Comments on April 5, 2023 stakeholder workshop

1. Please provide a summary of your organization’s comments on the April 5, 2023 Extended Day-Ahead Market (EDAM) ISO Balancing Authority Area (BAA) Participation Rules stakeholder workshop discussion:

The California Community Choice Association (CalCCA) appreciates the opportunity to comment on the April 5, 2023 EDAM ISO BAA Participation Rules stakeholder workshop. CalCCA’s comments focus on (1) resource sufficiency evaluation (RSE) cost allocation, (2) setting the net export transfer constraint in a manner that preserves capacity dedicated to California during times of system stress, and (3) clarifying the historical wheeling access charge (WAC) revenue recovery proposal.

In summary:

• CalCCA supports the initiative’s scope and schedule and agrees with the need to complete Track A issues to support day 1 of EDAM go-live. As the discussion evolves, the California Independent System Operator Corporation (CAISO) and stakeholders should consider whether certain Track B elements can be revisited after initial EDAM implementation.
• The ideas for Track A on Slide 20 appear to be the right steps to take using existing tools if the CAISO fails advisory RSE. CalCCA supports exploring a CAISO balancing authority areas (BAA) procurement mechanism to cure RSE advisory failures once the options on Slide 20 are exhausted. Any CAISO procurement mechanism should allow for the consideration of the magnitude of the failure, the cost of curing the failure, and the cost of failing the RSE before curing.
• CalCCA does not support allocating RSE failure surcharges based upon demand net supply (option three), as many load-serving entities (LSEs) are not their own scheduling coordinators, making it difficult, if not impossible, to tie supply offers to LSEs. Additionally, LSEs are incentivized to bring enough supply to the day-ahead market through both the California Public Utilities Commission (CPUC) and the CAISO Resource Adequacy (RA) compliance mechanisms.
• CalCCA supports the list of conditions for setting the net export transfer constraint included in the CAISO presentation, including Flex Alerts, D+2 Residual Unit Commitment (RUC) infeasibilities, and the RA outlook (Slide 30), as each of these conditions can signal stressed system conditions. 
• Transfer resource settlement payments should be allocated in a manner that is consistent with how the charges are allocated.

It is unclear at this point how to accurately capture historical WAC revenues given the impacts EDAM will have on schedules and WAC’s dependency on the current state of the transmission system.

2. Provide your organization’s comments on the proposed EDAM ISO BAA Participation Rules initiative scope and schedule:

CalCCA supports the initiative’s scope and schedule and agrees with the need to complete Track A issues to support day 1 of EDAM go-live. As the discussion evolves, the CAISO and stakeholders should consider whether it is necessary to complete Track B policy and take it to the CAISO Board of Governors before EDAM implementation or whether certain Track B elements can be revisited after initial EDAM implementation. Completing the Track B policy after initial EDAM implementation would allow time to see how the Track A policies function before finalizing the Track B policy.

3. Provide your organization’s comments on scope item #1 – process to cure advisory resource sufficiency evaluation (RSE) shortfalls:

CalCCA largely supports the proposed objectives for curing advisory RSE shortfalls, including minimizing RSE failures while also minimizing additional BAA costs, curing RSE shortfalls using existing mechanisms, and allocating costs in a manner commensurate with cost causation where feasible (see Slide 18). As discussed in response to question four below, CalCCA has concerns with the discussions around cost allocation, particularly when considering allocating costs dependent upon LSE contracted supply.

The ideas for Track A on Slide 20 appear to be the right steps to take using existing tools if the CAISO fails advisory RSE. These steps could be sequenced so that the more costly measures, such as exceptional dispatch, occur later in the process and those that leverage existing resources under contract occur earlier in the process (like moving forward the bid insertion timeline for RA resources). When issuing market notices to LSEs asking for additional offers, the CAISO should include the size of the deficiency and the LSEs’ share of the deficiency so the LSEs know the amount of deficiency charges that could be allocated to them if not cured. This information should be provided confidentially to each LSE so as not to reveal market-sensitive information as LSEs attempt to cure.  

CalCCA supports exploring a CAISO BAA procurement mechanism to cure RSE advisory failures once the options on Slide 20 are exhausted. Any CAISO procurement mechanism should allow for the consideration of the magnitude of the failure, the cost of curing the failure, and the cost of failing the RSE before curing. Any resource eligible to count towards the RSE should be eligible to cure RSE advisory shortfalls.

A CAISO BAA procurement mechanism could be modeled off the CAISO’s existing Capacity Procurement Mechanism (CPM) used for RA deficiencies, significant events, and exceptional dispatches. CPMs typically have a 30-day minimum term, but as the CAISO notes on Slide 21, a one-day term may fit best with the timing of the RSE given the RSE is re-run daily to capture loads, resources, and uncertainty for each day. The CAISO should explore whether or not a one-day term would be supported by the Federal Energy Regulatory Commission (FERC), given it would divert from previous FERC orders on the term of the existing CPM mechanism. Offers into the CAISO’s procurement mechanism should be capped, but the appropriate cap is dependent upon the term of the procurement.

4. Provide your organization’s comments on scope item #2 – process to allocate RSE failure surcharges and revenues:

The CAISO presents three options for allocating RSE failure surcharges and revenues (Slide 25). Option one would allocate surcharges and revenues pro-rata to SCs based upon metered demand. Option two would allocate surcharges to generators who did not comply with their must-offer obligations and revenues to generators who did comply with their must-offer obligations. Option three would allocate charges to SCs based on metered demand net of supply and revenues to SCs based on supply net of metered demand.

CalCCA understands the long-term objective of incenting market participants to bring enough supply to the day-ahead market to pass the RSE by allocating costs and revenues in a manner that follows cost causation principles. However, CalCCA does not support option three because it would be extremely difficult to tie a resource’s schedule to a particular LSE, which appears to be the intent of the option. LSEs do not have to be the scheduling coordinator for their resources. Since that is the case, there is not a one-for-one relationship between the schedule of a resource and the LSE for which it is serving. Even where an LSE is the scheduling coordinator for a resource, there is no guarantee that the resource being scheduled is to serve that LSE’s load. The LSE may have sold the output associated with that resource to another LSE. The only way to realistically allocate charges based on metered demand net of supply to understand the contractual obligation between LSEs and resources, the schedule alone does not provide this information.  

Additionally, implementing option three on top of the RA program compliance mechanisms already in place would result in duplicative charges on LSEs who have already paid for their deficiencies through the RA program. LSEs are incentivized to bring enough supply to the day-ahead market through both CPUC and CAISO RA compliance mechanisms. The RA program incents upfront compliance through a robust penalty structure at the CPUC. LSEs face tiered penalties increasing in price based upon the number of deficiencies the LSEs have. If LSEs are short on their RA requirements, in addition to paying the CPUC penalties, the CAISO can backstop through its CPM to fill the deficiency and allocate costs first to deficient LSEs. Therefore, LSEs will either (1) collectively meet their RA obligations, obviating the need for CAISO backstop, or (2) receive costs of CAISO backstop allocated to them if they are the cause of a deficiency. After CAISO backstop for RA deficiencies occurs, LSEs’ obligations to bring supply to the day-ahead market should be considered fulfilled, and it is up to the supplier to ensure the resource is available and offered into the day-ahead market consistent with its must-offer obligation to pass the RSE. If a resource does not comply with its must-offer obligation, the resource is assessed Resource Adequacy Availability Incentive Mechanism (RAAIM) penalties.

For these reasons, CalCCA opposes option three. The CAISO should adopt option one in Track A and consider whether or not to adopt option two at a later date. Option two may be duplicative of RAAIM charges. However, it is unclear if RAAIM is effective at incenting supply to be available to meet its RA obligations. If the CAISO transitions away from RAAIM to another availability incentive, like unforced capacity, it may be prudent to revisit option two at a later date.

5. Provide your organization’s comments on scope item #3 – criteria to set the ISO BAA’s net EDAM export transfer constraint:

The CAISO asks how to set the optional “confidence factor” that will be used to account for the deliverability of non-RSE eligible supply, like economic imports with untagged day-ahead schedules. Using historical data on the deliverability of non-RSE eligible supply appears to be the best data source for setting the confidence factor.

The CAISO also asks how the CAISO should set the conditions for using the “additional margin” to constrain the CAISO BAA’s net EDAM export transfers. CalCCA supports the list of conditions included in the CAISO presentation, including Flex Alerts, D+2 RUC infeasibilities, and the RA outlook (Slide 30), as each of these conditions can signal stressed system conditions.  

In this initiative, the CAISO and stakeholders should also consider how the CAISO would set the additional margin percentage once triggered. In the example on Slide 29, it appears in HE 12, the CAISO could set the additional margin anywhere from 0 megawatts (MW) - 3,000 MW. Once triggered, would the CAISO set the additional margin at the maximum amount or would there be an additional decision point deciding where to set the additional margin once one of the conditions on Slide 30 has been met.

6. Provide your organization’s comments on scope item #4 – transfer resource settlement and transfer revenue distribution:

Transfer resource settlement payments should be allocated in a manner that is consistent with how the charges are allocated.  

7. Provide your organization’s comments on scope item #5 – historical wheeling access charge recovery process:

Currently, wheel through and export energy from the CAISO BAA is subject to the WAC. Under EDAM, instead of receiving export schedules, the market will determine transfer energy schedules at transfer locations with other EDAM entities, and these transfer schedules will not be subject to WAC. The EDAM policy establishes a mechanism for recovering foregone WAC revenues. The question of how to establish foregone WAC revenues is a complicated one, and at this point, CalCCA has additional questions, rather than recommendations.

• Does the CAISO anticipate that historical usage will reflect what usage would have been at that time under an EDAM?
• As the transmission system changes, flows on the transmission system will also change. How will new transmission affect flows relative to historical flows? How will the CAISO determine whether the WAC charge would increase or decrease based upon these changes?
• Would the CAISO use the last three years’ historical usage prior to EDAM implementation going forward or rolling three years’ historical usage?

It is unclear at this point how to accurately capture historical WAC revenues given the impacts EDAM will have on schedules and WAC’s dependency on the current state of the transmission system.

8. Provide any additional comments on the April 5, 2023 EDAM ISO BAA Participation Rules stakeholder workshop discussion:

CalCCA has no additional comments at this time.

1. Please provide a summary of your organization’s comments on the April 5, 2023 Extended Day-Ahead Market (EDAM) ISO Balancing Authority Area (BAA) Participation Rules stakeholder workshop discussion:

The Public Advocates Office (Cal Advocates) at the California Public Utilities Commission (CPUC) appreciate the opportunity to offer feedback and comments. 

For the sake of clarity, Cal Advocates acknowledges Pacific Gas and Electric Company’s (PG&E’s) proposal to delineate the separate roles of the California Independent System Operator (CAISO) in the extant discussion.[1]  In these comments, Cal Advocates uses “CISO BAA” when referring to the CAISO’s market participant role as the Balancing Authority Area (BAA) for California load serving entities (LSEs), and uses “EDAM Market Operator” when referring to the CAISO’s role as the Extended Day-Ahead market operator. 

Cal Advocates comments on a number of issues discussed in the CAISO workshop held on April 5, 2023, summarized as follows:

• Cal Advocates appreciates the CAISO’s sense of urgency to ensure that the EDAM is implemented in time for its planned 2025 go-live date.  Cal Advocates urges the CISO BAA to pursue solutions that are agreeable to a majority of CISO BAA stakeholders and avoid settling for imperfect solutions for the sake of expediency.  This may necessitate adjustments to the initiative’s timeline to ensure that inefficient solutions are not adopted.
• The CISO BAA should publish information about LSE shortfalls to meet Resource Sufficiency Evaluation (RSE) requirements following the close of the daily market.
• CAISO should allocate RSE surcharges and revenues to LSEs as accurately as possible to provide the correct incentives for LSE market behavior.
• The net export transfer constraint should consider policy-driven inputs in addition to various market inputs and supply factors.
• The responsibilities and objectives of CAISO’s functions as both the EDAM Market Operator and the CISO BAA market participant should be clearly delineated and distinct.

[1] CISO BAA Participation in the Extended Day-Ahead Market, Pacific Gas and Electric Company, April 5, 2023 at 2, available at: http://www.caiso.com/InitiativeDocuments/PG_EPresentation-ExtendedDay-AheadMarketISOBAAParticipationRules-Apr5-2023.pdf.

2. Provide your organization’s comments on the proposed EDAM ISO BAA Participation Rules initiative scope and schedule:

The timeline of this initiative may prevent the development of equitable solutions, particularly the processes to cure RSE shortfalls and the allocation of RSE penalties and revenues to LSEs.  Given the lack of proposals for those issues and absence of operational knowledge of EDAM, the timeline to solve “day 1 EDAM go-live” with just one straw proposal and one draft final proposal does not appear reasonable.  This rushed timeline may lead to imperfect solutions that fail to meet cost causation principles or are inefficient processes for LSE compliance with the RSE.  Given that the “day 1 EDAM go-live” is targeted for 2025 with EDAM implementation activities carrying on through Q4 2024,[1] the CAISO should adjust the scope and timeline of this initiative to take better advantage of the available time prior to EDAM’s launch.

[1] California Independent System Operator, Extended Day-Ahead Market ISO Balancing Authority Area Participation Rules, April 5, 2023 (EDAM BAA Participation Workshop) at 8, and 13.  Available at: http://www.caiso.com/InitiativeDocuments/Presentation-ExtendedDay-AheadMarketISOBAAParticipationRules-Apr5-2023.pdf.

3. Provide your organization’s comments on scope item #1 – process to cure advisory resource sufficiency evaluation (RSE) shortfalls:

The CISO BAA should publicly publish information about LSE RSE shortfalls.  Information about LSE shortfalls should not be published prior to the market closing but should be available on an ex-post basis to stakeholders.  The CAISO Department of Market Monitoring’s (DMM) regular reports on RSE failures in the Western Extended Imbalance Market serve as a useful precedent.[1]  However, the CISO BAA should publish data about LSE shortfalls with hourly granularity via a platform such as the Open Access Same-time Information System rather than publish aggregated data. 

Consistent LSE RSE shortfalls could be caused by several factors; however, information about specific LSE RSE shortfalls are nonetheless useful for market observers.  For example, the makeup of each LSE’s RA portfolio is different, and some RA resources are less reliable than others.[2]  The transparency provided by hourly granularity data would be useful for promoting the procurement of resource adequacy (RA) resources that can reliably comply with their must-offer obligation (MOO).  Likewise, hourly data on RSE failure would provide a verification check on the assumptions made by the various non-CPUC jurisdictional LSEs that are part of CISO BAA and determine their own resource counting conventions and reliability programs.[3]  Increased transparency through the publication of information regarding LSE RSE failures would promote reasonable resource counting conventions among all CISO BAA-participating LSEs. 

[1] See, for example, http://www.caiso.com/Documents/Jan-2023-Metrics-Report-on-Resource-Sufficiency-Evaluation-in-WEIM-Feb-28-2023.pdf.

[2] DMM, Demand response issues and performance 2022, February 14, 2023 at 4, available at: http://www.caiso.com/Documents/Demand-Response-Issues-and-Performance-2022-Report-Feb14-2023.pdf.

[3] Cal Advocates has voiced concerns about the failure to establish clear rules for resource accreditation in the California Energy Commission’s Publicly-Owned Utility Integrated Resource Plan Guidelines.  See The Public Advocates Office’s Comments on Publicly Owned Utility Integrated Resource Plan Guidelines, TN #245899, September 7, 2022 at 5-6, available at: https://efiling.energy.ca.gov/Lists/DocketLog.aspx?docketnumber=18-IRP-01.

4. Provide your organization’s comments on scope item #2 – process to allocate RSE failure surcharges and revenues:

Cal Advocates appreciates CAISO’s commitment to ensure timely day-one implementation of the EDAM.  Cal Advocates supports exploring the second example, assigning surcharges based on hourly allocation to RA capacity that did not comply with MOOs and revenues based on hourly allocation to RA capacity that did comply with MOOs.[1]  This second example appropriately adheres to cost causation principles without requiring time-consuming policy development and implementation complexity.  The second example should be prioritized on an interim basis to allow exploration of other approaches and a better understanding of the feasibility of implementing other approaches.  At the workshop, multiple parties expressed that the second example could be duplicative of the Resource Adequacy Availability Incentive Mechanism (RAAIM) and, therefore, should not be considered.  However, RAAIM applies penalty and incentive payments depending on an RA resource’s average monthly availability during specific Availability Assessment Hours (AAH).[2]  Penalties and revenues associated with meeting RSE requirements will be based on hourly requirements for each day and those requirements are met by the sum of resource offers, rather than the performance of particular resources.  Insofar as a RAAIM failure may coincide with an RSE failure, it would be reasonable to apply the higher of the two penalties to avoid duplication. 

Cal Advocates is also concerned that the first example, to allocate penalties and revenues to Scheduling Coordinators (SCs) by metered load-share ratio, has a very weak link to cost causation principles.  By allocating costs incurred by some LSEs to all LSEs, penalties would fail to incentivize compliant showings by LSEs within the CISO BAA.  Metered load-share allocation may also raise concerns of unjust or unreasonable rate structures at EDAM since compliant LSEs would be paying the same proportional penalty as deficient LSEs.[3]

Track A and B of this initiative should also develop the third example given its superior adherence to cost causation by directly matching penalty or revenues to LSEs that incurred the penalty or award.  By allocating costs and awards to SCs instead of RA resources, the third example can appropriately consider all supply used to meet the CISO BAA RSE requirements, rather than only RA resources. 

If necessary, this initiative’s development and implementation timelines should be adjusted to enable development and implementation of an equitable cost allocation method that meets cost causation principles.  Additionally, any adjustments to Tariff language should facilitate ongoing development and modification of the process to allocate RSE penalties and revenues.

[1] EDAM BAA Participation Workshop at 25.

[2] Resource Adequacy Availability Incentive Mechanism Modification: Draft Final Proposal, September 21, 2017 at 3-4, and 16.  Available at: http://www.caiso.com/Documents/DraftFinalProposal-RAAIMCalculationModifications-clean.pdf.

[3] Unjust or unreasonable rates may lead to federal litigation of the EDAM structure due to Federal Energy Regulatory Commission (FERC) statutes.  Namely, 16 United States Code §§ 824d - 824e (2000) Section 206(a) which states:

[w]henever the Commission … shall find that any rate, charge, or classification demanded, observed, charged or collected by any public utility for any transmission or sale subject to the jurisdiction of the Commission, or that any rule, regulation, practice, or contract affecting such rate, charge, or classification is unjust, unreasonable, unduly discriminatory or preferential, the Commission shall determine the just and reasonable rate, charge, classification, rule, regulation, practice or contract to be thereafter observed and in force, and shall fix the same by order.

5. Provide your organization’s comments on scope item #3 – criteria to set the ISO BAA’s net EDAM export transfer constraint:

The net export transfer constraint is a reliability tool that can manage the amount of internal BAA supply that is exported to support EDAM transfers.[1]  Two variables, a Coincidence Factor and Additional Margin may be set by the CISO BAA to retain supply from exporting out of the BAA at the EDAM’s Integrated Forward Market (IFM). 

The CAISO speculates on various inputs and conditions to use to inform the Coincidence Factor and Additional Margin.[2]  However the Coincidence Factor and/or Additional Margin may be best informed by policy decisions instead of algorithms. The Additional Margin in particular can increase or decrease the net export transfer constraint in a straightforward manner by setting a MW volume of supply to be retained that can be used as a form of reliability insurance.  Increasing the Additional Margin for specific hours may be prudent when demand is historically very high in the CISO BAA, such as the evenings of August and September.  A policy-driven net export transfer constraint would have to consider non-market reliability resources such as California’s Strategic Reliability Reserve capacity and the CPUC’s Emergency Load Reduction Program in determining how much capacity to retain from EDAM to provide reliability assurances to the CISO BAA.  The CAISO’s suggestion to use Flex Alert and emergency conditions to inform the Additional Margin is similar to this concept, though a policy-based approach could be set months ahead of time to better facilitate planning.[3]

[1] EDAM BAA Participation Workshop at 27.

[2] EDAM BAA Participation Workshop at 30.

[3] EDAM BAA Participation Workshop at 30.

6. Provide your organization’s comments on scope item #4 – transfer resource settlement and transfer revenue distribution:

Cal Advocates does not have a comment on this topic at this time.

7. Provide your organization’s comments on scope item #5 – historical wheeling access charge recovery process:

Cal Advocates does not have a comment on this topic at this time.

8. Provide any additional comments on the April 5, 2023 EDAM ISO BAA Participation Rules stakeholder workshop discussion:

As noted above, Cal Advocates supports PG&E’s delineation between the CISO BAA and the EDAM Market Operator.  The distinction is important for more than nomenclature reasons.  As an internal stakeholder of the CISO BAA, it is important to Cal Advocates that the different roles and objectives of the CISO BAA and the EDAM Market Operator are clearly defined.  In its role as the EDAM Market Operator, there must be some entity within the CAISO that is assigned the role to advocate for the interests of CISO BAA stakeholders.  That entity must be able to make policy recommendations to the CAISO Board of Directors directly to avoid an opportunity for the Market Operator to dismiss policy suggestions that represent the consensus interests of the CISO BAA.  Without an entity capable of this advocacy, the CAISO opens itself to the perception of double-dealing. 

For example, the EDAM Market Operator will likely want to maximize supply offerings to EDAM to maximize transfer opportunities across the footprint, but the CISO BAA market participant may want to retain some supply using the net export transfer constraint to enhance the reliability of the BAA.  While this exact BAA-to-LSE advocacy role does not exist at other independent system operators or regional transmission operators, nor does a stand-alone regional Day-Ahead Market construct such as EDAM.[1]  New institutions require new solutions, and such an office would provide assurances to CISO BAA stakeholders that there is an entity which is adequately independent of the EDAM Market Operator to voice the concerns of the CISO-BAA participants. 

[1] Examples include the role of Cal Advocates at the CPUC, the role of DMM at the CAISO, and the codes of conduct that govern the walled-off Central Procurement Entities that carry out Local RA procurement for Pacific Gas & Electric Company and Southern California Edison Company.

1. Please provide a summary of your organization’s comments on the April 5, 2023 Extended Day-Ahead Market (EDAM) ISO Balancing Authority Area (BAA) Participation Rules stakeholder workshop discussion:

PG&E appreciates the opportunity to comment on this initiative and would like to emphasize the following key points:

• The timing and tracking of this initiative need to be changed:
  • This should not be a multitrack initiative.
  • The timing of Track 1 should not dictate the solution.
  • If the Track 1 timeline drives activities, then CAISO should add contractor resources or look for other means to achieve timeline without sacrificing the quality of the solution.

• The CAISO BAA role needs to be defined and have clear representation in this initiative:
  • This initiative needs to clarify the way we talk about the CISO BAA versus the CAISO market operator.
  • This initiative needs more engagement with the CISO BAA Operations.
    • They can provide valuable feedback
    • Help create effective answers to hard CAISO BAA problems due to EDAM
    • The CISO BAA needs to be an active EDAM participant and they likely have a role to play in this process.
  • This initiative should clearly defined responsibilities for CISO Operators

2. Provide your organization’s comments on the proposed EDAM ISO BAA Participation Rules initiative scope and schedule:

• The timing and tracking of this initiative need to be changed
  • This should not be multitrack initiative.
  • The timing of Track 1 should not dictate the answer.
  • If the Track 1 timeline drives activities, then CAISO should add contractor resources or look for other means to achieve timeline without sacrificing the quality of the solution.

• The scope needs to include the definition of the roles and responsibilities of the CAISO BAA
• • This initiative needs to clarify the way we talk about the CAISO BAA verse the CAISO market operator.
  • This initiative should clearly defined responsibilities for CAISO Operators
  • Understanding who has the authority and responsibility to make key decisions will help clarify how the rules need to be written.

3. Provide your organization’s comments on scope item #1 – process to cure advisory resource sufficiency evaluation (RSE) shortfalls:

• Curing decision should be a rational decision based on numerous factors such as:
  • Timing of the results, i.e., a 6 am advisory result should be considered less accurate than a 9 am
  • Size of the deficiency relative to the size of failure tiers.  
  • Cost of the next incremental cure as compared to the expected failure penalty
  • Be a rational decision, not an algorithm, e.g., it wouldn’t make sense to cure a de minisis failure; or to cure a “Tier 1” failure at a “Tier 3” curing cost.

• Advisory deficiencies can be avoided through process improvements such as:
  • RA bid insertion before 6 am run or SC inserting place-holder bids at before 6 am run.
  • Providing SC’s clear targets.
  • Clear incentives for hitting targets.
  • Clear roles and responsibilities for LSEs, SCs, and CAISO BAA.

• It needs to be clear who has the authority and responsibility to cure on behalf of the CAISO BAA and how cost causation principles will be followed.

4. Provide your organization’s comments on scope item #2 – process to allocate RSE failure surcharges and revenues:

• This is an important and challenging issue for the CAISO BAA. The solution must maintain cost-causation linkages between RSE deficiencies and charges; “Option 1” does not do this; “Option 2” does.  

5. Provide your organization’s comments on scope item #3 – criteria to set the ISO BAA’s net EDAM export transfer constraint:

• This initiative needs to define who, how, and when the authority and responsibility for setting these parameters.

• The Net-Export Transfer Limit constraint should be in effect for the CAISO BAA for all hours.

• The “confidence factor” should be set to zero (0).
• • The EDAM stakeholder processed decided this set of non-RSE-eligible supply is not reliable enough for the day-ahead market and, therefore, not reliable enough to count for the day-ahead RSE
  • If the confidence factor were to be set to anything other than zero (0), then the CISO BAA would be:
    • Getting no RSE credit for this supply; AND
    • Signing up for day-ahead transfers based on this supply.
    • In short – all risk, no reward.
  • Setting the confidence factor to anything other than zero would be inequitable to the CISO BAA.

• With respect to the “additional margin” parameter
  • We need to clarify who is setting this parameter
  • Once we know who is making this decision, we can help create guidelines for the decision, e.g.,
    • It should never be zero during peak or super peak conditions;
    • It should be reflective of the risk to the BAA including:
      • Expected import and export levels
      • Wildfire risk
    • During peak conditions such as in the Summer, the additional margin parameter should include:
      • Historic load biasing data could provide initial guidance and as source of analysis to set the parameter.
        • The subset of load biasing not associated with virtual bidding could be reflective of operators trying to keep generation in California

6. Provide your organization’s comments on scope item #4 – transfer resource settlement and transfer revenue distribution:

PG&E agrees with the direction the CAISO is heading on this topic and appreciate the CAISO’s progress to date.  

7. Provide your organization’s comments on scope item #5 – historical wheeling access charge recovery process:

PG&E agrees with the direction the CAISO is heading on this topic and appreciate the CAISO’s progress to date. For the CAISO BAA, the historic OATT sales will consist of two components:

1. Revenue from exports and wheels that are charged the Wheeling Access Charge, and
2. Revenue from sales of Transmission Priority outline in the Transmission Service and Market Scheduling Prioritization initiative.

If both volumes are not included, then the benchmark for the CISO BAA will be inaccurate and the CISO BAA will be given an inequitable amount of transmission revenue reimbursement.

8. Provide any additional comments on the April 5, 2023 EDAM ISO BAA Participation Rules stakeholder workshop discussion:

No further comments

1. Please provide a summary of your organization’s comments on the April 5, 2023 Extended Day-Ahead Market (EDAM) ISO Balancing Authority Area (BAA) Participation Rules stakeholder workshop discussion:

As noted in many prior comments, a central concern for the Public Generating Pool (PGP) is ultimately enabling an independent governance model for the CAISO Market Operator as a regional market develops. Short of legislative change to enable this goal, PGP has supported the joint authority model and approaches to governance that drive unbiased decision-making and balanced outcomes in the absence of a fully independent model. To this end, one important element of the joint authority model and CAISO’s governance in general is transparency. PGP has generally noted in the past, and notes specifically in this context, that greater transparency is needed with respect to the CAISO’s role and responsibilities as a Balancing Authority (BA) (which apply solely to the CAISO Balancing Authority Area (BAA)) and those it performs as a regional Market Operator (MO) (which apply to the entire EDAM footprint and all participating BAAs). In the Extended Day-Ahead Market (EDAM), there are certain aspects of the CAISO role, notably those that relate to BA functions and the relationship between the BA and the Load Serving Entities (LSEs) within that BA, that may have a different set of stakeholders and objectives than the broader pool of EDAM Entities and stakeholders. As CAISO has proposed, each EDAM Entity BA has responsibilities for implementing EDAM with respect to transmission customers and load-serving entities within its BAA. Each EDAM Entity BAA will be responsible for any process for those entities to engage with their BA on the participation framework for their participation in EDAM as an embedded entity. The CAISO BAA, as an EDAM entity, has this responsibility as well. It appears that the proposed “EDAM ISO BAA Participating Rules” stakeholder process envisions this group and these key questions, which is a critical process for the CAISO BA to become a participant in the EDAM. However, the CAISO BAA is unique as an EDAM Entity because the CAISO is also performing the function of the Market Operator for the entire footprint. It is extremely challenging to appropriately participate and contribute to this initiative without first addressing the differentiation between the roles the CAISO is performing as a Balancing Authority and those it is performing as the CAISO Market Operator.

PGP reiterates the comments reflected in the presentation by PG&E, and notes that PGP has commented similarly on the recent DAME proposal. Clarification and transparency of CAISO’s Market Operator role from its BA role in both language and process will enable appropriate participation in this process and aid progress on regionalization while enabling an appropriate CAISO BAA internal forum to maintain its own internal processes and related stakeholder engagement. PGP suggests this EDAM ISO BAA Participation Rules initiative be split into two separate conversations, one regarding the differentiation between the CAISO MO and CAISO BAA, and a separate conversation that is geared toward the stakeholders internal to the CAISO BAA, essentially the process already outlined. The former should clearly establish roles and responsibilities for the CAISO Market Operator, and the CAISO BAA as a participant like any other EDAM BA, which will enable further testing of the joint governance and improve regional trust in how CAISO is performing its dual obligations. Such an initiative would anticipate engagement from many potential EDAM entities and should focus on defining areas that require separation of duties between the MO and BA to ensure that there is parity between all EDAM and EIM BAs, including the CAISO. The latter process, already outlined in the initial materials presented by CAISO staff in the initiative, will provide an appropriate forum for entities within the CAISO BAA to focus on the CAISO BAA participation within the EDAM market, similar to stakeholder processes that may be expected from other regional EIM Entities as they consider joining the EDAM.

2. Provide your organization’s comments on the proposed EDAM ISO BAA Participation Rules initiative scope and schedule:

As noted above, this scope appears reasonable to address the latter questions specific to the relationship between the CAISO BAA and internal entities, but the questions of how to appropriately differentiate the CAISO BAA and the CAISO MO roles needs to be addressed in a broader context. This should be effectively documented through all of the revised tariff language as well as through the development of new organizational processes that will enable the CAISO to effectively perform and differentiate these two roles in a way that is equitable and appropriately considerate of relevant stakeholder interests in each setting.

3. Provide your organization’s comments on scope item #1 – process to cure advisory resource sufficiency evaluation (RSE) shortfalls:

See above.

4. Provide your organization’s comments on scope item #2 – process to allocate RSE failure surcharges and revenues:

See above.

5. Provide your organization’s comments on scope item #3 – criteria to set the ISO BAA’s net EDAM export transfer constraint:

See above.

6. Provide your organization’s comments on scope item #4 – transfer resource settlement and transfer revenue distribution:

See above.

7. Provide your organization’s comments on scope item #5 – historical wheeling access charge recovery process:

See above.

8. Provide any additional comments on the April 5, 2023 EDAM ISO BAA Participation Rules stakeholder workshop discussion:

See above.

1. Please provide a summary of your organization’s comments on the April 5, 2023 Extended Day-Ahead Market (EDAM) ISO Balancing Authority Area (BAA) Participation Rules stakeholder workshop discussion:

PPC Comments in Response EDAM ISO BAA Participation Rules

The Public Power Council[1] (PPC) thanks the CAISO for the opportunity to comment on the recent workshop regarding EDAM ISO BAA Participation.  PPC continues to be interested in the development of EDAM as a potential option for a greater west-wide day ahead market and looks forward to additional engagement as EDAM enters its implementation stage.

We appreciated the information provided by CAISO staff and also by Pacific Gas and Electric (PG&E).  PG&E’s presentation identified the need to better define the two roles filled by the CAISO, as a participating EDAM BAA and as the market operator.  PPC agrees with the need to better define these roles and to distinguish the individual needs and perspectives that the CAISO has in each of these roles during the EDAM implementation process and in other initiatives that impact EDAM and EIM participants.  Without doing so, it can be unclear to stakeholders how their needs are being considered and addressed – as either a participant in the market or an entity within the CAISO BAA. 

Additional transparency into how the CAISO balances the consideration of these two roles in making recommendations, along with a more clear distinction of which issues are relevant to which role the CAISO is serving, will be helpful throughout the EDAM implementation process.  As issues are addressed in this process CAISO should clearly identify topics that are relevant in its role as a participating EDAM BAA, in its role as a market operator, and where both roles need to be considered.  From a process standpoint, it may be helpful to group together issues based on which roles they impact to facilitate relevant stakeholder participation.

PPC has previously made similar suggestions for providing more transparency into how CAISO balances these dual roles in our comments responding to the GRC’s proposal for EDAM governance[2].  PPC stated:

One of the challenges that has become more evident throughout this process relates to the dual role played by the CAISO as both a BAA - which makes them a market participant, and as a market operator. In initiative discussions it can be difficult to understand which objectives CAISO is pursuing in its role as a BAA, which objectives are related to its role as a market operator and how CAISO is balancing those roles in developing its recommendations. PPC offers for the GRC's consideration, that it would be helpful to ask that CAISO staff clearly and separately identify considerations it is making in its role as an individual BAA/market participant, and which are being made in its role as a market operator. We are hopeful that such an approach would provide benefits to broader stakeholder community by allowing the CAISO to more clearly advocate on behalf of interests within its BAA, to demonstrate that it is acting as an independent and unbiased market operator - despite being a participant in the market, and to provide additional transparency to all stakeholders on how CAISO is balancing its dual roles. If this is outside the purview of the GRC, we appreciate consideration of this recommendation by CAISO staff as a potential improvement to its regular initiative processes.

We also strongly agree with PG&E’s principles that in EDAM no BAA should receive preferential treatment and no BAA should be at a disadvantage.  This is foundational for EDAM implementation.  Additional clarity on how CAISO fills its dual roles will help ensure that objective is achieved in a transparent manner.

Thank you for the opportunity to comment and for the CAISO team’s work on this initiative.

[1] PPC, established in 1966, is an association that represents the vast majority of consumer-owned electric utilities across five states in the Pacific Northwest. PPC’s mission is to preserve and enhance the benefits of the Federal Columbia River Power System operated by BPA for consumer-owned utilities.  PPC’s members pay roughly 70% of BPA’s annual $3.9M revenue requirement, in addition to owning their own generation and transmission facilities in the Northwest.

[2] https://stakeholdercenter.caiso.com/Comments/AllComments/da41bf56-cc7d-40e4-9e63-de91cb83dd21#org-73c42ebc-be72-4e85-b5f7-97606cba45c0

2. Provide your organization’s comments on the proposed EDAM ISO BAA Participation Rules initiative scope and schedule:

No comments at this time.

3. Provide your organization’s comments on scope item #1 – process to cure advisory resource sufficiency evaluation (RSE) shortfalls:

No comments at this time.

4. Provide your organization’s comments on scope item #2 – process to allocate RSE failure surcharges and revenues:

No comments at this time.

5. Provide your organization’s comments on scope item #3 – criteria to set the ISO BAA’s net EDAM export transfer constraint:

No comments at this time.

6. Provide your organization’s comments on scope item #4 – transfer resource settlement and transfer revenue distribution:

No comments at this time.

7. Provide your organization’s comments on scope item #5 – historical wheeling access charge recovery process:

No comments at this time.

8. Provide any additional comments on the April 5, 2023 EDAM ISO BAA Participation Rules stakeholder workshop discussion:

No comments at this time.

1. Please provide a summary of your organization’s comments on the April 5, 2023 Extended Day-Ahead Market (EDAM) ISO Balancing Authority Area (BAA) Participation Rules stakeholder workshop discussion:

Creation of CISO BAA – SDG&E supports PG&E’s proposal to create a separate entity to represent California’s interests within EDAM.

Curing RSE Shortfalls – CAISO’s decision-making process for curing should be a rational judgment between the cost to cure and the cost of the RSE failure.

Allocation of RSE Failure Surcharges/Revenues – CAISO should allocate charges and revenues to demand netted against supply from each Load Serving Entity (LSE).

2. Provide your organization’s comments on the proposed EDAM ISO BAA Participation Rules initiative scope and schedule:

No comment at this time.

3. Provide your organization’s comments on scope item #1 – process to cure advisory resource sufficiency evaluation (RSE) shortfalls:

CAISO’s decision-making process for curing an RSE shortfall should be a rational judgment between the cost to cure and the cost of the RSE failure. If CAISO is facing a de minimis failure where the expected penalty is $0, then CAISO should not pay to cure such a failure. If the expected cost of failure is $100/MWh, then CAISO should be willing to pay up to that amount, on a levelized average cost basis, to cure the failure.

Furthermore, as the entities responsible for paying the bill, CAISO LSEs should have a say in this process. Preferably this would happen in the operational timeframe when CAISO is looking to cure an EDAM RSE failure. If not at that time, CAISO LSEs should at least have their say at the policy level in creating the decision-tree that CAISO will follow to determine when to cure.

4. Provide your organization’s comments on scope item #2 – process to allocate RSE failure surcharges and revenues:

CAISO should allocate charges and revenues to demand netted against supply from each LSE. That way, LSEs responsible for the CAISO BAA failure are bearing the costs. For example, if an LSE has 5 MW of load and brings only 4.5 MW of supply, it should be charged for RSE failures and/or cures. The reverse should be true for revenues. Revenues should be allocated to LSEs’ supply netted against their demand. If an LSE brings 5 MW of supply and has only 4.5 MW of load, then that LSE should be eligible to receive revenues from helping others to cure EDAM RSE failures.

From a process and timing standpoint, SDG&E understands that it may be difficult to estimate demand on an LSE basis with reasonable accuracy. SDG&E is willing to live with an imperfect solution so long as it is ready on day 1 and CAISO can continue to refine it as time goes on.

It may also be difficult to estimate what supply is being brought to market by each LSE. SDG&E believes that CAISO should be able to use the supply plans submitted by each LSE each month. However, CAISO’s own rules create a problem. Due to the Planned Outage Substitution Obligation (POSO) rules, CAISO LSEs may not declare all of their resources on the supply plan. Specifically, CAISO requires LSEs to provide substitution on any resources that go on outage and as a result, each LSE may only meet the bare minimum on its supply plan in order to satisfy its requirements to serve load and opt to leave additional units off in the event of an unplanned outage. If a unit on the supply plan experiences an unplanned outage, the LSEs now have additional units under RA contract available to provide substitution for the resource on outage. It would be far more sensible if CAISO did an extremely simple accounting whereby LSEs who are long on supply can take outages as needed so long as they are still over their requirements. So for example, if SDG&E has to serve 500 MW of demand and has 1,000 MW of supply, then a 100 MW unit needs to go on forced outage, SDG&E should be able to declare all 1,000 MW of supply on its supply plan and still take the 100 MW forced outage without suffering Resource Adequacy Availability Incentive Mechanism (RAAIM) penalties. In that situation, SDG&E has still overshot its requirement by 400 MW even after the outage, but under CAISO’s current POSO rules, SDG&E would suffer RAAIM penalties for the 100 MW of forced outage that went unsubstituted. This design objectively makes no sense, and now CAISO can see that there are spillover effects of having such a nonsensical design. When evaluating how much supply each LSE has brought to meet the RSE, CAISO should be able to simply look at the supply plans for each LSE. However, because CAISO’s POSO rules put LSEs in a difficult position, the simple solution is not feasible and CAISO will have to figure out a complicated work-around for the EDAM RSE to assess the amount of supply that each LSE is bringing to the EDAM RSE.

5. Provide your organization’s comments on scope item #3 – criteria to set the ISO BAA’s net EDAM export transfer constraint:

No comment at this time.

6. Provide your organization’s comments on scope item #4 – transfer resource settlement and transfer revenue distribution:

No comment at this time.

7. Provide your organization’s comments on scope item #5 – historical wheeling access charge recovery process:

No comment at this time.

8. Provide any additional comments on the April 5, 2023 EDAM ISO BAA Participation Rules stakeholder workshop discussion:

SDG&E agrees with PG&E that CAISO needs to create a separate team to represent the interests of CAISO Balancing Authority Area (CISO BAA).   The team representing the CISO BAA needs to be separate and distinct from CAISO’s market policy and development organization.  Further, that team’s goal should be to advocate for the CISO BAA and its interests with a focus on safeguarding California’s reliability at the lowest cost.  To successfully achieve this, the team should have the ability to evaluate CAISO initiatives and their impact on the CISO BAA separately from their impact on the markets as a whole for EDAM and EIM, as well as comment and participate in the stakeholder process on behalf of the CISO BAA just as participating EIM/EDAM BAAs are able to do.

The issue CAISO faces is a potential conflict of interest as the EDAM market operator. There is potential for the interests of the market operator to conflict with California’s interests in reliability and cost. For example, the proposal adopted through the Transmission Scheduling and Market Services Priority (TSMSP) initiative likely would have been different if there was a separate group representing the interest of California stakeholders. The result of the TSMSP initiative appears to have left many California stakeholders dissatisfied and could lead to a growing lack of trust if this conflict of interest is not addressed. Any potential western expansion will require collaboration and trust amongst the participants to be successful.

This request is in line with other participating EIM/EDAM BAAs that can independently advocate for themselves through the continuing EDAM stakeholder processes. The CISO BAA and its interests should receive fair and separate representation from the CAISO market policy team. Separate teams focused on separate interest would likely engender trust with potential EDAM participants that EDAM is being developed and operated fairly to benefit all participants.

1. Please provide a summary of your organization’s comments on the April 5, 2023 Extended Day-Ahead Market (EDAM) ISO Balancing Authority Area (BAA) Participation Rules stakeholder workshop discussion:

The Six Cities agree with the recommendation of the Pacific Gas and Electric Company (“PG&E”) (presented by Todd Ryan on April 5, 2023) that the scope of this initiative include a process for establishing and developing guiding principles for a “CISO BAA representative” team (borrowing the terminology of the Ryan presentation) with responsibility and authority for evaluating the impacts of EDAM operations on load within the CAISO BAA and providing input to EDAM operators on behalf of load within the CAISO BAA.

The Six Cities support consideration of processes for curing advisory RSE failures by the CAISO BAA and the delineation of objectives for cure of advisory RSE failures as described on Slide 18 of the CAISO’s presentation for the April 5th workshop.  The Six Cities have not yet developed substantive positions on other elements relating to cure of advisory RSE failures by the CAISO BAA but will evaluate concrete proposals (along with supporting analyses) regarding this topic.

The Six Cities generally support consideration of the other topics identified for inclusion within the scope of this initiative as identified in Items 4 – 7 below.  At this time, the Six Cities have not developed substantive positions with respect to those topics, but they look forward to evaluating concrete proposals (along with supporting analyses) regarding those topics.

2. Provide your organization’s comments on the proposed EDAM ISO BAA Participation Rules initiative scope and schedule:

The Six Cities agree with the recommendation of PG&E that the CAISO designate one or more experienced personnel with responsibility and authority for evaluating the impacts of EDAM operations on load within the CAISO BAA and providing input to EDAM operators on behalf of load within the CAISO BAA.  The scope of the EDAM ISO BAA participation rules initiative should include development of such a CISO BAA representative team and more detailed delineation of responsibilities and objectives for that team.  To ensure independence, effectiveness, and transparency with respect to the activities and views of the CISO BAA representative(s), such representatives should be under managerial supervision separate from the EDAM operations team.

The Six Cities generally support consideration of the other topics identified for inclusion within the scope of this initiative.

3. Provide your organization’s comments on scope item #1 – process to cure advisory resource sufficiency evaluation (RSE) shortfalls:

The Six Cities support consideration of this topic within this initiative and support the CAISO’s delineation of objectives for cure of RSE failures as described on Slide 18 of the CAISO’s presentation for the April 5, 2023 workshop.  At this time, the Six Cities have not developed substantive positions with respect to other elements relating to this topic, but they look forward to evaluating concrete proposals (along with supporting analyses) regarding this topic.

4. Provide your organization’s comments on scope item #2 – process to allocate RSE failure surcharges and revenues:

The Six Cities support consideration of this topic within this initiative.  At this time, the Six Cities have not developed substantive positions with respect to this topic, but they look forward to evaluating concrete proposals (along with supporting analyses) regarding this topic.

5. Provide your organization’s comments on scope item #3 – criteria to set the ISO BAA’s net EDAM export transfer constraint:

The Six Cities support consideration of this topic within this initiative.  At this time, the Six Cities have not developed substantive positions with respect to this topic, but they look forward to evaluating concrete proposals (along with supporting analyses) regarding this topic.

6. Provide your organization’s comments on scope item #4 – transfer resource settlement and transfer revenue distribution:

The Six Cities support consideration of this topic within this initiative.  At this time, the Six Cities have not developed substantive positions with respect to this topic, but they look forward to evaluating concrete proposals (along with supporting analyses) regarding this topic.

7. Provide your organization’s comments on scope item #5 – historical wheeling access charge recovery process:

The Six Cities support consideration of this topic within this initiative.  At this time, the Six Cities have not developed substantive positions with respect to this topic, but they look forward to evaluating concrete proposals (along with supporting analyses) regarding this topic.

8. Provide any additional comments on the April 5, 2023 EDAM ISO BAA Participation Rules stakeholder workshop discussion:

The Six Cities have no additional comments at this time.

1. Please provide a summary of your organization’s comments on the April 5, 2023 Extended Day-Ahead Market (EDAM) ISO Balancing Authority Area (BAA) Participation Rules stakeholder workshop discussion:

SCE is pleased that CAISO is hosting the EDAM ISO Balancing Authority Area (BAA) Participation Rules initiative and appreciates the opportunity to comment. This initiative is crucial for discussing complex topics that need to be resolved for the CAISO BAA before EDAM go-live. Therefore, it is essential that CAISO does not rush the initiative and utilize the ideas presented by the CAISO BAA participants.

2. Provide your organization’s comments on the proposed EDAM ISO BAA Participation Rules initiative scope and schedule:

SCE generally agrees with the proposed scope and schedule of this initiative.  

3. Provide your organization’s comments on scope item #1 – process to cure advisory resource sufficiency evaluation (RSE) shortfalls:

SCE questions the usefulness of the Advisory Resource Sufficiency Evaluation (RSE) tests for the CAISO BAA and its load serving entities (LSEs) in identifying shortfalls. The Advisory RSE results, as currently proposed, lack the necessary detail for LSEs to accurately procure resources to pass the binding RSE. To address this, load obligation details and advisory RSE results at the LSE level are required. Without this information, some LSEs may over-procure to compensate for the uncertainty of others not curing. SCE proposes CAISO work towards creating an Advisory RSE test that includes detail at the LSE level on Day 1 of EDAM go-live.  The test does not have to be perfect on Day 1 but should be periodically tested and refined for accuracy.  SCE also recommends that the results not be made public and only viewable to the individual LSE running the test.  This ensures that sellers don’t receive a competitive advantage. SCE also notes flaws with the timing of the Advisory RSE Test and when DA schedules are due.  The 9 AM showing could provide false indications of failure due to some LSEs submitting DA schedules after the test between 9 AM and 10 AM. CAISO should consider aligning the DA schedule submission deadline with the last Advisory RSE test. 

CAISO proposed the idea for Track B of having the CAISO BAA cure on behalf of LSEs which SCE strongly opposes.  However, if a solution cannot be developed by the CAISO BAA and market participants to cure shortfalls at the LSE level, SCE assumes that CAISO BAA curing would be the only option.  In such case, SCE advises that curing should only be done when CAISO is certain there is a shortfall.  The CAISO BAA must not rely on Advisory RSE results, but instead only consider bids that will be used to run the market.  That is, the CAISO needs to wait until after 10 AM before taking any potential action.  Before running market optimization, CAISO would identify the shortfall amount and then decide what actions to take.  First, the CAISO must consider that all available RDRRs and Strategic Reserves are accounted for, and if a shortfall still exists, only then consider additional actions.  But again, SCE does not support the CAISO doing such procurement as of the writing of these comments.   

4. Provide your organization’s comments on scope item #2 – process to allocate RSE failure surcharges and revenues:

SCE believes that adhering to cost causation principles requires basing surcharges and revenues on net supply and metered demand, respectively. However, SCE acknowledges the complexity and implementation challenges that may arise when meeting EDAM Go-Live. Therefore, SCE suggests implementing a two-tiered structure surcharge and revenue allocation for EDAM Go-Live, using the first two ideas proposed by CAISO on page 25 of the Extended Day-Ahead Market ISO Balance Authority Area Participation Rules presentation.[1] The first tiered cost and revenue structure would be based on RA compliance showing, and the second tier would be a pro-rata hourly allocation to SCs based on metered demand. LSEs that did not comply with must-offer obligations would be charged first based on their RA deficiency. If the sum of RA deficiency does not cover the RSE failure amount, then the remaining surcharge would have a pro-rata allocation based on metered demand to all LSEs, including those LSEs charged under tier 1. 

[1] See page 25 at http://www.caiso.com/InitiativeDocuments/Presentation-ExtendedDay-AheadMarketISOBAAParticipationRules-Apr5-2023.pdf 

5. Provide your organization’s comments on scope item #3 – criteria to set the ISO BAA’s net EDAM export transfer constraint:

SCE supports the implementation of a net EDAM export transfer constraint to prevent internal supply from being exported out of the CAISO BAA during stressed conditions.  However, it is unclear how the confidence factor and the additional margin will be determined by the CAISO BAA.  Therefore, SCE recommends that the CAISO takes a conservative approach when setting the confidence factor, starting at 50% and adjusting it based on learnings during the first year of EDAM.  Additionally, SCE requests that the CAISO provides more information on how the additional margin reserved will be determined.

6. Provide your organization’s comments on scope item #4 – transfer resource settlement and transfer revenue distribution:

SCE agrees with the proposal to divide up Transfer Revenue 50/50 (after paying Bucket 2 transmission their full share of Transfer revenue).  However, SCE questions why generating resources awarded an IRU or IRD are getting paid anything beyond its own nodal IRU/IRD price.   The CAISO states in the Final EDAM Proposal: [1] 

“Resources that receive an imbalance reserve upward (IRU) capacity award will be paid the applicable nodal imbalance reserve upward price (IRUP). These resources will have a must offer obligation to bid the IRU capacity into the real-time market (RTM). If the resource does not meet its must offer obligation, the ISO will assess a non-compliance rescission charge for the IRU capacity in excess of the resource 5-minute-ramp-capable portion not bid into the RTM.  EDAM transfer resources that received an IRU capacity award will be charged the IRUP of the BAA out of which the capacity requirement is transferring and be paid the IRUP of the BAA into which the capacity requirement is transferring.  

Resources that receive an IRD capacity award will be paid the applicable nodal IRDP. These resources will have a must offer obligation to bid the IRD capacity into the RTM. If the resource does not meet its must offer obligation, the ISO will assess a non-compliance rescission charge for the IRD capacity in excess of the resource 5-minute-ramp-capable portion not bid into the RTM.  EDAM transfer resources that received an IRD capacity award will be charged the IRDP of the BAA out of which the capacity requirement is transferring and be paid the IRDP of the BAA into which the capacity requirement is transferring.” 

SCE believes it is inappropriate to pay the generating resource the difference between the generator’s nodal price and the BAA nodal price it is transfer to (deemed delivered price), in addition to, the generator’s nodal price.   The price difference between the two nodal prices would mostly be attributed to transfer revenue, which should not be allocated to the generator but instead the EDAM entities 50/50.   

[1] See page 119 under section L) Imbalance Reserve Settlements at http://www.caiso.com/InitiativeDocuments/FinalProposal-ExtendedDay-AheadMarket.pdf 

7. Provide your organization’s comments on scope item #5 – historical wheeling access charge recovery process:

SCE supports the concept of a Historical Wheeling Access Charge Recovery Process to apply to the CAISO EDAM BAA.  SCE understands that the proposal in this Stakeholder process is to determine additional details specific to the CAISO EDAM BAA relating to the EDAM-wide proposal set forth in “Providing for Historical Transmission Revenue Recovery through EDAM” (Page 47 of the Final EDAM Proposal published December 7, 2022).  SCE expressed general support for Historical Transmission Revenue Recovery aspect of EDAM, and notes that whatever rules apply to the EDAM footprint as a whole on this issue should be applied to the CAISO, and vice-versa.  SCE also seeks clarification that the proposed process, while described as applying to the CAISO in its entirety, would be applied separately to each CAISO BAA Participating Transmission Owner. 

 SCE believes that any Transfer Revenues generated by EDAM should be considered before determining a make-whole payment for historical Transmission or Wheeling revenues lost as a result of the new EDAM market.  For example, if an EDAM BAA receives a new Transfer Revenue payment of $1 million, but loses $3 million in Transmission / Wheeling revenue, the make whole recovery payment should only be $2 million.  This calculation should be applied to the CAISO only if it is also applied to other EDAM entities.  Additionally, any payment attributed to new transmission should be based on the actual increase in EDAM transfer capability.  SCE’s responses to the specific questions asked are as follows:   

A.  Who determines the values?

The CAISO should, since they are the only entity with the complete set of necessary data with respect to CAISO Wheeling service (individual PTO members of the CAISO are not the providers of Wheeling service and are not provided Scheduling Point specific information of MWh of Wheeling or $ of Wheeling by Scheduling Point) 

B.  Should PTO(s) provide the information to ISO? 

No.  See response to A. 

C.  To what extent should ISO be involved in helping PTO(s) determine the values? 

See response to A. 

D.  How are the foregone WAC revenues value determined?

SCE supports a comparison of actual Wheeling revenue to adjusted historical  Wheeling revenue (adjusted for the change in the Wheeling rate during the historical period as compared to the current period, and adjusted for any Transfer Revenue received by the PTO) 

E.  How is the true-up value accounted in CAISO BAA? 

Any amounts paid for historical WAC recovery to CAISO BAA PTOs should be included in the respective TRBAAs of the PTOs, and deemed as “Wheeling Revenue” by the CAISO.  Any necessary “True Up Adjustment” is also fundamentally Wheeling Revenue, and included in the TRBAAs of the CAISO PTOs. 

8. Provide any additional comments on the April 5, 2023 EDAM ISO BAA Participation Rules stakeholder workshop discussion:

SCE has no additional comments. 

1. Please provide a summary of your organization’s comments on the April 5, 2023 Extended Day-Ahead Market (EDAM) ISO Balancing Authority Area (BAA) Participation Rules stakeholder workshop discussion:

Utah Associated Municipal Power Systems (“UAMPS”) appreciates the opportunity to provide comments on the corresponding market design elements needed for the CAISO Balancing Authority Area (“BAA”) to participate in the Extended Day-Ahead Market (“EDAM”).  While UAMPS is not a load-serving entity (“LSE”) within the CAISO BAA, similar to the WEIM market design, EDAM entities will benchmark market design elements needed for their participation in EDAM against the CAISO BAA approach.  Therefore, UAMPS is providing comments on the proposed allocation for transfer revenue rights for the CAISO BAA.

UAMPS is an interlocal association and a political subdivision of the State of Utah that provides power pooling, scheduling, resource management, and other electric services to its members, consisting of 50 public power systems in seven western states.  UAMPS and its members are transmission-dependent LSEs that rely on the transmission systems of others to serve their loads and access their resources, and they receive transmission and interconnection services for these purposes from, among others, PacifiCorp.  Most of UAMPS’s load and generation are located in PACE, but it also has load in NVE and generation in BPA and WAPA.  Through UAMPS, these loads and resources receive a form of network integration transmission service from PacifiCorp pursuant to a pre-Order No. 888 contract between UAMPS and PacifiCorp, the Transmission Service and Operating Agreement, as amended and restated (“TSOA”). 

Although UAMPS’s load and generation are located in the Western Energy Imbalance Market (“WEIM”) footprint, UAMPS’s generation currently does not participate in the WEIM.  UAMPS does not initially plan for its load and generation to participate economically in the EDAM when PacifiCorp joins EDAM.  UAMPS intends to continue to schedule its generation to meet its day-ahead load forecast.  UAMPS recognizes that EDAM will require changes in its business processes and the submission of self-schedules for both generation and load to CAISO as the market operator.  UAMPS objects, however, to market rules that introduce settlement price differences when utilizing UAMPS’s current transmission rights.   

After reviewing CAISO’s proposal for allocating transfer revenue within the CAISO BAA, UAMPS is concerned that, if extended to other EDAM BAAs, transmission customers would be exposed to settlement charges inconsistent with existing scheduling rights.  Currently, if a transmission customer schedules generation located in an external balancing authority and imports the energy to serve its load, no price difference exists which results in payments or charges beyond the bilateral contract between the generator and the load.  UAMPS urges CAISO to allocate transfer revenue such that it will be allocated to the transmission customer whose import or export created the ability for the EDAM transfer to occur and which resulted in price separation between the two BAAs.  This will allow transmission customers, such as UAMPS, to fully hedge the price differences between its generation and load, essentially holding them harmless from the move to EDAM.

2. Provide your organization’s comments on the proposed EDAM ISO BAA Participation Rules initiative scope and schedule:

None.

3. Provide your organization’s comments on scope item #1 – process to cure advisory resource sufficiency evaluation (RSE) shortfalls:

None.

4. Provide your organization’s comments on scope item #2 – process to allocate RSE failure surcharges and revenues:

None.

5. Provide your organization’s comments on scope item #3 – criteria to set the ISO BAA’s net EDAM export transfer constraint:

None.

6. Provide your organization’s comments on scope item #4 – transfer resource settlement and transfer revenue distribution:

At the workshop, CAISO proposed to allocate transfer revenue, that has been allocated to the CAISO BAA, to measured demand (metered load and exports).  Based on UAMPS’s understanding of the proposal, the approach may not allow a transmission customer to fully hedge price differences between its generation and load as it does today and may unjustly compensate other transmission customers in the BAA who are not involved in the import or export that created the transfer revenue. 

By way of example, assume all BAAs discussed below have joined the EDAM, if a load-serving entity has procured transmission and generation in BAA1 to serve its load located in BAA2, the perfect hedge is achieved by allocating the following to the transmission customer:

• BAA1 allocates congestion revenue from the generator to the intertie scheduling point;
• BAA1 allocates its share of transfer revenue;
• BAA2 allocates its share of transfer revenue; and
• BAA2 allocates congestion revenue from the intertie scheduling point to the load aggregation point.

Assume no internal congestion in either BAA1 or BAA2, if the marginal energy cost in BAA1 is $20.00 and in BAA2 is $50.00, this results in transfer revenue equal to $30.00.  The CAISO, as the EDAM market operator, will allocate the transfer revenue to BAAs using a 50/50 split.  Thus, BAA1 is allocated $15.00 and BAA2 is allocated $15.00.  The transfer revenue is then subsequently allocated to market participants consistent with the rules of the individual BAAs.

If BAA2 allocates its transfer revenue to measured demand, this can result in cost shifts between load-serving entities in its BAA.  Assume BAA2 has two LSEs, LSE1 is serving its load with an import sourced from BAA1 and LSE2 is serving its load with internal generation.  If LSE1 metered demand is 600MW, LSE2 metered demand is 400MW, the BAA2 transfer revenue will be sub-allocated as follows: LSE1 = $9.00, LSE2 = $6.00.  However, LSE1 needs to receive a payment of $15.00 in order to fully hedge the locational price difference between its generator and load.  LSE2 receives a $6.00 payment, yet none of the generation supporting LSE2 is sourced from BAA1.  There is no justification for LSE2 to receive a $6.00 payment.

If BAA1 also allocates its transfer revenue to measured demand, similar cost shifts will occur between LSEs and exports it its BAA.  Assume BAA1 has two LSEs who source all generation internal to BAA1.  If LSE3 metered demand is 300MW, LSE4 metered demand is 300MW, and the LSE1 Export is 600MW, the BAA1 transfer revenue will be sub-allocated as follows: LSE3 = $3.75, LSE4 = $3.75, and LSE1 Export = $7.50.  However, LSE1 needs to receive a payment of $15.00 in order to fully hedge the locational price difference between its generator and load.  LSEs in BAA1 receive payments, even though their generation is not exposed to any marginal energy cost price differences, which results in unwarranted compensation for those LSEs.

Transfer revenue should be allocated according to cost causation principles.  Applied here, that means allocating transfer revenue to the transmission customer whose import or export created the ability for the transfer revenue to occur and making such customers whole.  Broader allocation and payment to other LSEs within the BAA is unwarranted as they neither caused the transfer revenue nor were they impacted by it.  In addition, allocating transfer revenue to the transmission customer whose transmission rights resulted in transfer revenue ensures that entities like UAMPS are able to use their valuable transmission rights as they do today and are held financially harmless.

7. Provide your organization’s comments on scope item #5 – historical wheeling access charge recovery process:

None.

8. Provide any additional comments on the April 5, 2023 EDAM ISO BAA Participation Rules stakeholder workshop discussion:

None.

1. Please provide a summary of your organization’s comments on the April 5, 2023 Extended Day-Ahead Market (EDAM) ISO Balancing Authority Area (BAA) Participation Rules stakeholder workshop discussion:

Vistra agrees with Pacific Gas & Electric’s (PG&E) request that the CAISO prioritize defining its roles supporting its Balancing Authority Area (BAA) and Transmission Operator (TO) roles as well as its independent market operator role for an Extended Day-Ahead Market (EDAM).

It is critical the CAISO clearly and explicitly define roles and responsibilities in terms of both EDAM and the CAISO BAA and transmission area. The Tariff, Manuals, and Procedures must ensure those roles are clear to ensure that CAISO BAA and transmission operators are on an equal playing field with all other BAAs and transmission service providers within EDAM. Market participants must have confidence in EDAM, and this clarity is needed to instill that confidence.

It will be essential that EDAM and WEIM functions are physically separated from the operating desks that manage the CAISO BAA or TOP functions. In addition to physical separation, there will need to be data sharing and communication firewalls. We understand this requires the CAISO to incur additional costs, however this additional cost is appropriate given that all BAAs opting into EDAM will have incremental costs to support integration.

In summary, Vistra shares PG&E’s concern that EDAM should not give preferential treatment to any BAA or set of BAAs and that CAISO should be an active participant in EDAM. EDAM BAAs should have access to the same tools to behave as an active participant and communicate using the same tools with the EDAM operator. The draft EDAM Tariff does not provide this needed level of clarity. We request the CAISO prioritize the need for this additional clarity in the next round of EDAM Tariff drafts. The appropriate roles and responsibilities and separation of functions can be discussed and clarified in this initiative’s straw proposal for use in the next round of EDAM Tariff development.

2. Provide your organization’s comments on the proposed EDAM ISO BAA Participation Rules initiative scope and schedule:

It is likely that the CAISO BAA will need to develop business practices and procedures to effectively participate in EDAM, of which some may necessitate Tariff changes. We recommend the CAISO plan to have an on-going user group for CAISO BAA participation as we move forward with EDAM integration. An on-going user group, even if quarterly, should allow for fast identification of a need to improve, clarify, or add necessary processes to participate in EDAM more effectively.

Vistra believes there is a distinction between discrete operational improvements, and enhancements that require EDAM policy changes. Vistra believes that while discrete operational improvements are well-suited for consideration by the user group, operational enhancements that require policy changes should only be made as part of a future EDAM enhancements stakeholder project. In the meantime, we do not believe operational changes should be delayed as they are identified through experience. 

In this initiative, Vistra requests the CAISO also include in Track A the criteria for setting the CAISO’s net export constraint for transfers out of its BAA. This is a critical element of the EDAM design, and the criteria will need to be set prior to the first day of EDAM. To support this, we believe the criteria to include in the Tariff should be general enough to apply consistently across all EDAM and allow for refinements over time. For the CAISO, the user group and resulting Proposed Revision Requests to the Business Practice Manuals can be used to update the specific criteria consistent with Tariff rules. Similarly, the user group could discuss settlement mechanisms and leverage the BPM change management process where possible to pursue improvements as needed. As mentioned previously, if there are issues identified that merit policy changes these should be pursued in a stakeholder effort.

3. Provide your organization’s comments on scope item #1 – process to cure advisory resource sufficiency evaluation (RSE) shortfalls:

The CAISO BAA is made up of an organized market of buyers and sellers where the load serving entities and the resource owners have their own scheduling coordinators for their loads or resource participation. CAISO BAA has an obligation to ensure reliability. CAISO BAA operators currently use the D+2 and D+1 Integrated Forward Market and Residual Unit Commitment runs to support pre-scheduling roles. Both D+2 and D+1 horizons are critical to support CAISO participation in EDAM.

Vistra does not believe any emergency actions should be used to cure an advisory failure. Staff should stay focused on the purpose of the RSE, which is to ensure sufficient market participating resources are offered into EDAM, where out-of-market resources are by definition ineligible. For example, it would be inappropriate to include legacy Reliability Must Run resources as eligible supply to meet the overall requirements. Similarly, it would not be appropriate to include any Strategic Reliability Reserves as eligible supply because these are non-market participating resources and should not be included in the Resource Sufficiency Evaluation test to identify whether CAISO BAA has sufficient supply to avoid leaning on other areas to meet reliability needs. It would also be inappropriate to issue Restricted Maintenance Operations or Generation Restricted Maintenance Operations Notices, postpone outages for returning equipment to service early, cancelling outages, access emergency supply including Emergency Load Response Program or Reliability Demand Response Resources, or request relaxing environmental restrictions on plants that requires California Governor to issue an emergency proclamation.

There are two general options the CAISO BAA could leverage to increase its likelihood of passing an advisory Resource Sufficiency Evaluation (RSE) test. The first is to ensure sufficient transparency on the RSE requirements and ensure results for advisory runs are provided on a timely basis to provide sufficient time for market participants to either bilaterally contract for additional supply or to offer additional supply considering the risk of limited supply. At least one advisory run result two days prior to the operating day would suffice. The second is for the CAISO BAA operator to offer non-Resource Adequacy capacity without a must offer obligation an offer to procure its capacity, assigning it must offer obligation to bid into the day-ahead market.

Vistra recommends pursuing measures to accomplish both options by making the RSE advisory results transparent beginning two days prior to the operating day and by using its Significant Event Capacity Procurement Mechanism (CPM) authority if it believes it is appropriate to cure the RSE advisory failure. Below we provide additional details.

[1] CAISO Operating Procedure, System Emergency OP 4420, https://www.caiso.com/Documents/4420.pdf.

[2] CAISO Reliability Requirements Business Practice Manual, Pages 149 – 151, https://bpmcm.caiso.com/BPM%20Document%20Library/Reliability%20Requirements/BPM%20for%20Reliability%20Requirements%20Version%2070_redline.pdf.

4. Provide your organization’s comments on scope item #2 – process to allocate RSE failure surcharges and revenues:

Vistra can support the EDAM operator assessing RSE failure surcharges[1] on a pro-rata hourly allocation to Load Serving Entities based on metered demand. We cannot support either of the other two proposals.

First, the EDAM operator should not allocate any RSE failure surcharges to CAISO RA capacity. Unavailable RA capacity is already penalized under the Resource Adequacy Availability Assessment Mechanism and another charge for a share of the RSE failure surcharges to those same entities would be an inappropriate double penalty. Further, RSE is not a resource adequacy sufficiency test and confusing RSE with RA availability is detrimental to the discussion and exploration of solutions.

Second, the EDAM operator should not assess RSE failure surcharges to CAISO Load Serving Entities’ metered demand net of supply associated with the LSE scheduling coordinator ID. This proposal would unfairly shift a larger burden for covering failures to entities with less utility owned generation versus those LSEs that hold more utility owned generation. We are particularly concerned this would have the adverse result of unduly harming competitive retailers over investor owned utilities that may hold more utility owned generation than their Community Choice Aggregators or Electricity Service Provider colleagues.

[1] For simplicity, Vistra focuses our comments on how the CAISO will charge the penalties, however we recognize the options all include a complementary proposal for allocate those charges as revenues to remain revenue neutral.

5. Provide your organization’s comments on scope item #3 – criteria to set the ISO BAA’s net EDAM export transfer constraint:

Vistra requests the CAISO clarify that the decision to set the net export constraint will be made by the CAISO BAA independent of the EDAM operator. In addition, we have two clarifying questions:

• Whether the forecasted load is a forecasted load pre- or post- CAISO operator biases.
• If slide 30 reference “D+2 RUC” is meant to include the D+2 RUC or D+2 RSE run, or not. 

6. Provide your organization’s comments on scope item #4 – transfer resource settlement and transfer revenue distribution:

None currently.

7. Provide your organization’s comments on scope item #5 – historical wheeling access charge recovery process:

None currently.

8. Provide any additional comments on the April 5, 2023 EDAM ISO BAA Participation Rules stakeholder workshop discussion:

Vistra recommends the following terminology be adopted going forward and all governing documents as amended to implement EDAM:

• CAISO or CAISO BAA (BAA/participant) that perform forward planning, day-ahead, and real-time operations needed to support Balancing Authority Area or Transmission Operator roles.
• EDAM BAAs, including CISO BAA, which are the set of BAAs within the EDAM controlled grid.
• EDAM when referring to the market operator or footprint making up the controlled grid.
• WEIM BAAs, including CISO BAA, which are the set of BAAs within the WEIM controlled grid.
• WEIM when referring to the market operator or footprint making up the WEIM controlled grid.

1. Please provide a summary of your organization’s comments on the April 5, 2023 Extended Day-Ahead Market (EDAM) ISO Balancing Authority Area (BAA) Participation Rules stakeholder workshop discussion:

WPTF appreciates the opportunity to provide comments on the workshop held on April 5, 2023 to discuss the CAISO BAA specific EDAM participation rules. EDAM has the potential to realize market benefits and efficiencies across the entire EDAM footprint. However, the benefits that are ultimately realized by all are directly related to the relationship and trust between each participating BAA. Thus, it is imperative that we ensure the market participation rules developed in this effort that guide how the CAISO BAA will participate in EDAM are done in a way that helps facilitate confidence and credibility among all BAAs. Rules that limit participation may indicate CAISO BAA itself is not fully trusting of the EDAM market design or other BAAs which in turn can harm overall participation and potential benefits.

2. Provide your organization’s comments on the proposed EDAM ISO BAA Participation Rules initiative scope and schedule:

WPTF appreciates the CAISO acknowledging that this effort may require two tracks. While it may be necessary to phase the initiative’s implementation into tracks, WPTF does not agree the initiative should be separated into tracks up front. We are concerned with the way the CAISO is prioritizing some elements over others. For example, rather than taking the position up front that durable long-term solutions are going to be delayed until track B and track A will include interim measures, the CAISO should strive to first design and implement the durable solution in track A. Ideally the stakeholders and CAISO can develop the long-term durable solutions for all elements in track A and then evaluate whether or not that can meet the implementation timeline. If not, only then is an interim solution considered for implementation in track A and the durable solution is moved to track B.

3. Provide your organization’s comments on scope item #1 – process to cure advisory resource sufficiency evaluation (RSE) shortfalls:

WPTF would like to take this opportunity to reiterate that as we discuss RSE related market participation rules we keep in mind that RSE serves a different purpose than RA. A shortfall in RSE is not indicative of emergency conditions in real-time, it is more of a measure as to whether the CAISO has sufficient resources offered into the integrated forward market to result in a feasible integrated forward market solution without relying on other BAAs to mitigate against risk of leaning through IFM. Also keep in mind the RSE requirement includes imbalance reserves, which assumes 95% of uncertainty will materialize.  With all this in mind, we believe a detailed conversation on when curing advisory failures would be appropriate versus when a RSE binding failure and associated surcharge is in the best interest of the CAISO BAA.

That being said, of the four actions identified by the CAISO as being potential mechanisms by which the CAISO could address potential RSE advisory shortfalls, moving RA bid insertion to an earlier timeframe does make sense to WPTF. These bids are going to be inserted into the market anyways if the Scheduling Coordinator (SC) does not submit them at some point. Thus, an RSE advisory shortfall that will be cured once bid insertion rules are applied can be thought of as a false indication of RSE shortfall. Inserting the bids at an earlier point in the RSE advisory runs provides a more accurate assessment of potential RSE advisory shortfalls. However, the remaining actions identified by the CAISO are concerning to WPTF and warrant further discussions.

WPTF does not believe the CAISO should be inserting bids for PDR/RDRR to cure RSE shortfalls. It is our understanding that if the CAISO were to include PDR and RDRR resources in the RSE to cure any shortfalls, this also means the CAISO would be inserting bids into the IFM on their behalf which could result in market dispatches. First, we would like the CAISO to confirm this understanding, as counting these resources towards RSE but not including them in the market harms CAISO credibility. With this understanding, we need to keep in mind that these resource types do not have bid insertion rules applied to them for specific reasons. Inserting bids on their behalf and exposing them to market dispatches may violate programmatic restrictions, result in inefficient use of such resources, and create other market inefficiencies.

Similarly for utilizing tools enabled by system emergency conditions, RSE shortfalls are not a prediction of real-time system emergencies. Thus, leaning on such actions is not appropriate. Emergency actions are to prevent load shed and grid reliability issues that arise in real time, and should not be used to pass an RSE test in the day-ahead time frame to limit financial exposure. It is critical to remember that out-of-market actions or out-of-market tools cannot improve the CAISO BAA’s ability to have sufficient market participating resources to be able to feasibly solve the integrated forward market without “leaning” on other BAAs.

The CAISO identified a potential option for Track B - procuring “cure capacity”. This is an interesting idea and WPTF is open to discussions. It could be the case that this option is the long-term durable solution thus would be more appropriate to include in Track A rather than the aforementioned actions that have inappropriate market impacts.  WPTF believes a discussion is warranted regarding if it makes sense for the CAISO to leverage the existing Capacity Procurement Mechanisms for significant events as a process for curing capacity as a feasible Track A solution.

4. Provide your organization’s comments on scope item #2 – process to allocate RSE failure surcharges and revenues:

WPTF believes it is appropriate to consider long-term durable solutions now and modify if/when needed to align with other policy changes. It is important that we discuss how the allocation of RSE failure charges interacts with the existing Resource Adequacy Availability Incentive Mechanism to ensure appropriate outcomes. WPTF also believes a discussion is warranted regarding if allocating the RSE failure charges to load serving entities metered demand net of resources under their scheduling coordinator ID shifts costs unfairly. Shifting costs to Load Serving Entities based purely on their choices to contract or own generation seems as though it may not align with cost causation principles and thus warrants further discussion.

5. Provide your organization’s comments on scope item #3 – criteria to set the ISO BAA’s net EDAM export transfer constraint:

WPTF is concerned with the proposed formulation of the net EDAM export constraint. More specifically, we are concerned that this formulation provides the CAISO too much flexibility in setting their net EDAM export constraint such that it will harm CAISO’s credibility in participating in the EDAM.  The formulation as presented during the April 5 workshop includes two parameters – confidence factor and additional margin – that could enable the CAISO to essentially restrict all export transfers without any transparency. First, we need to evaluate if these factors align with the intent of the policy discussions. If the CAISO is going to include such factors, then there needs to be more transparency and specificity into how the additional margin and confidence factors are determined. Not allowing any RA capacity to support transfers even when the CAISO is flush with capacity seems like a way to hold back RA capacity from being available to other BAAs, hindering economic benefits of the entire system. Here again, this could harm CAISO’s credibility to the other participating EDAM BAAs and diminish overall EDAM benefits.

6. Provide your organization’s comments on scope item #4 – transfer resource settlement and transfer revenue distribution:

No comment at this time. 

7. Provide your organization’s comments on scope item #5 – historical wheeling access charge recovery process:

No comment at this time.

8. Provide any additional comments on the April 5, 2023 EDAM ISO BAA Participation Rules stakeholder workshop discussion:

During the EDAM policy discussions, questions were raised related to the Maximum Import Capability (MIC) and how the existing MIC requirements would interact (or not) with the transmission path requirements under EDAM. The CAISO indicated that discussion would take place during this policy effort, thus we would ask that in the issue paper the CAISO initiate those conversations. For example, it is unclear to WPTF if a resource physically located in an EDAM BAA but providing import RA to CAISO would now be required to have MIC and secure transmission to support transfers between the BAAs or continue status quo and just need MIC. 

WPTF agrees that the role and responsibilities of California ISO corporation in its balancing authority area or transmission operator functions should be distinct from its EDAM and WEIM operator functions. WPTF recommends the CAISO adopt strict separation of function rules and procedures for its BAA/TOP versus its market operator roles. For example, the EDAM Tariff and applicable Business Practice Manuals can begin to refer to EDAM in place of CAISO when referring to the market operator role and functions and to retain CAISO, or CAISO BAA, when referring to BAA or TOP role and functions.