Comments on Jan 12 Load and Export Scheduling Priorities Workshop

Market enhancements for summer 2021 readiness

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Comment period
Jan 13, 12:30 pm - Jan 20, 05:00 pm
Submitting organizations
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Balancing Authority of Northern California
Submitted on 01/20/2021, 04:57 pm

Submitted on behalf of
Balancing Authority of Northern California

Contact

Kevin Smith, smith@braunlegal.com

1. 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:

General Statement of Interest

The Balancing Authority of Northern California (BANC) appreciates the opportunity to provide its comments to the California Independent System Operator Corporation’s (CAISO) January 12, 2021 Load and Export Scheduling Priorities Workshop (Export Workshop).  BANC is a joint powers authority and operates as a public agency that is governed by the BANC Commission, currently made up of an executive representative from each of its members.  BANC’s members include the following utilities: Cities of Redding (Redding), Roseville (Roseville), and Shasta Lake, the Modesto Irrigation District (MID), the Sacramento Municipal Utility District (SMUD), and the Trinity Public Utilities District.  The Western Area Power Administration – Sierra Nevada Region (WAPA) operates within the BANC Balancing Authority Area (BAA) and participates in BANC processes; however, WAPA is not a formal member of BANC.  Currently, WAPA participates through various agreements with BANC.

BANC is a registered Balancing Authority with the North American Electric Reliability Corporation and operates as a neighboring BAA to the CAISO BAA.  BANC is also a participant in the Western Energy Imbalance Market (EIM) operated by the CAISO.  Currently, BANC serves as the EIM Entity for one EIM Participant, SMUD, but will be expanding participation in the BANC EIM Entity footprint to MID, Redding, Roseville and WAPA in March of this year.

BANC’s members (and WAPA) frequently participate in the CAISO’s day-ahead and real-time markets, including scheduling exports from the CAISO to serve their respective loads.  The scheduling of exports in the CAISO market is an important piece of the Summer 2021 readiness initiative, especially for neighboring BAAs and utilities.  

BANC Response to Question 1

BANC agrees with this principle.  We believe that the RUC scheduling run should control priority for day-ahead schedules that are not associated with contracted supply (i.e., with Non-RA “Supporting Resources”).  Using the RUC schedule ensures the CAISO has enough supply to serve its load and exports and maintain system reliability, especially in peak demand periods.  If a day-ahead export schedule clears RUC, it should have a higher priority than load scheduled in the real-time.  Exporters rely on the CAISO’s day-ahead schedule to serve load and forgo other options in the bilateral market to secure power.  If an export schedule clears RUC and is awarded to a neighboring utility or BAA, this ensures a high priority export is consistent with bilateral arrangements in the west.

2. 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:

As a general matter, the CAISO’s current rules around non-RA exports associated with Supporting Resources are not clear and can be found in disparate parts of the CAISO Tariff and Business Practice Manual (BPM).  Having a clearer explanation, consolidation of provisions, and, when necessary, section cross references would help entities better understand market operations, which will improve planning for exports and potential curtailments that may arise during high demand periods.  Certain BANC members are familiar with the use of non-RA supply and were involved years ago in the formation of the rules around Supporting Resources to support firm exports.  However, unless a neighboring utility contracts for capacity in the CAISO to use as a Supporting Resource, it is difficult to understand the rules around this function just by reviewing the Tariff and BPMs.  Changes to the Tariff take more time than BPM changes and may not be feasible before Summer 2021. However, the CAISO should still pursue clarifying Tariff changes for future years.

Furthermore, BANC encourages the CAISO to provide additional transparency in its scheduling process, including how and when it curtails exports and its internal demand.  Currently, there is little transparency in the CAISO’s market optimization between bid/schedule submission in the day-ahead market and when schedules are awarded later in the day.  The CAISO’s September 5, 2020 emergency BPM change (PRR 1282) has exacerbated this “black box” effect, causing additional uncertainty.  For example, while we generally understand that a self-scheduled export with a Non-RA Supporting Resource is supposed to be treated on par with CAISO demand, there is absolutely no visibility into how, or even whether, this actually occurs on some form of pro rata basis.  The CAISO should, to the extent practicable, provide data on the amount(s) and location(s) of the CAISO demand that was also curtailed along with the Supporting Resource self-schedule(s) reduced/curtailed out of the RUC.  Such information does not need to be highly load-specific, but it should be detailed enough for the exporter to confirm the equitable and reasonable application of curtailment to both load and exports.  BANC appreciates the scheduling curtailment information provided in the CAISO’s Export Workshop presentation and notes that this information highlights the need to make refinements to improve transparency.  While this additional transparency may not be possible in the short-term before Summer 2021, BANC encourages the CAISO to focus on opening up the black box in the long term.

Regarding timing for contracting, the CAISO should not mandate any contracting timeframes for entities outside of its jurisdiction, except those limits imposed by its fixed market timelines. Creating artificial timelines would clearly disrupt commercial activity that utilities and suppliers are accustomed to and also impact reliability. External entities need the flexibility to contract when needed, whether for plant outage issues, increased demand, and other unexpected circumstances.  Moreover, in the bilateral market, utilities can purchase energy at any time and for any term.  For example, many use WSPP as the contracting mechanism, and there are no timing or term restrictions in WSPP protocols.  While BANC is not opposed to some form of validation process to clarify whether exports are associated with non-RA Supporting Resources, the CAISO should not encumber resources or contracts that are outside of its authority to regulate.

3. Provide your organization’s feedback on how the ISO should clarify rules regarding wheeling transactions:

No response at this time.

4. 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:

No response at this time.

5. Additional comments:

It is important that the nature of non-RA contracts and scheduling arrangements are fully understood by the CAISO and stakeholders alike. Certain BANC members and other neighboring utilities have for years contracted with resources in the CAISO to use as Supporting Resources to firm exports.  This non-RA is critical for these utilities’ load serving capabilities and is used for their own RA needs to reliably serve load.  Put simply, what is “non-RA” to the CAISO is “RA” to BANC participants with Supporting Resource arrangements.  Because of the reliability importance associated with these resources, the non-RA contracts typically span multiple years and represent millions of dollars of forward commitments to ensure the resource is available when needed.  While the non-RA generator may bid the unit 24/7 into the CAISO market, a neighboring utility with a non-RA Supporting Resource contract pays for the capacity availability (like an internal CAISO load serving entity (LSE) depends on its own RA arrangements) and may only actually schedule an export using the non-RA Supporting Resource a handful of times throughout the year.  Indeed, this resource “supports” a self-scheduled export, meaning that the exporting utility is a “price taker.”  Because the export price for the self-schedule can be extremely high at times and out of the exporting LSE’s control, this is used as a reliability arrangement and is only used during months, days, or hours where ensuring the ability of the exporter to meet its load serving obligations supersedes its pricing concerns.  During all other times, the non-RA portion of the unit is available to participate in the CAISO market without providing export priority.

California Community Choice Association (CalCCA)
Submitted on 01/20/2021, 04:54 pm

Submitted on behalf of
CalCCA

Contact

Evelyn Kahl, (415) 254-5454

1. 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:
2. 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:
3. Provide your organization’s feedback on how the ISO should clarify rules regarding wheeling transactions:
4. 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:
5. Additional comments:

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.

California ISO - Department of Market Monitoring
Submitted on 01/22/2021, 01:57 pm

1. 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:

Please see link to comments below:

http://www.caiso.com/Documents/DMMCommentsonMarketEnhancementsSummer2021Readiness-Jan12-13Workshops-Final.pdf

2. 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:

Please see link to comments in Section 1.

3. Provide your organization’s feedback on how the ISO should clarify rules regarding wheeling transactions:

Please see link to comments in Section 1.

4. 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:

Please see link to comments in Section 1.

5. Additional comments:

Please see link to comments in Section 1.

California Public Utilities Commission - Energy Division
Submitted on 01/21/2021, 08:45 am

1. 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:

To address reliability concerns raised in the CAISO/CPUC/CEC Final Root Cause Analysis Report, CPUC staff recommends that schedules without “contracted supply,” which we would define as “contracted NQC” as explained further below, should not continue to have a higher priority than load in real-time. In short, CPUC staff recommends that exports not receive “day-ahead priority” over load (even “high priority” exports), and instead “high priority” exports with contracted non-RA should be provided equal priority with load in the real-time.  CPUC staff understand this to be consistent with CAISO staff’s presentation at the December 11th Market Surveillance Committee meeting,1 proposing the following: 

• High priority exports are supported by contracted internal non-RA supply prior to the day-ahead market. Receive same priority as ISO load in all markets.  

• Low priority exports can clear the IFM, but energy that can be self-scheduled and tagged prior to real-time is the RUC schedule  

• Low priority RUC schedules will have lower self-schedule scheduling priority than ISO load in real-time  

• Low priority RUC schedules have higher priority than new real-time export self-schedules 

As currently configured, it is CPUC staff’s understanding that if an export is scheduled in RUC (regardless of whether it is contracted or not), it would have “day-ahead priority” coming into the real-time and, therefore, would have higher priority than load. CPUC staff is concerned about this for a number of reasons.  

First, the export could be relying on RA resources and the load forecast coming into the RUC process could be wrong (as it was in August), and this could inadvertently lead to instances in which CAISO could unintentionally award “day-ahead priority” to exports supported by RA resources in the day ahead markets that receive priority over serving CAISO load in the real time markets and, therefore, jeopardize reliability for California customers.  Second, RA resources have real-time must offer obligations – and are paid a premium to commit to these must offer obligations – precisely because the must offer obligation allows those resources to address reliability concerns in the real-time,  not to ensure that the energy can be exported.  

Further, CPUC staff also recommends that “contracted supply” should indeed be “contracted” and not just “identified,” that it should include firm “contracted NQC,” and that it not include the following: 

  • Capacity above the NQC.  For example, a hydro resource might have an NQC of 80 MW (as determined by historical production), but a maximum capacity (pmax) of 100 MW.  No entity should be able to export as “contracted supply” the additional 20 MW above the NQC.  In addition, a solar resource might have an NQC of 20 MW, but a pmax of 100 MW. Again, no entity should be able to export as “contracted supply” the additional 80 MW above the NQC. 

  • Energy only contracts. For example, a solar resource may not have an NQC because it is not deliverable to load (that is, the transmission is not sufficient to ensure full deliverability).  It does not seem to make sense that energy that is not fully deliverable to load in California should be allowed to be fully deliverable to an entity external to California. 

  • Non-shown RA. In some cases, entities may not show the full NQC of a resources on its RA plan.  This should not be exportable unless it is indeed contracted (as opposed to identified). 

  • Imports.  Entities should not be able to use contracted imports to support high priority exports unless those imports are incremental to the RA imports; otherwise economic imports that displace RA imports could be used to support exports – to the detriment of reliability for California load. 

In addition, CAISO should clarify whether or not it will allow exports associated with a non-RA contract if that non-RA resource is on a forced outage. Under this scenario, CPUC staff does not believe that the export is supported.  Finally, CAISO should clarify whether it will allow exports associated with non-RA resources that are not producing energy during periods in which CAISO is considering shedding load or is experiencing another form of a reliability event. CPUC staff does not believe that the export is supported under this scenario.   

2. 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:

As discussed above, high priority exports (those contracted with non-RA resources) should not be afforded day-ahead priority over load, but should be afforded the same priority as load in real-time.   

CAISO should require the contract itself or an attestation that the contract is executed and should verify that the resource is on the NQC list and is not 1) under an RA contract for energy up to the resource’s NQC, such that the “resource” supporting the export is actually only energy from a resource under an RA contract for energy  above the resource’s NQC, 2) energy only, 3) on a supply plan, or 4) an import. 

3. Provide your organization’s feedback on how the ISO should clarify rules regarding wheeling transactions:

No comments at this time, other than those discussed above regarding the fact that contracted imports should not support high priority exports (low priority exports would appear to be fine). 

4. 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:

It would be helpful if CAISO could clarify the 1,000 MW of high priority exports on 8/18 shown in the graphic on page 9 of CAISO’s presentation. This appears to be an anomaly given that high priority exports were non-existent in the days before 8/18 and were much smaller (~100 – 200 MWs) in the days after 8/18. If exports are contracted in advance, we would not expect these amounts to vary so dramatically from day to day. Further information regarding how these “high priority” exports are identified and contracted would be helpful. CPUC staff had assumed that these would be long-term contracts for firm capacity, but this graphic suggest otherwise and raises additional concerns (e.g., what resources were not contracted on 8/18 and available for exports?). 

5. Additional comments:

Imperial Irrigation District
Submitted on 01/20/2021, 04:55 pm

Submitted on behalf of
Imperial Irrigation District

Contact

Sean Neal, Tel: 916-498-0121; E-mail: smn@dwgp.com 

1. 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:

The Imperial Irrigation District (“IID”) thanks the California Independent System Operator Corporation (“CAISO”) for the opportunity to submit comments in this aspect of the Market Enhancements for Summer 2021 Readiness stakeholder process.  IID supports the concept of Day-Ahead self-schedules without contracted supply continuing to receive Day-Ahead priority in Real-Time.  IID previously submitted comments on this topic on:  1) October 20, 2020 in response to the CAISO’s emergency implementation of Business Practice Manual (“BPM”) Proposed Revision Request (“PRR”) 1282; and 2) on December 9, 2020, in response to the CAISO’s November 20, 2020 webconference on Penalty Prices and Scheduling Priorities.

An entity located outside of the CAISO’s Balancing Authority Area (“BAA”) should be able to rely on its Day-Ahead E-Tag submittals carrying through with priority into the Real-Time Market.  Otherwise, the CAISO is issuing financially binding day ahead market awards for exports that it is not serving.  IID did not hear at the January 12 workshop discussion of tangible alternatives to lost awards.  The lateness in the CAISO’s market timeline process for declining exports under PRR 1282 creates considerable obstacles for IID in obtaining alternative supply.  At the time of the day when RUC awards are published for the day ahead horizon, the timelines for obtaining equivalent, day-ahead products in Western markets outside of the CAISO markets are formally closed.  IID cannot, at that point, turn to those day-ahead markets an option to substitute for non-awarded schedules.  

IID supports the views of Idaho Power Company expressed at the January 12 workshop that even though the WSPP Agreement may allow for the curtailment of exports in the real-time, as a matter of practice, cutting third-party energy to preserve a BAA’s native load is inadvisable.  BAAs must maximize the trust in each other’s ability to deliver on exports, even when internal conditions are strained.  IID heard other commenters at the January 12 workshop to express skepticism toward practices that disallow third-party export schedules in real time.

If the CAISO continues on the path of tightening the ability for Day-Ahead schedules to receive Day-Ahead priority in real time, IID urges the CAISO to focus the conversation in this stakeholder process on identifying options to obtaining equivalent Day-Ahead products in Western markets after the CAISO Day-Ahead markets are closed.  IID supports further practice changes where the financially binding results directly correspond with the scheduling practices enforced by tagging.

As the CAISO and stakeholders identify measures that will help bring assurance to Day-Ahead schedules carrying priority through real time, or otherwise reversing in whole or in part BPM PRR 1282, any measures identified should be implemented as promptly as possible.  IID is making procurement decisions to prepare for summer 2021, and those decisions carry financial impacts above-and-beyond what IID would receive prior to the institution of BPM PRR 1282.  While IID recognizes that some measures that may be adopted in this stakeholder process will require EIM Governing Body and CAISO Board of Governors approval and subsequent regulatory filing, to the extent that any revisions offering market participants relief and flexibility can be implemented in a manner that does not require formal approval, IID urges the CAISO to do so by taking the more expeditious, efficient track.
 

2. 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:

Failure to award non-RA supply with Day-Ahead priority is not advisable, based on the same rationale provided by Idaho Power Company as to why cuts to outside BAAs are inadvisable.  In each case, the supply is a third-party resource that is not the asset of the host BAA.  The same rationale applies to wheel-through transactions.  Information regarding non-RA resources is incomplete insofar as allowing market participants to understand their operations and mechanisms.  As one example of information that would assist market participants understand how best to use and interact with non-RA resources, the CAISO should better define what information the CAISO needs from the non-RA resource to ensure reliable delivery for the contracted capacity in day-ahead and real-time.
 

3. Provide your organization’s feedback on how the ISO should clarify rules regarding wheeling transactions:

To assist market participants in evaluating different summer capacity products, the CAISO should provide clear identification of how wheeling priority relates to priority for non-RA exports in CAISO market runs.  Ideally, the CAISO should provide the priority order used in its constraints relaxation mechanism similar to priorities/penalty price information that the CAISO presented for LPT exports and non-RA exports during its November 20, 2020 workshop. 

For wheeling transactions, the CAISO should develop a mechanism to reserve the rights to the transmission ahead of time.  For example, if IID procures a summer product from east of IID and needs to wheel the power through the CAISO, IID can see transmission availability on CAISO OASIS.  However, IID has no assurance that IID will receive it until the market run for a given flow day. This is a risk and uncertainty that should be addressed further.  Under the current circumstances, there are questions as to the firmness of LPT exports from CAISO, and there may be more interest in wheeling options on a daily basis as a result.
 

4. 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:

As described above, IID is making procurement decisions to prepare for summer 2021 based on current circumstances, which carry financial burdens and impacts.  IID advises the CAISO to maximize revisions that can offer market participants relief and flexibility in as expeditious manner as possible.

5. Additional comments:

Merced Irrigation District
Submitted on 01/20/2021, 12:03 pm

Contact

rdragonajtys@mercedid.org

1. 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:

Agree, keep it this way

2. 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:

You need to update the BPM for Market Instruments and the SIBR Rules.  Only updating the BPM for MO does not tell the whole story around this.  I depend on this type of Export for my RA in the TID BA, and will be penalized heavily if there is confusion about this rule change,

3. Provide your organization’s feedback on how the ISO should clarify rules regarding wheeling transactions:
4. 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:
5. Additional comments:

Middle River Power, LLC
Submitted on 01/20/2021, 03:58 pm

1. 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:

As noted immediately below, Middle River Power, LLC (“MRP”) MRP supports providing export schedules backed by non-RA capacity with the same CAISO scheduling priority as CAISO Balancing Authority Area (“BAA”) load.  MRP recognizes that CAISO current practice is for RUC schedules to have price taker (PT) priority, the same as exports backed by non-RA capacity, at least relative to HASP schedules.  While MRP would support affording non-RA backed schedules with a higher priority than RUC schedules not supported by non-RA capacity, MRP recognizes that would be a significant departure from current practice.

Additionally, MRP supports the CAISO treating RA capacity and non-RA capacity as equivalent products, so that RA capacity and non-RA capacity would be reduced pro-rata in the event a resource that is providing both RA and non-RA capacity is de-rated and cannot simultaneously provide the full committed amount of both capacity products.    

2. 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:

The CAISO should implement rules and processes that ensure that exports backed by non-RA capacity have the same priority as CAISO BAA load. 

CAISO BAA load should be covered by an amount of RA capacity sufficient to ensure reliable service under stressed system conditions and sufficiently far in advance.  This requirement would help ensure that RA program requirements are robust.  To the extent that load-serving entities have contracted with non-RA capacity within the CAISO to serve as supporting capacity for their exports, such contracting represents prudent forward operational planning that should be encouraged and rewarded by (1) affording such exports CAISO scheduling priority commensurate with that afforded CAISO BAA load, and (2) reducing RA and non-RA capacity pro-rata when a generating unit providing both products is de-rated. 

It would not be prudent to allow load within the CAISO BAA to wait until close to real-time to secure capacity before allowing that capacity to be dedicated as non-RA capacity; such “just in time” procurement would run counter to well-established reliability principles, including the principle of ensuring that adequate capacity has been secured well in advance of the operating horizon.  MRP notes that securing capacity well in advance through multi-year forward contracting is a principle that the CAISO supported in its Track 3B.2 proposals.[1]  

As Idaho Power’s Kathy Anderson explained, it is reasonable for a BAA to consider firm exports to be of comparable priority to BAA native load, both to provide assurance that such export sales are, in fact, “firm” sales, and to prevent “exporting energy emergencies to other BAAs” by cutting the exports on which those BAAs depend.  Compromising BAAs’ ability to depend on firm exports from other BAAs (assuming those exports are truly firm, both in resource priority and in transmission priority) would undermine interconnected operations.   

[1] See Final Track 3B.2 Proposals of the California Independent System Operator, submitted December 18, 2020 in California Public Utilities Commission Rulemaking R.19-11-009, at pages 31-33.  See also California Independent System Operator Corporation Comments on Track 3B.2 Proposals, submitted January 15, 2021 in the same Rulemaking at page 4 (“directionally” supporting the Western Power Trading Forum’s proposal for multi-year forward system RA requirements.) 

3. Provide your organization’s feedback on how the ISO should clarify rules regarding wheeling transactions:

MRP has no comments on this topic. 

4. 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:

MRP has no comments on this topic. 

5. Additional comments:

MRP has no additional comments.  

Pacific Gas & Electric
Submitted on 01/21/2021, 10:59 am

1. 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:

PG&E's Comments on Initiative Direction

PG&E supports CAISO’s prioritizing short-term efforts to enhance market rules related to exports to improve grid reliability for summer 2021. As noted in our previous comments, this initiative covers many complicated market rules which CAISO has spent the last decade plus developing. Given the risk of implementation challenges and the potential for unintended consequences, PG&E requests CAISO focus on discrete changes  that offer clear benefits to reliability in the summer of 2021. Specific market design gaps in the RUC market that allowed the export of California RA during system emergencies have been identified and specific solutions to address these market flaws should be prioritized to address future reliability challenges.

While PG&E supports these efforts on export curtailment, PG&E requests that any market rule changes should have sunset provisions at the end of the Summer of 2021. CAISO can examine the effectiveness of these temporary changes in a full stakeholder process before making changes permanent.

Response to Question 1

Consistent with the recommendations of the CAISO’s DMM, PG&E requests the CAISO to coordinate with neighboring BAs to ensure consistent and comparable rules related to export scheduling and curtailment are developed within the West, especially related to periods of system emergencies.

2. 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:

PG&E believes the CAISO needs to consider additional requirements for high priority exports in order to ensure California can maintain reliability in 2021. Specifically, we ask CAISO to consider the following changes: 1) create a process to validate exports from contracted supply and additional attestation requirements, 2) recallability provisions for non-performance in real-time and 3) limit the export capacity to what is deliverable given transmission constraints.

Process for Validating Exports and Attestation Requirements

PG&E encourages the CAISO to develop additional criteria before an export can be designated as a high priority export and apply targeted export limitations during emergency conditions. PG&E understands that scheduling coordinators do not need to provide significant information about the contracted generation other than indicating that it is sourced from a non-RA generator.

In order to ensure that high priority exports are being served only by non-RA capacity, PG&E sees the need for CAISO to request and validate the following information from exporters:

  • CAISO should require the exporter to submit its contract with an external BA outside the CAISO. The CAISO can then validate the terms of the agreement and ensure that it is indeed tied to non-RA capacity and has been contracted to serve firm load outside the CAISO.
  • CAISO should limit the export from scheduling above its contracted NQC amount. For example, if a hydro unit or solar resource (presumably with a RA agreement with a California Load Serving Entity) has a lower NQC designed to reflect the expected energy output of the resource, CAISO should not allow energy production above the NQC to be exported from CAISO during emergency conditions. 

Recallability Provisions for Non-Performance in Real Time 

PG&E believes that an exporter desiring to flag exports as a high priority should only be able to have high priority for energy that is flowing in real time. If an exporter flags a day-ahead award up to the contracted generator’s NQC, but the unit does not perform in real time, CAISO should have methods to measure the underperformance of that contracted generator and curtail exports in real time. From the stakeholder call, PG&E understands that Idaho Power only allows generators to sell firm energy specifically sourced from that generator and will curtail any energy the generator attempts to sell above that amount. It is also our understanding that such a process is not currently possible under the CAISO’s current rules and processes.  Due to the CAISO’s lack of visibility into the export generator and lack of clear rules around the amount for which the generator can receive a day ahead export, the CAISO  could not prevent a contracted generator from exporting energy above what that contracted generator was actually able to produce.  PG&E believes addressing these issues could provide reliability benefits during system emergencies.   

Limit Export to Deliverable Capacity due to Transmission Constraints

PG&E believes it is important that the CAISO also consider the amount of energy a contracted generator can export given transmission congestion. Specifically, PG&E has concerns that along some congested paths an export of a non-RA resource could crowd out a RA resource that is needed in system emergencies. For example, consider in a system emergency if there are two generators – one RA and the other non-RA – in a generation pocket with transmission limits that cannot support both generator’s capacity. The non-RA generator schedules an export in the Day Ahead market which clears but the RA resource bids and does not clear. An exporter should not be able to flag the energy from the non-RA resource as supporting a high priority export transaction, particularly if the generator is located in a generation pocket and is functionally preventing an RA resource from serving load in California. CAISO should consider this possibility and, under such a scenario, limit the capacity that this contracted generator could export based on what is deliverable given CAISO’s own internal reliability needs. At a minimum, CAISO should consider limiting high priority exports to units with full network deliverability status.

3. Provide your organization’s feedback on how the ISO should clarify rules regarding wheeling transactions:

Similar to the discussion above, PG&E believes it is critical to develop market rules to limit the ability for wheeling transactions to crowd out import RA on the interties. First, we would note that forward trading hub prices indicated that there is a significant premium for energy in the Southwest this upcoming summer such that wheeling energy through California could be economic given transmission hurdle rates (See Chart Below). To the degree CAISO is reliant on imports submitting price responsive bids over the ties, CAISO should make sure its export rules do not allow a wheeling transaction (e.g. self-scheduling imports from the Pacific Northwest supporting a high priority export in the Southwest) to functionally block RA resources from being dispatched to serve internal CAISO load during emergency conditions. Unless a wheeling transaction pays for the long-term transmission right, CAISO should not allow such wheeling transactions to prevent CAISO from serving internal loads.

Prices ($) for 5 MW Peak Calendar-Month Day-Ahead LMP Futures (as of 1/20/21)

 

Palo Verde

SP15

NP15

June 2021

35.75

39.48

40.80

July 2021

148.46

77.64

61.01

August 2021

147.04

89.19

79.94

September 2021

147.75

78.42

66.80

October 2021

49.08

46.21

48.38

Sources: https://www.cmegroup.com/trading/energy/electricity/caiso-sp15-ez-gen-hub-5-mw-peak-calendar-month-day-ahead-lmp-swap-futures.html, https://www.cmegroup.com/trading/energy/electricity/palo-verde-day-ahead-peak-calendar-month-5-mw-futures_quotes_globex.html, https://www.cmegroup.com/trading/energy/electricity/caiso-np15-ez-gen-hub-5-mw-peak-calendar-month-day-ahead-lmp-swap-futures.html

4. 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:

PG&E requests an evaluation of the CAISO’s current rules and processes to confirm that imports of firm energy provide comparable reliability value as internal energy. Specifically, PG&E worries that due to price differentials at trading hubs in the West, market participants may attempt to take advantage of an arbitrage opportunity and use one of these imports to back an export from the CAISO when California needs the energy for reliability, particularly if this import energy is not designated as RA.  PG&E requests that CAISO provide the same treatment to firm imports as RA energy to ensure that these imports cannot be used to serve exports, especially in the summer.

5. Additional comments:
  • PG&E requests the CAISO perform an analysis of market data after the introduction of the emergency BPM (PRR 1282) as PG&E has previously requested. In particular, an analysis of pricing inconsistencies from using the schedules from RUC that curtailed exports but the prices from the pricing run where that export was not curtailed. Additionally, an estimation of potential inconsistencies that could occur in summer 2021 and a justification if CAISO believes this to be a minor issue. 
  • PG&E also requests the following clarification on terminology: CAISO has referred to High Priority Exports, PT SS Exports, and Contracted Supply in recent workshops and stakeholder events. It appears that the CAISO and other stakeholders have used these terms interchangeably. PG&E asks that CAISO clarify the meaning of each of these terms within the context of the current market and, specifically, to highlight if there are any key differences between the terms.

PacifiCorp
Submitted on 01/20/2021, 04:53 pm

1. 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:
2. 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:

As Idaho Power stated in its presentation, and for load serving entities outside the CAISO, including PacifiCorp, purchases and sales are backed by physical assets through bilateral contracts that are e-tagged. Energy priority (e.g., firm energy) is separate from transmission priority, and the majority of the West transacts for firm energy products. In its presentation, the CAISO appears to consider including a curtailment priority lower than that of CAISO load to awarded exports in the day-ahead market.  These awarded exports, that do not receive RUC awards will be subject to real-time resource sufficiency capability.  One area of concern for PacifiCorp is its ability to understand for the energy that it has contracted for with a third-party, which may be sourcing its sale out of the CAISO BAA, the priority that has been awarded in the day-ahead market.  For example, PacifiCorp may contract with a counter-party prior to the CAISO’s Integrated Forward Market (IFM), that counterparty may choose to put in a bid to the CAISO market for supply of that sale, and the relative firmness of that demand bid into the CAISO will not be known until after the IFM and RUC awards are issued in the afternoon. PacifiCorp is concerned that the CAISO’s current proposal would require it to re-evaluate its bilateral contracting practices, and whether sales sourced from the CAISO BAA would be considered firm, specifically under the current Western System Power Pool (WSPP) Agreement Schedule C firm energy product, which specifically requires that the product contracted for is a firm energy product. 

 

PacifiCorp recommends a focus on avoiding situations where bilateral contracts sourced from the CAISO BAA are curtailed in the real-time market as non-firm energy.  When these types of deals are done under WSPP Schedule C, the expectation is that entities have contracted for firm energy. PacifiCorp appreciates the transparency that is being contemplated with regard to the curtailable day-ahead schedules up to the RUC schedule, but that does not appear to fit with PacifiCorp’s expectation of firm energy at the time the transactions is negotiated with the counterparty prior to the IFM awards.  In addition, NERC standard EOP-011-1 states that during an energy emergency alert (EEA) 1 and 2 only non-firm wholesale schedules are curtailed and it is unclear on the priority of wholesale sale versus retail load under an EEA 3. That effectively means that all sales sourced from the CAISO BAA appear to fit more so under the category of non-firm energy sales at the time that they are entered into during the early morning bilateral process. 

 

PacifiCorp is concerned that there may be an effect on the bilateral market if the CAISO’s exports were considered non-firm for all transactions, as it will likely impede sales sourced from and across the CAISO BAA from non-RA resources, such as non-RA import bids at the CAISO ties in the Pacific Northwest, or economic transactions for resources not needed for retail load in the CAISO BAA. 

3. Provide your organization’s feedback on how the ISO should clarify rules regarding wheeling transactions:

Please see our comments above. 

4. 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:
5. Additional comments:

Public Generating Pool
Submitted on 01/20/2021, 04:02 pm

1. 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:

In real-time, CAISO should have sufficient information on the specific resource and transmission that is available for all exports – including bilateral transactions and market awards.  If that is the case, all RUC awards should have known contracted supply and continue to have a higher priority than CAISO loads.  If that is not the case, CAISO should take steps to acquire the necessary information rather than consider lowering the priority of these exports.

2. 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:

PGP believes that more transparency and clarity is needed on these rules, which may require memorializing these rules in CAISO tariff and/or business practices.

3. Provide your organization’s feedback on how the ISO should clarify rules regarding wheeling transactions:

PGP believes that more transparency and clarity is needed on these rules, which may require memorializing these rules in CAISO tariff and/or business practices.

PGP would like further discussion on the example Powerex raised regarding an intended wheel to the Desert Southwest that was instead taken by CAISO at a lower price than what the Desert Southwest was willing to pay.  It is important to PGP members that a wheeled bilateral transaction is delivered to the purchaser and that CAISO scheduling priorities does not impede market competition

4. 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:

One area that was discussed at the workshop was developing a comparison of CAISO and NERC energy emergency levels.  If this comparison shows differences between conditions that result in an energy alert between CAISO and the non-CAISO market participants, CAISO should consider an initiative to align its emergency levels with those of NERC..

5. Additional comments:

Idaho Power’s presentation suggested “one BA does not propagate its supply deficiency to another BA by cutting firm exports” is a general principle regarding firm exports.  Does CAISO agree with this?  If not, can CAISO articulate what conditions would warrant curtailing firm exports prior to CAISO load? 

During the workshop, there were several references to operators “biasing RUC.” Can CAISO provide more information on how and under what conditions this occurs?   Is this done manually or automatically?  Are there procedures in place that guide operational decisions to “bias RUC”?

It appears that CAISO has three different roles that could play a part in determining the prioritization of exports vs CAISO demand: market operator, balancing authority area operator, and reliability coordinator.  Can CAISO provide information on the responsibility of each of these roles related to determining the priority of export vs. CAISO load?

It was not clear at the conclusion whether or not there were any next steps.  PGP would like CAISO to provide their understanding of how these policy questions will be addressed.
 

Public Power Council
Submitted on 01/20/2021, 05:03 pm

Contact

Michael Linn

mlinn@ppcpdx.org

1. 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:
2. 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:
3. Provide your organization’s feedback on how the ISO should clarify rules regarding wheeling transactions:
4. 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:
5. Additional comments:

The Public Power Council (PPC) appreciates the information provided by CAISO staff and Idaho Power at the January 12, 2021 CAISO Export and Load Scheduling Priorities Workshop and the opportunity to submit comments.  The overview of CAISO’s revised practices of export and load scheduling priorities and Idaho Power’s presentation how these priorities are considered under the non-CAISO OATT framework was helpful context.  PPC supports CAISO’s prioritization of this issue as part of it’s Market Enhancement for Summer 2021 Readiness initiative. The discussion during the stakeholder call underscored the complexity and importance of this issue.

PPC believes CAISO should approach this initiative with principals that strive to align the CAISO BAA with OATT providers and BAAs outside CAISO.  PPC recommends as a beginning principal, CAISO’s market process and rules should not prioritize the CAISO BAA’s access to resources not forward committed under Resource Adequacy above of access of other BAA’s.  Entities across the west should compete through their bids to have access to non-RA import and non-RA resources in the CAISO footprint.  This is consistent with Western BAA’s outside CAISO and would result in the most competitive market outcome.   In addition to supporting a competitive market outcome, curtailing firm exports can spread reliability issues to adjacent BAAs that are relying on firm supply to serve load.    

Although CAISO is working to implement changes it can make prior to summer 2021, solutions that can better address the underlying issues – but have longer implementation timelines – should be considered for the future.    Many of the potential policy changes discussed during the stakeholder call may have merit despite requiring longer implementation timelines.  Similarly, short term changes made through this process should be considered temporary and revisited through a traditional stakeholder process where they can be more thoroughly vetted and informed by experience gained in Summer 2021. 

Select EIM Entities
Submitted on 01/20/2021, 03:58 pm

Submitted on behalf of
Arizona Public Service, Bonneville Power Administration, Idaho Power, Los Angeles Department of Water and Power, NV Energy, PacifiCorp, Portland General Electric Company, Powerex, Public Service Company of New Mexico, Puget Sound Energy, Seattle City Light, Tacoma Power, Turlock Irrigation District

Contact

Ryan Millard

ryan.millard@pgn.com

1. 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:

Please see attached comments.

2. 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:

Please see attached comments.

3. Provide your organization’s feedback on how the ISO should clarify rules regarding wheeling transactions:

Please see attached comments.

4. 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:

Please see attached comments.

5. Additional comments:

Shell Energy
Submitted on 01/20/2021, 05:51 pm

Contact

ian.d.white@shell.com

1. 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:

Shell Energy supports continuing to allow non-RA units or resources to support firm exports with a higher priority than real-time native load.  In practice, exports backed by non-RA supply is equal in priority to native load as both are considered firm obligations of the CAISO BAA.  A firm export, complying with all classifications as such should be considered a firm obligation of the CAISO BAA. .

2. 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:

CAISO should not consider contract provisions which allow non-RA supply (resources or imports) to back firm exports.  It is irrelevant what, how or if an SC has a long-term contract with a resource to support exports.  As long as the resource is not under contract to provide RA, the resource and controlling SC should be able to serve load in markets other than just the CAISO.

The ISO could allow an SC’s resources and exports to “link” in SIBR, similar to IST matching. This would give the ISO the ability to validate the resource controlling SC consents to serving load outside of the CAISO (by virtue of backing the export).

.

3. Provide your organization’s feedback on how the ISO should clarify rules regarding wheeling transactions:

Shell Energy supports market participants ability to utilize wheeling transactions to support exports on a firm basis from the CAISO grid, such that the import resource is not associated with RA supply.  

The CAISO is charged with ensuring open and non-discriminatory access to transmission capacity.  An SC’s bid for wheeling will signal a willingness to pay for this service. This approach should determine which SCs are granted transmission access required and allow for imports at one location to support an export at another location (e.g. allowing a non-RA import wheel at Malin500 to support a firm export at Eldorado230).

Transmission access by TOR holders must follow existing guidelines for these rights under applicable business practices and the CAISO tariff.  Additionally, should the CAISO transmission operators curtail schedules for reliability, these curtailments should be made on a pro-rata basis, affecting both the import and export sides of the wheeling schedule.

4. 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:

Shell Energy notes that many transactions in the Western Interconnection are traded under a WSPP Schedule C firm energy contract.  This contract allows for limited circumstances when transactions may be interrupted for system contingencies and obligates the defaulting party to pay liquidated damages.

Historically, this has been rare; interruptions by BAAs to firm energy interchange transactions “push the problem” of interruption to another BAA.  With this in mind, the CAISO must treat export firmness policies with the same regard and equity as the CAISO treats imports.

Curtailing exports, while a solution to reduce the CAISO BAA’s obligations during tight conditions, has unintended consequences due to the interconnected nature of the power markets. 

Shell Energy suggests a standardized approach to classifying exports as “at risk of curtailment” when declared EEA conditions are met.  Exports could also be considered G-FC, following WECC and NERC protocols, to allow the CAISO to designate exports as resource contingent; conditional upon the performance and operation of the underling resource or wheeling schedule.

5. Additional comments:

Shell Energy appreciates the opportunity to comment on these matters.  

Six Cities
Submitted on 01/20/2021, 06:21 pm

Submitted on behalf of
Cities of Anaheim, Azusa, Banning, Colton, Pasadena, and Riverside, California

Contact

mmcnaul@thompsoncoburn.com

202.585.6940

1. 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:

RUC schedules that are not supported by contracted supply should not have higher priority than load in real-time.  See the broader discussion of policies that should apply to export scheduling priorities in response to Item 4 below.

2. 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:

As described in response to Item 4 below, exports that are supported by contracts with non-RA supply should continue to have high priority.  To be eligible for such high priority status, contracts with non-RA supply should be entered into prior to the IFM run for a particular Trade Day.

3. Provide your organization’s feedback on how the ISO should clarify rules regarding wheeling transactions:

As described in response to Item 4 below, wheeling transactions should continue to receive priority status only to the extent that wheeling exports are supported fully by matching imports.  If an import supporting a wheeling transaction is curtailed, the related export also should be curtailed.

4. 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:

As a result of the workshops on export scheduling priorities, it has become apparent to the Six Cities that there is a disconnect between the concept underlying Resource Adequacy (“RA”) procurement and the scheduling processes and priorities in the CAISO’s markets.  In theory, RA resources are paid for taking on a commitment to serve load in the CAISO BAA.  But in practice, RA resources may be scheduled to support Day-Ahead exports that have a higher priority than CAISO load, effectively negating the RA commitment.

The presentation by Idaho Power Company in the January 12th workshop made clear that BAAs operating under a standard type Open Access Transmission Tariff (“OATT”) make an a priori determination with respect to amounts of energy that can be sold off-system on a firm basis.  As described by the Idaho Power representative, energy from Network Resources (i.e., those resources that are designated to serve Network Load) can only be sold on a firm basis to the extent the resource is undesignated as a Network Resource.  Thus, a BAA operating under a standard OATT must make an advance determination that a resource is in excess of anticipated system needs before energy from the resource can be sold on a firm basis, and there must be separate arrangements for point-to-point transmission to support the off-system sale. 

Consistent with the principles underlying the practices described by Idaho Power, energy from resources within the CAISO BAA that are contracted to supply external entities on a firm basis (prior to the IFM run for a particular Trade Day) should receive higher priority than CAISO load.  Such contracts obviously should not be sourced from designated RA resources, because such a contract would be inconsistent with an RA resource commitment to the CAISO BAA.  Likewise, schedules associated with wheeling transactions also should receive high priority so long as a wheeling export is supported by a matching wheeling import.  It should be understood that failure to deliver a scheduled wheeling import will result in parallel curtailment of the matched wheeling export.  The Six Cities assume that it would be possible to provide for documentation of firm energy sales contracts by non-RA resources as well as matched wheeling imports and exports as part of the e-tag process.

With respect to Day-Ahead exports that may be supported by RA resources, the Six Cities support development of a process that would allow such exports only when anticipated system conditions indicate that available RA capacity is likely to be in excess of CAISO system needs.  Such a construct seems consistent with the practice described in the Idaho Power presentation of making firm off-system sales only from resources determined to be in excess of anticipated system needs.  Although it seems questionable that an automated process of that sort could be incorporated into the CAISO’s algorithms prior to June 1, 2021, the Six Cities urge the CAISO to explore the possibility of implementing a manual constraint on Day-Ahead exports (to the extent not supported by firm energy sales contracts from non-RA resources or matching wheeling imports) when forecasts of system conditions indicate that most or all RA resources may be needed to serve CAISO load.  The Six Cities recommend that the CAISO consider the appropriateness and feasibility of providing advance notice of the application of such constraints to minimize potential burdens on market participants outside of the CAISO’s BAA. 

5. Additional comments:

The Six Cities have no additional comments at this time.

Southern California Edison
Submitted on 01/20/2021, 01:31 pm

Contact

Wei Zhou

1. 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:

Please see the attachment.

2. 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:

Please see the attachment.

3. Provide your organization’s feedback on how the ISO should clarify rules regarding wheeling transactions:

Please see the attachment.

4. 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:

Please see the attachment.

5. Additional comments:

Please see the attachment.

Vistra Corp.
Submitted on 01/20/2021, 04:53 pm

1. 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:

Please see our general comments below.

2. 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:

Please see our general comments below.

3. Provide your organization’s feedback on how the ISO should clarify rules regarding wheeling transactions:

Please see our general comments below.

4. 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:

Vistra appreciates the CAISO facilitating the workshops on scheduling priorities in California ISO markets held on November 20, 2020 and January 12, 2021. At this time, we believe there is additional discussion that is warranted prior to moving forward with a specific proposal. Specifically, Vistra is interested in how existing mechanisms, such as using the inter-Scheduling Coordinator (“inter-SC”) trades to honor transmission rights, could be leverage and applied to honor intertie transactions that are for bilaterally contracted obligations. We request the CAISO explore how inter-SC trade could be leveraged to identify whether intertie transactions (import, export, wheels) are associated with bilateral contracts to apply a higher priority than power balance constraint. While not quite the same use since the inter-SC would not be validating that existing transmission rights exist, there may be an analogous use of the inter-SC trades to validate that the intertie transactions held by the same SC for that source/sink point is backed by a bilateral contract obligation. The difference that these intertie transactions do not own the transmission rights is meaningful and consequently we believe that it would not be appropriate to value them at penalty prices above those associated with cleared day-ahead awards in real-time markets. We do not believe that there is sufficient support to honor these at penalty prices like the ETC or TOR used today since the transmission rights are not reserved. But we can see a path where it may be appropriately valued at penalty prices above maintaining power balance like day-ahead market cleared awards in real-time markets. We ask CAISO to provide additional details and support for any proposals including their rationale for any penalty parameter values that may be added or adjusted.

5. Additional comments:

We offer the above suggestion in hopes of furthering the discussion as well as to focus on feasible approaches for June 1, 2021 implementation. However, Vistra strongly believes that the most appropriate and efficient way to prioritize intertie transactions is based on forward procurement of the transmission service with which the bid-in intertie transactions are associated. This is how MISO and PJM approach this prioritization. Based on our experience in these markets, Vistra believes it allows for appropriate prioritization to those who have paid to reserve the service. We are happy to share our experiences with CAISO staff if they contemplate long-term changes in this area.

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