion costs when it provides counterflow.

Despite support for the Draft Final Proposal, SRP would prefer that transmission customers of EDAM Entities have the option to carve their transmission out of EDAM altogether. The CAISO has said carve-outs are beyond the scope of this initiative; however, SRP believes the CAISO and EDAM Entities are missing an opportunity to help the development of day-ahead markets in the Western Interconnection by defining the scope of this initiative so narrowly.

In addition to benefiting transmission customers, transmission carve-outs would eliminate the need for the CAISO to optimize and settle transmission that will not be used for load service in EDAM. The general positions of the CAISO and EDAM Entities that EDAM functions better with all transmission in the market is inaccurate. The reality is that the transmission that will be self-scheduled out of EDAM will not benefit the EDAM optimization or settlement process; in fact, the opposite is true. It will only make it more complicated, expensive, and cumbersome for the CAISO, EDAM Entities, and transmission customers. Thus, SRP believes the CAISO should reconsider its position on this. Allowing carve-outs would resolve issues regarding the allocation of congestion charges and revenues and address other concerns such as those associated with intra-day scheduling.

SRP also continues to have concerns about the expedited schedule for this initiative. Because of the complicated concepts being considered and potentially significant congestion revenues and charges that would be affected, the CAISO should take adequate time to perform analysis and consider potential unintended consequences. Given the impact to all stakeholders, continuity of policy drivers and principles are important. Unpredictable policy shifts that have significant negative impacts on transmission customers that have made long-term investments in transmission systems in EDAM should be avoided.

3. Please provide your organization’s feedback regarding the future evolution of the design, including the data that will be monitored, transparency measures, and the transitionary period (described in section VII.D of the Draft Final Proposal).

As noted above, SRP generally supports the CAISO’s Draft Final Proposal as a fair and reasonable solution. The Draft Final solution should become the “default” policy regarding allocation of congestion revenues for parallel flows. Any changes to the allocation of congestion revenues in this context should build upon and enhance the Draft Final Proposal. The CAISO should not revoke or drastically change the policy back to the status quo. It is also highly uncertain (if not unlikely) that EDAM, which is based on physical OATT rights, will easily lend itself to a solution involving congestion revenue rights that the CAISO utilizes in its BAA in the foreseeable future without significant complication, expense, and potentially litigation.

As stated in comments on the Issue Paper, SRP believes it is important for the CAISO and its stakeholders to develop and agree on a set of principles regarding how congestion revenue will be allocated applicable to any market or design going forward. SRP believes the following principles should guide future changes to congestion revenue allocation:

• Recognize and preserve (or even enhance) the value of long-term firm transmission rights of transmission customers in the EDAM footprint through market and tariff design.
• Provide an effective financial congestion hedge for schedules using long-term and monthly firm transmission within the EDAM footprint, even if the schedules will export power out of, or wheel power through, the EDAM footprint. This hedge should be extended to conditional firm service as well.
• Recognize that parallel flow impacts may originate from entities outside of EDAM and ensure equitable treatment of those entities.
• Create a common approach and uniform treatment throughout the EDAM footprint – transitioning from the current Transmission Service Provider-dependent/BAA-level approach.
• Enable efficient interchange transactions in a western interconnection with multiple markets.

4. Please provide your organization’s feedback regarding the decisional classification (described in section VIII.B of the Draft Final Proposal).

SRP agrees that any proposed tariff changes that result from this initiative should be subject to the joint authority of the Board of Governors and the Western Energy Markets Governing Body.

5. Please provide any additional feedback regarding the Draft Final Proposal and stakeholder workshop discussion and materials (April 23rd).

No additional comments.

1. Please provide a summary of your organization’s overall feedback on the Extended Day-Ahead Market (EDAM) Congestion Revenue Allocation Draft Final Proposal.

San Diego Gas and Electric (SDG&E) appreciates CAISO’s efforts to evaluate stakeholder feedback and to provide an overview of the Extended Day-Ahead Market congestion revenue allocation (EDAM CRA) issue, the updated proposal, and the proposed methods for addressing stakeholder concerns. SDG&E continues to support implementation of EDAM in a manner that facilitates broad participation and maximizes market benefits. Regarding EDAM CRA, SDG&E encourages CAISO and stakeholders to continue working towards a durable long-term solution.

Based on stakeholder feedback and the discussion at the April 23 workshop, the updated transitional proposal endeavors to address stakeholder concerns related to the initial version. That said, stakeholder concerns demonstrate that this proposed approach is not a long-term solution. We understand that a transitional approach is needed as a starting point due to the expedited timeline but encourage CAISO to make near-term adjustments if necessary and to prioritize development of a long-term solution.

2. Please provide your organization’s feedback regarding the proposed design to congestion revenue allocation (described in section VII of the Draft Final Proposal).

SDG&E greatly appreciates CAISO’s willingness to consider additional near-term enhancements if needed, as well as CAISO’s clarification regarding how and when long-term design changes will be considered.

As CAISO is aware, a number of stakeholders are concerned with an open-ended approach to implementation of the transitional congestion revenue allocation methodology. SDG&E shares these concerns. Due to the expedited timeline of this initiative, CAISO has not provided analysis identifying which constraints are most likely to bind or the magnitude of congestion revenue allocation shift that is possible under this approach. Given the absence of this information, it is critical to have a well-defined transitional period that recognizes the potential for unintended consequences due to congestion cost shifts between EDAM balancing authority areas (BAA) and allows for adjustments if the methodology does not support market efficiency. The updated proposal moves in the right direction, identifying how CAISO will monitor and share the effects of the proposed design and indicating how enhancements may be considered. But additional work is still required, and modifications are necessary, as outlined below under Q3.

In addition to SDG&E’s feedback on the transitional design, we also offer several comments related to issues that were raised during the April 23 stakeholder meeting. First, SDG&E requests that CAISO clearly defines which open access transmission tariff (OATT) rights are eligible for congestion revenue allocation in the final proposal. The Draft Final Proposal states that long-term firm and monthly firm point-to-point (PTP) rights, as well as network integrated transmission service (NITS) rights, will be eligible for this treatment. However, during the call, CAISO staff said conditional firm rights will also be eligible. While SDG&E is not opposed to the inclusion of these rights, a clear eligibility definition is necessary so that all stakeholders have the same understanding. Second, SDG&E appreciates the presentation and discussion regarding impacts on Congestion Revenue Rights (CRRs) from implementation of this proposal. Although it is clear that the approach to funding and allocation will not change, we recommend that CAISO explore this topic further to ensure that implementation of the proposal does not result in negative CRR funding and allocation impacts. We support the inclusion of this discussion in the most appropriate forum, whether in a subsequent phase of this initiative or within the CRR Enhancements initiative following market-sim or EDAM go-live.  

3. Please provide your organization’s feedback regarding the future evolution of the design, including the data that will be monitored, transparency measures, and the transitionary period (described in section VII.D of the Draft Final Proposal).

SDG&E understands that this initiative is intended to address the concerns of some entities regarding congestion cost exposure associated with the exercise of firm OATT rights. The Draft Final Proposal outlines a more tailored approach that would, given certain conditions, re-allocate parallel flow congestion revenues to the BAA in which the congestion revenue accrued. The “future evolution of the design” section establishes that this would be a thoroughly monitored design enhancement but does not provide a concrete sunset date for this methodology.

While SDG&E recognizes and greatly appreciates CAISO’s efforts to modify the proposal, we submit the following comments to give further perspective on the topic and highlight that additional enhancements are necessary.

1. Additional information is needed on how CAISO will identify increased, inefficient self-scheduling of generation used to receive a greater, more complete, congestion hedge. It is unclear how simply tracking the volume of self-scheduling across EDAM BAAs will identify anomalies that could indicate gaming. To the extent appropriate, SDG&E recommends that CAISO include additional details on how this concern will be addressed in the final proposal.   
2. CAISO should acknowledge the range of possible near-term adjustments to the allocation methodology should there be significant market inefficiencies. While SDG&E believes the transition period will allow CAISO to collect and evaluate data that will better inform the design of an optimal long-term solution, it is important that CAISO consider all possibilities for near-term enhancements should this proposal result in significant unintended consequences following EDAM go-live. Should a substantive issue arise, any changes to the proposal should find an appropriate balance between all of the guiding objectives.
3. CAISO should consider ways to incentivize economic scheduling of transmission in the market as a near-term enhancement. As contemplated in the Draft Final Proposal, an incremental enhancement that provides a congestion hedge for firm PTP and NITS OATT transmission rights holders that economically participate in the market should be explored. This requires more time and resources than this expedited stakeholder initiative allows, but it may result in better incentives and improved market efficiency in EDAM and could be addressed following approval of the transitional approach.

SDG&E is looking forward to working with CAISO and other stakeholders to develop a long-term solution that strikes a reasonable and workable balance between all of the guiding objectives outlined in the Draft Final Proposal. As described above, we believe further discussions on data monitoring and future evolution of the design are necessary to avoid negative impacts from cost-shifts and to ensure market efficiency. SDG&E hopes these outstanding issues will be addressed by CAISO in the next iteration of the proposal.

4. Please provide your organization’s feedback regarding the decisional classification (described in section VIII.B of the Draft Final Proposal).

No comment.

5. Please provide any additional feedback regarding the Draft Final Proposal and stakeholder workshop discussion and materials (April 23rd).

No comment.

1. Please provide a summary of your organization’s overall feedback on the Extended Day-Ahead Market (EDAM) Congestion Revenue Allocation Draft Final Proposal.

Six Cities’ Comments:  The Six Cities do not oppose implementation of the approach for allocating Extended Day-Ahead Market (“EDAM”) congestion revenues as described in the Draft Final Proposal on a basis that (i) is expressly transitional and (2) is limited in application to eligible OATT rights existing as of the go-live date for the EDAM.  The Six Cities oppose application of the revised method for allocating congestion revenues as described in the Draft Final Proposal to support congestion hedges for OATT transmission rights secured after the go-live date for the EDAM (including any renewal rights under initially eligible agreements), because applying the revised allocation methodology will create adverse incentives that will undermine the efficiency and reliability of the EDAM and effectively create an unjust and unreasonable preference for OATT transmission service over transmission for market transactions.

The Six Cities also support immediate commencement of a Phase 2 for this initiative to explore a more durable mechanism to address parallel flow impacts that will support both efficiency and reliability.  The commencement of the Phase 2 initiative should include adoption of a realistic but well-defined timeline for progression of the initiative as well as an express commitment to prioritize the effort to develop a better solution.  The Six Cities also recommend consideration of monitoring efforts relating to the impacts of parallel flows prior to the implementation of the EDAM so as to establish a baseline against which to evaluate the effects of the proposed method for allocating congestion revenues when the EDAM commences operation.

2. Please provide your organization’s feedback regarding the proposed design to congestion revenue allocation (described in section VII of the Draft Final Proposal).

Six Cities’ Comments:  The Six Cities appreciate the CAISO’s consideration of and responsiveness to comments on the alternative approach for allocation of EDAM congestion revenues reflected in the March 17, 2025 Issue Paper and consider the revised approach described in the April 16, 2025 Draft Final Proposal a significant improvement over the Issue Paper methodology, although it appears to establish an asymmetry between the CAISO balancing authority and external balancing authorities to the extent that no CAISO transmission transactions will qualify for the transitional allocation mechanism.  Nonetheless, the Six Cities remain concerned with the proposed scope of application of the revised methodology in the Draft Final Proposal.  Specifically, for the reasons described below, the Six Cities oppose application of the revised allocation method described in the Draft Final Proposal to contracts for OATT service entered into after the go-live date for the EDAM.

The draft Final Proposal addresses allocation of congestion revenues associated with the impact of so-called parallel or unscheduled flows on an integrated transmission network.  Based on discussions of such impacts during recent meetings of the CAISO’s Market Surveillance Committee (“MSC”) and the Western Energy Markets (“WEM”) Governing Body, as well as the stakeholder meeting on April 23, 2025, the Six Cities understand that parallel flows can arise as a result of any injection of power into an integrated transmission network or any withdrawal of power from the network.  Stated differently, parallel flows can occur as a result of power dispatched in accordance with market optimization or injections or withdrawals associated with OATT transmission service.  One difference, however, is that market optimization includes consideration of the impacts of parallel flows in selection of resources for dispatch, but implementation of OATT transmission service historically has not considered parallel flow impacts. 

The EDAM market optimization will both seek to minimize the impacts of parallel flows that are uneconomic and expose the price impacts of parallel flows that are economic through congestion charges.  The Draft Final Proposal recommends a transitional methodology for allocating revenues recovered through the congestion charges to BAAs with transmission customers exercising certain OATT rights in order to provide such customers a hedge against such charges arising from parallel flows.  The Six Cities note that under the proposal, the only eligible contracts that are proposed to qualify for this treatment are specified long term OATT service agreements; because the CAISO and its Participating Transmission Owners do not engage in sales of such transmission rights, the Six Cities understand that the CAISO does not have contracts that will qualify for parallel treatment.[1]  As such, any benefits of the transitional methodology will be exclusively available to external BAs and their transmission service customers.  Nevertheless, the Six Cities do not oppose implementation of the revised congestion revenue allocation methodology on a transitional basis to enhance congestion hedges for OATT arrangements in place at the EDAM go-live date.  It would be unjust, unreasonable, and unduly discriminatory, however, to apply the proposed allocation methodology for the benefit of OATT contracts entered into after the EDAM go-live date.

Applying the proposed allocation methodology to new OATT contracts entered into after the EDAM go-live date would create an unwarranted preference for OATT transactions over market transactions.  Dr. Susan Pope, the WEM Governing Body Market, noted in an April 8, 2025 presentation to that Body that the OATT paradigm of firm transmission rights without regard to the potential impacts of parallel flows does not fit well with how power flows over a system.  She expressed the view that charging OATT customers for congestion (consistent with the congestion revenue allocation method included in the existing EDAM design as submitted to and approved by FERC) aligns with appropriate economic principles, because it even-handedly charges both market transactions and bilateral scheduled transactions for parallel flow impacts and avoids disincentives for flexible bidding.  See Pope 4/8/25 presentation at Slide 9.  Dr. Pope identified concerns that shielding OATT schedules from any responsibility for impacts of parallel flows could encourage inefficient dispatch of resources and increase reliability challenges during stressed conditions (id. at Slide 18), and she recommended consideration of establishing fixed “flow entitlements” for parallel flows (id. at Slide 18).  Similarly, MSC Member Dr. Scott Harvey indicated at a March 28, 2025 MSC meeting that it would be unreasonable to keep selling OATT service without limits on loop flow.  In addition, at the MSC meeting on May 2, 2025, Dr. Harvey presented an extensive analysis demonstrating that the proposed approach will increase incentives for self-scheduling to increase collection of congestion revenues, thereby reducing efficiency and undermining the benefits of the EDAM.  Dr. Harvey also noted a potential for self-scheduling of phantom generation, which could have an adverse impact on reliability.

Limiting the application of the Draft Final Proposal congestion revenue allocation methodology to OATT contracts entered into prior to the EDAM go-live date would parallel the treatment approved by FERC for ETCs existing on the CAISO system at the inception of the CAISO’s markets.  ETCs in place at the time of the CAISO’s formation were granted a “perfect hedge” against congestion charges for the original duration of such contracts, but not for any extensions of such ETCs.  Applying the congestion revenue allocation method in the Draft Final Proposal to contracts existing as of EDAM go-live likewise would provide reasonable accommodation for the expectations of OATT customers under contract existing as of that date.  But there is no reason why customers purchasing OATT service under contracts executed after that date—including with respect to the exercise of any renewal rights—should expect to receive greater protection from the impacts of parallel flow than customers receiving supply from the EDAM, and there is no legitimate basis for an assumption on the part of such customers that the attributes of OATT service will remain unchanged in perpetuity.

[1] The Six Cities do not consider the treatment of Existing Transmission Contracts (“ETCs”) and Transmission Ownership Rights within the CAISO to provide comparability, because the CAISO through a separate process provides the perfect hedge to these arrangements under rules that are a longstanding element of the CAISO markets and proposes to simply retain that structure under the Draft Final Proposal. 

3. Please provide your organization’s feedback regarding the future evolution of the design, including the data that will be monitored, transparency measures, and the transitionary period (described in section VII.D of the Draft Final Proposal).

Six Cities’ Comments:  The Draft Final Proposal expressly contemplates that the congestion revenue allocation method described therein will be transitional, but it does not include a sunset date after which congestion revenues would be allocated as prescribed in the EDAM design approved by FERC nor establish any explicit bookends for the transition period.  So long as OATT customers are relieved to a significant degree from the consequences of parallel flow, and especially if (contrary to the Six Cities’ recommendation above) the same congestion revenue allocation is available for new OATT contracts, they have limited incentive to participate constructively in efforts to develop a more efficient and equitable approach for addressing parallel flow impacts.  The Six Cities, therefore, support immediate commencement of a Phase 2 for this initiative to explore a more durable mechanism to address parallel flow impacts that will support both efficiency and reliability.  The commencement of the Phase 2 initiative should include adoption of a realistic but well-defined timeline for progression of the initiative as well as express commitment to prioritize the effort to develop a better solution.  Initial objectives of the Phase 2 initiative should include identification of metrics to be monitored, including impacts of parallel flows associated with OATT schedules on dispatch efficiency and reliability.  The Six Cities also recommend the use of monitoring efforts relating to the impacts of parallel flows prior to the implementation of the EDAM so as to establish a baseline against which to evaluate the effects of the proposed method for allocating congestion revenues when the EDAM commences operation.

4. Please provide your organization’s feedback regarding the decisional classification (described in section VIII.B of the Draft Final Proposal).

Six Cities’ Comments:  The Six Cities agree with the CAISO’s proposed decisional classification for the Draft Final Proposal as subject to the joint authority of the CAISO Board of Governors and the WEM Governing Body.

5. Please provide any additional feedback regarding the Draft Final Proposal and stakeholder workshop discussion and materials (April 23rd).

Six Cities’ Response:  The Six Cities have no additional comments at this time.

1. Please provide a summary of your organization’s overall feedback on the Extended Day-Ahead Market (EDAM) Congestion Revenue Allocation Draft Final Proposal.

SCE agrees with the efforts to limit how much transmission will be subject to the transition mechanism but thinks that there should be additional limits imposed and a firm end date for the transition mechanism.

2. Please provide your organization’s feedback regarding the proposed design to congestion revenue allocation (described in section VII of the Draft Final Proposal).

SCE believes that the CAISO’s proposed design for EDAM congestion revenue allocations is moving in the right direction. The most recent version limits the congestion revenue allocation for parallel flow to OATT firm transmission holders, which the CAISO believes should reduce the amount of congestion revenue that will need to be re-allocated. It seems that this would reduce incentives for the BAA to self schedule in the day ahead market, but that depends on whether the BAA holds NITS firm transaction that they would be able to self-schedule under a CRN. CAISO should provide data on how much Point-to-Point and how much NITS service has been sold in potential EDAM BAAs.

For existing third-party transmission customers, it makes sense to provide a transition period during which they receive as close as possible to their current product, but because of the potential market impacts, such as inefficient self-scheduling to receive the congestion revenue, the amounts of these accommodations should be minimized. SCE recommends that the accommodation should only apply to existing contracts (at the time when parties join EDAM), or only allow this treatment for some limited time (e.g., three years) after a party joins EDAM.  

The CAISO should be clearer that the new proposal is only for a transition period and is not a permanent accommodation (see our answer to the next question).

The CAISO should also clearly state that CAISO TOR and ETC contracts, which already have CRNs, would be given the same treatment as OATT firm transmission customers in other BAAs. Any parallel flow congestion revenue from other BAAs should be returned to the CAISO BAA for appropriate distribution.

3. Please provide your organization’s feedback regarding the future evolution of the design, including the data that will be monitored, transparency measures, and the transitionary period (described in section VII.D of the Draft Final Proposal).

As explained in the previous answer, SCE understands the need to ensure that third-party entities which have previously purchased OATT transmission continue to receive the value that they procured for a transition period. However, given the potential incentives to self-schedule inefficient generation which can arise[1], the accommodations for those OATT contracts should be limited. SCE supports the idea of collecting data and then determining a long-term solution, but when entities have an incentive to prolong the existing mechanism it becomes very hard to reach a solution. As per above, we recommend including limits on this treatment to existing contracts at the time a party joins EDAM, or a three year sunset of this accommodation after an entity joins EDAM. CAISO should retain its proposal to collect and provide data and begin a stakeholder process to develop a long-term solution, but SCE recommends an automatic default switch back to the original EDAM CRA after three years if a long-term solution is not put in place. This could still honor the transitional treatment for “grandfathered contracts” or allow the special treatment for the first three years a party is in EDAM. This provision would provide incentives for existing OATT transmission holders to only sign new contracts that the BAA can fully support after some limited transition time in EDAM.

[1] See the examples in Scott Harvey’s presentation at the MSC meeting on May 2, 2025.

4. Please provide your organization’s feedback regarding the decisional classification (described in section VIII.B of the Draft Final Proposal).

SCE agrees that any proposed tariff changes emerging from this stakeholder process should be subject to the joint authority of the Board of Governors and the WEM Governing Body.

5. Please provide any additional feedback regarding the Draft Final Proposal and stakeholder workshop discussion and materials (April 23rd).

No further comments at this time.

1. Please provide a summary of your organization’s overall feedback on the Extended Day-Ahead Market (EDAM) Congestion Revenue Allocation Draft Final Proposal.

The Energy Authority (TEA) and its Regional Partners[1] (TEA-RPs) appreciate the CAISO’s efforts to incorporate stakeholder feedback into the EDAM Congestion Revenue Allocation Draft Final Proposal (EDAM Congestion DFP). While an improvement from the Issue Paper, TEA-RPs are still not able to support the CAISO’s EDAM Congestion Revenue Allocation Draft Final Proposal (EDAM Congestion DFP) moving forward. We find the EDAM Congestion DFP to be too narrowly focused as it is disconnected from the practical application of its enhancements to various types of market participants when executed through the Tariffs and Business Practices (BP) of the non-CAISO EDAM BAs. As a group, we are concerned that there is not sufficient evidence that the proposal will meaningfully address the issues raised by stakeholders without introducing unintended consequences that could outweigh its benefits even over the transitional period proposed. The initiative needs more time to be thoroughly vetted and allow CAISO and stakeholders to fully address stakeholder concerns.

TEA-RPs understand however that the CAISO must weigh the interests of multiple stakeholders in determining its next steps and therefore may still push forward with the proposal near term. If that is the case, we request the CAISO address three outstanding issues prior to EDAM go-live in coordination with the non-CAISO EDAM BAs.

• Development of a methodology to allow economically-bid balanced schedules to qualify for Tier One allocation.
• Development of rules to prevent Contract Reference Number (CRN) “gaming” by rights-holders.
• Development of rules to ensure Network Transmission (NT) rights’ qualifications for congestion allocation are equitable relative to those for Long-Term Firm Point-to-Point (LT-F PTP) rights.

Despite its members’ diverse positioning in the market[2], TEA-RPs find the CAISO proposal problematic from both a LT-F PTP and NT user perspective:

• For LT-F PTP users, the most expedient path forward is to encourage non-CAISO EDAM BAs to include LT-F PTP wheelthrough and export rights “opt-outs” to minimize internal and external market seams, while also allowing the EDAM congestion revenue management framework to focus on allocation between LSE participants in EDAM.

• For NT users, there is a disconnect between NT service billing and the assignment and allocation of congestion revenue rights and revenues inherent in the non-CAISO EDAM BAs’ two-tier allocation methodologies filed in their pending Tariffs by focusing on the equitability of LT-F PTP congestion hedge reversals under a use-it-or-lose-it paradigm.

The CAISO has stated that directing the non-CAISO EDAM BAs to augment their Tariffs is beyond the scope of this initiative and that CAISO is only considering limited enhancements to the inter-BAA congestion allocation issues identified in its Issue Paper. During the CAISO Market Surveillance Committee (MSC) meeting, however, the CAISO and its EDAM BA stakeholders discussed at length the CAISO’s consideration of complementary enhancements to the CAISO Tariff as would apply to the internal disbursement of congestion revenues through its CRR program, likely through a separate CAISO EDAM BA initiative. TEA-RPs fully support this type of holistic consideration of EDAM market design implications and would like to see the same effort applied to the non-CAISO EDAM BAs’ associated market design and implementation elements. TEA-RPs therefore request the CAISO take the opportunity now, in coordination with the non-CAISO EDAM BAs that are in sole control of their Tariffs and BPs, to come up with a series of targeted enhancements to address known issues prior to market go-live that move the EDAM model forward for both CAISO EDAM BA users and non-CAISO EDAM BA users. Doing so now would give EDAM the greatest chance of success in its initial months and years of operation and would bring greater efficiency to the non-CAISO EDAM BAs’ Tariff and BP development and approval processes.

TEA-RPs have participated in each of the CAISO’s meetings on these issues, including the two MSC meetings where stakeholders and MSC Members remained divided on whether issues were being adequately addressed and the Western Energy Market (WEM) Governing Body meeting where the Governing Body Market Expert presented multiple concerns and identified a number of unaddressed issues. While at a very high level there is some stakeholder agreement that the proposal is moving in the right direction, TEA-RPs do not believe the EDAM Congestion DFP is ready to be brought to the CAISO Board of Governors and WEM Governing Body for approval, or to be translated into Tariff language for filing with FERC.

TEA-RPs want to see EDAM go-live be successful and share CAISO’s and the EDAM Entities’ long-term goals of achieving forecasted EDAM benefits for the region and its end-use consumers.

[1] TEA has coordinated with Utah Associated Municipal Power Systems (UAMPS), Cowlitz PUD, Klickitat PUD, Lewis PUD, and Franklin PUD, in its assessment of the CAISO EDAM Congestion Revenue Allocation IP and development of the positions expressed in these comments, each of whom will have load, generation, and/or transmission affected by this proposal, as will TEA itself.

[2] The TEA-RP group includes both non-CAISO EDAM BA transmission rights-holders that are primarily LT-F PTP users and non-CAISO EDAM BA transmission rights-holders that are third-party Load Serving Entities (LSE) and predominantly NT users.

2. Please provide your organization’s feedback regarding the proposed design to congestion revenue allocation (described in section VII of the Draft Final Proposal).

When CAISO developed the core EDAM design and associated Tariff language, stakeholders were led to believe that both LT-F PTP and NT transmission customers would largely be held harmless in the market, either because they would be permitted to choose whether to schedule on their rights through the market vs. bilaterally (as they do today) or because they would be provided a near complete hedge against congestion price risk when serving demand in an EDAM BAA.

CAISO’s EDAM Tariff filing left many implementation details open at the time with the expectations that they would be resolved in CAISO’s Business Practice Manual (BPM) change process and through the EDAM Entity Tariffs and BP. While CAISO has yet to release its draft EDAM (or DAME) BPMs, the first two EDAM Entities (PacifiCorp and PGE) have developed and filed their Tariffs at FERC and in PacifiCorp’s case have published draft BPs. During the development of PacifiCorp’s and PGE’s EDAM Tariffs, and through the process of stakeholders protesting PacifiCorp’s EDAM Tariff at FERC, multiple concerns were raised by third-party transmission and BA-services customers but to date have not been addressed adequately by the EDAM Entities or the CAISO. These areas of concern represent critical issues tied to congestion revenue management. Taken together, the BA-level implementation issues identified will impede efficient market outcomes, particularly for third-party entities such as the TEA-RPs group, if not addressed prior to market go-live. Examples communicated during the stakeholder process include:

• Absence of an economic intertie bidding framework for EDAM BAAs at go-live will prevent efficient contracting with available external supply to meet Resource Sufficiency Evaluation requirements and result in inefficient scheduling of hourly imports and exports at odds with organized market priorities;
• EDAM BAs’ requiring LT-Firm PTP contract rights acquired to support wheelthroughs or exports to schedule as EDAM transmission rights despite the CAISO Tariff supporting “opt-outs” will complicate congestion revenue management, potentially undermine reciprocity provisions with adjacent non-EDAM BA systems relied upon to deliver off-system resources to EDAM LSEs, and have a chilling effect on inter-regional trade of Resource Adequacy capacity and Renewable Portfolio Standard-eligible products;
• Lack of coordination regarding how NT customers’ rights and their scheduling of DNRs and other resources to serve NT loads would be impacted by EDAM will destabilize LSE operations[1], while NT customers being incentivized to uneconomically self-schedule to receive a meaningful congestion hedge in Tier One will undermine market benefits for all participants; and
• Assigning congestion revenue accrued in one EDAM BAA (due to a binding transmission constraint in a different EDAM BAA) back to the EDAM BAA with the binding constraint will cause underfunding of congestion hedges for rights-holders in the affected EDAM BAA.

TEA-RPs appreciate the CAISO’s efforts to address the last concern through this initiative and agree that from a narrow perspective the EDAM Congestion DFP will provide  congestion revenue allocation between EDAM BAs that is more closely tied to cost-causation principles than the current design. Unfortunately, addressing that concern in isolation without consideration of how the Tariffs and BPs of the EDAM Entities will interact with the proposal leaves other issues outstanding that could be dealt with expediently at this time.

As a result, TEA-RPs request the CAISO not move forward with the EDAM Congestion DFP at this time but instead convene a series of workshops with stakeholders and the EDAM Entities to address known issues and identified stakeholder and market participant concerns comprehensively. TEA-RPs believe that a coordinated set of EDAM congestion revenue rights assignment (i.e., to LT-F PTP and NT rightsholders) and congestion revenue accrual and allocation enhancements[2] could be developed in 1-3 months that would meaningfully improve the EDAM congestion revenue framework and give EDAM go-live the greatest chance for success with limited or no delay to the current timeline.

TEA-RPs also request the CAISO commit at this time to work over the next 12-24 months to develop a long-term congestion revenue right assignment, accrual, and allocation framework for the EDAM areas. We request this work be committed to as “non-discretionary” from a stakeholder catalog perspective. Further, the framework targeted for EDAM should be consistent with the principles and design elements of the CAISO CRR market, including: assignment and allocation commensurate with long-term investment in the transmission system and mapped to path-based use of the system to identify specific revenue allocation rights on specific constraints, optionality to trade in and out of rights at specific constraints, with appropriate safeguards, and direct settlement between rights-holders and the CAISO in its role as Market Operator. TEA-RPs are concerned that even if the CAISO addresses the short-term concerns expressed above, EDAM will fail to achieve net-positive results for market participants and end-use consumers unless a durable, granular congestion framework is implemented.

If after weighing stakeholder perspectives and other priorities, the CAISO determines it is in the best interest of all parties to move forward with the EDAM Congestion DFP, it is critical that the near-term enhancement discussed during the meeting of giving Tier One congestion revenue allocation to balanced economically-bid schedules from NT resources to serve NT demand, as well as for certain LT-F export schedules, is prioritized for implementation prior to market go-live. While TEA-RPs do not see this enhancement as sufficient as it maintains the use-it-or-lose-it paradigm that is particularly harmful to NT users, it nevertheless would be a step in the right direction toward reducing the impact of the counterproductive incentives to self-schedule embedded in the EDAM Congestion DFP.

Similarly, if moving the EDAM Congestion DFP forward with or without that enhancement, the CAISO should work with the EDAM Entities to develop Tariff language and BPs regarding the use of CRN to dissuade Scheduling Coordinators (SC) from attempting to cherry-pick which hours to make their transmission rights available for congestion allocation. MSC Member Dr. Scott Harvey acknowledged this potential issue as the last MSC meeting and it was also raised by stakeholders at the last CAISO meeting. TEA-RPs believe this is especially important given that being eligible for congestion allocation could be a liability or an asset for a transmission rights-holder, depending on the BPs developed by individual EDAM BAs, the level of cost-shifts allowed through uplift allocation or clawback provisions to maintain neutrality, and how market flows materialize under various conditions.

[1] A primary concern here is that NT customers will be billed based on their NT load coincident peak but only receive congestion revenue associated with interval-to-interval use of those rights, and only if self-scheduling on 7-FN, which would significantly diminish market optionality and efficiency for these entities. Additional concerns include the granularity of load-aggregation, the use of intra-change schedules for NT service, and the granularity of constraint management.

[2] TEA-RPs are prepared to present alternatives for further development that have the potential to provide balanced treatment to LT-F PTP and NT rights-holders without disrupting or materially impacting the CAISO Congestion Revenue Rights (CRR) market or unduly shifting costs between market participants.

3. Please provide your organization’s feedback regarding the future evolution of the design, including the data that will be monitored, transparency measures, and the transitionary period (described in section VII.D of the Draft Final Proposal).

As explained above, TEA-RPs are not able to support the CAISO (1) implementing the EDAM Congestion DFP as an interim solution and (2) waiting to address associated congestion revenue management issues until some future date. 

4. Please provide your organization’s feedback regarding the decisional classification (described in section VIII.B of the Draft Final Proposal).

TEA-RPs support the Joint Decisional Authority recommendation.

5. Please provide any additional feedback regarding the Draft Final Proposal and stakeholder workshop discussion and materials (April 23rd).

TEA-RPs reiterate their appreciation for the work CAISO staff has completed in a relatively short amount of time to support discussions at the stakeholder meetings.

In addition to seeking a response to its feedback and requests embedded in responses to Questions 1 and 2 above, TEA-RPs reiterate the following requests for additional information and examples, which were submitted in its prior comments and have been edited for clarity:

• CAISO’s counterflow example from its March 24, 2025, presentation shows an insufficient collection of congestion revenue in two instances at the BAA-level from load relative to what is owed to generation when focusing solely on the external constraint impacts (i.e., not netting with other congestion allocations). How frequently and in what scenarios would this be expected to occur, and how would EDAM BAs deal with the associated cost-allocation issues to prevent undue cost-shifts between customers?
• Shift-factor thresholds (i.e., choosing 0.2% vs. 2% or another number) appear to have a meaningful impact on the accuracy of inter-BAA congestion revenue allocation. Should reducing (or increasing) the default threshold in some or all instances be considered alongside any other EDAM congestion revenue program changes?
• Are there metrics that the CAISO would use to advise Sub-LAP development for EDAM BAAs (e.g., for SMUD vs. WAPA-SNR within the BANC BAA, or the Northern vs. Southern part of the NV Energy BAA if it were to join EDAM)? To date the EDAM Entities have claimed sole discretion over establishment of LAPs and have stated only one LAP will be used for their BAAs.
  • Please explain the potential trade-offs in terms of market efficiency, congestion exposure, and congestion allocation of NT users being settled at a single LAP for a large BAA with multiple modeled internal cutplanes, vs. more granular LAP modeling, such as is used within the CAISO BAA. See below (Exhibit - 1) for a representation of potential cutplanes and congested regions relative to the PACE and PACW systems, and interfaces for import/export and wheelthrough activity.
• Is it reasonable to be concerned that inter-BAA congestion impacts will be exacerbated and cost-allocation or cost-shift risks increased if heightened levels of self-scheduling occur in EDAM, whether associated with exports or wheelthroughs using PTP rights, or associated with load using NT rights?
• Please describe the self-scheduling mechanics that would be applied to NT users on an EDAM BAA system that would allow sub-allocation according to external constraint impacts.
  • To the extent defining Sub-LAP aggregations of NT loads in some instances would be recommended, please also describe the self-scheduling mechanics for entities serving multiple Sub-LAPs with a broad Designated Network Resource portfolio, including on- and off-system resources.
• Please expand the market-results examples to include the following scenarios:
  • Self-scheduled wheelthroughs across an EDAM BAA sinking in the CAISO with and without transfer-constraint congestion, with a binding CAISO constraint, and for both prevailing and counter-flow on that constraint. [Covered in CAISO’s April 23, 2025, supplementary presentation]
  • Balanced self-schedule exports from an EDAM BAA sinking in the CAISO with and without transfer-constraint congestion, and for prevailing and counter-flow on a binding CAISO constraint.
  • Economically-bid non-EDAM CAISO intertie export sinking in a non-CAISO BAA alongside a self-scheduled EDAM Internal Interface transfer import into the CAISO BAA from a non-CAISO EDAM BAA affecting a common ITC/ISL.
  • Self-scheduled imports from a non-EDAM BAA to an EDAM BAA LAP or Sub-LAP creating prevailing flow or counter-flow on a binding CAISO constraint.
  • Self-scheduled WRAP holdback deliveries from an EDAM BAA to a non-EDAM BAA creating prevailing flow or counter-flow on a binding CAISO constraint.
  • Imbalance Reserve deployment factor impacts on external constraints in any relevant scenarios.
  • Direct or indirect EDAM net-export constraint application impacts, if any.
• Please coordinate with an EDAM Entity BAA to provide a reasonably-accurate sub-allocation example under their filed design (e.g., PacifiCorp’s Two-Tier allocation proposal), including for a counterflow scenario.

------------------------------------------------------------

Exhibit - 1:

https://www.oasis.oati.com/woa/docs/PPW/PPWdocs/Revised_Scheduling_Diagram_11.14.2024.pdf - accessed 05.05.2025

1. Please provide a summary of your organization’s overall feedback on the Extended Day-Ahead Market (EDAM) Congestion Revenue Allocation Draft Final Proposal.

WPTF appreciates the opportunity to provide these comments on the CAISO’s EDAM Congestion Revenue Allocation Draft Final Proposal. We would like to first take this opportunity and extend our appreciation for the CAISO listening to the concerns and feedback related to the previously proposed approach and being willing to pivot. We believe the proposal as currently described in the Draft Final Proposal achieves an appropriate balance for a transitional solution as the CAISO and stakeholders continue to discuss a pathway towards a more long-term solution with consideration of more immediate enhancements.

We also ask that the CAISO actively engage in the various EDAM OATT filing processes. CAISO can help guide consistency among the OATTs but also ensure the congestion revenue that is allocated to the BAAs to provide hedges for those utilizing long-term firm point-to-point and network transmission rights are allocated to the appropriate entities.  Furthermore, through the engagement, CAISO can encourage these entities to allow their long-term firm point-to-point transmission customers to avail themselves of an option to opt-out certain transmission. Even with the implementation of the Draft Final Proposal, it is likely firm transmission customers scheduling in the day-ahead timeframe will continue to be exposed to congestion/transfer risk despite not serving demand in their host BA or otherwise engaging with EDAM to dispatch their resources or schedules economically.

2. Please provide your organization’s feedback regarding the proposed design to congestion revenue allocation (described in section VII of the Draft Final Proposal).

We believe the proposal as currently described in the Draft Final Proposal achieves an appropriate balance for a transitional solution. More narrowly applying the approach to only balanced self-schedules utilizing firm transmission rights addresses many of the concerns that were raised by stakeholders, while also mitigating risks associated with the previous approach. Ideally the solution would have been able to include either direct settlements with the entities utilizing firm transmission rights or provide for transmission carve outs. The CAISO has implied that those approaches are not feasible for implementation next year, and to the extent neither can be pursued prior to EDAM go-live, WPTF generally supports the transitional proposal as described in the Draft Final Proposal. To the extent, these approaches can however be incorporated into the Draft Final Proposal and implemented ahead of EDAM go-live, WPTF strongly supports CAISO including them in the Final Proposal in this initiative. Further, WPTF strongly supports the CAISO exploring options to allow economically-bid balanced schedules to qualify for priority congestion allocation at the EDAM BA-level. This could include exploring solutions such as the one noted by the MSC during the May 2 meeting that moved towards a system of financial entitlement rights which could be an interim step towards something that considers a CRR framework.

WPTF is concerned that despite the significant level of effort the CAISO and stakeholders provided to address this issue, there is minimal assurance that, at the end of the day, the intention behind this policy change will remain subject to each BAA’s congestion revenue allocation process that is to be established in each individual OATT. Thus, we urge CAISO to (as expeditiously as possible) implement direct settlement with these transmission customers and work to enable carve-outs for transmission scheduled in the day-ahead timeframe. Additionally, in the interim, WPTF respectfully requests that the CAISO actively engage in each EDAM BAA’s OATT filing process to ensure (1) consistency among each OATT filing and (2) each OATT filing appropriately allocates the congestion revenue to the entities utilizing firm transmission rights as envisioned by this policy process. It would be unfortunate for the effort that has culminated in the present proposal to become moot if each EDAM BAA ultimately allocates the congestion revenue in a different manner.

3. Please provide your organization’s feedback regarding the future evolution of the design, including the data that will be monitored, transparency measures, and the transitionary period (described in section VII.D of the Draft Final Proposal).

We encourage the CAISO to continue the discussions and start developing near-term enhancements with a vision towards a long term robust solution. As noted above, ideally we would have reached a design with direct settlement and/or one in which there was more clear direction to EDAM entities to permit transmission carve outs (and for CAISO to implement these, which are currently permitted under the CAISO’s EDAM tariff). We understand the timing constraints may have made these an infeasible option at this point; thus, we encourage the CAISO to continue discussing at what point those options would be feasible. To be clear, we are not suggesting that is the only option for a long-term durable solution but it may be an improvement upon the current proposal that could be done as a near-term enhancement as we continue developing a durable robust solution. Additionally, we believe that the CAISO should prioritize a near-term enhancement that mitigates the self-scheduling incentive this proposal creates, for example, by exploring options to allow economically-bid balanced schedules to qualify for priority congestion allocation. Higher levels of self-scheduling reduces overall market benefits and efficiencies; thus to the extent a market solution incentivizes self-scheduling it potentially comes at the expense of market efficiencies and benefits.

4. Please provide your organization’s feedback regarding the decisional classification (described in section VIII.B of the Draft Final Proposal).

No comment.

5. Please provide any additional feedback regarding the Draft Final Proposal and stakeholder workshop discussion and materials (April 23rd).

During the May 2 MSC call the CAISO acknowledged this change may impact CAISO CRR underfunding although unsure to what extent. Given that CRR underfunding is an existing issue being discussed in another on-going effort, we ask that the CAISO consider making changes to the CRR underfunding approach through the CRR Enhancements effort that can be implemented prior to go-live to help mitigate the potential impact this change may have on CRR underfunding.