Provide a summary of your organization’s comments on the Maximum Import Capability (MIC) Enhancements straw proposal:
Birch Comments on the CAISO’s Maximum Import Capability Enhancements Straw Proposal
Company Date Submitted
Birch Infrastructure, PBLLC
May 27, 2021
Birch thanks the CAISO for providing an opportunity to submit comments on the Maximum Import Capability Enhancements Straw Proposal posted on May 6 and discussed during the May 13 stakeholder call.
Birch Infrastructure, PBLLC and or affiliates of the company are actively developing and or pursuing assets with deliverability to the CAISO. Thus, Birch is committed to helping ensure the CAISO has sufficient generating capacity such that it can continue to reliably operate the grid. The 2020 summer events have highlighted the importance of being able to rely on imports to serve California load as the grid transitions away from predominately a thermal fleet to a renewable rich resource mix. During this transition and going forward, it will be imperative that the CAISO is able to achieve maximum reliability through ensuring the deliverability the grid can sustain is allocated in the most efficient and effective manner.
As the stakeholder community embarks upon this effort to improve the overall effectiveness of import capability, having a solid understanding of how the process works today and interplays with the other elements of the CAISO system is paramount. Birch greatly appreciates the CAISO spending the time to educate the stakeholder community on how the existing maximum import capability (MIC) values are determined and allocated as well as talking through the interaction between deliverability on the interties and deliverability allocated to new resources interconnecting through the CAISO’s interconnection process. Having a foundational understanding of how the overall deliverability in the CAISO market is determined and ultimately allocated for use provides for a more robust stakeholder engagement.
The more detailed comments below are intended to (1) seek additional clarification and (2) spur robust discussion regarding if/how the current processes may be improved such that the value of deliverability on the CAISO grid is maximized and increases overall reliability.
Birch believes developing a formalized and transparent method for establishing MIC values when a new transmission project either (1) creates a new branch group or (2) increases the transfer capability of an existing branch group is imperative. Having a transparent and established process will enable market participants and developers to have more information when making investment decisions regarding where to site new resources and/or which resources to contract with outside of the CAISO BAA with the intention of serving CAISO load via resource adequacy (RA) capacity. California is relying on continued significant amounts of RA import capacity, which is challenging when significant amounts of capacity is retiring across the west. As these older contracts retire, new contracts that rely on MIC can only take their place if developers and load serving entities have assurance that they will be able to get MIC upon energization of new transmission and capacity.
Ideally the fixed methodology will enable MIC to be determined and allocated in a timely manner such that when the physical transmission project is energized RA imports will have corresponding MIC. Furthermore, the amount of incremental MIC that will be available should also be made transparent to stakeholders in such a manner that investment and RA contracting decisions can be made with sufficient lead time that the RA capacity becomes available nearly simultaneously with the increased transfer capability.
During the stakeholder call, the CAISO described how the MIC values are set based on historical usage/flows across the interties. This implies that imports first must actually flow across a given intertie point before the CAISO will allow a portion of that intertie capacity to be used to support resource adequacy imports. Under this method, there will inherently be a lag between when a new branch group (or transmission project that increases current capacity on an intertie) will provide the benefit of accessing more RA imports sooner rather than later. For example, the Delaney – Colorado River project is anticipated to come online by December 2021 and may be modeled as a new branch group, or at a minimum, increase the transfer capability at Palo Verde. Given that this project is expected to increase deliverability of external resources into the CAISO BAA, one would also anticipate an increase in available MIC. However, unless the CAISO clearly establishes a process by which market participants are aware of how much MIC will be made available because of this project, the CAISO market may not actually realize the full benefits of accessing more import RA from those external resources for years to come.
Additionally, Birch strongly encourages the CAISO to consider modifications to its overall process for allocating deliverability not only via MIC but also to new resources coming through the interconnection process. The goal of any such modifications would be to ensure the process is not stranding deliverability (e.g., deliverability that is available but unable to be used) and allocating the deliverability in a way that its available where needed and most valued. In the end, having an allocation and deliverability study process that achieves those goals will enable the CAISO to increase reliability via increasing availability of deliverable RA capacity.
During the stakeholder call the CAISO explained how the MIC allocation process and deliverability studies for internal resources interact. Through this discussion, Birch is concerned that the current methodology has resulted in stranded deliverability not only on interties but also for interconnecting resources trying to achieve deliverability status. It seems that the CAISO could, in effect, increase the amount of available RA capacity via modifications to the deliverability processes without degrading the reliable operation of the grid.
For example, assume two intertie locations (A and B) each with a MIC of 1,000 MWs based on historical flows. This implies that the system can reliably manage 2,000 MWs of imports across the interties. Assuming only 800 MWs of MIC at intertie A is used to support RA imports and all 1,000 MWs of MIC at intertie B is used to support RA imports. Furthermore, assume there is an additional 200 MWs of imports at intertie B that would be available to the CAISO is sufficient MIC were available. Even though the system can reliability manage 2,000 MWs of MIC across the two intertie points, only 1,800 MWs of RA imports are provided because the 200 MWs of unused MIC at intertie A cannot be “transferred” to intertie B. If there is a way to “transfer” that capability to intertie B, it would provide for an additional 200 MWs of RA imports to serve CAISO load.
Another example of stranded deliverability relates to the how the MIC impacts deliverability of interconnecting resources. Using the same initial set up as the prior example, also assume there is a 200 MW resource interconnecting to the CAISO seeking deliverability. Today, the CAISO fixes the deliverability of imports at the MIC values (2,000 MWs in this example) when running its studies to determine if the 200 MWs from the internal resource can be deemed deliverable, and thus able to provide resource adequacy capacity. Also assume this resource is deemed not deliverable. Birch wonders if had the CAISO not fixed the assumed level of imports at 2,000 MWs (and potentially used 1,800 MWs to align with the used MIC) the internal resource would have been then deemed deliverable.
There are two potential modifications the CAISO could consider that would result in increased utilization of deliverability across the grid, and thus higher levels of RA capacity made available to serve CAISO load. First, is to allow unused MIC from one branch group to be transferred to another branch group that has a higher demand for MIC. Second, consider modifying the deliverability studies such that the MIC values, which includes unused MIC, are not assumed fixed when conducting the deliverability studies for new interconnecting resources.
During the stakeholder call, the CAISO continually noted that MIC is available for load serving entities. However, based on section 184.108.40.206.1 of the Tariff, Birch’s understanding is that suppliers also can be allocated MIC. Specifically, the Tariff notes under step 13 that “[s]cheduling Coordinators for Load Serving Entities, Participating Generators, or System Resources may notify the CAISO of a request for unassigned Available Import Capability on a specific Intertie on a per MW basis.” Thus, Birch would like the CAISO to confirm that suppliers also can be allocated MIC.
Birch thanks the CAISO for consideration of these comments.
Provide your organization’s comments on the improve transparency topic, as described in section 3.1:
Provide your organization's comments on the education regarding deliverability of imports and internal resources topic, as described in section 3.2:
Provide your organization’s comments on other issues that require further exploration, as described in section 3.3:
Provide your organization’s comments on the proposed initiative schedule and EIM Governing Body role, as described in section 4:
Additional comments on the Maximum Import Capability Enhancements straw proposal: