Please provide your organization’s feedback on whether Residual Unit Commitment (RUC) schedules without contracted supply should continue to have a higher priority than load in real-time:
Provide your organization’s feedback on how the ISO should clarify rules around high priority exports contracted with non-RA supply, including timing for contracting and priority relative to CAISO load:
Provide your organization’s feedback on how the ISO should clarify rules regarding wheeling transactions:
Provide any additional suggestions for policy changes (implementable by June 1) needed to provide comparable treatment for ISO exports that the ISO receives for imports:
The Idaho Power Company (IPC) presentation (http://www.caiso.com/InitiativeDocuments/IdahoPowerPresentation-MarketEnhancements-Summer2021Readiness-Jan122021Workshop.pdf ) provided helpful background information on how BAs that are not in organized markets operate under their open access tariffs (Standard OATT BAs). Standard OATT BAs ensure resource adequacy using resources that have been procured under Integrated Resource Planning (IRP) processes in conjunction with firm and non-firm transmission service that is separately provided under their OATT. LSEs within the Standard OATT BAs must designate network resources to use firm network service for load service, and must request and be granted firm point-to-point service or secondary network transmission service (non-firm) for non-designated resources. Undesignated network resources must use point-to-point transmission service to make a firm sale to a third party.
IPC states that all load service in its BAA is backed by physical assets, either owned or contracted generation or market purchases, and market purchases are e-tagged. Energy priority is NOT tied to transmission priority and the transmission provider does not curtail transmission transactions based on energy needs of the BA. The presentation did not address the timing of the e-tagging, including whether the load service or export transactions must be tagged day-ahead or whether they can be tagged in real-time. The IPC presentation also did not make it clear whether firm transmission must be used for all load service or to support imports or exports.
The IPC day ahead group determines what physical resources are available to service load and reserve obligations and ensures there are enough physical resources to meet the obligations. If surplus resources are identified, resources are undesignated and offered for sale by the merchant to the bi-lateral market. The presentation did not state whether contracted resources or market purchases are considered in making this determination.
The IPC presentation did not address how IPC and other Standard OATT BAs treat imports into their BAA when they are making their assessments of resource sufficiency to serve their native load and exports and of available transmission for off system sales. CalCCA would like to know whether IPC and other Standard OATT BAs require that imports must use firm transmission to serve native load and exports, or whether non-firm transmission may be used. If non-firm transmission may be used, are there limitations on how much non-firm transmission may used?
The IPC presentation indicated that Third party generators within IPC that are not contracted to sell to IPC, cannot have their export schedules curtailed due to the BA being energy deficient, but their exports are subject to curtailment if the resource output does not support the schedule (but real-time outages are typically covered by contingency reserves for the first hour). Transmission curtailments are made in response to transfer capability shortages as a result of system reliability conditions. Transmission service providers do not curtail transmission service to address supply shortfalls in the BAA. CalCCA observes that the IPC BA and Standard OATT BA practices contrast with CAISO’s organized market approach in a critical aspect: the CAISO runs a sequential market process (day ahead Integrated Forward Market (IFM), Hour Ahead Scheduling Process (HASP), Fifteen Minute Market (FMM) and Real-time Dispatch (RTD)). In each of these markets, the CAISO selects the lowest cost mix of resources available to serve load, given all modeled constraints. The selection process does not match specific resources with specific loads, and therefore both RA supply and Non-RA supply can get displaced by more economical resources in any step of the sequential market process. Because of this, prioritization schemes can lead to problems. For example, if self-schedules receive the highest priority, parties may be motivated to submit self-schedules to protect their priority, potentially leaving CAISO with insufficient economic bids to efficiently clear the market. Without economic bids, the models need to rely on other parameters to get the dispatch. On the other hand, if any CAISO load is to be served with economic bids, rather than self-schedules, the CAISO load could receive a lower priority than self-scheduled exports or wheel-throughs. Because exports will always be smaller than the total CAISO load (i.e., the amount transmission available for export is significantly smaller than the total CAISO load), this means that if exports are self-scheduled, there would always be at least a portion of CAISO load that would have a lower priority than exports. Absent self-scheduling all CAISO transactions, not only would CAISO load not have a higher priority than exports, at least some and potentially a very large portion of CAISO load would have a lower priority than exports. This situation does not seem tenable.
CAISO staff raised the following questions and clarifications on slide 17 of its presentation (http://www.caiso.com/InitiativeDocuments/Presentation-MarketEnhancements-Summer2021Readiness-Jan122021Workshop.pdf ):
Are additional policy changes need to provide comparable treatment for exports that CAISO receives for imports?
- Should RUC schedules without contracted supply continue have a higher priority than load in real-time?
- Clarify rules around high priority exports contracted with non-RA supply
- Timing for contracting with non-RA supply
- Priority relative to CAISO load when load shedding occurs
- Clarify rules regarding wheeling transactions
- Can a wheel specify it has contracted with the import supply?
- Must transmission be procured prior to market?
The differences in practices between Standard OATT BAs and CAISO’s organized market make it very challenging to identify satisfactory responses to CAISO’s questions. If CAISO is going to require that transmission be procured prior to market, what should be the appropriate term and the required timing? Hourly, daily, monthly, annual, multi-year? Post day-ahead market, pre-day-ahead market, pre-month, pre-year? How would EIM transfers be affected by these potential rules? Would EIM transfers have lower, higher, or the same priority as exports? If EIM transfers have a higher priority, would that motivate parties to favor EIM transfers over export schedules? What would be the consequences? If wheels can specify contracted supply, will internal CAISO loads need to specify their contracted supply? Will self-schedules be needed to ensure the contracted supply does not get displaced by economic bids? Will CAISO have sufficient economic bids to clear the market?
Given the number of outstanding questions and their complexity, it will be extremely challenging to develop and implement policy changes related to exports and load scheduling priorities prior to summer 2021. CAISO therefore should focus on concrete steps that parties can take to increase the resources available to the CAISO (including demand-side resources) for summer 2021. CAISO needs to ensure that raising the priority given to exports or wheels does not disadvantage service to its BAA native loads.