Comments on Phase 1 Final Proposal

1. Provide a summary of your organization's comments on the phase 1 final proposal:

ACP appreciates the modifications CAISO has made to the Minimum State of Charge proposal and ask that the forthcoming tariff language seek to address concerns raised by stakeholders related to when operators can implement this constraint.

2. Provide your organization’s overall position on the phase 1 final proposal:

3. Provide your organization’s feedback on the Planned Outage Process Enhancements topic as described in section 5.1.1:

4. Provide your organization’s feedback on the Operationalizing Storage Resources topic as described in section 5.1.2:

ACP greatly appreciates CAISO’s revisions to the Minimum State of Charge (MSOC) proposal included in the Final proposal. And is grateful that CAISO has implemented the recommendations made by ACP and other stakeholders to reduce the conditions when the MSOC is utilized and to sunset these provisions and implement a market-based approach, which will be evaluated through an upcoming stakeholder initiative. Stakeholders have raised concerns that operators would be able to impose the MSOC even when it was not triggered through the RUC process. In the forthcoming tariff language, CAISO should seek to include parameters that specify the conditions under which this would be permitted and should minimize those conditions to those truly necessary to address reliability concerns. We look forward to working with CAISO on the forthcoming tariff language and in the upcoming stakeholder initiative.

5. Provide your organization’s feedback on the Backstop Capacity Procurement topic as described in section 5.2:

6. Please provide your organization’s feedback on the implementation plan, including the proposed phases, the order these policies must roll out, and the feasibility of the proposed implementation schedule, as described in section 6:

7. Please provide your organization’s feedback on the proposed decisional classification for this initiative as described in section 7:

8. Additional comments on the Resource Adequacy Enhancements phase 1 final proposal:

1. Provide a summary of your organization's comments on the phase 1 final proposal:

In summary, BPA agrees with CAISO’s approach to Import RA and applauds its effort to continue to distinguish Non-Dynamic Resource Specific RA Import resources from unspecified import resources.  BPA supports the attestation requirements and overall principles associated with Import RA.  BPA feels strongly that a system of resources managed in concert, from a single BAA is more reliable than any one resource.

2. Provide your organization’s overall position on the phase 1 final proposal:

Bonneville is in support of the Phase 1 Final Proposal.

3. Provide your organization’s feedback on the Planned Outage Process Enhancements topic as described in section 5.1.1:

No additional comments.

4. Provide your organization’s feedback on the Operationalizing Storage Resources topic as described in section 5.1.2:

No additional comments.

5. Provide your organization’s feedback on the Backstop Capacity Procurement topic as described in section 5.2:

No additional comments.

6. Please provide your organization’s feedback on the implementation plan, including the proposed phases, the order these policies must roll out, and the feasibility of the proposed implementation schedule, as described in section 6:

The Import RA provisions were originally included in Phase 1 of this initiative but in the latest proposal have been moved to Phase 2, resulting in a year delay to the implementation of these Import RA changes to RA year 2023.

BPA believes the Import RA provisions the CAISO proposes provides a sound approach to Import RA and encourages the CAISO to implement those provisions in RA year 2022 rather than waiting until RA year 2023.  Given the CPUC RA proceedings in Track 3.B.1 addressing Import RA are to conclude in May of 2021, any coordination will be completed between the CAISO and CPUC and so should not be a reason for postponing implementation until 2023.

BPA believes that delaying the Import RA rule modifications may prolong the risks the existing rules present to reliability:   The current Import RA rules discourage Import RA sales by eliminating both the capacity pricing and the ability to bid economically. Additionally, suppliers are not required to provide assurance that Non-resource specific RA imports are providing dedicated physical supply at the time of RA showings, posing a risk of supply not being committed to CAISO.

BPA understands there is a level of interaction between the various aspects of the proposed RA enhancements that make implementation complex, but encourages CAISO to carve out and implement in Phase 1, those elements that define Resource Specific RA Imports in order to increase certainty that RA Imports will be available and committed to the CAISO.

7. Please provide your organization’s feedback on the proposed decisional classification for this initiative as described in section 7:

No additional comments.

8. Additional comments on the Resource Adequacy Enhancements phase 1 final proposal:

No additional comments.

1. Provide a summary of your organization's comments on the phase 1 final proposal:

Throughout the development of this initiative, CESA has held that the ISO’s evaluation of the resource adequacy (RA) framework must be undertaken carefully and with strong considerations of stakeholder input. The ISO’s acknowledgement and incorporation of stakeholder feedback is fundamental to minimize market disruptions and yield the reliability outcomes the ISO seeks. In this context, it is worth recognizing the diligent labor of ISO staff in incorporating recommendations made by members of the Market Surveillance Committee (MSC), CESA, and other stakeholders with regards to the Minimum State-of-Charge (MSOC) proposal.

In the Final Proposal, the ISO clearly states that the MSOC proposal would be a temporary solution implemented solely to minimize reliability risks while the ISO works with stakeholders to identify a permanent, market-oriented solution. Furthermore, the ISO has revised the MSOC proposal substantially, adopting a trigger condition that is well-equipped to solely apply the restriction in the days of most critical need, and minimizing the number of real-time (RT) intervals the restriction would apply to.

Given these modifications, as well as the ISO’s commitment to revise the MSOC proposal and improve on it through the upcoming Energy Storage Enhancements (ESE) initiative, CESA’s comments can be summarized as follows:

• The ISO should consider applying the MSOC to a portion of energy storage based on the expected RUC shortfall, in a pro rata basis.?
• The ISO should study MSOC use during the summer of 2021 to automate a process that would drop the restriction if RT conditions allow it. ?
• In order to replace the MSOC in a timely manner, the ISO should consider the following list of storage issues when scoping the ESE initiative:?
  • Update the Multi-Interval Optimization (MIO) tool.
  • Revise the Bid-Cost Recovery (BCR) mechanism.
  • Consider the creation of an Energy Shifting product.

2. Provide your organization’s overall position on the phase 1 final proposal:

3. Provide your organization’s feedback on the Planned Outage Process Enhancements topic as described in section 5.1.1:

CESA offers no comments at this time. 

4. Provide your organization’s feedback on the Operationalizing Storage Resources topic as described in section 5.1.2:

CESA generally supports the modifications ISO staff have done to the MSOC proposal within the Final Proposal. In particular, CESA appreciates the ISO’s consideration of a trigger condition that focuses solely on critical days; the determination that the MSOC would apply only in the intervals prior to a resource’s Day-Ahead (DA) schedule; and, most importantly, the recognition that this restriction shall be temporary and will be accompanied with a two-year sunset provision. While these modifications substantially improve upon previous versions of the MSOC proposal, CESA still considers the ISO could meaningfully enhance it by minimizing the number of MW affected by the MSOC and evaluating a methodology that would allow the automatic elimination of the MSOC if RT conditions allow.

The ISO should consider applying the MSOC to a portion of energy storage based on the expected RUC shortfall, in a pro rata basis

As mentioned above, the ISO has been diligent in its integration of most stakeholder feedback relative to the MSOC proposal. While the minimization of days and intervals affected by an MSOC trigger is welcome, limiting the number of MW is also necessary to mitigate the impact of MSOC on the storage fleet’s ability to provide flexibility to the grid. As such, CESA urges the ISO consider elements of LS Power’s Alternative MSOC Proposal, as included in their comments on this initiative’s Draft Final Proposal.

In their comments, LS Power recommends the ISO uses the results of their preferred sufficiency test to determine the minimum quantities of charge power (MW) and stored energy (MWh) necessary to meet the day’s evening peak. By doing so, the ISO would be able to determine a system-wide MSOC requirement and allocate it in a pro rata basis to all RA-providing storage assets. CESA considers that the ISO would be able to do this in the case of a RUC infeasibility, as said process would indicate the magnitude of the expected shortfall. This minimization would reserve only a fraction of power and capacity of each storage asset to comply with the MSOC, thus allowing them to keep flexibly responding to RT grid needs.

The ISO should study MSOC use during the summer of 2021 to automate a process that would drop the restriction if RT conditions allow it

In the Final Proposal, the ISO has ensured stakeholders that it will track MSOC use in a manner consistent with Exceptional Dispatch (ED) in order to better determine the conditions that have resulted in MSOC usage, and its effectiveness.[1] CESA appreciates this inclusion, as it will enable the ISO to collect necessary data to consider improvements to this framework past its most urgent application period, summer of 2021. Furthermore, the Final Proposal also notes that, in the case of an MSOC trigger in the DA market, the ISO’s operations team will have the opportunity (albeit not the obligation) to cancel the MSOC in the RT market if conditions have materially changed and the grid can provide the level of reliability required solely via optimal dispatch.[2] In this context, CESA believes the ISO should utilize the data collected from potential MSOC applications during the summer of 2021 to identify a viable methodology to automate the process of cancelling the MSOC constraint if RT conditions allow it.

To this end, CESA reiterates the recommendation made within the Market Enhancements for Summer 2021 Readiness Initiative, which essentially states the ISO should run sufficiency tests on a regular basis throughout the day to determine if MSOC is still needed, not limiting itself to a single test after the DA schedules are determined. As such, CESA recommends the ISO collects and analyzes MSOC data from Summer 2021 to ensure the automation of this process is feasible by summer 2022, ahead of the permanent sunset of this provision.

[1] Final Proposal, at 25.

[2] Final Proposal, at 24.

5. Provide your organization’s feedback on the Backstop Capacity Procurement topic as described in section 5.2:

CESA offers no comments at this time. 

6. Please provide your organization’s feedback on the implementation plan, including the proposed phases, the order these policies must roll out, and the feasibility of the proposed implementation schedule, as described in section 6:

CESA offers no comments at this time. 

7. Please provide your organization’s feedback on the proposed decisional classification for this initiative as described in section 7:

CESA offers no comments at this time. 

8. Additional comments on the Resource Adequacy Enhancements phase 1 final proposal:

Within the Final Proposal, the ISO commits to the development of a permanent solution to replace the temporary MSOC proposal. To do so, the ISO will initiate the ESE initiative, expected to launch in Q2 2021. CESA appreciates the ISO’s commitment and will actively participate in these discussions. In this context, and in order to commence a record on subjects and modifications to be considered in that initiative, CESA shares a list of topics that the ISO might want to consider in the ESE initiative.

• Multi-interval optimization (MIO) tool: Currently, the MIO software’s operation can lead to undesired discharge in intervals prior to the evening peak since it does not link real-time dispatch (RTD) instructions directly to the binding interval. Revising this tool could enable the RT market to dispatch energy storage in a way that obviates the need for the MSOC.
• Bid-cost recovery (BCR): Today, the BCR mechanism does not properly address the losses non-generator resources (NGRs) incur when following CAISO dispatch. This, paired with the previously noted deficiencies of the MIO tool exacerbates the financial risks of suboptimal dispatch instructions for NGRs. As such, a revision of the BCR, paired with improvements to the MIO, could enable the ISO to rely on dispatch instructions and ED to operate the storage fleet ?while properly compensating assets.
• Energy shifting product: The ISO should consider the creation of a DA product designed to compensate storage specifically for shifting renewable energy into the evening hours. This product should capture the opportunity costs storage resources would undertake by limiting themselves to energy shifting. This proposal has been shared previously by CESA and Wellhead within this initiative; as such, CESA urges the ISO to revise said comments and consider this topic in the upcoming ESE Initiative. ?

1. Provide a summary of your organization's comments on the phase 1 final proposal:

Please see the following link for comments from the Department of Market Monitoring:

http://www.caiso.com/Documents/DMMCommentsonResourceAdequacyEnhancements-FinalProposalPhase1-Mar102021.pdf

2. Provide your organization’s overall position on the phase 1 final proposal:

Please see item 1 for comments from the Department of Market Monitoring.

3. Provide your organization’s feedback on the Planned Outage Process Enhancements topic as described in section 5.1.1:

Please see item 1 for comments from the Department of Market Monitoring.

4. Provide your organization’s feedback on the Operationalizing Storage Resources topic as described in section 5.1.2:

Please see item 1 for comments from the Department of Market Monitoring.

5. Provide your organization’s feedback on the Backstop Capacity Procurement topic as described in section 5.2:

Please see item 1 for comments from the Department of Market Monitoring.

6. Please provide your organization’s feedback on the implementation plan, including the proposed phases, the order these policies must roll out, and the feasibility of the proposed implementation schedule, as described in section 6:

Please see item 1 for comments from the Department of Market Monitoring.

7. Please provide your organization’s feedback on the proposed decisional classification for this initiative as described in section 7:

Please see item 1 for comments from the Department of Market Monitoring.

8. Additional comments on the Resource Adequacy Enhancements phase 1 final proposal:

Please see item 1 for comments from the Department of Market Monitoring.

1. Provide a summary of your organization's comments on the phase 1 final proposal:

As detailed below, Cal Advocates has several concerns about the design of the planned outage substitution obligation (POSO) as presented in the Resource Adequacy Enhancements Final Proposal - Phase 1 (FPP1).  If the POSO is implemented, Cal Advocates continues to support the POSO as a pilot for Summer 2021 only. 

2. Provide your organization’s overall position on the phase 1 final proposal:

3. Provide your organization’s feedback on the Planned Outage Process Enhancements topic as described in section 5.1.1:

The California Independent System Operator (CAISO) proposes to modify the planned outage process by requiring full substitution for any planned outage by a resource adequacy (RA) resource.[1]  Procuring substitute capacity would be the obligation of the resource scheduling coordinator (SC) instead of the load-serving entity (LSE) which showed the resource.[2]  The CAISO’s proposed planned outage substitution obligation (POSO) would apply to all summer and non-summer months beginning in summer 2021, and would sunset when a Phase 2 solution is adopted in the CAISO’s RA Enhancements Initiative (expected in late 2021, to be implemented in RA year 2023).[3]  In other words, the CAISO’s current proposal would apply for at least 18 months, or indefinitely if a longer-term proposal cannot be agreed upon.

1. Stakeholders are largely opposed to the POSO

As the CAISO acknowledges,[4] stakeholder comments submitted on January 21, 2021, on the Draft Final Proposal were overwhelmingly opposed to the POSO component of the proposal.[5]  The current and final iteration of the proposal makes one major change in extending the POSO from applying to Summer 2021 only, to starting in Summer 2021 and continuing through all months to the unspecified date when Phase 2B can be completed.[6]  Cal Advocates opposed the design of the POSO in the Draft Final Proposal stage with the caveat that if the CAISO were to revise the POSO, “Cal Advocates prefers a pilot program for only summer 2021, with an opportunity for ex-post evaluation.”[7]  Notably, California Public Utilities Commission (CPUC) Energy Division staff expressed support for the CAISO’s proposal “to require substitute capacity for any RA resource that seeks to take a planned outage during the summer months” [emphasis added].[8]  Cal Advocates maintains its prior position, and strongly reiterates that, if revised, the POSO should only apply to summer months. 

2. The POSO will increase ratepayer costs, eliminate outage flexibility, and is too open-ended

Cal Advocates appreciates the CAISO’s commitment to identifying feasible solutions which can be implemented on a very short timeline to improve system reliability in Summer 2021.  That said, Cal Advocates has several concerns about the design of the POSO in the FPP1 and, if the POSO is implemented, Cal Advocates continues to support the POSO as a pilot for Summer 2021 only.  

1. Extending the POSO to cover all months will increase long-term ratepayer costs

A year-round POSO would increase ratepayer costs as generators incorporate the costs of substitution into new RA contracts.  Eliminating the option for planned outages without replacement would inevitably increase ratepayer costs as scheduling coordinators pass the costs of substituting all planned outages on to LSEs.  LSEs that act as SCs would incur ratepayer costs through substitution procurement unless the LSE happens to control spare non-RA capacity.[9]  Non-LSE SCs could potentially recover the costs of this proposal by raising RA prices in the near future. 

Applying the POSO year-round would also send a strong market signal about increasing costs just as large volumes of incremental RA capacity are being procured.  There is substantial RA capacity likely to come online before RA Year 2023 during which the POSO would apply, including RA procurement authorized in CPUC Rulemaking 20-11-003 for 2021 and anticipated for 2022, as well as ongoing procurement authorized by CPUC Decision 19-11-016.  This new RA capacity would therefore be subject to the proposed year-round POSO for the life of their contracts (unless renegotiated), including both short-term and long-term contracts.  A nominally temporary proposal such as this would have additional long-lasting ratepayer impacts because many RA contract terms extend for 10 to 20 years and would have planned outage substitution costs baked into their prices.  Limiting the POSO to summer months would provide yearly windows when generators could take planned outages without incurring additional costs which would inevitably be passed on to ratepayers in the form of higher RA prices. 

2. Extending the POSO effectively eliminates the purpose of a planned outage

Planned outages are not a major source of reliability risk because they are entirely within the CAISO’s purview to approve or deny.  CAISO Operating Procedures describe two types of RA Maintenance Outages and their approval criteria.[10]  The POSO would eliminate the second outage type, RA Maintenance Outage Without Replacement, which allows planned outages when the “outage will not result in insufficient RA capacity during outage period.”[11]  In contrast, the POSO would require generators to provide substitute capacity even when the CAISO’s reliability studies forecast no risk of insufficient RA supply. 

Planned outages are a negotiated solution between LSEs and the system operator to allow generators to carry out necessary maintenance when it is convenient for all participants.  If the CAISO’s reliability studies forecast that a planned outage could threaten the reliability of the grid, the CAISO already has the right to deny that outage.  However, in the FPP1 and CAISO staff comments during stakeholder workshops, the CAISO has framed the necessity of a year-round obligation using terms such as “principles” and “commitments.”  For example, the CAISO states that it, “does not believe that the presence of non-RA capacity or the lack of substitute capacity should relieve an RA resource of its obligation to be available to the CAISO.”[12]  

From a structural perspective, the CAISO’s proposal attempts to eliminate all risk associated with the type of outage over which it has the most control.  For example, the CAISO notes that, “Ultimately, providing RA is a commitment to be available to the CAISO. If a resource is unable to do so, it should have an obligation to find another resource that will, or not be shown as RA in that month.”[13]  Describing RA resources which are on planned outages of being unavailable to the CAISO is unreasonable because those outages would have already received prior approval by the CAISO.  Planned outages are needed to allow generators to carry out necessary maintenance which in turn supports reliability and reduces future unexpected outages.  Imposing a year-round POSO will add additional costs without any clear reliability improvement. 
 

Grid managers must always seek to balance the tension between costs and reliability, but the CAISO’s POSO proposal prioritizes reliability with inadequate heed to the cost implications.  The CAISO notes that, “the current planning reserve margin does not account for capacity unavailable due to planned outages.”[14]  However, there is no need to account for a planned outage in the planning reserve margin because a planned outage is controllable.

Additionally, imposing a year-round POSO could have unintended side effects stemming from generator perceptions that having substitute capacity all-but-guarantees approval of a planned outage.  During the FPP1 stakeholder call, a generator described this perspective and suggested that generators would end up delaying planned outage submissions until seven days ahead of operations instead of 45 days ahead.[15]  While the CAISO staff insisted that several other factors inform the results of outage reliability studies and earlier submissions receive a higher likelihood of approval, the CAISO should be wary of misperceptions in the generator community.  The CAISO should make clear that any planned outage that is canceled and not substituted for would be treated as a forced outage and subject to associated penalties.

3. Extending the POSO indefinitely is not a temporary solution

Finally, Cal Advocates is concerned that the POSO proposal is temporary in name only.  The CAISO clarifies that its “goal is to implement this policy promptly, to reduce reliability risks during the upcoming summer and all other months until phase 2 is implemented.”[16]  Cal Advocates appreciates and shares the CAISO’s commitment to identify solutions which can be implemented to address short-term needs for summer 2021.  However, the CAISO has not provided evidence that extending a year-round POSO is necessary to address reliability problems during non-peak months.  Phase 2 of the RA Enhancements Initiative is set to be decided on by the CAISO board in either September or November of 2021.  However, the CAISO’s RA Enhancements Initiative has been continually beset by delays, and there is little guarantee that the CAISO’s proposed timeline for a Phase 2 planned outage substitution successor policy will yield the necessary innovations.[17]  An open-ended, year-round POSO is an unnecessary and expensive proposal.

3. If the POSO is adopted, it should apply only to Summer 2021 as a single-season pilot program to inform a more permanent solution

Cal Advocates does not support revising the CAISO’s existing planned outage policy; however, if the CAISO decides to move forward with a POSO, Cal Advocates recommends that the POSO be limited to Summer 2021.  A POSO limited to Summer 2021 would allow time to evaluate the POSO’s efficacy in Summer 2021 and inform future planned outage policy design, whether in Phase 2 of the CAISO’s RA Enhancements Initiative or a successor initiative.  The CAISO cites major changes in forecast demand occurring in the seven days between when the POSO assessment window closed and grid operations took place in August and September 2020.  Increased forecast uncertainty during summer months could be a reason a POSO could be valuable during the summer months.  However, applying the POSO year-round would be superfluous and burdensome to ratepayers. 

[1] Resource Adequacy Enhancements Final Proposal - Phase 1 (FPP1), February 17, 2021, p. 10.

[2] FPP1, p. 11.

[3] FPP1, p. 11.

[4] FPP1, p. 12.

[5] Stakeholder comments available at: https://stakeholdercenter.caiso.com/StakeholderInitiatives/AllComments/9c1e6759-bbeb-4930-ad6b-ec6894b2b2a4#question-2907d5b0-2e30-4790-be7a-c0266e303f4b

[6] FPP1, p. 16.

[7] See Cal Advocates’ comments, Question 4, available at: https://stakeholdercenter.caiso.com/StakeholderInitiatives/AllComments/9c1e6759-bbeb-4930-ad6b-ec6894b2b2a4#org-59e16160-3d44-4f81-938c-7a46f61eabd9

[8] See CPUC Energy Division staff comments, Question 4, available at: https://stakeholdercenter.caiso.com/StakeholderInitiatives/AllComments/9c1e6759-bbeb-4930-ad6b-ec6894b2b2a4#org-fd5371fa-d301-4bcb-9ca9-0f62da0e9713 

[9] While the CAISO acknowledges that requiring SCs to provide substitution could incent withholding RA capacity by LSEs, the CAISO asserts that the benefits outweigh the costs.  (See FPP1, p. 13.)

[10] CAISO Operating Procure No. 3220, Version 6.0, Effective Date 2/19/2021, p. 5, available at https://www.caiso.com/Documents/3220.pdf.

[11] CAISO Operating Procure No. 3220, Version 6.0, Effective Date 2/19/2021, p. 5, available at https://www.caiso.com/Documents/3220.pdf.

[12] FPP1, p. 12.

[13] FPP1, p. 12.

[14] FPP1, p. 12.

[15] Resource Adequacy Enhancements: Final Proposal - Phase 1, Call, February 23, 2021.

[16] FPP1, p. 16.

[17] FPP1, p. 9.

4. Provide your organization’s feedback on the Operationalizing Storage Resources topic as described in section 5.1.2:

 Cal Advocates has no comment on this topic at this time.

5. Provide your organization’s feedback on the Backstop Capacity Procurement topic as described in section 5.2:

 Cal Advocates has no comment on this topic at this time.

6. Please provide your organization’s feedback on the implementation plan, including the proposed phases, the order these policies must roll out, and the feasibility of the proposed implementation schedule, as described in section 6:

 Cal Advocates has no comment on this topic at this time.

7. Please provide your organization’s feedback on the proposed decisional classification for this initiative as described in section 7:

 Cal Advocates has no comment on this topic at this time.

8. Additional comments on the Resource Adequacy Enhancements phase 1 final proposal:

 Cal Advocates has no comment on this topic at this time.

1. Provide a summary of your organization's comments on the phase 1 final proposal:

Calpine does not oppose the planned outage substitution obligation but believes it would provide marginal benefit relative to the status quo.  Additionally, Calpine supports the use of CPM when energy deficiencies are evident in local areas.  

2. Provide your organization’s overall position on the phase 1 final proposal:

3. Provide your organization’s feedback on the Planned Outage Process Enhancements topic as described in section 5.1.1:

Calpine does not object to the CAISO’s proposal to require substitution on all planned outages but believes that it would provide marginal benefit relative to the status quo.  One of those benefits would be the certainty that if substitution is available and provided, an "approved" planned outage could move forward with high confidence.

That said, Calpine already attempts to obtain substitute capacity for significant planned outages.  A more liquid market for substitute capacity, including offers to sell capacity currently included on LSE showings but excess to LSE requirements (“over-shown capacity”) would be necessary for this mandatory substitution proposal to work well.  Under the status quo, LSEs face significant frictions and limited incentives to make substitute capacity available to the market, especially over-shown capacity.  The CAISO proposal may ultimately encourage liquidity, but also may constrain suppliers’ ability to take necessary planned outages until and if that liquidity emerges.  

Calpine supports continued attention to longer-term approaches to planned outage substitution including folding a planned outage buffer into the shoulder month RA compliance requirements and/or developing a more liquid substitution pool.  In addition, Calpine supports the continued availability of substitution-free off-peak opportunity outages.

With respect to the outage scenarios presented, Calpine asserts that once started, planned outage extensions must be approved when needed in one form or another.  Often “emergent work” is discovered upon inspection of sealed equipment (generators, turbines, etc.) and must be addressed. The “denial” of a planned outage extension has no significant operational meaning if the machine is disassembled and unable to return to service. When and if this occurs, Calpine will seek to notify the CAISO as soon as the need for such an extension is necessary – regardless of whether that information is discovered prior to, or during, the forced-outage window.  CAISO should clarify that extension, if classified as “forced” does not invoke the “planned–to-forced” compliance issues.  

4. Provide your organization’s feedback on the Operationalizing Storage Resources topic as described in section 5.1.2:

No further comment.

5. Provide your organization’s feedback on the Backstop Capacity Procurement topic as described in section 5.2:

Calpine continues to support the CAISO’s proposal to use CPM if necessary to acquire capacity if an energy shortage is discovered within a local area.

6. Please provide your organization’s feedback on the implementation plan, including the proposed phases, the order these policies must roll out, and the feasibility of the proposed implementation schedule, as described in section 6:

No comment

7. Please provide your organization’s feedback on the proposed decisional classification for this initiative as described in section 7:

No comment

8. Additional comments on the Resource Adequacy Enhancements phase 1 final proposal:

No Comment

1. Provide a summary of your organization's comments on the phase 1 final proposal:

 EDF-R is still very concerned about the Minimum State of Charge (MSOC) proposal for battery storage resources.  EDF-R welcomes the CAISO’s changes to the proposal in setting a two-year sunset provision and clarifying MSOC will not be activated but for certain system conditions being met.  However, EDF-R reiterates this requirement is not rooted in data, has the potential for penalizing battery storage resources for response in the real-time market, and is very concerned about the CAISO’s introduction of a Real Time MSOC tool.

EDF-R does not support the CAISO’s proposal to amend the planned outage process to require all RA resources requesting planned outages to provide substitute capacity.

2. Provide your organization’s overall position on the phase 1 final proposal:

3. Provide your organization’s feedback on the Planned Outage Process Enhancements topic as described in section 5.1.1:

 EDF-R opposes the CAISO’s proposal to amend the planned outage process to require all RA resources requesting planned outages to provide substitute capacity, regardless of season or system conditions.

The proposal will not serve the CAISO’s goal of “reduc[ing] reliability risks during future summer months.” As has been outlined on many occasions to the CAISO, including in the CAISO’s Business Practice Management Proposed Revision Request 1122 appeals committee answering briefs and the February 19, 2020 appeals committee meeting.  With this proposal the CAISO achieves its goal of avoiding “cancellation of any approved planned outages to the extent possible” by blunt force: the CAISO’s outage cancellation ratio will drop by virtue of the CAISO never approving such outages in the first place. The CAISO will have a low planned outage rate because the CAISO will have created an environment where it is extremely difficult to take a planned outage. Furthermore, the CAISO’s view that it is not appropriate for a generator or transmission operator to submit a forced outage after the ISO has rejected the same outage when submitted as a maintenance outage is incongruous with 100% substitution requirements in a market without any available substitute capacity. The 100% substitution will certainly increase forced outages overall, as was evidenced by stakeholders on the call who indicated that since they know they will not be able to procure sufficient substitute capacity, they don’t plan to submit their forced outage until the last minute, there is little incentive for generators to do otherwise. 

And finally, this proposal decreases transparency. It forces planned outages into being labeled as “forced outages”, and in the event summer load shedding occurs, creates the opportunity for a false narrative that pointing to a root cause of supply shortages as attributable “forced outages”.

EDF-R acknowledges that the planning reserve margin does not account for forced outages, however the CAISO has failed to acknowledge that there is an implicit seasonal margin, and on a day like today, March 9 2021, the peak load is ~27,000 MW and is being ~70% served by renewables. Surely a basic reliability assessment could allow for a planned outage of some number of generators on a day like that, and EDF-R urges the CAISO to re-introduce the reliability assessment and seasonal forecasts to the planned outage procedure to accommodate outages for generators that do not have substitute capacity.

4. Provide your organization’s feedback on the Operationalizing Storage Resources topic as described in section 5.1.2:

 EDF-R appreciates the CAISO’s changes to the Minimum State of Charge (MSOC) proposal. EDF-R welcomes the inclusion of a sunset provision, the identification of a set of ‘critical’ hours where the requirement is imposed, and the CAISO’s commitment to reporting.

EDF-R requests that the sunset provision come in the form of an explicit expiration date, and that the CAISO commits to sunsetting both the Day Ahead MSOC functionality as well as the Real Time tool. A sunset provision that removes MSOC “upon development of a replacement functionality” without a specific date is not a meaningful commitment from the CAISO. It is easy to see how such generic language could allow the MSOC to stay in place indefinitely. If MSOC survives a challenge at FERC, it will be in in part because CAISO committed to speedy and adequate replacement designed around incentives rather than directives and punishments.

With respect to MSOC reporting, EDF-R requests that the CAISO model the reporting procedures and communications on the CAISO’s existing processes for exceptional dispatches and Capacity Procurement Mechanism (CPM) designations including a report that describes the reason for the MSOC designation[1] and spreadsheet style report for data analysis.[2] Transparency and comprehensive reporting is paramount for a tool that has the potential to cause severe market inefficiencies, increase costs, and if forecast errors occur, could actually decrease system reliability by prohibiting storage resources from responding to scarcity in Real Time. Appropriate reporting will also ensure that future storage proposals are built on an empirical foundation of transparent data.

EDF-R supports the notion that CAISO Real Time operators should have transparency into storage state-of-charge at any given time, as described in in the draft final proposal (page 39 paragraph 1) however, the control tool described later in the section is concerning. As EDF-R understands it, the tool CAISO plans to give Real Time operators is not separate from the MSOC but is the ability to activate MSOC if they deem it appropriate. This means operators will have the ability to activate MSOC even if day-ahead results did not indicate tight conditions.  This is a major shift from the February 22^nd description. EDF-R requests that the CAISO provide clarity on this real-time tool and commit to developing an operating procedure, transparent and comprehensive reporting, and BPM change to describe when and how real-time operators will deploy MSOC, as discussed on the February 25^th Summer Readiness Update web conference. 

[1] http://www.caiso.com/Documents/October2020SignificantEventCPMReport.pdf

[2] http://www.caiso.com/market/Pages/DailyExceptionalDispatch/Default.aspx

5. Provide your organization’s feedback on the Backstop Capacity Procurement topic as described in section 5.2:

6. Please provide your organization’s feedback on the implementation plan, including the proposed phases, the order these policies must roll out, and the feasibility of the proposed implementation schedule, as described in section 6:

7. Please provide your organization’s feedback on the proposed decisional classification for this initiative as described in section 7:

8. Additional comments on the Resource Adequacy Enhancements phase 1 final proposal:

1. Provide a summary of your organization's comments on the phase 1 final proposal:

LS Power generally supports CAISO’s Phase 1 Final Proposal and thanks CAISO for its collaboration with stakeholders and the significant improvements over previous versions, particularly on the minimum state of charge (MSOC) requirements. LS Power reiterates CAISO should seek to implement in-market solutions and use transparent prices to achieve desired reliability goals, and looks forward to working with CAISO on developing long-term solutions in the upcoming energy storage initiative. Additionally, LS Power hopes that the MSOC tool will reduce the frequency of Exceptional Dispatch events, which is a blunt out-of-market tool that severely limits storage operations and was used frequently in summer/fall 2020.

LS Power seeks clarification on the treatment of extension requests in the Planned Outage Process Enhancements proposal.

For MSOC, LS Power requests CAISO set MSOC to the minimum amount and time needed, not just based on the day-ahead schedules.

2. Provide your organization’s overall position on the phase 1 final proposal:

3. Provide your organization’s feedback on the Planned Outage Process Enhancements topic as described in section 5.1.1:

LS Power generally supports CAISO’s Phase 1 proposal for Planned Outage Process Enhancements. LS Power requests clarification on the extension requests. In this scenario, an outage request was submitted at T-45 and approved, then the operator updates the request at T-10 with an extension. Would this be considered the same outage card or a new outage card? What is the closest to the outage date that it would be the same outage card? Would the extension request put the approval at risk of being denied? If the outage modification with the extension could be denied, then LS Power suggests the generator be given the option to keep the original request and submit a new outage request with the extension.

4. Provide your organization’s feedback on the Operationalizing Storage Resources topic as described in section 5.1.2:

LS Power supports with caveats CAISO’s proposal for the MSOC requirements. LS Power thanks CAISO for its collaboration with stakeholders and the significant improvements over previous versions. LS Power reiterates CAISO should seek to implement in-market solutions and use transparent prices to achieve desired reliability goals, and looks forward to working with CAISO on developing long-term solutions in the upcoming energy storage initiative. Additionally, LS Power hopes that the MSOC tool will reduce the frequency of Exceptional Dispatch, which is a blunt out-of-market tool that severely limits storage market participation. The Exceptional Dispatch tool was used frequently in summer/fall 2020, during which time, Exceptional Dispatch orders were independent of, and often times at odds with, a resource’s Day Ahead award obligations.

LS Power requests CAISO set MSOC to the minimum amount and time needed, not just based on the day-ahead schedules. The residual unit commitment (RUC) process should indicate how much energy is needed and the hours in which there is an insufficiency. LS Power proposes a modification to the CAISO proposal, such that using this information, the CAISO could then determine both the minimum quantities of charge power (in MW) and stored energy that must be maintained across the storage fleet (in MWh) to serve the day’s insufficiency period. CAISO could count the MW of Day Ahead storage awards in each hour and sum over the appropriate time scales. Then the appropriate fraction of a resource’s storage capacity can be reserved from the real time market, as opposed to all of it. For example, the RUC process may show that 1000 MWh are needed, but cumulative storage day-ahead awards are 1500 MWh. The 1000 MWh should be allocated proportionally among the storage fleet, and the extra 500 MWh from day-ahead awards should not be subject to the MSOC.

5. Provide your organization’s feedback on the Backstop Capacity Procurement topic as described in section 5.2:

LS Power has no comments at this time.

6. Please provide your organization’s feedback on the implementation plan, including the proposed phases, the order these policies must roll out, and the feasibility of the proposed implementation schedule, as described in section 6:

 LS Power supports CAISO’s proposed phased implementation plan

7. Please provide your organization’s feedback on the proposed decisional classification for this initiative as described in section 7:

LS Power has no comments at this time.

8. Additional comments on the Resource Adequacy Enhancements phase 1 final proposal:

LS Power has no additional comments at this time.

1. Provide a summary of your organization's comments on the phase 1 final proposal:

LSA and SEIA’s Final Proposal comments focus on the following topics:

Planned Outage 100% substitution requirement   

• LSA and SEIA oppose the requirement generally, because the CAISO has not demonstrated that the benefits exceed the costs, i.e., provided evidence that there is a problem that needs to be solved, or considered the cost to generators or market efficiency.  (This is an earlier LSA and SEIA comment to which the CAISO has yet to provide a response.) 

• If the CAISO nevertheless proceeds with this proposal, LSA and SEIA recommend that the CAISO: (1) Modify the proposal to reduce the impacts on very small outages and small generation projects; and (2) clarify the substitute capacity requirement calculation for Variable Energy Resources (VERs – solar and wind).

Operationalizing storage resources/Minimum State of Charge (MSOC) requirement  

• LSA and SEIA continue to believe that the CAISO has not demonstrated that the benefits exceed the costs, i.e., provided evidence that there is a problem that needs to be solved, or considered the cost to generators or market efficiency.  While the criteria for imposing the MSOC are somewhat clearer than in the last proposal version, stakeholders have raised other serious questions about this proposal that the CAISO has not yet addressed.  (This is an earlier LSA and SEIA comment to which the CAISO has yet to provide a response.)

• LSA and SEIA also agree with WPTF that, if CAISO operators are allowed to override market results and impose the MSOC when the imposition criteria have not been met, that the criteria for this serious decision be explicit and transparent.

2. Provide your organization’s overall position on the phase 1 final proposal:

Oppose, for the two proposals above.  No Position for the Backstop Capacity Procurement proposal.

3. Provide your organization’s feedback on the Planned Outage Process Enhancements topic as described in section 5.1.1:

LSA and SEIA still oppose this 100% substitution requirement, mainly due to lack of information on whether the benefits would exceed the costs, i.e., whether this is a (potentially very burdensome) solution seeking a problem. LSA and SEIA made this argument in their last comments, but despite the CAISO’s response to comments by others, the CAISO did not address it at all in its latest proposal.  The CAISO’s refusal to seriously consider providing generators with any tools to meet this new obligation – such as the stakeholder-suggested bulletin board to help match seekers of substitute capacity with those offering it – simply increases the lack of justification for the proposal.

If CAISO persists in adopting this proposal, other factors should be considered.  While CAISO called Phase I proposals “very focused and easily implemented,” the reasonableness of the proposal for VERs depends greatly on implementation details that have not been addressed in the stakeholder process.  LSA and SEIA below suggest a minor modification to reduce the burden on VERs and small projects, and a clarification on how the need for substitute capacity will be determined.

CAISO should demonstrate that the benefits exceed the costs. 

CAISO has presented no information about the costs that suppliers might have to incur to comply with these requirements, only hypothetical statements that costs should be low when substitute capacity is available and that outages should be rescheduled when it is not.  Moreover,  CAISO has not considered at all the efforts that suppliers must exert to locate and contract with substitute capacity.  CAISO’s refusal to consider tools such as a simple electronic bulletin board – strongly supported in stakeholder meetings – to help buyers and sellers of substitute capacity find each other will only increase the administrative cost and burden to comply with this blanket requirement.

Likewise, CAISO has not demonstrated the benefits of the proposal, e.g., when or how often substitute capacity has been required under the current rules, or how often substitute capacity has been required under the current rules but not provided (e.g., where the outage had to be rescheduled, or taken as a Forced Outage).  If generators are able already to procure substitute capacity with the current relatively short notice that it is required, then there is no reason to change the current practice.  Before the CAISO imposes such a sweeping requirement, it should be required to demonstrate that there is actually a problem that needs to be addressed.

CAISO should modify and/or clarify the proposal to reduce unreasonable burdens.

If CAISO persists in adopting the 100% substitution requirement, LSA and SEIA strongly recommend that the CAISO take the actions below, to: (1) Exempt very small Planned Outage MW amounts; and (2) clarify that the current methods used to determine the amount of RA substitute capacity required would continue to apply going forward.  These actions will go far in ensuring that the impact of the proposal on VERs is reasonable and proportional to the CAISO’s needs.

These recommended actions stem from the manner in which most Planned Outages for VERs are typically implemented, i.e., by removing groups of inverters from service, not taking the entire plant down at once, in order to maintain production at a high level.  This means that a 100% substitute capacity requirement for VER Planned Outages would require numerous transactions for small amounts of substitute capacity each year, instead of procurement of a single amount of substitute capacity in a single, more efficient transaction.

Recommended modification:  Exemption for very small MW amounts of equipment on Planned Outage.  The frequent need for just a few MWs of substitute capacity would greatly increase the administrative burden to comply with the requirement.  (Likewise, the burden on very small generation projects of finding and engaging substitute capacity would be relatively very high.)

Instead, LSA and SEIA recommend that the CAISO exempt small Planned Outages from the substitution requirement (or retain the current practice for such outages).  The CAISO tariff Uninstructed Deviation Penalties (currently inactive) are instructive; that structure exempts deviations within a Tolerance Band – the greater of 5 MW or 3% of the resource capacity – from such penalties.  The CAISO should use this same level of flexibility, already found reasonable by FERC, to reduce the burden of the proposal on VERs and small projects.

Recommended clarification:  CAISO should clarify how substitute capacity will be determined for VERs.  CAISO proposals in this initiative (including the draft tariff changes), as well as the current CAISO tariff and BPMs, provide almost no information on this very important topic.  LSA and SEIA expect that there has been little focus on this issue because: (1) VERs are usually prohibited contractually from taking Planned Outages in high-demand months, when substitution requirements are more likely to be imposed under the current rules; (2) their practice of taking only small Planned Outages a given time, and the typical large VER location outside Local Capacity Areas, has usually kept them from triggering substitute-capacity requirements.

LSA and SEIA were only able to find specific information in the RA Enhancements Phase 1 Business Requirements Specification (BRS), posted at http://www.caiso.com/Documents/Business-Requirements-Specification-Resource-Adequacy-Enhancements-Track-1.pdf.  This document has an example (on p.24) for a 150 MW solar project counted for 55 MW of NQC in a given month, taking a partial outage of 80 MW that month, leaving 70 MW of capacity in service – see below. 

The example indicates that this resource would not be required to provide replacement capacity, since the 70 MW of physically available capacity would exceed the 55 MW NQC for that month – in other words, as long as the remaining physical capability of a VER exceeds the NQC of the resource in the month when the Planned Outage occurs, there would be no replacement obligation.

LSA and SEIA ask that the CAISO confirm that this interpretation of the BRS is correct and reflects the CAISO’s proposal concerning VER replacement capacity determination.

4. Provide your organization’s feedback on the Operationalizing Storage Resources topic as described in section 5.1.2:

LSA and SEIA continue to believe that this proposal is not sufficiently developed to be in Phase 1.  As a foundational matter, and similar to the issue with the Planned Outage 100% substitution requirement, CAISO has not provided information establishing that benefits will exceed costs.

With respect to benefits, the CAISO has yet to provide evidence that this is actually a real concern, i.e., that storage resources active in the RT Market are actually depleting their SOC such that they cannot meet their DA Market schedules, and that this is causing CAISO reliability problems.  In fact, storage resources are highly incented to ensure that their SOC is sufficient to fulfill their DA market schedules, since the CAISO’s own data show that energy prices during scheduled discharge hours are typically very high.  The CAISO should be required to determine that a problem actually exists before it imposes a solution, especially a potentially costly and harmful solution like this one. 

Likewise, the CAISO has not provided any information about the potential costs to storage resources of this proposal, and/or loss of efficiency in the CAISO’s real-time market.  (The CAISO’s proposal to report on the frequency of MSOC declarations does not even commit to providing impact information after implementation.)  For example, in addition to potential revenue decreases to storage resources, the CAISO has not addressed PG&E’s concern that restrictions on dispatching storage (a fast resource) when needed in real time might cause the CAISO to lean on Regulation, and deplete those resources.

The CAISO should closely examine such impacts before making a decision to impose this requirement.

LSA and SEIA also share WPTF’s concerns that CAISO operations staff would have the authority to override market results and impose the Minimum State of Charge requirement, even where the CAISO’s criterion for invoking the MSOC – DA RUC insufficiency – was not met.  The CAISO should provide the decision criteria that the operators will use in making this determination, and not leave that determination to be made based on potentially arbitrary and non-transparent factors.

5. Provide your organization’s feedback on the Backstop Capacity Procurement topic as described in section 5.2:

LSA and SEIA have no comment on this proposal at this time.

6. Please provide your organization’s feedback on the implementation plan, including the proposed phases, the order these policies must roll out, and the feasibility of the proposed implementation schedule, as described in section 6:

As noted above, LSA and SEIA oppose the Planned Outage Enhancements proposal and the Operationalizing Storage Resources proposals, since the CAISO needs to provide more justification for adopting them.

LSA and SEIA are glad to see that the CAISO is taking more time to resolve the serious issues involved with the UCAP proposal.  They hope that the CAISO will use that as an opportunity to reconsider the significant interference with PPA contracting caused by the proposed NQC re-definition, in particular.

7. Please provide your organization’s feedback on the proposed decisional classification for this initiative as described in section 7:

LSA and SEIA have no comment on this proposal at this time.

8. Additional comments on the Resource Adequacy Enhancements phase 1 final proposal:

LSA and SEIA have no other comments on the Phase 1 proposal at this time.

1. Provide a summary of your organization's comments on the phase 1 final proposal:

MRP supports two aspects of the CAISO’s proposal (operationalizing storage and expanding its backstop procurement authority) but still does not support the proposal regarding changes to the planned outage process.   

2. Provide your organization’s overall position on the phase 1 final proposal:

MRP supports two aspects of the CAISO’s proposal (operationalizing storage and expanding its backstop procurement authority to address energy duration limitations in local areas) but still does not support the proposal regarding changes to the planned outage process.   

3. Provide your organization’s feedback on the Planned Outage Process Enhancements topic as described in section 5.1.1:

 The CAISO proposes to require substitute capacity for all planned outages beginning in Summer 2021.  MRP continues to oppose this proposal.  While the CAISO acknowledges that the underlying problem is created by the monthly nature of the RA program, the CAISO proposes to adopt this requirement for substitute capacity rather than adopt the best practices of all other ISOs to implement annual or seasonal RA requirements.  Providing substitute capacity for all planned outages will be an increasingly expensive and perilous undertaking in an increasingly tight RA market.  The CAISO is pushing generator owners towards a paradigm in which it will become increasingly difficult or burdensome to take the planned outages necessary to maintain the fleet on which the CAISO will rely to maintain reliability for the foreseeable future.

MRP still expects that, in spring and fall shoulder periods, monthly RA requirements may be significantly higher than actual demand.  In such conditions, it would be unnecessary, expensive and burdensome for RA resources to be required to provide substitute capacity in order to take a planned outage.   The CAISO’s “all planned outages require substitute capacity” may impose a measure of equity across market participants, but – at what cost?  

The CAISO is also proposing to not allow planned outages that go beyond their originally-scheduled scheduled times to extend the planned outage by extending the outage card.  Instead, the CAISO is proposing to require that the Scheduling Coordinator (SC) extend the planned outage by submitting a new outage card.  The CAISO indicates it will deny the extension if the SC cannot provide substitution.  As the CAISO recognizes, unless the SC discovers the need to extend the planned outage at the beginning of the outage, it may be difficult to find substitute capacity for the extended outage, which will then become a forced outage. 

Finally, the CAISO has not memorialized in the final Phase 1 proposal its apparent agreement with the principle that if a generator provides substitute RA capacity at the time of the planned outage request, the CAISO should approve that outage immediately and not wait until the RA showings to approve the outage.  MRP understands that there will be situations in which the CAISO cannot approve a planned outage even with substitute capacity provided at the time of the outage request because that resource is uniquely needed to address a local reliability problem.  However, MRP expects those situations to be limited.   Where a resource is not a local capacity resource, and the requesting SC provides substitute capacity at the time of the outage request, that outages request should be immediately and unconditionally approved. 

4. Provide your organization’s feedback on the Operationalizing Storage Resources topic as described in section 5.1.2:

Given the stakeholder opposition to the earlier-proposed Minimum State of Charge (MSOC) requirement, MRP understands the CAISO’s proposal to put additional “guardrails” around the use of this tool (e.g., applying the requirement only on days in which the CAISO market shows a RUC infeasibility (i.e., when RUC does not have sufficient capacity), and applying the requirement only in the hours immediately preceding the storage resource’s discharge schedule).   MRP continues to support the CAISO developing rules and requirements that help ensure that short-duration storage that counts towards RA requirements the same way as duration-unlimited resources is fully available to meet the most operationally challenging hours of the day. 

5. Provide your organization’s feedback on the Backstop Capacity Procurement topic as described in section 5.2:

MRP supports the CAISO’s proposal to expand its CPM backstop authority to address situations in which an LSE has secured resources with insufficient energy duration to meet local area needs. 

6. Please provide your organization’s feedback on the implementation plan, including the proposed phases, the order these policies must roll out, and the feasibility of the proposed implementation schedule, as described in section 6:

MRP finds the proposal to implement the provisions regarding operationalizing storge before Summer 2021 to be a very aggressive one that presents a challenging implementation schedule, but supports that timing. 

7. Please provide your organization’s feedback on the proposed decisional classification for this initiative as described in section 7:

MRP agrees with the CAISO’s proposed decisional classification (CAISO Board approval only). 

8. Additional comments on the Resource Adequacy Enhancements phase 1 final proposal:

1. Provide a summary of your organization's comments on the phase 1 final proposal:

Planned Outage Process Enhanements:

• PG&E believes there are many practical implementation challenges/questions not fully addressed in the proposal and it remains unclear on the implementation timing and how CAISO plans to test its IT systems prior to full implementation.

• As explained in PG&E’s answer to question 3, PG&E also has many concerns about the logistics of the CAISO substitution proposal, and requests modifications to the timeline that will not jeopardize CAISO’s objectives, including:

• PG&E proposes the CAISO require substitution capacity for planned outages at T-30 rather than T-45, as currently proposed;
• PG&E proposes that planned outages emerging between T-30 and T-8 should maintain the current substitution rules, or be given three to five business days to provide substitution capacity, rather than 24-hours;
• PG&E requests the CAISO clarify the substitution types should remain unchanged (e.g. system RA can be used to substitute for local RA on planned outage);
• PG&E believes that the implementation of the proposal which requires new forced outage cards for planned outage extensions needs to be revised in order to minimize the operational burden on the CAISO’s operators and scheduling coordinators.

 Operationalizing storage:

• PG&E appreciates CAISO’s continued efforts to implement storage measures. However, the proposal still lacks a clear definition and effect of the minimum state of charge proposal. The two examples provided do not adequately address what the CAISO is intending to implement.
• PG&E also  has several concerns with implementing this proposal in the summer 2021 timeframe: There is a need for consistent telemetry between SCs and the CAISO’s operators; Implementation of the MSOC requirement could have unforeseen effects; Communication of the MSOC requirement is of paramount concern to scheduling coordinators (SCs); The two-year sunset period should be modified to one year.

Backstop capacity procurement authority for local area energy sufficiency:

• PG&E believes more work is needed to improve the methodology that the CAISO has proposed for evaluating local capacity and energy needs and considering resource availability limitations. The CAISO’s proposed methodology will determine the hourly capacity needs by dispatching all resources including solar up to the latest available NQC at the time of the load in the local area. Applying a time duration curve to modify the dispatch of a solar resource that has already been adjusted for the ELCC methodology does not properly account for all of the energy production available during all hours of the day. The CAISO should examine other methods of evaluating resource insufficiency before implementing an approach that does not account for the resource’s contribution during different hours of the day.

2. Provide your organization’s overall position on the phase 1 final proposal:

3. Provide your organization’s feedback on the Planned Outage Process Enhancements topic as described in section 5.1.1:

PG&E believes there are many practical implementation challenges/questions not fully addressed in the proposal and it remains unclear on the implementation timing and how CAISO plans to test its IT systems prior to full implementation.

PG&E’s comments can be summarized as follows:

• The CAISO should require substitution capacity for planned outages at T-30 rather than T-45, as currently proposed;
• Planned outages that emerge between T-30 and T-8 should maintain the current substitution rules, or be given three to five business days to provide substitution capacity, rather than 24-hours;
• Substitution types should remain unchanged (e.g. system RA can be used to substitute for local RA on planned outage);
• Implementation of the proposal which requires new forced outage cards for planned outage extensions needs to be revised in order to minimize the operational burden on the CAISO’s operators and scheduling coordinators.

The CAISO should require substitution capacity for planned outages at T-30 rather than T-45, as currently proposed

The proposed changes are a significant departure from the current POSO timeline, and PG&E has concerns about the logistics of the CAISO substitution proposal and requests modifications to the timeline.   PG&E proposes having the mandatory substitution capacity requirement to be submitted by the SC in CIRA no later than T-30 instead of 24 hours after T-45. Requiring an SC to provide substitute capacity at T-45 with a 24-hour window (as CAISO explained at the stakeholder call held on 2/23) is not workable and has many immediate short term legal and contract management impacts. Based on the current filing timeline, the RA Plan and Supply Plan(s) can be revised and resubmitted up to T-30 to address any data entry errors. Under the current business practice manual, all plans are formally locked at T-30 in CIRA so that the CAISO can perform its Monthly CPM Assessment. A more practical timeframe for requiring substitution for planned outages that fits seamlessly into the new substitution capacity rules would be to require substitution capacity before T-30 to allow LSEs and SCs enough time to resolve any upload mismatches. Additionally, requiring planned outage substitution for RA resources before T-30 would still give the CAISO visibility into any local reliability issues, and precedes the current outage assessment performed by CAISO at T-22.

Planned outages that emerge between T-30 and T-8 should maintain the current substitution rules, or, at the very least, be given five business days to provide substitution capacity, rather than 24-hours

Additionally, any incremental planned outages for RA resources submitted after T-30 should continue to follow the existing T-8 substitution rules. Current rules already allow the CAISO to cancel a planned outage for RA resources if an SC does not provide substitution RA capacity by T-8. There is already a limited amount of time to procure and provide the CAISO with substitution RA capacity for planned outages discovered after an RA Filing under the current rules. Reducing the existing short substitution timeline down to 24 hours does not improve reliability if the proposed change effectively limits the ability and time for generators to acquire substitution capacity and are therefore unable to take a planned outage.

If planned outages occur between T-30 and T-8 (as they often do), PG&E recommends that SCs be given until the T -8 timeline to provide substitution. At the very least, SCs should be given five business days to provide the substitution capacity rather than 24 hours. A 24-hour mandate to provide substitution capacity would require extra personnel (seven days a week) whose sole function would be to watch for and respond to incoming outages. While PG&E's preference is to maintain the current substitution requirement (at T-8), an alternative could be to require substitution capacity to be made within 5 business days from the time a planned outage is submitted. This approach is warranted given the concerns mentioned previously and considering how RA filing deadlines and short-term substitutions are often handled by different teams.

The CAISO should consider how certain outages outside of the control of the generator or not technically forced as they are within the planning timeframe should be considered. For example, if a gas pipeline outage occurs and generators have been made aware of the outage 21 days in advance (as has been the historical average), under the current proposal the generators would have to wait until T-8 to take the outage as forced, since the notice was given after T-45. In this case, gas transmission outages should be treated the same as electric transmission outages and not require substitution capacity.  The CAISO will need to consider how such a scenario would be handled. 

Substitution types should remain unchanged (e.g. system RA can be used to substitute for local RA on planned outage)

PG&E requests that the CAISO make it explicit that substitution capacity can be provided in any form (i.e., system RA can be substituted for local RA on planned outage).

The proposal which requires new forced outage cards for planned outage extensions has merit, but its implementation needs to be revised in order to minimize the operational burden on the CAISO’s operators and scheduling coordinators.

The CAISO also proposes to move forward with the ‘Option 1’ approach that the requested planned outage extensions must be made as a new outage card for extension and will require substitute capacity. PG&E recognizes that switching to a forced outage card does have the added benefit of accessing substitute capacity for the extended portion of the outage. However, there are some issues with this approach.

First, scheduling coordinators currently have no ability to enter forced outages between T-45 and T-8, which means that if a planned outage is extended without available/identified substitution (for the extended portion), the CAISO is kept in the dark until T-8 that the planned outage is being extended. PG&E requests that the CAISO acknowledge this outcome and advise market participants if they still would like communication on upcoming outages such as extensions.

Second, creating new OMS cards is more burdensome for operators than extending existing OMS cards. The CAISO should therefore clarify that only one new forced outage OMS card needs to be created when a planned outage is extended, and that the new OMS card can be further modified in case the outage dates change again. Scheduling coordinators should not be required to create new OMS cards every time an existing outage is extended.

Finally, some allowance should be given depending on the granularity of extensions. If a planned outage needs to be extended for an hour or even several hours within the final day of the outage, a new forced outage OMS card does not give CAISO any benefit related to substitution because substitution has already been provided for that operating day. Instead, it creates an operational burden for scheduling coordinators without any benefit to the CAISO or the system. Therefore, PG&E requests that the CAISO allow planned outages to be extended intraday on the final day of the planned outage.

4. Provide your organization’s feedback on the Operationalizing Storage Resources topic as described in section 5.1.2:

PG&E appreciates CAISO’s continued efforts to implement storage measures. However, the proposal still lacks a clear definition and description of the intended effect of the minimum state of charge proposal. The two examples provided do not adequately address what the CAISO is intending to implement.

PG&E also has the following concerns with implementing this proposal in the summer 2021 timeframe.

There is a need for consistent telemetry between SCs and the CAISO’s operators — PG&E understands and agrees with the need for the CAISO to develop appropriate enhancements to their tools for storage resource telemetry: “Prior to summer 2021, the CAISO will develop a new screen for the operations team so that they can visualize a system summary of the storage fleet including details for each online storage resource including: current state of charge, site telemetry values, and maximum/minimum operating limits for these resources. Additionally, this screen will show capacity and state of charge aggregated for the storage fleet at the transmission level…The CAISO will develop an internal tool that will accept a specific threshold or target state of charge for storage resources from system operators and move those resources to a specific state of charge value. System operators will have the ability to specify hours in which these specific limits are issued to storage resources. This tool will help CAISO system operators manage storage resources in the real-time market.” 

These statements raise the possibility that if these tools are not transparent, or not implemented in partnership with the SC of a storage resource, there may be discrepancies between what the CAISO sees as real-time telemetry and what the SC sees. PG&E would like to stress that any discrepancies (especially in state-of-charge) would likely have significant market impacts. Because bids are in the hands of market participants, as are limitations entered through OMS, if there are inconsistencies in what market participants see and what CAISO sees, these inconsistencies may cause intractable problems in managing state-of-charge.  Market participants need to know that they’re seeing the same information CAISO is seeing for a minimum state-of-charge requirement to work properly. This situation can be avoided by the CAISO providing: (1) transparent and frequent communication with SCs on the implementation details of any new tools and visualizations, and (2) comprehensive testing environments/scenarios which demonstrate alignment between the CAISO’s telemetry and that of market participants.    

Implementation of the MSOC requirement could have unforeseen effects — The CAISO’s current MSOC construct has the singular focus of protecting day ahead energy schedules in peak hours by means of an out-of-market constraint. However, CAISO should also be focused on protecting the flexibility which batteries offer in dealing with unforeseen system conditions during high demand periods. If the MSOC is implemented as currently proposed, it’s possible that the constraint could force significant charging, and hence load, into hours just before hours when batteries received day ahead market awards (which aren’t guaranteed to be the hours of highest real-time need). This effect would in turn create a supply-demand imbalance during hours just before the critical hours, using the case of 2020 as an example. Likewise, there may be an incentive under such conditions for any discharge to be replaced with charging not in the next day’s solar hours, but immediately after the discharge schedule has been fulfilled, which might similarly lead to increased battery loads right after what were the 2020 critical periods, creating immediate risks to the system. The CAISO should be aware of the potential for unintended consequences such as these as they push to fast-track this proposal.  

On the premise that the MSOC is triggered on days of tight system conditions, PG&E has concerns about the ability for market participants to manage their state-of-charge through their bids during these events, given that the real-time optimization horizon does not extend far enough to capture the evening peak. In other words, storage resources could be dispatched by the CAISO uneconomically earlier in the day, which lowers their SOC, and then subsequently forced to charge at high prices (leading up to the peak) to meet the MSOC. While the CAISO has relaxed the MSOC constraint to allow additional real-time discharge and then additional real-time charging, they have not yet demonstrated how market participants are protected from MSOC charging in cases where real-time market bids/schedules are not observed (e.g., under exceptional dispatch scenarios). If the CAISO cannot provide this confidence and/or adequate cost recovery mechanisms for state-of-charge impacts of uneconomic dispatch, they should revert to a more conservative approach towards the MSOC which preserves state-of-charge earlier in the day.  Such an implementation would assure that no additional charging is required to ensure feasibility during the peak hours, whether or not there is any additional discharge in real-time.  

Communication of the MSOC requirement is of paramount concern to scheduling coordinators (SCs)— In the RA Enhancements stakeholder call on 2/23/2021, it was identified that the MSOC could be imposed on any given day in real-time, even if there was not a RUC infeasibility in the day-ahead timeframe (applicable to that operating day). This approach conflicts with the CAISO’s statement that all MSOC commitments would be identified and communicated to scheduling coordinators in the day-ahead timeframe upon the conclusion of the RUC process. The RA Enhancements Final Proposal is absent any details on if/when the CAISO would notify SCs of the MSOC being imposed during this potential “real-time only” scenario, aside from saying that the decision will be made between 8-11am. PG&E would like to underscore the importance of the CAISO maintaining as much communication with scheduling coordinators as possible when it comes to a tool which manages a battery’s state-of-charge. Not only do state-of-charge values impact an SC’s real-time and day-ahead bids/schedules, they impact the resource’s operations as well. Considering this, implementation details such as communication commitments must be established and explained when the CAISO ultimately files at FERC.  

The two-year sunset period should be modified to one year – If implemented, the proposed changes should be closely monitored after this summer and modified if necessary. A one-year sunset period would ensure that CAISO re-examines the impact of the changes and addresses any unforeseen effects as additional storage capacity continues to come online.

5. Provide your organization’s feedback on the Backstop Capacity Procurement topic as described in section 5.2:

The CAISO is seeking to expand its existing tariff authority to designate local RA collective deficiencies if any area or sub-area fails an evaluation (e.g. “sufficiency test”) and allows the CAISO to backstop (following a cure period) to ensure sufficient energy to cover local area reliability needs.

PG&E does not oppose the general principle of expanding CAISO’s authority to designate and backstop in local areas and sub-areas for energy sufficiency in addition to capacity needs in local areas to ensure sufficient MWs, or in this case MWhs, to meet local area reliability needs. PG&E supports the importance of enhancing CAISO’s evaluation processes to consider availability limitations from a RA perspective towards meeting the peak capacity requirement and load across all hours of the day. 

However, PG&E objects to the evaluation/sufficiency methodology that the CAISO proposed so far.  The CAISO’s method for evaluating local energy needs considering resource availability limitations is inadequate and could result in unnecessary resources being procured to meet the capacity requirement. The CAISO should determine the hourly capacity needs that consider the effectiveness of resources that contribute to the hourly requirements. The CAISO described the enhancements to its study process that is intended to ensure sufficient energy (megawatt-hour) in the local areas by identifying the hourly load data and determining the contingency limit.  The CAISO’s methodology will determine the hourly capacity needs by dispatching all resources including solar up to the latest available NQC at the time of the load in the local area.  Applying a time duration curve to modify the dispatch of a solar resource that has already been adjusted for the ELCC methodology will not properly account for all of the energy production available during the hours. The CAISO should examine other methods of evaluating resource insufficiency before implementing an approach that doesn’t account for the resource contribution during the different hours of the day.

In addition, it is not clear to PG&E whether the existing cost allocation mechanism for backstop procurement (e.g., CPM), based on capacity deficiencies, are adequate to address CPM cost allocation for energy deficiencies.  For example, the current cost allocation for a collective deficiency is based on an LSE’s share of the peak load.  Given that backstop procurement could be based on energy deficiencies, the use of an LSE’s share of the peak load may not be fair and equitable.  PG&E requests that CAISO provide additional details on how costs will be allocated among LSEs in the event of an individual or collective CPM based on energy deficiencies.

6. Please provide your organization’s feedback on the implementation plan, including the proposed phases, the order these policies must roll out, and the feasibility of the proposed implementation schedule, as described in section 6:

As developed in answers to previous questions, PG&E believes there are clarifications needed for the Planned Outage Process Enhancements and storage policies prior to their implementation in summer 2021, and before the end of the year for the extension of backstop procurement authority.

7. Please provide your organization’s feedback on the proposed decisional classification for this initiative as described in section 7:

No comments.

8. Additional comments on the Resource Adequacy Enhancements phase 1 final proposal:

No additional comments.

1. Provide a summary of your organization's comments on the phase 1 final proposal:

Please see Powerex's comments at https://powerex.com/sites/default/files/2021-03/2021-03-09 CAISO RA Enhancements Draft Final Phase 1 Proposal - Powerex Comments_1.pdf

2. Provide your organization’s overall position on the phase 1 final proposal:

Please see Powerex's comments at https://powerex.com/sites/default/files/2021-03/2021-03-09 CAISO RA Enhancements Draft Final Phase 1 Proposal - Powerex Comments_1.pdf

3. Provide your organization’s feedback on the Planned Outage Process Enhancements topic as described in section 5.1.1:

4. Provide your organization’s feedback on the Operationalizing Storage Resources topic as described in section 5.1.2:

5. Provide your organization’s feedback on the Backstop Capacity Procurement topic as described in section 5.2:

6. Please provide your organization’s feedback on the implementation plan, including the proposed phases, the order these policies must roll out, and the feasibility of the proposed implementation schedule, as described in section 6:

Please see Powerex's comments at https://powerex.com/sites/default/files/2021-03/2021-03-09 CAISO RA Enhancements Draft Final Phase 1 Proposal - Powerex Comments_1.pdf

7. Please provide your organization’s feedback on the proposed decisional classification for this initiative as described in section 7:

8. Additional comments on the Resource Adequacy Enhancements phase 1 final proposal:

Please see Powerex's comments at https://powerex.com/sites/default/files/2021-03/2021-03-09 CAISO RA Enhancements Draft Final Phase 1 Proposal - Powerex Comments_1.pdf

1. Provide a summary of your organization's comments on the phase 1 final proposal:

Public Generating Pool (PGP) appreciates the opportunity to comment on CAISO’s Resource Adequacy (RA) Enhancements Phase 1 Final Proposal dated February 18th, 2021. PGP’s comments are focused on the changes to the implementation plan and phases as it relates to import RA provisions. PGP continues to support CAISO’s proposed import RA modifications, but we have concerns with CAISO’s proposal to delay implementation of these changes from Phase 1 to Phase 2 which results in a year delay in implementation, as discussed in more detail in response to question 6. In summary, PGP recommends that CAISO continue to move forward key elements of the import RA proposal within Phase 1.

2. Provide your organization’s overall position on the phase 1 final proposal:

3. Provide your organization’s feedback on the Planned Outage Process Enhancements topic as described in section 5.1.1:

No comments.

4. Provide your organization’s feedback on the Operationalizing Storage Resources topic as described in section 5.1.2:

No comments.

5. Provide your organization’s feedback on the Backstop Capacity Procurement topic as described in section 5.2:

No comments.

6. Please provide your organization’s feedback on the implementation plan, including the proposed phases, the order these policies must roll out, and the feasibility of the proposed implementation schedule, as described in section 6:

PGP’s comments on this initiative have focused on the import RA provisions. We have been supportive of CAISO’s import RA proposal and believe the collective impact of these tariff modifications should greatly reduce or eliminate the potential for speculative supply. The import RA provisions were originally included in Phase 1 of this initiative but in the latest proposal have been moved to Phase 2, essentially resulting in a year delay to the implementation of these changes as Phase 1 changes are appliable for RA year 2022 and Phase 2 changes are applicable to RA year 2023. 

CAISO’s Final Phase 1 Proposal provides very reasoning for the delay to import RA provisions, other than to state that the schedule was modified to provide additional time to engage with stakeholders and the CPUC and to align the schedule with the upcoming Maximum Import Capability Enhancements initiative. PGP is supportive of CAISO’s efforts to continue to seek alignment where possible with the CPUC, however, it would appear that the current CPUC RA proceeding is expected to reach a decision on the import RA topic by May, 2021[1] which would not support the need to delay for alignment/coordination sake. 

Moreover, and more importantly, PGP believes delaying implementation of the import RA provisions could have negative reliability consequences. The recent August and September 2020 system conditions point to an increasing need for reliable and dependable capacity, including RA imports. The recent capacity deficiencies place even greater emphasis on imports to manage grid conditions, particularly during net load peak hours. The current RA rules, as CAISO itself has reiterated, add reliability risk. Non-resource specific RA imports do not assure dedicated physical supply at the time of RA showings and pose a risk of supply not being committed to CAISO. In addition, the further limitations by local regulatory authorities on economic biding of RA imports (as approved by the CPUC in decision D.20-06-028) can limit market efficiency and detract from import RA. 

PGP believes the RA import rule modifications should not be further delayed given the risks the existing provisions present to reliability. That said, PGP recognizes that there are elements within the import RA proposal that may require additional time to work through with stakeholders, such as the transmission requirements that may be better suited to address in Phase 2. However, at a minimum, PGP believes CAISO should move forward with the source specification proposal and the attestation requirements proposal in Phase 1 to ensure these are in place for RA year 2022.

Finally, PGP continues to believe that CPUC decision D.20-06-028 that directs non-resource specific resources to self-schedule or bid at or below $0/MWh does not provide assurance that non-specified resources are backed by physical resources and would not eliminate concerns with speculative supply and is harmful to reliability. We believe these requirements would discourage import RA sales and detract from the overall goal of enhancing the RA program and the reliability of the CAISO grid. PGP believes CAISO’s proposed import RA modifications are the preferred solution to address speculative supply and we commend the CAISO for its efforts to continue to pursue its recommended solution with the CPUC.

[1]Assigned Commissioner’s Amended Track 3B and Track 4 Scoping Memo and Ruling, Rulemaking 19-11-009. https://docs.cpuc.ca.gov/PublishedDocs/Efile/G000/M354/K191/354191178.PDF.

7. Please provide your organization’s feedback on the proposed decisional classification for this initiative as described in section 7:

No comments.

8. Additional comments on the Resource Adequacy Enhancements phase 1 final proposal:

No comments.

1. Provide a summary of your organization's comments on the phase 1 final proposal:

2. Provide your organization’s overall position on the phase 1 final proposal:

3. Provide your organization’s feedback on the Planned Outage Process Enhancements topic as described in section 5.1.1:

SDG&E is disappointed that the CAISO is moving forward with changes to the planned outage substitution obligation process.  As noted in SDG&E’s prior comments, this change unjustly increases the monthly planning standard to a higher threshold because LSEs may have shown additional capacity than required.  SDG&E believes this is contradictory to CAISO’s stated principle #3 to incentivize showing of all RA resources.  Instead, LSEs will only show the minimum amount so that they may use their reserve for planned outages scheduled prior to the T-45 due date or potentially future planned outages that occur after the T-45 due date.  SDG&E is very concerned that due to the new requirements, scheduling coordinators will further make their non-RA capacity not available to the broader market in case a resource in their portfolio requires substitute capacity. 

SDG&E highly recommends the CAISO clearly illustrate with examples of the timing of planned outage submissions and when substitutions will be required.  Based on the discussion on the call, SDG&E understood the CAISO to say that if a planned outage is submitted prior to T-45 due date, then the substitution requirement will only need to be submitted by T-44.  However, if a new planned outage is known after T-45, then the scheduling coordinator should not submit the planned outage if it does not yet have or may be unable to obtain the substitute capacity within the “immediate” or “24 hour” window.  The scheduling coordinator should submit the outage when substitute capacity is secured otherwise submit the outage as a forced outage.  Withholding this outage information as planned is acceptable because the CAISO’s requirement is to only notify the CAISO of forced outages that impact real time operations.

If the CAISO has a different view of the planned outage process that is not written in the proposal, SDG&E recommends the CAISO to include that in the final iteration of the proposal so that there is no confusion of the intention of the CAISO. 

4. Provide your organization’s feedback on the Operationalizing Storage Resources topic as described in section 5.1.2:

SDG&E is pleased to see the CAISO has committed to a sunset date to the minimum state of charge (MSOC) constraint and to start a new stakeholder initiative to improve the CAISO’s optimization of energy storage resources.  SDG&E understands the difficult challenge the CAISO faces with its optimization of energy storage resources.  SDG&E hopes the CAISO will be able to provide transparency as to when the MSOC is activated and under which conditions.  This will help provide additional analysis and data for the upcoming initiative.

5. Provide your organization’s feedback on the Backstop Capacity Procurement topic as described in section 5.2:

SDG&E appreciates the CAISO’s response to concerns raised in SDG&E’s comments.  It would be helpful for market participants to understand the amount of energy deficiency found by the CAISO in its mid-November report and how much energy each non-RA resource would be able to provide.  This would be necessary for LSEs to understand how much capacity and energy are required to cure the deficiency, especially since there are no energy requirements for a local area at this time.  This would also provide transparency to market participants when the CAISO backstop procures resources to fill the energy deficiency and whether the CAISO had other resources that were not procured while being able to provide similar levels of energy capability.

6. Please provide your organization’s feedback on the implementation plan, including the proposed phases, the order these policies must roll out, and the feasibility of the proposed implementation schedule, as described in section 6:

SDG&E recommends the CAISO to hold additional RA customer partnership groups to further discuss implementation and discussion of BPM changes. 

7. Please provide your organization’s feedback on the proposed decisional classification for this initiative as described in section 7:

8. Additional comments on the Resource Adequacy Enhancements phase 1 final proposal:

SDG&E recommends the CAISO to publish a Tariff Final version of the proposal with a redline so that stakeholders understand what changes, if any, were made by the CAISO based on stakeholder feedback.  This is important for stakeholders to track the proposal as it is presented to the board for approval, Tariff language and FERC filing.

1. Provide a summary of your organization's comments on the phase 1 final proposal:

The Six Cities oppose the CAISO’s proposal to require substitute Resource Adequacy (“RA”) capacity for all planned outages of RA resources as presented in the Final Proposal, even on an interim basis.  Full substitution for all planned outages may not be achievable, and the proposed full substitution requirement therefore may lead to decreased reliability.  However, the CAISO could mitigate the potential adverse consequences of imposing the full substitution requirement by (1) allowing monthly RA showings to include different RA values for a specified resource for different days of the month, subject to the sum of the RA values for each day satisfying the monthly RA requirement for the LSE submitting the showing, and (2) allowing imported resources to provide substitute capacity where a Maximum Import Capability (“MIC”) allowance is available.

With respect to the CAISO’s proposal for operationalizing storage resources, the CAISO support, or do not oppose, limited elements of the CAISO’s proposals, including the Minimum State of Charge (“MSOC”) requirement, and they oppose other elements of the CAISO’s proposals, including the requirement for storage resources to bid both their charging and discharging components pursuant to the Must Offer Obligation (“MOO”).  The Six Cities emphasize that their position on this element of the CAISO’s proposal arises specifically from an absence of clarity concerning the implications of this proposal on co-located resources. 

Finally, the Six Cities continue to support the CAISO’s proposal regarding backstop procurement. 

2. Provide your organization’s overall position on the phase 1 final proposal:

3. Provide your organization’s feedback on the Planned Outage Process Enhancements topic as described in section 5.1.1:

The Six Cities oppose the CAISO’s proposal to require substitute RA capacity for all planned outages of RA resources as presented in the Final Proposal, even on an interim basis.  The Six Cities appreciate that the objective of the CAISO’s proposal is to enhance reliability for the 2021 summer period, and the Cities further agree that one virtue of a comprehensive requirement for substitute capacity is simplicity and predictability.  However, the Six Cities remain concerned that it simply may not be feasible for many resource owners and/or Scheduling Coordinators to provide substitute capacity to cover necessary planned maintenance for RA resources.  If that turns out to be the case, an absolute requirement to provide substitute capacity for planned outages may backfire and result in decreased reliability.

It appears obvious that an absolute requirement to provide substitute capacity for planned outages will result in resource owners, Scheduling Coordinators, and load-serving entities (“LSEs”) holding back on designation of capacity in excess of RA requirements or making excess capacity available for purchase by others, choosing instead to retain undesignated capacity so as to have substitute capacity available to support planned outages of their own designated RA resources.  Combined with the potential for increased RA requirements (as contemplated under an unforced capacity (“UCAP”) approach or an increased planning reserve margin) and more realistic, but also more restrictive, counting rules, the Six Cities question whether the resource fleet expected to be available in the near term will be capable of supporting both RA requirements and a requirement to provide substitute capacity for all planned outages.  If it turns out that the resource fleet is not capable of supporting substitute capacity for all planned outages as a practical matter, then the substitution requirement will act as a barrier to the performance of planned maintenance and potentially reduce reliability as a result. 

The Six Cities requested in their comments submitted in this initiative on January 21, 2021 that the CAISO conduct a quantitative assessment of the feasibility of satisfying the proposed requirement to provide substitute capacity for all planned outages, taking into account historical schedules for planned outages, the CAISO’s proposals for increased RA requirements and modified counting rules, and resources expected to be available during the next two RA years.  The CAISO has not provided any such analysis demonstrating the feasibility of satisfying the proposed substitution requirement.  The Six Cities, therefore, remain concerned that the substitution requirement as presented in the Final Proposal may do more harm than good from a reliability perspective.

The CAISO could mitigate the potential adverse consequences of imposing the full substitution requirement by (1) allowing monthly RA showings to include different RA values for a specified resource for different days of the month, subject to the sum of the RA values for each day satisfying the monthly RA requirement for the LSE submitting the showing, and (2) allowing imported resources to provide substitute capacity where a Maximum Import Capability (“MIC”) allowance is available. 

The Six Cities discuss their proposal to allow variable daily resource RA values within monthly showings in greater detail under Item 8 below.  Allowing different RA values for a specified resource for different days of the month would allow SC’s to better manage a full substitution obligation and expand the pool of available substitute capacity.  In addition, allowing different RA values for a specified resource for different days of the month would be completely consistent with the CAISO’s determination that substitute capacity need not come from the same resource(s) for every day of a requested outage as explained at page 17 of the Final Proposal.

Allowing imported resources to provide substitute capacity where a supporting MIC allowance is available also may expand the pool of available substitute capacity and help to mitigate the potential adverse consequences of a full substitution requirement.  Since import resources are eligible to provide RA capacity, there is no reason why imported resources should not be eligible to provide substitute capacity, so long as a supporting MIC allowance is available.  In the case of planned outages for import RA resources, it may be possible to utilize the MIC allowance associated with the resource on outage to deliver substitute import capacity.  This should be allowed.  With respect to planned outages for resources internal to the CAISO Balancing Authority Area (“BAA”), it may be more challenging to procure a MIC allowance to support an import resource for substitution purposes.  But where a MIC allowance can be obtained to support use of an import resource to provide substitute capacity for a planned outage of an internal resource, the CAISO should accept substitution by the import resource.

As to the CAISO’s proposed Phase 2 review of the planned outage process, the Six Cities support further evaluation of a potential “planned outage capacity pool,” and expect to provide further comments regarding this topic when the CAISO issues a proposal.

With regard to the CAISO’s discussion of Scenario 2 at pages 18-19 of the Final Proposal, the consequence for Scenario 2 under Option 1 is unreasonable.  There is no justification for classifying an outage extension as a Forced outage while also requiring the provision of substitute capacity for the outage extension.

4. Provide your organization’s feedback on the Operationalizing Storage Resources topic as described in section 5.1.2:

In general, the Six Cities continue to support – or not oppose – limited elements of the CAISO’s proposal regarding operationalizing storage resources, and they oppose other elements.  In particular, the Six Cities do not oppose the MSOC requirement, primarily because the CAISO has proposed to implement the MSOC program on a limited basis during periods of Residual Unit Commitment (“RUC”) infeasibility and only for an interim, two-year timeframe.  (See generally Final Proposal at 23-24.)  The Six Cities acknowledge concerns expressed during the CAISO’s February 23^rd stakeholder meeting regarding whether operators may have undue discretion to impose the MSOC in periods when it is not triggered by RUC infeasibility and are likely to routinely rely on it as an operational tool.  Stakeholders would benefit from further information concerning what steps the CAISO will take to ensure that use of the MSOC remains appropriately limited to circumstances when it is truly needed.  The Six Cities also appreciate the CAISO’s commitment to issue reports regarding the use of this tool.  (See id. at 25.)

However, the Six Cities continue to be concerned that the CAISO has failed to address the implications of its proposal, including the 24x7 MOO applicable to both the charging and discharging components (see Final Proposal at 21-22), on the storage resource component of co-located resources that are subject to Investment Tax Credit (“ITC”)-related restrictions on charging from the transmission system rather than from the adjacent variable resource.  As the Six Cities have previously explained, in not adopting a transition mechanism that would exempt such resources from the charge-side MOO for a limited period of time, the CAISO is creating a risk that these resources may be withheld from providing the CAISO with RA capacity by LSEs who are concerned with their inability to mitigate grid-charging risks.  Because the implications of the CAISO’s proposal for this resource type is unclear, the Six Cities are unable to support this aspect of the Final Proposal.  To the extent that this is an issue that remains under consideration in a subsequent phase of this initiative (i.e., Phase 2, which is where other issues relating to the MOO reside, according to the Final Proposal), stakeholders would benefit from the CAISO confirming this point. 

5. Provide your organization’s feedback on the Backstop Capacity Procurement topic as described in section 5.2:

The Six Cities continue to support this element of the CAISO’s Final Proposal. 

6. Please provide your organization’s feedback on the implementation plan, including the proposed phases, the order these policies must roll out, and the feasibility of the proposed implementation schedule, as described in section 6:

The Six Cities generally agree with the proposed phasing for implementation of the RA Enhancements and the assignments of topics to Phases One and Two.  Without waiving their objections and concerns with regard to the substance of some of the CAISO’s Phase One proposals, the proposed implementation of the Phase One elements in 2021 (for RA Year 2022) appears feasible.  With the exception of the Flexible Resource Adequacy topic, it seems reasonable (though potentially aspirational) to target implementation of the Phase Two elements in 2022 (for RA Year 2023).  Because the development of revisions to the Flexible RA framework has not really begun and previously has been explicitly tied to the outcome of the Day-Ahead Market Enhancements initiative, it is premature to target implementation of Flexible RA Enhancements in 2022.

7. Please provide your organization’s feedback on the proposed decisional classification for this initiative as described in section 7:

The Six Cities agree with and support the CAISO’s decisional classification for this initiative and its proposal to seek approval only from the CAISO Board of Governors.

8. Additional comments on the Resource Adequacy Enhancements phase 1 final proposal:

As noted in the discussion in Item 3 above, the CAISO could significantly mitigate the Six Cities’ concerns with the proposal to require substitute capacity for all planned outages by allowing monthly RA showings to include different RA values for a specified resource for different days of the month, subject to the sum of the RA values for each day satisfying the monthly RA requirement for the LSE submitting the showing.  As an example, for a resource eligible to provide RA capacity of 100 MW, the Six Cities propose that an LSE be permitted to include variable amounts of capacity from the resource (not to exceed 100 MW) for different days in a monthly showing, provided that the sum of the capacity values for all resources shown by the LSE for a given day equals or exceeds the LSE’s monthly requirement.  It is the Six Cities’ understanding that such variable showings currently are permitted for import resources, and the Cities request that the CAISO extend the ability to submit different RA values for a resource for days within a month to include not only import RA resources but also RA resources located within the CAISO BAA.  The Six Cities understood this concept to have been included in earlier straw proposals in this initiative, and they strongly recommend that the CAISO reinstate it.

There would be significant, reliability-enhancing benefits of allowing variable daily RA values within monthly showings.  If LSEs are required to show the same RA value for a given resource for each day of a month, they are likely to not include the resource in a monthly showing for a month in which they anticipate a need to perform maintenance on the resource.  By allowing different values to be submitted for RA resources for different days within a month, resources could effectively substitute for each other for different days (with the CAISO having full visibility in advance of the resources relied upon for each day) while maintaining the total RA shown for each day at the level of the LSE’s requirement.  This would facilitate performance of regular maintenance and reduce incentives to hold back RA capacity that has been contracted for by an LSE but is not needed to meet the RA requirement in a given month.  It also would support additional bilateral trading of RA capacity among LSEs for substitute capacity purposes.  Allowing variable daily RA values within monthly showings is likely to make satisfaction of RA requirements more efficient and thereby make more RA capacity available.  As noted in the discussion under Item 3 above, allowing variable daily resource RA values within monthly showings also would be consistent with the CAISO’s determination that substitute capacity for planned outages need not come from the same resource(s) for every day of a requested outage as explained at page 17 of the Final Proposal.

1. Provide a summary of your organization's comments on the phase 1 final proposal:

Please see SCE's comments covering this topic submitted on January 21, 2021, available at:  https://stakeholdercenter.caiso.com/StakeholderInitiatives/AllComments/9c1e6759-bbeb-4930-ad6b-ec6894b2b2a4#org-08926ac8-da87-4ab1-93c1-0dba152a2f9e

2. Provide your organization’s overall position on the phase 1 final proposal:

Please see SCE's comments covering this topic submitted on January 21, 2021, available at:  https://stakeholdercenter.caiso.com/StakeholderInitiatives/AllComments/9c1e6759-bbeb-4930-ad6b-ec6894b2b2a4#org-08926ac8-da87-4ab1-93c1-0dba152a2f9e

3. Provide your organization’s feedback on the Planned Outage Process Enhancements topic as described in section 5.1.1:

Please see SCE's comments covering this topic submitted on January 21, 2021, available at:  https://stakeholdercenter.caiso.com/StakeholderInitiatives/AllComments/9c1e6759-bbeb-4930-ad6b-ec6894b2b2a4#org-08926ac8-da87-4ab1-93c1-0dba152a2f9e

4. Provide your organization’s feedback on the Operationalizing Storage Resources topic as described in section 5.1.2:

Please see SCE's comments covering this topic submitted on January 21, 2021, available at:  https://stakeholdercenter.caiso.com/StakeholderInitiatives/AllComments/9c1e6759-bbeb-4930-ad6b-ec6894b2b2a4#org-08926ac8-da87-4ab1-93c1-0dba152a2f9e

5. Provide your organization’s feedback on the Backstop Capacity Procurement topic as described in section 5.2:

Please see SCE's comments covering this topic submitted on January 21, 2021, available at:  https://stakeholdercenter.caiso.com/StakeholderInitiatives/AllComments/9c1e6759-bbeb-4930-ad6b-ec6894b2b2a4#org-08926ac8-da87-4ab1-93c1-0dba152a2f9e

6. Please provide your organization’s feedback on the implementation plan, including the proposed phases, the order these policies must roll out, and the feasibility of the proposed implementation schedule, as described in section 6:

Please see SCE's comments covering this topic submitted on January 21, 2021, available at:  https://stakeholdercenter.caiso.com/StakeholderInitiatives/AllComments/9c1e6759-bbeb-4930-ad6b-ec6894b2b2a4#org-08926ac8-da87-4ab1-93c1-0dba152a2f9e

7. Please provide your organization’s feedback on the proposed decisional classification for this initiative as described in section 7:

Please see SCE's comments covering this topic submitted on January 21, 2021, available at:  https://stakeholdercenter.caiso.com/StakeholderInitiatives/AllComments/9c1e6759-bbeb-4930-ad6b-ec6894b2b2a4#org-08926ac8-da87-4ab1-93c1-0dba152a2f9e

8. Additional comments on the Resource Adequacy Enhancements phase 1 final proposal:

Please see SCE's comments covering this topic submitted on January 21, 2021, available at:  https://stakeholdercenter.caiso.com/StakeholderInitiatives/AllComments/9c1e6759-bbeb-4930-ad6b-ec6894b2b2a4#org-08926ac8-da87-4ab1-93c1-0dba152a2f9e

1. Provide a summary of your organization's comments on the phase 1 final proposal:

Vistra appreciates the opportunity to submit our views on the CAISO's Resource Adequacy Enhancements Phase 1 final proposal. We are disappointed that the RA imports element has been moved from Phase 1 to Phase 2 for Resource Adequacy compliance year 2023. However, Vistra thanks the CAISO for separating the item from the remaining elements to set it up for the best chance of success at FERC. Of the portfolio of proposals included in this initiative, the import proposal is most likely to result in meaningful improvements to firming up Resource Adequacy. While we are disappointed by the delay, we are committed to engaging with the CAISO on this important item as it moves towards bringing the Phase 2B item to the Board in November. On the revised Phase 1 scope, Vistra continues to believe Phase 1 elements will be ineffective at best and possibly harmful for both reliability and overall market efficiency. Vistra expands on our views for each element below.

2. Provide your organization’s overall position on the phase 1 final proposal:

3. Provide your organization’s feedback on the Planned Outage Process Enhancements topic as described in section 5.1.1:

Vistra is concerned that the 100% planned outage substitution obligation will not result in the outcome the CAISO hopes. The 100% planned outage substitution requirement would in some instances not be possible to comply with due to lack of liquidity making substitute capacity unavailable. If the CAISO is fixed on changing the planned outage substitution requirement to add a 100% substitution requirement, Vistra requests the CAISO revise the proposal to only apply the requirement to specific months with risk of insufficient Resource Adequacy. For example, in PJM the market operator defines a Peak Period Maintenance Season, which for 2021 is June 14, 2021 – September 10, 2021. The CAISO could propose a Peak Period Maintenance Season or Peak Period Maintenance Seasons for the CAISO that would restrict maintenance during the peak periods instead of indiscriminately 8,760 hours. This would be an incremental improvement to the proposal.

Regardless there are still many details to be developed to support this type of proposal. For instance, it is unclear what the recourse is for resources that have planned outages that need to be rescheduled for physical reasons and require a new planned outage card. Under this proposal, the market participant would only be able to reschedule their outage if they also show substitute capacity that may not be available. The answer cannot simply be that the new outage card is denied because there is no substitute capacity available. We are seriously concerned that this could make it more difficult or even restrict some Generating Facilities from being able to take maintenance outages when needed. Generating Facilities need to be able to undergo maintenance to ensure the integrity of the plant, where denying the ability to undergo the maintenance would harm the unit’s operations going into summer season will reduce Resource Adequacy. Indeed, some outages that were originally planned may become mandatory maintenance based on an original equipment manufacturer’s assessment of the generator. The proposal as currently proposed may not always be feasible and if implemented without any flexibility could undermine reliability if units are not approved for regular maintenance leading into summer periods. Or worse, Generating Facilities may try to remain online through periods where maintenance should have been scheduled and potentially trip resulting in forced outage likely due to Plant Trouble nature of work. This would be an unreasonable outcome especially under periods where this outage was not approved merely because Resource Adequacy substitute resource was not available, but the system was flush due to energy only resources. It is critical that if a generator is unable to provide substitution capacity where it cannot continue to operate without harming the asset that a forced outage be allowed under the rules. If existing penalties are insufficient in CAISO’s view, an alternative compliance mechanism for failure to provide substitution capacity could be proposed. These concerns and scenarios need to be evaluated prior to any proposal being moved forward.

4. Provide your organization’s feedback on the Operationalizing Storage Resources topic as described in section 5.1.2:

Vistra provided our comments on the stakeholder call on February 23, 2021. We respectfully reiterate a request for the CAISO to remove the minimum State of Charge requirement. We believe FERC will to struggle to approve any minimum State of Charge requirement since it conflicts with its Order 841. Order 841 requires each RTO/ISO to permit electric storage resources to manage their state of charge. The requirement applies to all storage participation regardless of if the storage resource is a capacity seller or not. In addition to an ISO managing the state of charge conflicting on its face with Order 841 requirements, we share other stakeholder concerns that imposing the minimum State of Charge may restrict battery energy storage from being available to meet real-time needs as they arise. Further, the CAISO proposes to provide its operators essentially full discretion to enforce this functionality introducing a great deal of uncertainty.

Vistra believes that the CAISO’s existing exceptional dispatch authority allows the out-of-market action by operators when CAISO is concerned that the market will not position the fleet to meet reliability needs. We see no reason that the exceptional dispatch authority is not sufficient to mitigate the operational concerns the CAISO describes on tight days. What appears to be the issue that needs to be addressed is procedures linking an incremental exceptional dispatch instruction with a complementary decremental exceptional dispatch prior to the incremental exceptional dispatch to (1) ensure a battery is charged to supply out-of-market instruction and (2) allow a battery to be eligible for exceptional dispatch settlements. We urge the CAISO to stop pursuing the policy proposal in this effort and to pursue efforts to ensure exceptional dispatch procedures include consideration for Non-Generating Resources where these resources types should receive both decremental and incremental exceptional dispatch instructions in a coordinated fashion, as well as receiving the applicable settlement treatment.

5. Provide your organization’s feedback on the Backstop Capacity Procurement topic as described in section 5.2:

Vistra provided our request on the stakeholder call held on February 23, 2021. We respectfully submit them in this format. We respectfully request the CAISO delay bringing this element to its Board of Governors for approval until after the CPUC has released their decision in its Track 3B.2 proceeding. We believe the CAISO could delay this element and it still be feasible for RA Year 2022 as proposed. Our expectation is that the CPUC will release a Proposed Decision in May 2021 and a final decision sometime in the next month. If the CAISO brought this element to its Board of Governors in June 2021, the CAISO would still have at least four months to receive a FERC decision by end of October 2021. We urge the CAISO to bring this element to a later Board of Governors meeting after the CPUC has issued its decision, so stakeholders can have some certainty as to whether the RA paradigm will adopt energy requirements or not. The coordination or lack thereof of energy requirements will inform the likelihood of Capacity Procurement Mechanism designations increasing because of this proposal.

6. Please provide your organization’s feedback on the implementation plan, including the proposed phases, the order these policies must roll out, and the feasibility of the proposed implementation schedule, as described in section 6:

Vistra encourages the CAISO to not pursue implementing the 100% planned outage substitution obligation or the minimum State of Charge requirement at all. We also encourage the CAISO to delay bringing the backstop procurement mechanism proposal to the Board of Governors until June 2021, which will still allow for a FERC filing in time for RA Year 2022 implementation.

7. Please provide your organization’s feedback on the proposed decisional classification for this initiative as described in section 7:

None at this time.

8. Additional comments on the Resource Adequacy Enhancements phase 1 final proposal:

None at this time.

1. Provide a summary of your organization's comments on the phase 1 final proposal:

Wellhead Supports phase1 final proposal, but we do have concerns that there will not be an adequate pool of resources for the required planned outage substitution in the foreseeable future. For this reason, Wellhead suggests limiting the mandatory substitution requirement to the summer months.

Wellhead supports the modification to the MSOC. 

2. Provide your organization’s overall position on the phase 1 final proposal:

Wellhead Supports phase1 final proposal, but we do have concerns that there will not be an adequate pool of resources for the required planned outage substitution in the foreseeable future. For this reason, Wellhead suggests limiting the mandatory substitution requirement to the summer months.

Wellhead supports the modification to the MSOC. 

3. Provide your organization’s feedback on the Planned Outage Process Enhancements topic as described in section 5.1.1:

Wareellhead appreciates the CAISO's commitment to provide a resource pool for planned outage substitution, but we share CAISO's concern that there will not be adequate resources available in 2023, let alone 2021. Wellhead supports a no planned outage without substitution for the summer period, but we request that CAISO give consideration to the continuation of the current POSO process during non-summer months until the pool can be established. Therefore the mandatory substitution requirement would only apply during the summer months

4. Provide your organization’s feedback on the Operationalizing Storage Resources topic as described in section 5.1.2:

Wellhead supports the modification to the MSOC and the two-year sunset provision tied to permanent changes to address operationalizing energy storage including changes to the MOIC, BCR, and an energy shifting product.

5. Provide your organization’s feedback on the Backstop Capacity Procurement topic as described in section 5.2:

6. Please provide your organization’s feedback on the implementation plan, including the proposed phases, the order these policies must roll out, and the feasibility of the proposed implementation schedule, as described in section 6:

7. Please provide your organization’s feedback on the proposed decisional classification for this initiative as described in section 7:

8. Additional comments on the Resource Adequacy Enhancements phase 1 final proposal: