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.
| Proposal Development | Decision | Implementation | Completed/Closed | |
|---|---|---|---|---|
| Phase 2 |
Jan 09, 2025 Meeting, Scarcity Pricing
Jan 16, 2025* Meeting, Fast Start Pricing Jan 22, 2025* Meeting, Scarcity Pricing Jan 30, 2025* Meeting, Fast Start Pricing Feb 06, 2025* Meeting, Scarcity Pricing Feb 13, 2025* Meeting, Fast Start Pricing Feb 20, 2025* Meeting Feb 27, 2025* Meeting, Fast Start Pricing Mar 06, 2025* Meeting, BAA level MPM Mar 13, 2025* Meeting, Fast Start Pricing Mar 20, 2025* Meeting, BAA level MPM Mar 27, 2025* Meeting, Fast Start Pricing Apr 03, 2025* Meeting, Fast Start Pricing |
Nov 14, 2024 PRR 1591 updates to the hourly energy shaping factor
Implementation milestones
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| 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) |
Jul 11, 2024 Training
Implementation milestones
Aug 01, 2024 Production |
Completed |
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.