Stakeholder center

INITIATIVE:
Price formation enhancements

Started: Apr 11, 2022

Leads
James Friedrich

This initiative will explore several topics related to price formation in the California ISO markets focused on real-time market pricing. Scarcity prices are important to attract supply and incent resources to be available and perform. They are also important to provide appropriate price signals to reduce demand. Recent energy shortages and associated prices in the ISO real-time market have emphasized the need for the ISO to review and enhance its scarcity pricing provisions.  Consequently, the ISO plans to consider the following topics in this initiative: (1) enhance real-time market scarcity pricing to better reflect tight supply conditions, (2) consider fast-start pricing, and (3) enhance how the real-time market uses advisory prices to dispatch resources.

Relevant notices Contact us

Status

Proposal Development Decision Implementation Completed/Closed
Phase 2
Q2 2025* Posting
Phase 1
Jul 31, 2024 Order accepting tariff amendment (ER24-2168)
Jul 08, 2024 Answer to comments (ER24-2168)
May 31, 2024 Tariff amendment filing (ER24-2168)
Nov 14, 2024 PRR 1591 updates to the hourly energy shaping factor
Jul 11, 2024 Training
Aug 01, 2024 Production
Implementation milestones 		Completed

Phase 2

Joint Authority

These sessions will focus on developing detailed proposals for
Scarcity Pricing, BAA-level Market Power Mitigation (MPM), and Fast Start Pricing.
Topic 1: Scarcity Pricing
Topic 2: BAA-level Market Power Mitigation (MPM)
Topic 3: Fast Start Pricing

Web meeting

Video - Price Formation Enhancements Policy Development Working Group - Mar 13, 2025 03/18/2025

Working Group Session 9 - BAA-Level Market Power Mitigation

Presentation - Price Formation Enhancements - Mar 13, 2025 03/13/2025

Web meeting

Working Group Session 8 - BAA-Level Market Power Mitigation

Presentation - Price Formation Enhancements - Mar 05, 2025 03/05/2025

Video - Price Formation Enhancements - Mar 05, 2025 03/11/2025

Web meeting

Working Group Session 7 - Fast Start Pricing

Presentation - Price Formation Enhancements - Feb 13, 2025 02/13/2025

Presentation - Price Formation Enhancements - Fast Start Pricing - Feb 13, 2025 02/12/2025
Issues Raised in FSP Presentations by MISO, PJM and Their IMMs, prepared by Michael Cadwalader

Mike Cadwalader Comments Price Formation Enhancements Working Group Session 6 and 7 - Feb 06, 2025 02/07/2025

Video - Price Formation Enhancements - Feb 13, 2025 02/18/2025

Web meeting

Working Group Session 9 - Scarcity Pricing

Presentation - Price Formation Enhancements - Feb 06, 2025 02/06/2025

Video - Price Formation Enhancements - Feb 06, 2025 02/11/2025

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Web meeting

Working Group Session 8 - Scarcity Pricing

Presentation - Price Formation Enhancements - Session 1 - Jan 22, 2025 01/21/2025
Scarcity Pricing: Market Mechanisms for Gradual Price Increases During Scarcity

Presentation - Price Formation Enhancements - Session 2 - Jan 22, 2025 01/21/2025
Scarcity Pricing: Anchoring Penalty Prices to the Value of Lost Load

Presentation - Department of Market Monitoring - Flexibility Ramping Product - Jan 22, 2025 01/21/2025

Presentation - Vitol - Competitive Electric Markets - Jan 22, 2025 01/21/2025

Video - Price Formation Enhancements - Jan 22, 2025 01/27/2025

Web meeting

Working Group Session 7 - Fast Start Pricing, PJM Interconnection

Presentation - PJM Fast Start Pricing - Jan 16, 2025 01/15/2025

Presentation - PJM Fast Start Education - Jan 16, 2025 01/15/2025

Presentation - Price Formation Enhancements - Jan 16, 2025 01/16/2025

Video - Price Formation Enhancements - Jan 16, 2025 01/22/2025

Web meeting

Working Group Session 6 - Fast Start Pricing Workshop

Presentation - MISO Independent Market Monitor Review of ELMP - Dec 19, 2024 12/17/2024
Extended Locational Marginal Pricing (ELMP)

Presentation - Fast-Start Pricing ELMP at MISO - Dec 19, 2024 12/17/2024
Extended Locational Marginal Pricing (ELMP)

Presentation - Price Formation Enhancements - Dec 19, 2024 12/18/2024

Video is unavailable for this meeting.

Web meeting

Working Group Session 5 - Scarcity Reserve Demand Curve (SRDC) to reflect tight supply conditions

Presentation - Price Formation Enhancements - Dec 16, 2024 12/16/2024

Video - Price Formation Enhancements - Dec 16, 2024 12/19/2024

Web meeting

Working Group Session 4 - Fast Start Pricing

Presentation - Price Formation Enhancements - Dec 05, 2024 12/05/2024

Video - Price Formation Enhancements - Dec 05, 2024 12/09/2024

Web meeting

Working Group Session 3 - BAA-Level Market Power Mitigation, Pivotal Suppliers and Impact Thresholds

Presentation - Price Formation Enhancements - Nov 20, 2024 11/20/2024

Video - Price Formation Enhancements - Nov 20, 2024 11/26/2024

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Web meeting

Working Group Session 2 - Fast Start Pricing

Presentation - Price Formation Enhancements - Nov 14, 2024 11/13/2024

Video - Price Formation Enhancements Policy Development Working Group - Nov 14, 2024 11/20/2024

Web meeting

Working Group Session 1 - BAA-Level Market Power Mitigation

Presentation - Price Formation Enhancements - Nov 06, 2024 11/06/2024

Video - Price Formation Enhancements Policy Development Working Group - Nov 06, 2024 11/20/2024


Price Formation Enhancements - Working Group Phase 2 - Schedule 2024-2025 11/13/2024
Updated 12/04/24

Phase 1

Completed
Joint Authority

Outcome statement: The effective trade date August 01, 2024, the ISO implemented the Price Formation Enhancements modifications to rules for bidding above the soft offer cap for resources, especially to allow resources with intra-day opportunity costs to reflect those costs in their energy bids. This implementation scope includes:
1) Revision of the cap on all Default Energy Bids (DEBs) from $1,000/MWh to $2,000/MWh (“Uncap the DEB”) for both Day-Ahead (DA) and Real-Time (RT). Generating resource energy bids are capped by max ($1000, DEB, adjusted DEB) for both DA and RT.
2) For energy storage resource registered as an LESR using a proxy value, ISO will cap their bids at max ($1000, DEB from internal system if available, 4th highest Maximum Import Bid Price (MIBP), highest cost-verified bid)
3) Modification of MIBP shaping factor formula based on the high-priced day SMEC only

Effective Trade Date August 16, 2024, the ISO implemented a modification of the MIBP shaping factor formula based on the high-priced day system marginal energy cost (SMEC) only.

Web meeting

Discussion Paper and Stakeholder Recommendations - Price Formation Enhancements - Sep 05, 2024 09/05/2024

Presentation - Price Formation Enhancements - Sep 30, 2024 09/30/2024

Video - Price Formation Enhancements Discussion Paper - Sep 30, 2024 10/03/2024

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May 31, 2024 Tariff Amendment - Price Formation Enhancements (ER24-2168) 08/01/2024

Jul 08, 2024 - CAISO Answer to Comments - Price Formation Enhancements (ER24-2168) 08/01/2024

Jul 31, 2024 - Order Accepting Tariff Amendment - Price Formation Enhancements (ER24-2168) 08/01/2024

Price Formation Enhancements - Soft Offer Bid Cap Pre-Market Simulation Training

Presentation - Price Formation Enhancements - Soft Offer Bid Cap Pre-Market Simulation Training - Jul 11, 2024 07/12/2024

Video - Price Formation Enhancements - Soft Offer Bid Cap Pre-Market Simulation Training - Jul 11, 2024 07/12/2024

Web meeting

Presentation - Market Simulation - Jun 20, 2024 06/25/2024
Rules for Bidding Above the Soft Offer Cap

Business Requirements Specification - Price Formation Enhancements - Rules for Bidding Above the Soft Offer Cap - Jun 25, 2024 06/25/2024

Market Simulation Structured Scenarios - Price Formation Enhancements - Rules for Bidding Above the Soft Offer Cap 07/30/2024

Video - Price Formation Enhancements - Market Simulation Call - Jul 22, 2024 07/30/2024
Password : Rn8wAhmD


Revised Draft Tariff Language - Price Formation Enhancements - May 20, 2024 05/20/2024
Comment deadline extended to May 28, 2024.

Draft Tariff Language - Price Formation Enhancements - May 13, 2024 05/13/2024
Rules for bidding above soft offer cap

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Final Proposal - Price Formation Enhancements - May 17, 2024 05/17/2024
Rules for bidding above soft offer cap


Notice of Decisional Classification - FERC 831 Soft Offer Cap - May 2024 05/10/2024


Draft Final Proposal - Price Formation Enhancements Redline - May 7, 2024 05/07/2024
Rules for bidding above soft offer cap

Web meeting


Working Group Session 18, Draft Final Proposal, Rules for Bidding above the Soft Offer Cap

Draft Final Proposal - Price Formation Enhancements - May 02, 2024 05/01/2024
Rules for bidding above the soft offer cap

Presentation - Price Formation Enhancements - May 02, 2024 05/02/2024

Video - Price Formation Enhancements - May 02, 2024 05/03/2024

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Web meeting


Market Surveillance Committee meeting

MSC Presentation - Price Formation Enhancements - Apr 24, 2024 04/24/2024

Web meeting


Working Group Session 17, Feasibility Assessment and Straw Proposal

Feasibility Assessment and Straw Proposal - Price Formation Enhancements - Apr 22, 2024 04/24/2024
Straw Proposal and Feasibility Assessment on Rules for Bidding Above Soft Offer Cap

Presentation - Price Formation Enhancements - Apr 23, 2024 04/23/2024

Video - Price Formation Enhancements - Apr 23, 2024 04/23/2024

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Issue Paper and Stakeholder Recommendations - Price Formation Enhancements - Rules for Bidding Above the Soft Offer Cap 04/12/2024

Presentation - Price Formation Enhancements - Apr 23, 2024 04/22/2024

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Web meeting


Working Group Session 16, Analysis on Fast Start Pricing

Presentation - Price Formation Enhancements - Apr 08, 2024 04/08/2024

Mike Cadwalader Comments Price Formation Enhancements Working Group Session 16 - Apr 8, 2024 05/13/2024

Video - Price Formation Enhancements - Apr 8, 2024 04/15/2024

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Updated Price Formation Enhancements Working Group Schedule 2024 01/30/2024

Web meeting

Working Group Session 15, Battery Storage Bidding and FERC
831

Video - Price Formation Enhancements Working Group - Mar 8, 2024 03/13/2024

Presentation - Price Formation Enhancements Working Group - Mar 12, 2024 03/12/2024

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Web meeting


Working Group Session 14, BAA-Level Market Power Mitigation

Video - Price Formation Enhancements Working Group - Feb 21, 2024 02/23/2024

Presentation - Price Formation Enhancement - Feb 21, 2024 02/20/2024

Web meeting


Working Group Session 13, Workshop

Video - Price Formation Enhancements Workshop - Feb 12, 2024 02/13/2024

Presentation - Price Formation Enhancement Workshop - Feb 12, 2024 02/09/2024

Web meeting


Working Group Session 12, Scarcity Pricing Sprint 3

Video - Price Formation Enhancements Working Group - Jan 24, 2024 01/29/2024

Presentation - Price Formation Enhancements - Jan 24, 2024 01/22/2024

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Web meeting


Working Group Session 11, Scarcity Pricing Sprint 2

Video - Price Formation Enhancements Working Group - Jan 17, 2024 01/23/2024

Presentation - Price Formation Enhancements - Jan 17, 2024 01/16/2024

Web meeting


Working Group Session 10, Scarcity Pricing Sprint 1

Video - Price Formation Enhancements Working Group - Jan 10, 2024 01/12/2024

Presentation - Price Formation Enhancements Working Group - Jan 10, 2024 01/08/2024

Web meeting


Working Group Session 9

Video - Price Formation Enhancements Working Group - Dec 12, 2023 12/13/2023

Presentation - Price Formation Enhancement - Dec 12, 2023 12/11/2023

Mike Cadwalader Comments Price Formation Enhancements Working Group Session 9 - Jan 11, 2024 01/11/2024

Web meeting


Working Group Session 8

Video - Price Formation Enhancements Working Group - Nov 16, 2023 11/17/2023

Presentation - Price Formation Enhancements - Nov 16, 2023 11/15/2023

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Web meeting


Working Group Session 7 - Draft Final Proposal

Draft Final Proposal - Scarcity Pricing - Oct 05, 2009 11/02/2023

Presentation - Price Formation Enhancements - Oct 25, 2023 10/25/2023

2020-2022 - Ancillary Service Scarcity Event Report 10/26/2023

Draft Market Surveillance Committee Opinion on Scarcity Pricing 11/01/2023

Nov 01, 2010 - Order on Compliance - Scarcity Pricing (ER10-500-000) 11/02/2023

Video - Price Formation Enhancements Working Group - Oct 25, 2023 10/26/2023

Web meeting


Working Group Session 6

Video - Price Formation Enhancements Working Group - Oct 12, 2023 10/17/2023

Presentation - Price Formation Enhancement - Oct 12, 2023 10/11/2023

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Web meeting

Working Group Session 5 - Discussion Paper

Discussion Paper - Price Formation Enhancements - Sep 21, 2023 09/21/2023

Presentation - Price Formation Enhancements - Sep 27, 2023 09/27/2023

Video - Price Formation Enhancements Working Group - Sep 27, 2023 09/29/2023

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Web meeting


Working Group Session 4

Video - Price Formation Enhancements - Sep 14, 2023 09/19/2023

Presentation - Price Formation Enhancements - Sep 14, 2023 09/14/2023

Poll Results - Price Formation Enhancements - Sep 14, 2023 09/18/2023

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Revised Price Formation Enhancements Overview 09/13/2023

Hybrid meeting

Working Group Session 3

Video - Price Formation Enhancements - Aug 17, 2023 08/22/2023

Presentation - Price Formation Enhancement - Aug 17, 2023 08/17/2023

Poll Results - Price Formation Enhancements - Aug 17, 2023 08/18/2023

Chat - Price Formation Enhancements - Aug 17, 2023 08/18/2023

Hybrid meeting

Working Group Session 2

Video - Price Formation Enhancements - Aug 10, 2023 08/14/2023

Presentation - Price Formation Enhancements - Aug 10, 2023 08/10/2023

Poll Results - Price Formation Enhancements - Aug 10, 2023 08/11/2023

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Hybrid meeting

Working Group Session 1

Video - Price Formation Enhancements Working Group - Aug 3, 2023 08/08/2023

Presentation - Price Formation Enhancements - Aug 3, 2023 08/02/2023

Poll Results - Price Formation Enhancements - Aug 3, 2023 08/03/2023

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Price Formation Enhancements Overview 07/17/2023

Web meeting


Video - Price Formation Enhancements - Jun 26, 2023 07/12/2023

Presentation - Price Formation Enhancements - Jun 26, 2023 06/23/2023

Hybrid meeting


Video - Price Formation Enhancements - Mar 20, 2023 03/24/2023

Presentation - Price Formation Enhancements - Mar 20, 2023 03/17/2023

Web meeting


Video - Price Formation Enhancements - Dec. 16, 2022 12/19/2022

Presentation - Price Formation Enhancements - Dec 16, 2022 12/15/2022

Web meeting


Video - Price Formation Enhancements - Nov 16, 2022 11/17/2022

Presentation - Price Formation Enhancements - Nov 16, 2022 11/14/2022

Web meeting


Issue Paper - Price Formation Enhancements 07/05/2022

Presentation - Price Formation Enhancements - Jul 12, 2022 07/11/2022

Video - Price Formation Enhancements - Jul 12, 2022 07/13/2022

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Web meeting

Workshop and Stakeholder Presentation

Presentation - Price Formation Enhancements Workshop - Jun 09, 2022 06/07/2022

Powerex Presentation - Price Formation Enhancements - Jun 09, 2022 06/07/2022

Calpine Presentation - Price Formation Enhancements - Jun 09, 2022 06/07/2022

Rev Renewables Presentation - Price Formation Enhancements - Jun 09, 2022 06/07/2022

WPTF Presentation - Price Formation Enhancements - Jun 09, 2022 06/13/2022

Powerex and Public Power Council Report - Importance of Fast Start Pricing in Market Design 06/27/2022

GDS Associates Report - Efficient Market Prices During Tight Supply Conditions - Issues and Recommendations 06/14/2022

Video - Price Formation Enhancements - Jun 09, 2022 06/14/2022