Comments on Draft Tariff Language (Default Energy Bid)

1. Please provide a summary of your organization’s comments on the revised draft tariff language:

Please see Department of Market Monitoring's comments here:

http://www.caiso.com/Documents/DMMCommentsonESDER4StorageDefaultEnergyBidDraftTariffLanguage-Dec42020.pdf

2. Provide your organization’s comments on Section 34.1.5.1, Mitigating Bids in the RTM, Generally:

Please see link to comments from Department of Market Monitoring in item 1.

3. Provide your organization’s comments on Section 31.2, Day-Ahead MPM Process:

Please see link to comments from Department of Market Monitoring in item 1.

4. Provide your organization’s comments on Section 39.7.1, Calculation of Default Energy Bids:

Please see link to comments from Department of Market Monitoring in item 1.

5. Provide your organization’s comments on Section 39.7.1.8, Calculation of Default Energy Bids for Storage Resource Option:

Please see link to comments from Department of Market Monitoring in item 1.

6. Provide any additional comments on the draft tariff language. Upload redlined tariff language using "attachments" field below:

Please see link to comments from Department of Market Monitoring in item 1.

1. Please provide a summary of your organization’s comments on the revised draft tariff language:

PG&E understands that it is the CAISO's practice to post policy proposals (i.e. ESDER4 Final Proposal) concurrently with draft tariff language, however will point out that the CAISO has yet to respond to stakeholders' previous comments on many of the same issues. PG&E requests that comments in both forums be given attention and/or adequate responses.

2. Provide your organization’s comments on Section 34.1.5.1, Mitigating Bids in the RTM, Generally:

3. Provide your organization’s comments on Section 31.2, Day-Ahead MPM Process:

4. Provide your organization’s comments on Section 39.7.1, Calculation of Default Energy Bids:

5. Provide your organization’s comments on Section 39.7.1.8, Calculation of Default Energy Bids for Storage Resource Option:

1.  PG&E strongly recommends that specificity/clarification be added to the language: “To calculate the Default Energy Bid, the CAISO will use the PMin, PMax, Run Times, and other charging and discharging parameters registered in the Master File.” As written, it is unclear how these parameters will be used to calculate the Default Energy Bid.

2.  PG&E suggests either (1) making the terms “variable storage operation cost” and “storage opportunity cost” consistent with the Final Proposal language (i.e. by removing the word ‘storage’) and/or (2) creating formal definitions for them in Tariff language.  

3.  The CAISO should make clear whether the variable cost component ($/MWh) of the DEB equation represents a marginal cost of cycling, cell replacement etc. or an assumed cost of cell replacement based on estimating a number of cycles per day beyond design specifications. If it is intended to be an assumed cost, then more specificity is required as to the meaning of “beyond its designed daily cycling range” in the draft tariff language quoted below (emphasis added):

“The variable storage operation cost represents the variable costs of operating a storage resource beyond its designed daily cycling range, submitted by the Scheduling Coordinator in $/MWh.  The CAISO will validate the storage operation cost based on manufacturer warranty, available data, and supporting documentation submitted by the Scheduling Coordinator.”

This detail is important because storage resources and scheduling coordinators will need to make certain assumptions in their variable cost calculations (i.e. two cycles per day) and the CAISO should state how far beyond design criteria is expected and/or allowed. To the extent the CAISO can provide a sample variable cost calculation for a hypothetical storage resource, this would be very helpful to stakeholders understanding.

6. Provide any additional comments on the draft tariff language. Upload redlined tariff language using "attachments" field below:

1. Please provide a summary of your organization’s comments on the revised draft tariff language:

SCE supports with caveats the proposed draft tariff language for default energy bids in relation to energy storage resources. Although the proposed tariff language captures the essence of market power mitigation proposed for application to energy storage resources, the tariff language fails to provide a clear distinction between the calculation used in the day-ahead market versus the real-time market. 

2. Provide your organization’s comments on Section 34.1.5.1, Mitigating Bids in the RTM, Generally:

There is a grammatical error that requires attention in Section 34.1.5.1, Mitigating Bids in the RTM. The tariff language should read as –  

” Energy storage resources whose Pmax is less than five (5) MW or net consumers over a quarterly basis are considered in the MPM process, but not subject to mitigation.” 

3. Provide your organization’s comments on Section 31.2, Day-Ahead MPM Process:

A similar grammatical error appears in the proposed tariff language for Section 31.2, Day-Ahead MPM Process, as drafted in Section 34.1.5.1 for the CAISO Tariff –  

” Energy storage resources whose Pmax is less than five (5) MW or net consumers over a quarterly basis are considered in the MPM process, but not subject to mitigation”. 

4. Provide your organization’s comments on Section 39.7.1, Calculation of Default Energy Bids:

SCE supports the proposed tariff language for Section 39.7.1, Calculation of Default Energy Bids of the CAISO Tariff. 

5. Provide your organization’s comments on Section 39.7.1.8, Calculation of Default Energy Bids for Storage Resource Option:

SCE recommends that the proposed tariff language be amended to reflect : “As detailed in the Business Practice Manual, for storage resources participating as Non-Generator Resources, the storage resource option will calculate the Default Energy Bid by selecting: (1)  the maximum expected cost of energy plus the variable storage operation cost in the DAM and, in the RTM, the maximum of (2) the storage opportunity cost and, the maximum of the expected cost of energy plus the sum of the variable storage operation cost.” 

While the proposed tariff language is not a literal description of the mathematical expression used in the calculation, the proposed language seems confusing and leaves the reader with the expectation of a second term for which the maximum is sought in the DAM. Absent the mathematical expression, the reader is unaware that the comparison is between zero and the expected cost of energy prior to adding the result to the variable storage operation cost.  SCE requests simplification of the proposed tariff language to facilitate better understanding of the terms within the expression for the DAM versus the RTM. 

6. Provide any additional comments on the draft tariff language. Upload redlined tariff language using "attachments" field below:

None.