Comments on Discussion paper 3 and October 19 and October 30 working groups

1. Please provide a summary of your organization’s feedback on the October 19 and October 30 working groups, and discussion paper posted on October 16, 2023:

We provide responses to CAISO’s “question to consider” for problem statements #5, 7, 8, 9, and 15 in the discussion paper. We also provide suggestions for combining and prioritizing problem statements.

2. Provide your organization’s feedback on the Stakeholder Proposed Problem Statements section of the discussion paper and as discussed in the working group meetings. Please also include any outstanding problem statements that are not captured by those proposed in the discussion paper:

It may be possible to combine:

• Problem Statements #5, 12, & 13
• Problem Statements #7, 14 & 15
• Problem Statements #8, 9, & 11

From our perspective, the most important problem statements are (in numerical order): #5, 6, 7, and 8. See question no. 3 below for a categorization and prioritization of these and the other problem statements.

Problem Statement #5

What analysis is needed to support this problem statement?

• Analysis of the extent of current double counting of attributed generation, by simply quantifying attributed generation and comparing this to voluntary and compliance program data. This data may be found in WREGIS, state RPS data, state power source/fuel mix disclosure LSE data, Green-e® program voluntary market data.
• We are not recommending that CAISO conduct analysis to determine whether attribution results in double counting. The relevant state compliance or voluntary program will determine that. Neither are we recommending that CAISO evaluate the potential for future perceived double counting since that would involve evaluating future state policy, accounting, and tracking scenarios. That analysis would be of interest, however.

What metrics at the ISO are of concern?

• See our 9/27 comments: https://stakeholdercenter.caiso.com/Comments/AllComments/01bb00d7-a42c-40b4-82d8-2398e5ffae0e#org-faa6b199-6bcc-4d27-890d-1ab027546755.

1. Attributed hourly generation data by GHG compliance zone or state

1. Total attributed generation: All generation attributed in the timeframe (e.g. month)
2. Attributed non-WREGIS generation: Total attributed generation minus attributed WREGIS generation
3. Attributed WREGIS generation: Generation attributed in the timeframe that is tracked in WREGIS. We have asked the ISO to provide the quantity of electricity in a given period (e.g. month) from each generating unit registered in WREGIS that was bid into the market and attributed to certain GHG compliance zones on a resource-specific basis as a result of the GHG optimization method (e.g. a “deemed” import to the California GHG compliance area). We’ve provided detailed comments (on Sept 26, 2022 on the Revised EDAM proposal) explaining the rationale. We’ve also explained the frequency (monthly) and granularity (hourly). WREGIS can “tag” or designate an equivalent quantity of WREGIS Certificates associated with load in that zone. This communication of quantity to WREGIS and WREGIS designation of an equivalent quantity will work with the timing differential between attribution in short-term markets and monthly issuance of WREGIS Certificates, as well as the hourly (vs. monthly) megawatt-hour (MWh) format of the data. Market attribution data would be aggregated by generator and by month on monthly issued certificates. See https://stakeholdercenter.caiso.com/Common/DownloadFile/b4f1bd16-b72b-4b42-8c32-2fc40ecbc7ef.

2. Unallocated hourly generation data for the whole market (and/or narrower geographies)

1. Total unallocated generation: Generation not attributed or transacted on a resource-specific basis in the market in the timeframe (e.g. monthly)
2. Unallocated non-WREGIS generation: Total residual generation minus generation that is tracked in WREGIS. Stakeholders could use this to characterize market purchases for retail claims or in load-based programs

What metrics at the retail level are of concern?

• Monthly RECs in WREGIS and other contractual instruments used to demonstrate retail delivery of specified power (e.g. renewable energy) for compliance or voluntary sales.
• Potential future hourly accounts, e.g. those reported under CA SB 1158.

What states/other reporting requirements does this pertain to?

• Market attribution to CA and WA.
• Retail programs in CA, WA, OR, NV, UT, AZ, CO, and NM.
• Voluntary RE programs/sales in all Western states.

Are there examples that the working group can provide either as a case study or a comprehensive list?

• Every case where the generation is deemed delivered to CA or WA load and the REC is retired for load in a different state for a retail emissions claim/report (compliance or voluntary).
• Hypothetical example: Generation and associated emissions from a wind generator located in WY participating in EDAM are attributed and deemed to serve load in the CA GHG compliance area in EDAM, while the RECs associated with this generation are sold and transferred in WREGIS to an LSE in CO and retired for compliance with CO’s RPS program. In this case, the same generation and associated emissions are reported as serving load in two different states.
• More data, from WREGIS, states, and the ISO would be needed to identify examples of actual double counting. See below.

What is the role of CAISO?

• CAISO should coordinate with other systems for attribution (e.g. WREGIS) to prevent double counting regionally. CAISO should not adopt a resource-specific attribution mechanism in market design that gives preference to a specific state or market participant, or that only accommodates a single type of state program such that it may harm other existing state and voluntary programs or create inconsistency that can damage the market or these programs.

Problem statement #7

What proposals are there to reflect a program without a cost of carbon?

• There are entities from multiple states that value low- or nonemitting power that participate in ISO markets. If the market is going to allocate this specified power (and differentiated emissions) efficiently to these entities in these states, it is with a price on carbon in the market. And the resulting allocation of emissions/generation should be coordinated to match existing out-of-market allocation systems, e.g. RECs, for generation tracked in those systems, to avoid double counting.
• The alternative is not to allocate in the market and exclusively use an out-of-market allocation mechanism, e.g. RECs/EACs. But that is not sufficient for many state programs (e.g. that require bundling).

What is the role of the CAISO?

• Once it chooses to allocate emissions, CAISO’s role is to do it in a transparent and efficient way, without giving preference to a certain market participant, state, or type of policy.
• If it cannot enable emissions allocations to entities in all states in the market, at the very least its role is to be transparent and to coordinate with other systems to prevent double counting at a regional level. It can provide better data and work to facilitate a regionally consistent residual mix, for example.

What is the role of states?

• States decide what constitutes the procurement and/or delivery of clean power (or power with specified emissions) in a market under their programs, e.g. market power + RECs.

Problem statement #8

What data is required or desired by participants?

• See our 9/27 comments: https://stakeholdercenter.caiso.com/Comments/AllComments/01bb00d7-a42c-40b4-82d8-2398e5ffae0e#org-faa6b199-6bcc-4d27-890d-1ab027546755.

Are there examples of attribution in wholesale markets affecting retail GHG claims, load-based state programs, or systems for allocating generation and associated emissions to retail load?

• If “attribution in wholesale markets” refers generally to procuring power wholesale, then examples of effects on retail claims and systems for allocating generation to load include:

• NEPOOL import rules. If you want a retail claim for imported power in NEPOOL, you need a REC and NEPOOL requires a bundled import.
• Residual mix emissions factor calculations for NEPOOL, PJM, and NYISO
• The U.S. FTC said Green Mountain Power could not claim retail delivery without the RECs. This generally shows the interaction between a wholesale market activity and retail claims. Letter from James A. Kohm, Assoc. Dir., Div. of Enf’t, Bureau of Consumer Prot. to R. Jeffrey Behm, Esq., Sheehey, Furlong & Behm, P.C. (FTC Feb. 5, 2015), https://www.ftc.gov/system/files/documents/public_statements/624571/150205gmpletter.pdf.

• Examples of effects on load-based state programs include all load-based state programs that have limits regarding the procurement of power, including limits on unbundled attribution in CA and other states.
• If, on the other hand, “attribution in wholesale markets” in this question refers specifically to the current resource-specific market mechanism for attribution in ISO markets, then examples of effects on state programs, retail claims, and REC systems include:

• WA’s determination about CA imports under CETA. In WA, all stakeholders agreed and regulators later approved rules that RECs associated with energy imported into California with specified emissions (and counted under cap-and-trade) without RECs are not be eligible to be counted toward CETA, a load-based emissions standard for WA LSEs. See WAC 194-40-420 (2)(b), (4), and (5): https://app.leg.wa.gov/WAC/default.aspx?cite=194-40-420.
• Oregon DOE 2017 stakeholder meetings on RECs and EIM imports: https://www.oregon.gov/energy/energy-oregon/Pages/RECs-EIM-Stakeholder-Meetings.aspx.
• CA’s IEMAC 2019 Annual Report (pg. 15-17). Cites “mounting concerns about how low- or zero-carbon renewable energy imports are tracked and managed in California’s cap-and-trade program.” States “If a neighboring state associates a REC with a low- or zero-carbon resource when California also counts the low- or zero-carbon resource with the associated energy delivery, there is the potential to “count” (albeit using different metrics) the same low- or zero-emissions attribute twice.” Recommends “that CARB share available data on the RECs that were retired or “bundled” with California imports” https://calepa.ca.gov/wp-content/uploads/sites/6/2020/01/Final_2019_IEMAC_Annual_Report_2019_12_06.a.pdf.

• Market attribution data is needed to calculate an accurate market unallocated mix and regional residual mix to compare to state default emissions factors and state LSE power content labels for customers, revealing the degree of error in these programs as a result of market attribution.

Problem statement #9

Which GHG reduction mandates does this pertain to?

• WA CETA, OR HB 2021, CA SB 100

What information would a state without a price on carbon request from the market?

• See comments on problem statements 5 and 8 above, and our previous 9/27 comments on metrics (https://stakeholdercenter.caiso.com/Comments/AllComments/01bb00d7-a42c-40b4-82d8-2398e5ffae0e#org-faa6b199-6bcc-4d27-890d-1ab0275467550)

Problem statement #15

In order to avoid favoring a certain state or type of GHG program (e.g. GHG pricing) in the market, either:

1. The market should allocate low- or nonemitting power (and emissions) efficiently to entities in all states with a pricing mechanism for emissions in the market, and the resulting allocation of emissions/generation should be coordinated to match existing out-of-market allocation systems, e.g. RECs, for generation tracked in those systems. That would need to be developed, either as a single mechanism providing bidding and allocation based on emissions that would satisfy entities in both GHG-pricing and non-pricing states, or as a separate mechanism for non-pricing states (though that would be less ideal); OR
2. There should be no allocation in the market and states and entities should exclusively use an out-of-market allocation, e.g. RECs/EACs. But this would require changes to and alignment of state GHG policy (e.g. to remove bundling requirements or define bundled delivery as energy injected into the market footprint + RECs/EACs), without which, this option would not support market participation.

If it cannot enable emissions allocations to entities in all states in the market (and will therefore favor certain state programs over others in terms of allocation and attribution), at the very least CAISO can be transparent and coordinate with other systems (e.g. WREGIS) to prevent double counting at a regional level. CAISO can help enable all-generation regional tracking, e.g. in WREGIS, to ensure that market allocation (though incomplete) is consistent with all state accounting policies so that there is exclusive resource-specific allocation/attribution regionally, e.g. by effectively combining accounting systems and frameworks (e.g. RECs and GHG attribution in the market).

See comments on problem statements 5 and 8 above, and our previous 9/27 comments on metrics (https://stakeholdercenter.caiso.com/Comments/AllComments/01bb00d7-a42c-40b4-82d8-2398e5ffae0e#org-faa6b199-6bcc-4d27-890d-1ab0275467550)

3. Provide an outline of what data you believe may help the ISO and working group participants in prioritizing the potential impact of the proposed problem statements:

Please provide an overview of what data is requested, the rationale for providing the data, the problem statement the data relates to, the granularity of the data, the time period of the data, and any other parameters you believe will help the working group in understanding the problem statement. Please note that the ISO may not be able to provide all the data that is ultimately requested.

See above and our 9/27 comments for our suggestions regarding data to assess and address different problem statements. Below is our suggestion for prioritizing the problem statements:

1. Avoiding double counting
   1. External – Problem Statement #5, 8
   2. Internal – Problem Statements #6, 15
2. Enabling market participation and facilitating state programs
   1. Problem Statements #7, 9, 14, and 15
3. Improving current market attribution
   1. Problem Statements #1-4, and 10
4. Building regional consistency
   1. Problem Statements #8, 15
5. Measuring market impact
   1. Problem Statement #11

4. Provide your organization’s feedback on any additional issues that should be discussed that are currently not represented in the discussion paper:

None at this time

5. Additional comments:

None at this time

1. Please provide a summary of your organization’s feedback on the October 19 and October 30 working groups, and discussion paper posted on October 16, 2023:

LADWP observed that many of the problem statements discussed during the working group meetings stem from GHG attribution/deeming to individual generating resources, and encourages CAISO and stakeholders to consider whether that approach is the correct path forward.

2. Provide your organization’s feedback on the Stakeholder Proposed Problem Statements section of the discussion paper and as discussed in the working group meetings. Please also include any outstanding problem statements that are not captured by those proposed in the discussion paper:

As mentioned in LADWP’s comments on the August working group meeting, GHG compliance is a carbon tax on GHG emissions, not something that market participants should profit from. However, the current EIM and EDAM GHG accounting design treats GHG like a market commodity rather than a carbon tax, by paying GHG awards to both emitting and non-emitting generating resources in the name of GHG compliance. An accurate market design shall implement the state carbon policy to effectively reduce emissions. The current GHG accounting design results in higher than necessary electricity prices within states that have a carbon pricing policy, which is counterproductive when trying to encourage cost-effective electrification to reduce emissions. This design issue is not captured in any of the proposed problem statements.

At this time, LADWP would like to suggest the following long-term solutions to some of the problem statements for consideration:

3. Provide an outline of what data you believe may help the ISO and working group participants in prioritizing the potential impact of the proposed problem statements:

Please provide an overview of what data is requested, the rationale for providing the data, the problem statement the data relates to, the granularity of the data, the time period of the data, and any other parameters you believe will help the working group in understanding the problem statement. Please note that the ISO may not be able to provide all the data that is ultimately requested.

Reserve for later.

4. Provide your organization’s feedback on any additional issues that should be discussed that are currently not represented in the discussion paper:

GHG compliance should be treated as a carbon tax rather than as a market commodity (see comment in question 2).

5. Additional comments:

1. Please provide a summary of your organization’s feedback on the October 19 and October 30 working groups, and discussion paper posted on October 16, 2023:

PG&E supports both short-term and long-term enhancements to the existing GHG design and appreciate the collaborative efforts of CAISO and stakeholders in addressing the problem statements.

PG&E believes that focusing on the long-term programmatic changes will deliver more significant results and effectively address many of the existing problem statement items.

PG&E encourages CAISO to streamline the short-term problem statements to a manageable list of 2-4 items before initiating any further analysis or work.

2. Provide your organization’s feedback on the Stakeholder Proposed Problem Statements section of the discussion paper and as discussed in the working group meetings. Please also include any outstanding problem statements that are not captured by those proposed in the discussion paper:

No further comment at this time

3. Provide an outline of what data you believe may help the ISO and working group participants in prioritizing the potential impact of the proposed problem statements:

Please provide an overview of what data is requested, the rationale for providing the data, the problem statement the data relates to, the granularity of the data, the time period of the data, and any other parameters you believe will help the working group in understanding the problem statement. Please note that the ISO may not be able to provide all the data that is ultimately requested.

No further comment at this time

4. Provide your organization’s feedback on any additional issues that should be discussed that are currently not represented in the discussion paper:

No further comment at this time

5. Additional comments:

No further comment at this time

1. Please provide a summary of your organization’s feedback on the October 19 and October 30 working groups, and discussion paper posted on October 16, 2023:

PacifiCorp thanks the CAISO for facilitating this working group as it serves to recognize challenges related to greenhouse gas accounting of transactions enabled through market participation. The problem statements highlighted in the working groups thus far have prompted discussion beneficial for the region to gain additional awareness. Although the intent is not to solve all the intricacies that naturally exist with different regulatory regimes, PacifiCorp believes this is a path forward to increased coordination. The discussion paper provides a helpful snapshot of pain points discussed throughout the working group process that will serve as a springboard for a robust stakeholder initiative in the future. 

2. Provide your organization’s feedback on the Stakeholder Proposed Problem Statements section of the discussion paper and as discussed in the working group meetings. Please also include any outstanding problem statements that are not captured by those proposed in the discussion paper:

PacifiCorp believes the discussion paper appropriately captures stakeholders’ proposed problem statements and appreciates the CAISO explicitly stating problem statements that PacifiCorp has written in prior comments.  

To continue making strides towards increased coordination, PacifiCorp believes problem statement #10 would benefit from refinement as it currently is written to state the following: “it is unclear if the treatment of GHG used in the optimization accurately reflects actual costs of GHG to end-use customers.” Additional discussion regarding what specific impacts are intended to be captured in “costs of GHG to end-use customers” would be helpful for PacifiCorp, as the impacts to end-use customers from the market optimization is of interest to PacifiCorp. Once this problem statement is expanded upon, having data to support those claims would be well advised for the working group to explore.  

In problem statement #12, PacifiCorp has stated that if the methodology for compliance reporting is not congruent with existing regulations for retail load GHG accounting, there could be inaccuracies with reporting. To expand on this problem statement, PacifiCorp offers an example:  In order to support reporting of emissions associated with its Washington retail customers, there needs to be a way to account for imports into the Washington GHG regulation area from the PacifiCorp system, that distinguishes the market transactions associated with serving the PacifiCorp retail load in Washington, from the market transactions serving the state that are incremental to that retail load. Otherwise, PacifiCorp retail customers who have already accounted for emissions associated with their retail load would then pay for emissions again due to market participation. There is also a vital role for the state air regulators to help with establishing clear criteria around the conditions for when a market import is assumed to have occurred from a multi-state BAAs that overlaps the state border.    

In addition to the specific comments above and as a general process matter, PacifiCorp believes there are possible refinements that can be made to the problem statements to consolidate issues that are akin to one another. For instance, problem statements #8, #9, and #11 discuss the need for reporting metrics from the market operator to track emissions relating to impacts the market has on decarbonization goals and the type of resources transferred in the BAA to serve load. PacifiCorp offers the following rewording that more generally covers these concerns: “The market does not provide the complete reporting metrics desired by all market participants, regulators and energy buyers.” This problem statement could be further clarified with the specific metrics that stakeholders desire, such as, a complete portfolio of the specified resources attributed to retail load; or specific metrics on the market’s impact on decarbonization and renewable curtailment.  

3. Provide an outline of what data you believe may help the ISO and working group participants in prioritizing the potential impact of the proposed problem statements:

Please provide an overview of what data is requested, the rationale for providing the data, the problem statement the data relates to, the granularity of the data, the time period of the data, and any other parameters you believe will help the working group in understanding the problem statement. Please note that the ISO may not be able to provide all the data that is ultimately requested.

PacifiCorp requests the following data to support problem statements identified through the GHG coordination working group: 

• Problem statement #2 states “The current attribution process still results in secondary dispatch, and the market lacks sufficient transparency into the degree of secondary dispatch occurring as a result.” At the October 19th meeting, stakeholders edited this problem statement to read: “The current attribution process still results in leakage, and the market lacks sufficient transparency into the degree of secondary dispatch occurring as not a result of economic displacement.” PacifiCorp believes the revision more appropriately captures the issue of leakage and secondary dispatch (a type of leakage). Stakeholders articulated a need for analysis the CAISO could perform that determines whether secondary dispatch results from attribution, or economic displacement. PacifiCorp would like to see this analysis carried out as it will provide useful insight into the drivers of secondary dispatch within the market.  

• Problem statement #3 states “It is unclear if the market has correctly balanced leakage and costs.” PacifiCorp would like the CAISO to perform analysis to identify if least-cost optimization leads to rising costs without accomplishing the overarching goal of reducing net GHG emissions across the market footprint. 

4. Provide your organization’s feedback on any additional issues that should be discussed that are currently not represented in the discussion paper:

?No additional comments at this time. 

5. Additional comments:

?No additional comments at this time. 

1. Please provide a summary of your organization’s feedback on the October 19 and October 30 working groups, and discussion paper posted on October 16, 2023:

The Salt River Project Agricultural Improvement and Power District (SRP) appreciates the opportunity to comment on the recent working group (WG) meetings and discussion paper. The CAISO compiling all of the submitted problem statements was very helpful to inform the direction of this WG.

2. Provide your organization’s feedback on the Stakeholder Proposed Problem Statements section of the discussion paper and as discussed in the working group meetings. Please also include any outstanding problem statements that are not captured by those proposed in the discussion paper:

SRP’s comments on each problem statement as defined in the discussion paper are summarized below.  SRP does not have any additional problem statements to add.

Problem statement #

1. It is unclear if the CAISO’s market correctly identifies available surplus on resources that may be attributed to a GHG zone.
   1. SRP supports a larger discussion on the current definition of surplus within the Western Energy Imbalance Market (WEIM) and Extended Day-Ahead Market (EDAM), as well as other options for defining surplus. A summary of pros and cons of each method and a history of why the current method was chosen would be helpful.
   2. SRP believes it would be useful and recommends the CAISO provide simple examples of how GHG attribution/prices might change if other definitions of surplus are used.
2.  The current attribution process still results in secondary dispatch, and the market lacks sufficient transparency into the degree of secondary dispatch occurring as a result.
   1. SRP supports this problem statement and recommends clarifying the definition of leakage versus secondary dispatch. 
   2. SRP believes it would be helpful to identify the merits and drawbacks of a two-pass approach versus the current method.
   3. SRP acknowledges that quantifying the amount of secondary dispatch and/or leakage may be difficult within the context of WEIM.  SRP would support analysis that could provide an order of magnitude or range for context.
3. It is unclear if the CAISO’s market has correctly balanced minimizing leakage and costs.
   1. SRP supports this problem statement. However, SRP recommends that once the definitions of leakage and secondary dispatch are established, an evaluation of alternative approaches should be conducted to estimate the tradeoff between these factors.
4. The current price formation does not provide full transparency into the total marginal GHG cost, leading to inaccurate price signals and reduced price transparency.
   1. SRP would be interested in better understanding if this distinction is possible, since GHG costs are embedded in the energy bids. SRP recommends exploring the possibility of estimating GHG costs based on average emission rates for that type of generator.
5. GHG attribution in ISO markets creates a risk of double counting of attributed generation in compliance and voluntary retail GHG programs.
   1. SRP requests some examples of how attribution could be double counted currently to better understand this problem statement.
6. Under the WEIM, there are known instances of double counting of emissions between Washington and California GHG regulation areas for emitting resources physically located in Washington and deemed delivered to California, in the absence of program linkage.
   1. SRP requests examples of double counting.
7. LSEs subject to a state GHG reduction mandate do not have the ability to affect dispatch to ensure that the emissions of energy deemed to serve their load is within their regulatory limits.
   1. SRP recommends expanding this problem statement to include participants that have corporate emission reduction goals that may not be tied to a state mandate.  SRP agrees that the dispatch algorithm lacks a price signal to indicate a preference for clean energy, and that there is not currently a mechanism to track clean energy imports to their Balancing Authority Area (BAA).  SRP supports a review of options to better account for imports.
8. The ISO’s market does not provide the complete reporting metrics desired by all market participants.
   1. SRP strongly supports this problem statement.  SRP voluntarily reports emissions to the Climate Registry and tracks emissions as part of corporate objectives.  More precise data regarding the emission rates of WEIM imports would allow SRP to better understand the impact of the market on meeting these objectives. 
9. LSEs subject to GHG reduction mandates do not receive data about market imports indicating which resources were deemed to have served their load.
   1. SRP agrees with combining this problem statement with #8.  SRP would be open to reviewing options outside of deeming.
10. It is unclear if the treatment of GHG used in the optimization accurately reflects actual costs of GHG to end-use customers.
    1. SRP requests more background on this problem statement.
11. Current emissions tracking and accounting metrics do not demonstrate the impact of the market on decarbonization and renewable curtailment, or provide requisite data at the greatest feasible granularity for market participants, state regulatory compliance programs, and energy buyers.
    1. SRP would agree to combine this problem statement with #8 and #9.
12. If the methodology for PacifiCorp’s compliance reporting of EDAM transactions with the CCA is not congruent with existing regulations and guidance for imports for bilateral transactions and retail, then the GHG regulation area’s reporting will be incomplete or inaccurate.
    1. No comment at this time.

Beyond GHG Pricing Policies

13. If policies (such as CETA's delivery-based renewable compliance paradigm, and prohibitions on coal) base compliance on data from the market operator [data intended to inform market settlements] -- and use that data to represent energy flow serving retail load -- a number of adverse effects would result. These effects include (a) a disconnect would appear between costs and benefits of the resources paid for by retail customers in retail rates and their compliance benefits; (b) it would discount long range clean energy plans developed by utilities to comply with state policies, and (c) it would ultimately disincentivize market participation.
    1. No comment at this time.
14. There is not a market mechanism to reflect state climate policies that are not based on the cost of carbon. Participating in the CAISO’s market could undermine efforts to decarbonize as the unspecified emissions rate used by states fails to reflect the accuracy of generation and consumption at a local level.
    1. SRP supports combining this problem statement with #7.
15. There is no policy or process that defines how the market can handle both price and non-price based GHG programs and within a state simultaneously.
    1. SRP supports combining this problem statement with #7.

3. Provide an outline of what data you believe may help the ISO and working group participants in prioritizing the potential impact of the proposed problem statements:

Please provide an overview of what data is requested, the rationale for providing the data, the problem statement the data relates to, the granularity of the data, the time period of the data, and any other parameters you believe will help the working group in understanding the problem statement. Please note that the ISO may not be able to provide all the data that is ultimately requested.

SRP does not have any specific requests outside of the items listed in question #2.

4. Provide your organization’s feedback on any additional issues that should be discussed that are currently not represented in the discussion paper:

 No comments on additional issues at this time.

5. Additional comments:

 No comment at this time.

1. Please provide a summary of your organization’s feedback on the October 19 and October 30 working groups, and discussion paper posted on October 16, 2023:

SCE appreciates the opportunity to participate in and provides comments to the efforts of the CAISO GHG working group.  SCE suggests that the CAISO re-evaluate the timeline and goals of the working group given the recent announcement to delay the roll-out of EDAM from 2025 to 2026.  The working paper states the “ISO will not immediately consider proposed alternatives to the GHG design approved by ISO Board[…] and WEIM Governing Body[…] for EDAM go-live. Doing so could…impose delays on, planned implementation.” (pg 5, October 16, 2023, GHG Coordination Discussion Paper) The CAISO should take the opportunity offered by the delay to identify potential high-priority changes to the GHG design that could now be implemented in EDAM go-live.  For example, the incorporation of state GHG regimes, such as Oregon, that do not rely on pricing carbon.  The detailed examination of leakage should be an additional high priority topic, based upon the numerous problem statements submitted related to the issue. 

Leveraging this new window of time could significantly improve the GHG design to better align with the GHG emissions regulations that participants and potential participants must adhere to in their respective states.  And, to accomplish this, SCE recommends that the working group further focus on coordinating with relevant state agencies and regulators.  In essence, this would collapse the Beyond GHG Pricing Policies topic into the State Coordination topic, perhaps simplifying the activities this working group needs to address.

2. Provide your organization’s feedback on the Stakeholder Proposed Problem Statements section of the discussion paper and as discussed in the working group meetings. Please also include any outstanding problem statements that are not captured by those proposed in the discussion paper:

The proposed problem statements are likely too numerous to fully address in the first two phases of the working group but SCE recommends that either the CAISO on its own or in a working group session attempt to consolidate the problem statements.  This should be an achievable effort since many of the problem statements relate to similar topics, e.g., leakage, differing state GHG regulations, data transparency and reporting.

As a point of explanation, SCE submitted problem statement #10 and was asked for further clarification about the problem statement.  This statement attempts to capture an issue that SCE believes encompasses, at least partially, the two topics described above as high important topics that CAISO should consider prioritizing and addressing prior to EDAM go-live in 2026.  Specifically, how the optimization identifies the marginal cost of GHG emissions and CAISO attributes emissions amounts to the respective California LSE’s.  This attribution is not the sole source of end-user costs associated with GHG.  The California Air Resources Board (CARB) also performs a subsequent attribution of GHG emissions which then impacts the allocation of GHG credits provided to California LSE’s.  Any reduction in the allocation due to differences between the CAISO and CARB emission attribution amounts represents a cost to SCE’s end-use customers; therefore, the optimization is NOT identifying the true cost to SCE’s end-use customers.  Currently, CARB is undertaking a comprehensive effort to address GHG emissions in the CA energy sector and SCE encourages the CAISO to actively participate in this effort with a goal of addressing this problem.

Many of the problem statements reflect concerns about how LSEs in states which have emission caps but not carbon pricing can ensure that their emissions remain below the cap. SCE believes that this issue requires a discussion of what it means to participate in a market. It seems that the easiest method of achieving a definite emission level is to self-schedule all resources for the LSE. However, this approach defeats the purpose of the market, which is to use market prices to select the optimal mix of resources. Before discussions on how to accommodate such a mechanism within the market, the discussion should first focus on whether such mechanisms are compatible with a market dispatch system.

3. Provide an outline of what data you believe may help the ISO and working group participants in prioritizing the potential impact of the proposed problem statements:

Please provide an overview of what data is requested, the rationale for providing the data, the problem statement the data relates to, the granularity of the data, the time period of the data, and any other parameters you believe will help the working group in understanding the problem statement. Please note that the ISO may not be able to provide all the data that is ultimately requested.

One suggestion that may assist in addressing the problem statements submitted by the regulatory body(s) in Oregon would be to have that group provide a more detailed explanation of the Oregon GHG regulations as applied to the electric industry.  The ability to better compare and contrast the different GHG regulations among states could spark further creative thinking on how to address.

4. Provide your organization’s feedback on any additional issues that should be discussed that are currently not represented in the discussion paper:

SCE does not have any further feedback or comments. 

5. Additional comments:

1. Please provide a summary of your organization’s feedback on the October 19 and October 30 working groups, and discussion paper posted on October 16, 2023:

The Six Cities recommend that the next steps in the GHG Coordination working group process include: (1) distinguishing between those problem statements that address current market operations and those that relate to future operations under the Extended Day-Ahead Market design and deferring further consideration of the latter, (2) only for problem statements that identify concerns under current market operations, consolidating problem statements that raise the same or substantially similar concerns, and (3) for such consolidated problem statements, identifying data available to analyze the scope of the problem and potential solutions under current market operations.

2. Provide your organization’s feedback on the Stakeholder Proposed Problem Statements section of the discussion paper and as discussed in the working group meetings. Please also include any outstanding problem statements that are not captured by those proposed in the discussion paper:

The Six Cities recommend that this working group process focus on problem statements that identify concerns with the CAISO’s markets as they currently operate.  It is premature and an inefficient use of CAISO and stakeholder resources to attempt to predict how well the Extended Day-Ahead Market design will or will not properly account for GHG impacts.  Subsequent working group sessions should distinguish between those problem statements that address current market operations and those that relate to future operations under the EDAM, identify data available to analyze the scope of the problem and potential solutions under current market operations, and defer consideration of concerns that may or may not arise under EDAM operations.

The Six Cities also note that there appears to be significant overlap among proposed problem statements.  The Six Cities agree with the comment during the October 30^th working group meeting that problem statements numbers 8, 9, and 11 appear to be focused on the same issue.  Likewise, problem statements numbers 14 and 15 appear to raise the same concerns, and there also appears to be substantial overlap between problem statements numbers 7 and 13.  The Six Cities recommend that in addition to identifying problem statements that should be deferred until there has been operating experience under the EDAM, the working group should make an effort to consolidate problem statements that raise the same or substantially similar concerns and, again, identify data available to analyze the scope of the problem and potential solutions under current market operations.

Finally, with respect to problem statements 7 and 13, the Six Cities question why the opportunity to self-schedule resources procured in order to satisfy regulatory requirements would not address the concerns raised in the problem statements.

3. Provide an outline of what data you believe may help the ISO and working group participants in prioritizing the potential impact of the proposed problem statements:

Please provide an overview of what data is requested, the rationale for providing the data, the problem statement the data relates to, the granularity of the data, the time period of the data, and any other parameters you believe will help the working group in understanding the problem statement. Please note that the ISO may not be able to provide all the data that is ultimately requested.

The Six Cities do not have any recommendations at this time with regard to specific data collection for assessment of problem statements.  Stakeholders that propose problem statements are in the best position to identify data that would support evaluation of the problem statements and potential solutions.  As discussed above, to the extent problem statements focus on potential concerns with GHG accounting under the EDAM design, the Six Cities recommend deferring further consideration of such problem statements until the EDAM has been operating for a reasonable period of time (e.g., one year following implementation of the EDAM).

4. Provide your organization’s feedback on any additional issues that should be discussed that are currently not represented in the discussion paper:

The Six Cities have not identified any additional issues at this time.

5. Additional comments:

The Six Cities do not have any additional comments at this time.

1. Please provide a summary of your organization’s feedback on the October 19 and October 30 working groups, and discussion paper posted on October 16, 2023:

WRA appreciates the presentations and discussion paper from October and supports the updated working group principles. In summation, WRA urges the prioritization of problem statements about state non-priced GHG program compliance and emissions reporting. See our detailed responses to Questions #2 and #3.

2. Provide your organization’s feedback on the Stakeholder Proposed Problem Statements section of the discussion paper and as discussed in the working group meetings. Please also include any outstanding problem statements that are not captured by those proposed in the discussion paper:

WRA appreciates the work to identify important problem statements to be addressed by CAISO and the GHG Coordination WG. While EDAM is not live and key areas of GHG design will need to continue to be evaluated once the market is operational, work on critical topics such as reporting and incorporation of non-priced GHG programs should commence well before market launch to enhance participation and market performance. Our comments on a number of the individual problem statements follow.

Problem Statements #2 and #3: WRA supports focusing specifically on the issue of leakage, as collectively defined by the group. While not all leakage can be eliminated, it must be minimized to accurately account for decarbonization via the market and support compliance with various GHG policies across the West.

Problem Statement #5: WRA recognizes the concern of double counting and associated impacts on voluntary retail GHG programs. WRA suggests prioritizing wholesale issues in the work group for the time being and setting up, to start, separate discussions for affected/interested parties to explore the retail issue.

Problem Statements #7, #9, #14, and #15: WRA agrees that these are critical problem statements for the working group to address. It is essential that potential participants in states with non-priced GHG programs (e.g. OR, NV, NM, CO) can demonstrably participate in the market while still maintaining compliance with state policies. WRA urges the group to take on this problem statement as a priority as early as possible before the market launch, and both CAISO and state regulators should contribute to identifying workable solutions. One proposal to reflect a program without a cost of carbon is the “emission constraint dispatch” approach proposed by Doug Howe and the PUC subgroup. WRA requests that the GHG Coordination WG invite Doug Howe and this group to present to the WG for discussion.

Problem Statements #8 and #11: To support the compliance needs of utilities and state regulatory programs, track market performance, and evaluate impacts to customers, it’s essential to provide robust and sufficiently granular data on GHG emissions and renewable curtailment associated with market participation. WRA requests further discussion in the WG of CAISO’s current capabilities, as well as market participant needs, for reporting.

3. Provide an outline of what data you believe may help the ISO and working group participants in prioritizing the potential impact of the proposed problem statements:

Please provide an overview of what data is requested, the rationale for providing the data, the problem statement the data relates to, the granularity of the data, the time period of the data, and any other parameters you believe will help the working group in understanding the problem statement. Please note that the ISO may not be able to provide all the data that is ultimately requested.

To support the discussion on Problem Statements #8 and #11, WRA requests that CAISO provide information about existing capabilities for reporting emissions and renewable curtailment – including at what jurisdictional level (e.g. entity, BAA, state) and time granularity. We’d like to understand average, marginal, and residual emission capabilities.

WRA looks forward to future discussions on necessary and preferred reporting metrics to meet the needs and capabilities of CAISO, market participants, state regulatory programs, customers, and other stakeholders. WRA will provide our recommendations on those metrics.

4. Provide your organization’s feedback on any additional issues that should be discussed that are currently not represented in the discussion paper:

N/A.

5. Additional comments:

N/A.

1. Please provide a summary of your organization’s feedback on the October 19 and October 30 working groups, and discussion paper posted on October 16, 2023:

WPTF appreciates the CAISO’s efforts in trying to clearly articulate problem statements prior to moving onto discussions around potential market design changes and/or solutions. We believe the effort put up front to ensure all stakeholders are on the same page with regards to the issues being addressed will result in an efficient and productive policy process whereby the solutions can be measured against their ability to address the clearly defined problems.  

2. Provide your organization’s feedback on the Stakeholder Proposed Problem Statements section of the discussion paper and as discussed in the working group meetings. Please also include any outstanding problem statements that are not captured by those proposed in the discussion paper:

The CAISO and stakeholders have compiled an extensive list of problem statements to consider. As we move forward through this process, WPTF encourages the CAISO to condense/combine problem statements that are capturing the same issue. For example, there are several problem statements addressing non-priced based GHG Reduction policies (e.g. 7, 14 and 15) as well as a few that are under the Emissions and Tracking section that should be merged with items under Market Operations and GHG Pricing (10 and 11, and 2 and 3). To the extent we can reduce the problem statements this effort is attempting to evaluate and address, the more efficient and productive the policy effort will likely be.

WPTF also believes that prior to any policy discussions taking place, it would be useful to ensure any key terms used in the problem statements are clearly defined to help avoid any potential talking past one another due to differences in interpreting certain key words. Specifically, we believe that the terms emissions leakage/secondary dispatch, and surplus require definition.

3. Provide an outline of what data you believe may help the ISO and working group participants in prioritizing the potential impact of the proposed problem statements:

Please provide an overview of what data is requested, the rationale for providing the data, the problem statement the data relates to, the granularity of the data, the time period of the data, and any other parameters you believe will help the working group in understanding the problem statement. Please note that the ISO may not be able to provide all the data that is ultimately requested.

WPTF does not have any specific data requests at this point that have not previously been requested through the EDAM GHG policy effort. However, we would like to take this opportunity to encourage the CAISO to provide another opportunity for data requests once EDAM is implemented. At this juncture, while we can identify problem statements based on experience with the GHG design in WEIM, it is unclear exactly what data would be useful under EDAM. This is especially important given that the ability to evaluate the magnitude of the issue will depend on the EDAM design and resulting data.

4. Provide your organization’s feedback on any additional issues that should be discussed that are currently not represented in the discussion paper:

No comment at this time.

5. Additional comments:

WPTF appreciates the CAISO revising the principle “efficiency” to try and distinguish between a market that prioritizes least cost vs a market that is a least cost optimization but also prioritizes appropriate price formation and signals. While these terms may seem interchangeable, they can be interpreted in different ways, potentially leading to significantly different market designs. For example, a market design that solely focuses on least cost would likely find secondary dispatch or leakage a non-issue. Whereas the CAISO market also prioritizes appropriate price signals and price formation along with a market that minimizes cost to serve load based on the accurate price signals. This market design would likely find issue with significant secondary dispatch and suppressed GHG price signals. Thus, while we understand the challenge with clearly distinguishing between the two within a problem statement, we encourage the CAISO to at a minimum provide context around that problem statement that better captures the underlying intent of the issue.