Comments on revised straw proposal

1. Please provide your organization’s general comments on the RDRR Bidding Enhancement’s Revised Straw Proposal.

The California Efficiency + Demand Management Council (Council) appreciates the CAISO’s efforts in this stakeholder initiative to explore opportunities to improve the conditions for Reliability Demand Response Resources (RDRR) to efficiently operate in its market.  The reliability events experienced in 2020 and 2021 have demonstrated the value these resources provide to the grid and the commensurate necessity of their participation.  To this end, the Council supports the CAISO’s proposals as put forth in its Revised Straw Proposal but, as discussed further below, encourages the CAISO to reconsider its position on the 50 MW cap for discrete RDRR registration.

2. Please provide comments on the RDRR Bidding Rules under the FERC Order No. 831 paradigm options for SIBR implementation revised straw proposal.

The Council supports the CAISO’s proposal to automatically scale up RDRR bids when the $2,000/MWh hard cap is in effect by a percentage consistent with the original RDRR bid relative to the $1,000/MWh soft cap. This will likely eliminate concerns about gaming or insufficient time for Scheduling Coordinators to react to the implementation of the hard cap. The Council also agrees with CAISO that this preserves the intent of the settlement approved in CPUC Decision 10-06-034 and maintains compliance with FERC Order 831.

3. Please provide comments on CAISO’s proposal to address the real time infeasible dispatch issue, whereby if a RDRR did not have a day ahead award, the CAISO would re-rate the resource’s Pmin below the upper economic limit and a formula will be used to represent to the market the resource’s minimum load cost.

The Council supports the CAISO’s proposal to address the infeasible dispatch and minimum load costs issues by adopting a Pmin of slightly below an RDRR’s discrete MW value, and setting a Minimum Load Cost as the product of the real-time market bid price and discrete MW value.  This approach is critical to ensuring that RDRRs capable of discrete dispatch only will be able to continue operating in the CAISO market without being subject to dispatch orders that are outside of their capability.

4. Regarding RDRR registration, please provide feedback on why updates to utility dispatch systems are not an alternative approach to raising the discrete dispatch cap.

The Council reserves comment on this issue.

5. Regarding RDRR registration, please provide feedback on what challenges RDRRs face in splitting their resources into 50MW resources.

The Council appreciates the concerns expressed by the CAISO with regard to the imbalance and pricing impacts that increasing the 50 MW cap on discrete RDRRs.  However, the CAISO should consider the conditions that would likely be prevailing when one or more RDRR are dispatched.  Because RDRRs can only be inserted into the CAISO’s real-time market bid stack under acute system conditions when the stability of the grid is under threat, the imbalance issues cited by the CAISO would likely be a lower priority because at that time, highly dispatchable resources such as combustion turbines and energy storage would be the marginal units.  In addition, the reality is often that due to the “lumpiness” of some customers enrolled in an RDRR, even if the CAISO retains the 50 MW cap, a dispatch will result in greater load reduction.  In other words, a discrete dispatch RDRR will deliver whatever amount of load reduction it has available, regardless of whether it is recognized in the CAISO market.  Finally, the CAISO should encourage delivery of the greatest amount of load curtailment as possible during the times when the grid is most in need.  Even if, as the CAISO describes, a discrete resource will set a higher market price, that will only attract additional needed resources.  This will be critical during region-wide heat events when other markets will be competing with California for this energy.

6. Regarding RDRR registration, please provide feedback on if there are any RDRRs registered as continuous when their capabilities are discrete? If so the CAISO would like to understand why the resources are not better represented as either discrete RDRRs or as separate Proxy Demand Response resources. While dual enrollment (e.g., one location with two DR resources) is prohibited, the CAISO would like a better understanding of why these resources are not better suited for PDR participation or being characterized as discrete RDRR.

The Council reserves comment on this issue.

7. Please provide any additional comments on RDRR registration that have not previously been addressed:

N/A

8. Please provide comments on the EIM Governing Body joint authority on RDRR Bidding Enhancements.

The Council supports the CAISO’s position that the EIM Governing Body has joint authority with the CAISO Board of Governors over the proposed changes to RDRR rules in this initiative.  As the CAISO has noted, EIM balancing authority areas may use RDRRs under certain conditions, so it would seem appropriate that the EIM Governing Body play a role in deciding on these proposed changes.

1. Please provide your organization’s general comments on the RDRR Bidding Enhancement’s Revised Straw Proposal.

Please see DMM comments in attached PDF.

2. Please provide comments on the RDRR Bidding Rules under the FERC Order No. 831 paradigm options for SIBR implementation revised straw proposal.

Please see DMM comments in attached PDF.

3. Please provide comments on CAISO’s proposal to address the real time infeasible dispatch issue, whereby if a RDRR did not have a day ahead award, the CAISO would re-rate the resource’s Pmin below the upper economic limit and a formula will be used to represent to the market the resource’s minimum load cost.

Please see DMM comments in attached PDF.

4. Regarding RDRR registration, please provide feedback on why updates to utility dispatch systems are not an alternative approach to raising the discrete dispatch cap.

Please see DMM comments in attached PDF.

5. Regarding RDRR registration, please provide feedback on what challenges RDRRs face in splitting their resources into 50MW resources.

Please see DMM comments in attached PDF.

6. Regarding RDRR registration, please provide feedback on if there are any RDRRs registered as continuous when their capabilities are discrete? If so the CAISO would like to understand why the resources are not better represented as either discrete RDRRs or as separate Proxy Demand Response resources. While dual enrollment (e.g., one location with two DR resources) is prohibited, the CAISO would like a better understanding of why these resources are not better suited for PDR participation or being characterized as discrete RDRR.

Please see DMM comments in attached PDF.

7. Please provide any additional comments on RDRR registration that have not previously been addressed:

Please see DMM comments in attached PDF.

8. Please provide comments on the EIM Governing Body joint authority on RDRR Bidding Enhancements.

Please see DMM comments in attached PDF.

1. Please provide your organization’s general comments on the RDRR Bidding Enhancement’s Revised Straw Proposal.

CLECA appreciates the CAISO’s effort to implement CLECA’s recommendation that “The change in the bid for RDRR should be automated whenever the CAISO changes the bid cap.”  Example 2 in the proposal says the RDRR bids would be automatically lowered if the bid cap is reduced.  However, absent from the discussion is what happens to non-RDRR bids when this occurs. If non-RDRR bids are not similarly adjusted downward, then RDRR resources could be dispatched prior to other economic resources. The CAISO should clarify what happens to other market bids when this adjustment occurs.

As mentioned in CAISO’s prior comments, CAISO DMM issued a report noting “some resources with high commitment costs for the amount of energy offered appeared uneconomic to commit in the integrated forward market in August and September 2020 despite often high day-ahead nodal prices.”^[1]  CLECA is concerned that bidding parameters can be used by non-RDRR to prevent dispatch during peak events, causing them to be dispatched after RDRR, or perhaps not at all.  Since RDRR is a reliability resource, it should be dispatched after economic proxy demand resources. CLECA repeats its request that the CAISO discuss in more detail how permissible bidding parameters interact between RDRR and proxy demand resources in the next proposal.

[1] http://www.caiso.com/Documents/ReportonDemandResponseIssuesandPerformance-Feb252021.pdf at 13.

2. Please provide comments on the RDRR Bidding Rules under the FERC Order No. 831 paradigm options for SIBR implementation revised straw proposal.

CLECA has no comments on the use of SIBR option to effectuate the FERC order.

3. Please provide comments on CAISO’s proposal to address the real time infeasible dispatch issue, whereby if a RDRR did not have a day ahead award, the CAISO would re-rate the resource’s Pmin below the upper economic limit and a formula will be used to represent to the market the resource’s minimum load cost.

CLECA appreciates the CAISO’s efforts to address the long standing “Pmin of zero” problem that can result in infeasible dispatch. Due to the complexity of the market optimization model, CLECA does not have an opinion on the workability of CAISO’s proposal to re-rate the Pmin value to resolve the infeasible dispatch. CLECA recommends the CAISO implement market simulation testing with and without its recommended change and provide the results to stakeholders.

The current restriction of RDRR resources from using min load costs or start-up costs puts RDRR resources at a disadvantage in the optimization compared to other resources that can use those bidding options. The CAISO should review its Pmin reset proposal and also allow for additional bidding parameters (min load cost and startup costs) to manage infeasible RDRR dispatch outcomes.

4. Regarding RDRR registration, please provide feedback on why updates to utility dispatch systems are not an alternative approach to raising the discrete dispatch cap.

 CLECA does not have any comments on this issue.

5. Regarding RDRR registration, please provide feedback on what challenges RDRRs face in splitting their resources into 50MW resources.

There are industrial processes or pump load that exceed 50 MW that cannot be safely split into separate load reductions. Even if an industrial load could be theoretically separated into different blocks below 50 MW, there is a practical problem since the running of processes varies across time and the size of the blocks separating the load to below 50 MW could change over time. It would be difficult for the customer to manage such a dynamic change when the CAISO wants load reduction in a system emergency as rapidly as possible. There is also a problem of how these dynamic blocks would be communicated to the DR program manager and/or Scheduling Coordinator.

6. Regarding RDRR registration, please provide feedback on if there are any RDRRs registered as continuous when their capabilities are discrete? If so the CAISO would like to understand why the resources are not better represented as either discrete RDRRs or as separate Proxy Demand Response resources. While dual enrollment (e.g., one location with two DR resources) is prohibited, the CAISO would like a better understanding of why these resources are not better suited for PDR participation or being characterized as discrete RDRR.

CLECA has no comments on this issue.

7. Please provide any additional comments on RDRR registration that have not previously been addressed:

CLECA has no comments on this issue.

8. Please provide comments on the EIM Governing Body joint authority on RDRR Bidding Enhancements.

CLECA has no comments on this issue.

1. Please provide your organization’s general comments on the RDRR Bidding Enhancement’s Revised Straw Proposal.

Based on CAISO’s December 22, 2021, public meeting concerning its straw proposal for changes to the RDRR program, Enchanted Rock respectfully requests again that CAISO raises the cap to 100 MW or eliminate the cap altogether.

During the December 22^rd meeting CAISO explained that the 50MW cap is necessary to address “forecasted” load imbalances and pricing concerns, and has not had any actual incidents of concern. It suggested projects can be registered as “continuous” or by “proxy as an alternative.” However, this may noty be applicable to Enchanted Rock's operations due to the sporadic, non-continuous nature of our backup generators.  Our experience working with large (>50 MW) data centers is they come online with appropriately fueled backup generation.  These backup generators enable the data centers to easily provide highly dependable RDRR capability that will not require loss of production. Further, they can provide near instantaneous response time when needed.  

2. Please provide comments on the RDRR Bidding Rules under the FERC Order No. 831 paradigm options for SIBR implementation revised straw proposal.

3. Please provide comments on CAISO’s proposal to address the real time infeasible dispatch issue, whereby if a RDRR did not have a day ahead award, the CAISO would re-rate the resource’s Pmin below the upper economic limit and a formula will be used to represent to the market the resource’s minimum load cost.

4. Regarding RDRR registration, please provide feedback on why updates to utility dispatch systems are not an alternative approach to raising the discrete dispatch cap.

5. Regarding RDRR registration, please provide feedback on what challenges RDRRs face in splitting their resources into 50MW resources.

6. Regarding RDRR registration, please provide feedback on if there are any RDRRs registered as continuous when their capabilities are discrete? If so the CAISO would like to understand why the resources are not better represented as either discrete RDRRs or as separate Proxy Demand Response resources. While dual enrollment (e.g., one location with two DR resources) is prohibited, the CAISO would like a better understanding of why these resources are not better suited for PDR participation or being characterized as discrete RDRR.

7. Please provide any additional comments on RDRR registration that have not previously been addressed:

8. Please provide comments on the EIM Governing Body joint authority on RDRR Bidding Enhancements.

1. Please provide your organization’s general comments on the RDRR Bidding Enhancement’s Revised Straw Proposal.

PG&E supports CAISO’s effort of enhancing RDRR’s bid in response to the implementation of FERC 831 and to improve its dispatch feasibility.

2. Please provide comments on the RDRR Bidding Rules under the FERC Order No. 831 paradigm options for SIBR implementation revised straw proposal.

PG&E continues to support CAISO’s proposal of raising RDRR’s bid floor under FERC Order 831. CAISO’s proposed SIBR implementation seems reasonable. However, PG&E would like to the CAISO to confirm that this implementation option is compliant with FERC requirements.

3. Please provide comments on CAISO’s proposal to address the real time infeasible dispatch issue, whereby if a RDRR did not have a day ahead award, the CAISO would re-rate the resource’s Pmin below the upper economic limit and a formula will be used to represent to the market the resource’s minimum load cost.

PG&E supports CAISO’s proposal to address the real-time infeasible dispatch issue.

However, PG&E wants to caution the CAISO against extending this concept to other types of resources, since the proposed change could open the door to dynamic Pmin re-rating. Consequently, it could lead to bid cost recovery complexities and gaming opportunities.

4. Regarding RDRR registration, please provide feedback on why updates to utility dispatch systems are not an alternative approach to raising the discrete dispatch cap.

5. Regarding RDRR registration, please provide feedback on what challenges RDRRs face in splitting their resources into 50MW resources.

6. Regarding RDRR registration, please provide feedback on if there are any RDRRs registered as continuous when their capabilities are discrete? If so the CAISO would like to understand why the resources are not better represented as either discrete RDRRs or as separate Proxy Demand Response resources. While dual enrollment (e.g., one location with two DR resources) is prohibited, the CAISO would like a better understanding of why these resources are not better suited for PDR participation or being characterized as discrete RDRR.

7. Please provide any additional comments on RDRR registration that have not previously been addressed:

8. Please provide comments on the EIM Governing Body joint authority on RDRR Bidding Enhancements.

According to CAISO’s BPM, “RDRR participation is limited to CPUC-jurisdiction programs.[1]”  PG&E requests the CAISO to clarify why EIM Governing Body joint authority is necessary for the proposed enhancements.

[1] CAISO, “BPM for Demand Response,” Section 2.1. Version 3, April, 2020. Available at: https://bpmcm.caiso.com/BPM%20Document%20Library/Demand%20Response/BPM_for_Demand_Response_V3_redline.doc.

1. Please provide your organization’s general comments on the RDRR Bidding Enhancement’s Revised Straw Proposal.

See attached. 

2. Please provide comments on the RDRR Bidding Rules under the FERC Order No. 831 paradigm options for SIBR implementation revised straw proposal.

3. Please provide comments on CAISO’s proposal to address the real time infeasible dispatch issue, whereby if a RDRR did not have a day ahead award, the CAISO would re-rate the resource’s Pmin below the upper economic limit and a formula will be used to represent to the market the resource’s minimum load cost.

4. Regarding RDRR registration, please provide feedback on why updates to utility dispatch systems are not an alternative approach to raising the discrete dispatch cap.

5. Regarding RDRR registration, please provide feedback on what challenges RDRRs face in splitting their resources into 50MW resources.

6. Regarding RDRR registration, please provide feedback on if there are any RDRRs registered as continuous when their capabilities are discrete? If so the CAISO would like to understand why the resources are not better represented as either discrete RDRRs or as separate Proxy Demand Response resources. While dual enrollment (e.g., one location with two DR resources) is prohibited, the CAISO would like a better understanding of why these resources are not better suited for PDR participation or being characterized as discrete RDRR.

7. Please provide any additional comments on RDRR registration that have not previously been addressed:

8. Please provide comments on the EIM Governing Body joint authority on RDRR Bidding Enhancements.

1. Please provide your organization’s general comments on the RDRR Bidding Enhancement’s Revised Straw Proposal.

2. Please provide comments on the RDRR Bidding Rules under the FERC Order No. 831 paradigm options for SIBR implementation revised straw proposal.

3. Please provide comments on CAISO’s proposal to address the real time infeasible dispatch issue, whereby if a RDRR did not have a day ahead award, the CAISO would re-rate the resource’s Pmin below the upper economic limit and a formula will be used to represent to the market the resource’s minimum load cost.

4. Regarding RDRR registration, please provide feedback on why updates to utility dispatch systems are not an alternative approach to raising the discrete dispatch cap.

5. Regarding RDRR registration, please provide feedback on what challenges RDRRs face in splitting their resources into 50MW resources.

6. Regarding RDRR registration, please provide feedback on if there are any RDRRs registered as continuous when their capabilities are discrete? If so the CAISO would like to understand why the resources are not better represented as either discrete RDRRs or as separate Proxy Demand Response resources. While dual enrollment (e.g., one location with two DR resources) is prohibited, the CAISO would like a better understanding of why these resources are not better suited for PDR participation or being characterized as discrete RDRR.

7. Please provide any additional comments on RDRR registration that have not previously been addressed:

8. Please provide comments on the EIM Governing Body joint authority on RDRR Bidding Enhancements.

1. Please provide your organization’s general comments on the RDRR Bidding Enhancement’s Revised Straw Proposal.

WPTF appreciates the opportunity to submit these comments on the Reliability Demand Response Resource Bidding Enhancements Revised Straw Proposal discussed with stakeholders on December 22, 2021. Generally speaking, WPTF is supportive of the proposed bidding of RDRRs when the bid cap is raised to $2,000/MWh but is concerned the way it’s currently being characterized inadvertently introduces FERC risk. Additionally, we believe that the proposed solution to the infeasible dispatch issue may be introducing adverse price formation concerns that should be addressed before moving forward.  

2. Please provide comments on the RDRR Bidding Rules under the FERC Order No. 831 paradigm options for SIBR implementation revised straw proposal.

WPTF supports the CAISO’s proposal to administratively adjust the incremental energy offers of RDRRs in hours during which the energy bid cap is increased to $2,000/MWh to maintain alignment with current bidding requirements; see WPTF’s prior comments on preferred approach. However, we are concerned that the way the issue is currently being characterized – alignment with FERC Order 831 – may unnecessarily introduce FERC risk. FERC Order 831 allows energy offers greater than $1,000/MWh to be used in the market and set prices when cost verified. The CAISO currently does not have a process by which to cost verify energy offers from RDRRs. Thus, simply increasing the submitted RDRR offers when the bid cap increases to $2,000/MWh does not align with increasing the bids because they are cost justified per FERC Order 831.

Thus, WPTF strongly encourages the CAISO to recharacterize this issue and solution as administratively increasing energy offers of RDRRs under a $2,000/MWh bid cap to ensure continued alignment with the bidding requirements of RDRRs.

3. Please provide comments on CAISO’s proposal to address the real time infeasible dispatch issue, whereby if a RDRR did not have a day ahead award, the CAISO would re-rate the resource’s Pmin below the upper economic limit and a formula will be used to represent to the market the resource’s minimum load cost.

WPTF understands the concern of infeasible dispatches of RDRRs due to the fact that they have a zero Pmin and no minimum load cost. However, WPTF is concerned that the current proposed solution adversely impacts price formation and thus encourages the CAISO to consider alternative means to address the issue. Under the current proposal, the CAISO will essentially create minimum load costs for RDRRs based on the submitted energy offers using its existing pmin re-rate functionality. This will in turn result in the market only dispatching the resources to a non-zero pmin value when its economic based on the CAISO calculated minimum load cost. While WPTF understands this will minimize instances of the “infeasible dispatch” concern, the resulting energy prices may not reflect market conditions. In other words, the market will result in diluted price signals. This is because the minimum load costs are not reflected in the energy market clearing prices and thus may not reflect the fact that the market is having to rely on high priced reliability demand response resources. Take for example a RDRR with $1,000/MWh energy offer and a 6MW Pmax.  It is our understanding that the CAISO proposal will adjust the pmin to 5.9 MW and calculate a $5,900/hr minimum load cost in the market. The concern is that if the resource is dispatched up to its non-zero minimum load (5.9MW) and is eligible to recover the $5,900 of minimum load cost through BCR, the energy prices may not reflect the $1,000/MWh priced energy of the RDRR. Again, while we appreciate this proposed solution will minimize infeasible dispatches for RDRRs, we are concerned that it will not allow the price signal of the energy market to reflect the marginal energy cost of dispatching the resources as one would expect.

4. Regarding RDRR registration, please provide feedback on why updates to utility dispatch systems are not an alternative approach to raising the discrete dispatch cap.

WPTF appreciates the CAISO providing more explanation on why the current cap exists. While we understand the imbalance concern, we are still unclear of the magnitude of the issue/concern. It would be useful to first see some analysis that quantifies the amount of imbalance the CAISO system is currently seeing as a result of the imbalance issue/concern. It could be the case that while in theory this is a concern, in reality the market tends to dispatch the resources at or near the maximum output which would result in minimal imbalance concern. Under that scenario, the CAISO may consider at least raising if not eliminating the discrete dispatch cap. 

5. Regarding RDRR registration, please provide feedback on what challenges RDRRs face in splitting their resources into 50MW resources.

6. Regarding RDRR registration, please provide feedback on if there are any RDRRs registered as continuous when their capabilities are discrete? If so the CAISO would like to understand why the resources are not better represented as either discrete RDRRs or as separate Proxy Demand Response resources. While dual enrollment (e.g., one location with two DR resources) is prohibited, the CAISO would like a better understanding of why these resources are not better suited for PDR participation or being characterized as discrete RDRR.

7. Please provide any additional comments on RDRR registration that have not previously been addressed:

8. Please provide comments on the EIM Governing Body joint authority on RDRR Bidding Enhancements.