Comments on Western EIM Governance Review Committee: 2/17/22 General Session Meeting

1. Comments on timing of the GRC proposals relative to EDAM market design proposals?

American Clean Power Association (ACP)-California appreciates the opportunity to comment on the questions put forth by the Governance Review Committee (GRC) on the scope of the Extended Day-Ahead Market (EDAM) Governance Review. ACP supports the GRC’s recommendation to work in parallel to the EDAM stakeholder process, as governance is an important factor in the market design. By starting the governance review process now and running it in parallel to the EDAM schedule, stakeholders can engage in meaningful discussions on the implications of the market design on governance as issues form and develop.

ACP-California also suggests the GRC remain available through the tariff filing and until implementation of the EDAM governance proposal, should EDAM go forward and the proposal be jointly adopted by the Board and Governing Body. Extending the timing would ensure the GRC is available should the tariff design or implementation have a substantive impact on their proposed framework and in the event any modifications or adjustments to the governance structure are required as a result of EDAM’s market design and its implementation (including the implementation that will be required to take place through individual EDAM Entity Open Access Transmission Tariffs or “OATTs”).

2. What governance elements are implicated by the EDAM market design?

In addition to the many governance elements the GRC will explore, including on joint authority and durability, with the increased market share and capacity through an extended day-ahead market, ACP recommends the GRC consider the implications of this market design on engagement with stakeholders and specifically on the Regional Issues Forum (RIF) and Body of State Regulators (BOSR). This topic was explored in the previous iterations of the governance review but given the impacts of increased market participation on regional stakeholders and regulators, it will be important to reevaluate the structure, scope, and design of the RIF and BOSR under a day-ahead market paradigm. As such, ACP supports further strengthening of the RIF and exploring more authority and support for the BOSR through the EDAM governance review process.

3. Does the broader nature of the EDAM Market Design implicate the legal construct for governance?

ACP recognizes the statutory obligations and legal limitations that CAISO is under, and strongly supports the exploration of creative solutions and options for an EDAM governance framework that creates as robust of a market as possible, while balancing the interests of all market participants.  ACP notes that many benefits, including long-term resource adequacy diversity benefits and the ability to make long-term transactions, are unlikely to be achieved until there is a fully autonomous multi-state governing body overseeing the market.  While ACP does not have any specific recommendations at this time, we encourage the GRC to strive to ensure that EDAM have a robust and resilient governance structure, with as much independence as possible. We encourage the exploration of creative ideas in this regard and a full exploration of what might be possible under the legal constraints that exist.

4. Any other comments?

ACP believes a well-designed, well-structured market that is supported by a strong governance structure will deliver value for all market participants. However, it is important to note that EDAM is an important, incremental step towards regional coordination and cooperation. ACP-California supports the development of EDAM and the benefits it can offer. But continues to note that EDAM does not offer the same level of benefits that can be provided by implementation of a full RTO. Thus, one of the primary benefits of EDAM is development of relationships and trust, along with market policies and governance frameworks that can be used as building blocks for a future RTO. The benefits of an RTO are many and include additional structures to incent the development and construction of clean energy resource to meet corporate energy goals, something that appears unlikely under EDAM. Given this, we urge the GRC to think of EDAM as an incremental step in western market expansion and not the “end game.” All governance modifications should be considered with this context in mind.

ACP looks forward to the work of the Governance Review Committee and appreciates the opportunity to provide comment.

1. Comments on timing of the GRC proposals relative to EDAM market design proposals?

The Salt River Project Agricultural Improvement and Power District (SRP), Arizona Public Service, and Tucson Electric Power, collectively referred to in these comments as the Arizona utilities, appreciate the CAISO’s and the Energy Imbalance Market (EIM) Governance Review Committee’s (GRC) commitment to re-evaluating the current governance structure of the CAISO as it relates to the potential expansion of the EIM to an Extended Day-Ahead Market (EDAM).  The Arizona utilities agree with the GRC comments made at the February 17, 2022, GRC meeting that the governance proposal should be started immediately and developed in parallel with the EDAM market design proposal process. 

In addition to these Arizona utilities comments below, we also support the comments made by the joint EIM entities comment letter.

The potential size and importance of EDAM and its impact on the broader wholesale energy market cannot be understated. Unlike the EIM, with its relatively small pool of real-time transactions, an EDAM could ultimately facilitate a vast amount of short-term energy transactions, representing a much larger share of the resources and loads across the west, while also potentially reducing existing bilateral market activity and opportunities.

Arizona utilities support the Joint Boards consideration of the EDAM market design and governance proposals at the same time because it ensures that the required governance changes are included and evaluated as a comprehensive EDAM final design. Maintaining GRC engagement through the entire EDAM development process, submittal to the Joint Boards through implementation will be required to ensure the governance proposal is aligned with the market policy and implemented as required. 

Starting as soon as possible to identify an acceptable EDAM governance proposal allows for full exploration of CAISO governance independence that would include a new independent board that makes decisions in the interest of the market as a whole.  

2. What governance elements are implicated by the EDAM market design?

Arizona utilities view CAISO’s current Joint Authority EIM governance model as acceptable at this time for EIM based on the voluntary nature of EIM participation and the relatively limited commitment of resources and transmission.  EDAM represents considerably more financial and operational exposure than the EIM; therefore, EDAM requires an independent governance structure.  Arizona utilities have been clear through our engagement on the GRC that the current EIM governance structure cannot extend and be applied to an EDAM given the terms of commitment for the EDAM and the magnitude of resource and transmission commitments.  It is Arizona utilities’ view that EDAM will require consideration of legislative changes.

The GRC and the CAISO identified governance elements in the July 31, 2020, EIM Governance Review Committee Straw Proposal document that would need to be considered if EDAM were to be implemented.  At this time, Arizona utilities believe the following governance changes should be explored:

1. Greater Independence: 
   • Consideration of a governing body independent of all market participants and stakeholders (including California), to preside over all aspects of the EDAM due to the anticipated scope of control, impact on all participants obligations to reliably meet load, the magnitude of financial risk, and resource impact from market participants to serve their load and participate in both EDAM and EIM. 
2. Scope of Delegation of Authority:
   • A strong delegation of authority for EDAM and EIM to be applied to the new EDAM independent board, as well as to the decisional classification and durability process.
3. Improved Governing Body and stakeholder involvement in the CAISO initiative process:
   • Explore improved involvement with the annual CAISO Policy Initiatives Roadmap process where the governing body and stakeholders would have input into the policies that establish prioritization of initiatives.
4. Explore further enhancements to engagement processes:
   • Explore further enhancements to the governing body’s roll and engagement with the Department of Market Monitoring, Market Surveillance Committee, and outside independent market expert(s).
5. Reevaluation of the Governing Body mission statement:
   • A consideration of the Governing Body’s mission statement to consider the broader impact of EDAM on stakeholders and the balancing of interests that must be achieved given the potential impact of EDAM.
6. Timing and periodic review of governance:
   • Timing of the GRC’s proposed EDAM governance structure shall be in place prior to EDAM participation and would apply equally to the EIM and EDAM, as well as California load serving entities if they are participating in EDAM or EIM.
   • If EDAM is approved for participation by the joint boards, then the GRC with stakeholders would review the new EDAM governance structure no later than five years after the EDAM market participation begins in order to identify and implement any changes that would be needed as the market evolves.

These elements may be modified as Arizona utilities learn more about the final proposed EDAM market policy design.

In addition to the changes described above, Arizona utilities request the GRC, with the CAISO, to develop a Governance Road Map.  We believe a regional market for the west requires true independence and the CAISO may need changes to California law to effectuate such change.  The Governance Road Map should include identified milestones, deliverables, and dates outlining how to achieve such independence.  The Governance Road Map would measure progress towards independence. The Governance Road Map could include such milestones as the GRC revisiting the 2021 CAISO legal review (see answer to question 3 below for more detail), reevaluating the governance principles so they are reflective of a potential EDAM, identifying actions required for an independent board, and identifying actions on how an independent board would be established and the process for appointing board members.  The Governance Road Map and progress would be included as part of the governance proposal and comprehensive EDAM final design submitted to the Joint Boards for approval as described above.

3. Does the broader nature of the EDAM Market Design implicate the legal construct for governance?

Yes.  Arizona utilities recommend the GRC explore a pathway towards a fully independent governance structure that includes a new board, with ultimate authority over a potential EDAM that makes decisions in the interest of the market as a whole.  Full governance independence would be consistent with FERC policy for any regional wholesale energy market that economically dispatches generation to match load that encompasses more than one state.

Arizona utilities request the GRC explore the question of whether the CAISO Board of Governors can delegate full market policy authority to a new independent board. This exploration could include the evaluation of:

1. Primary Authority given to the EIM / EDAM Governing Body with no veto by the Board of Governors over market policy.
2. Establishment of a new, independent board that would have full delegated authority over EDAM.  Arizona utilities recommend that any new board that results from this effort be consistent with the following principles:
   1. Independent of any specific entities, states, or regions and serve the interests of consumers and market participants.
   2. Independent from market participants.
   3. Be transparent in structure and decision-making.
   4. Respect local governing boards’ and states’ authority on resource decision-making and policies.
   5. Have a defined role and representation for utilities, such as Arizona utilities, that own and operate transmission to provide input into operational aspects to the board.
   6. Define a role in governance and representation for public power entities with clearly delineated roles for local governing boards, and states.
   7. Authority distributed and sufficiently independent to prevent a few entities from inequitable control and to ensure that a consensus is required to direct the whole.
   8. Diversity of skillset and experience (such as geographic diversity, industry knowledge such as natural gas, hydro, regulatory, legal, finance, market design etc.).

A logical first step by the GRC would be revisiting the 2021 CAISO legal review.  The 2021 CAISO legal review, Appendix A of the CAISO’s Decision of the EIM Governance Review Committee’s Part Two Draft Final Proposal dated July 19, 2021, served its purpose for the EIM, but in light of EDAM an in-depth conversation on how governance independence can be achieved is essential. 

Arizona utilities respectfully request the GRC, and the CAISO consider the following principles in the evaluation of EDAM governance:

1. Governance independence is a bedrock EDAM principle as the CAISO’s EIM evolves to a potential EDAM.
2. Seek, where possible, to build upon and refine the existing EIM structure as well as evaluate a completely new governance model including standing up a new independent board.
3. Independent market monitoring should extend to EDAM and report to an independent board.
4. Demonstration that regional market expansion is transparently and fairly administered.
5. Establishment of an independent board that understands the region and the various interests of public power, not based on California-first statutes and policies.  

These principles would be in addition to and could replace some of the principles identified in the July 31, 2020, EIM Governance Review Committee Straw Proposal document.

4. Any other comments?

Arizona utilities request the following additional issues be in scope as a pathway towards an independent governance structure under EDAM is explored:

1. The addition of an EDAM / EIM transmission owners / operators committee as a stakeholder sector in the Regional Issues Forum.
2. Enhancements to the CAISO board selection policy and board review nominating committee process (CAISO Board Selection Policy document July 2020).  Arizona utilities are interested in having this process explore potential modifications to the qualifications of board members that would allow for geographic diversity of experience, both within and outside the CAISO BAA. Additionally, Arizona utilities are interested in this process to explore changes to the Board Nominee Review Committee to achieve a more balanced representation of stakeholder sectors and support decision making that is free from bias.

1. Comments on timing of the GRC proposals relative to EDAM market design proposals?

The Bonneville Power Administration (BPA) appreciates the opportunity to comment on the Governance Review Committee’s (GRC) Scope of EDAM Governance Review as discussed at its February 17, 2022 Public Meeting.  Specifically, BPA is pleased the GRC is responding to the many stakeholder comments made during its Energy Imbalance Market (EIM) governance review process to initiate a like process for governance review when and if an Extended Day-Ahead Market initiative advanced. 

BPA continues to view independent governance as paramount to an EDAM as it represents considerably more stakeholder commitment and financial exposure than the EIM.  As such, BPA believes it is critical for the GRC’s EDAM governance effort to proceed simultaneously with the ongoing EDAM market design proposals.  Doing so will help to ensure the effort receives due attention as market design discussions are ongoing, and therefore does not become an effort that could be viewed as a hurdle to overcome as quickly as possible to enable EDAM to move forward. 

BPA believes the governance and the market design efforts should be done simultaneously to reflect the foundational importance of independent governance to any successful EDAM. Further, BPA proposes that the GRC take necessary time after the EDAM design efforts are complete.  This will allow the GRC’s final EDAM governance proposal to fully consider appropriate support, as well as checks and balances, to respond to the final market design. 

2. What governance elements are implicated by the EDAM market design?

1. Delegation of Authority

Delegation of Authority must be revisited to advance full independent governance where a Board, with ultimate authority, makes decisions in the interest of the market as a whole—not based on California-first statutes and policies.  Full independence would be consistent with FERC policy for any RTO that encompasses more than one state. 

2. The Selection of Governing Body Members

Changes to the Delegation of Authority governance element could necessitate changes to the method of selecting Governing Body members, or an alternate governing body if proposed. Whatever the ultimate outcome for the governance structure, BPA believes it must be a Board that understands the region and the various interests of public power and Power Marketing Administrations. 

3. Engagement with Stakeholders

While it is possible the current structure the EIM Governing Body uses to engage with stakeholders may be sufficient for an EDAM, this governance element should be revisited to determine whether alternative structures may be necessary to ensure an agile process given the increased activity and impact an Extended Day-Ahead Market will bring.  It may be that a more formalized subcommittee structure, such as that being employed to design the EDAM, could be more responsive to ongoing market developments.

3. Does the broader nature of the EDAM Market Design implicate the legal construct for governance?

The potential terms for participation in the EDAM, and the magnitude of resource and transmission commitments and congestion relief, require thoughtful consideration of California’s authority over the EDAM.  As stakeholders continue to participate in governance review as part of the EDAM design process, the threshold question of whether CAISO governance is sufficiently independent, or whether the California legislature needs to make significant changes to enable that independence, must be addressed.

The EIM is governed by an independent Governing Body nominated by stakeholders, and is approved by the CAISO Board. The CAISO Board has delegated certain authorities over EIM operations to the EIM Governing Body, but the CAISO Board retains its ultimate oversight authority over the CAISO. It has been explained by CAISO legal staff that California’s corporation laws and its own statutory obligations limit the ability of the CAISO Board to delegate additional authority to an independent body without a legislative change. 

The expansion of the EIM to day-ahead services necessitates revisiting the scope of the joint authority model adopted last year.  As the GRC recommendations anticipated, the day-ahead market involves a wider scope of issues in the CAISO tariff than does the EIM.  The impact on other market participants is also more significant.  Already, the effect on other parties by CAISO rules and priorities have tested the standard of applicability used to determine joint authority.  Therefore, the GRC should revisit the scope of joint authority, including a standard of impact on parties outside of California.  

Stakeholders must determine if the CAISO governance structure for the proposed EDAM will provide for the consideration of the interests of all market participants without unduly prioritizing obligations to California entities. BPA is concerned that absent a legislative change for California governance, BPA’s interests may not sufficiently align with the interests of California entities in creating a market that BPA would benefit from participating in.

4. Any other comments?

None at this time.

1. Comments on timing of the GRC proposals relative to EDAM market design proposals?

The Energy Division staff of the California Public Utilities Commission (ED staff) appreciates this opportunity to provide comments on the February 17, 2022 general session meeting of the Energy Imbalance Market (EIM) Governance Review Committee (GRC) regarding the scope of Extended Day-Ahead Market (EDAM) governance review.

Regarding the timing of the GRC proposals relative to EDAM market design proposals, ED staff believes that the relevant governance draft final proposal should be submitted to the Joint Boards for approval no earlier than the EDAM market design (which is planned for Q4 2022), but also cautions that the EDAM market design must not be overly expedited.

2. What governance elements are implicated by the EDAM market design?

ED staff has no comment on this issue at this time. 

3. Does the broader nature of the EDAM Market Design implicate the legal construct for governance?

ED staff has no comment on this issue at this time. 

4. Any other comments?

During the February 17, 2022 GRC general session meeting, one stakeholder commented that a fully independent governance structure is the ideal approach for any multi-state market such as EDAM, and that as long as the California Independent System Operator (CAISO) Board is appointed by the California Governor and confirmed by the California State Senate, any EDAM will struggle to be truly independent both in reality and in perception. Echoing the sentiment that statutory constraints limit the potential independent governance of EDAM, another stakeholder expressed a desire to have a conversation on legislative change and explore options for moving toward truly independent governance. It is relevant to note that neither of these stakeholders represent California.

ED staff acknowledges the desire for a balancing of interests in the decision-making process, but would note that the California Legislature created CAISO in 1998 as part of the state restructuring of electricity markets. The Federal Power Act also maintains state authority over long-term procurement (in the absence of a Centralized Capacity Market). Accordingly, as the stakeholders themselves acknowledge, California laws would need to be modified to enable such a governance structure overhaul. An endeavor such as this, which is certain to be both controversial and time-consuming, is unrealistic given the Q4 2022 target timeline for bringing EDAM market design and relevant governance proposals to the Joint Boards for approval. As such, ED staff recommends that proposals requiring a legislative change not be included in the GRC proposal scope.

ED staff appreciates the opportunity to comment on the recent EIM GRC general session meeting and scope of EDAM governance review, and looks forward to continuing participation in the stakeholder process.

1. Comments on timing of the GRC proposals relative to EDAM market design proposals?

The Joint Commenters continue to view governance as a critical issue for EDAM.  The Joint Commenters agree with FERC that “independence is the bedrock upon which the ISO must be built”[1] and encourage the GRC to continue to push forward with governance changes that bring governance of EDAM and WEIM more closely into alignment with this principle. 

The Joint Commenters support the GRC’s proposal to scope and develop the EDAM governance proposal in parallel with the EDAM market design stakeholder process; however, the Joint Commenters encourage the GRC to seek opportunities to accelerate both the development and implementation of the EDAM governance proposal on a faster track if possible. 

The Joint Commenters agree that independence is a guiding principle for all markets and moving the CAISO governance structure towards more independent oversight is critically important for well-functioning markets, whether EDAM moves forward or not.  The scope of EDAM, and the number of EDAM participants, should not be precursors to the recognition that independence is a guiding principle.

[1] FERC Order No. 2000 Regional Transmission Organizations.  89 FERC ¶ 61,285 at P 193 (December 20, 1999). 

2. What governance elements are implicated by the EDAM market design?

The Joint Commenters agree that additional progress remains to achieve a governance structure that is “independent in both reality and perception.”[1]  The Joint Commenters also recognize that stakeholders approach governance from various perspectives and that the GRC must balance those perspectives to reach a durable solution that will enable EDAM to move forward.  However, the Joint Commenters would be the initial potential participants in the EDAM and as such the governance solution to support EDAM will need to be sufficiently meaningful to enable the Joint Commenters to be comfortable participating in this expanded market and to ensure support from applicable state and local policy makers. The Joint Commenters recognize that the GRC is likely to look at a range of governance alternatives based on the various interests of stakeholders.

Joint Authority

While the Joint Commenters appreciate the enhancements that have been made for WEIM governance through the development of the joint authority construct, many EIM Entities feel that the scope of joint authority for WEIM was tailored to be as narrow as possible. The Joint Commenters are concerned that if the GRC uses a “minimalist” approach for defining EDAM authority, it will not be appropriately tailored to both the nature and character of a Day Ahead market, which is anticipated to have far greater reach than the EIM and include greater volumes of transactions.  The Joint Commenters recommend that the GRC immediately surface for consideration the concepts initially proposed by the GRC in July 2020, which would have applied Joint Authority to a broad swath of both real time and day ahead market provisions, and which garnered widespread support in the region.  This approach would go beyond the current narrower construct and reasonably extend joint authority to those critical issues that are likely to affect all market participants and for which application of the independent Governing Body’s oversight is appropriate and necessary.  The next phase of governance modification must move beyond a simple extension of the Phase Two approach; an EDAM requires that more authority be given to the EIM/EDAM Governing body in order to gain broad buy-in and participation. 

Considerations Beyond Joint Authority

The Joint Commenters recognize that there are diverse opinions on governance and that for some EIM Entities, joint authority may not be sufficient to meet the “independent in both reality and perception” benchmark established by FERC.  Therefore, the Joint Commenters support consideration of further modifications that place the EIM/EDAM Governing Body as the primary authority over real-time and day-ahead markets.  In other words, the GRC should reconsider application of the prior primary authority model for the EIM/EDAM Governing Body.  Even if Joint Authority is ultimately retained, the Joint Commenters believe that the GRC’s willingness to reopen this discussion would help demonstrate that independent governance is a value in and of itself and that there is willingness to make progress toward that goal.

All of the detailed proposals regarding division of decisional authority, oversight of market monitoring, and review of the stakeholder calendar are based on the foundational predicate that the EIM/EDAM Governing Body has primary responsibility for the successful functioning of the day-ahead and real-time markets.

[1] Id, at 193.

3. Does the broader nature of the EDAM Market Design implicate the legal construct for governance?

The Joint Commenters reiterate that independence remains a bedrock principle, regardless of the market scope.  While WEIM represents an incremental optimization, the EDAM can include optimization of significant portions of the participating entity’s overall load profile, as well as certain ancillary services. In order to build upon the success of the WEIM and expand the benefits into the EDAM, there must be comparable treatment of participating BAAs and transparent oversight of market activities.  As recognized, in other ISOs and RTOs, particularly those covering a multi-state footprint, this is best achieved by independent oversight.

The Joint Commenters believe that this expanded role for the EIM/EDAM Governing Body can be achieved while remaining consistent with California law and preserving existing State and Local authority over resource adequacy, environmental policy, transmission planning, and retail ratemaking. 

The Joint Commenters are also hopeful that there will be continued evolution in this area and that the ultimate solution for expanding Western markets is a successful change to California’s laws so that the CAISO can fully regionalize. These comments supporting incremental governance expansion to support EDAM are provided in the spirit of finding a workable bridge to the time when the ultimate solution becomes available.

4. Any other comments?

The Joint Commenters reiterate our thanks and appreciation for the work of CAISO staff and the GRC to address this critical, complex topic.

1. Comments on timing of the GRC proposals relative to EDAM market design proposals?

Northwest Requirements Utilities (“NRU”) has no comments at this time.

2. What governance elements are implicated by the EDAM market design?

NRU appreciates this opportunity to provide comments. NRU represents the interests of 56 consumer-owned utilities that purchase all or most of their wholesale power from the Bonneville Power Administration (“BPA”) on a preferential basis pursuant to section 5(b) of the Pacific Northwest Electric Power Planning and Conservation Act. Combined, NRU members serve over 2,245 aMW of retail load and represent over 29% of BPA’s Tier 1 power sales. NRU members are located in BPA’s Balancing Authority Area (“BAA”) as well as other BAAs across the West, including those that have already joined the Energy Imbalance Market (“EIM”) or are in the process of joining. As such, NRU members have a substantial interest in all matters related to the EIM and the Energy Day-Ahead Market (“EDAM”), including appropriate and representative governance.

NRU appreciates the previous work of the Governance Review Committee (“GRC”) and its responsiveness to concerns of NRU and other non-California stakeholders related to the governance framework of the EIM.  It is NRU’s perspective that the GRC has done the best possible job in recommending a workable governance structure within the legal and political confines of an EIM that is fully within the control of the California ISO.  As expressed in the past, NRU believes there is a fundamental, unsolvable problem with any west-wide market for which ultimate control, including control over the tariff, remains with the California ISO.  Governance of these market constructs by a Board that is appointed entirely by the governor of one state creates risk, uncertainty, and the perception of bias toward California entities at the expense of others in the region.

Regarding EDAM market design, NRU urges the GRC to find governance solutions that work for non-California stakeholders, including BPA.  Independent governance through legislative change would be the ideal structure for EDAM.  Anything less than independent governance will bring a significant risk analysis process by entities exploring participation.  For the EIM, the GRC was able to establish a Joint Authority model that changed the dynamic to be more collaborative and give EIM participants and other stakeholders more confidence in the governance structure.  It is likely that the EDAM governance structure, due to the more expansive nature of the market, will require additional modifications.  Potentially looking at the Governing Board selection policy could be an area for discussion, among other things.  For NRU to not oppose BPA joining an EDAM, the GRC must find acceptable governance solutions that minimize risk to BPA and its customers.

3. Does the broader nature of the EDAM Market Design implicate the legal construct for governance?

NRU has no comments at this time.

4. Any other comments?

No further comments.

1. Comments on timing of the GRC proposals relative to EDAM market design proposals?

PG&E supports development of governance proposals for EDAM in parallel with the EDAM market design currently under stakeholder review.  If a governance proposal is completed before the market rules are done, the governance proposal should be held in readiness, such that the governance and EDAM market rules can be submitted simultaneously and considered jointly as a package for approval by the CAISO Board of Governors and WEIM Governing Body. 

For the EDAM market design, which requires a further tariff filing at FERC, approval would likely take the form of a vote authorizing CAISO Staff to submit tariff language at FERC.  As has been the practice with previous WEIM governance matters, PG&E expects that the EDAM governance changes recommended by the GRC, if approved, would lead to CAISO Legal recommending specific language for the relevant governance documents (Bylaws and Charters), which are not generally subject to FERC review. 

PG&E notes that, while both the EDAM governance and market design may receive approval at the time of such a joint Board and Governing Body vote, the implementation of the EDAM market design will depend critically upon a final FERC order approving the CAISO tariff filing.  Until time of final FERC approval, it is therefore possible that further market design changes may be required that would alter the delicate balance of governance and market design.  The GRC may therefore wish to clarify how any interim/pre-implementation modifications to the EDAM market design (i.e., to satisfy any FERC concerns) would be approved (that is, whether they should fall under the current governance rules or any future EDAM governance rules). 

2. What governance elements are implicated by the EDAM market design?

EDAM will implicate many, if not all, of the same key features of the governance design that were considered by the GRC in development of the WEIM Joint Authority.  These include: the nature of delegated authority; the classification of initiatives (as between areas of remaining exclusive CAISO Board authority versus the delegated Joint Authority for WEIM and EDAM); voting rules for Joint Authority items; the process for dispute resolution (including remands, tiebreakers, and/or tariff filings with alternate opinions); and the durability of the delegated authority (including conditions for rescinding the delegated authority in the event of a departure by a large percentage of non-CAISO EDAM participants). 

3. Does the broader nature of the EDAM Market Design implicate the legal construct for governance?

PG&E has not developed a formal legal opinion on this question but believes this is a foundational issue that should be investigated by the GRC, with assistance from CAISO Legal, prior to the development of any proposal for EDAM Joint Authority. 

If the current delegated authority were extended from WEIM to the EDAM, almost all elements of the CAISO market design would likely be subject to the Joint Authority, with the remaining scope of primary authority of the CAISO Board of Governors limited to a narrow set of Balancing Area-only responsibilities.  This high degree of delegation may cross a threshold, in terms of the legal responsibility of the CAISO Board of Governors, under California Corporation statute, to retain full operational control over the institution of the CAISO.  If this is determined to be the case, the GRC’s options for expanded use of Joint Authority may be limited.

PG&E looks forward to the GRC revisiting the legal opinion on this question and would support, if desired, further engagement with California policy makers, such as the Governor’s Office, to ascertain their position on these questions.

4. Any other comments?

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1. Comments on timing of the GRC proposals relative to EDAM market design proposals?

Please see Powerex’s comments available at: CAISO February 17 WEIM Governance Review Committee Meeting Comments

2. What governance elements are implicated by the EDAM market design?

Please see Powerex’s comments available at: CAISO February 17 WEIM Governance Review Committee Meeting Comments

3. Does the broader nature of the EDAM Market Design implicate the legal construct for governance?

Please see Powerex’s comments available at: CAISO February 17 WEIM Governance Review Committee Meeting Comments

4. Any other comments?

Please see Powerex’s comments available at: CAISO February 17 WEIM Governance Review Committee Meeting Comments

1. Comments on timing of the GRC proposals relative to EDAM market design proposals?

PGP agrees with the GRC’s proposal that the scope of the EDAM governance review should be informed by the EDAM market design and thus governance enhancements should proceed generally in parallel to the EDAM Market Design Process. PGP notes that it will be important that the straw proposals on EDAM market design and governance are staggered by at least a few weeks to ensure that stakeholders have the bandwidth to review and comment on both. PGP strongly supports the GRC’s recommendation that the governance proposal be submitted to the Joint Boards for approval with EDAM market design.

2. What governance elements are implicated by the EDAM market design?

PGP continues to advocate that a fully independent governance structure, which can only be achieved through a legislative change in California, is the ideal governance approach for any multi-state market like EDAM. As long as the California ISO Board of Governors is appointed by the Governor of California and approved by the state Senate, any governance structure or model will struggle to be truly independent, in either reality, perception or both. PGP believes this is a strong impediment for future regionalization efforts, including EDAM. 

Given this challenge, PGP does not presume one way or the other as to whether there are changes to the delegation of authority or other governance elements that could achieve sufficient independence for entities in the West to consider EDAM a viable option. However, we are committed to exploring possible options for improvement within existing limitations, given the potential benefits of EDAM.

PGP recommends that the scope of EDAM governance should focus on changes to those elements that will support balanced decision  making and enhance independence and that could best support or set up a path for a fully independent governance structure that may be achieved in the future. The below topics are an initial list of those items we believe should be included within scope however, we may support other stakeholder proposals to consider additional issues.

• Scope of Delegation of Authority:
  Delegation of authority is appropriately included in the GRC’s proposed scope of governance changes for EDAM. EDAM involves a much broader scope of market activities and commitment by market participants in comparison to the EIM; it is therefore appropriate and necessary to consider changes to the delegation of authority approved in Phase 2 for the EIM. Given the importance of this key governance element, we believe both the type and scope of delegated authority should be addressed. As the GRC explores options for changes to the delegation of authority, PGP encourages the GRC to consider changes to the scope of delegation of authority that could potentially support and set up a path for a fully independent governance structure that may be achieved in the future.
   
• Governing Body Mission Statement:
  As PGP articulated in earlier phases of the GRC’s work, we believe it is appropriate and necessary to consider changes to the EIM Governing Body mission statement to reflect the broader impact of EDAM on stakeholders and the balancing of interests that must be achieved and to address and strengthen exit criteria. This topic should be included in the scope of EDAM governance enhancements. 
   
• Durability of Delegation of Authority and Dispute Resolution:
  As PGP has strongly advocated in earlier phases of the GRC’s work, the durability of delegation of authority is key to ensuring that the governance structure is resilient under a wide range of conditions and is essential to achieving an acceptable approach to delegated authority. Likewise, under a delegated authority governance framework, a dispute resolution process to address circumstances where there is a disagreement between the CAISO Board and Independent Governing Body is vital. Third-party dispute resolution ensures that the authority of the Independent Governing Body is not limited or thwarted by the ability of the CAISO Board to repeatedly reject proposals.
  
  PGP recognizes the legal limitations that prevented accomplishing our ideal solutions for durability and dispute resolution and we also recognize that meaningful enhancements were made on both topics in the GRC’s earlier phases of work. However, we believe the importance of these topics are heightened in a market with a broader scope like EDAM and for this reason recommend that these topics be included within scope, to the extent any new solutions/enhancements can be devised that fall within the legal limitations.
   
• CAISO Board Selection Policy:
  PGP recommends that changes to the CAISO board selection policy[1] be included within scope. In particular, PGP is interested in exploring potential modifications to the qualifications of board members that would allow for geographic diversity of experience, both within the CAISO BAA but also outside. In addition, PGP is interested in exploring changes to the Board Nominee Review Committee to achieve a more balanced representation of stakeholder sectors within the CAISO BAA and outside. PGP believes these topics are appropriately within scope for EDAM as they could help achieve a balancing of interests and support decision making that is free from bias.
   
• CAISO Corporate Governance Principles:
  PGP recommends that changes to CAISO’s Corporate Governance Principles be included within the scope of EDAM governance changes. PGP is interested in exploring whether there are modifications to the board of directors’ roles and responsibilities that would more explicitly address considerations for EDAM and the impacts on entities outside the ISO footprint. [2]

[1] http://www.caiso.com/Documents/DecisiononBoardSelectionPolicy-ProposedFinalPolicy-July2020.pdf

[2] http://www.caiso.com/Documents/CorporateGovernancePrinciples.pdf

3. Does the broader nature of the EDAM Market Design implicate the legal construct for governance?

PGP supported the GRC’s proposed changes to EIM governance in Phase 2 as important improvements to the existing EIM governance only and noted that, should EDAM move forward, it would be necessary to consider future changes to governance in the context of the EDAM market design. PGP has noted its concerns in past comments about the legal limitations to the ISO Board’s ability to delegate or share authority that present a challenge to achieving an acceptable delegation of authority for EDAM. PGP appreciates the GRC teeing up the question of whether the broader nature of the EDAM market design implicates the legal construct for governance. PGP does not offer an opinion on this but looks forward to perspectives from other stakeholders as well as the CAISO legal team. 

4. Any other comments?

No further comments.

1. Comments on timing of the GRC proposals relative to EDAM market design proposals?

The following comments are submitted on behalf of the following organizations:  Western Resource Advocates, Renewable Northwest, Western Grid Group, Clean Energy Buyers Association, NW Energy Coalition and Sustainable FERC Project (“Joint Commenters”).

Category 1: How the GRC Will Conduct the Review.

In summary, the Joint Commenters agree that it makes sense for the governance review to proceed in parallel with the CAISO’s EDAM market design process and to generally follow the iterative process used for CAISO’s stakeholder initiatives.  However, the Joint Commenters offer suggestions for the format of some GRC meetings and specifics for the process that will enhance the ability for all stakeholders to engage effectively in the review.

First, we commend the members of the GRC for their commitment to the governance review. The GRC is a temporary committee and the original members were seated almost 2 ½ years ago. Only four of the 14 members have resigned and been replaced with new members, and all after the EIM phase of the work was completed.[1]  The members of the GRC represent a significant amount of historical and technical intelligence that is invaluable.  Further, the governance design is a key feature of the full EDAM program design.  Thus, the Joint Commenters support the decision to begin the EDAM phase of the governance review now, even before a market design proposal has been developed, and to run in parallel with and match the schedule of the market design process.  To this end, however, more information about the market design will be necessary to fully develop proposals for many of the issues that are expected to fall within the scope of the governance review. There should at least be a credible market design proposal before the stakeholders can engage in meaningful discussions on these EDAM governance issues.

The GRC also recommends an iterative process that is very similar to the CAISO stakeholder initiative process.[2] The Joint Commenters have no objection to this recommendation but provide the following recommendations to supplement it.  The GRC should consider making additional meetings open to the public. Informational or educational meetings should not be held in executive session. For example, if CAISO staff will be explaining technical topics to the GRC, such as the impact of California law on the range of potential proposals, all stakeholders could benefit from this exchange of information.  Further, the GRC should consider the format of their public meetings (or hold additional public meetings) and include more time for GRC members to explain and discuss their perspectives as members who represent different sectors.

The review process should provide stakeholders the opportunity to more effectively engage. Multiple design efforts are underway in the Western Interconnection and many stakeholders, such as public interest organizations and large clean energy customers, have limited resources.  Further, some sectors strive to develop consensus comments amongst multiple entities or organizations.[3] Therefore, the GRC should consider the following so that stakeholders can more effectively track the review process and provide thoughtful advice:

• Post meeting materials at least five days in advance of a meeting.  Post more extensive detailed materials, such as straw, draft or final proposals, at least 10 business days in advance of a meeting.
• Provide at least 20 business days for comments, 30 business days for more extensive detailed material.  
• Post meeting recordings no later than three business days after each meeting.

[1] CAISO, EIM Governance Review Committee webpage (last visited February 28, 2022) available at:   https://www.westerneim.com/Pages/Governance/GovernanceReviewCommittee.aspx.

[2] Western EIM GRC Public Meeting on Scope of EDAM Governance Review, presentation material at slide 8 (February 17, 2022) available at:  https://www.westerneim.com/Documents/EIM-Governance-Review-Committee-Scope-EDAM-Governance-Presentation-Feb-17-2022.pdf (hereinafter “GRC Presentation Material").

[3] For example, the EIM BOSR strives to provide consensus comments in ISO stakeholder processes or to the EIM Governing Body on EIM issues. Charter EIM Body of State Regulators, Purpose and Responsibilities, #3 (rev.’d April 30, 2021), available at: https://www.westernenergyboard.org/wp-content/uploads/04-30-21-EIM-BOSR-Amended-Charter.pdf.

2. What governance elements are implicated by the EDAM market design?

Category 2: Governance Elements Implicated by EDAM.

In summary, the Joint Commenters recommend that the following governance elements should be included in the GRC’s scope of work:

1. Delegation of Authority: Scope and Type
2. Governing Body’s Mission Statement and Name
3. Governing Body Support and Member Compensation
4. Durability Provisions.

1.         Delegation of Authority: Scope and Type of Authority

The delegation of authority from the CAISO Board of Governors (“Board”) to the EIM Governing Body is clearly implicated by the EDAM.[1] The GRC should consider expanding the scope of the EIM Governing Body’s authority to include EDAM and EDAM-related market rules. In considering the scope of rules and manner in which the Governing Body will approve, in conjunction with the CAISO Board, EDAM and EDAM-related market rules, the GRC should be guided by certain principles.

The comments in this section are premised on the assumption that amendments to California law are outside of the GRC’s scope and authority. (See comments below in Category 3.)

When considering the scope of the Governing Body’s authority and the manner in which rules are approved, the GRC should consider the following:

• Will the rule enhance regional confidence and support in the EDAM by ensuring that the Governing Body has a shared role in approving policy initiatives that will establish or change rules that apply to EDAM participants?
• Is the rule easy to administer and straightforward, and thus will it lead to transparent results?
• Does the rule support holistic engagement by the Board and Governing Body and enhance trust between the governing bodies, participants, regulators and others stakeholders?

One of the options the GRC should consider, which meets the above criteria, is extending the scope and type of authority now used for the EIM to EDAM, i.e., joint and advisory authority, with appropriate modifications. If a rule applies to an EDAM Entity or to market participants within an EDAM Entity balancing authority in their capacity as EDAM participants, then it is subject to joint authority.  The Governing Body should also have the ability to provide advisory authority input to the Board for matters that substantially affect the operation of the CAISO markets or may otherwise warrant input from the Governing Body and that are not in the scope of joint authority.

2.         The Governing Body’s Mission Statement and Name

The EIM Governing Body’s mission statement is clearly implicated by the EDAM.[2]  First, the current mission statement is EIM specific.[3]  At a minimum the GRC should consider expanding all EIM market references to include EDAM.  Second, as the EDAM market design develops the GRC should consider whether the mission statement continues to clearly articulate the direction and values of the Governing Body.

Further, the GRC should consider amending the EIM Governing Body’s name to reflect the Governing Body’s expanded oversight role with regard to the EDAM.

3.         Governing Body Support and Member Compensation

The EDAM implicates a much larger area of responsibility for the Governing Body.  The GRC should consider whether the Governing Body has adequate resources to effectively perform their increased responsibilities.  Further, as their responsibilities increase, their compensation should be fair and competitive to ensure that valuable expertise and experience is maintained (and attracted when there is turnover) on the Governing Body.  The GRC should consider reviewing the compensation provisions for Governing Body members.

When considering the support for the Governing Body and compensation for the members, the GRC should consider the following:

• Does the Governing Body have sufficient support services, such as dedicated staff hours and a sufficient budget for independent market expertise to effectively perform their increased responsibilities?
• Under the current compensation provisions, will Governing Body member compensation continue to be competitive and fairly reflect the increased work load with regard to EDAM?

4.       Durability

The GRC should consider whether the durability provisions, i.e., the process by which changes to governance documents are made, in the EIM Charter and CAISO Bylaws[4] align with the EDAM market design or otherwise provide sufficient stability for the EDAM which extends a significantly deeper level of market participation to participants than the EIM. 

For example, currently, if the CAISO Board amends the delegation of authority provisions in the EIM Charter, the amendments will not become effective until 180 days pass after the Board approves the amendment.[5] This aligns with the required notice period for EIM entities that plan to withdraw from the EIM.  Similarly, the effective date for any Board changes to the EDAM delegation of authority should align with any required EDAM withdrawal period.

As another example, if EIM entities that collectively represent 75% or more of the highest annual net energy for load in the EIM balancing authority areas (excluding CAISO) have given notice of their intent to withdraw from the EIM, the Board, by unanimous vote, can repeal the EIM delegation of authority provisions recently adopted, e.g., joint authority.[6]  If a similar provision is considered for EDAM, in addition to evaluating whether such a provision is appropriate for EDAM, the GRC should consider whether 75% of the highest annual net energy for load is the appropriate threshold for EDAM.

Just as governance is one of the most important elements of program design, governance stability is important for the healthy operation of the organization. When considering the durability provisions for EDAM governance, the GRC should consider the following:

• Can the current durability provisions be extended to the EDAM, as is, or will amendments be necessary to be consistent with the EDAM market design?
• Is an extension of the current durability provisions to EDAM sufficient to ensure a level of stability commensurate with the deeper market participation?

[1] See GRC Presentation Material at slide 7.

[2] See GRC Presentation Material at slide 7.

[3] For example, the mission statement begins as follows: “The EIM Governing Body shall promote and expand the success of the EIM for the benefit of ...”  CAISO, Charter for Energy Imbalance Market Governance, §2.1 (rev.’d Sept. 23, 2021) (hereinafter “EIM Charter”).

[4] Amended and Restated Bylaws of California Independent System Operator Corporation (rev.’ d Nov. 3, 2021) (hereinafter “CAISO Bylaws”).

[5] EIM Charter, §9; CAISO Bylaws, Art. 9, §3(b)(ii).

[6] EIM Charter, §9; CAISO Bylaws, Art. 9, §3(c).

3. Does the broader nature of the EDAM Market Design implicate the legal construct for governance?

Category 3:  The Legal Construct for Governance. 

The GRC posed the following question for consideration: Does the broader nature of EDAM market design implicate the legal construct for governance?[1]  The Joint Commenters support an exploration of this question, as we understand it, within the governance review and make the observations below.  In future discussions or documents, the GRC should add some clarity to this question in terms of intent and scope.

The stakeholders in the GRC process continue to strive for the best proposal within the limitations imposed by the California Corporations Code which applies to the CAISO Board.  Under the Corporations Code, the CAISO Board has ultimate responsibility for all corporate activities, which must be under its “ultimate supervision.”[2]  While there is still the possibility for a satisfactory governance structure and processes within the delegation of authority model for the EDAM market construct, it is unlikely this will be the case for further market expansion, i.e., a full RTO option offered to states outside of California by CAISO.

The GRC should explore creative proposals that seek to balance interests at the highest levels of CAISO’s governance structure.  For example, the GRC should explore the possibility of regional representation on t e CAISO Board.  This could include, for example, requiring or prioritizing one or more regional members on the Board through an amendment to the CAISO Bylaws[3] or including it in the Board search and selection criteria.  Evidence of movement in this direction today would offer some optimism that the delegation of authority model will not be the only option for future market expansion, though EDAM participation would likely not hinge on this.

[1] GRC Presentation Material at slide 8.

[2] California Corporations Code §5210. See EIM GRC Draft Straw Proposal, Appendix A (July 31, 2020) (fulldiscussion of the Corporations Code and limitations to CAISO Board’s delegation of authority), available at:http://www.caiso.com/InitiativeDocuments/StrawProposal-EIMGovernanceReviewCommittee.pdf.

[3] CAISO Bylaws, §4.2 (Qualification of Governors), Art. 9, §3 (Amendment of Bylaws).

4. Any other comments?

In summary, the Joint Commenters recommend the following:

Category 1: How the GRC Will Conduct the Review.  The Joint Commenters agree that it makes sense for the governance review to proceed in parallel with the CAISO’s EDAM market design process and to generally follow the iterative process used for CAISO’s stakeholder initiatives.  However, the Joint Commenters offer suggestions for the format of some GRC meetings and specifics for the process that will enhance the ability for all stakeholders to engage effectively in the review.

Category 2:  Governance Elements Implicated by EDAM.  The Joint Commenters recommend that the following governance elements should be included in the GRC’s scope of work:

1. Delegation of Authority: Scope and Type
2. Governing Body’s Mission Statement and Name
3. Governing Body Support and Member Compensation
4. Durability Provisions.

Category 3:  The Legal Construct for Governance.  The Joint Commenters support an exploration of the question posed by the GRC within the governance review: Does the broader nature of EDAM market design implicate the legal construct for governance? 

We appreciate the opportunity to engage in this early stage of the EDAM phase of the governance review.

1. Comments on timing of the GRC proposals relative to EDAM market design proposals?

The Public Power Council (PPC) continues to believe that EDAM market design and governance must be evaluated as a package.  Specific design features of EDAM, including the extent to which the EDAM market design requires that participants give up aspects of control over their system, will impact the level of independence that is required from an EDAM governance.  The closer the market design is to that of a full RTO (all generation dispatch and all transmission use is optimized through the market) the greater the need for independent governance.

This important relationship means that it is critical that governance development follow market design.  The concurrent paths proposed by the GRC are reasonable given there is a final opportunity to review the EDAM governance after the EDAM market design is complete.

2. What governance elements are implicated by the EDAM market design?

As stated above, this will likely depend on some of the specifics around EDAM market design.  At this time addressing the independence of the CAISO Board is of primary concern to PPC, although there may be other aspects of the governance structure which could benefit from improvements as well.

During the EIM governance review process PPC questioned whether there should be more Board and Governing Body oversight of the CAISO roadmap process.  This may be an area for additional discussion during the EDAM governance design.

3. Does the broader nature of the EDAM Market Design implicate the legal construct for governance?

During the EIM governance review effort, PPC raised several questions about the legal construct for CAISO’s governance.  CAISO staff responded thoroughly in what is now referred to as “Appendix A.”  PPC appreciates these incredibly helpful responses.

As stated above, the implications that EDAM may have for CAISO governance are somewhat dependent on the specifics of the market design itself.  Nevertheless, without a change to the current legal construct, it is not possible for EDAM to have a truly independent and regionally inclusive governance – at least not one that treats all participants in the market equally.

The potential need for changes to CAISO’s statutory obligations should be included as part of the discussion on EDAM governance.  We acknowledge that this may not be in the scope of the GRC.  However, there needs to be some venue where this can be discussed.  Whether it is included specifically within the scope of this process or not, it will be an issue that weighs heavily on potential participants minds as they contemplate whether they would join and EDAM market with less than independent governance.

4. Any other comments?

PPC reiterates its appreciation for the work done both by the GRC and the CAISO during the EIM Governance Review process.  Meaningful improvements were found and implemented during that process; however, those improvements do not go far enough for many to provide sufficient confidence in participation in an Extended Day-Ahead Market.  We look forward to exploring additional opportunities to improve this governance framework to support a potential Extended Day Ahead Market.

At the same time, without broad legislative change that addresses all of CAISO’s mandates that require CAISO to operate for the benefit of a subset of market participants the EDAM cannot and will not have a truly independent governance that treats all participants equally.  This may prevent some potential participants from joining the EDAM and will certainly be a barrier for most, if not all, in expanding a west-wide RTO.  Each prospective market participant might evaluate the risk presented by the CAISO governance structure differently, but the current lack of independence threatens the likelihood of achieving a single, consolidated organized market footprint in the West.  We look forward to engaging with other stakeholders on the balance of these risks and potential paths forward.

1. Comments on timing of the GRC proposals relative to EDAM market design proposals?

Subject to the comments below regarding the scope of governance review for the Extended Day Ahead Market, the Six Cities do not object to consideration of appropriate expansions of the joint authority framework to support the EDAM in parallel with development of the EDAM market design.  The Six Cities agree with the recommendation discussed at the February 17^th meeting that the Governance Review Committee defer presentation of any recommendations regarding EDAM governance until such time as a fully developed market design for the EDAM is presented to the CAISO Board of Governors and the Energy Imbalance Market Governing Body.

2. What governance elements are implicated by the EDAM market design?

The Six Cities support continuation of the joint authority model adopted and implemented for the EIM during 2021 with modifications to expand the scope of joint authority review by the CAISO Board of Governors and the EIM Governing Body to encompass matters relating to the design and operation of the EDAM.  Accordingly, the review of governance for the EDAM should focus on necessary adaptations to the joint authority model identifying and defining the types of issues that will affect implementation of the EDAM or impact market participants in their role as participants in the EDAM.

3. Does the broader nature of the EDAM Market Design implicate the legal construct for governance?

As currently contemplated, the EDAM market design does not implicate the legal construct for governance.  It appears to be a foundational assumption that participation in the EDAM will be voluntary for entities other than those located within the CAISO BAA with minimal limitations on withdrawal from EDAM participation.  Under this construct, market participants within the CAISO BAA will continue to bear greater exposure to risks of EDAM dysfunctions, with no off-ramp from participation in the CAISO Day-Ahead Market, than market participants in external EDAM Entities.  In light of the significant differences between voluntary versus captive participation in the EDAM, the joint authority framework appropriately balances the needs and interests of all prospective EDAM participants and should remain in place.  The Six Cities, therefore, strongly oppose suggestions by some participants in the February 17^th meeting that the Governance Review Committee consider development of a multi-state, “fully independent” governing body.   

4. Any other comments?

The Six Cities have no additional comments on governance review for EDAM at this time. 

1. Comments on timing of the GRC proposals relative to EDAM market design proposals?

See attachment.

2. What governance elements are implicated by the EDAM market design?

See attachment.

3. Does the broader nature of the EDAM Market Design implicate the legal construct for governance?

See attachment.

4. Any other comments?

See attachment.

1. Comments on timing of the GRC proposals relative to EDAM market design proposals?

See attached.

2. What governance elements are implicated by the EDAM market design?

See attached.

3. Does the broader nature of the EDAM Market Design implicate the legal construct for governance?

See attached.

4. Any other comments?

See attached.

1. Comments on timing of the GRC proposals relative to EDAM market design proposals?

Vistra appreciates GRC asking for public input on GRC review of EDAM governance. We propose the following timing for the GRC milestones relative to the current EDAM milestones that provided at the December 16, 2021 EDAM meeting[1]. Conceptually, we are proposing that the GRC proposals be published after the GRC has an opportunity to review both the most recent EDAM proposal and stakeholder comments to inform your proposal updates.

* Assume Early is Beginning of Month

** Assume Mid is ~15th of Month

*** Assume Late is End of Month

*** Assume GRC only issues a Final Proposal

[1] Extended Day-Ahead Market (EDAM) Stakeholder Meeting: Working Group Organization and Logistics, CAISO, December 16, 2021, slide 8, http://www.caiso.com/InitiativeDocuments/Presentation-ExtendedDay-AheadMarket-StakeholderWorkingGroupsOrganization-Logistics-Dec16-2021.pdf.

2. What governance elements are implicated by the EDAM market design?

Vistra expects that there will be a need to meaningfully discuss governance elements, specifically joint authority. As stakeholders providing feedback on CAISO staff recommendation for the EIM classification, we have found on a recurring basis that our view that an item should at least be joint authority since it impacts EIM has not been seen the same way by CAISO Staff. We believe there is a trend of trying to identify projects as not subject to WEIM Governing Body authority if the changes are impacting the real-time market generally, however real-time market changes that impact the entire footprint impact EIM entities equally where the WEIM Governing Body should have joint authority in our view.

To illustrate this disparity between what we would understand to be subject to WEIM Governing Body authority at a joint level, we will highlight some stakeholder initiatives that are not subject to the new joint authority classification under the new joint authority model. On February 28, 2022, the CAISO released decisional designations for stakeholder initiatives[1] under the new joint authority model. The initiatives that jump out at us that we believe should be under joint authority are those the CAISO has previously identified as critical to supporting EDAM but are not at this time designated under Joint Authority, specifically Day Ahead Market Enhancements and EDAM.

Vistra struggles with how there is any question that WEIM Governing Body does not hold joint authority over EDAM design and efforts supporting EDAM design. While we hope the existing joint authority rules allow for this authority, if not it appears challenging if WEIM Governing Body is only advising the Board of Governors. Therefore, at a minimum, Vistra believes what constitutes joint authority needs to be reviewed and expanded to ensure that WEIM Governing Body has at least joint authority over rules that will impact the market that its stakeholders participate in.

[1] Decisional Designations for Stakeholder Initiatives, CAISO, February 28, 2022, https://www.westerneim.com/Documents/Memorandum-DecisionalDesignationsForStakeholderInitiatives.pdf.

3. Does the broader nature of the EDAM Market Design implicate the legal construct for governance?

No input at this time.

4. Any other comments?

No input at this time.

1. Comments on timing of the GRC proposals relative to EDAM market design proposals?

Please see attached.

2. What governance elements are implicated by the EDAM market design?

Please see attached.

3. Does the broader nature of the EDAM Market Design implicate the legal construct for governance?

Please see attached.

4. Any other comments?

Please see attached.