Comments on Revised final proposal

1. Please provide a summary of your organization’s comments on the WEIM Resource Sufficiency Evaluation (RSE) Enhancements Phase 2 revised final proposal and November 7, 2022 stakeholder call discussion:

Bonneville appreciate the CAISO’s continued efforts to enhance the Resource Sufficiency Evaluation and be responsive to stakeholder feedback. Bonneville supports the proposed changes with caveats. Bonneville continues to have concerns regarding the treatment of lower priority exports cleared by the HASP. While recognizing that there is not a perfect solution to the current issue, Bonneville would like to see the CAISO address the underlying structure and timing of its market processes that create the challenges with timing that rendered the approach proposed in the straw proposal infeasible.

Bonneville supports the updated proposal to provide energy assistance through the WEIM and requests responses to some questions regarding details of the program.

2. Please provide your organization’s overall position on the WEIM Resource Sufficiency Evaluation Enhancements Phase 2 revised final proposal:

No additional comment

3. Provide your organization’s comments on the interaction between advisory WEIM transfers and HASP intertie schedules, and the proposal to account for this interaction as described in section 4.2 of the revised final proposal (no changes were made in the revised final proposal):

 As stated in previous comments, Bonneville recognizes the interaction as described by CAISO’s analysis. Bonneville appreciates the inclusion of a numeric example of the interaction and resulting impact on the CAISO BAA’s incremental transfers. However, Bonneville continues to encourage the CAISO to examine and improve the interaction of its market processes.

Further, BPA is concerned that the CAISO BAA is removing all HASP LPT exports from HASP from its RS test, not just those relying on WEIM advisory imports or untagged HASP output (or other supply side sources that are not included in RS for CAISO). Bonneville recommends that the ISO differentiate between LPTs supported by CAISO non-RA capacity resources (should count towards CAISO’s RSE) and LPTs that are supported by advisory EIM imports (should not count in CAISO’s RSE). The approach proposed in the Draft Final Proposal potentially double-counts non-RA capacity resources assumed to support the export by counting it once for the CAISO BAA in its RSE and once for the sink WEIM BAA counting the energy.

Bonneville appreciates CAISO staff’s efforts to find an alternate approach to that proposed in the Phase 2 Straw Proposal. Although both proposals present potential issues, Bonneville prefers the proposal presented in the Draft Final proposal as it works by reducing the likelihood of RS failure due to discounted LPT exports, this would allow the EIM (market) the opportunity to resolve the issue and make LPT export curtailments less likely.

As CAISO stated in the proposal “This issue is unique to the CAISO BAA because the HASP schedules hourly exports at the CAISO BAA intertie based on economic bids and self-schedules clearing in the market optimization process. The optimization can choose to meet this demand with either internal CAISO BAA resources, or with imports or WEIM transfers. Because of this, the CAISO BAA cannot ensure it has sufficient internal supply and imports to support LPT exports as the supply for the exports is coming from WEIM transfers.” Bonneville is concerned that the approach is made in an attempt to work around the issues created by CAISO’s market processes as described in the proposal.

Bonneville’s support for the proposed approach is predicated on a request that CAISO examine the issues in its market processes in a subsequent phase. Until the root of the issue is resolved in the market processes, the solutions will continue to be sub-optimal.

4. Provide your organization’s comments on the proposed changes to the tagging of LPT exports, as described in section 4.2.3 of the revised final proposal (no changes were made in the revised final proposal):

As previously stated, Bonneville has significant concerns regarding the impact of this change. Our understanding from the draft tariff language is that this change would require that the Scheduling Coordinator for any export schedule other than an export backed by Generation from non-Resource Adequacy Capacity must submit an E-Tag with the designation of firm provisional energy (G-FP). The Bonneville BAA does not currently allow energy with an E-tag other than Firm to sink in the Bonneville BAA. In order to allow firm provisional energy to sink in the BAA, Bonneville would be responsible for either ensuring that reserves were self-supplied for all tagged energy and/or establishing practices for Bonneville to offer reserves to back these imports. At this time, the Bonneville BAA does not have the business practices, policies and rate structures in place to provide this service.

The impact of this change is that Bonneville and other sub-entities in its BAA will no longer be able to purchase this firm provisional energy from CAISO to sink in the Bonneville BAA.

5. Provide your organization’s comments on the proposal to cure resource insufficiencies through the WEIM subject to an out of market financial surcharge, as described in section 5.1 of the revised final proposal:

Bonneville appreciates CAISO’s efforts to define a revised approach to cure resource insufficiencies through the WEIM. The proposal approach remedies a number of the concerns with the previous approach, specifically the potentially large scale of the impact on entities that opt in. Bonneville supports the proposed approach to limit the exposure of an entity to the surcharge. While there were favorable elements of the within-market approach, including transparency through LMPs, Bonneville understands why the CAISO chose to pursue an out of market approach. However, we are concerned that it reduces the transparency of market actions and failure consequences. We recommend that CAISO commit to report at least quarterly on the use of energy assistance to monitor for disuse and share transparent reporting with entities.

Bonneville has one question regarding the statements about ABC being considered as a credit to reduce the volume of WEIM transfers exposed to the surcharge.  Could ABC be used as a credit against only the WEIM transfers or could it also be considered a credit resource to reduce the scale of the RS test failure amount? I.e. can ABC reduce either of the two values in the minimum equation for calculating the exposure to the surcharge?  

Bonneville has previously raised concerns about the bias of the CAISO hourly forecast relative to the 15 minute forecast. If a BA schedules to the hourly CAISO forecast, this bias can make it more difficult to pass the flex test. The introduction of a surcharge for accessing EIM transfers after failing the RSE places increased importance on reducing the bias between the hourly and 15 minute CAISO forecasts. 

6. Provide your organization’s comments on the proposed allocation of assistance energy revenue and charges, as described in section 5.1.1 of the revised final proposal:

Bonneville is supportive of the proposal to allocate assistance energy revenue pro-rata by net WEIM export transfer amount. Bonneville has one question regarding the proposed change in the Revised Final Proposal. Please clarify what is considered a “base transfer” for the CAISO. Since CAISO does not have base schedules, there is less certainty around whether this would refer to the HASP schedule or other schedule for transfers.

7. Provide your organization’s comments on the proposed WEIM decisional classification, as described in section 6 of the revised final proposal:

 As stated in previous comments, Bonneville has concerns about excluding element 4 “a change to the rules for tagging exports from the CAISO balancing authority area” from joint authority. Although this change only has immediate application to the CAISO BAA, it has the potential to impact the market more broadly.

8. Provide any additional comments on the WEIM Resource Sufficiency Evaluation Enhancements Phase 2 revised final proposal or November 7, 2022 stakeholder call discussion:

No additional comments

1. Please provide a summary of your organization’s comments on the WEIM Resource Sufficiency Evaluation (RSE) Enhancements Phase 2 revised final proposal and November 7, 2022 stakeholder call discussion:

The California Community Choice Association (CalCCA) appreciates the opportunity to provide comments on the Revised Final Proposal. CalCCA comments on a specific issue regarding allocation of the costs of the California Independent System Operator Corporation (CAISO) opting in to utilizing energy assistance as part of its participation in the Western Energy Imbalance Market (WEIM). In the event the CAISO has opted in, and subsequently fails the resource sufficiency evaluation (RSE) resulting in the CAISO being charged for assistance energy, the CAISO proposes to sub-allocate the costs or charges of assistance energy to measured demand. Allocating costs in this manner may fail to provide appropriate incentives within the CAISO for load-serving entities (LSEs) to avoid such deficiencies. The CAISO should clarify its proposal for charging LSEs within the CAISO for RSE failures, and provide further justification for its cost allocation proposal.

2. Please provide your organization’s overall position on the WEIM Resource Sufficiency Evaluation Enhancements Phase 2 revised final proposal:

Support with caveats

3. Provide your organization’s comments on the interaction between advisory WEIM transfers and HASP intertie schedules, and the proposal to account for this interaction as described in section 4.2 of the revised final proposal (no changes were made in the revised final proposal):

CalCCA has no comments at this time.

4. Provide your organization’s comments on the proposed changes to the tagging of LPT exports, as described in section 4.2.3 of the revised final proposal (no changes were made in the revised final proposal):

CalCCA has no comments at this time.

5. Provide your organization’s comments on the proposal to cure resource insufficiencies through the WEIM subject to an out of market financial surcharge, as described in section 5.1 of the revised final proposal:

CalCCA has no comments at this time.

6. Provide your organization’s comments on the proposed allocation of assistance energy revenue and charges, as described in section 5.1.1 of the revised final proposal:

The CAISO should clarify its proposal to sub-allocate the assistance energy charge among LSEs within the CAISO (Revised Proposal, Section 5.1.1 at 27). Specifically, the Revised Final Proposal states that WEIM balancing authority areas (BAA) will charge for assistance energy within their BAA “as defined in their OATT.” With respect to the CAISO BAA, CAISO proposes “to sub-allocate the assistance energy charge to measured demand.” The CAISO’s proposal on sub-allocating the charge appears to ignore the principles of cost causation by failing to only charge the load-serving entity(s) (LSE) that actually caused the RSE failure. The CAISO should explain whether instead of allocating among measured demand, it can allocate this charge or charges among LSEs that caused the RSE failure in order to provide appropriate incentives to LSEs to avoid such deficiencies causing the RSE failure.

7. Provide your organization’s comments on the proposed WEIM decisional classification, as described in section 6 of the revised final proposal:

CalCCA has no comments at this time.

8. Provide any additional comments on the WEIM Resource Sufficiency Evaluation Enhancements Phase 2 revised final proposal or November 7, 2022 stakeholder call discussion:

CalCCA has no comments at this time.

1. Please provide a summary of your organization’s comments on the WEIM Resource Sufficiency Evaluation (RSE) Enhancements Phase 2 revised final proposal and November 7, 2022 stakeholder call discussion:

The full text of two sets of DMM's comments are included in this summary section:  DMM's November 16, 2022 Comments on the Revised Final Proposal and DMM's December 1, 2022 Supplemental Comments.  The December 1, 2022 Supplemental Comments provide analysis of what the potential costs and impacts of the energy assistance program would have been if provisions of the Revised Final Proposal had been in effect during the critical period from September 5 to 8, 2022.

Fully formatted versions of both the November 16, 2022 Comments and the December 1, 2022 Supplemental Comments are provided as PDF attachments after the ISO's final question below.

Comments on WEIM Resource Sufficiency Evaluation Enhancements Phase 2

Revised Final Proposal

Department of Market Monitoring

November 16, 2022

Summary

The Department of Market Monitoring (DMM) appreciates the opportunity to comment on the WEIM Resource Sufficiency Evaluation Enhancements Phase 2 – Revised Final Proposal.[1]

The revised energy assistance approach in the Revised Final Proposal seems to be a reasonable compromise that could encourage a large portion of WEIM balancing areas to participate in this option.  Under the proposal, when an area opting into the energy assistance program fails a test, the penalty payments will be based on the lower of (1) the amount by which the area failed the capacity or flexibility test, or (2) dynamic WEIM transfers made into the area.  With this approach, the total cost of the penalty is scaled much more closely with the degree to which areas may be relying on the WEIM when failing the test.  While further refinements to this approach may be developed, the relative simplicity of the proposal will allow implementation of this option by summer 2023.

DMM is conducting analysis to estimate the cost impacts of the Revised Final Proposal’s energy assistance program on each WEIM balancing area, and plans to publish that analysis when it is completed.  DMM expects the cost impacts of the Revised Final Proposal to be significantly less than the impacts of the ISO’s prior energy assistance proposal. 

DMM also supports the proposal to exclude low priority exports from the CAISO balancing area from the CAISO area’s test requirements.  However, DMM recommends the ISO work on further enhancements in the next phase of the initiative in order to eliminate inconsistencies between exports that do not count as requirements in the CAISO area’s tests but that can count as supply in the importing area’s tests in tight conditions when CAISO may not deliver the exports.

Finally, DMM expects that even with more testing, the quantile regression method that will be used to calculate the uncertainty adder included in the  tests will fluctuate significantly interval by interval, making it difficult for balancing areas to reproduce or predict in advance.  Therefore, DMM continues to recommend that the ISO and stakeholders consider developing much simpler and more transparent uncertainty adders in the next phase of this initiative.

Comments

Energy assistance and consequences of failing resource sufficiency evaluation

As described in the Revised Final Proposal, the ISO proposes to add an energy assistance program to its existing resource sufficiency evaluation design.  Each WEIM balancing area will be able to choose whether or not it elects to receive energy assistance. 

If an area elects to be eligible for energy assistance, the proposal will change the consequences of that area failing a sufficiency test.  Instead of limiting import transfers to the previous interval’s transfer level, an area failing the test could receive the transfers needed to meet load.  However, instead of paying the locational marginal price for all transfers, an area failing the test would pay an additional out-of-market energy assistance penalty cost for some of the transfers. 

The penalty cost will be set at the CAISO/WEIM penalty price ($1,000 or $2,000/MWh).  The quantity of transfers into an area paying the energy assistance penalty cost would be the lesser of (1) the amount by which the area failed an upward WEIM capacity or flexibility RSE test, or (2) dynamic WEIM transfers into the area.  The ISO is not proposing to change existing sufficiency test failure consequences for balancing areas that do not elect energy assistance eligibility.

In a prior proposal, the ISO had proposed applying the energy assistance penalty cost to all of a failing balancing area’s real-time imbalance energy when that area had any WEIM transfers into its area.  DMM’s analysis of this prior proposal showed that applying the energy assistance penalty to all real-time imbalance energy could significantly raise real-time market costs for balancing areas failing the sufficiency tests.^[2] 

DMM is conducting analysis to estimate the cost impacts of the Revised Final Proposal’s energy assistance program on WEIM balancing areas, and plans to publish that analysis when it is completed.  DMM expects the cost impacts of the Revised Final Proposal to be significantly less than the impacts of the ISO’s prior energy assistance proposal. 

Moreover, the Revised Final Proposal seems to be a reasonable compromise that helps to limit large penalty payments to the amount of capacity that the failing balancing area had never made available to the WEIM’s multi-interval optimization.  As a result, assuming some WEIM balancing areas would choose to opt into receiving energy assistance, DMM supports the current energy assistance proposal.

DMM continues to recommend that in the next phase of this initiative, the ISO and stakeholders consider further refinements to the consequences a balancing area faces when it fails a sufficiency test.^[3]  For balancing areas that elect to not opt into the energy assistance program, the consequence of only limiting WEIM import transfers at the last interval’s transfer level can be too lenient.  In some situations, the transfer limitation could allow the failing area to have access to more capacity than the failing area had ever made available to the multi-interval optimization, without requiring compensation on the same order of magnitude as a capacity payment.   In the next phase of this initiative, the ISO should continue to refine the failure consequences for areas that elect to not opt into the energy assistance program.

Treatment of low priority exports in resource sufficiency evaluations

The ISO also proposes to change how the resource sufficiency evaluation treats low priority exports scheduled out of the CAISO balancing area over its interties.  Currently, any such low priority export that ends up receiving a schedule in the hour-ahead market is included in the requirements that must be met by CAISO balancing area capacity in both the flexibility and capacity tests.  The ISO proposes that low priority exports will only be included in the CAISO balancing area’s test requirements if the export has first received an award in the CAISO’s day-ahead residual unit commitment process, and then proceeds to receive an hour-ahead market schedule.

This change is an improvement to the CAISO balancing area’s current sufficiency test requirements.  The ISO has clarified that the CAISO balancing area would curtail any low priority exports with hour-ahead market awards within the hour when the CAISO balancing area does not have enough resources to meet its load and reserve obligations.^[4]  Therefore, the CAISO balancing area could potentially justify not including any low priority exports in its resource sufficiency test requirements. 

However, in situations when the CAISO balancing area will not curtail an export, it would be extremely inefficient to not allow other WEIM balancing areas to count export schedules out of CAISO towards meeting their resource sufficiency evaluation obligations.  Furthermore, inconsistencies between how these exports are included as obligations for the CAISO balancing area and as supply for the receiving WEIM balancing areas create clear inaccuracies in the test accounting that could ultimately allow a receiving WEIM balancing area to “lean” on other WEIM areas—i.e. to utilize capacity from other WEIM areas in excess of what the receiving area had ever made available to the market.

The proposed change to the treatment of low priority exports out of CAISO is a reasonable interim compromise between (1) placing excessive requirements on the CAISO balancing area for exports it ultimately would not deliver in a reliability emergency and (2) not allowing other WEIM areas to count as capacity the exports that CAISO would always deliver in non-reliability emergency situations. 

CAISO balancing area operators utilize adjustments to the residual unit commitment market load forecasts to help limit exports that receive awards in that market to only those exports that operators expect to ultimately be able to deliver in real-time.  Not allowing the receiving WEIM balancing areas to count these exports from CAISO as supply in their resource sufficiency evaluations would force the receiving WEIM balancing areas to procure other supply instead.  This could result in significant inefficiencies when power from CAISO is less expensive than the alternatives.  Therefore, we support counting exports that receive residual unit commitment awards as part of the sufficiency test requirements for the CAISO balancing area and as supply to meet the test requirements of receiving balancing areas, assuming they receive awards in the subsequent hour-ahead market.

Exports out of CAISO that ultimately do not receive awards in the hour-ahead market are not counted as part of CAISO’s sufficiency test requirements.  Similarly, since CAISO will not deliver this power, WEIM balancing areas that had tried to schedule an export that did not receive an hour-ahead market award cannot include these exports as part of their base schedules, and so they will not count as supply in their sufficiency tests.  Therefore, the only source of inconsistency between exports out of CAISO not counted as requirements in CAISO’s tests but counted as supply in receiving WEIM balancing area’s tests will be low priority exports that did not receive residual unit commitment awards but subsequently self-scheduled out of CAISO in the hour-ahead market. 

CAISO operators have the ability to conform the hour-ahead market load in order to help limit these exports to power that CAISO expects to deliver except in only rare reliability emergency situations.  As the CAISO balancing area will cut these exports before other exports and its own load when an unexpected contingency occurs after the hour ahead market run, it is reasonable for the CAISO balancing area to not count these exports as requirements in its sufficiency tests.  However, the inconsistency that arises from allowing the receiving WEIM balancing areas to count these exports as supply in their tests is problematic.  DMM continues to recommend that in the next phase of this initiative, the ISO develop policy that would not allow the receiving balancing area to count these exports as supply in their tests during tight system conditions when CAISO is at risk of not delivering the exports, such as during an EEA event.^[5]

Incorporating uncertainty adder into test requirement

The resource sufficiency evaluation was adopted at the beginning of the WEIM as an incentive for balancing areas to make sufficient capacity available to meet their loads and to deter “leaning” on other balancing areas to meet reliability needs – while still allowing economic transfers between areas.  Including an adder for uncertainty about load and resource availability in the evaluation requirements would make each balancing area’s total requirement greater than each area’s expected net load.   While incorporating some level of uncertainty into the test is reasonable, there is not an objectively correct answer to what this uncertainty adder should be.

On the one hand, increasing the test requirements by adding uncertainty adders will create more incentives for WEIM areas to procure more capacity in advance of the real-time market and will reduce the potential for one area to “lean” on another – i.e. to utilize more capacity than the receiving area had ever made available to the WEIM multi-interval optimization.  On the other hand, it would be prohibitively expensive to adopt test requirements designed to ensure that each balancing area can meet its full imbalance requirements 100 percent of the time with just the resources made available to the real-time market in that area.

Therefore, the question of how to set an uncertainty adder used in the resource sufficiency test is a policy question that can only be answered through debate and consensus amongst the balancing areas participating in the WEIM.  There could be significant value in developing an uncertainty adder that has general consensus amongst WEIM balancing areas. 

DMM understands that the ISO and many stakeholders believe the quantile regression methodology the ISO is developing requires further assessment before being implemented in the sufficiency tests.  Even with more development, DMM expects the quantile regression adder to fluctuate significantly interval by interval, making it very difficult for balancing areas to reproduce or predict in advance.  Therefore, DMM continues to recommend that the ISO and stakeholders consider developing much simpler and more transparent uncertainty adders in the next phase of this initiative.^[6]

[1] WEIM Resource Sufficiency Evaluation Enhancements Phase 2– Revised Final Proposal, California ISO, November 7, 2022: http://www.caiso.com/InitiativeDocuments/RevisedFinalProposal-WEIMResourceSufficiencyEvaluationEnhancementsPhase2.pdf

[2] Supplemental Comments on WEIM Resource Sufficiency Evaluation Enhancements Phase 2 Revised Draft Final Proposal, Department of Market Monitoring, September 27, 2022, p. 2-6: https://www.caiso.com/Documents/DMM-Comments-WEIM-Resource-Sufficiency-Evaluation-Enhancements-Phase2-Draft-Final-Proposal-Sep-27-2022.pdf

[3] DMM’s September 27 Supplemental Comments on RSE Revised DFP, p. 1 and p. 7.

[4] ISO’s November 7 Revised Final Proposal, p. 18.

[5] Comments on WEIM Resource Sufficiency Evaluation Enhancements Phase 2 Revised Draft Final Proposal, Department of Market Monitoring, September 16, 2022, p. 3: https://www.caiso.com/Documents/DMM-Comments-WEIM-Resource-Sufficiency-Evaluation-Enhancements-Phase2-Draft-Final-Proposal-Sep-16-2022.pdf

[6] DMM’s September 16 Comments on RSE Revised DFP, pp. 1-2.

Supplemental Comments on WEIM Resource Sufficiency Evaluation Enhancements Phase 2 - Revised Final Proposal

Department of Market Monitoring

December 1, 2022

Summary

The Department of Market Monitoring (DMM) has performed additional analysis to help different balancing areas and stakeholders assess the implications of the WEIM Resource Sufficiency Evaluation Enhancements Phase 2 – Revised Final Proposal.[1]  For this analysis, DMM performed a back cast of what the potential costs and impacts of the energy assistance program would have been if provisions of the Revised Final Proposal had been in effect during the critical period from September 5 to 8, 2022.  DMM performed similar analysis of the CAISO’s prior Revised Draft Final Proposal.[2]  This analysis also incorporates adjustments made to account for several issues which lead to counting of battery capacity that was actually unavailable during this period, as described in DMM’s most recent monthly report on Resource Sufficiency Evaluation Metrics.[3]  

Background

Revised Final Proposal

Under the Revised Final Proposal, if an area elects to be eligible for energy assistance, the proposal will change the consequences for that balancing area of failing the upward capacity or flexibility test.  Instead of having import transfers limited to the previous interval’s transfer level, an area failing the test could receive additional WEIM transfers needed to meet load.  In this scenario, the area failing the test would pay an additional out-of-market energy assistance penalty cost for some of these WEIM transfers. 

The penalty cost will be set at the CAISO/WEIM penalty price ($1,000 or $2,000/MWh).  The quantity of transfers into an area paying the energy assistance penalty cost would be the lesser of (1) the amount by which the area failed an upward capacity or flexibility test, or (2) dynamic WEIM transfers into the area.  Under the proposal, low priority exports from the CAISO balancing area would be excluded from the demand used to calculate the capacity requirement for the CAISO area.

Adjustments to capacity test results

For this analysis, DMM incorporated the following adjustments into the historical capacity test results for the CAISO balancing area.

• Battery storage capacity that was counted in the capacity test but was not actually available.  As described in DMM’s most recent monthly report on Resource Sufficiency Evaluation Metrics, during peak hours of the September heatwave period, battery storage capacity counted in the capacity test significantly exceeded the actual available capacity from batteries for a variety of reasons. [4] For this analysis, DMM adjusted the amount of battery capacity used in the capacity test to account for the four issues described in DMM’s monthly report which lead to significant over counting of battery capacity that was actually available.[5]  This adjustment reduced the amount of available capacity from batteries by an average of about 1,300 MW during peak hours on September 6.
• Low priority exports that will not be included in demand used to set capacity test requirements under the ISO’s proposal.  For this analysis, DMM also recalculated the capacity test requirement for the CAISO area after excluding low priority exports, as proposed in the Revised Final Proposal.  DMM estimates that low priority exports that would be excluded from the capacity test requirement under the proposal totaled an average of just over 1,100 MW during peak hours of September 5 and 6.[6]

Figure 1 illustrates the magnitude of these two different adjustments for the net peak hours of September 6.  Excluding battery capacity that was unavailable from the supply used in the capacity test would have increased the intervals in which the CAISO area would have failed the test.[7]  However, with low priority exports excluded from test requirements, there would be no change in the intervals in which the CAISO area failed the test over this period.[8]

During intervals in which the CAISO failed the test, these two adjustments would also both have an impact on the amount by which the CAISO area failed.  Under the Revised Final Proposal, the amount by which an area fails the capacity or flexibility test is one of the factors that can determine the amount of the energy assistance penalty cost.  Therefore, for this analysis, the potential cost of this penalty during intervals when the CAISO area failed the test was calculated based on the amount by which the CAISO would have failed the capacity or flexibility test after including the adjustments to available battery capacity and low priority exports described above.

Figure 1.  Adjustments made to exclude unavailable battery capacity and low priority exports from capacity test (September 6, 2022)

Results of Analysis

Table 1 summarizes results of this analysis for all balancing areas in the WEIM.  The first column shows the number of 15-minute intervals each area failed the test during this period.  Results in the rest of Table 1 are summarized for two different categories of intervals:

• The columns on the left side of Table 1 summarize results for intervals in which the limit on WEIM transfers that is triggered when an area fails the test was not binding in the 5-minute market.  During these intervals, no additional transfers into those BAAs from the WEIM would have occurred through participation in the energy assistance program, as explained in DMM’s analysis of the ISO’s prior energy assistance proposal.[9]
• The columns on the right side of Table 1 summarize results for intervals in which the limit on WEIM transfers triggered when an area fails the test was binding in the 5-minute market.  During these intervals, additional transfers into those BAAs from the WEIM could have occurred through participation in the energy assistance program.  This analysis does not include any estimate of the volume or cost of any such additional transfers.

For each of these two categories of intervals, Table 1 shows (1) the average net imports from the WEIM in the 5-minute market, and (2) the average RSE insufficiency for each balancing area, along with the total estimated amount of energy assistance surcharges that would have been imposed under the Revised Final Proposal.

Table 1.  Estimated impacts of energy assistance proposal by balancing area
September 5-8, 2022

[1] DMM previously submitted comments on the final proposal in Comments on WEIM Resource Sufficiency Evaluation Enhancements Phase 2 – Revised Final Proposal, Department of Market Monitoring, November 16 2022:
http://www.caiso.com/Documents/DMM-Comments-WEIM-Resource-Sufficiency-Evaluation-Enhancements-Phase2-Revised-Final-Proposal-2022-11-16.pdf

[2] Supplemental Comments on WEIM Resource Sufficiency Evaluation Enhancements Phase 2 – Revised Draft Final Proposal, Department of Market Monitoring, September 27, 2022.  
http://www.caiso.com/Documents/DMM-Comments-WEIM-Resource-Sufficiency-Evaluation-Enhancements-Phase2-Draft-Final-Proposal-Sep-27-2022.pdf

[3] Western Energy Imbalance Market Resource Sufficiency Evaluation Metrics Report covering October 2022, Department of Market Monitoring, November 30, 2022, pp. 7–9.  
http://www.caiso.com/Documents/2022-10-Metrics-Report-on-Resource-Sufficiency-Evaluation-in-WEIM-2022-11-30.pdf

[4] Ibid. pp. 7–9.

[5] Ibid. pp. 7–9.

[6] Ibid. pp. 9-10.

[7] Ibid. Figure 2-8, p. 11.

[8] Ibid. Figure 2-8, p. 11.

[9] Supplemental Comments on WEIM Resource Sufficiency Evaluation Enhancements Phase 2 – Revised Draft Final Proposal, op. cit., pp. 4-6.

2. Please provide your organization’s overall position on the WEIM Resource Sufficiency Evaluation Enhancements Phase 2 revised final proposal:

Please see the two PDF attachments after the ISO's final question below for fully formatted versions of DMM's November 16, 2022 Comments and DMM's December 1, 2022 Supplemental Comments.

3. Provide your organization’s comments on the interaction between advisory WEIM transfers and HASP intertie schedules, and the proposal to account for this interaction as described in section 4.2 of the revised final proposal (no changes were made in the revised final proposal):

Please see the two PDF attachments after the ISO's final question below for fully formatted versions of DMM's November 16, 2022 Comments and DMM's December 1, 2022 Supplemental Comments.

4. Provide your organization’s comments on the proposed changes to the tagging of LPT exports, as described in section 4.2.3 of the revised final proposal (no changes were made in the revised final proposal):

Please see the two PDF attachments after the ISO's final question below for fully formatted versions of DMM's November 16, 2022 Comments and DMM's December 1, 2022 Supplemental Comments.

5. Provide your organization’s comments on the proposal to cure resource insufficiencies through the WEIM subject to an out of market financial surcharge, as described in section 5.1 of the revised final proposal:

Please see the two PDF attachments after the ISO's final question below for fully formatted versions of DMM's November 16, 2022 Comments and DMM's December 1, 2022 Supplemental Comments.

6. Provide your organization’s comments on the proposed allocation of assistance energy revenue and charges, as described in section 5.1.1 of the revised final proposal:

Please see the two PDF attachments after the ISO's final question below for fully formatted versions of DMM's November 16, 2022 Comments and DMM's December 1, 2022 Supplemental Comments.

7. Provide your organization’s comments on the proposed WEIM decisional classification, as described in section 6 of the revised final proposal:

Please see the two PDF attachments after the ISO's final question below for fully formatted versions of DMM's November 16, 2022 Comments and DMM's December 1, 2022 Supplemental Comments.

8. Provide any additional comments on the WEIM Resource Sufficiency Evaluation Enhancements Phase 2 revised final proposal or November 7, 2022 stakeholder call discussion:

Please see the two PDF attachments after the ISO's final question below for fully formatted versions of DMM's November 16, 2022 Comments and DMM's December 1, 2022 Supplemental Comments.

1. Please provide a summary of your organization’s comments on the WEIM Resource Sufficiency Evaluation (RSE) Enhancements Phase 2 revised final proposal and November 7, 2022 stakeholder call discussion:

Energy Division staff’s positions on the various elements of CAISO’s proposal are summarized in response to Question 2 and discussed in more detail below.

With respect to the energy assistance proposal, which was the primary focus of the revised final proposal and the November 7, 2020, stakeholder call, Energy Division staff (hereafter “Staff”) appreciates the changes made to this aspect of the proposal and supports it being made available on an optional basis, but opposes CAISO opting into the emergency assistance program for the CAISO balancing authority area, for the reasons discussed further below.

2. Please provide your organization’s overall position on the WEIM Resource Sufficiency Evaluation Enhancements Phase 2 revised final proposal:

Below are Staff’s positions on the various elements of CAISO’s WEIM resource sufficiency revised draft final proposal.

• Staff supports CAISO’s proposal to exclude real-time LPT exports from the WEIM resource sufficiency evaluation (RSE), but has not yet determined its position regarding the inclusion of day-ahead LPT exports in the test, in light of results from the stressed system conditions in September, 2022.
• Staff supports CAISO’s proposal to separately label post-HASP LPT exports in some fashion, but oppose CAISO’s proposal to prioritize LPT exports over load in the post-HASP timeframe, unless and until CAISO enters into an EEA3.
• Staff does not oppose CAISO’s energy assistance proposal to be offered on an optional basis, but opposes the CAISO BAA opting into this program.
• Staff supports CAISO’s proposed classification of this initiative.

3. Provide your organization’s comments on the interaction between advisory WEIM transfers and HASP intertie schedules, and the proposal to account for this interaction as described in section 4.2 of the revised final proposal (no changes were made in the revised final proposal):

In section 4.2, CAISO proposes to exclude from the RSE the low priority exports that have not cleared the day-ahead residual unit commitment. As stated by CAISO:

Capacity Test:  The proposal is to only to count demand, net-load uncertainty,[] exports that meet the high priority criteria, or lower priority exports that have cleared the ISO’s day-ahead market process, in the WEIM RSE capacity test obligation for the CAISO BAA. As described above, no longer including real-time LPT exports is appropriate because HASP may schedule LPT exports at the CAISO BAA interties based on WEIM energy transfers. Including LPT exports that have cleared the day-ahead process is reasonable as the ISO has previously determined that they can be supported through the reliability unit commitment process; any changes to the resultant supply mix that resulted in these LPT exports clearing would already be accounted for as the exports would be required to re-bid into the real-time market, would not clear the subsequent HASP process, and thus would not be added to the CAISO BAA’s RSE obligation.

Flexible Ramping Sufficiency Test:  The proposal is to only count demand, net-load uncertainty,[] exports that meet the high priority criteria, or lower priority exports that have cleared the ISO’s day-ahead market process in the derivation of its flexible ramping sufficiency upward requirements. This tests to ensure that the CAISO BAA is able to ramp from the binding market schedule in the previous hour, to expected obligations in the upcoming hour. As described above, no longer including real-time LPT exports is reasonable as the HASP may schedule LPT exports at the CAISO BAA interties based on WEIM energy transfers. Day-ahead LPT exports are reasonable to include in the CAISO BAA’s RSE obligation for the reasoning provided in 4.2.2.1.

Staff supports CAISO’s proposal to exclude LPT exports from the resource sufficiency test, but is still trying to understand the implications of inclusion of day-ahead LPT exports in the test, in light of the September 2022 stressed system conditions.  In particular, EnStaff does not yet fully understand how CAISO cleared day-ahead LPT exports during the stressed system conditions (see figures from CAISO’s Summer Market Performance Report, below).

4. Provide your organization’s comments on the proposed changes to the tagging of LPT exports, as described in section 4.2.3 of the revised final proposal (no changes were made in the revised final proposal):

In section 4.2.3, CAISO proposes to require LPT exports to be e-tagged as “Firm Provisional Energy (G-FP).”  CAISO explains this new rule, as follows:

The purpose of this rule is to apply the existing market scheduling priorities affording LPT exports a lower priority than serving CAISO BAA load in the day-ahead and real-time market post HASP so if the CAISO BAA is unable to maintain its own load serving obligations as a balancing authority it can manually curtail LPT exports that have cleared HASP within the hour. Requiring LPT exports to be tagged as Firm Provisional Energy also will provide better visibility to other BAAs regarding the firmness of these exports.

According to CAISO, G-FP is defined by WECC as follows: “This product may be interrupted only if the interruption is within the recall time and for conditions allowed by applicable provisions governing interruption of service, as mutually agreed to by the parties. A G-FP product cannot be interrupted for economic reasons.”

Energy Division staff does not oppose using a term to convey that CAISO can cut LPT exports during the post-HASP process, but is concerned that using this definition could be problematic, since it refers to “recall times” and “conditions allowed by applicable provisions governing interruption of service, as mutually agreed to by the parties.”  Thus, it is not clear whether, in using this term, CAISO is in any way limiting its options to cut these LPT exports as necessary to ensure reliability of the grid, or alternatively whether the term may be misleading if CAISO’s options are not limited by this different terminology.  In this regard, Energy Division staff question why CAISO has not proposed to label these LPT exports as “non-firm.” 

Further, CAISO explains that it would carry reserves for all exports from its BAA, that it “would only look to curtail these exports if it is unable to replace its reserves within the NERC allotted timeframes, and that LPT exports clearing HASP would be made with this understanding regarding the potential for future curtailment, which will be reflected in the tariff.

Staff is concerned with the provision that CAISO is agreeing to carry reserves for LPT exports that are likely facilitated by WEIM advisory transfers and HASP imports, which are non-binding and may not show up in the subsequent real-time markets.  In this regard, it would be helpful if CAISO could clarify if the costs of these reserves are borne by those procuring the LPT exports directly and, if not, why not.  In addition, again referring to export figures shown below, it is not yet fully clear to Staff, whether and why the CAISO system was supporting LPT exports, and carrying reserves for those LPT exports, at the same time that it was in emergency alert conditions, deploying its Base Interruptible Program (BIP), procuring emergency assistance from neighboring balancing authorities, and taking other emergency actions to preserve the reliability of the CAISO grid.

Finally, CAISO explains that it “would curtail these exports within the hour when it does not have enough resources to meet its load and reserve obligations” and that this “would occur when the CAISO BAA is in an Energy Emergency Alert (EEA) 3 and requires LPT exports to be curtailed to prevent the need to arm load, or to reduce the amount of load that is armed, to meet its reserve obligations” and that this would also occur “when the CAISO BAA is shedding firm load.”

Staff opposes CAISO’s proposal regarding the alert level that it must be in before it begins curtailing LPT exports post-HASP.  Staff believes that it would be more appropriate to begin curtailing these economic exports in an EEA-2 or even earlier, rather than using emergency resources being paid for by CAISO customers and in some cases California taxpayers to support these economic exports.  Energy Division is concerned that allowing exports to be supported by WEIM advisory transfers during stressed system conditions and CAISO’s unwillingness to cut these LPTs as conditions evolve post-HASP, both increases costs and reduces reliability for CAISO’s California customers. It increases costs because CAISO must procure sufficient resources in the FMM to cover those now near-firm exports and additional reserves. As stated by CAISO’s Market Surveillance Committee in its RSE Phase 2 opinion:

In addition, the following Department of Market Monitoring figure illustrates WEIM FMM procurement, compared to WEIM RTD procurement and the final figure illustrates FMM prices, compared to RTD prices (from CAISO's Summer Market Performance Report), illustrating the phenomenon highlighted by the Market Surveillance Committee (i.e., procurement at high prices in the FMM, benefiting “non-CAISO EIM entities who export power to the CAISO in the FMM”).  And to complete the circle, it may be that it is necessary to procure these expensive resources in the FMM to support the exports (and reserves) originally supported by “advisory WEIM transfers” in the first place.

Allowing WEIM advisory transfers to support near-firm exports decreases reliability because it puts CAISO in the position of having to be in an EEA 3 before it can or will cut those LPT exports post-HASP.  Thus, CAISO has committed itself to deploying its base interruptible programs, deploying out-of-market procurement, potentially requesting extraordinary action (such as the OES alert utilized on September 6, 2022), and buying emergency assistance at exceptionally high prices among other actions, all to support LPT exports facilitated by “WEIM advisory transfers” or HASP imports that potentially do not materialize in the post-HASP time period.  This does not seem like a sustainable path that will lead to reliable operation during stressed system conditions.

To highlight this, Staff note two things. First, the penalty provisions in the FMM and RTD place LPT exports that clear HASP at a higher level than load, all but ensuring that the computer modeling system will prioritize these LPT exports over load and thus requiring manual action that is difficult to administer.  Second, Staff notes that it appears that during the September stressed system conditions, CAISO entered into an EEA 3, armed load, but did not cut LPT exports post-HASP.  As noted by CAISO:

This occurred on September 6^th, at the same time that CAISO had cleared LPT exports that it did not cut post-HASP, as illustrated in the following figure from DMM’s Regional Issues Forum presentation.

While Staff appreciate that it can be destabilizing to cut tagged exports, we note three additional points. 

First, other external balancing authorities cut imports into California (see CAISO’s Summer Market Performance Report, p. 114, “After the T-40 deadline and after the capacity test run, there were about 459 MW of imports curtail by other BAAs”), highlighting that this practice does occur and that it occurred in the post-HASP timeframe. 

Second, it appears that some HASP imports cleared, but did not materialize, highlighting the fact that CAISO is firming non-firm resources for export (CAISO’s Summer Market Performance Report, p. 114, “There is a second type of capacity discrepancy related to the imports used by the capacity test. This difference was driven by a timing issue whereby the data of the T-40 transmission profile was not available in time to be accounted for in the capacity test. This amounted to over 200 MW in the capacity test that did not realize in real time.”). 

Third, CAISO acknowledges that in some cases WEIM transfers were not delivered because of changing conditions in the exporting balancing authority (CAISO’s Summer Market Performance, p. 121 – 122, “Furthermore, at the beginning of the heat wave period, operators observed tight conditions that realized until the operation of the five-minute market. This was largely driven by changing conditions from the HASP process towards the RTD at which time system conditions changed primarily due to additional procurement of ancillary services, outages, and realization of VER uncertainty. Some of these changes happened not only in the ISO area but also other WEIM BAAs. They resulted in significantly lower transfer levels realized in RTD than projected advisory transfers cleared in HASP and FMM”) – calling into question why CAISO commits to supporting exports during stressed system conditions without regard to changing reliability and grid conditions.

Further, Staff opposes CAISO’s proposal to include  this language regarding alert levels necessary to curtail LPT exports post-HASP in its tariff, as proposed in its initial draft tariff language.  In its proposal, CAISO argues that its operators need maximum flexibility to address emerging reliability issues. Likewise, Staff believes that CAISO should instead aim to retain maximum flexibility to cut LPT exports post-HASP in order to retain maximum flexibility to maintain reliability. Committing to only cutting LTP exports post-HASP when CAISO is in an EEA-3 does not seem aimed at retaining that flexibility.

5. Provide your organization’s comments on the proposal to cure resource insufficiencies through the WEIM subject to an out of market financial surcharge, as described in section 5.1 of the revised final proposal:

In Section 5.1, CAISO proposes to allow BAAs to optionally elect to participate in a new energy assistance program, which would allow BAAs to continue to obtain WEIM transfers even if they failed the RSE (currently BAAs are limited to the last feasible schedule in the FMM). BAAs electing into this program would pay an ex post payment of $1,000/MWh or $2,000/MWh to the lower of 1) the quantity of the upward WEIM RSE failure of the capacity or flexible ramping sufficiency test, or 2) the dynamic WEIM transfers that are tagged.  In practice, Staff understands that the lower number for the CAISO BAA will likely be the WEIM RSE failure amount, given the large WEIM transfers that typically result from advisory WEIM transfers clearing LPT exports in the HASP process (and, thus, necessitating continued WEIM transfers in the FMM). 

While Staff does not oppose this optional energy assistance program, Staff does not fully support it, both because of the magnitude of the penalty and because WEIM failures can occur spuriously.  Further, Staff does not support the CAISO BAA from opting into this program because 1) CAISO’s California customers already pay exceptionally high prices for FMM transfers and this would only add additional, potentially unwarranted costs, 2) the current failure consequences are not typically binding for CAISO because of the large load conformance adjustments (for which CAISO’s California customers pay high prices, as discussed by the MSC above), and 3) the RSE test is complex and likely needs further refinement, after which Staff and other CAISO stakeholders could reconsider their positions.

As noted by CAISO in its Summer Market Performance Report, there were approximately 10 reasons that the RSE test did not accurately reflect capacity available to the CAISO during stressed system conditions, summarized as follows:  1) Load arming in EEA3 – this capacity was not counted the RSE; 2) MSG transitions – more capacity was available than was reflected in the test; 3) Export cuts for ETC/TOR wheels – less capacity was available than in the test because the ETC/TOR did not properly register as a wheel and the export cut was reversed after the test; 4) RDR resources – counted for more capacity than available in real-time, 5) Storage resources – inaccurately modeled to include ancillary service capacity, 6) DC losses – DC losses not included in the test, 7) Emergency imports and exports – were not included in the test, 8) Curtailment of HASP imports – the test did not reflect cuts instituted by other BAAs, or HASP imports that failed to deliver, 9) Exports – the test excluded LPT exports that should have been cut in the HASP process, 10) MSG – the test included some MSG that was not available.  In addition, staff notes that it is also not clear that BIP program capacity was included in the RSE test. 

Thus, given that the current consequences are not binding, that the penalties are so high and that CAISO’s California customers already pay high prices in the FMM for WEIM transfer that are typically not delivered, and the issues discussed above, Staff opposes the BAA defaulting into this program.

6. Provide your organization’s comments on the proposed allocation of assistance energy revenue and charges, as described in section 5.1.1 of the revised final proposal:

Staff has no comment on this section.

7. Provide your organization’s comments on the proposed WEIM decisional classification, as described in section 6 of the revised final proposal:

Staff supports CAISO’s proposed WEIM decisional classification.

8. Provide any additional comments on the WEIM Resource Sufficiency Evaluation Enhancements Phase 2 revised final proposal or November 7, 2022 stakeholder call discussion:

Staff has no additional comments at this time.

1. Please provide a summary of your organization’s comments on the WEIM Resource Sufficiency Evaluation (RSE) Enhancements Phase 2 revised final proposal and November 7, 2022 stakeholder call discussion:

NV Energy appreciates the opportunity to comment on the phase 2 revised draft final proposal. In particular, we support the inclusion of financial consequences for failure of the resource sufficiency evaluation (“RSE”) in this phase of the resource sufficiency (“RS”) enhancements for a proposed implementation date of June 1, 2023.    

FERC has stated that a tariff provision implementing a particular rate or practice that was found reasonable at one time does not preclude later reviewing the provision to determine whether it continues to be just and reasonable.[1] At the time Section 29.34(m) of the CAISO Tariff was adopted, establishing the freeze as a consequence for failing the RSE, PacifiCorp was the only participating EIM Entity. With the tremendous success of the EIM, currently 79% of the Western Interconnection load is now participating in the market. The expansion of the EIM has had a significant effect on the liquidity of the intra-day bilateral market as participating EIM Entities utilize excess capacity to participate within the EIM. This restricts the ability of a distressed EIM Entity to respond to a reliability challenge as available capacity in the bilateral market has been greatly reduced or taken to zero on the most critical of days. 

In addition, events such as the 2021 Bootleg fire have demonstrated that an EIM Entity can go into a day expecting it is fully capable of meeting its forecasted load and passing the RSE only to have an event, or a series of events, pose a sudden and severe reliability challenge. As recognized by the Market Surveillance Committee (“MSC”), “the Western EIM FMM and RTD are potentially powerful tools for balancing load across the WECC to maintain reliability in uncertain operating conditions. In contrast, placing restrictions on the use of EIM transfers during unexpected operating conditions has the potential for problematic outcomes.”[2]  We agree with the MSC. 

Having identified a significant reliability concern with the current CAISO Tariff and the failure consequences of the RSE, it is incumbent on the CAISO, the EIM Entities, and other stakeholders to implement a solution at the earliest possible date. If an EIM Entity has an EEA event and any resulting rolling blackouts could have been prevented by allowing access to available EIM supply at a scarcity price, our customers will have been greatly disserved.  

CAISO has proposed to implement changes to the resource sufficiency test consequences on June 1, 2023. The implementation date is of paramount importance to NV Energy and should be extremely important to all other EIM Entities in the West considering the implications that locked transfers could have on the reliability of the grid. 

[1] ¹ See e.g.,?Maryland PSC v. PJM Interconnection, L.L.C., 123 FERC ¶ 61,169 at P 31 (2008),?citing Ameren Services Co. v. Midwest Indep. Transmission Sys. Operator, Inc., 121 FERC ¶ 61,205 at P?33 (2007). 

[2]  See, Opinion on Energy Imbalance Market (EIM Resource Sufficiency Enhancements dated February?2, 2022 at 29. The report can be found at:??MSCFinalOpiniononEIMResourceSufficiencyEvaluationEnhancements-Phase1.pdf (caiso.com).

2. Please provide your organization’s overall position on the WEIM Resource Sufficiency Evaluation Enhancements Phase 2 revised final proposal:

No additional comment

3. Provide your organization’s comments on the interaction between advisory WEIM transfers and HASP intertie schedules, and the proposal to account for this interaction as described in section 4.2 of the revised final proposal (no changes were made in the revised final proposal):

No Comment

4. Provide your organization’s comments on the proposed changes to the tagging of LPT exports, as described in section 4.2.3 of the revised final proposal (no changes were made in the revised final proposal):

No Comment

5. Provide your organization’s comments on the proposal to cure resource insufficiencies through the WEIM subject to an out of market financial surcharge, as described in section 5.1 of the revised final proposal:

NV Energy supports the proposal to apply an after the fact surcharge to the minimum of the EIM Dynamic transfer or the resource sufficiency test failure amount at the applicable bidding cap that is in effect at that time.  Additionally, NV Energy is supportive of the additional proposal to apply the Available Balancing Capacity (ABC) as a credit towards the MW amount that will receive a surcharge. The inclusion of ABC is important because there are instances that BAAs fail the resource sufficiency tests due to the market economically dispatching their resources without the consideration of how much ramp might be needed to pass the P95 level of uncertainty. Therefore, this inclusion should allow EIM Entities to feel more comfortable electing to utilize this financial mechanism at all times rather than only during instances where the system might become stressed due to a heat wave.

NV Energy understands that this revised draft final proposal has been proposed with the intention of furthering this discussion in RSE phase 3 to develop an in market solution, which NV Energy also supports. NV Energy reiterates the importance of this market enhancement prior to another Summer in order to at least provide the optionality to eliminate a market design feature that could have significant reliability impacts when future heat waves occur.  Concerns regarding misuse of this new enhancement should be documented and monitored by the Department Market Monitor with the intention to make quicker interim changes if the need arises.

6. Provide your organization’s comments on the proposed allocation of assistance energy revenue and charges, as described in section 5.1.1 of the revised final proposal:

CAISO has proposed to allocate the revenue pro-rata to the EIM Entities that are dynamic EIM net exporters that have passed the resource sufficiency test. NV Energy is supportive of this proposal because it encourages a competitive outcome by incentivizing EIM Entities to pass the resource sufficiency tests by bidding in additional supply at the marginal cost of energy.??Furthermore, NV Energy supports the proposal to settle any assistance revenue or charges through the BAA’s OATT.  

7. Provide your organization’s comments on the proposed WEIM decisional classification, as described in section 6 of the revised final proposal:

No Comment

8. Provide any additional comments on the WEIM Resource Sufficiency Evaluation Enhancements Phase 2 revised final proposal or November 7, 2022 stakeholder call discussion:

No Comment

1. Please provide a summary of your organization’s comments on the WEIM Resource Sufficiency Evaluation (RSE) Enhancements Phase 2 revised final proposal and November 7, 2022 stakeholder call discussion:

PG&E appreciates the CAISO’s responsiveness to stakeholder concerns in this expedited phase of the initiative.  The revised final proposal includes important improvements to the RSE that can be implemented by Summer 2023.  A summary of our comments on the different elements of the proposal follows below:

• PG&E supports the interim adoption (with the 2025 sunset) of the out-of-market financial surcharge for Assistance Energy. 

• • PG&E believes the out-of-market financial surcharge is an improvement over the CAISO’s previous Assistance Energy proposal.  The out-of-market surcharge is more consistent with the proposed EDAM RSE failure consequences and removes some of the disincentives for EIM areas to participate that existed with the previous design.

• The Price Formation initiative should revisit the Assistance Energy proposal and aim to align the WEIM and EDAM RSE failure consequences.

• • Sunsetting the Assistance Energy option at the end of 2025 will provide an opportunity to revisit and improve upon this proposed design.  PG&E supports revisiting this issue as part of a more holistic scarcity pricing proposal in the Price Formation Enhancements initiative. In addition, alignment between the RSE failure consequences in the WEIM and EDAM RSE should be an important objective to help ensure equity and consistency in both markets.

• Transparency for market participants is critical in the absence of a penalty framework for misuse

• • Transparency for market participants regarding the utilization of this option is critical.   In lieu of developing penalties for misuse of this functionality, PG&E requests reporting on OASIS or CAISO’s website of the utilization of this market option as close to real-time as possible.  Such transparency will allow market participants to monitor and understand any adverse consequences of this new market feature.

• • Another way to enhance transparency and address any equity concerns is to include a reporting requirement for each BAA to justify its decision to change its election to opt in or out (after its initial election).  A simple informational requirement to explain the reasons a BAA has decided to opt in or out (i.e. the loss of key transmission or generation assets) could help prevent inappropriate strategic behavior.  Such a step will preserve the flexibility of EIM BAAs to change their participation while also building confidence in the appropriate use of the design.

• CAISO should hold a stakeholder process to identify how the CAISO BAA would opt in and out of Assistance Energy and how it would change its participation if necessary

• • The revised final proposal does not define the decision-making process by which the CAISO BAA would opt in or out of the Assistance Energy option.  PG&E supports holding a stakeholder initiative to define the process by which the CAISO BAA would elect to participate in the Assistance Energy option and how it would change its participation if necessary. 

• PG&E supports the proposal to remove real-time LPT exports from the CAISO BAA’s RSE obligation

• • CAISO’s proposal addresses the potential for the CAISO BAA to erroneously fail the RSE due to the misalignment between the RSE counting rules and the HASP market process.  The solution to exclude real-time LPT exports from the CAISO BAA’s RSE obligation is an appropriate step to correct this problem.

2. Please provide your organization’s overall position on the WEIM Resource Sufficiency Evaluation Enhancements Phase 2 revised final proposal:

                                                                                                                                                                                                         .

3. Provide your organization’s comments on the interaction between advisory WEIM transfers and HASP intertie schedules, and the proposal to account for this interaction as described in section 4.2 of the revised final proposal (no changes were made in the revised final proposal):

PG&E supports the proposal to remove real-time LPT exports from the CAISO BAA’s RSE obligation

CAISO’s analysis has demonstrated that the misalignment between HASP and the RSE counting rules can inappropriately add to the CAISO BAA’s RES obligation and cause spurious RSE failures.  When HASP schedules exports from the CAISO supported by expected EIM imports, the current RSE rules count the exports as additional demand but do not count the advisory EIM imports as supply in the RSE calculation.  CAISO’s proposal to exclude real-time low-priority exports from the CAISO BAA’s RSE obligation will help correct this inaccuracy. 

4. Provide your organization’s comments on the proposed changes to the tagging of LPT exports, as described in section 4.2.3 of the revised final proposal (no changes were made in the revised final proposal):

No additional comments. 

5. Provide your organization’s comments on the proposal to cure resource insufficiencies through the WEIM subject to an out of market financial surcharge, as described in section 5.1 of the revised final proposal:

PG&E supports the interim adoption (with the 2025 sunset) of the out-of-market financial surcharge for Assistance Energy and encourages further refinements that align with the EDAM RSE design

PG&E believes the out-of-market financial surcharge is an improvement over the CAISO’s previous Assistance Energy proposal.  The out-of-market surcharge is more consistent with the proposed EDAM RSE failure consequences and removes some of the disincentives for EIM areas to participate that existed with the previous design. 

Sunsetting the Assistance Energy option at the end of 2025 will provide an opportunity to revisit and improve upon this proposed design.  PG&E supports consideration of this issue as part of a more holistic scarcity pricing proposal in the Price Formation Enhancements initiative or the next phase of this initiative. In addition, alignment between the RSE failure consequences in the WEIM and EDAM RSE should be an important objective to help ensure equity and consistency in both markets.

Transparency for market participants is critical in the absence of a penalty framework for misuse

Transparency for market participants regarding the utilization of this option is critical.   In lieu of developing penalties for misuse of this functionality, PG&E requests reporting on OASIS or CAISO’s website of the utilization of this market option as close to real-time as possible.  Such transparency will allow market participants to monitor and understand any adverse consequences of this new market feature.

Another way to enhance transparency and address any equity or leaning concerns is to include a reporting requirement for each BAA to justify its decision to change its election to opt in or out (after its initial election).  A simple informational requirement to explain the reasons a BAA has decided to opt in or out (i.e. the loss of key transmission or generation assets, or seasonal dynamics) could help prevent inappropriate strategic behavior or leaning.  Such a step will preserve the flexibility of EIM BAAs to change their participation while also building confidence in the equity of the design.

CAISO should hold a stakeholder process to identify how the CAISO BAA would opt in and out of Assistance Energy and how it would change its participation if necessary

The revised final proposal does not define the decision-making process by which the CAISO BAA would opt in or out of the Assistance Energy option.  PG&E supports holding a stakeholder initiative to define the process by which the CAISO BAA would elect to participate in the Assistance Energy option and how it would change its participation if necessary.

6. Provide your organization’s comments on the proposed allocation of assistance energy revenue and charges, as described in section 5.1.1 of the revised final proposal:

PG&E supports the proposed allocation of revenue and charges related to Assistance Energy 

PG&E appreciates the clarification in the revised final proposal that revenue from Assistance Energy transfers will be distributed pro rata to net WEIM export amounts, excluding base transfers.

7. Provide your organization’s comments on the proposed WEIM decisional classification, as described in section 6 of the revised final proposal:

PG&E supports the proposed decisional classification.

8. Provide any additional comments on the WEIM Resource Sufficiency Evaluation Enhancements Phase 2 revised final proposal or November 7, 2022 stakeholder call discussion:

No additional comments.

1. Please provide a summary of your organization’s comments on the WEIM Resource Sufficiency Evaluation (RSE) Enhancements Phase 2 revised final proposal and November 7, 2022 stakeholder call discussion:

PacifiCorp appreciates the opportunity to comment on the WEIM Resource Sufficiency Evaluation (RSE) Enhancements Phase 2 proposal. PacifiCorp is generally supportive of the elements included in CAISO’s proposal, especially those targeted at improving accuracy of the ISO’s RSE. PacifiCorp also supports moving the energy assistance program to the Price Formation Initiative as that will be an appropriate venue to discuss the potential scarcity pricing implications as referenced in the November 7, 2022, stakeholder meeting. PacifiCorp agrees that the quantile regression methodology within the uncertainty adder should be tested and assessed before reintroducing this requirement in the WEIM RSE capacity test. Additionally, PacifiCorp supports the proposed changes to the e-tagging characterization where “G-FP” be shown on a low priority (LPT) export that clears the hour-ahead scheduling process (HASP).

2. Please provide your organization’s overall position on the WEIM Resource Sufficiency Evaluation Enhancements Phase 2 revised final proposal:

PacifiCorp generally supports the utilization of the quantile regression methodology to calculate net-load uncertainty in the flexible ramping test and agrees with the CAISO’s proposal to collect performance data on this methodology following its implementation as part of the FRP Refinement effort and to collect the needed data to objectively assess the performance of quantile regressions before taking further actions in re-introducing net load uncertainty into the RSE. 

3. Provide your organization’s comments on the interaction between advisory WEIM transfers and HASP intertie schedules, and the proposal to account for this interaction as described in section 4.2 of the revised final proposal (no changes were made in the revised final proposal):

PacifiCorp has no issues with this section of the proposal. 

4. Provide your organization’s comments on the proposed changes to the tagging of LPT exports, as described in section 4.2.3 of the revised final proposal (no changes were made in the revised final proposal):

PacifiCorp generally supports the proposed changes as described in section in 4.2.3 of the proposal. PacifiCorp views the proposed change as a path forward in increased reliability as operators will have the ability to differentiate real-time schedules that have the potential for curtailment, due to CAISO being unable to support those exports. PacifiCorp asks the CAISO to clearly state whether day-ahead schedules will also be e-tagged as “G-FP" and if so, how will the market distinguish LPT’s in the day-ahead timeframe opposed to real-time awards cleared in the HASP. Additionally, PacifiCorp requests explicit criteria in defining an LPT export versus a high priority (PT) export as it could be due to either the transmission and/or generator on the e-tag. 

5. Provide your organization’s comments on the proposal to cure resource insufficiencies through the WEIM subject to an out of market financial surcharge, as described in section 5.1 of the revised final proposal:

PacifiCorp supports the CAISO’s desire to develop an assistance energy program where entities are able to provide additional resources to WEIM participants required to cure a prospective RSE failure. PacifiCorp considers it a key feature that each BAA has full digression over whether to participate. While the proposal outlines how each BAA would communicate the needed information to CAISO, PacifiCorp requests the CAISO provide additional information regarding the process for opting in and out of the program, how often a BAA may change its selection and if there is a minimum timeframe an entity is required to use the program once opted in. While PacifiCorp agrees with the CAISO’s proposal to include the development of an ‘in-market’ solution for the assistance energy program to the Price Formation Initiative, PacifiCorp does not support a blanket activation period of the proposed energy assistance program until December 31, 2025. Not only would this timeline overlap with the launch of EDAM, which is likely to include a pooled RSE evaluation and related failure consequences, but instead suggests the CAISO consider limiting the program’s effective date to December 31, 2024. Additionally, PacifiCorp requests the CAISO provide stakeholders formal updates and an assessment of the usage, efficacy and pricing impacts of the assistance program as currently designed.  

6. Provide your organization’s comments on the proposed allocation of assistance energy revenue and charges, as described in section 5.1.1 of the revised final proposal:

PacifiCorp does not have issues with the proposed revenue and charges outlined in the proposal at this time. 

7. Provide your organization’s comments on the proposed WEIM decisional classification, as described in section 6 of the revised final proposal:

PacifiCorp agrees with the decisional classification as outlined in section 6 with the understanding that the change in e-tagging rules is “severable from the remaining three elements” as it will be implemented regardless of approval from the first two elements outlined, where the CAISO will discount LPT exports when calculating the CAISO’s resource sufficiency obligation and changing the consequences for a BAA where they may cure through an energy assistance program through the WEIM.

8. Provide any additional comments on the WEIM Resource Sufficiency Evaluation Enhancements Phase 2 revised final proposal or November 7, 2022 stakeholder call discussion:

Section 4.3.2 of the proposal states that the CAISO proposed, and FERC approved suspending net load uncertainty as a component of each BAA’s RSE obligation. PacifiCorp requests the data be posted after the implementation of the quantile regression methodology to further assess its performance in order to properly opine on its addition to the bid-range capacity test.

1. Please provide a summary of your organization’s comments on the WEIM Resource Sufficiency Evaluation (RSE) Enhancements Phase 2 revised final proposal and November 7, 2022 stakeholder call discussion:

Powerex recently announced its commitment to fund and participate in SPP’s Markets+, beginning as early as June 2024.[1]  Powerex anticipates continued participation in the Western EIM until that time, and has an ongoing interest in the development of market rules that are efficient, equitable, and non-discriminatory.

Powerex submits the following comments on CAISO’s November 7, 2022 EIM Resource Sufficiency Evaluation Enhancements Phase 2 Revised Final Proposal (“Revised Final Proposal”), and the discussion at the workshop on this topic.  The Revised Final Proposal is a highly watered-down version of what began as a conceptually sound proposal for EIM entities that fail the Resource Sufficiency Evaluation (RSE) and are experiencing supply deficiencies to access “energy assistance” from the rest of the EIM at appropriately high prices that provide strong financial incentives and price signals to avoid such deficiencies.  The CAISO has largely nullified the effectiveness of this approach through a Revised Final Proposal that:

1. Applies the high prices only as an “out of market” settlement charge, instead of establishing an appropriately high market-clearing price in the deficient BAA;
2. Applies the out-of-market charge to the lesser of EIM imports or the RSE deficit quantity, rather than to the entire volume of imbalance energy in the deficient BAA; and
3. Allows each EIM entity to elect to remain under the status quo, bypassing any changes at all.

The CAISO’s changes in the Revised Final Proposal ensure that the CAISO BAA will continue to be able to lean on capacity procured and paid for by ratepayers of other EIM entities, paying only a small fraction of the build and/or procurement costs of such supply.  And in the event that the CAISO BAA eventually “opts in” to the energy assistance framework being proposed, the last-minute modifications ensure the financial consequences will be so weak that no meaningful change in behavior in the CAISO BAA can reasonably be expected.  Despite a clear path for all BAAs to be held to comparable resource sufficiency requirements and consequences, the CAISO has again found a way for the CAISO BAA not to be similarly accountable.

Since the outset of the EIM, the Resource Sufficiency Evaluation (RSE) has been designed and implemented by the CAISO in a manner that requires all EIM entities other than the CAISO BAA to procure sufficient supply prior to the EIM timeframe—by building resources or contracting for supply in 16-hour blocks, often for entire seasons—while the CAISO BAA is able to enter the EIM with persistent and large resource deficiencies.  The CAISO BAA is then able to access to the supply from other EIM entities to cure those deficiencies, paying for energy imports only in the hours they are actually needed, and paying suppressed energy prices that do not reflect the value of the underlying capacity. 

The extensive leaning by the CAISO BAA on supply procured and paid for by other EIM entities is obvious in the data for the September 2022 heat event, where the CAISO BAA received virtually all energy imports from the rest of the EIM:

Source: CAISO DMM, Market Monitoring Update: Resource Sufficiency Tests In The Energy Imbalance Market, at 7.

The CAISO BAA received thousands of MW of imports through the EIM, and without any financial consequence, even when it was in a declared EEA2 or EEA3—including, but not limited to, the few instances that the RSE actually recognized the CAISO BAA was not resource sufficient.  These outcomes show that the RSE, as currently implemented to the CAISO BAA, is largely meaningless.  This is the unworkable and highly inequitable status quo that the CAISO has ensured will continue to be available to the CAISO BAA.

The CAISO’s design and implementation of the RSE with respect to the CAISO BAA has never lived up to the foundational design principle that all EIM entities must come to the EIM fully resource sufficient.  Rather than meaningfully address this problem, the Revised Final Proposal ensures it will continue.  And because the load-serving entities responsible for procuring supply to meet load in the CAISO BAA will continue to be able to rely on access to supply procured by other EIM entities and then sold to the CAISO BAA through the EIM, there will continue to be under-procurement of supply, exposing the entire EIM footprint to increased reliability risk and price volatility.

[1] Among the key reasons identified by Powerex for its decision to commit to Markets+ was its “inclusive and independent governance framework supported by a neutral market operator and independent board of directors.”  See also SPP’s press release.

2. Please provide your organization’s overall position on the WEIM Resource Sufficiency Evaluation Enhancements Phase 2 revised final proposal:

Please see comments above.  

Powerex’s comments are also available at WEIM Resource Sufficiency Evaluation Enhancements Phase 2 Revised Final Proposal Comments

3. Provide your organization’s comments on the interaction between advisory WEIM transfers and HASP intertie schedules, and the proposal to account for this interaction as described in section 4.2 of the revised final proposal (no changes were made in the revised final proposal):

Please see comments above.  

Powerex’s comments are also available at WEIM Resource Sufficiency Evaluation Enhancements Phase 2 Revised Final Proposal Comments

4. Provide your organization’s comments on the proposed changes to the tagging of LPT exports, as described in section 4.2.3 of the revised final proposal (no changes were made in the revised final proposal):

Please see comments above.  

Powerex’s comments are also available at WEIM Resource Sufficiency Evaluation Enhancements Phase 2 Revised Final Proposal Comments

5. Provide your organization’s comments on the proposal to cure resource insufficiencies through the WEIM subject to an out of market financial surcharge, as described in section 5.1 of the revised final proposal:

Please see comments above.  

Powerex’s comments are also available at WEIM Resource Sufficiency Evaluation Enhancements Phase 2 Revised Final Proposal Comments

6. Provide your organization’s comments on the proposed allocation of assistance energy revenue and charges, as described in section 5.1.1 of the revised final proposal:

Please see comments above.  

Powerex’s comments are also available at WEIM Resource Sufficiency Evaluation Enhancements Phase 2 Revised Final Proposal Comments

7. Provide your organization’s comments on the proposed WEIM decisional classification, as described in section 6 of the revised final proposal:

Please see comments above.  

Powerex’s comments are also available at WEIM Resource Sufficiency Evaluation Enhancements Phase 2 Revised Final Proposal Comments

8. Provide any additional comments on the WEIM Resource Sufficiency Evaluation Enhancements Phase 2 revised final proposal or November 7, 2022 stakeholder call discussion:

Please see comments above.  

Powerex’s comments are also available at WEIM Resource Sufficiency Evaluation Enhancements Phase 2 Revised Final Proposal Comments

1. Please provide a summary of your organization’s comments on the WEIM Resource Sufficiency Evaluation (RSE) Enhancements Phase 2 revised final proposal and November 7, 2022 stakeholder call discussion:

PGP generally supports the new concepts introduced through the revised final proposal, namely to limit ex-post settlements on the assistance energy imports to the lower of the RSE failure of the capacity or flex-ramp test or the dynamic transfers that are tagged. Continued monitoring of this functionality and if it continues to align with the policy objectives of this initiative is critical, as is the sunset in favor of a market-based solution as proposed.

PGP also notes the success of this initiative, and its limited scope, is contingent upon the management and improvement of upstream issues such as load conformance reduction that is expected through the successful implementation of the Day Ahead Market Enhancements initiative, and appropriate alignment of the WEIM RSE with the Extended Day Ahead Market Resource Sufficiency Evaluation. PGP cannot offer full support or fully evaluate or contextualize the success of this initiative without appropriate progress in these other areas and dedicated documentation addressing the interactions between them. PGP also stresses that true avoidance of leaning would require regional RA programs, or at minimum, programs that adequately plan to the same level of reliability. PGP also looks forward to renewed conversation on the concept of energy assistance during oversupply conditions, and other ongoing improvements to be discussed in Phase 3, and recommends the topics for the next phase of this initiative be scoped as early as possible. That said, given the clear intention of continued improvement and monitoring reflected in this final draft, and commitments for an additional phase of this initiative, PGP is prepared to support the outcome of this initiative with the above caveats.

2. Please provide your organization’s overall position on the WEIM Resource Sufficiency Evaluation Enhancements Phase 2 revised final proposal:

PGP recommends scope 3 be started as soon as feasible.

3. Provide your organization’s comments on the interaction between advisory WEIM transfers and HASP intertie schedules, and the proposal to account for this interaction as described in section 4.2 of the revised final proposal (no changes were made in the revised final proposal):

While the remaining asymmetry in the treatment of LPT exports is not ideal, PGP supports the updates to differentiate between DA LPT exports and RT for the purposes of CAISOs RS test, and the clarification of what may occur if LPT exports are curtailed. Given the non-firm nature of these transfers, it is appropriate that the power-balance violation in a curtailment situation would fall upon the entity that chose to rely on these less-than-firm imports for supply.

4. Provide your organization’s comments on the proposed changes to the tagging of LPT exports, as described in section 4.2.3 of the revised final proposal (no changes were made in the revised final proposal):

PGP supports tagging that accurately reflects the priority of various transfers and looks forward to further market monitoring and reporting of the prioritization of these exports in the rare events that they may need to be manually curtailed. PGP appreciates the clarification in the proposal and tariff language that specifies this would only occur when the CAISO is in an EEA 3 event or during load shed.

5. Provide your organization’s comments on the proposal to cure resource insufficiencies through the WEIM subject to an out of market financial surcharge, as described in section 5.1 of the revised final proposal:

PGP sees the additional revisions in the Revised Final proposal as likely to reduce the frequency of extreme price events caused in non-stressed system conditions and supports these changes with the understanding that they may enable more entities to participate in the assistance program. They may also further encourage WEIM participants to make supply available to the broader WEIM prior to summer 2023. PGP supports the voluntary nature of this program, and the added ability to net ABC capability form the assistance settlement volume. As noted, continued monitoring and evolution of this program and the RSE will be required to evaluate if it is meeting the stated policy objectives. PGP supports the provision that this program will sunset by December 31, 2025, in favor of in-market solutions that may result from an RSE Phase 3 initiative and the Price Formation Enhancement Initiative that is already underway.

6. Provide your organization’s comments on the proposed allocation of assistance energy revenue and charges, as described in section 5.1.1 of the revised final proposal:

As stated in PGPs original comments, PGP supports the methodology to align the assistance revenue allocation to those that provide net transfers during the assistance event, encouraging availability of supply and avoiding over-dilution of the benefits for providing assistance in these situations. PGP believes the refinement in the revised final proposal improves the alignment with these stated objectives. Regarding the allocation of these revenues, PGP does not find it necessary for the CAISO to define the allocation methodology for external EIM entities.

7. Provide your organization’s comments on the proposed WEIM decisional classification, as described in section 6 of the revised final proposal:

 PGP supports the decisional classification of this initiative.

8. Provide any additional comments on the WEIM Resource Sufficiency Evaluation Enhancements Phase 2 revised final proposal or November 7, 2022 stakeholder call discussion:

While not directly addressed in November 7^th call, PGP looks forward to continuing analysis of the accuracy of the RSE during scarce conditions such as the report presented to the Board of Governors on the market performance during the September heat wave event. To interpret the final changes included herein, PGP believes WEIM entities would benefit of a counterfactual analysis showing what the impacts of these changes would have been on the previously analyzed intervals, assuming the data is available. PGP also looks forward to ongoing documentation and examples regarding the interaction of the RSE and the EDAM, and monitoring of the test once load conformance changes discussed in the DAME initiative are implemented, even in a provisional approach through continued market operator action. PGP looks forward to the next phase of this initiative including the oversupply assistance originally discussed in the draft, in-market solutions, and continued improvement of upstream issues that may cause inconsistent use of the WEIM in times of scarcity by some participants.

1. Please provide a summary of your organization’s comments on the WEIM Resource Sufficiency Evaluation (RSE) Enhancements Phase 2 revised final proposal and November 7, 2022 stakeholder call discussion:

PPC appreciates CAISO staff’s continued efforts to balance the comments received from stakeholders and to seek improvements to the Resource Sufficiency Evaluation (RSE) based on that feedback. Given the time provided to comment, PPC’s feedback on the proposal is limited but would like to emphasize the importance of several considerations and the need to continue to work to improve the WEIM RSE in the future.

PPC does not object to moving forward with the proposed formation of the assistance energy service in order to have a tool in place prior to next summer which could allow EIM Entities to use capacity made available through the EIM to retain reliability in their BAA. We understand that several stakeholders see value in this potential service, and the concept as proposed – while not ideal – does have advantages compared to continued broad use of the current failure consequence. The concept will still allow entities to utilize capacity available through the EIM as a tool to avoid potential disruptions of service to their customers. Additionally, while settling this service ex ante is not ideal, the pricing associated with the energy assistance transfers begins to address some concerns PPC has with the equity of the current failure consequences of the RSE. We also understand CAISO staff’s perspective that the revised financial costs associated with using the tool may encourage more entities to select to take the voluntary assistance energy instead of relying on the current failure consequences which PPC views as an inequitable penalty among EIM participants.  

Many stakeholders, including PPC, over the past several years have expressed continued concern with both the accuracy and failure consequences of the RSE. While we do not object to the proposal in the short term, the proposal as currently drafted does not adequately address those concerns on a longer-term basis. Additional specificity on the commitments to continue to improve the WEIM RSE are needed to provide comfort moving forward with the current proposal. On the November 7 stakeholder call, CAISO staff seemed to indicate several areas that needed additional improvement, including acknowledging that current failure consequences introduced the potential for inequitable outcomes. Staff then pointed to its Price Formation initiative and RSE Enhancements Phase 3 and forums to continue to improve the failure consequences for the RSE. We agree that additional work is needed to continue to improve on this proposal and would recommend that CAISO staff add additional specificity on what Phase 3 of this effort would cover, and the timing for that effort.

PPC would recommend that the following be included in RSE Enhancements Phase 3:

- Development of an “in market” assistance energy design (as contemplated in the Revised Final Proposal)

- Evaluation of potential options to replace the current “default” failure consequence of freezing transfers at the level of the prior interval. As described in previous comments, this can penalize entities that do not typically import from the EIM to a greater extent than those EIM participants who are typically large importers.

- Continued evaluation on the role that load conformance plays in the RSE. While PPC appreciates that analysis performed by the CAISO to date, we continue to have questions on how load conformance is impacting passing/failure of the RSE.

We would like to reiterate our thanks to CAISO staff for their hard work on this issue and appreciate the opportunity to comment. We look forward to continued improvement of this test so that it can meet the objectives identified by CAISO staff and stakeholders during the RSE enhancement process.

2. Please provide your organization’s overall position on the WEIM Resource Sufficiency Evaluation Enhancements Phase 2 revised final proposal:

No additional comments at this time.

3. Provide your organization’s comments on the interaction between advisory WEIM transfers and HASP intertie schedules, and the proposal to account for this interaction as described in section 4.2 of the revised final proposal (no changes were made in the revised final proposal):

No additional comments at this time.

4. Provide your organization’s comments on the proposed changes to the tagging of LPT exports, as described in section 4.2.3 of the revised final proposal (no changes were made in the revised final proposal):

No additional comments at this time.

5. Provide your organization’s comments on the proposal to cure resource insufficiencies through the WEIM subject to an out of market financial surcharge, as described in section 5.1 of the revised final proposal:

No additional comments at this time.

6. Provide your organization’s comments on the proposed allocation of assistance energy revenue and charges, as described in section 5.1.1 of the revised final proposal:

No additional comments at this time.

7. Provide your organization’s comments on the proposed WEIM decisional classification, as described in section 6 of the revised final proposal:

No additional comments at this time.

8. Provide any additional comments on the WEIM Resource Sufficiency Evaluation Enhancements Phase 2 revised final proposal or November 7, 2022 stakeholder call discussion:

No additional comments at this time.

1. Please provide a summary of your organization’s comments on the WEIM Resource Sufficiency Evaluation (RSE) Enhancements Phase 2 revised final proposal and November 7, 2022 stakeholder call discussion:

Salt River Project Agricultural Improvement and Power District (SRP) appreciates the CAISO’s attention to stakeholder concerns and efforts to improve the proposal for WEIM Resource Sufficiency Evaluation (RSE) Enhancements Phase 2.

As stated in previous comments, SRP continues to be concerned that a WEIM energy assistance program is inconsistent with the WEIM market principle that each entity must come to the market fully prepared to serve its own load. SRP also requests that the CAISO conduct robust testing of these changes with WEIM Entities and not implement changes until market simulation is complete and any deficiencies identified are fully corrected. 

2. Please provide your organization’s overall position on the WEIM Resource Sufficiency Evaluation Enhancements Phase 2 revised final proposal:

Support with caveats 

3. Provide your organization’s comments on the interaction between advisory WEIM transfers and HASP intertie schedules, and the proposal to account for this interaction as described in section 4.2 of the revised final proposal (no changes were made in the revised final proposal):

SRP supports the proposed treatment of WEIM Balancing Authority Area (BAA) hour-ahead scheduling process (HASP) exports, which allows these exports to be counted toward the Base Schedule used for RSE test. SRP concurs that if the HASP schedule needs to be curtailed by CAISO, the power balance constraint should be the mechanism to reflect imbalance in real time.

4. Provide your organization’s comments on the proposed changes to the tagging of LPT exports, as described in section 4.2.3 of the revised final proposal (no changes were made in the revised final proposal):

As stated in previous comments, SRP has concerns with the CAISO’s proposal to require LPT exports to be e-tagged as “Firm Provisional Energy (G-FP)” because this term is not commonly used by the entities in the west and may cause confusion for the receiving BAAs.

5. Provide your organization’s comments on the proposal to cure resource insufficiencies through the WEIM subject to an out of market financial surcharge, as described in section 5.1 of the revised final proposal:

SRP continues to have concerns that a WEIM energy assistance program is inconsistent with the WEIM market principle that each entity must come to the market fully prepared to serve its own load; however, SRP recognizes that there is strong support for this type of program. SRP supports a voluntary participation framework should the CAISO implement a WEIM energy assistance program.

Despite recent revisions to the proposal, SRP remains concerned that the current design will expose an WEIM BAA to an ex-post surcharge when the BAA intentionally fails the RSE for reliability reasons. SRP also encourages the CAISO to provide greater transparency through the availability of data for after-the-fact review to distinguish between economic displacement and emergency assistance.

6. Provide your organization’s comments on the proposed allocation of assistance energy revenue and charges, as described in section 5.1.1 of the revised final proposal:

SRP supports pro-rata allocation of energy revenue by net WEIM export transfer amounts to BAAs that have passed the WEIM RSE.

7. Provide your organization’s comments on the proposed WEIM decisional classification, as described in section 6 of the revised final proposal:

As explained in previous comments, SRP recommends that the WEIM Governing Body have joint authority for all elements of this proposal.  

8. Provide any additional comments on the WEIM Resource Sufficiency Evaluation Enhancements Phase 2 revised final proposal or November 7, 2022 stakeholder call discussion:

No additional comments.

1. Please provide a summary of your organization’s comments on the WEIM Resource Sufficiency Evaluation (RSE) Enhancements Phase 2 revised final proposal and November 7, 2022 stakeholder call discussion:

SDG&E appreciates the opportunity to comment on the Western Imbalance Energy Market (WEIM) Resource Sufficiency Evaluation Enhancements (RSEE) initiative. SDG&E believes that the proposed RSEE is a net improvement on the WEIM RSE design. We further believe that CAISO should initiate a new stakeholder process specific to CAISO Load Serving Entities (LSEs) to determine whether or not CAISO should opt-in to the new RSEE penalty structure.

2. Please provide your organization’s overall position on the WEIM Resource Sufficiency Evaluation Enhancements Phase 2 revised final proposal:

SDG&E supports this version of the WEIM RSEE proposal but would like the CAISO commit to both monitoring the financial penalty prices for a period and opening a new stakeholder initiative specifically to determine the impacts to CAISO LSEs to inform the decision of whether the CAISO BA should opt-in to the new WEIM RSE penalty structure.

3. Provide your organization’s comments on the interaction between advisory WEIM transfers and HASP intertie schedules, and the proposal to account for this interaction as described in section 4.2 of the revised final proposal (no changes were made in the revised final proposal):

No comment.

4. Provide your organization’s comments on the proposed changes to the tagging of LPT exports, as described in section 4.2.3 of the revised final proposal (no changes were made in the revised final proposal):

SDG&E supports this change as it allows the Fifteen Minute Market (FMM) to identify and potentially curtail low-priority (LPT) exports intra-hourly, if CAISO is in an emergency situation.

5. Provide your organization’s comments on the proposal to cure resource insufficiencies through the WEIM subject to an out of market financial surcharge, as described in section 5.1 of the revised final proposal:

SDG&E supports this version of the proposal to cure RSE failures through a financial penalty as opposed to the current WEIM RSE failure penalty, which physically caps transfers.

However, SDG&E also believes that CAISO should set an initial timeframe to observe the penalty prices generated by this new mechanism to ensure that the tool is functioning as intended. After the observation period, CAISO should open a new initiative that includes data analysis on the potential impact of the financial penalty based on CAISO’s RSE performance for the timeframe and get market participants’ perspectives on whether CAISO should opt-in.

6. Provide your organization’s comments on the proposed allocation of assistance energy revenue and charges, as described in section 5.1.1 of the revised final proposal:

No comment.

7. Provide your organization’s comments on the proposed WEIM decisional classification, as described in section 6 of the revised final proposal:

No comment.

8. Provide any additional comments on the WEIM Resource Sufficiency Evaluation Enhancements Phase 2 revised final proposal or November 7, 2022 stakeholder call discussion:

No comment.

1. Please provide a summary of your organization’s comments on the WEIM Resource Sufficiency Evaluation (RSE) Enhancements Phase 2 revised final proposal and November 7, 2022 stakeholder call discussion:

The Six Cities strongly support the following elements of the Revised Final Proposal: (i) to address inappropriate and asymmetric treatment of advisory imports and LPT exports scheduled in the HASP by removing Real-Time LPT exports from CAISO BAA obligations in the application of the RSE tests; (ii) to tag LPT exports as “Firm Provisional” rather than “Firm;” and (iii) to implement an optional process for receiving energy assistance through WEIM transfers subject to an ex-post surcharge applied to the lower of the quantity of upward RSE test failure or dynamic WEIM transfers that are tagged.  The Six Cities particularly appreciate the CAISO’s responsiveness to their concerns regarding the design of the energy assistance approach proposed previously.

The Six Cities continue to have concerns regarding implementation of the CAISO’s curtailment policies for LPT exports as described in Item 4 below.

2. Please provide your organization’s overall position on the WEIM Resource Sufficiency Evaluation Enhancements Phase 2 revised final proposal:

See comments on specific elements.

3. Provide your organization’s comments on the interaction between advisory WEIM transfers and HASP intertie schedules, and the proposal to account for this interaction as described in section 4.2 of the revised final proposal (no changes were made in the revised final proposal):

The Six Cities appreciate and strongly support the CAISO’s effort to address the asymmetry that occurs when HASP exports are supported by advisory WEIM HASP imports but only the export schedules are counted (as CAISO obligations) in the RSE tests.  For the reasons described in Section 4.2 of the Revised Final Proposal, it is unreasonable that the CAISO BAA should fail an RSE test due to the asymmetric treatment of interchange transactions included in the output from HASP.  Accordingly, the Six Cities strongly support exclusion of Real-Time LPT exports from CAISO BAA obligations in the application of the RSE tests.

4. Provide your organization’s comments on the proposed changes to the tagging of LPT exports, as described in section 4.2.3 of the revised final proposal (no changes were made in the revised final proposal):

The Six Cities support the CAISO’s proposal to require that LPT exports be e-tagged as “Firm Provisional Energy (G-FP).”

However, the Six Cities do not support all elements of the manual process for curtailing LPT exports as described in Section 4.2.3 of the Revised Final Proposal.  It does not appear reasonable for the CAISO to establish a “practice” of maintaining reserves for LPT exports, or at least all LPT exports.  Section 4.2.1 of the Revised Final Proposal demonstrates that a substantial volume of LPT exports clear in HASP based on advisory WEIM transfers that are unrealized in the real-time dispatch.  There is no apparent justification for requiring load in the CAISO BAA to bear the costs of carrying reserves for LPT transfers triggered by advisory WEIM imports that do not materialize.  Although it may be reasonable for the CAISO to carry reserves for some LPT exports that are similar in nature to the types of exports for which WEIM Entities consistently provide reserves, establishing a “practice” of carrying reserves for all LPT exports clearly is over-broad and imposes an undue burden on CAISO load.

Section 4.2.3 of the Revised Final Proposal also indicates that the CAISO does not plan to initiate curtailment of LPT exports until CAISO is in an Energy Emergency Alert (EEA) 3.  The Six Cities question the appropriateness of delaying curtailment of LPT exports until the EEA 3 stage.  LPT exports should be curtailed prior to arming any firm load to meet reserve obligations, not simultaneously with (or after) arming firm load.  LPT exports should be “armed” for curtailment (and the receiving BAA notified of the potential for curtailment) at the EEA 1 or EEA 2 stage, and curtailment of LPT exports should occur prior to arming of firm load to supply reserves.  The Six Cities do not oppose the CAISO’s proposal to provide a higher priority to LPT exports that clear the Day-Ahead Market processes over LPT exports that appear in Real-Time in implementing the manual curtailment process.

5. Provide your organization’s comments on the proposal to cure resource insufficiencies through the WEIM subject to an out of market financial surcharge, as described in section 5.1 of the revised final proposal:

The Six Cities support the proposal to implement an optional process for receiving energy assistance through WEIM transfers subject to an ex-post surcharge applied to the lower of the quantity of upward RSE test failure or dynamic WEIM transfers that are tagged, as described in Section 5.1 of the Revised Final Proposal.

6. Provide your organization’s comments on the proposed allocation of assistance energy revenue and charges, as described in section 5.1.1 of the revised final proposal:

Based on the revisions to the structure of the energy assistance proposal and the CAISO’s identification of challenges with implementing alternative approaches for allocating assistance energy revenues and charges, the Six Cities do not oppose application of the allocation approaches described in Section 5.1.1 of the Revised Final Proposal, at least on an initial basis. 

7. Provide your organization’s comments on the proposed WEIM decisional classification, as described in section 6 of the revised final proposal:

The Six Cities support the CAISO’s proposed decisional classification as described in Section 6 of the Revised Final Proposal. 

8. Provide any additional comments on the WEIM Resource Sufficiency Evaluation Enhancements Phase 2 revised final proposal or November 7, 2022 stakeholder call discussion:

The Six Cities have no additional comments on the Revised Final Proposal. 

1. Please provide a summary of your organization’s comments on the WEIM Resource Sufficiency Evaluation (RSE) Enhancements Phase 2 revised final proposal and November 7, 2022 stakeholder call discussion:

SCE appreciates the hard work CAISO has put forth in the WEIM RSE Phase 2 initiative and would like to thank the CAISO for informing and engaging stakeholders to develop a WEIM RSE that is accurate, fair, robust and that is consistent with EDAM RSE design.  SCE is generally supportive of the proposal. In particular, SCE supports the proposed ex post charge for Energy Assistance instead of an in-market charge and for the incremental amount only, to minimize otherwise adverse impacts to the CAISO market.

SCE supports the idea of an Energy Assistance program and believes it will positively impact reliability.  However, SCE believes additional policy discussions and workshops are needed.   SCE is pleased to hear that CAISO will continue to develop Energy Assistance in Phase 3 of the RSEE initiative and the Price Formation Initiative.   SCE urges CAISO to not rush an in-market EA initiative and to develop policies that would give CAISO LSEs confidence in opting in for Energy Assistance as those entities will ultimately bear the costs of RSE failures according to the cost causation principle.   To achieve support, SCE believes the proposal needs to address the following: 

• Energy Assistance program for WEIM and EDAM should be very similar in nature
• Energy Assistance surcharge should be for the incremental amount delivered only
• The CAISO BAA does not get overcharged for failing the RSE due to supporting lower priority transfers  
• Energy Assistance pricing should reflect the current bilateral markets and system conditions (e.g., hefty surcharges should not be accessed for failures when prices are below $100)
• Bulletin board that is updated daily that provides details of which BAAs, and a breakdown of within the CAISO BAA, are failing the RSE

SCE looks forward to further discussions with the CAISO.

2. Please provide your organization’s overall position on the WEIM Resource Sufficiency Evaluation Enhancements Phase 2 revised final proposal:

SCE supports the proposals mentioned in the WEIM Resource Sufficiency Evaluation Enhancements Phase 2.   However, due to the unique situation the CAISO BAA is in, the HASP issues identified by the MSC, and CAISO supporting large quantities of EIM transfers, SCE is not able to support CAISO opting into Energy Assistance next year.  As the proposal evolves, SCE will reconsider this position.  However, it is important that the CAISO have a thorough stakeholder process before deciding if the CAISO BAA will “opt-in”.  Preferably, this would require a FERC filing so that parties that disagree with the ultimate decision could have additional review at FERC.

3. Provide your organization’s comments on the interaction between advisory WEIM transfers and HASP intertie schedules, and the proposal to account for this interaction as described in section 4.2 of the revised final proposal (no changes were made in the revised final proposal):

SCE remains supportive of not considering lower priority exports from the CAISO BAA’s WEIM RSE obligation.  SCE urges CAISO to continue exploring ways to improve the HASP process to address the issues of the CAISO BAA clearing higher exports because of undelivered advisory WEIM imports.

4. Provide your organization’s comments on the proposed changes to the tagging of LPT exports, as described in section 4.2.3 of the revised final proposal (no changes were made in the revised final proposal):

SCE remains supportive of CAISO’s proposal to require LPT exports to be tagged as “firm provisional” tag for non-firm imports entering the CAISO BAA.  However, it is still unclear in the proposal how the LPT exports are quantified by each individual CAISO LSE and whether there is adequate time for LSEs to identify and tag the LPTs.  CAISO should provide more details and even consider an automated way to tag these LPT on behalf of CAISO LSEs. 

5. Provide your organization’s comments on the proposal to cure resource insufficiencies through the WEIM subject to an out of market financial surcharge, as described in section 5.1 of the revised final proposal:

SCE supports CAISO’s proposal to administer an out-of-market surcharge instead of an in-market surcharge.   Although at this time SCE does not support CAISO opting in for EA next summer, SCE believes an out-of-market surcharge is appropriate and will have the least impact on real-time prices.  In addition, it will also address concerns that the CAISO BAA (if opt-in) would not be overcharged large amounts of imbalance energy due to how the CAISO BAA is uniquely situated.  

6. Provide your organization’s comments on the proposed allocation of assistance energy revenue and charges, as described in section 5.1.1 of the revised final proposal:

SCE believes the new Energy Assistance proposal is an improvement to the previous proposal because the EA surcharge is applied to only the incremental amount failed and not to the entire imbalance energy amount.   It is also an improvement to the previous proposal because it allows BAAs the ability to utilize their available balancing capacity (ABC) to offset EA costs in an event of an RSE failure, alleviating concerns of failing the RSE (with surplus capacity) under non-stressed conditions. 

SCE does not agree with how the Energy Assistance charged will be suballocated for the CAISO BAA.   CAISO mentions that the charge would be sub-allocated based on measured demand.   SCE believes this is unfair and the charge should be allocated to the LSEs that caused the CAISO BAA to fail.  

7. Provide your organization’s comments on the proposed WEIM decisional classification, as described in section 6 of the revised final proposal:

SCE continues to agree with CAISO on the decisional classifications of the proposed changes to the resource sufficiency test. 

8. Provide any additional comments on the WEIM Resource Sufficiency Evaluation Enhancements Phase 2 revised final proposal or November 7, 2022 stakeholder call discussion:

SCE does not have any additional comments.