Comments on Straw proposal

1. Please state your organization’s overall views on the GRC’s Phase 3 Straw Proposal.

American Clean Power - California (ACP- California) is the voice of clean power industry in California, focusing on California’s market and policies for a reliable and affordable transition to 100% clean energy. ACP-California greatly appreciates the work that the Governance Review Committee (GRC) has put in to develop refinements to governance to support the proposed Extended Day-Ahead Market (EDAM) and offers below several comments on the Phase 3 Straw Proposal. In general, ACP-California supports the GRC’s recommendations as a creative solution to governance, achieving as much independence as possible for a resilient and robust governance structure which can help facilitate additional regional coordination in the future.

A governance structure that enables addition regional coordination in the future is critical as EDAM should be an incremental step in market evolution, but not the “end game.” ACP-California continues to note that, while EDAM can offer substantial benefits, it 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. All governance modifications should be considered with the context of EDAM as one step, but not the end solution, in mind. The proposal put forward by the GRC appears to offer a set of solutions that would demonstrate commitment to stakeholders across the West and could help establish a reasonable foundation on which to build an RTO.

2. DELEGATION OF AUTHORITY – TYPE: Please state your organization’s views on the proposal to retain the joint authority model as the structure of the delegation to the Governing Body, as discussed in Section III(B)(1).

ACP-California supports the GRC’s recommendation for a Joint authority governance structure, where the current EIM governance model is retained and expanded to include (at a minimum) all market rules that apply to EIM/EDAM participants in their capacity as EIM/EDAM participants. Given the impacts of increased market participation on regional stakeholders and regulators, ACP-California also encourages further consideration of inclusion in the scope of Joint Authority rules beyond those that would be covered by the “apply to” test, though we offer no specific recommendations at this time.

3. DELEGATION OF AUTHORITY – OTHER TOPICS: Please state your organization’s views on the GRC’s proposal to retain the current processes for designating the decisional classification for initiatives and for resolving disagreements between the Board and the Governing Body on whether to approve a proposal within their shared approval authority.

No comments at this time.

4. SIZE AND COMPOSITION OF THE GOVERNING BODY: Please state your organization’s views on the issues discussed in Section IV of the GRC’s Straw Proposal, including: a) The size of the Governing Body, b) The Nominating Committee’s evaluation of sitting Governing Body members seeking re-appointment, and c) Compensation for Governing Body members.

In addition to the changes to the delegation of authority for the Governing Body, the GRC has asked stakeholders to contemplate modifications to its size and compensation. While ACP-California does not have any specific recommendations at this time, we encourage the GRC to explore the options for expanding the size of the Governing Body to seven members. The additional membership on the Governing Body could enable more diverse perspectives to be present in the Body’s membership, including representation from a broader set of Governing Body expertise, such as those with prior experience in the Independent Power Producer (IPP) community. ACP-California also supports the exploration of any implications this expansion may have on the work of the Nominating Committee, and the potential benefits changing the members’ compensation may have on identifying candidates for these positions.

5. STAKEHOLDER ENGAGEMENT: Please state your organization’s views on the issues discussed in Section V of the GRC’s Straw Proposal, including: a) Increasing the use of stakeholder working groups as part of policy initiatives, b) Beginning the annual roadmap process for prioritizing policy initiatives with panel discussion of sector representatives hosted by the RIF, and c) Allocating the two liaisons for the RIF’s public interest and consumer advocate sector – one to consumers advocates and one to other public interest organizations.

ACP-California reiterates its support for increased engagement with stakeholders through the CAISO policy initiative process, Regional Issues Forum (RIF), and Body of State Regulators (BOSR). The GRC’s proposal to better integrate stakeholder working groups into the CAISO stakeholder process should help facilitate greater engagement and collaboration at the earliest stage of the stakeholder process, which is something we strongly support. ACP-California also supports the RIF’s engagement in the prioritization of policy initiatives as part of the EDAM governance proposal.

6. CLARIFYING CAISO’S RESPONSIBILITIES: Please state your organization’s views on the proposal to clarify the CAISO’s responsibility to consider the interests of all regional stakeholders, as discussed in Section VI of the GRC’s Straw Proposal.

Recognizing the statutory obligations and legal limitations that CAISO is under, ACP-California strongly supports the GRC’s recommended change to the bylaws as a creative solution to balance the interests of all market participants. This clarification will explicitly enumerate the responsibilities of CAISO to consider the needs and interests of all stakeholders in their markets and is indicative of CAISO’s obligation to fair treatment of regional stakeholders. ACP-California supports the proposed modifications to the bylaws put forward by the GRC, as a helpful initial step to building additional regional trust and helping further advance a potential multi-state RTO.

7. Other Comments: Please set forth here any further comments your organization may have on the GRC’s Phase 3 Straw Proposal or related governance topics.

ACP-California believes ensuring reasonable market consistency, especially in EDAM (which will cover all day-ahead transactions in the footprint), is of the utmost importance and that there should be a role for the Governing Body in ensuring reasonable market consistency across the different EDAM Entity footprints and market rules which are included in EDAM Entity Open Access Transmission Tariffs (OATTs). This issue is one that ACP-California (and its predecessor AWEA-California) have previously raised to the GRC and which we continue to urge further discussion around.

A lack of consistency in market rules and approaches has proven to be problematic for entities (notably third-parties) operating in the EIM and especially for those operating in multiple EIM areas. This is because each EIM Entity tariff provision regarding the EIM looks slightly different, though FERC’s review of OATT modifications have largely kept most aspects of the EIM relatively similar. The EIM is now incorporating more and more entities that are not FERC-jurisdictional and which could (theoretically), implement rules and requirements within their tariff that are at odds with the rest of the EIM market. Thus, there is a critical need to ensure that the rules implemented across EIM, and even more importantly EDAM, are consistent and do not create seams within the market or lead to the market divulging into individual “submarkets.”

As the CAISO’s regional market services look to extend from the real-time EIM to the day-ahead EDAM, it will be critical to ensure that there is some level of consistency across the EDAM footprint.  We greatly appreciate the GRC’s consideration and discussion of this issue in prior governance discussions and while, to this point, the GRC has elected not to take action on this topic, ACP-California wants to reiterate the importance of developing a process to help ensure that, across EDAM Entities, there is some reasonable consistency to the market rules and requirements and that they are in line with the overall EDAM design put forward by the CAISO. We believe there may be a role for the Governing Body in this regard.

Additionally, this issue has become increasingly important as it is becoming more evident through the EDAM market design process that EDAM Entities will likely have key provisions of the EDAM market within their own tariffs and not within the CAISO’s. For instance, provisions around congestion/transfer revenue allocation to their customers (such as loads, generators, and transmission customers) are likely to be addressed within individual EDAM Entity tariffs. Additionally, there is the potential for EDAM Entities to include their own provisions/requirements for EDAM market participation within their own tariffs.  

As the EDAM and GRC stakeholder processes move forward, we suggest placing as many market rules and requirements as possible in the CAISO tariff, rather than individual EDAM Entity tariffs. But, given that it is clear there will likely be key market provisions included in the EDAM Entity tariffs, the GRC should consider a process that would provide the Governing Body oversight in reviewing EDAM Entity tariffs for consistency with the overall EDAM market design and providing a venue for stakeholders and customers of EDAM Entities to raise concerns around specific areas of EDAM implementation/tariff rules/practices of individual EDAM BAAs. ACP-California appreciates the GRC’s consideration of this issue and supports any additional discussion on this topic.

1. Please state your organization’s overall views on the GRC’s Phase 3 Straw Proposal.

The Salt River Project Agricultural Improvement and Power District (SRP), Arizona Public Service (APS) and Tucson Electric Power (TEP), collectively referred to in this document as the Arizona Utilities, appreciate the opportunity to comment on the Governance Review Committee (GRC) Phase 3 straw proposal for the WEIM governance review.  The Arizona Utilities would like to thank the GRC for their work on this straw proposal. 

Overall, the Arizona Utilities are concerned that the GRC’s Phase 3 straw proposal does not adequately broaden the authority of the Governing Body.  Independent governance remains a bedrock principle for us as regional markets expand beyond the Western Energy Imbalance Market (WEIM) because expansion represents considerably more stakeholder commitment and financial exposure than the WEIM. 

Arizona utilities have been clear through our engagement with the GRC and the CAISO that the current WEIM governance structure must be broadened and enhanced given the terms of commitment for the regional extended day-ahead market (EDAM) and the magnitude of resource and transmission commitments. Because of EDAM’S potential size and its anticipated impact on the broader wholesale energy market, the Arizona Utilities believe more can be done to broaden the authority of the Governing Body. Unlike the WEIM, 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.

Because of this concern, the Arizona Utilities request that the proposed joint authority delegation to the Governing Body be expanded and broadened beyond the proposed “applies to” test as described in our answer to question 3 below.

The Arizona Utilities would also like the GRC to consider expanding the Regional Issues Forum (RIF) by adding an EDAM entities sector, for those outside of the California balancing authority area, as stated in the March 2022 Arizona Utilities comments to the GRC.  Adding this new RIF sector would ensure that those entities in EDAM, as well as those entities in the WEIM that do not transition to EDAM, are represented. CAISO should strive for geographic diversity in both of these two RIF sectors.  

The Arizona Utilities do not agree that the existing scope of joint authority be in effect when the EDAM market design is approved for filing at FERC. The Arizona Utilities request that governance changes be implemented immediately and prior to any EDAM FERC filings in order for the WEIM-EDAM Governing Body to have joint authority over EDAM market policies prior to any proposed tariff changes.  It is of great importance to the Arizona Utilities that the EDAM market policy initiatives be considered under the GRC’s recommended governance model.  The proposed EDAM policies and initiatives being considered for market participation should not be governed by the structure in place today given the possible impact on potential EDAM participants outside of the CAISO balancing authority area.

2. DELEGATION OF AUTHORITY – TYPE: Please state your organization’s views on the proposal to retain the joint authority model as the structure of the delegation to the Governing Body, as discussed in Section III(B)(1).

The Arizona Utilities request that the joint authority model be expanded beyond the currently proposed “apply to” scope. 

Given the limited time available to implement true CAISO independence through legislative change, the Arizona Utilities are generally supportive of the proposed joint authority model with caveats.  The Arizona Utilities believe the governance straw proposal does not adequately broaden the authority of the Governing Body, and that joint authority should be expanded beyond what is currently being proposed by the GRC in the straw proposal.

3. DELEGATION OF AUTHORITY – OTHER TOPICS: Please state your organization’s views on the GRC’s proposal to retain the current processes for designating the decisional classification for initiatives and for resolving disagreements between the Board and the Governing Body on whether to approve a proposal within their shared approval authority.

The Arizona Utilities strongly support the current dispute resolution process as outlined in the GRC’s proposal. 

The Arizona Utilities support and would like to broaden the Expanded Authority Option to identify and include additional market rules within joint authority beyond the “apply to” test.  The Arizona Utilities strongly support the GRC’s proposal as stated in option B:

• Extend joint authority to all real-time and day-ahead market rules but create a defined set of exceptions or exclusions for topics that would remain subject to the Board’s sole approval.

The Arizona Utilities request that the proposed delegation of authority be expanded to include initiatives that affect WEIM and EDAM operations, and not be limited to those that only “apply to.”  The GRC’s governance straw proposal should be more broadly applied as exemplified by the inclusion of the Transmission Service and Market Scheduling Priorities (wheel-through or TSMSP) Initiative under the GRC’s proposed joint authority model and other such market initiatives that would substantially affect and apply to potential EDAM participants, that are highly impactful topics, and are closely intertwined with topics already covered by the “apply to" test.

At the July 20, 2022, WEIM GRC General Session webinar, SRP asked if the TSMSP Initiative, which CAISO filed with FERC in Docket No. ER21-1790, would be considered under the GRC’s proposed joint authority model.  GRC clarified that it would not.  This is of particular concern to the Arizona Utilities and other desert southwest entities.  The lack of joint authority over the wheel-through initiative demonstrates that the proposed governance model would not provide the Governing Body authority over important initiatives that would affect and “apply to” potential EDAM and WEIM participants. In this example, the wheel-through initiative would apply to EDAM’s resource sufficiency evaluation.  The wheel-through initiative is a regional issue that requires full consideration of impacts to multiple Balancing Authorities and should be under the joint authority model.  In expanding joint authority beyond what is being proposed, the GRC would be doing so in support of the GRC’s three newly proposed GRC’s guiding principles, which the Arizona Utilities support:

• G: Seek, where possible, to modify or enhance the WEIM governance structure, as it relates to the establishment of the EDAM, in support of a more autonomous WEIM Governing Body.
• H: Ensure modifications or enhancements to the WEIM governance structure, as it relates to the EDAM, balance the interests of full CAISO market participants in the CAISO balancing authority area and prospective EDAM participants.
• I:  Ensure modifications or enhancements to the WEIM governance as it relates to the establishment of the EDAM, support or advance a potential future governance structure appropriate for a multi-state RTO.

4. SIZE AND COMPOSITION OF THE GOVERNING BODY: Please state your organization’s views on the issues discussed in Section IV of the GRC’s Straw Proposal, including: a) The size of the Governing Body, b) The Nominating Committee’s evaluation of sitting Governing Body members seeking re-appointment, and c) Compensation for Governing Body members.

At this time, the Arizona Utilities are supportive of retaining five Governing Body members.  As a foundational principle, it is imperative that any member of the Board of Governors and Governing Body make decisions in the interest of the market as a whole as the CAISO governance structure evolves under a potential EDAM.              

The Arizona Utilities support the GRC’s proposed recommendation that as part of deciding whether to re-nominate a currently sitting WEIM-EDAM Governing Body member under this provision, the Nominating Committee should evaluate whether that member has the qualifications to serve given the additional responsibilities associated with the EDAM.  Careful evaluation should take place by the Nominating Committee (NC) to ensure that the re-nominated member has depth of market and utility knowledge, understanding of operations and reliability issues, and ability to remain intellectually honest without bias towards any specific sector or state.  At a minimum, the Selection Policy for the EIM Governing Body document would need to be updated to reflect any changes recommended by the GRC, as well as any other governing documents used by the NC.

The Governing Body’s compensation should be commensurate with the CAISO Board of Governors’ and with the broader scope and duties associated with a potential EDAM.  The Arizona Utilities request the CAISO assess what compensation would be appropriate for the Governing Body given this increased responsibility.

5. STAKEHOLDER ENGAGEMENT: Please state your organization’s views on the issues discussed in Section V of the GRC’s Straw Proposal, including: a) Increasing the use of stakeholder working groups as part of policy initiatives, b) Beginning the annual roadmap process for prioritizing policy initiatives with panel discussion of sector representatives hosted by the RIF, and c) Allocating the two liaisons for the RIF’s public interest and consumer advocate sector – one to consumers advocates and one to other public interest organizations.

In general regards to the RIF and stakeholder engagement, the Arizona Utilities strongly supports the need for geographic diversity and sector representation.  Entities in the Desert Southwest, as well as the Northwest, need to have a voice in the various governing bodies and RIF sectors given our unique position in the market footprint.

The Arizona Utilities support the GRC’s proposed recommendation that CAISO expand the use of the working group approach with the goal of enhancing the role of stakeholders in both the development and consideration of policy options.  CAISO staff and management should expand the role of stakeholders beyond what is currently in place.  Stakeholders have a deep understanding of the intended and unintended impacts of CAISO policy initiatives and their voices should be heard when developing and prioritizing policy initiatives in a more meaningful way than is occurring today.  CAISO and the working groups should be structured to ensure stakeholders work collaboratively to make timely decisions to effectively reach consensus on initiative policies and enhancements.

The Arizona Utilities support with caveats the GRC’s proposal of beginning the annual roadmap process for prioritizing policy initiatives with panel discussions of RIF sector liaisons.  The Arizona Utilities are concerned that RIF sectors may not always agree, thus a “minority report” may be required for stakeholders with unique concerns to be voiced during the prioritization process.  The Arizona Utilities strongly recommend that in addition to the proposed GRC RIF sector liaisons panel discussion that the GRC proposal also include an opportunity for a RIF minority report. This will provide all stakeholders the ability to voice their concerns and feedback as part of the GRC’s proposed RIF process.

The Arizona Utilities have no comment at this time regarding the RIF public interest and consumer advocate sector representation.

As stated in Arizona Utilities comments submitted in March 2022, the Arizona Utilities support the addition of a new EDAM entities sector to the Regional Issues Forum.  Geographic diversity is also imperative in sector representation with the need for voices to be heard from both the Desert Southwest and the Northwest.  The Arizona Utilities recommend that two representatives be appointed from this new sector to represent the geographic diversity of the EDAM footprint.

6. CLARIFYING CAISO’S RESPONSIBILITIES: Please state your organization’s views on the proposal to clarify the CAISO’s responsibility to consider the interests of all regional stakeholders, as discussed in Section VI of the GRC’s Straw Proposal.

The Arizona Utilities support CAISO amending its Bylaws as proposed by the GRC on page 27.  Additionally, CAISO should also amend its corporate policy, CAISO’s mission statement and any values statements to ensure a long-term and mutually beneficial relationship with neighboring utilities and states. Such action and clarification can provide stakeholders stronger assurance that CAISO Board of Governors and regulatory entities will hold the CAISO accountable to not favor one entity over other market participants.  The CAISO should also update its strategic plan (CAISO Strategic Plan 2022-26, at 9) to strengthen CAISO’s commitment to regional collaboration to include the GRC’s proposed language as stated on page 27 of the GRC’s straw proposal which plainly states:

• “CAISO will consider the interests of all stakeholders within the footprint of the markets that it administers, including the Corporation’s balancing authority area, EDAM balancing authority areas and WEIM balancing authority areas.”

7. Other Comments: Please set forth here any further comments your organization may have on the GRC’s Phase 3 Straw Proposal or related governance topics.

The Arizona Utilities would like to thank the GRC for making advancements to broaden the joint authority model as presented in the governance straw proposal. However, these advancements are limited, and the Arizona Utilities remain concerned that the CAISO and GRC are not going far enough to ensure fair treatment and representation of participants outside of the CAISO balancing authority area.  The Arizona Utilities encourage CAISO and the GRC to demonstrate that regional market expansion will be transparently and fairly administered by broadening the proposed joint authority model as described in our comments.  In addition to our own comments, the Arizona Utilities support the comments being submitted by NV Energy.

1. Please state your organization’s overall views on the GRC’s Phase 3 Straw Proposal.

None

2. DELEGATION OF AUTHORITY – TYPE: Please state your organization’s views on the proposal to retain the joint authority model as the structure of the delegation to the Governing Body, as discussed in Section III(B)(1).

None

3. DELEGATION OF AUTHORITY – OTHER TOPICS: Please state your organization’s views on the GRC’s proposal to retain the current processes for designating the decisional classification for initiatives and for resolving disagreements between the Board and the Governing Body on whether to approve a proposal within their shared approval authority.

I have only one comment on the “Western EIM Governance Review – Phase Three (EDAM); Governance Review Committee Straw Proposal”.  On page 16 it has two options for dealing with joint authority.  It is my opinion that option ‘b’ (Extend joint authority to all real-time and day-ahead market rules but create a defined set of exceptions or exclusions for topics that would remain subject to the Board’s sole approval.) should be chosen.  I believe it would be easier to decide ahead of time what issues/circumstances/items should be approved exclusively by the Board, rather than making that decision real-time when the issue/circumstance/item actually presents itself.

This comment is mine alone and should not be taken as a comment from the Arizona Corporation Commission. 

4. SIZE AND COMPOSITION OF THE GOVERNING BODY: Please state your organization’s views on the issues discussed in Section IV of the GRC’s Straw Proposal, including: a) The size of the Governing Body, b) The Nominating Committee’s evaluation of sitting Governing Body members seeking re-appointment, and c) Compensation for Governing Body members.

None

5. STAKEHOLDER ENGAGEMENT: Please state your organization’s views on the issues discussed in Section V of the GRC’s Straw Proposal, including: a) Increasing the use of stakeholder working groups as part of policy initiatives, b) Beginning the annual roadmap process for prioritizing policy initiatives with panel discussion of sector representatives hosted by the RIF, and c) Allocating the two liaisons for the RIF’s public interest and consumer advocate sector – one to consumers advocates and one to other public interest organizations.

None

6. CLARIFYING CAISO’S RESPONSIBILITIES: Please state your organization’s views on the proposal to clarify the CAISO’s responsibility to consider the interests of all regional stakeholders, as discussed in Section VI of the GRC’s Straw Proposal.

None

7. Other Comments: Please set forth here any further comments your organization may have on the GRC’s Phase 3 Straw Proposal or related governance topics.

None

1. Please state your organization’s overall views on the GRC’s Phase 3 Straw Proposal.

Bonneville appreciates the ongoing work of the GRC and its attempt to improve and adapt the EIM/EDAM governance structure within the bounds of the existing legal framework for the CAISO.  The GRC’s past proposals have accomplished significant improvements in the EIM governance structure. Bonneville continues its efforts to be consistently and constructively engaged in the CAISO’s day-ahead market design for the potential of cost-effective and reliable integration of clean energy resources in the West.  However, the lack of independence from a single state’s influence remains a significant concern.  Bonneville appreciates the GRC’s notice of this fundamental concern and its assurance that the straw proposal is not intended to be a model beyond a day-ahead market. 

Nevertheless, the implications of one state’s authorities and requirements governing a regional market are significant and are beyond the capabilities of the GRC to fully mitigate.  Bonneville, as will all prospective participants outside of California, must weigh those implications in consultation with its customers and regional constituencies in any decision to proceed with expansion of the EIM.  Bonneville seeks a durable partnership in any market engagement and it will be challenging to rely on prospective changes in the statutory framework for the CAISO.

2. DELEGATION OF AUTHORITY – TYPE: Please state your organization’s views on the proposal to retain the joint authority model as the structure of the delegation to the Governing Body, as discussed in Section III(B)(1).

As to the specifics in the GRC straw proposal, Bonneville agrees that under the current statutory restrictions the continuation of joint authority is the best approach.  For expansion of the joint authority, Bonneville supports the second option that would include all real-time and day-ahead issues, with a list of express exceptions that should be included in the GRC’s final proposal.

3. DELEGATION OF AUTHORITY – OTHER TOPICS: Please state your organization’s views on the GRC’s proposal to retain the current processes for designating the decisional classification for initiatives and for resolving disagreements between the Board and the Governing Body on whether to approve a proposal within their shared approval authority.

Bonneville supports continuing the current decisional classification process, agreeing with the reasoning of the GRC in its recommendation. 

4. SIZE AND COMPOSITION OF THE GOVERNING BODY: Please state your organization’s views on the issues discussed in Section IV of the GRC’s Straw Proposal, including: a) The size of the Governing Body, b) The Nominating Committee’s evaluation of sitting Governing Body members seeking re-appointment, and c) Compensation for Governing Body members.

Regarding the GRC’s questions about the composition of the Governing Body, Bonneville believes the number of members should remain at five.  The five member body has worked well for the EIM and with the joint authority model it is important to maintain the balance with five members on both the Governing Body and the CAISO Board of Governors.  Bonneville also supports keeping the existing level of compensation the same, unless it becomes clear that more compensation is needed to attract qualified members. If there are clearly identifiable additional governance costs associated with EDAM, those cost need to be bifurcated and only passed onto EDAM participants and not spread across all EIM participants.

5. STAKEHOLDER ENGAGEMENT: Please state your organization’s views on the issues discussed in Section V of the GRC’s Straw Proposal, including: a) Increasing the use of stakeholder working groups as part of policy initiatives, b) Beginning the annual roadmap process for prioritizing policy initiatives with panel discussion of sector representatives hosted by the RIF, and c) Allocating the two liaisons for the RIF’s public interest and consumer advocate sector – one to consumers advocates and one to other public interest organizations.

Bonneville is supportive of the GRC proposals for stakeholder engagement and policy development.  In addition to the improvements discussed in the straw proposal, Bonneville encourages fostering different perspectives among the sectors participating in the RIF and any work groups created by the RIF in the interest of developing alternative approaches to pending issues.  Ensuring that the Governing Body and Board of Governors see majority recommendations from sector representatives with minority opinions will give them a fuller understanding of how their decisions will impact participants.

6. CLARIFYING CAISO’S RESPONSIBILITIES: Please state your organization’s views on the proposal to clarify the CAISO’s responsibility to consider the interests of all regional stakeholders, as discussed in Section VI of the GRC’s Straw Proposal.

 Bonneville supports the bylaws amendments the GRC put forth in the straw proposal.

7. Other Comments: Please set forth here any further comments your organization may have on the GRC’s Phase 3 Straw Proposal or related governance topics.

The straw proposal addresses the timing of approval for the GRC proposal and notes that it will coincide with approval of the EDAM market design, i.e. the proposed expansion joint authority will not be effective for the approval of the filing of the EDAM market design.  The straw proposal goes on to explain that the joint boards have discussed this issue in executive session and there is a plan to propose expansion of joint authority in order to allow the Governing Body to participate jointly in the approval process for the EDAM market design and that this expansion of joint authority will be part of the next market design straw proposal.  Bonneville believes that the expansion of joint authority to consider the initial approval of the EDAM market design is essential.  The problem with the proposal to expand the joint authority through the process outlined in the straw proposal is that it is rather ad hoc and does not have the structure that will exist after the GRC proposal is approved.  Bonneville advocates for the approval of the GRC phase three proposal for expanding joint authority, including the proposal for expanded authority beyond the as applies to test, to precede any consideration of the EDAM market design.  This would provide formal structure for the expansion of joint authority and would remove any doubt as to the limitations on joint authority over EDAM.  The approach of approving the EDAM governance structure prior to the EDAM market design should enhance confidence in the decision making process.  The timing of the expansion of joint authority is a significant governance issue that should be dealt with by the GRC, rather than left to the overall market design process, hence the GRC should propose that the phase three (EDAM) proposal be addressed prior to the consideration of the EDAM market design.

1. Please state your organization’s overall views on the GRC’s Phase 3 Straw Proposal.

The California Community Choice Association (CalCCA) appreciates the opportunity to comment on the Governance Review Committee’s (GRC’s) Phase Three Straw Proposal. CalCCA supports retaining the joint authority model under an Extended Day-Ahead Market (EDAM). The joint authority model has worked well for the Western Energy Imbalance Market (WEIM) and should be extended to apply to a future EDAM. The joint authority model provides the California Independent System Operator Corporation (CAISO) Board of Governors and the Governing Body with decisional authority on scope that applies to the WEIM and EDAM markets which ensures the interests of all relative stakeholders are considered when approving policy changes.

CalCCA also supports the retention of the existing dispute resolution process established within the prior phase of the GRC. It is critical the EDAM governance framework continues to provide the CAISO Board of Governors with an avenue to move forward with policies it deems necessary in exigent circumstances that are time sensitive and/or critical to system reliability or market efficiency.

The GRC’s Phase Three Straw Proposal correctly recognizes that the CAISO’s existing stakeholder process provides the necessary transparency and ability for all stakeholders to provide their input on proposed market design changes. CalCCA supports the Straw Proposal’s direction to maintain the existing stakeholder process with enhancements to expand the use of working groups to enhance the role of stakeholders in developing policy.

CalCCA thanks the GRC for its thoughtful and detailed Straw Proposal and looks forward to continued engagement in this process to develop an EDAM governance framework that represents the interests of all stakeholders.

2. DELEGATION OF AUTHORITY – TYPE: Please state your organization’s views on the proposal to retain the joint authority model as the structure of the delegation to the Governing Body, as discussed in Section III(B)(1).

CalCCA has no additional comments at this time.

3. DELEGATION OF AUTHORITY – OTHER TOPICS: Please state your organization’s views on the GRC’s proposal to retain the current processes for designating the decisional classification for initiatives and for resolving disagreements between the Board and the Governing Body on whether to approve a proposal within their shared approval authority.

CalCCA has no additional comments at this time.

4. SIZE AND COMPOSITION OF THE GOVERNING BODY: Please state your organization’s views on the issues discussed in Section IV of the GRC’s Straw Proposal, including: a) The size of the Governing Body, b) The Nominating Committee’s evaluation of sitting Governing Body members seeking re-appointment, and c) Compensation for Governing Body members.

CalCCA has no additional comments at this time.

5. STAKEHOLDER ENGAGEMENT: Please state your organization’s views on the issues discussed in Section V of the GRC’s Straw Proposal, including: a) Increasing the use of stakeholder working groups as part of policy initiatives, b) Beginning the annual roadmap process for prioritizing policy initiatives with panel discussion of sector representatives hosted by the RIF, and c) Allocating the two liaisons for the RIF’s public interest and consumer advocate sector – one to consumers advocates and one to other public interest organizations.

CalCCA has no additional comments at this time.

6. CLARIFYING CAISO’S RESPONSIBILITIES: Please state your organization’s views on the proposal to clarify the CAISO’s responsibility to consider the interests of all regional stakeholders, as discussed in Section VI of the GRC’s Straw Proposal.

CalCCA has no additional comments at this time.

7. Other Comments: Please set forth here any further comments your organization may have on the GRC’s Phase 3 Straw Proposal or related governance topics.

CalCCA has no additional comments at this time.

1. Please state your organization’s overall views on the GRC’s Phase 3 Straw Proposal.

CPUC staff supports the Governance Review Committee’s (GRC’s) efforts to develop a durable and fair governance structure for the Extended Day-Ahead Market (EDAM) currently under consideration by CAISO and stakeholders in the parallel EDAM process.

2. DELEGATION OF AUTHORITY – TYPE: Please state your organization’s views on the proposal to retain the joint authority model as the structure of the delegation to the Governing Body, as discussed in Section III(B)(1).

CPUC staff supports the GRC’s proposal to retain the joint authority model.

3. DELEGATION OF AUTHORITY – OTHER TOPICS: Please state your organization’s views on the GRC’s proposal to retain the current processes for designating the decisional classification for initiatives and for resolving disagreements between the Board and the Governing Body on whether to approve a proposal within their shared approval authority.

CPUC staff supports the GRC’s proposal to retain the current process for designating the decisional classification for initiatives and for resolving disagreements between the Board and the Governing Body on whether to approve a proposal within their shared authority.

4. SIZE AND COMPOSITION OF THE GOVERNING BODY: Please state your organization’s views on the issues discussed in Section IV of the GRC’s Straw Proposal, including: a) The size of the Governing Body, b) The Nominating Committee’s evaluation of sitting Governing Body members seeking re-appointment, and c) Compensation for Governing Body members.

CPUC staff does not believe that it is necessary to expand the size of the Governing Body, nor to change the compensation, at this time.  CPUC staff has no opinion on the Nominating Committee’s evaluation process for sitting Governing Body members seeking reappointment.

5. STAKEHOLDER ENGAGEMENT: Please state your organization’s views on the issues discussed in Section V of the GRC’s Straw Proposal, including: a) Increasing the use of stakeholder working groups as part of policy initiatives, b) Beginning the annual roadmap process for prioritizing policy initiatives with panel discussion of sector representatives hosted by the RIF, and c) Allocating the two liaisons for the RIF’s public interest and consumer advocate sector – one to consumers advocates and one to other public interest organizations.

CPUC staff supports the GRC’s proposal to increase the use of stakeholder working groups, to begin the annual roadmap process with panel discussions hosted by the RIF, and to separate the RIF’s 2 membership positions for public interest organizations and consumer advocates.

6. CLARIFYING CAISO’S RESPONSIBILITIES: Please state your organization’s views on the proposal to clarify the CAISO’s responsibility to consider the interests of all regional stakeholders, as discussed in Section VI of the GRC’s Straw Proposal.

This is a difficult and thorny issue because CAISO has two roles, first as the “independent system operator” and second as the the “balancing authority” for much of California. While we understand some parties concerns that CAISO could tilt the field in favor of California, CPUC staff does not believe that any other balancing authority has or would incorporate anything in their bylaws that would specifically obligate them to consider the interests of other balancing authorities, since their primary focus is and should be ensuring the reliable operation of the grid within their ambit. Thus, CPUC staff has reservations about these bylaws changes and recommends that they not be undertaken without further time and consideration.

7. Other Comments: Please set forth here any further comments your organization may have on the GRC’s Phase 3 Straw Proposal or related governance topics.

In the GRC Phase 3 Straw Proposal, the GRC explains “at a minimum, that scope of joint authority should be increased by using the ‘apply to’ test to encompass both WEIM and EDAM rules. In addition, the GRC seeks comments on whether to further expand the scope of authority to other market rules and, if so, what additional rules should be covered.” CPUC staff does not support expanding the scope of the Governing Body’s decisional authority beyond the current “apply to” rules established for the EIM and proposed to be expanded to the EDAM.

1. Please state your organization’s overall views on the GRC’s Phase 3 Straw Proposal.

The Public Advocates Office at the California Public Utilities Commission (Cal Advocates) is an independent consumer advocate with a mandate to obtain the lowest possible rates for utility services, consistent with reliable and safe service levels, and the state’s environmental goals.[1]

[1] Pub. Util. Code Section 309.5. 

2. DELEGATION OF AUTHORITY – TYPE: Please state your organization’s views on the proposal to retain the joint authority model as the structure of the delegation to the Governing Body, as discussed in Section III(B)(1).

Cal Advocates supports this proposal as outlined.

3. DELEGATION OF AUTHORITY – OTHER TOPICS: Please state your organization’s views on the GRC’s proposal to retain the current processes for designating the decisional classification for initiatives and for resolving disagreements between the Board and the Governing Body on whether to approve a proposal within their shared approval authority.

Cal Advocates requests further discussion on the specific Tariff items that would be considered to be under joint authority using the “applies to" test.  

Specific information is needed to explain why the current “applies to" test is not sufficient to determine which tariff sections should be subject to the Western Energy Imbalance Market (WEIM) joint authority.  Furthermore, the WEIM Governing Body (GB) represents voluntary market participants and, therefore, should not have the power to shape and set policies that only apply to captive CAISO load.  Such policies may provide benefits for voluntary market participants at the detriment of California ratepayers.  Therefore, Cal Advocates opposes expansion of the joint authority to matters beyond those that directly apply to the WEIM and Extended Day-Ahead Market (EDAM) market participants.  

4. SIZE AND COMPOSITION OF THE GOVERNING BODY: Please state your organization’s views on the issues discussed in Section IV of the GRC’s Straw Proposal, including: a) The size of the Governing Body, b) The Nominating Committee’s evaluation of sitting Governing Body members seeking re-appointment, and c) Compensation for Governing Body members.

Cal Advocates opposes expanding the GB members from five to seven, or increasing compensation for the GB members.  Cal Advocates proposes that further discussion and reconsideration of the size of the GB be conducted periodically as the additional work and responsibilities of the GB required to oversee the EDAM becomes more apparent.

5. STAKEHOLDER ENGAGEMENT: Please state your organization’s views on the issues discussed in Section V of the GRC’s Straw Proposal, including: a) Increasing the use of stakeholder working groups as part of policy initiatives, b) Beginning the annual roadmap process for prioritizing policy initiatives with panel discussion of sector representatives hosted by the RIF, and c) Allocating the two liaisons for the RIF’s public interest and consumer advocate sector – one to consumers advocates and one to other public interest organizations.

1. Cal Advocates supports the proposal to increase use of stakeholder working groups to develop policy initiatives.  Cal Advocates further recommends that stakeholder working group meetings should be scheduled to facilitate the participation of stakeholders with fewer resources, such as many consumer advocates.  
2. Cal Advocates supports the proposal to begin the annual roadmap process for prioritizing policy initiatives with a panel discussion of sector representatives hosted by the Regional Issues Forum (RIF).
3. Currently, the RIF allocates two liaisons to the consumer advocates sector and public interest organizations sector, collectively.  Cal Advocates supports the proposal to separately assign one liaison to the consumer advocates and one liaison to the public interest organizations to ensure appropriate representation of these key sectors. 

6. CLARIFYING CAISO’S RESPONSIBILITIES: Please state your organization’s views on the proposal to clarify the CAISO’s responsibility to consider the interests of all regional stakeholders, as discussed in Section VI of the GRC’s Straw Proposal.

Cal Advocates recognizes the diversity of the stakeholders looking to participate in the EDAM and understands that the interest of all regional stakeholders must be considered to produce optimal outcomes for the market.  Cal Advocates supports the development of equitable policies for all stakeholders.  While we support these concepts discussed in Section VI of the GRC’s Straw Proposal, we oppose changes to CAISO’s bylaws without having more substantive discussions on the specific changes contemplated and the implications of those specific changes to CAISO’s bylaws.

7. Other Comments: Please set forth here any further comments your organization may have on the GRC’s Phase 3 Straw Proposal or related governance topics.

Cal Advocates recommends the CAISO facilitate more discussion on the Tariff sections and policies subject to joint authority under the “applies to" test.  We request that the CAISO preface this discussion by providing a list of the specific provisions of the Tariff, in addition to the general list of sections provided in the Straw Proposal, that will be subject to joint authority given the latest proposed structure of the EDAM.

1. Please state your organization’s overall views on the GRC’s Phase 3 Straw Proposal.

 Idaho Power appreciates the opportunity to comment on the GRC’s Phase 3 Straw Proposal dated July 15, 2022 (“Straw Proposal”).  The focus on fair and equitable governance is fundamental to the success of the EDAM.  Idaho Power emphasizes that for any market expansion beyond EDAM, Idaho Power will require independent governance in order to participate and satisfy its regulators at both the state and federal level.  At this time, and only under the circumstances where joint governance authority is applied across all aspects of the EDAM, Idaho Power could be amenable to extending the joint authority model from the EIM to EDAM.   Idaho Power appreciates the opportunity to comment on the GRC’s Phase 3 Straw Proposal dated July 15, 2022 (“Straw Proposal”).  The focus on fair and equitable governance is fundamental to the success of the EDAM.  Idaho Power emphasizes that for any market expansion beyond EDAM, Idaho Power will require independent governance in order to participate and satisfy its regulators at both the state and federal level.  At this time, and only under the circumstances where joint governance authority is applied across all aspects of the EDAM, Idaho Power could be amenable to extending the joint authority model from the EIM to EDAM. 

2. DELEGATION OF AUTHORITY – TYPE: Please state your organization’s views on the proposal to retain the joint authority model as the structure of the delegation to the Governing Body, as discussed in Section III(B)(1).

 As described above, with the caveat of broad-reaching joint authority, Idaho Power would not view this joint governance model as an issue that would prevent it from joining the EDAM.  However, as the GRC has noted in the Straw Proposal, Idaho Power agrees that the joint authority model would not be sufficient for purposes of a multi-state regional transmission organization.  There is a vast distinction between voluntary participation in markets like EIM or EDAM and any future regional market expansion in the West.   Extending markets beyond EDAM will necessitate an independent governance model in order to satisfy the state commissions that regulate Idaho Power as well as FERC.[1]  

[1] FERC has held that the principle of independence is the bedrock upon which the ISO must be built.  FERC has also held that governance must be independent in both reality and perception.  See Regional Transmission Organizations, Order No. 2000, FERC Stats. & Regs. ¶ 31,089, at 31,047 (1999) (cross-referenced at 89 FERC ¶ 61,285) order on reh'g, Order No. 2000-A, FERC Stats. & Regs. ¶ 31,092 (2000) (cross-referenced at 90 FERC ¶ 61,201), aff'd sub nom. Pub. Util. Dist. No. 1 v. FERC, 272 F.3d 607 (D.C. Cir. 2001).

3. DELEGATION OF AUTHORITY – OTHER TOPICS: Please state your organization’s views on the GRC’s proposal to retain the current processes for designating the decisional classification for initiatives and for resolving disagreements between the Board and the Governing Body on whether to approve a proposal within their shared approval authority.

As noted above, so long as the joint authority model is broadly applicable to all aspects of the EDAM, Idaho Power does not have significant concerns with retaining the current processes for designating decisional classification for initiatives and for resolving disagreements between the Board and the Governing Body.  To ensure joint authority is broadly applicable, the GRC should modify the decisional criteria so that the scope of joint authority is broadly interpreted in order for questions of applicability to be resolved in favor of joint decisional classification. 

4. SIZE AND COMPOSITION OF THE GOVERNING BODY: Please state your organization’s views on the issues discussed in Section IV of the GRC’s Straw Proposal, including: a) The size of the Governing Body, b) The Nominating Committee’s evaluation of sitting Governing Body members seeking re-appointment, and c) Compensation for Governing Body members.

 (a) Idaho Power does not have any concerns with retaining the current size of the Governing Body.

(b) Idaho Power does not have any concerns with the Nominating Committee’s evaluation of the sitting Governing Body members seeking re-appointment.

(c) Idaho Power is supportive of fair compensation for the Governing Body which should be commensurate with the compensation of the Board of Governors and other Western governance structures.

5. STAKEHOLDER ENGAGEMENT: Please state your organization’s views on the issues discussed in Section V of the GRC’s Straw Proposal, including: a) Increasing the use of stakeholder working groups as part of policy initiatives, b) Beginning the annual roadmap process for prioritizing policy initiatives with panel discussion of sector representatives hosted by the RIF, and c) Allocating the two liaisons for the RIF’s public interest and consumer advocate sector – one to consumers advocates and one to other public interest organizations.

 (a) Idaho Power is supportive of the continued use of stakeholder working groups.  In Idaho Power’s experience, the use of these working groups as a part of policy initiatives leads to productive and inclusive conversations among stakeholders and results in a better overall market design. 

(b) Idaho Power is supportive of the RIF hosting panels to discuss policy initiatives because it will lead to more information and opinions being evaluated when initiatives are identified.  However, Idaho Power stresses the importance of allowing individual stakeholders to continue to be involved and have a voice in prioritizing policy initiatives independent of the RIF.  Idaho Power believes that the RIF is an excellent forum for discussion and the exchange of ideas and should not be an advocacy group. 

(c) Idaho Power supports the allocating of one liaison to consumers advocates and one liaison to public interest organizations in the RIF’s public interest and consumer advocate sector. 

6. CLARIFYING CAISO’S RESPONSIBILITIES: Please state your organization’s views on the proposal to clarify the CAISO’s responsibility to consider the interests of all regional stakeholders, as discussed in Section VI of the GRC’s Straw Proposal.

 The Straw Proposal recommends that CAISO add statements to its Bylaws that it has a responsibility to consider all its stakeholders and cannot favor California ratepayers over other market participants.  Idaho Power agrees that CAISO should give equal value to all stakeholders and market participants and that no state or stakeholder should be favored over any others. 

7. Other Comments: Please set forth here any further comments your organization may have on the GRC’s Phase 3 Straw Proposal or related governance topics.

 Idaho Power appreciates the efforts of the GRC in developing this Straw Proposal.  Idaho Power encourages the routine evaluation of the governance model as development and changes to the markets occur in the future. 

1. Please state your organization’s overall views on the GRC’s Phase 3 Straw Proposal.

These are Joint Comments submitted by both BANC and LADWP (“Joint Commenters”).  BANC and LADWP are very supportive of the overall EDAM governance package contained in the Straw Proposal.

2. DELEGATION OF AUTHORITY – TYPE: Please state your organization’s views on the proposal to retain the joint authority model as the structure of the delegation to the Governing Body, as discussed in Section III(B)(1).

Joint Commenters support the Joint Authority model as reflecting the nature of the EDAM market and the co-optimization of the traditional CAISO market footprint with the expanded footprint of the EIM and EDAM.  The Joint Authority model appropriately demands collaboration between the CAISO Board and the Governing Body on issues that apply to the EDAM and EIM.

3. DELEGATION OF AUTHORITY – OTHER TOPICS: Please state your organization’s views on the GRC’s proposal to retain the current processes for designating the decisional classification for initiatives and for resolving disagreements between the Board and the Governing Body on whether to approve a proposal within their shared approval authority.

Joint Commenters find the current process for designating the decisional classification for initiatives acceptable.

4. SIZE AND COMPOSITION OF THE GOVERNING BODY: Please state your organization’s views on the issues discussed in Section IV of the GRC’s Straw Proposal, including: a) The size of the Governing Body, b) The Nominating Committee’s evaluation of sitting Governing Body members seeking re-appointment, and c) Compensation for Governing Body members.

Joint Commenters do not see a compelling need to increase the size of the Governing Body.  The symmetry of size between the Board and Governing Body seems appropriate, even if it has no bearing of voting outcomes.  We support the remainder of the suggestions of the GRC on these topics, including compensation commensurate with other regional market Boards at levels necessary to attract excellent candidates.

5. STAKEHOLDER ENGAGEMENT: Please state your organization’s views on the issues discussed in Section V of the GRC’s Straw Proposal, including: a) Increasing the use of stakeholder working groups as part of policy initiatives, b) Beginning the annual roadmap process for prioritizing policy initiatives with panel discussion of sector representatives hosted by the RIF, and c) Allocating the two liaisons for the RIF’s public interest and consumer advocate sector – one to consumers advocates and one to other public interest organizations.

Joint Commenters support the increased use of working groups as an initial improvement toward an increasing role and responsibility for stakeholders to shape market initiatives, find compromises and reach consensus.  We also agree that the RIF stakeholder panel is a good way to commence annual policy prioritization.  Joint Commenters do not oppose the changes to the consumer advocates/public interest sector if those changes are desired by those sectors.

6. CLARIFYING CAISO’S RESPONSIBILITIES: Please state your organization’s views on the proposal to clarify the CAISO’s responsibility to consider the interests of all regional stakeholders, as discussed in Section VI of the GRC’s Straw Proposal.

Joint Commenters do not believe that the CAISO discounts the interests of regional stakeholders.  Nonetheless, we support this clarification.

7. Other Comments: Please set forth here any further comments your organization may have on the GRC’s Phase 3 Straw Proposal or related governance topics.

The scope of Joint Authority is a key topic.  Joint Commenters are generally supportive of the “apply to” test as broadly applicable to virtually all of the Day Ahead and Real Time Market rules, as well as generally applicable rules of doing business under the Tariff.  Nevertheless, we recognize that several stakeholders believe key provisions of the Tariff are so critical to regional markets that they must be included within the scope of joint authority.  A notable issue that may fall into this category is the relative priorities of wheeling transactions. 

Joint Commenters support and emphasize the continued ability of transmission service providers to prioritize native load.  Wheeling priorities are obviously impactful on market outcomes.  Joint Commenters suggests that the GRC consider a procedural augmentation to the decisional classification process.  Under this possible augmentation, the CAISO Board and the Governing Body could make a finding that a tariff provision is so material to the operation of the EDAM that, despite the fact that it is not included in the scope of the "apply to” test, the Board and Governing Body can consider that issue using the joint authority model.  We recognize that many parties may find this process-oriented solution unsatisfactory.  At a minimum, it provides an avenue to affirmatively deal with important issues that may not otherwise fall strictly with the articulation of the joint authority model, and provide some affirmative flexibility to the Board and Governing Body to address current and future issues that may arise.

1. Please state your organization’s overall views on the GRC’s Phase 3 Straw Proposal.

Northwest Requirements Utilities ("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 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.  NRU members are located in BPA's Balancing Authority Area as well as other BAAs across the West, including those that have already joined the Energy Imbalance Market or are in the process of joining.  As such, NRU members have a substantial interest in all matters related to the EIM and the Extended Day-Ahead Market including appropriate and representative governance.  

NRU appreciates the work of the Governance Review Committee and its work to respond to NRU and other non-California stakeholders related to the governance framework of the EIM.  Regarding the GRC's Phase 3 Straw Proposal, NRU supports the joint authority model and the expansion of the model for the EDAM.  It is NRU's perspective that in order for a governance framework to be truly independent and able to fully respond to the interests of all market participants - inside and outside California - legislative changes will be required.  NRU recognizes this is outside the scope of the GRC's work.

2. DELEGATION OF AUTHORITY – TYPE: Please state your organization’s views on the proposal to retain the joint authority model as the structure of the delegation to the Governing Body, as discussed in Section III(B)(1).

No further comments.

3. DELEGATION OF AUTHORITY – OTHER TOPICS: Please state your organization’s views on the GRC’s proposal to retain the current processes for designating the decisional classification for initiatives and for resolving disagreements between the Board and the Governing Body on whether to approve a proposal within their shared approval authority.

No further comments.

4. SIZE AND COMPOSITION OF THE GOVERNING BODY: Please state your organization’s views on the issues discussed in Section IV of the GRC’s Straw Proposal, including: a) The size of the Governing Body, b) The Nominating Committee’s evaluation of sitting Governing Body members seeking re-appointment, and c) Compensation for Governing Body members.

No further comments.

5. STAKEHOLDER ENGAGEMENT: Please state your organization’s views on the issues discussed in Section V of the GRC’s Straw Proposal, including: a) Increasing the use of stakeholder working groups as part of policy initiatives, b) Beginning the annual roadmap process for prioritizing policy initiatives with panel discussion of sector representatives hosted by the RIF, and c) Allocating the two liaisons for the RIF’s public interest and consumer advocate sector – one to consumers advocates and one to other public interest organizations.

No further comments.

6. CLARIFYING CAISO’S RESPONSIBILITIES: Please state your organization’s views on the proposal to clarify the CAISO’s responsibility to consider the interests of all regional stakeholders, as discussed in Section VI of the GRC’s Straw Proposal.

No further comments.

7. Other Comments: Please set forth here any further comments your organization may have on the GRC’s Phase 3 Straw Proposal or related governance topics.

No further comments.

1. Please state your organization’s overall views on the GRC’s Phase 3 Straw Proposal.

NV Energy appreciates the opportunity to comment on the Western EIM Governance Review – Phase Three Straw Proposal dated July 15, 2022 (“Straw Proposal”), and thanks the members of the Governance Review Committee (“GRC”) for their continued service. The GRC proposes three new principles to guide their work:

1. Seek, where possible, to modify or enhance the WEIM governance structure, as it relates to the establishment of the EDAM, in support of a more autonomous WEIM Governing Body.
2. Ensure modifications or enhancements to the WEIM governance structure, as it relates to the EDAM, balance the interests of full CAISO market participants in the CAISO balancing authority area and prospective EDAM participants.
3. Ensure modifications or enhancements to the WEIM governance as it relates to the establishment of the EDAM, support or advance a potential future governance structure appropriate for a multi-state RTO.

NV Energy strongly supports these additional criteria. As FERC noted in Order No. 2000, independent governance is the “bedrock” upon which the organized market must be built.[1] Market participants, their customers, and their regulators must have confidence in the overall fairness of the governance process. No one state and no one sector can have control or undue influence over the market design. The third criteria -- the need to enhance governance as a pathway to a multi-state RTO -- is of particular importance to Nevada, given the statutory requirement to participate in an RTO with an independent governance structure by 2030.[2]

Unfortunately, the extremely limited modifications contained in the Straw Proposal fail to meet the objectives contained in these new criteria. One of the most telling shortcomings is the failure of the Straw Proposal to extend “joint authority” over the Wheel-Through Initiative.[3] No recent CAISO initiative has been more contested on a regional basis. The ability to arrange comparable firm transmission service is a vital element in the Desert Southwest Entities’ ability to meet EIM and EDAM Resource Sufficiency tests and maintain reliability within their Balancing Authority Areas.  If it is the intent of the GRC to encourage and not discourage expansion of the CAISO market, then this oversight must be remedied.

[1]  Regional Transmission Organizations, Order No. 2000, 65 Fed. Reg. 809 (2000), FERC Stats. & Regs. ¶ 31,089 (1999), order on reh'g, Order No. 2000-A, 65 Fed. Reg. 12,088 (2000), FERC Stats. & Regs. ¶ 31,092 (2000), aff'd sub nom. Public Utility District No. 1 of Snohomish County, Washington v. FERC, 272 F.3d 607 (D.C. Cir. 2001).

[2]   See NRS 704.79886.

[3]   This has been rebranded as “Transmission Service and Market Scheduling Priorities – Phase 2.”

2. DELEGATION OF AUTHORITY – TYPE: Please state your organization’s views on the proposal to retain the joint authority model as the structure of the delegation to the Governing Body, as discussed in Section III(B)(1).

1. Primary Authority

If the GRC truly seeks to establish “a more autonomous WEIM Governing Body”, “balance the interests of full CAISO market participants” and “advance a potential future governance structure appropriate for a multi-state RTO”, then the answer is to give primary authority over the markets to the fully independent Governing Body. On February 21, 2020, NV Energy submitted the following comments on the EIM Governance Review Committee Scoping Paper:

NV Energy respectfully requests that, as a foundational principle, the GRC seek to achieve the maximum independence for oversight of the market, consistent with existing California law. This request should not be viewed in any manner as a criticism of the actions of the CAISO Board of Governors. Rather, as FERC noted in Order No. 2000, governance must be independent in both reality and perception.[1] In all other RTOs and ISOs, oversight of the markets is performed by independent, non-politically aligned individuals. More can and must be done to implement, this important principle.

The fully independent EIM Governing Body should be delegated primary authority for initiatives related to the real-time market, with the limited exception of issues that apply uniquely to the CAISO Balancing Authority Area. If EDAM goes forward, the primary authority of the EIM Governing Body should be expanded to encompass the day-ahead market as well.

As the GRC notes in the Straw Proposal, “[i]t is universally recognized that in order for the West to have a multi-state RTO, an independent board free from the influence of any one state will be required.” NV Energy strongly agrees with this position, but the GRC must follow through and implement these principles in its proposal. The Governor-selected Board of Governors is a vestige of the 2000-2001 California Energy Crisis.[2] With the EIM, EDAM, and potential RTO expansion, the CAISO and the west is moving beyond this seminal event. It is inconsistent with the core independence principle to have a state-appointed Board of Governors overseeing activities that effect regional wholesale market. Moreover, there are the further concerns regarding the CAISO’s role as market operator while also assuming key responsibilities, most notably for resource procurement, in competition with other market participants. These are illustrated in the following table.

To those who would advocate that implementation of primary authority would decrease the dialogue between the Governing Body and the Board of Governors, the objective is a transfer of primary oversight responsibly for the markets to the independent Governing Body. While under current California law, the role of the Board of Governors cannot be eliminated, it can be modified. It is important to recognize that FERC is the ultimate arbiter of what is just and reasonable for the CAISO Tariff and FERC will adjudicate any attempt by the Board of Governors to overturn the work of the independent Governing Body. Moreover, the Board members will have numerous opportunities to engage on issues, including review of comments, CAISO proposals, and briefing materials, to listen stakeholder meetings and to participate in the Governing Body meeting. The GRC could maintain the joint meeting structure, but modify the voting practice.

The Straw Proposal States,

[t]hese rules must give EDAM participants sufficient assurance that the market will be governed with the objective of benefitting the market as a whole, appropriately reflecting their enhanced level of commitment. At the same time, the governance rules must also accommodate the needs of the full market participants located in the CAISO balancing authority who must rely on a full suite of market, grid operation, and transmission services.

Missing from the Straw Proposal is any explanation of how an independent Governing Body having primary jurisdiction does not fully and effectively account for the needs of the California parties. Rather, it suggests that there is not a shared view of the value of independent oversight. All of the other RTOs and ISOs under FERC’s jurisdiction have independent governance where the board members are not selected by a governmental authority. The time has come to “advance a potential future governance structure appropriate for a multi-state RTO” and adopt a structure that better resembles what must be established. The last round of changes to EIM Governance was a step backwards in certain respects, taking away primary authority from the Governing Body for a critical issue such as the Resource Sufficiency Evaluation. The time has come for the GRC to take a bold move and recognize the importance of independence governance now and to take the maximum step possible.  Independent governance should not be treated as a piecemeal award for expanded market participation.

The Straw Proposal states, [w]hile joint authority is clearly an insufficient approach for full RTO governance, it allows more issues to be framed primarily as regional issues that require full consideration of impacts to multiple balancing authorities. NV Energy agrees on the paramount importance of market design being considered on a regional basis, but this should be done under a construct that maximizes independent decision making not one that continues joint authority. If the Governing Body were to assume primary authority, NV Energy could support increasing the size from five to seven members. There could be rules established for the diversification of membership of the Governing Body such as two members from California, two from the Northwest, two from the Desert Southwest, and one from the Inter-Mountain West.

NV Energy recognizes that until California Law is changed, there would likely be a limited number of areas that would remain under the primary authority of the Governing Board.  These would consist of:

• Section 5 - Black Start and System Restoration
• Section 16 - Existing Contracts
• Section 17 - Transmission Ownership Rights (TORs)
• Section 19 - Reliability Coordinator
• Section 24 - Comprehensive Transmission Planning Process
• Section 25 - Interconnection of Generating Units and Facilities
• Section 40 - Resource Adequacy Demonstration for all SCs in the CAISO BAA
• Section 41 - Procurement of RMR Resources
• Section 42 - Adequacy of Facilities to Meet Applicable Reliability Criteria
• Section 43A - Capacity Procurement Mechanism

NV Energy disagrees that congestion instruments should not be under joint authority as their structure and use can have a direct effect on market prices and transmission charges. Moreover, certain of these sections, such as Section 42 on the adequacy of facilities to meet applicable reliability criteria, may become part of the Governing Body’s responsibility if they are modified to incorporate EDAM requirements.

2. Scope of Joint Authority

Under the current construct, shared approval authority covers proposals to establish or change any tariff rules that apply to WEIM Balancing Authority Areas, WEIM Entities, or other market participants within the WEIM Entity Balancing Authority Areas, in their capacity as participants in the WEIM. The Straw Proposal retains this structure and extends it to include, at a minimum, all market rules that apply to EDAM participants. Approval by a majority of the members of each decisional authority is required for the proposed tariff amendment to be filed with FERC. A vote by either decisional authority to oppose the proposal results in a remand of the initiative to the CAISO’s stakeholder process for further consideration. The Governing Body would retain advisory input over proposals to change or establish tariff rules that would apply to the real-time and/or day-ahead market but are not within the scope of joint authority.

The GRC puts forth two proposals to expand the joint authority approach:

1. Develop a set of specifically identified topics to be decided under joint authority that are in addition to those covered by the apply to test, or
2. Extend joint authority to all real-time and day-ahead market rules but create a defined set of exceptions or exclusions for topics that would remain subject to the Board’s sole approval.

The GRC states that the goal under either approach would be to establish a scope that includes within joint authority certain highly impactful topics that are closely intertwined with topics already covered by the apply to test, while preserving the CAISO Board’s sole authority to address key matters that each participating balancing authority should have the autonomy to address for itself.

If the joint authority approach is retained, NV Energy supports the extension of authority under option (b) so that joint authority would expend to any and all real-time and day-ahead market rules. Included within this jurisdiction would be initiatives associated with transmission access into, out of and through the CAISO Controlled Grid as that would have a material effect on participants’ ability to manage supply and meet the requirements of the resource sufficiency test, topics “closely intertwined” with core aspects of the EIM and EDAM. As the CAISO states in the recently released Wheel-Through Straw Proposal,

There are interdependencies between this initiative and the Extended Day Ahead Market Enhancements (EDAM) initiative. The EDAM design reflected in in the EDAM straw proposal contemplates that entities depending upon import resources to meet their resource sufficiency evaluation will need to demonstrate and make available to the market high quality transmission associated with the delivery of that import, i.e., “Bucket 1” transmission. This ensures that high quality transmission supports resources used to demonstrate resource sufficiency, instilling further confidence in transfers and making high quality transmission available to the market to support transfers between EDAM balancing authority areas.

This straw proposal describes the design for establishing wheeling through scheduling priority equal to load across the CAISO system. The design allows an entity to reserve wheeling through scheduling priority in advance – across monthly and daily horizons – and prepay for that transmission in advance of use. In order to demonstrate resource sufficiency, EDAM entities relying on imports that wheel through the CAISO system would need to secure wheeling through scheduling priority across the CAISO system to meet the EDAM “Bucket 1” transmission requirements.[6]

The argument that maintaining California-only control of the Wheel-Through Initiative is no different than any other transmission provider having control of their OATT fails to withstand scrutiny. As contemplated, EDAM will have a profound effect on the way transmission service offered under the OATT.

First, it is important to note that if CAISO used an OATT as the platform for offering transmission service there would be no wheel-through issue. For more than 20 years, FERC has designed the pro forma tariff to offer open access on a basis that gives native load customers and all other users of the transmission system equal access. It is because, CAISO does not offer OATT-based products and services that the need for the initiative exists. Moreover, OATT transmission providers are not also market operators. For CAISO, the rules of transmission access are intertwined with the market functions. For example, as proposed the EDAM resource sufficiency test that requires that external resources maintain firm transmission from the source to the border of the Balancing Authority Area to count for supply.

With respect to control of the OATT, it is important to recall that EIM modified numerous provisions including, scheduling timelines, pricing of transmission use (reciprocity), settlements, registration of resources, metering requirements and reporting, outage reporting requirements, and requirements to reserve transmission. Depending on the final design, under EDAM there will be a dramatic increase in effected OATT functions. These may include, but are not limited to:

• Available Transfer Capability (ATC) availability and posting. Transmission providers will need to suspend selling transmission in order to accommodate the Day-Ahead Market run.
• Curtailment priority. In order to maximize transmission available to the market and minimize the chance of phantom congestion while maintaining reliability, CAISO may propose to decrease lower the priority of an OATT customer who does not fully utilize their reserved transmission capacity in the day-ahead timeframe.
• Transmission pricing. Exposure to congestion costs modifies the currently approved pricing for transmission under the OATT, especially for non-firm service.
• Scheduling timelines.
• Reserve requirements. The CAISO seeks to impose a new imbalance reserve product.
• Transmission rates. EDAM comes with a potential loss of transmission revenue credits mechanisms for payment of shortfalls and allocation of their costs; potential payments for wheeling service above a balancing authority areas incremental imports and exports.
• Resource sufficiency requirements. These new requirements will need to be sub allocated to OATT customers; and
• Settlements.

Thus, it is a false equivalence to say OATT providers in the CASIO market maintain autonomy over their transmission service. Clearly, each set of market participants, those outside of California and those within California must give up a measure of their autonomy to make this new market work.

Again, NV Energy recognizes that, until California Law is changed, there would likely be a limited number of areas that would remain under the primary authority of the Governing Board. As mentioned in the prior section, these would consist of:

• Section 5 - Black Start and System Restoration
• Section 16 - Existing Contracts
• Section 17 - Transmission Ownership Rights (TORs)
• Section 19 - Reliability Coordinator
• Section 24 - Comprehensive Transmission Planning Process
• Section 25 - Interconnection of Generating Units and Facilities
• Section 40 - Resource Adequacy Demonstration for all SCs in the CAISO BAA
• Section 41 - Procurement of RMR Resources
• Section 42 - Adequacy of Facilities to Meet Applicable Reliability Criteria
• Section 43A - Capacity Procurement Mechanism

3. Board Composition

As an additional measure, the GRC could recommend that the Governor consider appointing at least one member of the Board of Governor from outside of California. To-date, the Governing Body has always operated with at least one member associated with California. If the joint authority model persists, it would be better if a similar regional diversity practice is extended to the Board of Governors.

[1] The Straw Proposal states,

The stakeholders that support the primary authority model want to shift as much of the consideration as possible solely to the Governing Body. This goal is based on a perception that the Governing Body is more neutral in its decision-making than the Board, given that Board members are appointed by the California Governor with consent of the California State Senate.

As noted above, FERC has recognized that governance must be independent in both reality and perception. Moreover, NV Energy would contend based on the actions taken by the Governing Body members in their public meetings as well as their participation in stakeholder meetings and the RIF, that they have demonstrated the reality of their independent oversight.

[2] The California State Legislature passed AB 5x on January 18, 2001, authorizing the replacement of the then-existing stakeholder board with a five-member board to be appointed by the Governor of California and confirmed by the state senate. Cal. Pub. Util. Code § 337(a) (Deering 2005) (“The Independent System Operator governing board shall be composed of a five-member independent governing board of directors appointed by the Governor and subject to confirmation by the Senate.”).

[3] For example, on September 5, 2020, the CAISO modified its procedures to render all awards of real-time market exports from unspecified resources essentially non-firm and subject to recall.

[4] See for example, the California ISO’s filing to limit wheel-though transactions by the Desert Southwest entities in Docket No. ER21-1790.

^[5]  For example, on June 29, 2021, the California Public Utility Commission and the California Energy Commission requested CAISO use its tariff-based authority to procure additional resources for the months of July and August 2021 and, if conditions did not improve, for the month of September. NV Energy understands that pursuant to this request CAISO procured 624 MW in July, 650 MW in August, and approximately 400 MW for September 2021.

[6] Transmission Service and Market Scheduling Priorities – Phase 2 dated July 29, 2022, at 6.

3. DELEGATION OF AUTHORITY – OTHER TOPICS: Please state your organization’s views on the GRC’s proposal to retain the current processes for designating the decisional classification for initiatives and for resolving disagreements between the Board and the Governing Body on whether to approve a proposal within their shared approval authority.

The GRC should modify the decisional criteria to instruct CAISO Staff, the Governing Body and the Board of Governors to interpret the scope of joint authority broadly so that if there is a question about the applicability, it should be decided in favor of a joint decisional classification.

With respect to the dispute resolution process, NV Energy had proposed a form of the “jump ball” section 205 filing process used by several RTOs. The GRC adopted an “an iterative remand process” that requires the two bodies to continue to collaborate together, and work with stakeholders, to develop a proposal that can address the concerns that caused the two bodies to reach differing conclusions. There is a process for the Board to act unilaterally in exigent circumstances. NV Energy understands the concerns expressed with the jump ball approach and can support a continuation of the current dispute resolution approach.

4. SIZE AND COMPOSITION OF THE GOVERNING BODY: Please state your organization’s views on the issues discussed in Section IV of the GRC’s Straw Proposal, including: a) The size of the Governing Body, b) The Nominating Committee’s evaluation of sitting Governing Body members seeking re-appointment, and c) Compensation for Governing Body members.

If the GRC maintains the joint authority approach for the Governing Body and the Board of Governors, the overall governance structure already has ten members. No further expansion appears necessary. Under California Law, the Board of Governors must be composed of five members. Thus, having five members of the Governing Body maintains a balance for voting purposes.

If the Governing Body were to assume primary authority, NV Energy could support increasing the size from five to seven members. Under the primary authority approach, there could be rules established for the diversification of membership of the Governing Body such as two members from California, two from the Northwest, two from the Desert Southwest, and one from the Inter-Mountain West.

The Governing Body’s compensation should be commensurate with the compensation of the Board of Governors. Compensation should also be commensurate with other Western governance structures, including the Western Power Pool’s independent Governing Board and a potential SPP Markets+ Independent Panel.

5. STAKEHOLDER ENGAGEMENT: Please state your organization’s views on the issues discussed in Section V of the GRC’s Straw Proposal, including: a) Increasing the use of stakeholder working groups as part of policy initiatives, b) Beginning the annual roadmap process for prioritizing policy initiatives with panel discussion of sector representatives hosted by the RIF, and c) Allocating the two liaisons for the RIF’s public interest and consumer advocate sector – one to consumers advocates and one to other public interest organizations.

1. Increasing the Use of Working Groups

NV Energy supports the GRC’s recommendation that CAISO expand the use of the working group approach with the goal of enhancing the role of stakeholders in both the development and consideration of policy options. Stakeholders have an understanding of the intended and unintended impacts of CAISO policy initiatives on their business and customer interests and their input is vital when developing and prioritizing policy initiatives. The working groups should be structured to ensure regional and sector diversity.

In Order No. 719, FERC required RTOs to promote a process that is responsive to the needs of its customers and other stakeholders and that meets four criteria: (i) inclusiveness; (ii) fairness in balancing diverse interests; (iii) representation of minority positions; and (iv) ongoing responsiveness. Expanded use of work groups can be a valuable component in establishing priorities; however, the process must not only be dictated by a “majority rules” approach, but also must take into account initiatives that may have a significant reliability or economic impact on a limited subset of participants.

2. Establishing Stakeholder Priorities

NV Energy agrees with the GRC that there is an “opportunity to enhance the role of stakeholders by giving them the opportunity to take a more active role in prioritizing the discretionary initiatives.” The GRC proposes that the RIF host a roundtable discussion about priorities within the set of possible discretionary initiatives. Each stakeholder sector could designate a representative to articulate their sector’s priorities during a RIF meeting, with members of the Board and Governing Body in attendance, who would want to hear this discussion as background for their own input later in the process of developing the roadmap.

A concern is that the sector representative may not be the entity most effected by the issue and thus be able to discuss its importance. In addition, the RIF sector may not always agree on priorities, necessitating a “minority report” for entities with specific concerns to be addressed during the prioritization process. It may be better to establish a specific work group that would feed into the CAISO Roadmap process. In this way, participants or groups of participants could voice their specific concerns directly into the ongoing prioritization process.

3. RIF

If EDAM moves forward, a new sector should be added with two members for EDAM Entities. At least at the start of the new market, it is likely that there will be EIM Entities that do not transition to EDAM. This would necessitate maintaining the existing WEIM Entity sector with two members to ensure geographic diversity. There would be a new EDAM Entity sector with two additional members bringing the RIF total to 13.

NV Energy agrees there could be separate sector representation between the public interest and consumer advocates. This appears to be how the sector has operated, but it could be formalized.

6. CLARIFYING CAISO’S RESPONSIBILITIES: Please state your organization’s views on the proposal to clarify the CAISO’s responsibility to consider the interests of all regional stakeholders, as discussed in Section VI of the GRC’s Straw Proposal.

In Appendix A of the Straw Proposal, the CAISO counsel explains that the Board of Governors is not required by law to favor California ratepayers over other market participants. The GRC proposes to provide regional stakeholders with stronger assurance by having CAISO state in its governance documents that CAISO and the Board of Governors, “will consider the interests of all stakeholders within the footprint of the markets that it administers, including the Corporation’s balancing authority area, EDAM balancing authority areas and EIM balancing authority areas.”  NV Energy commends the GRC for recognizing the importance of these changes to the governing documents and for clarifying that public interest extends to all market participants.

7. Other Comments: Please set forth here any further comments your organization may have on the GRC’s Phase 3 Straw Proposal or related governance topics.

In addition to our own comments, NV Energy is supportive of the comments being submitted by the Arizona Utilities. Consistent with those comments, NV Energy requests that improvements to CAISO’s governance be implemented prior to any EDAM-related FERC filings. Moreover, other related initiatives, including the Wheel-Through Initiative should not be governed by the structure that is in place today, given the impact on current EIM Entities and potential EDAM participants outside of the CAISO Balancing Authority Area.

In accordance with SB 448, Nevada is to participate in an RTO by January of 2030, a very short eight years from now. By that date there will be at least two organized markets operating in the Western Interconnection. The governance structure will no doubt be a critical component regarding RTO participation. At issue in the current effort is what message does the GRC, CAISO Management, and the CAISO Board want to send regarding how they value independence as the core component of the governance structure.

NV Energy respectfully asks the GRC to not only approve the three new proposed principles, but also to reflect them in the substance of a revised proposal. 

1. Please state your organization’s overall views on the GRC’s Phase 3 Straw Proposal.

PG&E applauds the work of the Governance Review Committee (GRC) and supports the direction of the GRC Phase 3 Straw Proposal of July 15, 2022, setting out the recommended governance enhancements to accommodate the Extended Day-Ahead Market (EDAM). 

Governance Principles
 

PG&E supports the GRC’s added Principles, and in particular the addition of Principle H, which states that the GRC shall:
 

• Ensure modifications or enhancements to the WEIM governance structure, as it relates to the EDAM, balance the interests of full CAISO market participants in the CAISO balancing authority area and prospective EDAM participants.[1]

PG&E appreciates the GRC’s recognition of the important asymmetry in the position of the California participants, vis a vis other prospective EDAM participants and states.  The CAISO is not only the EDAM Market Operator, but also our California Balancing Area Authority (BAA).  In the latter role, CAISO’s number one priority remains the provision of safe, reliable electric service to California customers – a priority which will necessarily sometimes take precedence in the allocation of Staff time and attention over market design enhancement and other policy priorities. 

As a full market participant and Participating Transmission Owner (PTO) within the California BAA, PG&E believes that an appropriate balance of interests in the EDAM, including in the structure of EDAM governance, must reflect that EDAM is – by design – a voluntary marketplace and not a full RTO.  EDAM will not obligate prospective participants to make long-term commitments, such as a full dedication of transmission (with transfer of operational control and transmission planning), or to participate in California’s Resource Adequacy (RA) regime, Renewable Portfolio Standards, or other state resource planning and interconnection policies.  Because PG&E and the other CAISO PTOs have made a durable commitment and lived under CAISO rules for 25 years, the institutional governance of the CAISO as a California public benefits corporation under California law, including the exclusive authority of the CAISO Board of Governors over important non-EDAM functions of the institution, necessarily must remain in place.  This residual authority must extend to the ability of the CAISO Board to rescind delegated authority and retake control of its BAA, in the event of a reliability emergency or significant market disruption, such as would accompany a large-scale voluntary withdrawal of EDAM participants.[2]  PG&E requests that the final GRC proposal reaffirm the WEIM durability and rescission of delegated authority rules, which should extend to apply to the EDAM (though, of course, we sincerely hope that they are never invoked).

[1] GRC Phase 3 Straw Proposal, p. 8

[2] The GRC Phase 2 final proposal recommended a process by which the CAISO Board of Governors, after a unanimous vote, may rescind its delegated authority within 180 days, in the event of a mass departure of 75% or more of WEIM participation (as measured by net energy for load).  http://www.caiso.com/InitiativeDocuments/Part-Two-Final-Proposal-EIM-Governance-Review-August-2021.pdf, pp. 17-19.

2. DELEGATION OF AUTHORITY – TYPE: Please state your organization’s views on the proposal to retain the joint authority model as the structure of the delegation to the Governing Body, as discussed in Section III(B)(1).

Scope of Delegated Authority

PG&E supports the continued use and extension to EDAM of the joint authority paradigm and the “apply to” test that were developed by the GRC for WEIM. 

While a detailed mapping of the tariff (as was performed for the GRC Phase 2) would be of value, it is a burdensome exercise and will not capture new and emerging issues that may result in wholly new tariff sections, or initiatives that (as often occurs) implicate changes to multiple disparate portions of the tariff at the same time, to achieve a broader policy objective (to name just two examples, the current “price formation enhancements” and “day-ahead market enhancements” will each result in changes to multiple sections of the CAISO tariff). 

PG&E supports the generic “apply to” test, which is extremely broad and will result in joint authority over most market design rules.  The advantage of this generic test is it is easy to understand and apply, and can readily encompass all future or potential initiatives, without reference to their location within the tariff book.  A full tariff review, if conducted, will provide additional insight, and could help ensure stakeholders have a common understanding of which existing tariff areas would be covered under the joint authority according the “apply to” test (and which would be left to the sole authority of the CAISO Board of Governors).

PG&E further notes the importance of the “…in their capacity as participants in the WEIM/EDAM” language, which correctly accounts for the fact that many WEIM (and prospective EDAM) entities and their corporate affiliates also engage in other types of CAISO market activities and transactions, unrelated to their potential participation in EDAM.  PG&E believes this issue was correctly addressed in development of the GRC’s Phase 2 final proposal and need not be revisited here.[1]

PG&E does not support either of the options for an expanded authority using a broader and potentially contentious “impact” test.

[1] “With respect to the requested clarification, the GRC can confirm that the joint authority definition, as set forth above, would not include the transmission priority issues addressed in the CAISO’s recent Load, Exports and Wheeling Priorities policy initiative [ed. note: this is initiative was subsequently renamed to Transmission Services and Market Scheduling Priorities]… While these new rules may apply to utilities who engage in such transactions and who happen also to be EIM Entities or EIM market participants, the proposal would not be subject to joint authority because these new rules do not apply to those entities ‘in their capacity as participants in EIM.’ The GRC included this quoted language in its proposed rule in part to distinguish between tariff rules that apply to EIM transactions and those that apply to traditional imports, exports and wheels that take place outside of EIM.” GRC Phase 2 final proposal, p. 11.

3. DELEGATION OF AUTHORITY – OTHER TOPICS: Please state your organization’s views on the GRC’s proposal to retain the current processes for designating the decisional classification for initiatives and for resolving disagreements between the Board and the Governing Body on whether to approve a proposal within their shared approval authority.

PG&E supports the GRC proposal to extend the current WEIM decisional classification process and dispute resolution mechanisms to EDAM.

4. SIZE AND COMPOSITION OF THE GOVERNING BODY: Please state your organization’s views on the issues discussed in Section IV of the GRC’s Straw Proposal, including: a) The size of the Governing Body, b) The Nominating Committee’s evaluation of sitting Governing Body members seeking re-appointment, and c) Compensation for Governing Body members.

PG&E supports expansion of the Governing Body from five to seven members (ideally staggered in over the first two years of EDAM operation).  The scale and scope of issues and range of stakeholder interests within EDAM will likely be larger than has been seen in WEIM.  Therefore, the Governing Body will benefit from a broader set of members with more diverse backgrounds, including better geographic representation from all parts of the region. 

The expansion to seven governing body members should not alter the balance under joint authority rules, as each board will still be required to approve any joint authority initiative by a majority of its own membership (i.e., a minimum of four Governing Body members and three Board of Governors members must vote affirmatively for a tariff change to be submitted at FERC).

With regard to compensation, PG&E supports the CAISO Board of Governors conducting a review of Governing Body compensation levels to ensure they remain sufficiently attractive to support attracting members with the necessary talent and experience.

5. STAKEHOLDER ENGAGEMENT: Please state your organization’s views on the issues discussed in Section V of the GRC’s Straw Proposal, including: a) Increasing the use of stakeholder working groups as part of policy initiatives, b) Beginning the annual roadmap process for prioritizing policy initiatives with panel discussion of sector representatives hosted by the RIF, and c) Allocating the two liaisons for the RIF’s public interest and consumer advocate sector – one to consumers advocates and one to other public interest organizations.

PG&E supports the GRC’s recommendation to continue with current stakeholder engagement practice, including the increased use by CAISO of stakeholder working groups, where appropriate, to attempt to achieve consensus on complex, technical topics.  PG&E agrees with the new roadmap roundtable recommendation and the proposed change in RIF liaison representation for the public interest organization and consumer advocate sector.

The Regional Issues Forum – as the main vehicle for stakeholder engagement within the broader regional stakeholder community -- provides a valuable convening and information-sharing function that should be continued and enhanced under EDAM.  One such enhancement that PG&E would like to take this opportunity to propose is to afford the RIF leadership the opportunity to speak on decisional items before the Governing Body and joint Board of Governors meetings, in order to present an alternative summary of stakeholder positions.  This option would be a standing invitation to RIF leadership, in much the same way DMM or the MSC may present their formal opinions before the board(s).  It is envisioned that the RIF could choose to avail itself of this option anytime the RIF leadership receives feedback that a significant number of stakeholders or stakeholder sectors are dissatisfied with the CAISO staff representation of stakeholder viewpoints.  The RIF leadership could then prepare and present before the board(s) an alternative summary of stakeholder views that is more aligned with the tone and language of stakeholders’ positions. 

The reasoning behind this proposal is that often stakeholders feel that the summary presented to the board(s) by CAISO Staff provides only a highly compressed and “sanitized” snapshot of stakeholder views, which fails to adequately capture the diversity of perspectives and concerns raised during the initiative development process.  While individual stakeholders may from time to time speak before the board(s), allowing the RIF, as a stand-in for the collective voice of a broad cross-section of stakeholders, the option to supplement the Staff narrative with an alternative summary of its own, could further enhance the discussion and highlight those occasions when significant dissenting views still exist at the end of the stakeholder process that may not be fully brought to light by the CAISO Staff discussion alone.  

6. CLARIFYING CAISO’S RESPONSIBILITIES: Please state your organization’s views on the proposal to clarify the CAISO’s responsibility to consider the interests of all regional stakeholders, as discussed in Section VI of the GRC’s Straw Proposal.

No comments.

7. Other Comments: Please set forth here any further comments your organization may have on the GRC’s Phase 3 Straw Proposal or related governance topics.

No comments.

1. Please state your organization’s overall views on the GRC’s Phase 3 Straw Proposal.

PacifiCorp appreciates the opportunity to comment on the Western EIM Governance Review – Phase Three Straw Proposal dated July 15, 2022 (“Straw Proposal”), and thanks the members of the Governance Review Committee (“GRC”) for their continued service. The primary recommendation of the Straw Proposal is to continue, but expand, the joint authority governance model. PacifiCorp agrees with the continuation and evolution of the joint authority model, but clarifies further below that the joint authority governance model will need to be routinely evaluated as changes to the markets occur prospectively.

2. DELEGATION OF AUTHORITY – TYPE: Please state your organization’s views on the proposal to retain the joint authority model as the structure of the delegation to the Governing Body, as discussed in Section III(B)(1).

1. Primary Authority vs. Joint Authority

The Straw Proposal recommends continuation of the joint authority governance model while increasing the WEIM Governing Body’s joint authority. PacifiCorp agrees with this proposal.  PacifiCorp acknowledges that while the joint authority model is unique and a creative way to work within the California statutory limitations around overall governance of the CAISO, this approach to date has fairly represented the broad interests of the voluntary participating entities within the WEIM.  The joint authority model strikes an appropriate balance between the explicit issues and oversight needs of the CAISO’s incremental markets (i.e., the WEIM and eventual EDAM) and the more expansive responsibilities tied to the oversight and operations of the CAISO and its membership.  At this time, PacifiCorp is unconvinced that moving to a primary authority model will necessarily yield improved governance over the WEIM and eventual EDAM. 

PacifiCorp notes that beyond the current and proposed voluntary market constructs, the governance of the CAISO must be addressed to allow for broader regional nomination and representation.  PacifiCorp views a very bright line between participation in a voluntary market and any future market, which will necessarily require independent governance to satisfy FERC requirements[1] and to receive the support of the state regulatory commissions to which PacifiCorp is accountable.  In particular, PacifiCorp notes and concurs with the GRC’s acknowledgement on page 4 of the Straw Proposal that the joint authority model for the WEIM and EDAM would not be sufficient for purposes of a multi-state regional transmission organization.

2. Expansion of Joint Authority

The Straw Proposal proposes to expand the current joint authority to the EDAM by extending the "apply to" test to EDAM tariff rules. Under this approach, the Governing Body’s role would be revised to add a reference to the EDAM in each place where the WEIM is mentioned and add a reference to the “day-ahead” market to the definition of advisory authority. PacifiCorp agrees with the proposed reference(s) to EDAM. 

The Straw Proposal frequently states that the new proposed tariff rule would “apply to WEIM and EDAM market participants in their capacities as such.” However, as set forth on page 14 of the Straw Proposal, the expanded joint authority would apply to new proposed tariff rules that apply to “WEIM/EDAM balancing authority areas, WEIM/EDAM Entities, or other market participants within the WEIM/EDAM balancing authority areas, in their capacity as participants in the WEIM/EDAM.”  Therefore, it appears the expanded authority would not only apply to new proposed tariff rules that apply to WEIM and EDAM market participants, but also to WEIM/EDAM balancing authority areas and WEIM/EDAM Entities.  PacifiCorp requests clarification on the scope of the proposed expansion.

On page 15, the Straw Proposal puts forth two proposals to establish a clearer demarcation point between the rules that are within the joint authority approach.  The two proposals are to:

1. Develop a set of specifically identified topics to be decided under joint authority that are in addition to those covered by the apply to test, or
2. Extend joint authority to all real-time and day-ahead market rules but create a defined set of exceptions or exclusions for topics that would remain subject to the Board’s sole approval.

PacifiCorp recommends both options be used.  In particular, stakeholders can currently identify topics for which the joint authority will be extended via the “does it apply test.”  However, in the future it is possible that topics or rules not currently identified will need to come under the scope joint authority, as well.  Extending the joint authority to all real-time and day-ahead market rules would be a flexible and responsible way of trying to account for unknown circumstances.

[1] FERC has held that the principle of independence is the bedrock upon which the ISO must be built.  FERC has also held that governance must be independent in both reality and perception.  See Regional Transmission Organizations, Order No. 2000, FERC Stats. & Regs. ¶ 31,089, at 31,047 (1999) (cross-referenced at 89 FERC ¶ 61,285) order on reh'g, Order No. 2000-A, FERC Stats. & Regs. ¶ 31,092 (2000) (cross-referenced at 90 FERC ¶ 61,201), aff'd sub nom. Pub. Util. Dist. No. 1 v. FERC, 272 F.3d 607 (D.C. Cir. 2001).

3. DELEGATION OF AUTHORITY – OTHER TOPICS: Please state your organization’s views on the GRC’s proposal to retain the current processes for designating the decisional classification for initiatives and for resolving disagreements between the Board and the Governing Body on whether to approve a proposal within their shared approval authority.

PacifiCorp supports retaining the current processes for designating the decisional classification for initiatives and for resolving disagreements between the Board and the Governing Body. However, PacifiCorp recommends the GRC modify the decisional criteria to instruct CAISO Staff, the Governing Body and the Board of Governors to interpret the scope of joint authority broadly so that if there is a question about the applicability, it should be decided in favor of a joint decisional classification.

4. SIZE AND COMPOSITION OF THE GOVERNING BODY: Please state your organization’s views on the issues discussed in Section IV of the GRC’s Straw Proposal, including: a) The size of the Governing Body, b) The Nominating Committee’s evaluation of sitting Governing Body members seeking re-appointment, and c) Compensation for Governing Body members.

The Governing Body’s compensation should be commensurate with the compensation of the Board of Governors and other Western governance structures.

5. STAKEHOLDER ENGAGEMENT: Please state your organization’s views on the issues discussed in Section V of the GRC’s Straw Proposal, including: a) Increasing the use of stakeholder working groups as part of policy initiatives, b) Beginning the annual roadmap process for prioritizing policy initiatives with panel discussion of sector representatives hosted by the RIF, and c) Allocating the two liaisons for the RIF’s public interest and consumer advocate sector – one to consumers advocates and one to other public interest organizations.

PacifiCorp supports the GRC’s recommendation to increase use of stakeholder working groups and to use stakeholder process to prioritize discretionary initiatives, and adjustments to the Regional Issues Forum. PacifiCorp also agrees with increasing the use of stakeholder working groups at the early stage of policy development, as has been done in the EDAM initiative.

6. CLARIFYING CAISO’S RESPONSIBILITIES: Please state your organization’s views on the proposal to clarify the CAISO’s responsibility to consider the interests of all regional stakeholders, as discussed in Section VI of the GRC’s Straw Proposal.

In Appendix A of the Straw Proposal, the CAISO counsel explains that the Board of Governors is not required by law to favor California ratepayers over other market participants. The Straw Proposal recommends the CAISO make similar statements in governance documents, as well as its Bylaws.  PacifiCorp supports the GRC’s proposal and commends the GRC for recognizing the importance of these changes to the governing documents and for clarifying that public interest extends to all market participants.   

7. Other Comments: Please set forth here any further comments your organization may have on the GRC’s Phase 3 Straw Proposal or related governance topics.

No comment.

1. Please state your organization’s overall views on the GRC’s Phase 3 Straw Proposal.

Overall, PGE supports the GRC’s Phase 3 Straw Proposal and the continued progress on EDAM governance. 

2. DELEGATION OF AUTHORITY – TYPE: Please state your organization’s views on the proposal to retain the joint authority model as the structure of the delegation to the Governing Body, as discussed in Section III(B)(1).

PGE finds the joint authority proposal an acceptable governance model for the scope of the proposed EDAM market.  PGE agrees with the GRC that EDAM, like EIM, represents an energy optimization across the full regional footprint and not two separate markets.  Joint authority recognizes this unified market structure and promotes collaboration and cooperation between California and the broader western footprint.  Shared decisionmaking, based on the shared information, is an opportunity to build on the successful foundation of the EIM under an expanded scope. 

PGE notes that this support is specific to the EDAM/EIM scope and that to enable expansion into an RTO/ISO structure, the governance model must evolve to genuine independence from any direct political control, consistent with FERC requirements.  PGE recognizes that there is a bright line between a joint governance structure that is appropriate for overseeing an energy market and the need for genuine independence for any of the additional RTO/ISO functionality beyond these markets. 

3. DELEGATION OF AUTHORITY – OTHER TOPICS: Please state your organization’s views on the GRC’s proposal to retain the current processes for designating the decisional classification for initiatives and for resolving disagreements between the Board and the Governing Body on whether to approve a proposal within their shared approval authority.

PGE finds the current process for designating the decisional classification for intiatives acceptable.  PGE also recognizes that this area remains critical to enabling the broadest possible footprint for EDAM and encourages the GRC to carefully consider comments from stakeholders to identify workable solutions across the broadest possible footprint. 

4. SIZE AND COMPOSITION OF THE GOVERNING BODY: Please state your organization’s views on the issues discussed in Section IV of the GRC’s Straw Proposal, including: a) The size of the Governing Body, b) The Nominating Committee’s evaluation of sitting Governing Body members seeking re-appointment, and c) Compensation for Governing Body members.

PGE does not find there to be a compelling reason to expand the size of the current Governing Body.  PGE supports the GRC’s reccomendaiton regarding the re-nomination of a current Governing Body member seeking an additional term. PGE supports compensating Governing Body members consistent with industry norms and at a sufficient level to attract and retain the talent needed to oversee the EDAM/WEIM. 

5. STAKEHOLDER ENGAGEMENT: Please state your organization’s views on the issues discussed in Section V of the GRC’s Straw Proposal, including: a) Increasing the use of stakeholder working groups as part of policy initiatives, b) Beginning the annual roadmap process for prioritizing policy initiatives with panel discussion of sector representatives hosted by the RIF, and c) Allocating the two liaisons for the RIF’s public interest and consumer advocate sector – one to consumers advocates and one to other public interest organizations.

PGE supports a limited increase of working groups at the outset of stakeholder initiatives to draw more stakeholder perpsectives into the initial formation of the straw proposal.  However, PGE recommends that the use of these groups be utilized judiciously for iniatives with a large impact where stakeholder input will be valued and incorporated.  While PGE finds the working group process to produce valuable collaboration between stakeholders and CAISO staff, PGE also recognizes that working group participation can be labor-intensive.  PGE recommends the utilization of working groups when the investment of stakeholder time will pay a measurable dividend in the development of the straw proposal. 

PGE supports the recommendation regarding the role of the RIF in the annual roadmap process.  The RIF provides a valuable forum that can illuminate areas of consensus and prioritization for initiatives. 

6. CLARIFYING CAISO’S RESPONSIBILITIES: Please state your organization’s views on the proposal to clarify the CAISO’s responsibility to consider the interests of all regional stakeholders, as discussed in Section VI of the GRC’s Straw Proposal.

PGE supports this clarification.

7. Other Comments: Please set forth here any further comments your organization may have on the GRC’s Phase 3 Straw Proposal or related governance topics.

None at this time.

1. Please state your organization’s overall views on the GRC’s Phase 3 Straw Proposal.

Please see Powerex’s comments available at Western EIM Governance Review Phase 3 (EDAM) Straw Proposal Comments

2. DELEGATION OF AUTHORITY – TYPE: Please state your organization’s views on the proposal to retain the joint authority model as the structure of the delegation to the Governing Body, as discussed in Section III(B)(1).

Please see Powerex’s comments available at Western EIM Governance Review Phase 3 (EDAM) Straw Proposal Comments

3. DELEGATION OF AUTHORITY – OTHER TOPICS: Please state your organization’s views on the GRC’s proposal to retain the current processes for designating the decisional classification for initiatives and for resolving disagreements between the Board and the Governing Body on whether to approve a proposal within their shared approval authority.

Please see Powerex’s comments available at Western EIM Governance Review Phase 3 (EDAM) Straw Proposal Comments

4. SIZE AND COMPOSITION OF THE GOVERNING BODY: Please state your organization’s views on the issues discussed in Section IV of the GRC’s Straw Proposal, including: a) The size of the Governing Body, b) The Nominating Committee’s evaluation of sitting Governing Body members seeking re-appointment, and c) Compensation for Governing Body members.

Please see Powerex’s comments available at Western EIM Governance Review Phase 3 (EDAM) Straw Proposal Comments

5. STAKEHOLDER ENGAGEMENT: Please state your organization’s views on the issues discussed in Section V of the GRC’s Straw Proposal, including: a) Increasing the use of stakeholder working groups as part of policy initiatives, b) Beginning the annual roadmap process for prioritizing policy initiatives with panel discussion of sector representatives hosted by the RIF, and c) Allocating the two liaisons for the RIF’s public interest and consumer advocate sector – one to consumers advocates and one to other public interest organizations.

Please see Powerex’s comments available at Western EIM Governance Review Phase 3 (EDAM) Straw Proposal Comments

6. CLARIFYING CAISO’S RESPONSIBILITIES: Please state your organization’s views on the proposal to clarify the CAISO’s responsibility to consider the interests of all regional stakeholders, as discussed in Section VI of the GRC’s Straw Proposal.

Please see Powerex’s comments available at Western EIM Governance Review Phase 3 (EDAM) Straw Proposal Comments

7. Other Comments: Please set forth here any further comments your organization may have on the GRC’s Phase 3 Straw Proposal or related governance topics.

Please see Powerex’s comments available at Western EIM Governance Review Phase 3 (EDAM) Straw Proposal Comments

1. Please state your organization’s overall views on the GRC’s Phase 3 Straw Proposal.

PGP appreciates the continued efforts of the Governance Review Committee (GRC) to develop a governance framework that creates a successful foundation for the extended day-ahead market (EDAM) and future potential regionalization efforts.

Governance is a key issue for potential EDAM participants and other stakeholders, including PGP members. As set forth in the straw proposal, the overarching principle guiding the GRC’s work is to “ensure that the governance of the EIM and EDAM provides stakeholders throughout the West with confidence that the governance structure represents the market(s) as a whole, broadly respects and considers the interests of all stakeholders, and is resilient under a wide range of conditions.” PGP believes the GRC’s Phase 3 straw proposal is a key step toward meeting this objective and reflects diverse stakeholder perspectives in a balanced manner. 

The proposal extends the joint authority decision-making framework which will continue to encourage collaboration and trust building between the CAISO Board and EIM Governing Body and enable robust, informed decision-making in EDAM. The proposal also expands the scope of the authority of the EIM Governing Body, recognizing the additional market rules that would apply to future EDAM entities while also considering possible further expansion of the scope of the Governing Body’s authority to certain rules that may impact, but not “apply to” EDAM entities. As discussed later in these comments, PGP believes it is essential to expand joint authority beyond the “apply to” test for EDAM. The GRC’s proposal also clarifies that the CAISO board is not required by law to favor California ratepayers over other market participants and would affirmatively state this through changes to the CAISO’s bylaws. PGP largely supports the direction of the GRC’s proposal, and offers additional perspectives and recommendations later in these comments.

However, and as the GRC acknowledges and PGP and many other stakeholders have noted, until the CAISO board appointment process is free from the influence of any one state (i.e. until legislative change is made such that the California governor no longer appoints the CAISO board members), any governance framework will not be fully independent. PGP appreciates the GRC’s recognition of this challenge, the acknowledgment that additional changes to governance may be warranted in the future, and that the GRC’s work is not meant to foreclose work by others to address governance related matters, including potentially through legislative change.

PGP’s comments, likewise, offer perspective on the GRC’s proposed enhancements to governance for EDAM that are within scope for this effort, while also recognizing that other key changes are needed that fall outside the scope of the GRC’s work and likely are only possible through legislative change. 

2. DELEGATION OF AUTHORITY – TYPE: Please state your organization’s views on the proposal to retain the joint authority model as the structure of the delegation to the Governing Body, as discussed in Section III(B)(1).

Type of Authority:
PGP supports the GRC’s decision to retain the joint authority model for EDAM. Joint authority enables collaboration between the CAISO Board and Governing Body and promotes understanding of the issues impacting all stakeholders within the EDAM footprint. This collaborative approach recognizes the integrated nature of the market and would provide a solid foundation for future regionalization efforts.

PGP appreciates the perspectives of stakeholders who have expressed a preference for the primary authority model. In earlier phases of the GRC’s work, PGP also supported the primary authority model because it would appear to increase the autonomy of the Governing Body and enhance its decision-making authority. However, under a primary authority model, the CAISO board must still approve all items under the Governing Body’s primary authority through the consent agenda process which impinges enhanced decision-making or autonomy and decreases coordination between the two bodies. For the above reasons, PGP finds the joint authority model most appropriate for EDAM.
 

Scope of Authority:
EDAM will establish an integrated regional day-ahead market for the West - the scope of authority should reflect this by starting with the default assumption that ALL real-time and day-ahead market rules are under joint authority.  As fully articulated below, the “applied to” test is inadequate and should be replaced by creating limited exceptions to a broader default rule.  

As the GRC has noted, it is difficult to establish bright-line rules that effectively carve out portions of the real-time and day-ahead market rules based on the “impact” of those rules on differently situated entities. Given this challenge, the GRC proposes to extend the relatively straightforward “apply to” test currently applied in the WEIM to the EDAM. It is PGP’s view that this test is not adequate and does not appropriately reflect the integrated nature of the market and the impossibility of isolating the impact of a particular rule change on entities in the CAISO versus entities outside of California. In Appendix A to the GRC’s Phase 3 proposal, CAISO staff argues that it is consistent with both state and federal law for the CAISO Board to weigh the interests of California load with the interests of other market participants.  Similarly, the EIM Governing Body is not specifically called to favor the interests of entities outside of California over those of entities inside of California.  Assuming both bodies are faithfully performing their duties to balance the varied interests associated with any proposal, there is little risk of negative outcomes if the starting point for the scope of joint authority is more expansive. The risks associated with over-inclusiveness in the scope of joint authority, namely that the Governing Body may be required to opine on a topic that is not relevant to its jurisdiction or expertise, is outweighed by the risk associated the under-inclusiveness, wherein the Governing Body may be deprived of the ability to opine on a topic that is rightly under its purview.  PGP strongly urges the GRC to consider approaches that start with the presumption that joint authority will be as expansive as possible, and create limitations on joint authority only where justified because a particular rule is irrelevant to the Governing Body’s mission.  The proposed “apply to” test is inadequate precisely because it does not capture or consider the materiality of a particular rule change to a diversity of market participants.  PGP also finds it compelling that there is no corollary rule or carve out for rules that only apply to entities outside of California.  The GRC should seek to create parity across market participants with respect to the types of rules that will fall under joint authority.  Without a separate process for rules that only “apply to” entities outside of California, this is not achieved. Instead of applying the simple “apply to” test that could result in arbitrary outcomes, the GRC should consider creating exceptions to a general rule that all real-time and day-ahead market rules are under joint authority that are rooted in the goal of creating parity across market participants. 

PGP recognizes that, in some instances, a default rule such as that proposed above could create lack of parity or inequities between entities within and outside of California with respect to the types of rules that fall under joint authority.  For instance, there may be tariff or rule changes proposed by individual EIM or EDAM entities for their own tariffs or business practices that will not fall under the scope of joint authority but where a similar rule proposed for the CAISO tariff may get swept into the broad default scope proposed above.  PGP believes this would be rare because in most instances, with respect to real-time and day-ahead market rules, EIM or EDAM Entity tariffs would reflect CAISO rules; however, PGP requests that the GRC explore the possibility of establishing an exception rule that would be based on comparing the treatment of rules proposed by CAISO and those proposed for individual EIM or EDAM entities.  For example, rules associated with the provision of ancillary services for the CAISO BAA may be included in a joint authority scope that covers all real-time and day-ahead rules.  However, the CAISO is not proposing that EDAM will cover the provision of ancillary services for EDAM Entity BAAs so joint authority will not cover the provision of ancillary services for EDAM Entity BAAs.  In this case, the CAISO tariff rules on ancillary services could be appropriately excluded from joint authority. 

PGP acknowledges that this approach may be more difficult to administer and is less of a bright line than the “apply to” test.  However, PGP nonetheless urges the GRC to consider a different framework that more adequately recognizes the reality of a fully integrated day-ahead market. As a next step in considering stakeholder feedback on joint authority, it would be very helpful if the GRC could map the different recommended approaches to expanding joint authority to the existing tariff to determine which portions of the tariff would be under joint authority and which would be excluded.

3. DELEGATION OF AUTHORITY – OTHER TOPICS: Please state your organization’s views on the GRC’s proposal to retain the current processes for designating the decisional classification for initiatives and for resolving disagreements between the Board and the Governing Body on whether to approve a proposal within their shared approval authority.

PGP supports the GRC proposal on decisional classification with the exception of the tie-breaker rule. In the event of a dispute between the Governing Body and CAISO Board on decisional classification that results in a tie, PGP recommends that the tie-breaker authority alternate between the chairs of the two bodies, rather than having the CAISO board act as the tie-breaker in all instances. As PGP has explained in prior comments, under a joint authority model, in the event of a dispute, it is appropriate for equal deference to be granted to the the Governing Body and CAISO Board.

PGP recognizes the substantial enhancements to dispute resolution that were made in earlier phases of the GRC’s work. PGP and other stakeholders provided substantial feedback on the importance of establishing a process to address situations where the Governing Body and Board do not agree whether to approve a proposal that is within their joint authority. PGP believes the current dispute resolution process provides a strong incentive for the Governing Body and the CAISO Board to reach agreement prior to filing a tariff rule or modification by establishing a high threshold for the CAISO Board to act without agreement from the Governing Body. PGP believes this should be the overarching goal of the joint authority model and that tariff rules or modifications that do not have the support of both the Governing Body and the CAISO Board should occur only in very limited and extreme circumstances. PGP supports CAISO maintaining the current dispute resolution process.

4. SIZE AND COMPOSITION OF THE GOVERNING BODY: Please state your organization’s views on the issues discussed in Section IV of the GRC’s Straw Proposal, including: a) The size of the Governing Body, b) The Nominating Committee’s evaluation of sitting Governing Body members seeking re-appointment, and c) Compensation for Governing Body members.

PGP supports retaining the size of the Governing Body at five members at the outset of EDAM. PGP appreciates that additional members could enhance the collective experience of the Governing Body, but it remains to be seen whether this is necessary for EDAM, and as the GRC notes, this would also result in increased expense and administrative burden. As EDAM matures, PGP believes this topic could be reassessed. Likewise, PGP recommends that current compensation for the Governing Body be reassessed as EDAM evolves, if challenges arise in attracting members qualified to oversee EDAM.

The GRC also seeks feedback on whether the Nominating Committee should be required to evaluate qualifications of a sitting Governing Body member who wishes to seek an additional term after the EDAM transition. The current selection policy allows the Nominating Committee to re-nominate these members without interviewing other candidates, but because the current members of the Governing Body were selected to be responsible over the EIM only, the GRC believes it would be appropriate to require that Nominating Committee consider whether that member has the qualifications to serve given the additional responsibilities associated with EDAM. PGP supports the GRC’s proposal as a reasonable mechanism to ensure sitting EIM Governing Body members who transition to EDAM are well-qualified.

5. STAKEHOLDER ENGAGEMENT: Please state your organization’s views on the issues discussed in Section V of the GRC’s Straw Proposal, including: a) Increasing the use of stakeholder working groups as part of policy initiatives, b) Beginning the annual roadmap process for prioritizing policy initiatives with panel discussion of sector representatives hosted by the RIF, and c) Allocating the two liaisons for the RIF’s public interest and consumer advocate sector – one to consumers advocates and one to other public interest organizations.

PGP appreciates the GRC’s consideration of additional enhancements to the governance framework that would increase stakeholder engagement. PGP believes there are many elements of the CAISO’s stakeholder process that are working well today. For example, PGP notes the high-level of engagement across stakeholders in CAISO policy initiatives and supports the transparent and open process CAISO uses to ensure all stakeholders are able to participate and engage in policy discussions. 

That said, PGP recognizes and understands the interest from some stakeholders for a more stakeholder-driven process to guide CAISO policy prioritization and the initiative/proposal development. PGP believes it is important to strike the right balance in this regard. While it is appealing to envision a process where stakeholders have more influence over the discretionary initiatives CAISO undertakes and are involved in developing policy initiatives and proposals, PGP notes there are likely very few stakeholders who have the resources to dedicate to developing policy proposals across a wide range of complex market initiatives.

PGP believes the GRC’s proposal to begin the annual roadmap process for prioritizing policies with a panel discussion of sector representatives hosted by the Regional Issue Forum strikes the right balance in taking steps to enhancing stakeholder engagement and increasing stakeholder involvement in the policy initiative prioritization process. PGP also agrees with the GRC that consumer advocates and public interest organizations, which are currently in a single RIF sector, with two RIF liaisons, should be composed of one state-sanctioned utility consumer advocate and large customer representative, and the other liaison be chosen by the public interest groups in the sector, thus recognizing the unique perspectives among consumer advocates and public interest organizations.

PGP also supports the GRC’s proposal to provide more meaningful input by stakeholders in the decision-making process by increasing the use of stakeholder working groups as the early stage of policy development, as was done for the EDAM initiative. PGP notes that it will be important for the CAISO to consider stakeholder resources in the expanded use of working groups. While PGP believes there is merit in using working groups to achieve consensus on policy issues, we note the high level of stakeholder resources that were required to participate in such work groups in the EDAM initiative and suggest that these be used with discretion. PGP also encourages CAISO to continue hosting workshops with stakeholder-led presentations and panels as a way to increase stakeholder engagement and share perspectives, recommendations and solutions. For example, the current price formation enhancements initiative was initiated with a workshop of stakeholder presentations that were informative and effective at shaping the scope and issues in that initiative. These kinds of workshops may be an option to increase stakeholder influence on policy initiatives and proposals in a way that is less resource intensive than working groups and therefore accessible to more stakeholders.

6. CLARIFYING CAISO’S RESPONSIBILITIES: Please state your organization’s views on the proposal to clarify the CAISO’s responsibility to consider the interests of all regional stakeholders, as discussed in Section VI of the GRC’s Straw Proposal.

PGP appreciates the CAISO legal staff perspective that the CAISO Board is not legally required to act exclusively in the interest of California electric consumers. Notwithstanding the above, PGP does believe it is helpful to add language that states this directly in the CAISO’s bylaws and we support the GRC’s proposal to include language that achieves this. PGP offers one suggested edit to the proposed language which we believe would further clarify the GRC’s intent, which is to indicate that the CAISO Corporation and Board will go beyond simple consideration of all stakeholder interests but will balance those interests appropriately. .

“Consistent with its status as a non-profit public benefit corporation, and to enhance the efficient use and reliable operation of the ISO Controlled Grid, the Corporation will balance the interests of all stakeholders within the footprint of the markets that it administers, including the Corporation’s balancing authority area, EDAM balancing authority areas and EIM balancing authority areas.”

7. Other Comments: Please set forth here any further comments your organization may have on the GRC’s Phase 3 Straw Proposal or related governance topics.

No additional comments.

1. Please state your organization’s overall views on the GRC’s Phase 3 Straw Proposal.

Western Resource Advocates (WRA), Sustainable FERC Project, Renewable Northwest, Clean Energy Buyers Association, NW Energy Coalition and Western Grid Group (collectively, “Joint Commenters”) appreciate the opportunity to provide comments to the Western EIM (WEIM) Governance Review Committee (GRC) on the GRC’s Phase Three (EDAM) Straw Proposal dated July 15, 2022 (“Straw Proposal”).[1]  The Joint Commenters are very supportive of regional coordination efforts, such as CAISO’s Extended Day-ahead Market Initiative (EDAM). Organized markets are the key to achieving a reliable, modernized, cost effective and low carbon Western electricity grid.  Expansion of real-time electricity markets in the West to include the day-ahead timeframe can enhance reliability by improving day-ahead unit commitment and the speed and quality of the system response to changes in net load and other contingencies[2] and can have significant economic benefits.[3]  Governance is a key component of market design and can weigh heavily in the decision to join a specific organized market, as has historically been the case in the West.  The Joint Commenters acknowledge the effort put in to the current proposal reflects a willingness of the CAISO and its stakeholders to evolve the governance structure of the market as new market offerings are developed.  

The Straw Proposal is a strong start to a final set of recommendations from the GRC on changes to the EIM governance structure and processes (“EIM governance”) to support the extension of CAISO’s day-ahead market offering for EIM Entities.  We commend the GRC on their commitment to this process and the quality of their work. The Straw Proposal builds on the EIM governance changes recently negotiated and implemented in Phase Two of the governance review[4] and includes recommendations that, if adopted, will continue to evolve a more regional decision-making process. EDAM may not, and should not, be the final stopping point for regionalization and modifications made now should be made with that potential future in mind. The Joint Commenters find that, in many respects, the recommendations in the Straw Proposal meet that goal.

The EDAM governance design is not intended to be a model for RTO governance.  The Joint Commenters agree with the GRC; in order for the West to have a multi-state RTO, an independent board free from disproportionate influence of any one state will be required.  This will likely require changes to California state law. Though increased reliability and cost savings are expected from this incremental expansion in regionalization, a market that falls short of a full multi-state RTO leaves significant benefits on the table.[5]

In summary, the Joint Commenters:

1. Find that the Straw Proposals is generally a strong start to a final set of governance recommendations that will support the Extended Day-ahead Market (EDAM).
2. Support the GRC’s recommendation to retain and expand the joint authority model over an expanded set of market rules.
3. Support the GRC’s recommendation that, at a minimum, the scope of joint authority should be increased by using the “apply to” test and provide some considerations for evaluating whether and how to expand the scope further.
4. Support a review of the Western EIM Governing Body (“Governing Body”) member compensation rather than an expansion of the Body from five to seven members.
5. Make the following observations and recommendations on stakeholder engagement:
   1. Support the GRC’s recommendation to provide for more meaningful stakeholder input in the decision-making process by increasing the use of stakeholder working groups at the early state of policy development.
   2. Support the GRC’s recommendation to create a roundtable discussion hosted by the Regional Issues Forum (RIF) to provide CAISO feedback on priorities for discretionary initiatives.
   3. Support the solicitation of feedback on the GRC’s proposal to specify how liaisons in the public interest group and consumer advocate (CA) sector will be chosen; however, the decision is ultimately up the RIF liaisons and their respective sector members.  
6. Support the GRC’s proposal to clarify the role of the regional market and fair treatment of regional stakeholders through amendments to the CAISO Bylaws.
7. Request a process to allow feedback from stakeholders on the work proposed for the Governing Body market expert (GBME).

[1] CAISO, Western EIM Governance Review– Phase Three (EDAM) Governance Review Committee Straw Proposal (July 15, 2022), available at: http://www.caiso.com/InitiativeDocuments/EDAM-Governance-Straw-Proposal-WEIM-Governance-Review-Committee-Phase-3.pdf (“Straw Proposal”).

[2] Remarks of Commissioner K. Raper, Idaho PUC, on behalf of WIRAB, to the Federal Energy Regulatory Commission, Docket No. AD21-11-000, at 1 (Sept. 30, 2021), citing WECC MIC MEA Working Group, Reliability Implications of Expanding the EIM to Include Day Ahead Market Services: A Qualitative Assessment, (September 2020), available at: https://www.wecc.org/Reliability/EIM%20DAMS%20Market%20Paper.pdf.

[3] See e.g., Energy Strategies, The State-Led Market Study (July 30, 2021) (finds both economic and reliability benefits from adding day-ahead market services), available at: https://static1.squarespace.com/static/59b97b188fd4d2645224448b/t/6148a012aa210300cbc4b863/1632149526416/Final+Roadmap+-+Technical+Report+210730.pdf.

[4] CAISO, Western EIM Governance Review Committee Part One Final Proposal (May 6, 2021), available at: http://www.caiso.com/InitiativeDocuments/Part-One-Final-Proposal-EIM-Governance-Review-May-2021.pdf; CAISO, Western EIM Governance Review Governance Review Committee Part Two Final  Proposal (July 19, 2021), available at: http://www.caiso.com/InitiativeDocuments/Part-Two-Final-Proposal-EIM-Governance-Review-August-2021.pdf.

[5] The economic (and other) benefits of a Western multi-state RTO have been reported in a number of studies. See, e.g., The State Led Market Study; Advanced Energy Economy, Western RTO Economic Impact Study Region-Wide Analysis (July 26, 2022), available at: https://www.aee.net/western-rto.

2. DELEGATION OF AUTHORITY – TYPE: Please state your organization’s views on the proposal to retain the joint authority model as the structure of the delegation to the Governing Body, as discussed in Section III(B)(1).

The Joint Commenters support the GRC’s recommendation to retain the joint authority model and expand the scope of issues that will fall within joint authority.  The joint authority model requires an affirmative vote, after discussion, of a majority of both the Governing Body and the CAISO Board of Governors (“Board”) before CAISO can file new tariff rules for approval at the Federal Energy Regulatory Commission (FERC).[1]  Pursuant to the joint authority model, the Governing Body and Board meet in joint session to discuss and consider proposed tariff changes that fall within the shared authority framework. 

Retaining and expanding on joint authority has a number of advantages. It builds upon the structure recently established in Phase Two of the EIM Governance Review. It equitably shares authority between the two governing bodies ensuring that the Governing Body has a shared role in approving policy initiatives that will establish or change rules that apply to EDAM participants.  The joint authority model is more transparent than the primary authority model (previously used in the WEIM)[2] because the joint authority model substantially simplifies the process,[3] is more straightforward to administer, and is less likely to lead to unexpected results.  Further, the joint authority model supports holistic engagement by the two governing bodies, providing an opportunity for broader understanding and enhancing trust between the two bodies, market participants and other stakeholders.  In summary, the joint authority model supports and advances a potential future governance structure that can support a multi-State RTO. 

[1] There is an exigent circumstances exception. The Board alone may authorize a FERC filing if, by unanimous vote, they find the two bodies have reached an impasse and exigent circumstances exist.  CAISO, Charter for Energy Imbalance Market Governance, v.1.5, §2.2.2 (Sept. 23, 2021), available at: https://www.westerneim.com/Documents/CharterforEnergyImbalanceMarketGovernance.pdf, (“EIM Charter). 

[2] CAISO, Charter for Energy Imbalance Market Governance, v.1.3, §2.2.1 (May 27, 2019) (“EIM Charter v.1.3"); CAISO, Guidance for Handling Policy Initiatives within the Decisional Authority Role of the EIM Governing Body, v. 1.1, §II (May 27, 2019) (“Guidance for Handling Policy Initiatives, v.1.1”).

[3] The Primary Authority Model included designating a proposed market change into one of four decisional categories (i.e., primary, advisory, hybrid motivated by the EIM, and hybrid not motivated by the EIM), and maintaining a different approval process for each of the four categories.  Further, subjective standards, such as, “motivated by” and “primary driver” were used to make the classifications. See, EIM Charter, v.1.3, §2.2; Guidance for Handling Policy Initiatives, v.1.1, §II.

3. DELEGATION OF AUTHORITY – OTHER TOPICS: Please state your organization’s views on the GRC’s proposal to retain the current processes for designating the decisional classification for initiatives and for resolving disagreements between the Board and the Governing Body on whether to approve a proposal within their shared approval authority.

A.  Scope of authority.

The Joint Commenters support the GRC’s recommendation that, at a minimum, the scope of joint authority should be increased by using the “apply to” test. This test means that in addition the Governing Body’s shared approval authority over EIM and other real-time rules, the Governing Body will have joint authority over “all proposals to establish or change any tariff rules that apply to EDAM balancing authority areas, EDAM Entities, or other market participants within the EDAM Entity balancing authority areas, in their capacity as participants in the EDAM.”  The scope of this joint authority excludes, without limitation, any proposals to change or establish tariff rule(s) applicable only to the CAISO balancing authority area or to the CAISO-controlled grid. 

This approach entails a substantial expansion of the Governing Body’s authority. Examples of tariff sections that fall within the “apply to” test are provided in the Straw Proposal, as well as sections that are generally excluded.[1]  The Joint Commenters support the “apply to” test for a number of reasons. The “apply to” test would allow the Governing Body’s scope of authority to grow over time to the extent that new market rules or products are developed and made applicable to the EIM or EDAM market participants.  The “apply to” test provides an expansion of scope that is commensurate with the increased commitment that will be made by EDAM participants.  Further, the “apply to” test is more objective than the alternative “impact test”[2] and is clearer and easier to administer. Finally, the “apply to” test will build upon, and be consistent with, the process that is currently used for the WEIM.[3]

The Joint Commenters also support the GRC’s recommendation to expand the Governing Body’s advisory authority. The Governing Body may provide advisory input over proposals to change or establish tariff rules that would apply to the real-time and/or day-ahead market but are not within the scope of joint authority. The recommended change is indicated by the bold-italic font. Again, the recommended expansion in scope is consistent with the increased commitment that will be made by EDAM participants.

B. Expanding the scope of joint authority beyond the “apply to” test.

The GRC seeks stakeholder comments on whether to expand the scope of authority beyond the “apply to” test.  The following two options are under consideration:

1. Develop a set of specifically identified topics to be decided under joint authority that are in addition to those covered by the apply to test, or
2. Extend joint authority to all real-time and day-ahead market rules but create a defined set of exceptions or exclusions for topics that would remain subject to the Board’s sole approval.

There are legitimate concerns regarding the Governing Body’s limited authority over specific issues that would be of significant importance to EDAM entities but do not fall within joint authority as it is proposed.  An example that arises regularly is the treatment of “wheel through” transmission in the CASIO balancing authority area.  In evaluating any option to expand the scope of joint authority, or whether to expand at all, the Joint Commenters recommend the GRC consider the following:

• The extent of the expansion. The Governing Body’s scope of authority related to the WEIM increased significantly in September 2021.  The additional increase in joint and advisory authority recommended by the GRC, and supported by the Joint Commenters, related to the EDAM will be another a substantial increase. 
• The potential for other paths of influence. The Governing Body may have influence over important issues that do not fall within joint authority through related initiatives that do fall within the Governing Body’s joint authority.
• Balancing the interests of all participants.  It is important to remain cognizant of the different circumstances of distinct classes of entities and the different risks these entities perceive that they have under proposed changes to the governance --specifically, the potential EDAM entities outside of the CAISO balancing authority area that are weighing whether to commit a significantly greater share of their energy transactions in the CAISO market and the entities within the CAISO balancing authority area, that are full participants without the option to withdraw.
• A clear, objective and easy to administer standard.  In the options being considered, how will “specific topics” option 1 or “exceptions or exclusions” option 2 be determined? A clear, objective and easy to apply standard will enhance transparency and trust and minimize unexpected outcomes.
• Enhancing joint authority. Consider whether CAISO can enhance broader stakeholder engagement or provide additional avenues to work with CAISO staff on specific issues that are of significant importance to EDAM Entities but do not fall within joint authority.

C. Resolving disagreements between the Board and Governing Body on approving initiatives that fall within joint authority and the decisional classification of initiatives.

The Joint commenters support the GRC’s recommendation to make no changes to the decisional classification process or the dispute resolution process that would come into play if the Board and Governing Body do not agree on whether to approve an initiative within their shared approval authority.  Both of these issues were deeply explored and vetted in Phase Two of the governance review.  There was essentially no change recommended for the decisional classification process.[4]  The dispute resolution process that applies if the Board and Governing Body do not agree on whether to approve an initiative that falls within their shared joint authority was developed in Phase Two.[5]  Granted the dispute resolution process was explored in the context of WEIM, not EDAM, the provision was only implemented in September 2021and the necessity has not arisen to apply it.

[1] Straw Proposal, at 14-15 (lists 16 sections of the CAISO tariff that would fall under joint authority pursuant to the “apply to” test); Id., at 15, n.7 (lists five sections generally excluded from joint authority pursuant to the “apply to” test).

[2] Straw Proposal, at 15 (“The GRC previously contemplated that [the impact test] approach with the WIEM and found that it did not provide an administrable line that can be used with clarity over time.”), citing CAISO, Western EIM Governance Review Governance Review Committee Revised Straw Proposal, at 10 (December 14, 2020), available at:  http://www.caiso.com/InitiativeDocuments/Revised_Straw%20Proposal_Western_EIM_Governance_Review.pdf.

[3]  EIM Charter, §2.2.1; CAISO, Guidance for Handling Policy Initiatives within the Decisional Authority Role of the EIM Governing Body, v. 1.2, §II (Sept. 23, 2021).

[4]  EIM Charter, §2.2.3 (ii) (weighted voting was added if either body did not have five members seated during voting, otherwise the process is unchanged).

[5] EIM Charter, §2.2.2. There was an exigent circumstances process under the primary authority. EIM Charter v.1.3, §2.2.3.

4. SIZE AND COMPOSITION OF THE GOVERNING BODY: Please state your organization’s views on the issues discussed in Section IV of the GRC’s Straw Proposal, including: a) The size of the Governing Body, b) The Nominating Committee’s evaluation of sitting Governing Body members seeking re-appointment, and c) Compensation for Governing Body members.

A.  Expanding the size of the Governing Body.  

At this time, the Joint Commenters do not recommend increasing the size of the Governing Body.  The GRC is seeking comments on whether the size of the Governing Body should be increased from five to seven members.  Increasing the number of members comes with added cost in time and money, for example: the time and cost of the nomination process including additional work by the Nominating Committee; salary and expenses of additional members; and additional time for voting and debate so that all voices continue to be heard.  Further in December 2021, the Governing Body and Board began meeting in joint session on issues that fall within joint authority.  Ten members of the combined governing bodies meet together to review and discuss potential changes to the CASIO tariff that fall within joint authority.  The time to allow for each member and governor to provide their perspective, debate and vote is already substantial.  This will increase if the scope of joint authority is expanded to support EDAM. Without evidence of the necessity to increase the size of the Governing Body, the Joint Commenters do not support this proposal.

B. Nominating Committee’s evaluation of sitting Governing Body members.  

The Joint Commenters support the GRC’s recommendation for a discrete change in the selection policy applicable to Governing Body members who were selected prior to the implementation of EDAM and who seek re-appointment after the implementation of EDAM.  Under the Straw Proposal, the GRC recommends retaining the Governing Body and expanding its scope of authority to support the EDAM.  EDAM will substantially increase the volume and value of transactions through the regional markets, which will in turn increase the responsibility of the Governing Body.  Therefore, the GRC recommends that the Nominating Committee evaluate whether members appointed before implementation of EDAM and who seek reappointment of another term after implementation of EDAM have “the qualifications to serve given the additional responsibilities associated with EDAM.”[1]  The GRC is not recommending a specific standard to apply; the GRC recommends leaving the decision about appropriate qualifications to the Nominating Committee.  The Joint Commenters expect  that the Nominating Committee members will explain to their sectors how this standard was applied and affected their recommendations as has been the practice in the Public Interest and Consumer Advocate Groups sector for all of the standards included in the Selection Policy.  The Joint Commenters commend the current and past Public Interest and Consumer Advocate representatives for doing an excellent job maintaining communication with their sector about the Nominating Committee’s work, providing thorough explanations for recommendations and gathering feedback to take back to the Nominating Committee.

C. Governing Body compensation.  

The Joint Commenters support a recommendation to the Board to evaluate increasing Governing Body member compensation. The GRC seeks comments about whether to recommend that the Board consider an increase of the Governing Body members compensation to ensure that it can attract and retain members qualified to oversee the EDAM. It is expected that EDAM operations will commence in 2024.[2]  The Governing Body’s responsibilities will substantially increase if EDAM is implemented because of the increase in the scope of their authority and volume of transactions. Further, by 2024, it will be six years since the last compensation review.[3]  Even without considering EDAM, the following are examples of events that have impacted the Governing Body’s work load in just the last four years (2018-2022):  the August 2020 heat wave events; the expanded scope of rules under Governing Body’s authority implemented in September 2021; and the increase of WEIM participants from six EIM Entities in 2017 to 13 in 2022.  A compensation review is justified by either the passage of time and changing labor market or the substantial change in circumstances that will be associated with EDAM implementation.  Each factor on its own has (or will) substantially increased (increase) the role and responsibilities of the GB members. In addition to reviewing the compensation based on a part-time commitment, the compensation review could explore other options, such as, compensation based on the full-time commitment of the Chair and Vice Chair if justified by the workload.  

[1] Straw Proposal, at 21.

[2]EDAM Technical Workshop, presentation, slide 7 (July 26, 2022), available at: http://www.caiso.com/InitiativeDocuments/Presentation-ExtendedDay-AheadMarket-Jul26-27TechnicalWorkshop.pdf.

[3] The Board established the current compensation levels for both governing bodies in 2018. Straw Proposal, at 21, n.14.

5. STAKEHOLDER ENGAGEMENT: Please state your organization’s views on the issues discussed in Section V of the GRC’s Straw Proposal, including: a) Increasing the use of stakeholder working groups as part of policy initiatives, b) Beginning the annual roadmap process for prioritizing policy initiatives with panel discussion of sector representatives hosted by the RIF, and c) Allocating the two liaisons for the RIF’s public interest and consumer advocate sector – one to consumers advocates and one to other public interest organizations.

The Straw Proposal includes a graphic that attempts to capture the general participation models in RTOs around the country.[1]  The Joint Commenters agree that CAISO’s participation model falls into the upper left quadrant:  the engagement process is open equally to all (rather than providing superior opportunities to market participants or a subset of stakeholders); and decisions are made by an independent body, the Board and Governing Body (as opposed to providing decision-making authority or at least greater influence to market participants or a subset of stakeholders).  CAISO’s governance structure is recognized as unique among the RTO governance models in the United States.[2]  The Joint Commenters strongly support a model of stakeholder engagement that falls into the upper left quadrant of the graph. It is most closely aligned with good governance principles which underpin any regional collaboration that protects consumers and supports state policy mandates in the Western electricity grid:

• Independent Board
• Transparency
• Meaningful, effective and diverse stakeholder engagement 
• Significant role for commissioners and others who represent the public interest.

We view these principles as consistent with the Multi-state Electric Organization Principles and FERC’s stakeholder involvement policy which is included in FERC Order 719.[3]  Ensuring that the principles of good RTO governance are observed and implemented will significantly enhance the ability of SPP’s RTO to adequately consider the larger public interest and to appropriately leverage all stakeholder input to achieve maximum market efficiency.[4]

A.  Increasing use of working groups as part of the policy initiatives stakeholder process.

The Joint Commenters support the GRC’s recommendation to provide for more meaningful input for stakeholders in the decision-making process by increasing the use of stakeholder working groups at the early stage of any policy development.  Typically, initiatives are developed by CAISO staff; stakeholders react to staff drafted issue papers and proposals.  In some recent cases, such as EDAM, CAISO has started the process with working groups of stakeholders who collaborate to develop high-level policy approaches on key aspects of the initiative. The GRC is recommending that CAISO expand the use of this approach for “any initiative that is complex enough to have a wide range of possible solutions and is significant enough in terms of impact to market participants or other stakeholders to be worth the extra work.”[5]  The working group approach is an example of CAISO’s responsiveness to stakeholder concerns and the organization’s ability to adapt. This approach has proven successful in the EDAM initiative and will enhance stakeholder engagement and lead to improved market design and solution development.  The Joint commenters agree that the approach should be institutionalized though the standard for its application could be better defined.

B.  RIF round table for road map development.

The Joint Commenters support the GRC’s recommendation to create a roundtable discussion hosted by the RIF to provide CAISO feedback on priorities for discretionary initiatives.   The GRC envisions a roundtable discussion in which each stakeholder sector designates a representative to articulate their sector’s priorities during a RIF meeting, with members of the Board and Governing Body in attendance. If there were a consensus among the sectors that a certain initiative or set of initiatives should be a priority, that would be essential information for the remainder of the roadmap process, though RIF consensus will not guarantee inclusion in the Road Map as there are other considerations. The RIF’s role has recently been expanded[6] and the RIF has been discussing how to best facilitate its new responsibilities. The round table will provide the RIF sectors one avenue for collecting and sharing opinions and is a concrete step as the RIF progressively grows into its expanded role.

C.  Selection of the two liaisons for the RIF’s public interest and consumer advocate groups sector.

The Joint Commenters support the solicitation of feedback on the GRC’s proposal to specify how liaisons in the public interest and consumer advocate groups sector will be chosen; however, the decision is ultimately up to the RIF liaisons and their respective sector members. The RIF is composed of six sectors, one of which is the “public interest groups and consumer advocate groups that are actively involved in energy issues within the EIM footprint.”[7]  Pursuant to the RIF Operating Guidelines, this sector will include one liaison from organizations that represent end-use customers and one liaison from organizations that represent other public interests.[8]  The GRC proposes that this sector be composed of one liaison chosen by representatives of state-sanctioned utility consumer advocates and large consumer representatives and the other liaison chosen by the public interest groups within the sector.

The Joint Commenters, many of which are part of the RIF public interest and consumer advocate groups sector, support consideration of this proposal and welcome feedback through the governance review process. However, the GRC should recognize the following.  The RIF has been formed by the identified sectors, and is not a committee or sub-committee of or established by the ISO Board of Governors or the ISO EIM Governing Body.[9]  The RIF is expected to establish its own procedures and methods of operation[10] and has done so by adopting Operating Guidelines and works through consensus across sectors and within each sector.  Review and changes to the Operating Guidelines are made by the RIF as needed upon consensus of the liaisons.[11]

Public interest and consumer advocate groups have traditionally strived to work for consensus even when there are diverging viewpoints.  It is important to remain cognizant of different goals and views, but just as important to be conscious of commonalities.  In wholesale energy market stakeholder processes, the public interest is typically represented by nonprofits (i.e., environmental and reliability public interest groups), state consumer advocates and state regulators.[12] These groups typically represent larger public interests such as long-term grid reliability, environmental impacts and the interests of non-participants such as rate payers. These groups also provide an important voice for accountability.   Examples of specific areas in which there has historically been commonality include market performance, economic and environmental benefits of market initiatives, market expansion and good governance principles such as equal access, transparency and fairness.

Just as public interest groups are not always unanimous in their views and consumer advocate groups are not always unanimous in their views, the combined sector will not always have unanimous views.  However, there is value in the sector as a whole.  Joint meetings provide for joint dialogue and discussion and a broader understanding of issues by all sector members. Additional benefits, especially for organizations with limited resources, include:

• Sharing organizing and administrative functions
• Sharing attendance and coverage of CAISO meetings, workshops, etc.
• Sharing in insights and information drawn from a broader group
• Potentially sharing research and drafting responsibilities for comments and other feedback as the RIF grows into its expanded role.

These benefits allow sector members to more comprehensively and efficiently engage in the RIF.  As the RIF grows into its expanded role, the Joint Commenters will continue to support policies and processes that ensure all voices are heard.

The Joint Commenters recommend a review of the RIF sectors and sector definitions periodically. Currently, the RIF is composed of six stakeholder sectors. The sectors were reviewed and updated in Phase Two of the GRC’s review to reflect changes in the market and market participation.  This practice should continue.[13] As the market continues to grow and evolve, the RIF sectors and sector definitions should be reviewed periodically to reflect significant changes in the market or engaged stakeholders. For example, large clean energy buyers have become increasingly engaged in market design and governance and may warrant more representation in future Western wholesale market structures.

[1] Straw Proposal, at 23.

[2] E.g., Shelley Welton, Rethinking Grid Governance for the Climate Change Era, 109 Cal. L. Rev. 209, 229 (February 2021) available at: https://www.californialawreview.org/print/rethinking-grid-governance/ (CAISO’s decision-making process operates similar to the “standard administrative process of a government agency.”); Id., at 253  (Research suggests that the processes (outside of California) excel at producing reforms that serve incumbents’ business interests but struggle to effectuate reforms that enhance competition or shrink the demand for electricity).

[3] Multi-state Electric Organization Governance Principles (April 14, 2022) (endorsed by the following states: AZ, CA, CO, ID, MT, NV, NM, OR, WA, and WY), available at: https://www.westernenergyboard.org/wp-content/uploads/Multistate-Governance-Principles-4-25-22.pdf; Federal Energy Regulatory Commission, Order No. 719: Wholesale Competition in Regions with Organized Electric Markets, Docket Nos. RM07-19-000 and AD07-7-000, Oct. 17, 2008, available at: https://www.ferc.gov/media/order-no-719 (“FERC Order 719”).

[4] Integrating Western Parties into SPP’s RTO: Terms & Conditions, Comments of Public Interest Organizations, Attachment A at 1 (June 30, 2021), available at:  https://spp.org/Documents/65373/Final%20PIO%20Comments%20-%20SPP%20RTO%20West%20Terms%20and%20Conditions%206-30-21.pdf; cf. Energy Freedom Colorado, Comments on Wholesale Market Options for Colorado Utilities, Colorado PUC Docket no. 161-08-16E, §3 (April 2, 2018), available at: https://energyfreedomco.org/puc-mwtg-efco-comment5.php (An insular governance model with voting power vested largely in generation and transmission owners, as well as consensus-driven decision-making rather than more democratic across many stakeholder groups, “is a recipe for maintaining the status quo at a time when adaptability to a changing energy landscape is needed.”); Welton at 209, 213 (Most RTOs are structured as private industry clubs in which industry members “vote” on the rules for regional electricity markets and grid operation; this arrangement often serves as an impediment to progress on clean energy and energy conservation measures that lead to lower costs.)

[5] Straw Proposal, at 24.

[6] For example, changes implemented in September 2021 empowered the RIF to collect stakeholder input and provide written opinions on issues being considered within an ongoing CAISO stakeholder proceeding. Operating Guidelines Energy Imbalance Market Regional Issues Forum, at 1-2 (revised September 2021), available at: https://www.westerneim.com/Documents/OperatingGuidelines-EIMRegionalIssuesForumRevisedSep2021.pdf (“RIF Operating Guidelines”).

[7] EIM Charter, §7; RIF Operating Guidelines, Composition and Governance, §1a(iv).

[8] RIF Operating Guidelines, Composition and Governance, §1a(iv).

[9] RIF Operating Guidelines, at 1.

[10] EIM Charter, §7.1.1. 

[11] RIF Operating Guidelines, at 5.

[12] Michael H. Dworkin and Rachel Aslin Goldwasser, Ensuring Consideration of the Public Interest in the Governance and Accountability of Regional Transmission Organizations, 28 Energy L. J. 543 (July 1, 2007), available at: https://www.eba-net.org/assets/1/6/10-Governance_of_RTOs.pdf.

[13] See e.g., James et al., How the RTO Stakeholder Process Affects Market Efficiency, R Street Policy Study No. 112, at 13, 19 (October 2017), available at: https://www.rstreet.org/2017/10/05/how-the-rto-stakeholder-process-affects-market-efficiency/ (discusses the value of periodic reviews).

6. CLARIFYING CAISO’S RESPONSIBILITIES: Please state your organization’s views on the proposal to clarify the CAISO’s responsibility to consider the interests of all regional stakeholders, as discussed in Section VI of the GRC’s Straw Proposal.

The Joint Commenters support the GRC’s proposal to clarify the role of the regional market and fair treatment of regional stakeholders through amendments to the CAISO Bylaws.  A few stakeholders raised the concern that California law governing the CAISO requires CAISO to act in the interest of California electric consumers at the expense of the interests of other market participants. In response to this concern, CAISO legal counsel issued a legal analysis that explains that the Board is not required by law to favor California ratepayers over other market participants.  To provide stakeholders with a stronger assurance that California law does not require favoritism, the GRC recommends adding the following clause to the CAISO Bylaws:

Consistent with its status as a nonprofit public benefit corporation, and to enhance the efficient use and reliable operation of ISO Controlled Grid, the Corporation will consider the interests of all stakeholders within the footprint of the markets that it administers, including the Corporation’s balancing authority area, EDAM balancing authority areas and EIM balancing authority areas.

Further, the GRC recommends that the Bylaws should also clarify individual Governors share the same obligation.

The Joint Commenters support these amendments and view this as a positive step given the limitations of the GRC’s scope.   Ultimately, however, it is unlikely that a satisfactory governance model for a full multi-state RTO option is possible within the delegation of authority model.  Potential EDAM participants will likely consider this as they evaluate the day ahead market options that become available for Western utilities.  The Joint Commenters believe that evidence that can support optimism that a legislative change is possible will enhance support for CAISO market options. 

7. Other Comments: Please set forth here any further comments your organization may have on the GRC’s Phase 3 Straw Proposal or related governance topics.

A.  The Governing Body market expert (GBME).

In May 2021, the Governing Body and Board jointly approved the ability of the Governing Body to retain a GBME to provide the Governing Body with advice on market design issues.  The Governing Body recently hired the GBME. The GBME will provide evaluations and technical opinions, as well as, routine market-related analysis and reports as specified by Governing Body. The GBME has an important role and her work can influence opinions and decisions by the Governing Body and others. The Joint Commenters propose establishing a process by which stakeholders can provide feedback on the proposed work for the GBME. The process would provide stakeholders with the opportunity to review and comment on the scope of work and direction given to the GBME.

B.  Stakeholder process.

The Joint Commenters appreciate CAISO’s stakeholder policies and resources which maximize transparency and support effective stakeholder participation, especially for stakeholders with limited resources, like public interest organizations, for example:

• Posting meeting notices and materials (including agendas) prior to meetings;
• Providing a sufficient period of time to develop comments on CAISO’s work products;
• Providing virtual access to all meeting;
• Recording all meetings and providing access to the recordings on a public website;
• Maintaining a well-organized and easy to use website;
• Providing a user-friendly application to submit and review stakeholder comments; and
• Including in written proposals summaries of stakeholder comments and the basis for the recommendations made in the proposals. 

These resources and policies have made it easy to effectively track the GRC’s work.  The Joint Commenters provide two recommendations for improving the process: 1) conduct more meetings as general sessions; and 2) extend the scheduled duration for general sessions, especially those that will be used to explain and discuss lengthy documents like proposals.

The Joint Commenters appreciate this opportunity to provide comments on the GRC’s initial recommendations for Phase Three (EDAM) of the governance review.

1. Please state your organization’s overall views on the GRC’s Phase 3 Straw Proposal.

PPC Perspectives on Extended Day Ahead Market Governance

PPC has repeatedly emphasized the importance of instituting a strong, independent governance approach for a day ahead market that equitably balances and considers the needs of all participants.  Participation in any market requires an evaluation of the associated risks and benefits.  We have consistently noted that the magnitude of trading activity impacted by the expansion of CAISO’s day ahead market raises much greater concerns with the market’s governance structure compared to the risks of participating in the EIM which has a more limited scope.  PPC has identified the need for durable, independent governance as a requisite condition for an integrated day ahead market due to this much greater impact.

While the proposal set forth by the Governance Review Committee (GRC) continues to identify incremental improvements over the current EIM governance design, this proposal falls short of offering regional participants the durable, independent governance that would assure all participants that they will be treated equitably in the development and implementation of a day ahead market.  The GRC appears to have explored every available avenue within its authority in the interest of creating a governance structure which would support regional participation in a day ahead market.  Unfortunately, the current law restricts the options available to the GRC and perpetuates a governance structure that, in perception if not in practice, is centered around a subset of the markets’ participants.  Absent legislative changes aimed to “regionalize” governance and establish an independent governance structure appropriate to support a multistate market footprint, it will be very difficult for PPC to support BPA’s participation in EDAM.  The lack of independent governance also creates a barrier for participation for some individual PPC members.

The GRC Has Developed Meaningful and Necessary Improvements

PPC appreciates the hard work of the GRC, CAISO staff, and other stakeholders over the past several years to continue to look for potential improvements in CAISO’s governance structure.  In the first phase of this effort, focused on improving EIM governance, the GRC developed meaningful enhancements to the existing governance of the EIM market, which have since been adopted.  Chief among these were changes which expanded the scope of authority for the EIM Governing Body, including the creation of the joint authority model and an approach to dispute resolution which provided as much consideration as possible for the EIM Governing Body.  Now, as the GRC turns to developing a framework for a potential Extended Day Ahead Market (EDAM) governance, the GRC continues to doggedly pursue improvements within the confines of CAISO’s existing legal framework, working to provide all market participants greater assurance that decision-making over the EDAM will be non-discriminatory and inclusive.  Unfortunately, the current statutory structure hinders the GRC’s ability to adopt such policies.  This leaves entities outside of California, even under the best possible proposal from the GRC, relying on a decision-making body that governs pursuant to revocable and incomplete delegation of authority from a group of political appointees of the State of California.  PPC has been consistent and transparent in registering these concerns, explaining on December 14, 2020 in response to the GRC’s Revised Straw Proposal[1]:

For PPC, the central governance questions pertain to the role that the CAISO Board will play in approving policy initiatives to change the market rules, and how that role is defined and shared with the Governing Body.  The role of the CAISO Board is important because of its legal connection to the State of California and the risk – or the perception of the risk – that the Board is not truly independent, may be reluctant to address concerns of all the market participants, and may be unduly influenced by the State and the State stakeholders in its initiatives and decisions that impact a broader regional market.

These questions surrounding the CAISO Board’s perceived lack of independence from the State of California are not new.  In fact, the Federal Energy Regulatory Commission (FERC) has previously considered the governance issues surrounding the CAISO Board, and although FERC’s rulings were ultimately vacated by Federal court on the grounds that FERC exceeded its statutory authority under the Federal Power Act, its reasoning remains informative and its sentiment persists.^[2]  FERC ruled that the CAISO was “not sufficiently independent” because of its Board.^[3]  FERC explained that the “primary problem” with the CAISO Board “is the extent to which it and, in turn, the CAISO are controlled by the State,” given that all the Board members are selected by the California Governor and serve at his pleasure.^[4]  This structure, FERC reasoned, “established a decision-making process that is heavily influenced, if not completely dictated, by one stakeholder (i.e., the State).”^[5]  FERC noted that the Board’s lack of independence from the State, and the State’s potential influence over the market, resulted in the impression that the CAISO would not provide equal treatment to all market participants and ruled that “the Board’s lack of independence presents a significant impediment to a well-functioning Western energy market.”^[6]  Specifically, “[c]ontrol of the Board by one state threatens the CAISO’s ability to treat in-state and out-of-state transmission users on a non-discriminatory basis, thus undermining the prospect of broader regional cooperation throughout the West.”^[7]

Admittedly, some things have improved considerably since the challenges of the early 2000s, but the structure of the CAISO Board has largely remained.  As explained in the legal analysis in Appendix A, IRS regulations require that the “supported organization” – in this case, the State of California – must supervise or control the supporting organization – in this case, the CAISO.^[8]  This relationship is established by the fact that the CAISO Board is selected by the California Governor entirely at the Governor’s discretion.^[9]  An attempt to remove the Board from certain decisions by allowing the Governing Body to unilaterally direct changes to market rules or by irrevocably preventing the Board from changing any delegation or sharing of authority, could negate the showing of control and jeopardize the CAISO’s tax-exempt status.^[10]  PPC appreciates the restrictions arising out of the CAISO’s special status but also recognizes the practical reality that this governance structure retains the possibility and the perception of potential bias.  And even if it is merely a perception of bias, it may be enough to undermine the confidence of market participants in the governance and other aspects of the market and prevent the proper market forces from working. 

These concerns pertaining to the CAISO Board’s retention of ultimate authority and control over the functions delegated to the Governing Body, especially given the legal requirements that the CAISO Board be appointed by the California Governor entirely at the Governor’s discretion, continue to weigh heavily on PPC and its members across Northwest states.  The salient fact remains that the Governing Body can never have complete, irrevocable, independent authority over the rules pertaining to any CAISO market.  Despite the Governing Body’s best intentions, therefore, the net result might be a market governed by rules that are – or perceived to be – unduly influenced by the State of California.

To be clear, PPC is not raising concerns with the current members of the Board of Governors.  On the contrary, we have observed a willingness on their part to support and explore changes that would facilitate a regional expansion of the market.  Instead, we are concerned with the legal construct of the Board which may result in applications of the Board’s duties in the future which are less favorable to the region as a whole.  And we acknowledge that without a legislative change to pursue regionalization more formally, the GRC is limited in its ability to address PPC’s long-term concerns. 

We again commend the GRC for its efforts to address concerns expressed by stakeholders within the unique legal landscape discussed above.  We have also appreciated the information made available by CAISO legal staff in response to questions from PPC and other stakeholders regarding the relationship of the existing statutes with the role of the GRC and with the GRC’s proposal.  Both the initial Appendix A published on April 12, 2021 and the updated Appendix A published with the latest straw proposal provide helpful background for PPC to understand CAISO legal staff’s interpretation of the law and how it might apply in the context of a multi-state market.  We understand that these appendices are intended to work together and build off of each other.  We thank the CAISO legal staff for their efforts to provide this information and further clarify its position and answer questions for PPC.

PPC Concerns with CAISO’s Founding Statutes

As stated above, PPC has appreciated the work done to identify ways to provide additional considerations for out of state parties within CAISO’s existing statutory framework.  We acknowledge the challenges associated with growing and evolving what was initially designed to be a one-state market, to a market which serves and benefits entities across the West.  The desire to explore EDAM is largely due to the success of the CAISO-operated energy imbalance market, which demonstrates that such an evolution is possible.  The mounting challenge, as discussed above, is that the growing scope of the market submits entities to greater risks, and additional certainty is required to ensure that their interests will be considered with equal priority to those of all other participants.

Perhaps any individual element of the CAISO’s statutory framework is not significant enough to cause concern on its own, but when considered together, these present a significant barrier to providing out of state participants assurance that impacts to their customers will be considered on par with the interests of California consumers.

We understand the CAISO’s position that there are no conflicts between California law and Federal law or, even if such conflicts exist, they are not irreconcilable. The arguments, as we understand them, are that the California Public Utilities Code does not require CAISO to serve the interests of California ratepayers to the detriment of other market participants and that a larger regional market with broad out-of-state participation is, in fact, in the interests of both California consumers and the broader region.  Further, the argument suggests that competitive pressure from other market options serves as a disincentive for CAISO to discriminate against potential market participants who could then leave to join another market, to the detriment of California ratepayers.  We also appreciate the point that the current CAISO Board of Governors have, in sentiment and in practice, worked to advance a decision structure which would better serve the larger market as a whole.

While PPC does not dispute the validity of such an interpretation of CAISO’s wholistic obligations, this interpretation appears to be heavily influenced by current context, and by the current interest of entities within California to attract out-of-state participants who are currently considering another option.  This interpretation does not address how CAISO’s statutes may be applied in situations where the interests of those within California directly conflict with the interests of one or more out-of-state participants.  There are a number of market design issues where the “transfer of value” between regions is being discussed. 

Under the current legal framework, the ultimate decision-making authority must remain in the hands of a governing body unilaterally appointed by the California Governor and CAISO’s corporate structure requires it to operate to the benefit of the state of California.  When taken together these create sufficient doubt whether a different Board of Governors or a legal interpretation within a context different from today’s would come to the same conclusion about CAISO’s responsibilities.

PPC Remains Committed to Developing the CAISO EDAM Option

Notwithstanding the above concerns, PPC remains committed to continuing to develop the EDAM option with other regional stakeholders.  In this spirit, we offer some additional comments (attached) on the GRC’s EDAM straw proposal.  Likewise, we remain committed to working with stakeholders to develop an EDAM market design which would meet the needs of our members and create benefits for the region.  It is our hope that the governance issues identified above can be addressed to encourage broad participation in EDAM.  At the same time, we must emphasize that these changes to governance are necessary but are not sufficient.  PPC has significant outstanding concerns on several market design issues.  We look forward to working with the CAISO staff and other stakeholders on these issues in the coming months.

PPC offers our sincere thanks to the GRC, CAISO staff and other stakeholders as we work through these challenging issues.

[1] https://stakeholdercenter.caiso.com/Comments/AllComments/f6b52c90-63a6-4802-bc36-4c907ae22e5c#org-9d175506-6fd6-4aee-9ed9-c4919be970ff

[2] California Independent System Operator Corp. v. FERC, 372 F.3d 395, 304 (D.C. Cir. 2004).

[3] Mirant Delta, LLC, 100 FERC ¶ 61,059, at P 49 (July 17, 2002), vacated, California Independent System Operator Corp. v. FERC, 372 F.3d 395, 304 (D.C. Cir. 2004).

[4] Id. at P 50.

[5] Id.

[6] Id. at P 51.

[7] Id. at P 57.

[8] December 14, 2020 Revised Straw Proposal at 51.

[9] December 14, 2020 Revised Straw Proposal at 51 n. 98; see also http://www.caiso.com/Documents/BoardSelectionPolicy.pdf.

[10] December 14, 2020 Revised Straw Proposal at 51.

2. DELEGATION OF AUTHORITY – TYPE: Please state your organization’s views on the proposal to retain the joint authority model as the structure of the delegation to the Governing Body, as discussed in Section III(B)(1).

Given the current statutory framework, and the requirement that the Board of Governors retain ultimate decision-making authority on all CAISO issues, we support the use of the Joint Authority model.  We see additional benefits from the decision-making bodies meeting together, sharing information, and having a shared responsibility for decisions within this context.

3. DELEGATION OF AUTHORITY – OTHER TOPICS: Please state your organization’s views on the GRC’s proposal to retain the current processes for designating the decisional classification for initiatives and for resolving disagreements between the Board and the Governing Body on whether to approve a proposal within their shared approval authority.

PPC continues to support a broad application of Joint Authority, given the interconnected nature of many of the issues in the market.  We would prefer an approach where issues relevant only to the CAISO BAA is excluded from Joint Authority, with all other issues being subject to Joint Authority.  This approach should provide sufficient assurance that the EDAM Governing Body is not making decisions on issues that do not impact EDAM Entities.

4. SIZE AND COMPOSITION OF THE GOVERNING BODY: Please state your organization’s views on the issues discussed in Section IV of the GRC’s Straw Proposal, including: a) The size of the Governing Body, b) The Nominating Committee’s evaluation of sitting Governing Body members seeking re-appointment, and c) Compensation for Governing Body members.

PPC supports a review of EIM Governing Body members at the time of renomination to ensure that they are sufficiently qualified to serve under the expanded scope of an EDAM Governing Body.  PPC does not see specific benefits to altering the number of EIM Governing Body members nor the EIM Governing Body compensation at this time.

5. STAKEHOLDER ENGAGEMENT: Please state your organization’s views on the issues discussed in Section V of the GRC’s Straw Proposal, including: a) Increasing the use of stakeholder working groups as part of policy initiatives, b) Beginning the annual roadmap process for prioritizing policy initiatives with panel discussion of sector representatives hosted by the RIF, and c) Allocating the two liaisons for the RIF’s public interest and consumer advocate sector – one to consumers advocates and one to other public interest organizations.

PPC is generally supportive of the proposed changes to stakeholder engagement.

6. CLARIFYING CAISO’S RESPONSIBILITIES: Please state your organization’s views on the proposal to clarify the CAISO’s responsibility to consider the interests of all regional stakeholders, as discussed in Section VI of the GRC’s Straw Proposal.

PPC is generally supportive of making changes to the CAISO bylaws to state that CAISO’s responsibility is to serve the interests of all market participants.

7. Other Comments: Please set forth here any further comments your organization may have on the GRC’s Phase 3 Straw Proposal or related governance topics.

PPC offers our sincere thanks to the GRC, CAISO staff and other stakeholders as we work through these challenging issues.

1. Please state your organization’s overall views on the GRC’s Phase 3 Straw Proposal.

Overall, the Six Cities support the GRC’s Phase 3 Straw Proposal.  The Six Cities agree with the proposal to extend the existing joint authority model to include matters within the scope of the Day Ahead Market.  At this time, the Six Cities do not support the alternative joint authority formulations that are intended to expand the scope of joint authority beyond the Day Ahead Market. 

2. DELEGATION OF AUTHORITY – TYPE: Please state your organization’s views on the proposal to retain the joint authority model as the structure of the delegation to the Governing Body, as discussed in Section III(B)(1).

The Six Cities support retention of the joint authority model in its current formulation, subject to revision to reflect application of joint authority to market rules that apply to the Day Ahead Market, and agree with the formulation of joint authority on page 14 of the Straw Proposal:

“Joint authority”: The WEIM/EDAM Governing Body will have joint authority with the Board of Governors to approve or reject a proposal to change or establish a tariff rule applicable to the WEIM/EDAM Entity balancing authority areas, WEIM/EDAM Entities, or other market participants within the WEIM/EDAM Entity balancing authority areas, in their capacity as participants in the WEIM/EDAM.  The scope of this joint authority excludes, without limitation, any proposals to change or establish tariff rule(s) applicable only to the CAISO balancing authority area or to the CAISO-controlled grid.

Specifically, the Six Cities agree with the proposal to retain the joint authority model, for the reasons articulated by the GRC—namely, that joint authority promotes collaboration between the Board of Governors and Governing Body and creates strong incentives to reach consensus on challenging issues. 

The Six Cities do not oppose the related revision to the scope of the Governing Body’s advisory authority.  (See Straw Proposal at 14.)

With respect to whether the GRC should propose changes to the “apply to” test in order to expand the scope of joint authority into market rules where, for example, EDAM participants may have an “interest in,” be “affected by,” or experience “impacts from” potential changes, the Six Cities do not support adoption of such alternative formulations, which appear designed to broaden the scope of issues within the CAISO tariff where the Governing Body has joint authority.  The existing structure and scope of the test is both broad and clear, and revising it to ensure that selected topics are placed under joint authority is inappropriate.

In considering the scope of joint authority and whether expansion of joint authority is appropriate, the Six Cities urge the GRC to consider whether subjecting provisions of the CAISO tariff that do not apply to EIM or EDAM participants (but that EIM or EDAM participants may nonetheless have an interest in or be impacted by) should be matched by application of joint authority to counterpart tariff provisions for other EIM or EDAM participants.  For example, if provisions of the CAISO tariff related to the rates, terms, and conditions of wheeling service are made subject to joint authority because EIM or potential EDAM entities may be affected by such provisions, then it would likewise be appropriate to broaden the scope of joint authority to include counterpart provisions in EIM/EDAM entities’ tariffs related to the rates, terms, and conditions of the wheeling services that they offer, because CAISO entities likewise may be affected by or have an interest in such provisions.  Similarly, if CAISO market rules pertaining to resource adequacy are placed under the joint authority as a consequence of EIM/EDAM entities concluding that they are impacted by or have interests in such provisions, then there must be parallel treatment for counterpart provisions of EIM/EDAM entities’ tariffs.  There is no justifiable reason to subject additional provisions of the CAISO tariff to added scrutiny, while not extending that same treatment to EIM/EDAM entities. 

3. DELEGATION OF AUTHORITY – OTHER TOPICS: Please state your organization’s views on the GRC’s proposal to retain the current processes for designating the decisional classification for initiatives and for resolving disagreements between the Board and the Governing Body on whether to approve a proposal within their shared approval authority.

The Six Cities agree that changes to the decisional classification process are not needed at this time.  Likewise, the Six Cities do not perceive a need for changes to the existing procedure for resolving disputes between the Governing Body and Board of Governors. 

4. SIZE AND COMPOSITION OF THE GOVERNING BODY: Please state your organization’s views on the issues discussed in Section IV of the GRC’s Straw Proposal, including: a) The size of the Governing Body, b) The Nominating Committee’s evaluation of sitting Governing Body members seeking re-appointment, and c) Compensation for Governing Body members.

The Six Cities do not have a position on the size of the Governing Body at this time, nor do they take a position on the compensation provided to members.  The Six Cities do support the modest change proposed to the Selection Policy for members under EDAM, which is to supplement the reappointment process for current members to encompass consideration of their qualifications in light of the expanded scope of joint authority to the Day Ahead Market. 

5. STAKEHOLDER ENGAGEMENT: Please state your organization’s views on the issues discussed in Section V of the GRC’s Straw Proposal, including: a) Increasing the use of stakeholder working groups as part of policy initiatives, b) Beginning the annual roadmap process for prioritizing policy initiatives with panel discussion of sector representatives hosted by the RIF, and c) Allocating the two liaisons for the RIF’s public interest and consumer advocate sector – one to consumers advocates and one to other public interest organizations.

The Six Cities support retention of the existing CAISO stakeholder process, which is decentralized and open to wide participation by market participants.  The Six Cities acknowledge and support the proposal for the Regional Issues Forum to provide a venue for discussion of EIM/EDAM policy initiatives and how those may be prioritized. 

The Six Cities also agree with the recommendation to incorporate greater use of stakeholder working groups as part of policy initiatives.  The CAISO’s EDAM-related working groups provided an opportunity for stakeholders to observe how working groups might function, and the Six Cities agree that the working group processes generally added value to the EDAM initiative. 

Finally, the Six Cities do not oppose the proposal regarding the public interest and consumer advocate sector(s) of the Regional Issues Forum. 

6. CLARIFYING CAISO’S RESPONSIBILITIES: Please state your organization’s views on the proposal to clarify the CAISO’s responsibility to consider the interests of all regional stakeholders, as discussed in Section VI of the GRC’s Straw Proposal.

In the Six Cities’ view, the concern underpinning this proposed revision—i.e., stakeholder concerns regarding the potential for the CAISO Board of Governors to elevate CAISO-entity interests above those of other stakeholders—does not reflect the reality of CAISO stakeholder processes or the decision-making of the Board of Governors.  That said, the Six Cities appreciate that this represents an important issue for other stakeholders, and the Six Cities therefore do not oppose the proposal to include in CAISO governing documents the revision(s) suggested in this section, subject to review of the proposed language and the clear understanding that CAISO-entity interests are not to be considered subordinate to interests of stakeholders in other BAAs. 

7. Other Comments: Please set forth here any further comments your organization may have on the GRC’s Phase 3 Straw Proposal or related governance topics.

The Six Cities have no additional comments at this time. 

1. Please state your organization’s overall views on the GRC’s Phase 3 Straw Proposal.

SCE appreciates the opportunity to provide comments on the Governance Review Committee (GRC) Phase 3 Straw Proposal.    SCE would like to thank the GRC on the progress made with developing a review process for when/if an Extended Day-Ahead Market (EDAM) goes live.

SCE is generally supportive of the framework put forth in the GRC Phase 3 Straw Proposal.  The key to SCE’s support is to limit the scope of joint authority to rules that directly apply to, not just impact, EDAM participants.  SCE believes that there needs to a specific rule or procedure in the CAISO tariff (or Business Process Manuals) that applies to an EDAM participant and to which the EDAM participant must comply/conform. Only such “black letter” rules should be subject to Joint Authority.

2. DELEGATION OF AUTHORITY – TYPE: Please state your organization’s views on the proposal to retain the joint authority model as the structure of the delegation to the Governing Body, as discussed in Section III(B)(1).

SCE is supportive of the Joint Authority Model and believes it fosters a more collaborative and efficient process.  In particular, the Joint Authority Model includes a meeting with all members from both governing bodies and allows them to have open discussions before voting on various initiatives.   This is a major improvement over the Primary Authority Model where each governing body has its own separate meeting and voting process.  The collaborative nature of the Joint Authority Model ensures that members fully understand the topics discussed and the perspectives of all stakeholders before voting on an issue.   

3. DELEGATION OF AUTHORITY – OTHER TOPICS: Please state your organization’s views on the GRC’s proposal to retain the current processes for designating the decisional classification for initiatives and for resolving disagreements between the Board and the Governing Body on whether to approve a proposal within their shared approval authority.

SCE supports the GRC’s proposal to retain the current “decisional classification process”.  The current process appears to be a collaborative process that involves input from not only ISO, but also stakeholders.  In addition, the process also engages and informs the Governing Body on a quarterly basis with ongoing initiatives and their decisional classifications. 

SCE supports the current approach for resolving disagreements between the Governing Body and Board which is documented in the Charter for EIM Governance under Section 2.2.2. 

4. SIZE AND COMPOSITION OF THE GOVERNING BODY: Please state your organization’s views on the issues discussed in Section IV of the GRC’s Straw Proposal, including: a) The size of the Governing Body, b) The Nominating Committee’s evaluation of sitting Governing Body members seeking re-appointment, and c) Compensation for Governing Body members.

SCE questions the need to increase the size of the Governing Body members from five to seven.  The ISO board currently has 5 members, so it’s unclear why the Governing Body would need more than 5 members.   SCE opposes expanding the members of the Governing Body if there is a possibility that the current voting construct could change to a pooling of all members (Governing Board and Governing Body) for a single majority vote.  Furthermore, SCE also opposes the expansion of the Governing Body members if there is not enough critical mass of EDAM participants. 

The current process consists of two separate voting streams for each body (Governing Board and Governing Body) and requires majority approval in order for proposed tariff amendments to be filed with FERC.    SCE supports this current “two vote” process, and keeping it in place would be essential if the Governing Body added additional seats.

Please see #7 for further comments.

5. STAKEHOLDER ENGAGEMENT: Please state your organization’s views on the issues discussed in Section V of the GRC’s Straw Proposal, including: a) Increasing the use of stakeholder working groups as part of policy initiatives, b) Beginning the annual roadmap process for prioritizing policy initiatives with panel discussion of sector representatives hosted by the RIF, and c) Allocating the two liaisons for the RIF’s public interest and consumer advocate sector – one to consumers advocates and one to other public interest organizations.

SCE fully supports engaging stakeholders in the policy development process and believes a robust, transparent, and inclusive process increases stakeholder confidence in the decision-making processes.  It also helps ensure that developed policies  benefit the entire market and participants in all geographical areas.  It provides the opportunity for stakeholders to engage with each other to understand and solve difficult issues.  The RIF provides a helpful forum for this process. However, SCE does not believe that stakeholders should have the voting authority to decide whether an initiative can proceed to FERC for filing.  SCE believes the current status quo “advisory only” approach to stakeholder engagement is appropriate.   

6. CLARIFYING CAISO’S RESPONSIBILITIES: Please state your organization’s views on the proposal to clarify the CAISO’s responsibility to consider the interests of all regional stakeholders, as discussed in Section VI of the GRC’s Straw Proposal.

See other comments.

7. Other Comments: Please set forth here any further comments your organization may have on the GRC’s Phase 3 Straw Proposal or related governance topics.

In summary, SCE is supportive of most of the elements set forth in the GRC Phase 3 Straw Proposal.  However, SCE would like to highlight that joint authority should only be in effect when there is an impact to EDAM entities.  For clarity, SCE believes the Governing Body should not have any authority for items that exclusively impact the CAISO, and that authority should only lie with the ISO Governing Board.

Lastly, SCE agrees that joint authority over the Day-Ahead market should not be in effect until after EDAM goes live.  SCE also believes that there should be a consideration for critical mass of EDAM participants before transitioning over to the joint authority.  For example, it would not be logical to transition to joint authority if only one entity is participating in EDAM.  SCE recommends the GRC include a “critical mass of EDAM participants” element as a requirement for the expanded joint authority to become effective.  This should be included as part of the next straw proposal and stakeholder feedback should be requested on what level of “critical mass” is appropriate.

1. Please state your organization’s overall views on the GRC’s Phase 3 Straw Proposal.

Vistra appreciates the Governing Review Committee's work on these challenging topics. Vistra provides our feedback below.

2. DELEGATION OF AUTHORITY – TYPE: Please state your organization’s views on the proposal to retain the joint authority model as the structure of the delegation to the Governing Body, as discussed in Section III(B)(1).

Vistra supports retaining the joint authority model.

3. DELEGATION OF AUTHORITY – OTHER TOPICS: Please state your organization’s views on the GRC’s proposal to retain the current processes for designating the decisional classification for initiatives and for resolving disagreements between the Board and the Governing Body on whether to approve a proposal within their shared approval authority.

Vistra supports the option discussed in the straw proposal that would:

“Extend joint authority to all real-time and day-ahead market rules but create a defined set of exceptions or exclusions for topics that would remain subject to the Board’s sole approval.”

We provide two reasons as an indication of our thinking on why this approach is preferred:

• It will be difficult to brainstorm an exhaustive list of specifically identified topics to be included in addition to “apply to” test, and such we are uncomfortable that this approach would ensure that the Governing Body and Board of Governors share joint authority on items that would impact WEIM and its participants or stakeholders.
• It is much more feasible to identify specific topics outside the scope of “joint authority”.  Vistra proposes that the GRC identify a discrete list of exclusions that are sole authority of the CAISO BOG as the preferable approach.

In practice, Vistra believes two tests would be applied. First, the “Apply To” test where any proposal that applies to EDAM/WEIM participants or stakeholders are under joint authority, regardless of which Tariff sections are impacted. Second, “Carve Out” test where if it did not pass the Apply To test any proposals that would impact Tariff sections that are “carved out” of EDAM/WEIM joint authority unless it meets Apply To test are removed.

4. SIZE AND COMPOSITION OF THE GOVERNING BODY: Please state your organization’s views on the issues discussed in Section IV of the GRC’s Straw Proposal, including: a) The size of the Governing Body, b) The Nominating Committee’s evaluation of sitting Governing Body members seeking re-appointment, and c) Compensation for Governing Body members.

No comments.

5. STAKEHOLDER ENGAGEMENT: Please state your organization’s views on the issues discussed in Section V of the GRC’s Straw Proposal, including: a) Increasing the use of stakeholder working groups as part of policy initiatives, b) Beginning the annual roadmap process for prioritizing policy initiatives with panel discussion of sector representatives hosted by the RIF, and c) Allocating the two liaisons for the RIF’s public interest and consumer advocate sector – one to consumers advocates and one to other public interest organizations.

Vistra provides our recommendation and feedback below.

GRC proposal finds CAISO’s stakeholder model “inclusive and provides for equal access”

In Vistra’s experience the CAISO’s process has challenges with ensuring fair representation of all market participants, in part because there is asymmetrical access to the decision makers at the CAISO staff and leadership level and in part because there is little to no incentive for the CAISO/WEIM policy makers to incorporate stakeholders into the policy making process. It is largely culture where policy making is seen as primarily the responsibility of CAISO/WEIM/EDAM staff instead of a collaborative effort with stakeholders, albeit there appears to be some interest in a culture shift. We think and hope others will see it as fair to acknowledge that this culture has some challenges with inclusivity and equal access, while appreciating there are efforts to try to evolve it to a more collaborative, inclusive model.

It appears that another culture shift is needed. The Regional Issues Forum Liaison Committee should be viewed as an important part of the stakeholder process, not an auxiliary element. The sector experiment in the Regional Issues Forum is a starting place to try to create a stakeholder model where there is incentive for stakeholders to collaborate and incentive for CAISO/WEIM/EDAM staff to see where there is momentum for policy solutions. For it to be successful, the sectors need to be incorporated into the stakeholder process, and not remain a RIF only concept. CAISO staff should strive to understand the sectors’ views as it develops proposals to address identified issues with CAISO/WEIM/EDAM. This could include a presentation at RIF meetings on policy initiatives where the liaison committee could ask questions and provide some suggestions/insights for staff to consider (e.g., Market Surveillance Committee briefing). There may be opportunities to leverage CAISO/WEIM/EDAM systems and staff support to streamline and enhance the ability of entities to register for a sector and make point(s) of contact public, which would better support collaboration among sector members and sectors.

Finally, the equal access to decision makers asymmetry is a sticky issue. We encourage the GRC to explore how more equal access could be provided to the CAISO/WEIM staff, leadership, Governing Body, or Board of Governors.

Increasing use of SH working groups

Vistra appreciates the spirit of the GRC’s proposal to increase use of working groups in the policy initiatives. We are concerned that in practice, an increased use of working groups will construct barriers to entry for stakeholders that do not have a multi-person regulatory staff. Vistra respectfully asks the GRC to bear in mind that not all stakeholders have a team with more than one staff member to support its regulatory efforts across all venues and efforts, if any dedicated staff. Given this reality, the GRC recommendation should include a proposal that increased use of working groups that the process needs to respect the time constraints of stakeholders and should strive to avoid conflicts with other stakeholder meetings both at CAISO and at other venues, where possible and should limit frequency to one or two times a month.

Hold a RIF sector panel discussion with sector representatives for policy road map priorities

Vistra generally supports the GRC recommendation to require the RIF to hold a roundtable discussion on the policy roadmap process. We provide the following recommendations:

• Clarify the sector representatives are the sector liaisons, or their proxies.  
• Specify what the Governing Body and Board of Governors quorum required will be for the meeting where the RIF will discuss the policy roadmap for the joint participation. How many members from each body are needed to attend to meet the GRC intent in the proposal?
• GRC should make clear that each sector will be representing the combined and varied views of its sector.

Formally establishing sub-sectors within the RIF’s PIO and CAG sector

Vistra does not support adjusting the sector voting rules only for the Public Interest and Consumer Advocate Groups sector. We do not share the view that the any sector has sub-sectors. It is the role of the sector liaisons to facilitate their members participation within the sector to identify common themes and diverging views to articulate both shared views and diverging views.

We are concerned with a slippery slope if “sub-sectors” are incorporated into the stakeholder design. We have seen this in practice already where the “sub-sectors” believe they should have two votes instead of a single vote for their sector in RIF deliberations. We believe it is best that the GRC maintain the single sector approach, without sub-sectors, so there is no confusion on how many votes or what the briefing expectations are for the “sub-sectors”.

6. CLARIFYING CAISO’S RESPONSIBILITIES: Please state your organization’s views on the proposal to clarify the CAISO’s responsibility to consider the interests of all regional stakeholders, as discussed in Section VI of the GRC’s Straw Proposal.

The GRC proposal appears to imply there are separate market footprints (CISO BAA, EDAM BAA, and EIM BAA) where in reality there is a single market footprint for day-ahead operations and a single market footprint for real-time operations, where any BAAs that opt into that footprint are included. We believe there is benefit from phrasing that is more aligned with that reality. If a revision where made, it might be clearer to purely add “and WEIM/EDAM Controlled Grids” in the existing language.

7. Other Comments: Please set forth here any further comments your organization may have on the GRC’s Phase 3 Straw Proposal or related governance topics.

No additional comments at this time.

1. Please state your organization’s overall views on the GRC’s Phase 3 Straw Proposal.

Western Area Power Administration (WAPA) appreciates the opportunity to provide comments on the July 15, 2022, Governance Review Committee (GRC) Phase 3 Straw Proposal.

WAPA is a Federal entity with five distinct power marketing service areas in the West, three Balancing Authority Areas (BAAs), and one sub-BAA. WAPA provides electricity to a 15-state service territory, owns and operates over 17,000 miles of high-voltage transmission, provides close to 40% of the hydropower in the Western and Central U.S., and serves nearly 700 wholesale customers who, in turn, provide electricity to over 40 million end-use customers. WAPA’s regions and BAAs have unique customer characteristics, power marketing agreements, and operational practices. WAPA has an affirmative obligation to represent customer interests and to efficiently dispatch federal hydropower in a manner that meets statutory responsibilities, supports system reliability, and is environmentally compliant. WAPA’s comments endeavor to provide a holistic overview of WAPA’s perspectives regarding Energy Imbalance Market-Extended Day Ahead Market (EIM-EDAM) governance.

Overall, WAPA believes the Phase 3 Proposal includes meaningful improvements over previous approaches. However, WAPA continues to assert that the EIM-EDAM Governing Body should be able to independently make stakeholder-driven decisions without having to obtain joint approval from the California Governor-appointed California Independent System Operator (CAISO) Board.

WAPA believes the CAISO Board, as appointed by the Governor of California and subject to the authority of the Governor-appointed California Public Utilities Commission and the California Public Utilities Code, fundamentally and legally does not have sufficient independence to have joint authority over a market that spans a large market share of the Western Interconnection.

WAPA emphasizes that the California Public Utilities Code requires CAISO to “conduct its operations consistent with applicable state and federal laws and consistent with the interests of the people of the state” (Section 345.5). This requirement inherently creates a conflict of interest for the CAISO Board of Governor members regarding EIM-EDAM provisions that affect stakeholders across multiple states in the Western Interconnection. Where there is a conflict between what may be in the best interests of all EIM-EDAM participants versus the state of California, the CAISO Board members must, by statute, always decide in favor of California. This is a substantive issue that needs to be addressed to ensure non-discriminatory treatment against entities not within the CAISO footprint and especially entities outside of the state of California.

WAPA agrees with other stakeholders that independence of multi-state market governance should not be tied to a statutory mandate requiring prioritization of the interests of the people of California, and the statute should be revised in order to ensure equitable representation of the interests of the residents in all states for which the CAISO provides services.

2. DELEGATION OF AUTHORITY – TYPE: Please state your organization’s views on the proposal to retain the joint authority model as the structure of the delegation to the Governing Body, as discussed in Section III(B)(1).

While the joint authority framework and the proposed “does it apply” test are appreciated improvements, WAPA continues to have concerns about California Public Utilities Code Section 345.5, which requires the CAISO Board to act in the interest of the people of California.   

In terms of decisional authority, WAPA supports the perspective that the Governing Body should have decision authority over all tariff provisions that apply to entities who choose to participate in that market.

WAPA is particularly interested in more detail in the proposal and a stronger voice for regional market participants on CAISO transmission provisions that affect entities outside of California. Transmission is not currently included in the description of the Governing Body’s decision authority described on pages 14 and 15 of the Straw Proposal:

This approach also would entail a substantial expansion of the Governing Body’s current decisional authority given that the EDAM will give rise to an extensive set of new tariff rules that will apply to those entities who choose to participate in that market. The apply to test would cover, for example, all or a substantial part of various existing sections of the current tariff, including without limitation the sections devoted to: Communications (Section 6), Metering (Section 10), CAISO Settlements and Billing (Section 11), Creditworthiness (Section 12), Dispute Resolution (Section 13), Uncontrollable Force, Indemnity, Liabilities, and Penalties (Section 14), Confidentiality (Section 20), CAISO Markets and Processes (Section 27), the Energy Imbalance Market (Section 29), Bid and Self-Schedule Submission for all CAISO Markets (Section 30), the Day-Ahead Market (Section 31), the Real-Time Market (Section 34), Market Validation and Price Correction (Section 35), Rules of Conduct (Section 37), Market Power Mitigation Procedures (Section 39), and the Flexible Ramping Product (Section 44). These rules would become subject to the Governing Body’s joint approval authority. The apply to test would also allow the Governing Body’s scope of authority to grow over time to extent that new market rules or products within the WEIM or the EDAM are developed and made applicable to EIM or EDAM market participants.

WAPA suggests that the Governing Body have joint authority over CAISO transmission provisions that affect the market, including resource adequacy deliveries, wheel throughs, and exports.

3. DELEGATION OF AUTHORITY – OTHER TOPICS: Please state your organization’s views on the GRC’s proposal to retain the current processes for designating the decisional classification for initiatives and for resolving disagreements between the Board and the Governing Body on whether to approve a proposal within their shared approval authority.

Decisional Classification:

WAPA supports the proposed Decisional Classification and particularly appreciates the majority vote approach:

If either chair objects to the proposed final classification, the two chairs will confer together and if necessary with CAISO staff to attempt to resolve the matter. If the chairs are unable to reach agreement, then a dispute resolution process is triggered that involves the two bodies meeting together as a “committee of the whole” to decide the proper classification, after providing all stakeholders an opportunity to submit further comments on the proposed classification. The decision is then made by a vote of the combined members of both bodies, with the majority prevailing. In the event of a tie vote, the chair of the Board breaks the tie.

Process for resolving disagreements between the Board and the Governing Body:

WAPA generally supports the stakeholder process for resolving potential disagreements as delineated in the Straw Proposal (pages 18 through 20) . However, WAPA has concerns that Step 3 could result in unjust treatment of market participants and transmission owners outside the CAISO BAA. Resource adequacy, wheel throughs, and exports are of particular concern. WAPA encourages the CAISO to further refine the proposal in this regard.

Step 3 – Further Remand, Abandon Proposal or Invoke Exigent Circumstances Exception. If after going through the dispute resolution process the two bodies are unable to agree on approving a single proposal, they can jointly decide to abandon the proposal or jointly agree, with input from CAISO management, on another remand to the stakeholder process. Alternatively, the Board alone may authorize a FERC filing if, and only if, all of the following conditions are met:

1. 1. The Board, by unanimous vote, makes a finding that the two bodies have reached an impasse and that exigent circumstances exist such that a revision to the tariff is critical to preserve reliability or to protect market integrity. Unless the circumstance is so time critical as to require immediate action, this finding may be made only after at least one remand has occurred in an attempt to reach a proposal that both bodies approve. In such a time-critical circumstance where there is not sufficient time to complete at least one remand, the Board may by unanimous vote approve such a filing on an expedited basis without completing the remand process. The Board must set forth the basis for any and all of its findings justifying exigent or time critical circumstances in writing.

1. 2. If the Board authorizes such a filing, the CAISO would be required to include in its FERC filing whatever written opinion or other statement the Governing Body may want to offer regarding the proposal.

1. 3. The Governing Body would have a right, at its discretion, to retain outside counsel to assist in preparing any such written opinion or statement on the proposal.

4. SIZE AND COMPOSITION OF THE GOVERNING BODY: Please state your organization’s views on the issues discussed in Section IV of the GRC’s Straw Proposal, including: a) The size of the Governing Body, b) The Nominating Committee’s evaluation of sitting Governing Body members seeking re-appointment, and c) Compensation for Governing Body members.

• WAPA supports retaining the current five-member size of the Governing Body as it aligns with the proposed approach for resolving disagreements between the Governing Body and Board.
• WAPA advocates for a more defined process by which the Nominating Committee evaluates and selects members of the Governing Body, including specific standards to apply for re-nomination and re-appointment.
• Additionally, WAPA encourages the CAISO to develop more transparency and stakeholder involvement related to the Nominating Committee. To this end, WAPA seeks clarity and review of the selection, terms, and processes for the Nominating Committee.
• WAPA supports keeping the compensation at the existing level.

5. STAKEHOLDER ENGAGEMENT: Please state your organization’s views on the issues discussed in Section V of the GRC’s Straw Proposal, including: a) Increasing the use of stakeholder working groups as part of policy initiatives, b) Beginning the annual roadmap process for prioritizing policy initiatives with panel discussion of sector representatives hosted by the RIF, and c) Allocating the two liaisons for the RIF’s public interest and consumer advocate sector – one to consumers advocates and one to other public interest organizations.

No comments at this time.

6. CLARIFYING CAISO’S RESPONSIBILITIES: Please state your organization’s views on the proposal to clarify the CAISO’s responsibility to consider the interests of all regional stakeholders, as discussed in Section VI of the GRC’s Straw Proposal.

WAPA appreciates CAISO’s proposal to modify its governing documents to include something along the lines of (page 27):

Consistent with its status as a nonprofit public benefit corporation, and to enhance the efficient use and reliable operation of ISO Controlled Grid, the Corporation will consider the interests of all stakeholders within the footprint of the markets that it administers, including the Corporation’s balancing authority area, EDAM balancing authority areas and EIM balancing authority areas

Recognizing the CAISO’s positive intent, changes to the CAISO governing documents do not take precedent over the California Public Utility Code. So, the fundamental issue remains – the CAISO Board is appointed by California’s Governor and is legally bound to act in the interests of people in California. Unless and until the California Public Utilities Code is modified, it is recognized that the fundamental issues associated with Board independence remain.

7. Other Comments: Please set forth here any further comments your organization may have on the GRC’s Phase 3 Straw Proposal or related governance topics.

No additional comments.

1. Please state your organization’s overall views on the GRC’s Phase 3 Straw Proposal.

The Western Consumer Advocates appreciate that the GRC’s Phase 3 Straw Proposal explicitly acknowledged that, “that if regional market collaboration is to advance beyond the EDAM, the governance conversation must continue, and the proposals of the GRC are not the “end game.”” We agree.

2. DELEGATION OF AUTHORITY – TYPE: Please state your organization’s views on the proposal to retain the joint authority model as the structure of the delegation to the Governing Body, as discussed in Section III(B)(1).

The Western Consumer Advocates support the joint authority model for an expansion of the WEIM to include an EDAM. We explicitly do not support joint authority for any additional expansion of authority.

3. DELEGATION OF AUTHORITY – OTHER TOPICS: Please state your organization’s views on the GRC’s proposal to retain the current processes for designating the decisional classification for initiatives and for resolving disagreements between the Board and the Governing Body on whether to approve a proposal within their shared approval authority.

The Western Consumer Advocates support these aspects of the proposal.

4. SIZE AND COMPOSITION OF THE GOVERNING BODY: Please state your organization’s views on the issues discussed in Section IV of the GRC’s Straw Proposal, including: a) The size of the Governing Body, b) The Nominating Committee’s evaluation of sitting Governing Body members seeking re-appointment, and c) Compensation for Governing Body members.

The Western Consumer Advocates support the proposal that the Nominating Committee evaluate sitting Governing Body members seeking re-appointment to ensure that those individuals remain good candidates in the context of the potentially broader range and scope of oversight. The Western Consumer Advocates do not propose any changes to the size of the GB or compensation for GB members at this time. Rather, we propose that these issues be monitored and reconsidered periodically as it becomes more apparent how much additional work and scope is associated with expanding oversight to include the EDAM.

5. STAKEHOLDER ENGAGEMENT: Please state your organization’s views on the issues discussed in Section V of the GRC’s Straw Proposal, including: a) Increasing the use of stakeholder working groups as part of policy initiatives, b) Beginning the annual roadmap process for prioritizing policy initiatives with panel discussion of sector representatives hosted by the RIF, and c) Allocating the two liaisons for the RIF’s public interest and consumer advocate sector – one to consumers advocates and one to other public interest organizations.

As a preliminary matter, the Western Consumer Advocates clarify item “c” and emphasize that this allocation is already in place. Our understanding of the proposal is that the voting would also be separate, i.e., that only the consumer advocates would vote for the consumer advocate liaison and only the public interest representatives would vote for the public interest liaison. The Western Consumer Advocates support this proposed change in voting as an essential change to ensure our representation and participation. We also note that while the current sector arrangements are acceptable for an expansion into the EDAM, this is another specific example of a governance element that would not be sufficient if the Western EIM/EDAM were to expand further into a more complete RTO structure. The Straw Proposal acknowledges that an RTO would need a fully independent board and would need to address the role of the states. The Western Consumer Advocates note that our role would need to be re-evaluated as part of the discussion of the role of the states. Similar to utility commissions, each of our offices is established in state statute to represent the utility consumers in our states. If more functions were to become regionalized, consumer advocates need to ensure that we can continue to carry out our statutory responsibilities.

The Western Consumer Advocates generally support the use of stakeholder working groups as part of policy initiatives. However, we note that when multiple working groups are convened to complete a significant amount of work in a short amount of time, small organizations (including most consumer advocates) struggle to meaningfully participate. Having an intense work stream for a short period of time is difficult to manage within existing limited resources, in particular when it begins without significant advanced notice. Consumer advocates do not have the ability to reduce the standard workload of state regulatory proceedings or meaningfully influence the timeline of such work. Thus, working groups are more manageable when the work proceeds at a predictable pace.

Finally, the Western Consumer Advocates support the proposal to begin the annual roadmap process for prioritizing policy initiatives with panel discussion of sector representatives hosted by the RIF.

6. CLARIFYING CAISO’S RESPONSIBILITIES: Please state your organization’s views on the proposal to clarify the CAISO’s responsibility to consider the interests of all regional stakeholders, as discussed in Section VI of the GRC’s Straw Proposal.

The Western Consumer Advocates support this proposal.

7. Other Comments: Please set forth here any further comments your organization may have on the GRC’s Phase 3 Straw Proposal or related governance topics.

None at this time.

1. Please state your organization’s overall views on the GRC’s Phase 3 Straw Proposal.

Please see attached.

2. DELEGATION OF AUTHORITY – TYPE: Please state your organization’s views on the proposal to retain the joint authority model as the structure of the delegation to the Governing Body, as discussed in Section III(B)(1).

Please see attached.

3. DELEGATION OF AUTHORITY – OTHER TOPICS: Please state your organization’s views on the GRC’s proposal to retain the current processes for designating the decisional classification for initiatives and for resolving disagreements between the Board and the Governing Body on whether to approve a proposal within their shared approval authority.

Please see attached.

4. SIZE AND COMPOSITION OF THE GOVERNING BODY: Please state your organization’s views on the issues discussed in Section IV of the GRC’s Straw Proposal, including: a) The size of the Governing Body, b) The Nominating Committee’s evaluation of sitting Governing Body members seeking re-appointment, and c) Compensation for Governing Body members.

Please see attached.

5. STAKEHOLDER ENGAGEMENT: Please state your organization’s views on the issues discussed in Section V of the GRC’s Straw Proposal, including: a) Increasing the use of stakeholder working groups as part of policy initiatives, b) Beginning the annual roadmap process for prioritizing policy initiatives with panel discussion of sector representatives hosted by the RIF, and c) Allocating the two liaisons for the RIF’s public interest and consumer advocate sector – one to consumers advocates and one to other public interest organizations.

Please see attached.

6. CLARIFYING CAISO’S RESPONSIBILITIES: Please state your organization’s views on the proposal to clarify the CAISO’s responsibility to consider the interests of all regional stakeholders, as discussed in Section VI of the GRC’s Straw Proposal.

Please see attached.

7. Other Comments: Please set forth here any further comments your organization may have on the GRC’s Phase 3 Straw Proposal or related governance topics.

Please see attached.