Comments on Draft final proposal

1. Please provide a summary of your organization’s comments on the Generation Deliverability Methodology Review stakeholder call.

AES Clean Energy appreciates the opportunity to submit comments on the Generation Deliverability Methodology Review Draft Final Proposal (DFP). AES Clean Energy is overall supportive of the DFP and seeks clarification on proposed changes to the n-2 contingencies requirements and proposed Area Deliverability Network Upgrade cost threshold.   

Regarding timing, AES Clean Energy urges CAISO to begin applying the revised deliverability methodology to the upcoming 2024 Transmission Plan Deliverability allocation cycle. AES Clean Energy recommends the CAISO to initiate the Business Practice Manual change process in time for the next deliverability study cycle. 

2. Provide a summary of your organization’s comments on the proposed changes to treatment of n-2 contingencies and mitigation requirements, as described in the draft final proposal.

AES Clean Energy supports the CAISO’s proposal to maintain n-2 contingency studies while granting Full Deliverability Capacity Status (FCDS) to projects awaiting non-cascading n-2 mitigations.  However, AES Clean Energy seeks clarification on the study cases that will be used to determine if a n-2 contingency would be considered non-cascading or cascading. While AES Clean Energy understands that the Reliability Coordinator Procedure No. 06101 identifies the Powerflow Cascading Test procedures¹, it does not identify the cluster and reliability cases that would be used to conduct the studies. Based on the proposed methodology, would cascading outages in either the reliability or cluster case result in an outage on the constraint being identified as cascading? Without understanding the cluster and reliability cases used to conduct the Powerflow Cascading Test, it would be unclear to stakeholders whether n-2 contingencies would identify as cascading or non-cascading outages. In addition, AES Clean Energy recommends the CAISO  identify N-2 contingencies that would cause cascading outages in its annual TPD allocation reports for reference.

¹ Reliability Coordinator Procedure No. 0610. http://www.caiso.com/Documents/RC0610.pdf  

3. Provide a summary of your organization’s comments on revising the ADNU/LDNU Guidelines, as described in the draft final proposal.

?AES Clean Energy requests further impact analysis of converting the Area Deliverability Network Upgrade threshold from $20 million to $60,000/MW. It is unclear how changing the threshold from $20 million to $60,000/MW affect the volume of projects identifying as Local Deliverability Network Upgrades (LDNUs) versus ADNUS.  For example, does the CAISO expect more upgrades to be identified as ADNUs with its proposal?   

4. Provide a summary of your organization’s comments on the proposed conditional deliverability based original schedules during delayed deliverability upgrades, as described in the draft final proposal.

?AES Clean Energy understands the CAISO intent to revisit deliverability allocation reforms in the Interconnection Process Enhancements initiative. AES Clean Energy urges the CAISO to revisit its proposal to provide conditional deliverability to delayed upgrades based on the original schedule to avoid disrupting the resource procurement cycle.  

1. Please provide a summary of your organization’s comments on the Generation Deliverability Methodology Review stakeholder call.

CAISO has done a super job in updating the Final Proposal on Deliverability Assessment Methodology based on Stakeholder comments.

Avantus agrees with majority of the proposed updates and would like to offer a comment and ask few questions for clarifications.

1. Avantus agrees with studying only HSN scenario and removing SSN scenario for Deliverability Assessment.
2. Suggest clearing the language on page 3, fourth bullet, by deleting “is not considered always credible in the operations horizon and”. The sentence will now read “if the contingency does not risk cascading outages”.
3. Page 13, second paragraph, for long-term studies, shouldn’t the storage be modeled as “100% load” instead of 50% generators in SSN studies? Don’t we need all batteries fully charged at “sunset” to serve the high night load for HSN studies? Even if SSN studies may be informational and may not matter much, the fact remains that we will be relying primarily on the batteries, wind, and hydro to serve the heavy night load. This requires that the batteries must be fully charged during the daytime to be available at night.

2. Provide a summary of your organization’s comments on the proposed changes to treatment of n-2 contingencies and mitigation requirements, as described in the draft final proposal.

Avantus agrees with the CAISO proposal and discussion related to N-2 contingencies. The example on page 22 makes it clear about the difference between N-1 and N-2 contingencies in allocating Deliverability.

3. Provide a summary of your organization’s comments on revising the ADNU/LDNU Guidelines, as described in the draft final proposal.

Avantus appreciates and supports the ongoing discussion and further improving the ADNU/LDNU guidelines.

4. Provide a summary of your organization’s comments on the proposed conditional deliverability based original schedules during delayed deliverability upgrades, as described in the draft final proposal.

Avantus is in favor of assigning FCDS as opposed to conditional deliverability while N-2 upgrades are still under development.

1. Please provide a summary of your organization’s comments on the Generation Deliverability Methodology Review stakeholder call.

The California Community Choice Association (CalCCA) appreciates the opportunity to provide comments in response to the California Independent System Operator’s (CAISO) Deliverability Assessment Methodology Draft Final Proposal (Draft Final Proposal). CalCCA supports the majority of the proposed refinements to the deliverability assessment methodology with the following exceptions:

• The CAISO’s dispatch of resources above their Net Qualifying Capacity (NQC) for Resource Adequacy (RA) in the deliverability assessment reduces the availability of deliverability capacity for queued projects and new queue entries; and
• A conservative application of the CAISO’s “risk-based” approach to awarding deliverability status to resources while N-2 mitigations are under development may unnecessarily constrain the availability of deliverability capacity to the queue. 

Dispatch Level

To the extent the CAISO dispatches existing resources above their RA NQC in the deliverability assessment, deliverability capacity available to both queued projects and new entries is reduced. As CAISO states in the Draft Final Proposal, RA is a “regulatory construct developed to ensure there will be sufficient electric resources to serve demand in all but the most extreme conditions”. This regulatory construct requires that Load Serving Entities (LSE) procure this RA capacity which is in short supply.  Despite LSEs not being able to count “non-RA” capacity in their RA plan, the CAISO is proposing to continue to dispatch RA resources above their NQC in its deliverability assessment. This artificially limits the RA available to the marketplace.  While non-RA megawatts (MW) may be available in real-time, they should not utilize system capacity in the deliverability assessment that would otherwise be available to resources seeking deliverability capacity allocations.

From a basic market design perspective, these non-RA MW displace other resources from securing capacity which are subsequently disadvantaged in the marketplace. It would be more efficient from a market perspective to dispatch resources at their NQC and not above. NQC MWs are those LSEs are paying for and required to procure. By dispatching at the NQC, the remaining capacity can be made available to existing and proposed projects so that LSEs have a larger, more liquid pool of procurement options for RA.

Restricting the dispatch to only the NQC appears to be consistent with the Deliverability Methodology provided in the Draft Final Proposal. On page 6 the CAISO states: “Another perspective is that the transmission system needs to provide reasonable certainty that reliable supply can be maintained by relying solely on Resource Adequacy capacity” (emphasis added). This is not what the CAISO proposes, however. By assuming generators are operating above their NQC, the CAISO is assuming reliable supply is coming from non-RA resources. The CAISO should reconsider the proposed approach for the dispatch level of resources in the deliverability methodology.

Study of N-2 Contingencies

The proposed application of a “risk-based” approach to awarding deliverability status to resources in the short term while N-2 mitigations are under development is encouraging. The CAISO should make every effort to find a reasonable balance, however, so that its application of the risk-based approach is not overly conservative. If a cascading outage event associated with a credible N-2 is identified, assigning deliverability to resources behind the constraint is not prudent for reliable operations of the transmission system. However, it is important to recognize that the power flow models used in the deliverability analysis, in general, already represent stressed system conditions. Such conditions, from a risk assessment basis, do not occur frequently. The CAISO should include in its risk-based approach the probability of the simultaneous occurrence of the N-2, actual stressed system conditions, and associated dispatch that may lead to a cascading event. For example, the CAISO should consider running several scenarios where these conditions are slightly modified, i.e. relaxed, to gain an understanding of how tight the conditions actually are. If these scenario analyses find that a minor reduction in load or generation assumptions mitigates the cascading event, this finding should be included in the risk-based analysis.  

Summary

In summary, the CAISO should consider further modifications to the two elements of the assessment methodology discussed above. These two aspects of the methodology are the most limiting factors for the allocation of additional deliverable MWs to meet mandated RA targets. With the conservative approach proposed, LSEs may likely find it difficult to satisfy the California Public Utilities Commission’s Mid-Term Reliability procurement targets and RA compliance obligations with new deliverable capacity that can be interconnected to the CAISO system in a timely manner.[1]

[1]               The Mid-Term Reliability procurement target now totals 18,500 MW of new deliverable NQC.   

2. Provide a summary of your organization’s comments on the proposed changes to treatment of n-2 contingencies and mitigation requirements, as described in the draft final proposal.

See response in Section 1.

3. Provide a summary of your organization’s comments on revising the ADNU/LDNU Guidelines, as described in the draft final proposal.

See response in Section 1.

4. Provide a summary of your organization’s comments on the proposed conditional deliverability based original schedules during delayed deliverability upgrades, as described in the draft final proposal.

See response in section 1. 

1. Please provide a summary of your organization’s comments on the Generation Deliverability Methodology Review stakeholder call.

CalWEA appreciates the opportunity to comment on CAISO’ Generation Deliverability Methodology Review Initiative Draft Final Proposal. CalWEA thanks CAISO for the significant effort it has devoted to this important effort to address stakeholder requests for review of its deliverability study process and methodology and appreciated the opportunity for robust discussion on the November 13 stakeholder call.

In this section, we review elements of the Draft Final Proposal that are not addressed in CAISO questions 2-4, below.

Secondary System Need (SSN) Scenario: CalWEA continues to support CAISO’s proposal to remove the SSN study from generation interconnection deliverability studies and thanks CAISO for its responsiveness to stakeholder input on this item. CalWEA supports focusing the deliverability study only on hours of stressed conditions when reliability concerns may occur and therefore supports CAISO’s proposal to remove the SSN scenario.  CalWEA supports CAISO’s plan to perform the SSN study in the transmission planning process for at least a few years to ensure there are no issues accessing resources across the daily cycle when needed.

Resource Dispatch Assumption Levels:  CalWEA does not object to CAISO’s proposal to maintain existing assumptions for resource dispatch levels at this time given the CPUC’s planned transition to a 24-hourly RA framework for its resource adequacy (RA) program.  CalWEA trusts that CAISO will adjust its assumed dispatch levels for consistency with the values that the CPUC adopts under its 24-hourly RA program, as well as any changes to other LRAs’ resource valuation methodologies. 

Distribution Factor (DFAX) threshold of 5% and 10%:  CalWEA supports CAISO’s proposal to raise the 5% distribution factor threshold for 500 kV line overload constraints to 10%, to decrease the pool of generators that must wait for the identified transmission upgrades intended to mitigate the constrained path. CalWEA appreciates the CAISO’s proposal for this aspect and agrees with the CAISO’s expectation that this will be a more practical threshold that will include the generators that have a significant impact on the 500 kV line overload constraint and exclude generators that have an insignificant impact on the high capacity and low impedance 500 kV constraint.

2. Provide a summary of your organization’s comments on the proposed changes to treatment of n-2 contingencies and mitigation requirements, as described in the draft final proposal.

CalWEA appreciates CAISO’s acknowledgement on the November 13 stakeholder call that its use of N-2 criteria in deliverability studies is due to the unique construct of CAISO’s generation interconnection study process. CalWEA agrees that entirely eliminating N-2 criteria from that process, as recommended by CalWEA previously, would require redesigning the GIP reliability studies, which would be burdensome on CAISO and may produce unanticipated consequences. Therefore, CalWEA supports CAISO’s proposal to apply the cascading N-2 criteria for projects whose FCDS has been delayed but urges CAISO to apply this less stringent criterion more broadly.

Accordingly, CalWEA urges CAISO to modify its proposal by applying the same cascading N-2 criteria on a uniform basis, consistently across all generation projects.[1]  CalWEA has carefully reviewed the statement of position CAISO provided in the November 2023 proposal and continues to believe that CAISO has not adequately justified why different standards should apply to resources seeking FCDS and resources that have been awarded Full Capacity Deliverability Status (“FCDS”) conditioned on the completion of transmission upgrades that have been delayed.

As CalWEA understands the CAISO’s proposal, CAISO intends to continue to apply an N-2 non-cascading outage standard in Phase 2 deliverability studies for resources seeking FCDS, but to apply an N-2 cascading outage standard for resources that have been awarded FCDS pending completion of transmission upgrades that will remedy the non-cascading outage risk that was previously identified in the deliverability studies for those resources.  While CAISO addressed the topic at some length,[2] CalWEA is not persuaded that  applying different reliability standards in deliverability studies (one essentially applied post-hoc) is warranted.  CalWEA urges CAISO to reconsider this aspect of its proposal and to apply the same “cascading” outage standard in all deliverability studies. CalWEA also requests that CAISO explain the methodology it will use to determine whether the N-2 contingency causes cascading outages or not. 

CalWEA also recommends that CAISO analyze the effect of applying a cascading N-2 test consistently across all Cluster 14 projects, which would allow CAISO to “test drive” the approach.  If CAISO has already performed studies on Cluster 14, it would be less burdensome to perform such a “test drive” by applying the cascading outage standard under N-2 as a conditional screen for projects that might produce overloading, but not cascading outages.  This change would be consistent with how CAISO intends to apply N-2 to projects that are awaiting the completion of transmission upgrades.  An exercise of this nature is needed to understand how much more deliverability capacity would be made available by the proposed change, and CAISO could assess whether to  adopt the change, beginning with Cluster 14, in view of this additional information.

[1]      While CalWEA advocated elimination of the N-2 criterion from the deliverability study altogether, we noted that we could support, as a compromise,  applying the cascading N-2 criterion across the board.  See CalWEA’s comments of Sept. 27, 2023, in response to question 5. To be clear, CalWEA’s comments do not seek changes to how the reliability studies are conducted.

[2]      See CAISO Draft Final Proposal at pp. 17-21.

3. Provide a summary of your organization’s comments on revising the ADNU/LDNU Guidelines, as described in the draft final proposal.

CalWEA appreciates CAISO’s proposal to revise the guidelines for identifying Area Deliverability Constraints (ADCs) such that there is a potential for more constraints to be identified as Local Deliverability Constraints, enabling these constraints to be addressed through the generation interconnection process. CalWEA supports the CAISO proposal to update its guideline ADC-C4 to transition from a fixed cost threshold of $20M to a $60k per megawatt (adjusted per escalation) threshold based on the generation capacity behind the constraint. CalWEA agrees with this change because it could reduce the amount of identified ADNUs that would otherwise prevent generators from obtaining deliverability allocations and would provide developers an opportunity to finance the upgrades as local network upgrades themselves.

However, the proposed cost threshold change alone may not necessarily impact the volume of upgrades that will qualify as LDNUs rather than ADNUs.  Therefore, CalWEA encourages CAISO to continue monitoring this issue to determine if a more significant shift in the ADNU/LDNU threshold would benefit the state's efforts to bring projects online quickly. 

4. Provide a summary of your organization’s comments on the proposed conditional deliverability based original schedules during delayed deliverability upgrades, as described in the draft final proposal.

Please see response to question 2, above.  In addition, CalWEA supports CAISO’s position to defer the issue of any network upgrades that are delayed by PTOs beyond their originally identified in-service date to the Interconnection Process Enhancements initiative. CalWEA agrees that PTO upgrade delays are an important concern but these delays are not limited to delivery network upgrades and CalWEA appreciates this issue will need to be coordinated with other policy venues and industry efforts to address concerns with the pace of resource and transmission development.

1. Please provide a summary of your organization’s comments on the Generation Deliverability Methodology Review stakeholder call.

The California Energy Storage Alliance (CESA) appreciates the opportunity to provide comments on the Generation Deliverablity Methodology Review.  CESA supports the modest proposals included in the final proposal.

2. Provide a summary of your organization’s comments on the proposed changes to treatment of n-2 contingencies and mitigation requirements, as described in the draft final proposal.

CESA supports providing full capacity deliverability status (FCDS) to projects that are impacted by N-2 contingencies, but those contingencies do not result in cascading outages.  

3. Provide a summary of your organization’s comments on revising the ADNU/LDNU Guidelines, as described in the draft final proposal.

Supports

4. Provide a summary of your organization’s comments on the proposed conditional deliverability based original schedules during delayed deliverability upgrades, as described in the draft final proposal.

CESA supports further discussion of deliverablity impacted by delayed upgrades as part of the multi-year interim deliverabillity proposal included in the Interocnnection Process Enhancements 2023 initiative.

1. Please provide a summary of your organization’s comments on the Generation Deliverability Methodology Review stakeholder call.

Intersect Power is generally supportive of the Draft Final Proposal and appreciates CAISO's efforts to respond to stakeholder concerns.   

Intersect Power has four main concerns with CAISO's proposal at this stage:

1. CAISO should confirm that changes to the deliverability study methodology will be applied to the next round of studies, i.e., the TPD assessment that will take place in CY2024;
2. CAISO should provide data showing the potential impact of the proposal to allocate Full Capacity Deliverability Status (FCDS) to projects waiting for N-2 upgrades to be built;
3. CAISO should clarify the methodology it will use to determine whether N-2 contingencies cause cascading outages; and
4. CAISO has failed to address why it is not seeking better alignment between the dispatch levels assumed in the generation deliverability studies and the QC values provided by the CPUC, especially considering the upcoming paradigm shift to slice-of-day hourly resource values. 

Items 1-3 are discussed in more detail in the subsequent questions, and item 4 is discussed in more detail below.

Lack of Alignment Between Dispatch Levels and CPUC QC Values

As has been mentioned in all Intersect Power’s previous formal comments, the lack of alignment for study levels and counting levels is a concern, and CAISO's disinterest in addressing the lack of alignment and its potential ramifications is puzzling. Multiple stakeholders have raised concerns that a lack of alignment may lead to wasted deliverable transmission capacity. The CAISO continues to focus on justifying the technical merits of its approach to determine dispatch levels, while simply ignoring the potential issues caused by misalignment. Intersect Power is not challenging CAISO’s methodology for the determination of appropriate dispatch levels. Rather, Intersect Power is questioning why differences exist between dispatch levels by CAISO and counting levels by CPUC and why those two parties are not proactively coordinating to seek alignment (a concept the CAISO itself has championed via its references to the MOU between CAISO, CPUC, and CEC, which commits the entities to streamlining and coordinating across the various processes of transmission planning, interconnection, and power procurement).

It is difficult for stakeholders, and presumably the CAISO and CPUC, to accurately quantify the reliability attributes of the Resource Adequacy program (both risk abatement and cost effectiveness) when the values for modeling deliverable assets differ from the values for counting those same deliverable assets. The CAISO’s arguments for maintaining the current dispatch assumptions seem focused on providing technical justification for how the assumptions are devised rather than addressing the advantages and/or disadvantages of carrying two different sets of values. The discrepancy between the modeling and counting assumptions will only become starker with the implementation of the slice-of-day framework as the counting levels for each hour will diverge even further from the single-period dispatch assumptions currently utilized by the CAISO.

2. Provide a summary of your organization’s comments on the proposed changes to treatment of n-2 contingencies and mitigation requirements, as described in the draft final proposal.

Intersect Power supports CAISO's proposal to provide Full Capacity Deliverability Status (FCDS), instead of Conditional Deliverability, to projects that are impacted only by N-2 contingencies that do not cause cascading outages.  Intersect Power appreciates the clarification that FCDS will apply to these projects during the full period during which they are waiting for upgrades to be built.  However, CAISO should provide more clarity in the final proposal about two aspects of this proposal. 

First, CAISO should provide data showing how many upgrades were triggered by N-1 v. N-2 upgrades in the past, which would provide at least a ballpark estimate of the additional deliverability that the N-2 proposal might create.  Second, CAISO should explain the methodology it will use to determine whether the N-2 contingency causes cascading outages or not and provide data regarding how common this is.  This additional information would help developers assess the viability of projects that are awaiting deliverability allocations and future interconnection requests.  Giving developers the tools they need to assess project viability is critical to the success of CAISO's interconnection process. 

Finally, CAISO should confirm that the changes outlined in the Draft Final Proposal will be applied to the next round of deliverability studies in 2024.  CAISO has made statements alluding to their intent to do so but should formally indicate this approach in the final proposal to increase transparency for the market.

3. Provide a summary of your organization’s comments on revising the ADNU/LDNU Guidelines, as described in the draft final proposal.

Intersect Power supports CAISO's proposal to convert the existing ADNU/LDNU threshold to a $/MW number.  This adjustment will help to prevent overburdening individual developers with unreasonably high upgrade costs. 

4. Provide a summary of your organization’s comments on the proposed conditional deliverability based original schedules during delayed deliverability upgrades, as described in the draft final proposal.

No comment.

1. Please provide a summary of your organization’s comments on the Generation Deliverability Methodology Review stakeholder call.

LSA is generally supportive of the Draft Final Proposal and appreciates CAISO's efforts to respond to stakeholder concerns.  For example, LSA appreciates the analysis that CAISO provided in response to requests from LSA and others showing summer assessment results using normalized hydro assumptions.

LSA has three main concerns with CAISO's proposal at this stage:

1. CAISO should confirm that changes to the deliverability study methodology will be applied to the next round of studies;
2. CAISO should provide data showing the potential impact of the proposal to allocate Full Capacity Deliverability Status (FCDS) to projects waiting for N-2 upgrades to be built; and
3. CAISO should clarify the methodology it will use to determine whether N-2 contingencies cause cascading outages and publish a list of N-2 contingencies that cause cascading outages in the Transmission Plan Deliverability (“TPD”) allocation report.

These issues are discussed in more detail below.

2. Provide a summary of your organization’s comments on the proposed changes to treatment of n-2 contingencies and mitigation requirements, as described in the draft final proposal.

LSA supports CAISO's proposal to provide Full Capacity Deliverability Status (FCDS), instead of Conditional Deliverability, to projects that are impacted only by N-2 contingencies that do not cause cascading outages.  LSA appreciates the clarification that FCDS will apply to these projects during the full period during which they are waiting for upgrades to be built.  However, CAISO should provide more clarity in the final proposal about three aspects of this proposal. 

First, CAISO should provide data showing how many upgrades were triggered by N-1 v. N-2 upgrades in the past, which would provide at least a ballpark estimate of the additional deliverability that the N-2 proposal might create.  Second, CAISO should explain the methodology it will use to determine whether the N-2 contingency causes cascading outages or not and provide data regarding how common this is.  Finally, CAISO should publish a list of N-2 contingencies that cause cascading outages in the Transmission Plan Deliverability (“TPD” allocation report. This additional information would help developers assess the viability of projects that are awaiting deliverability allocations and future interconnection requests.  Giving developers the tools they need to assess project viability is critical to the success of CAISO's interconnection process. 

In addition, CAISO should confirm that the changes outlined in the Draft Final Proposal will be applied to the next round of deliverability studies in 2024.  CAISO has made statements alluding to their intent to do so but should formally indicate this approach in the final proposal to increase market transparency.

3. Provide a summary of your organization’s comments on revising the ADNU/LDNU Guidelines, as described in the draft final proposal.

LSA supports CAISO's proposal to convert the existing ADNU/LDNU threshold to a $/MW number.  This adjustment will help to prevent overburdening individual developers with unreasonably high upgrade costs. 

LSA notes, however, that this change alone does not necessarily impact the volume of upgrades that will qualify as LDNUs v. ADNUs.  Increasing the volume of projects that qualify as LDNUs would theoretically increase the possibility that those upgrades could get built because developers could self-fund them instead of hoping that that CAISO approves them through the TPP process.  LSA encourages CAISO to continue monitoring this issue to determine if a more significant shift in the ADNU/LDNU threshold would benefit the state's efforts to bring projects online quickly.

4. Provide a summary of your organization’s comments on the proposed conditional deliverability based original schedules during delayed deliverability upgrades, as described in the draft final proposal.

LSA acknowledges the overlap between its initial proposal regarding the allocation of Conditional Deliverability while projects wait for delayed deliverability upgrades and Interim Deliverability as it is currently applied in the Transmission Plan Deliverability allocation process.  LSA's comments to the Straw Proposal, submitted on September 12, 2023, outline similar concerns.  LSA looks forward to continued discussion regarding Interim Deliverability and delayed upgrades in the Interconnection Process Enhancements initiative. 

For example, CAISO must inform developers if they will get Interim Deliverability as soon as possible, preferably when their projects receive Transmission Plan Deliverability awards.  If developers do not know if they will get Interim Deliverability when they negotiate contracts, they will have to consider delaying CODs until they have more certainty, which defeats the purpose of CAISO’s efforts to reduce delays associated with transmission upgrades.  The best way to avoid delays would be for CAISO to inform developers about the availability of Interim Deliverability concurrently with the release of TPD allocation results. 

1. Please provide a summary of your organization’s comments on the Generation Deliverability Methodology Review stakeholder call.

New Leaf Energy, Inc. (“NLE”) thanks the CAISO for its continued efforts to consider impactful reforms to the deliverability methodology, as embodied in the November 6, 2023 Deliverability Assessment Methodology Revisions Draft Final Proposal and the November 13, 2023 stakeholder call. In these comments, NLE provides the following feedback:

• NLE strongly supports the Draft Final Proposal’s decision to give Full Capacity Deliverability Status (“FCDS”) to resources for which the only pending mitigation is for a non-cascading n-2 outage and supports stakeholder requests that the CAISO provide more detail on such mitigations in its Transmission Planning Deliverability (“TPD”) Allocation Reports.
• NLE supports the CAISO’s proposal to convert the Area Delivery Network Upgrade (“ADNU”)/Local Delivery Network Upgrade (“LDNU”) threshold from an absolute dollar figure to a dollar-per-megawatt figure yet continues to recommend: (1) that this threshold be tied to inflation and (2) that the CAISO consider restructuring the threshold number of projects that is included in the ADC-C4 guideline to differentiate ADNUs and LDNUs.
• NLE appreciates CAISO Staff’s commitment on the stakeholder call to addressing both the root causes and the impacts of worsening Participating Transmission Owner (“PTO”) Network Upgrade delays and makes specific recommendations to ensure that attention is paid in a timely manner to this important issue.

Additionally, NLE supports the Draft Final Proposal’s continued commitment to eliminating the secondary system need (“SSN”) scenario[1] and increasing the distribution factor (“DFAX”) threshold for 500 kV line overload constraints from 5 percent to 10 percent.[2] However, while NLE generally agrees with the CAISO’s decision to maintain current dispatch-level methodologies,[3] NLE recommends that the CAISO consider updating its offshore wind dispatch assumptions to align with the most recent estimates produced by the National Renewable Energy Lab (“NREL”),[4] as they are likely to be more accurate.

[1] Draft Final Proposal at 10-11.

[2] Draft Final Proposal at 22.

[3] Draft Final Proposal at 14.

[4] See CAISO 20 Year Transmission Outlook and Approach to Offshore Wind (August 16, 2023), p. 27, available at: http://www.caiso.com/InitiativeDocuments/Presentation-20-Year-Transmission-Outlook-Aug-16-2023.pdf  (“The data analysis indicates that the average offshore wind generation is 83% of installed capacity for [highest system need] hours and 45% for SSN hours.”).

2. Provide a summary of your organization’s comments on the proposed changes to treatment of n-2 contingencies and mitigation requirements, as described in the draft final proposal.

NLE strongly supports the Draft Final Proposal’s decision to give FCDS to resources for which the only pending mitigation is for a non-cascading n-2 outage. This approach is preferable to the Conditional Deliverability product proposed in the August 22, 2023 Straw Proposal. NLE agrees that this modest expansion to what qualifies for FCDS will “allow resources to provide Resource Adequacy capacity as soon as possible, giving operators reasonable comfort those resources can be accessed in tight supply conditions, taking into account practical operational considerations.”[1]

On the stakeholder call, CAISO Staff was amenable to stakeholder requests for improved Interconnection Customer (“IC”) visibility into the nature of the mitigations triggered by their projects. Currently, ICs may not know in advance which (if any) of the mitigations their projects are behind are considered n-2 contingencies that do not create cascading outage risks (or, in fact, any of the other mitigations that must be completed for their FCDS designation to become effective). NLE appreciates the CAISO’s agreement to adjust the TPD Allocation Report to reflect this level of detail.

[1] Draft Final Proposal at 22.

3. Provide a summary of your organization’s comments on revising the ADNU/LDNU Guidelines, as described in the draft final proposal.

NLE supports the CAISO’s proposal to convert the threshold from an absolute dollar figure (currently $20 million) to a dollar-per-megawatt figure. However, NLE requests more information on how the proposed $60,000/MW figure would, in practice, change the current state. For example, it would be helpful for the CAISO to publish data on how many upgrades historically were pushed into the Transmission Planning Process that might now be classified as LDNUs under the new threshold.

NLE agrees with the stakeholders who suggest that the threshold, regardless of how it is set, should be pegged to inflation. Construction costs have risen substantially in recent years and may continue to rise. And yet, the threshold has not been adjusted to reflect the reality that less mitigation work can be done within the same budget. On the stakeholder call, CAISO Staff seemed to consider that the guidelines may be subject to somewhat flexible implementation. NLE cautions that this may not provide sufficient protection from likely cost increases. Moreover, flexibility reduces certainty, which is generally unhelpful in processes like the Generation Interconnection and Deliverability Allocation Procedures (“GIDAP”). And finally, the fact that this level would be a “guideline” and not a bright line does not reduce the benefits of inflation adjustments; the lack of an inflation adjustment would still lead to more upgrades being classified as ADNUs over time simply due to construction-related cost increases.

Finally, NLE reiterates its recommendation that the CAISO consider restructuring the threshold number of projects that is included in the ADC-C4 guideline. The Draft Final Proposal retains the criterion that more than ten generating units must be contributing to the constraint.[1] First, the number should be increased to something higher than ten. Given the exponential queue growth since the CAISO adopted the ADC-C4 guideline in 2020, ten queued and existing generators simply is not the indicator that it once was. Second, only new generators should be counted within this criterion. It makes little sense to look to the number of existing generators to understand which new transmission investments would be beneficial. If the CAISO agrees with this recommendation, there should be a discussion with stakeholders about what the optimal threshold number of generators should be.

[1] Draft Final Proposal at 24.

4. Provide a summary of your organization’s comments on the proposed conditional deliverability based original schedules during delayed deliverability upgrades, as described in the draft final proposal.

The Draft Final Proposal punts the discussion of delayed deliverability upgrades to further legal review and possible future discussion in the Interconnection Process Enhancements (“IPE”) Initiative.[1] NLE understands the CAISO’s reluctance to provide Conditional Deliverability to generators whose Network Upgrades are not completed, yet fears that the CAISO risks exacerbating an already untenable situation that compromises reliability. NLE was heartened by CAISO Staff’s statements on the stakeholder call acknowledging that the current pace of transmission buildout is increasingly out of step with the state’s needs. NLE also appreciates the commitment by CAISO Staff to continue working with the PTOs and stakeholders to address the root cause of snowballing upgrade delays in order to avoid them in the first place, while also managing the impacts of delays as they occur.

The difficult truth is that the current state is unsustainable, unfair, and jeopardizes reliability. Developers of generation projects are bound to load-serving entities (“LSEs”) by contractual commitments to provide needed Net Qualifying Capacity (“NQC”) by certain dates. LSEs are bound by CPUC regulations to demonstrate that they have met their Resource Adequacy (“RA”)  Obligations, and the CAISO is bound to maintain reliability. Thus, generators, LSEs, and the CAISO are all accountable for meeting their deadlines, while the PTOs (and, to the extent those delays are due to the CPUC permitting process, the CPUC) appear to not only account for increasingly gaping delays but also the only entities that bear no consequences for them. This belies fairness and will ensure that the state’s grid misses the mark in terms of both reliability and meeting its greenhouse gas reduction goals.

The Conditional Deliverability product outlined in the Straw Proposal[2] was a practical and reasonable way to: (1) ensure that new resources could continue to enter the RA program despite upgrade delays and (2) maintain pressure on the CPUC to permit upgrades and on the PTOs to complete upgrades in a timely manner. NLE continues to see merit in such an approach but understands that even this would be a band-aid solution to a much deeper problem. There must be greater accountability for the PTOs to provide more accurate timelines upfront and to then remain on schedule, especially for steps that are within the PTOs’ control. Therefore, NLE makes two final recommendations: first, that the CAISO revisit its Conditional Deliverability proposal Track 2 of the IPE Initiative; and second, that the CAISO set a date certain by which the broader issue of PTO delays will be addressed.

NLE thanks CAISO Staff for considering its feedback on these important issues across multiple high-impact and fast-moving stakeholder processes.

[1] Draft Final Proposal at 25.

[2] Deliverability Assessment Methodology Revisions Straw Proposal (August 22, 2023) at 20.

1. Please provide a summary of your organization’s comments on the Generation Deliverability Methodology Review stakeholder call.

REV Renewables (REV) overall supports CAISO’s draft final proposal on Generation Deliverability Methodology Review.  CAISO notes that the changes to SSN and simultaneous dispatch will be implemented for the upcoming 2024 Transmission Plan Deliverability (TPD) allocation process, which REV supports. REV also suggests that the revisions to ADNU/LDNU guidelines will be implemented for the 2024 TPD cycle, and requests CAISO clarification that it agrees.

2. Provide a summary of your organization’s comments on the proposed changes to treatment of n-2 contingencies and mitigation requirements, as described in the draft final proposal.

 REV supports this proposal

3. Provide a summary of your organization’s comments on revising the ADNU/LDNU Guidelines, as described in the draft final proposal.

REV supports this proposal, and REV requests clarification that the revisions to ADNU/LDNU guidelines will also be implemented for the 2024 TPD cycle.

4. Provide a summary of your organization’s comments on the proposed conditional deliverability based original schedules during delayed deliverability upgrades, as described in the draft final proposal.

REV supports CAISO’s proposal to include this topic in the Interconnection Process Enhancements initiative for further exploration. Given delays to network upgrades, this topic is increasingly important in order to get projects online in a timely manner. Having certainty around conditional deliverability will help the projects to achieve successful commercial outcomes.

In CAISO’s next iteration of the proposal, REV requests that CAISO provide clarity that conditional deliverability is assured during the entire time the project is awaiting the upgrade(s) to receive FCDS and how this status will be communicated to customers.

1. Please provide a summary of your organization’s comments on the Generation Deliverability Methodology Review stakeholder call.

In general, the Six Cities support or do not oppose the revisions to the deliverability assessment methodology that are described in the Draft Final Proposal.  The Six Cities view these changes as incremental enhancements that may have an impact on available amounts of deliverability for interconnecting resources in the future, but these changes may not go far enough.  As the Six Cities have reiterated in this and related stakeholder initiatives, the bilateral market for capacity that is eligible to provide Resource Adequacy (“RA”) and meet state and local environmental policy objectives is very tight, and the Six Cities are concerned that this dynamic will persist for at least the next several years.  The CAISO’s deliverability assessment and allocation processes are among the factors that influence whether and under what timeline new resources can come online.  The CAISO is considering related revisions to the interconnection process in the Interconnection Process Enhancements initiative and has also begun assessment of the CAISO RA program in the RA Modeling and Program Design initiative.  As the changes in this and related initiatives are implemented, it may become appropriate for the CAISO to assess if further modifications to the deliverability assessment methodology are needed, with the goal of enabling LSEs within the CAISO to meet evolving needs for RA capacity and renewable resources consistent with state and local policy. 

2. Provide a summary of your organization’s comments on the proposed changes to treatment of n-2 contingencies and mitigation requirements, as described in the draft final proposal.

The Six Cities do not oppose implementation of the proposed changes to the treatment of n-2 contingencies and mitigation requirements, and request that the CAISO monitor the implementation of these changes and provide stakeholders with reports addressing whether the revisions related to n-2 contingencies and mitigation are in fact achieving the desired objectives of enabling resources to provide RA capacity on an expedited basis. 

3. Provide a summary of your organization’s comments on revising the ADNU/LDNU Guidelines, as described in the draft final proposal.

The Six Cities do not oppose these changes.  The Six Cities request that the CAISO provide reports to stakeholders demonstrating the impact of these changes on the deliverability assessment methodology. 

4. Provide a summary of your organization’s comments on the proposed conditional deliverability based original schedules during delayed deliverability upgrades, as described in the draft final proposal.

The Six Cities do not oppose the CAISO’s decision to forgo development of a conditional deliverability status in favor of the proposed revisions related to identification and mitigation of n-2 contingencies, despite concerns about the extent to which these changes will materially impact the amount of deliverability that is available for allocation.  For this reason, the Six Cities request that the CAISO evaluate and report to stakeholders whether the changes related to n-2 contingencies are having the effect of enabling resources to provide RA capacity on a more expedited timeline than otherwise would be applicable.

1. Please provide a summary of your organization’s comments on the Generation Deliverability Methodology Review stakeholder call.

SCE commends the CAISO for the innovative concepts under consideration in this policy initiative to potentially unlock additional deliverability from the existing transmission system. A generation resource’s deliverability is fundamental in helping Load Serving Entities meet their Resource Adequacy requirements, thus such an attribute increases the commercial viability of a given resource.  While striving to identify additional available deliverability, the CAISO must ensure it does so in a manner which does not jeopardize the reliability of the grid.

2. Provide a summary of your organization’s comments on the proposed changes to treatment of n-2 contingencies and mitigation requirements, as described in the draft final proposal.

SCE supports the CAISO’s intention to not change the current requirements for the study and mitigation of n-2 contingencies on double-circuit towers. SCE agrees this will help ensure that RA resources are reasonably available during times of stressed system conditions.

SCE supports the CAISO proposal of a risk-based approach and resulting policy changes to provide deliverability while a resource is waiting for the related n-2 deliverability upgrades to be completed if the contingency is not considered always credible in the operations horizon and does not risk cascading outages. SCE previously sought clarification from the CAISO on how the CAISO could award “conditional deliverability” for a project that is not physically deliverable until a network upgrade is completed.  SCE is appreciative of the CAISO’s elucidation that this deliverability award could only be considered in cases where reliability concerns do not exist, e.g. not risking a cascading situation.

3. Provide a summary of your organization’s comments on revising the ADNU/LDNU Guidelines, as described in the draft final proposal.

SCE support the CAISO proposal to revise the guidelines for identifying Area Deliverability Constraints (ADC) so there is a potential for more constraints to be identified as Local Deliverability Constraints, enabling them to be addressed through the generation interconnection process.  SCE supports raising the cost threshold in the ADC guideline for ADC-C4 to $35M in current dollars to more appropriately categorize certain upgrades as LDNUs.  The higher ADNU cost “floor” should result in more LDNUs being identified which could be more affordable through cost sharing by the various resources triggering the upgrade.

4. Provide a summary of your organization’s comments on the proposed conditional deliverability based original schedules during delayed deliverability upgrades, as described in the draft final proposal.

SCE agrees with the CAISO that this is not simply a technical issue and this issue should be explored in the IPE. SCE is concerned with the CAISO awarding “conditional deliverability” without the existence of the required physical infrastructure (i.e., network upgrades) unless there is a reasonable degree of confidence that the generating unit will continue to provide reliability benefits during the interim period. Any conditional deliverability proposal should not undermine the core structure of the RA process.  Thus, while some deliverability accommodations can and should be made, there must be some understanding of the reliability impacts of these accommodations. There should be some additional consideration for delays in upgrades.  For example, perhaps a deliverability accommodation would be reasonable if the upgrade was not necessary in the base case but was only needed to resolve a contingency or some other infrequent event.

1. Please provide a summary of your organization’s comments on the Generation Deliverability Methodology Review stakeholder call.

Terra-Gen, LLC (Terra-Gen) appreciates the opportunity to comment on CAISO’ Generation Deliverability Methodology Review Initiative Draft Final Proposal. Terra-Gen thanks CAISO for the effort it has devoted to this important effort to address stakeholder requests for review of its deliverability study process and methodology.

In this section, Terra-Gen comments on elements of the Draft Final Proposal that are not addressed in CAISO’s stakeholder comment template questions.

Secondary System Need (SSN) Scenario: Terra-Gen continues to support CAISO’s proposal to remove the SSN study from generation interconnection deliverability studies and thanks CAISO for its responsiveness to stakeholder input on this item. Terra-Gen supports focusing the deliverability study only on hours of stressed conditions when reliability concerns may occur and therefore supports CAISO’s proposal to remove the SSN scenario. Terra-Gen supports CAISO’s plan to perform the SSN study in its transmission planning process to ensure there are no issues limiting the delivery of resources during evolving periods of stressed system conditions.

Resource Dispatch Assumption Levels:  Terra-Gen does not object to CAISO’s proposal to maintain existing assumptions for resource dispatch levels at this time given the CPUC’s planned transition to a 24-hour Slice-of-Day RA framework for its Resource Adequacy (RA) program.  Terra-Gen recommends that CAISO review its assumed dispatch levels for consistency with the values that the CPUC adopts under its Slice-of-Day RA program in the future.

Distribution Factor (DFAX) threshold of 5% and 10%:  Terra-Gen supports CAISO’s proposal to raise the 5% distribution factor threshold for 500 kV line overload constraints to 10%, to decrease the pool of generators that must wait for the identified transmission upgrades intended to mitigate the constrained path. Terra-Gen agrees with the CAISO’s expectation that this will be a more practical threshold to identify only those generators that have a significant impact on 500 kV line overload constraints. Terra-Gen also notes this proposal better aligns CAISO with other regions’ treatment of DFAX thresholds for 500 kV lines.

2. Provide a summary of your organization’s comments on the proposed changes to treatment of n-2 contingencies and mitigation requirements, as described in the draft final proposal.

Terra-Gen understands the CAISO’s explanation that its use of n-2 criteria in deliverability studies is due to the unique construct of CAISO’s Generation Interconnection Process (GIP) studies. Terra-Gen understands that eliminating n-2 criteria from that process would require redesigning the GIP reliability studies, which would be burdensome on CAISO and may produce unanticipated consequences. Terra-Gen continues to request CAISO reconsider its position and propose to apply its n-2 criteria uniformly to all resources for deliverability purposes. Terra-Gen notes that it does not support a full redesign of the CAISO’s GIP reliability studies.

Terra-Gen understands that CAISO’s proposal is intended to continue to apply an n-2 non-cascading outage standard in Phase II deliverability studies for resources seeking FCDS, but to apply a relaxed n-2 cascading outage standard for resources that have been awarded FCDS pending completion of transmission upgrades that will remedy the non-cascading outage risk that was previously identified in the deliverability studies for those resources. Terra-Gen supports CAISO’s proposal to relax the n-2 criteria for projects whose FCDS has been delayed. Terra-Gen also requests CAISO provide clarification to better explain the methodology it will use to determine whether n-2 contingencies cause cascading outage risk or not.

Terra-Gen recommends CAISO analyze the impacts of applying a cascading n-2 test consistently across all Cluster 14 projects prior to finalizing its proposal. CAISO has recently initiated its Cluster 14 Phase II study process and could perform such analysis relatively easily by applying the cascading outage standard under n-2 as a conditional screen for projects that might produce overloading, but not cascading outages. The application of this approach to its Cluster 14 studies would be consistent with how CAISO proposes to apply n-2 to projects that are awaiting the completion of transmission upgrades. Further, such an exercise will provide a reasonable estimate of the additional deliverability that a more uniform application of the n-2 criteria would make available for Cluster 14 resources.

3. Provide a summary of your organization’s comments on revising the ADNU/LDNU Guidelines, as described in the draft final proposal.

Terra-Gen appreciates CAISO’s proposal to revise the guidelines for identifying Area Deliverability Constraints (ADCs) such that there is a potential for more constraints to be identified as Local Deliverability Constraints, enabling these constraints to be addressed through the generation interconnection process. Terra-Gen believes the CAISO proposal to update its guideline ADC-C4 to transition from a fixed cost threshold of $20M to a $60k per MW threshold based on the generation capacity behind the constraint is a step in the right direction. However, Terra-Gen also encourages CAISO to consider utilizing the annual Reliability Network Upgrades (RNU) reimbursement cap for the purposes of the proposed threshold for ADNUs versus LDNUs. CAISO utilizes an annual inflation factor adjustment for these RNU reimbursement caps. Terra-Gen believes that a similar application of annual inflation factor adjustments to the proposed ADNU/LDNU threshold aspect of the CAISO’s proposal would better reflect cost escalation and inflation over time and would be more helpful towards accomplishing the intent of the proposed modifications to identify more LDNUs versus ADNUs.

Terra-Gen notes that the proposed cost threshold change alone does not necessarily impact the volume of upgrades that will qualify as LDNUs versus ADNUs. Increasing the volume of projects that qualify as LDNUs would theoretically increase the possibility that those upgrades could get built because developers could self-fund them instead of hoping that that CAISO approves them through the TPP process. Terra-Gen encourages CAISO to continue monitoring this issue to determine if a more significant shift in the ADNU/LDNU threshold would benefit the state's efforts to bring projects online quickly.

4. Provide a summary of your organization’s comments on the proposed conditional deliverability based original schedules during delayed deliverability upgrades, as described in the draft final proposal.

Terra-Gen supports CAISO’s position to defer the issue of any network upgrades that are delayed by PTOs beyond their originally identified in-service date to the Interconnection Process Enhancements initiative. Terra-Gen agrees that PTO upgrade delays are an important concern, but these delays are not limited to delivery network upgrades and Terra-Gen appreciates this issue will need to be coordinated with other policy venues and industry efforts to address concerns with the pace of resource and transmission development.