Comments on Working group 6

1. Provide a summary of your organization’s comments on the January 11, 2024 GHG Coordination working group discussion:

Please see the attached comments from the Department of Market Monitoring.

2. Provide your organization’s comments or remaining questions on the ISO’s overview of the mechanics of GHG attribution in EDAM and WEIM:

Please see the attached comments from the Department of Market Monitoring.

3. If your organization suggested GHG metrics, please provide the problem statement the metric relates to (or if none exists, please draft one and provide it), any regulatory requirement associated with providing the data, and the details associated with the metric (metric, cadence, granularity, etc.). Please also provide any feedback to the discussion on GHG metrics.

Please see the attached comments from the Department of Market Monitoring.

4. Problem Statements:

a.Please identify if you are willing to be a problem statement / sub-problem statement sponsor. This could entail leading a discussion on the rationale behind the problem statement and facilitating a discussion with other working group members. b. Provide your organization’s comments on the consolidated problem statements and prioritization:

Please see the attached comments from the Department of Market Monitoring.

5. Problem Statements for Reference:

1. The optimization does not take the explicit cost of secondary dispatch into account, and therefore may not balance optimized attribution with constraints to limit secondary dispatch. 2. The current GHG design does not limit attribution to only capacity above the baseline which results in the potential for secondary dispatch. 3. Attribution is not scale-able because it creates the potential for secondary dispatch. This secondary dispatch could increase with market expansion. 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. 5. When there are multiple unlinked GHG regulation areas or different reporting requirements by different states, market participation may result in double counting, undercounting, or inconsistent counting of emissions. Variations of this issue include: a. Using both total WEIM transfer data and cost based accounting b. Using both total WEIM transfer data and cost based accounting c. Between unlinked jurisdictions if one area uses generation based accounting and another area uses load based accounting 6. The ISO does not provide all metrics desired by market participants. This includes: a. Demonstration of the impact of the market on decarbonization and renewable curtailment. b. Information is lacking to LSEs in jurisdictions with non-priced emissions reduction policies to fulfill reporting obligations with state policy such as market imports to serve load. This could undermine efforts to decarbonize as the unspecified emissions rate used by states with an absolute reduction program fails to reflect the accuracy of generation and consumption at a local level. c. Costs of GHG to end-use customers 7. There is not a market mechanism in states with a declining cap on emissions for: a. Utilities to ensure load is served by generation and wholesale market transfers that meet those emission reduction targets b. Utilities to offer generation to the market on a portfolio basis (regardless of point of consumption) that meets the state’s emissions target over a given time period c. Reflecting both the declining cap and a price on carbon in the market for states that have both requirements

Please see the attached comments from the Department of Market Monitoring.

1. Provide a summary of your organization’s comments on the January 11, 2024 GHG Coordination working group discussion:

Our suggested metrics (total generation/market average, attributed WREGIS and non-WREGIS generation by zone, and unallocated generation) relate to consolidated PS 5.b. and 6.b. We would like more information about being a PS sponsor before volunteering. We do not feel that former PS 8 is fully captured in consolidated PS 6. We think that problem statements 5.b., 6.b., and 7.a. should be prioritized.

2. Provide your organization’s comments or remaining questions on the ISO’s overview of the mechanics of GHG attribution in EDAM and WEIM:

3. If your organization suggested GHG metrics, please provide the problem statement the metric relates to (or if none exists, please draft one and provide it), any regulatory requirement associated with providing the data, and the details associated with the metric (metric, cadence, granularity, etc.). Please also provide any feedback to the discussion on GHG metrics.

We have suggested metrics related to PS 5.b. and 6.b. Specifically, our suggested metrics “Attributed non-WREGIS generation by zone/state” and “Attributed WREGIS generation by zone/state” relate to PS 5.b., avoiding double counting with existing systems used for retail attribution and reporting (e.g. REC systems). We have also suggested “Total unallocated generation” and “Unallocated non-WREGIS generation” metrics (also generally referred to as “residual mix”), which relate to PS 6.b., but also to PS 5.b. since residual mixes help avoid implicit double counting. We also suggested different versions of generation data, market average, average emissions rate metrics, which relates to PS 6.

Regarding regulatory requirements associated with providing the data:

• Market attribution to CA and WA supports regulatory requirements related to cap-and-trade programs in those states.
• There are retail supply and/or GHG reporting programs in CA, WA, OR, NV, UT, AZ, CO, and NM.

We have provided details about the metric, frequency, and granularity of the data in our previous 9/27/23 comments on metrics:

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

4. Problem Statements:

a.Please identify if you are willing to be a problem statement / sub-problem statement sponsor. This could entail leading a discussion on the rationale behind the problem statement and facilitating a discussion with other working group members. b. Provide your organization’s comments on the consolidated problem statements and prioritization:

We would like more information about the scope of activities (e.g. number of discussion sessions), timeframe, and time commitment associated with being a PS sponsor.

There appears to be a typo in the January 11 slide deck, slide 34, and in question 5 below: 5.b. is the same as 5.a. I believe 5.b. should be: “Using both total WEIM attribution and systems to allocate generation and associated emissions to retail load (i.e., RECs).” This appears to be correct in the Jan 10 Discussion paper, pg. 14.

Former PS 8 is not fully captured in 6.b., since 6.b. is only concerning LSEs in non-pricing states. Additional reporting metrics are also needed by states with load-based programs (including states that also have GHG pricing, e.g. WA), customers in all states, and voluntary programs.

From our perspective, the most important consolidated problem statements are 5.b., 6.b., and 7.a. PS 6 should be expanded to include information/metrics that are lacking to load-based programs, customers, and voluntary programs in all states. We agree that PS 6 and 5 should be the top and second priority, respectively. But we believe that PS 7 should be prioritized after those since this problem is limiting market participation, while PS 1 and 2 address problems with the current market attribution serving states with GHG pricing which is already enabled.

5. Problem Statements for Reference:

1. The optimization does not take the explicit cost of secondary dispatch into account, and therefore may not balance optimized attribution with constraints to limit secondary dispatch. 2. The current GHG design does not limit attribution to only capacity above the baseline which results in the potential for secondary dispatch. 3. Attribution is not scale-able because it creates the potential for secondary dispatch. This secondary dispatch could increase with market expansion. 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. 5. When there are multiple unlinked GHG regulation areas or different reporting requirements by different states, market participation may result in double counting, undercounting, or inconsistent counting of emissions. Variations of this issue include: a. Using both total WEIM transfer data and cost based accounting b. Using both total WEIM transfer data and cost based accounting c. Between unlinked jurisdictions if one area uses generation based accounting and another area uses load based accounting 6. The ISO does not provide all metrics desired by market participants. This includes: a. Demonstration of the impact of the market on decarbonization and renewable curtailment. b. Information is lacking to LSEs in jurisdictions with non-priced emissions reduction policies to fulfill reporting obligations with state policy such as market imports to serve load. This could undermine efforts to decarbonize as the unspecified emissions rate used by states with an absolute reduction program fails to reflect the accuracy of generation and consumption at a local level. c. Costs of GHG to end-use customers 7. There is not a market mechanism in states with a declining cap on emissions for: a. Utilities to ensure load is served by generation and wholesale market transfers that meet those emission reduction targets b. Utilities to offer generation to the market on a portfolio basis (regardless of point of consumption) that meets the state’s emissions target over a given time period c. Reflecting both the declining cap and a price on carbon in the market for states that have both requirements

1. Provide a summary of your organization’s comments on the January 11, 2024 GHG Coordination working group discussion:

The state commissioners listed below appreciate the commendable efforts by ISO Staff facilitating the GHG Coordinating Group. The approach taken by the ISO, in which stakeholders take the lead in shaping topics and priorities, has fostered substantial engagement. This structured process has allowed parties with diverse perspectives to be heard.

We offer the following comments on the consolidated Problem Statements discussed at the January 11, 2024, working group meeting.

• Generally, we support and appreciate the consolidation of the original sixteen problem statements into the current seven.
• We concur with how the issues are presented in Problem Statements 5, 6, and 7 and strongly endorse their inclusion.
• We find Problem Statement 3 problematic, and we agree with its ranking as the lowest priority. Problem Statement 3 is “Attribution is not scale-able because it creates the potential for secondary dispatch. This secondary dispatch could increase with market expansion.” This statement is subjective and not based in fact. Some degree of secondary dispatch is inevitable in a market covering both priced GHG zones and non-priced zones. Some may argue that attribution can be scaled despite the potential for secondary dispatch. The extent to which secondary dispatch is acceptable is a matter of policy. For purposes of the Problem Statement phase, we would suggest this wording: “Attribution may not be readily scalable in certain circumstances due to secondary dispatch that exceeds applicable state guidelines”.  As we move into the prioritization and solutions phases, we further recommend waiting to expend efforts to further reduce secondary dispatch until after the proposed EDAM dispatch constraints are implemented so that we can first understand the scale of the secondary dispatch problem.
• Problem Statement 4, "The current price formation does not provide full transparency into the total marginal GHG cost," is also subjective. The formulae driving the GHG marginal cost calculation are meticulously described in the business practice manual. The working group should seek stakeholder clarification on why the GHG marginal cost is perceived as non-transparent.

We remain committed to collaborative efforts aimed at enhancing the effectiveness of the GHG Coordinating Group's initiatives.

Commissioner Darcie Houck, California Public Utilities Commission

Commissioner Gabriel Aguilera, New Mexico Public Regulation Commission

Commissioner Letha Tawney, Oregon Public Utility Commission

Commissioner Ann Rendahl, Washington Utilities and Transportation Commission

2. Provide your organization’s comments or remaining questions on the ISO’s overview of the mechanics of GHG attribution in EDAM and WEIM:

3. If your organization suggested GHG metrics, please provide the problem statement the metric relates to (or if none exists, please draft one and provide it), any regulatory requirement associated with providing the data, and the details associated with the metric (metric, cadence, granularity, etc.). Please also provide any feedback to the discussion on GHG metrics.

4. Problem Statements:

a.Please identify if you are willing to be a problem statement / sub-problem statement sponsor. This could entail leading a discussion on the rationale behind the problem statement and facilitating a discussion with other working group members. b. Provide your organization’s comments on the consolidated problem statements and prioritization:

5. Problem Statements for Reference:

1. The optimization does not take the explicit cost of secondary dispatch into account, and therefore may not balance optimized attribution with constraints to limit secondary dispatch. 2. The current GHG design does not limit attribution to only capacity above the baseline which results in the potential for secondary dispatch. 3. Attribution is not scale-able because it creates the potential for secondary dispatch. This secondary dispatch could increase with market expansion. 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. 5. When there are multiple unlinked GHG regulation areas or different reporting requirements by different states, market participation may result in double counting, undercounting, or inconsistent counting of emissions. Variations of this issue include: a. Using both total WEIM transfer data and cost based accounting b. Using both total WEIM transfer data and cost based accounting c. Between unlinked jurisdictions if one area uses generation based accounting and another area uses load based accounting 6. The ISO does not provide all metrics desired by market participants. This includes: a. Demonstration of the impact of the market on decarbonization and renewable curtailment. b. Information is lacking to LSEs in jurisdictions with non-priced emissions reduction policies to fulfill reporting obligations with state policy such as market imports to serve load. This could undermine efforts to decarbonize as the unspecified emissions rate used by states with an absolute reduction program fails to reflect the accuracy of generation and consumption at a local level. c. Costs of GHG to end-use customers 7. There is not a market mechanism in states with a declining cap on emissions for: a. Utilities to ensure load is served by generation and wholesale market transfers that meet those emission reduction targets b. Utilities to offer generation to the market on a portfolio basis (regardless of point of consumption) that meets the state’s emissions target over a given time period c. Reflecting both the declining cap and a price on carbon in the market for states that have both requirements

1. Provide a summary of your organization’s comments on the January 11, 2024 GHG Coordination working group discussion:

LADWP appreciates the ongoing working group discussions, and encourages CAISO and stakeholders to continue working on long-term GHG emission accounting design improvements focused on solving issues related to the practice of attribution to individual generating resources, with the goals of improving accuracy and reducing GHG costs to end-use customers.

2. Provide your organization’s comments or remaining questions on the ISO’s overview of the mechanics of GHG attribution in EDAM and WEIM:

None at this time.

3. If your organization suggested GHG metrics, please provide the problem statement the metric relates to (or if none exists, please draft one and provide it), any regulatory requirement associated with providing the data, and the details associated with the metric (metric, cadence, granularity, etc.). Please also provide any feedback to the discussion on GHG metrics.

LADWP’s suggested GHG metrics (revised below) are related to Problem Statements 2 (secondary dispatch), 4 (transparency into marginal GHG cost) and, 6c (GHG cost to end-use customers).

For transparency purposes, CAISO should provide reports on the generating resources and associated GHG emissions deemed to have served Load in a GHG regulation area. These reports should be at the lowest level of granularity possible (ideally each 5-minute interval).

1. The dollar amount of GHG revenue distributed to zero-emitting resources within GHG and non-GHG regulatory areas.
2. The dollar amount of GHG revenue distributed to emitting resources within GHG and non-GHG regulatory areas.
3. For resources deemed to support an import into a GHG regulatory area, the total MWH volume of GHG attribution below the base schedule/GHG reference level, marginal cost of GHG and marginal GHG emission rate.
4. For resources deemed to support an import into a GHG regulatory area, the total MWH volume of GHG attribution above the base schedule/GHG reference level, marginal cost of GHG and marginal GHG emission rate.

4. Problem Statements:

a.Please identify if you are willing to be a problem statement / sub-problem statement sponsor. This could entail leading a discussion on the rationale behind the problem statement and facilitating a discussion with other working group members. b. Provide your organization’s comments on the consolidated problem statements and prioritization:

a) LADWP is interested in all the problem statements. In particular, we would like to participate in the discussions (support the primary sponsors) for Problem Statements 4 and 7.

b) LADWP believes that Problem Statements 1, 2 and 3 can be discussed as a group since they are all related to attribution / secondary dispatch issues.

For Problem Statement 4, consider adding that GHG bid adders for all generating resources inside a GHG regulation area should be broken out to improve transparency.

For Problem Statement 6, consider adding the following LSE data needs:

• Data to comply with hourly GHG emission reporting requirements (California SB 1158).
• For transparency, can CAISO include MWh purchased and sold in the LSE invoice to aid reconciliation and for regulatory reporting and verification purposes.

5. Problem Statements for Reference:

1. The optimization does not take the explicit cost of secondary dispatch into account, and therefore may not balance optimized attribution with constraints to limit secondary dispatch. 2. The current GHG design does not limit attribution to only capacity above the baseline which results in the potential for secondary dispatch. 3. Attribution is not scale-able because it creates the potential for secondary dispatch. This secondary dispatch could increase with market expansion. 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. 5. When there are multiple unlinked GHG regulation areas or different reporting requirements by different states, market participation may result in double counting, undercounting, or inconsistent counting of emissions. Variations of this issue include: a. Using both total WEIM transfer data and cost based accounting b. Using both total WEIM transfer data and cost based accounting c. Between unlinked jurisdictions if one area uses generation based accounting and another area uses load based accounting 6. The ISO does not provide all metrics desired by market participants. This includes: a. Demonstration of the impact of the market on decarbonization and renewable curtailment. b. Information is lacking to LSEs in jurisdictions with non-priced emissions reduction policies to fulfill reporting obligations with state policy such as market imports to serve load. This could undermine efforts to decarbonize as the unspecified emissions rate used by states with an absolute reduction program fails to reflect the accuracy of generation and consumption at a local level. c. Costs of GHG to end-use customers 7. There is not a market mechanism in states with a declining cap on emissions for: a. Utilities to ensure load is served by generation and wholesale market transfers that meet those emission reduction targets b. Utilities to offer generation to the market on a portfolio basis (regardless of point of consumption) that meets the state’s emissions target over a given time period c. Reflecting both the declining cap and a price on carbon in the market for states that have both requirements

1. Provide a summary of your organization’s comments on the January 11, 2024 GHG Coordination working group discussion:

PG&E appreciates the opportunity to offer its comments on the GHG Working Group #5. PG&E’s comments can be summarized as follows:

• PG&E supports further analysis of the current GHG accounting program, including the cost of secondary dispatch constraints in California and evaluating the benefits and leakage aspects of secondary dispatch (i.e., Problem Statement 1).
• PG&E reiterates its previous comments to prioritize the exploration of load-based accounting, to assess if it could be a better long-term method for the GHG accounting.
• PG&E volunteers to sponsor problem statement #1.
• PG&E supports transparency in markets but do not see an urgent need to enhance or create new metrics. As this initiative starts developing solutions, we would suggest revisiting this topic.

2. Provide your organization’s comments or remaining questions on the ISO’s overview of the mechanics of GHG attribution in EDAM and WEIM:

PG&E supports further analysis of the current GHG accounting program, including the cost of secondary dispatch constraints in California and evaluating the benefits and leakage aspects of secondary dispatch (i.e., Problem Statement 1).  

PG&E recommends utilizing aggregate (BAA-level) data to explore whether attribution below the baseline could be beneficial or result in leakage.

• Load and renewable forecast errors for each BAA (where larger errors raise the probability of an inaccurate baseline and attribution below the baseline might be beneficial secondary dispatch).
• Bid prices of units attributed below their baseline compared to the average price of neighboring BAA’s (indicating economic displacement if a unit is more expensive than its neighbors)
• Net import / export levels for the BAA (with net-importing suggesting the likelihood of a unit being economically displaced). 

While we acknowledge that this analysis may not provide a definitive answer; the goal is to gain insight into the relative amounts of beneficial secondary dispatch versus potential leakage, contributing to a better understanding of the current state of the GHG program.

3. If your organization suggested GHG metrics, please provide the problem statement the metric relates to (or if none exists, please draft one and provide it), any regulatory requirement associated with providing the data, and the details associated with the metric (metric, cadence, granularity, etc.). Please also provide any feedback to the discussion on GHG metrics.

PG&E supports transparency in markets but does not see an urgent need to enhance or create new metrics. As this initiative starts developing solutions, we would suggest revisiting this topic.

4. Problem Statements:

a.Please identify if you are willing to be a problem statement / sub-problem statement sponsor. This could entail leading a discussion on the rationale behind the problem statement and facilitating a discussion with other working group members. b. Provide your organization’s comments on the consolidated problem statements and prioritization:

PG&E volunteers to sponsor problem statement #1.

PG&E reiterates its previous comments to prioritize the exploration of load-based accounting, to assess if it could be a better long-term method for the GHG accounting. In this context, proponents for load-based accounting suggest that problem statements 2-4 could be resolved or largely addressed.

PG&E urges CAISO to refrain from using Slido results to prioritize these problem statements, or in any other working groups. While Slido is effective for real-time feedback within a working group, it should not be mistaken as representative of all stakeholders’ positions. PG&E believes that written comments provide the most accurate representation of stakeholders’ positions.  

5. Problem Statements for Reference:

1. The optimization does not take the explicit cost of secondary dispatch into account, and therefore may not balance optimized attribution with constraints to limit secondary dispatch. 2. The current GHG design does not limit attribution to only capacity above the baseline which results in the potential for secondary dispatch. 3. Attribution is not scale-able because it creates the potential for secondary dispatch. This secondary dispatch could increase with market expansion. 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. 5. When there are multiple unlinked GHG regulation areas or different reporting requirements by different states, market participation may result in double counting, undercounting, or inconsistent counting of emissions. Variations of this issue include: a. Using both total WEIM transfer data and cost based accounting b. Using both total WEIM transfer data and cost based accounting c. Between unlinked jurisdictions if one area uses generation based accounting and another area uses load based accounting 6. The ISO does not provide all metrics desired by market participants. This includes: a. Demonstration of the impact of the market on decarbonization and renewable curtailment. b. Information is lacking to LSEs in jurisdictions with non-priced emissions reduction policies to fulfill reporting obligations with state policy such as market imports to serve load. This could undermine efforts to decarbonize as the unspecified emissions rate used by states with an absolute reduction program fails to reflect the accuracy of generation and consumption at a local level. c. Costs of GHG to end-use customers 7. There is not a market mechanism in states with a declining cap on emissions for: a. Utilities to ensure load is served by generation and wholesale market transfers that meet those emission reduction targets b. Utilities to offer generation to the market on a portfolio basis (regardless of point of consumption) that meets the state’s emissions target over a given time period c. Reflecting both the declining cap and a price on carbon in the market for states that have both requirements

1. Provide a summary of your organization’s comments on the January 11, 2024 GHG Coordination working group discussion:

PacifiCorp thanks the CAISO for their presentation on January 11, 2024, that went through the CAISO’s GHG attribution process in the WEIM, and the stakeholder driven proposed metrics. As more conversations continue to take place, having a common understanding of market mechanics will help shape conversations to find workable solutions and areas where the CAISO can support its stakeholders by giving access to data available for transparency. In prior comments PacifiCorp has advocated for the CAISO, state regulators and market participants to come together to derive the metrics needed for reporting. PacifiCorp continues to urge the need for regulators to be part of these conversations, as transparency into reporting metrics will ultimately be a tool for those agencies to utilize should they choose to make changes to existing reporting paradigms regarding the treatment of electricity attributed to organized markets purchases. PacifiCorp supports the CAISO providing data needed for regulators but advises that with the expansive amount of data that could be provided, that its usage could suggest different results for describing the emissions associated with the market at a given interval. 

2. Provide your organization’s comments or remaining questions on the ISO’s overview of the mechanics of GHG attribution in EDAM and WEIM:

PacifiCorp does not have outstanding questions or comments on GHG attribution in EDAM and WEIM at this time. Nonetheless, if there are instances of attribution discussed in further working groups that can be drawn back to the EDAM and WEIM processes, it would be helpful to continue to add additional context or examples for increased awareness and understanding. 

3. If your organization suggested GHG metrics, please provide the problem statement the metric relates to (or if none exists, please draft one and provide it), any regulatory requirement associated with providing the data, and the details associated with the metric (metric, cadence, granularity, etc.). Please also provide any feedback to the discussion on GHG metrics.

At this stage in the stakeholder process PacifiCorp is unable to evaluate the usage of such metrics for compliance reporting until there is insight toward a guided approach that will show the efficacy of the metrics which can only be done with increased coordination between market operator, state regulators, and market participants for how the data is utilized by regulators.  

4. Problem Statements:

a.Please identify if you are willing to be a problem statement / sub-problem statement sponsor. This could entail leading a discussion on the rationale behind the problem statement and facilitating a discussion with other working group members. b. Provide your organization’s comments on the consolidated problem statements and prioritization:

PacifiCorp will not sponsor a problem statement or sub-problem statement at this time. 

5. Problem Statements for Reference:

1. The optimization does not take the explicit cost of secondary dispatch into account, and therefore may not balance optimized attribution with constraints to limit secondary dispatch. 2. The current GHG design does not limit attribution to only capacity above the baseline which results in the potential for secondary dispatch. 3. Attribution is not scale-able because it creates the potential for secondary dispatch. This secondary dispatch could increase with market expansion. 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. 5. When there are multiple unlinked GHG regulation areas or different reporting requirements by different states, market participation may result in double counting, undercounting, or inconsistent counting of emissions. Variations of this issue include: a. Using both total WEIM transfer data and cost based accounting b. Using both total WEIM transfer data and cost based accounting c. Between unlinked jurisdictions if one area uses generation based accounting and another area uses load based accounting 6. The ISO does not provide all metrics desired by market participants. This includes: a. Demonstration of the impact of the market on decarbonization and renewable curtailment. b. Information is lacking to LSEs in jurisdictions with non-priced emissions reduction policies to fulfill reporting obligations with state policy such as market imports to serve load. This could undermine efforts to decarbonize as the unspecified emissions rate used by states with an absolute reduction program fails to reflect the accuracy of generation and consumption at a local level. c. Costs of GHG to end-use customers 7. There is not a market mechanism in states with a declining cap on emissions for: a. Utilities to ensure load is served by generation and wholesale market transfers that meet those emission reduction targets b. Utilities to offer generation to the market on a portfolio basis (regardless of point of consumption) that meets the state’s emissions target over a given time period c. Reflecting both the declining cap and a price on carbon in the market for states that have both requirements

1. Provide a summary of your organization’s comments on the January 11, 2024 GHG Coordination working group discussion:

Portland General Electric (“PGE”) appreciates the commitment to understanding key stakeholder issues and the unique compliance obligations for PGE. We appreciated the information and explanation CAISO provided to improve stakeholder understanding.

2. Provide your organization’s comments or remaining questions on the ISO’s overview of the mechanics of GHG attribution in EDAM and WEIM:

PGE appreciates the thorough presentation of the current GHG attribution process in EDAM and WEIM and has several remaining questions. We are interested in additional information regarding the process and technical steps necessary to provide an average emissions rate to more accurately reflect the emissions associated with EIM transfers (such as to Oregon utilities). 

3. If your organization suggested GHG metrics, please provide the problem statement the metric relates to (or if none exists, please draft one and provide it), any regulatory requirement associated with providing the data, and the details associated with the metric (metric, cadence, granularity, etc.). Please also provide any feedback to the discussion on GHG metrics.

PGE had suggested CAISO provide data on GHG emissions associated with power transacted in the WEIM, including through an average emissions rate (AER) similar to that described by CAISO in the November 27 GHG working group. PGE believes the AER discussed at the workshop would be useful and promising for regulatory use in Oregon.  As discussed, it may be useful for CAISO to produce several different metrics, such as for different time scales (PGE is particularly interested in hourly data that can be easily aggregated for an annual regulatory report).  This relates directly to Problem Statement 6.

4. Problem Statements:

a.Please identify if you are willing to be a problem statement / sub-problem statement sponsor. This could entail leading a discussion on the rationale behind the problem statement and facilitating a discussion with other working group members. b. Provide your organization’s comments on the consolidated problem statements and prioritization:

PGE is willing and interested in sponsoring or co-sponsoring Problem Statement 6 (The ISO does not provide all metrics desired by market participants) and is interested to co-sponsor or at least participate in discussions on Problem Statement 7 (There is not a market mechanism in states with a declining cap on emissions for Utilities to ensure load is served by generation and wholesale market transfers that meet those emission reduction targets).

PGE agrees that Problem Statement 6 (The ISO does not provide all metrics desired by market participants) is appropriately prioritized as the top near-term priority that will help enable resolutions to other problem statements.  We believe Problem Statement 7 (There is not a market mechanism in states with a declining cap on emissions for Utilities to ensure load is served by generation and wholesale market transfers that meet those emission reduction targets) must be prioritized higher given its importance for utilities in non-priced GHG states to participate in regional markets while complying with state laws.

5. Problem Statements for Reference:

1. The optimization does not take the explicit cost of secondary dispatch into account, and therefore may not balance optimized attribution with constraints to limit secondary dispatch. 2. The current GHG design does not limit attribution to only capacity above the baseline which results in the potential for secondary dispatch. 3. Attribution is not scale-able because it creates the potential for secondary dispatch. This secondary dispatch could increase with market expansion. 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. 5. When there are multiple unlinked GHG regulation areas or different reporting requirements by different states, market participation may result in double counting, undercounting, or inconsistent counting of emissions. Variations of this issue include: a. Using both total WEIM transfer data and cost based accounting b. Using both total WEIM transfer data and cost based accounting c. Between unlinked jurisdictions if one area uses generation based accounting and another area uses load based accounting 6. The ISO does not provide all metrics desired by market participants. This includes: a. Demonstration of the impact of the market on decarbonization and renewable curtailment. b. Information is lacking to LSEs in jurisdictions with non-priced emissions reduction policies to fulfill reporting obligations with state policy such as market imports to serve load. This could undermine efforts to decarbonize as the unspecified emissions rate used by states with an absolute reduction program fails to reflect the accuracy of generation and consumption at a local level. c. Costs of GHG to end-use customers 7. There is not a market mechanism in states with a declining cap on emissions for: a. Utilities to ensure load is served by generation and wholesale market transfers that meet those emission reduction targets b. Utilities to offer generation to the market on a portfolio basis (regardless of point of consumption) that meets the state’s emissions target over a given time period c. Reflecting both the declining cap and a price on carbon in the market for states that have both requirements

1. Provide a summary of your organization’s comments on the January 11, 2024 GHG Coordination working group discussion:

Renewable Northwest (RNW) appreciates CAISO's commitment to stakeholder discussions on how greenhouse gas (GHG) accounting functionality could evolve after the ISO implements the Extended Day Ahead Market (EDAM). The January 11 discussion was in part technically informational but was also an opportunity for meaningful stakeholder engagement, and we support this dynamic meeting format as the group works to produce a GHG Action Plan which will recommend robust GHG policy designs that reflect the variety of western climate policies.

In these comments RNW outlines its support and prioritization of various problem statements which will drive future working group discussions. One commonality underlying many of the problem statements in each of the four discussion themes is data transparency. In general RNW supports a high level of transparency in data reporting, but specifically, a number of the proposed metrics discussed at the January 11 meeting have the potential to 1) ease friction created by the layered compliance environment across the WEIM and future EDAM and 2) enhance market participation. We support the ISO's proposal that enhanced data sharing be translated into a (new or perhaps existing) problem statement so the group can address this issue in greater detail at a future working group meeting.

RNW also suggests that in addition to discussing a market mechanism to support GHG accounting for non-pricing programs, the working group should treat non-pricing programs as a subtopic within the other discussion topics. We hope this reduces future duplicative work and ensures decisions about "Emissions tracking and accounting" do not disadvantage non-pricing GHG programs. This would support the ISO's principles of non-discrimination and congruence with state policy.

2. Provide your organization’s comments or remaining questions on the ISO’s overview of the mechanics of GHG attribution in EDAM and WEIM:

With the launch of EDAM in 2026, there will be market software and rules to enable attribution of energy to serve load in Washington, per the passage of Washington's cap and invest program, just as it's been designed to serve load in California. We would benefit from a breakdown of scenarios clarifying how a non-emitting resource will be prioritized in a market with a variety of GHG-related compliance requirements. For example, when the non-emitting resource is the economic dispatch, how does the market optimization solve for delivery of that resource, considering physical, economic, and zone-specific compliance characteristics? Will other variables be considered?

3. If your organization suggested GHG metrics, please provide the problem statement the metric relates to (or if none exists, please draft one and provide it), any regulatory requirement associated with providing the data, and the details associated with the metric (metric, cadence, granularity, etc.). Please also provide any feedback to the discussion on GHG metrics.

RNW supports the need for improved data transparency by way of additional reporting metrics that better reflect market activity:

1. GHG attributions by fuel type broken down into attributions from generators registered / not registered in WREGIS. We agree with CRS that the reporting of GHG attribution data to WREGIS by zone, aggregated by generator and by month, would allow WREGIS to accurately designate renewable energy certificates (RECs) and thus help protect against the double counting of the nonpower attributes associated with that renewable generation. Additionally, with the more granular reporting of attributed generation, this data could be aggregated and used by states to develop a more comprehensive residual emissions rate by zone. These two factors -- stronger safeguards against double counting and a residual emissions rate -- could enable stronger market participation by entities operating within load-based programs. This would be best achieved with the reporting of all three components identified by CRS: attributed non-WREGIS generation, attributed WREGIS generation, and unallocated generation data.

2. Residual emissions rate. As noted above, this metric could improve market participation by entities operating within load-based programs and currently subject to a suboptimal default emissions rate.

3. Marginal emissions rate. RNW agrees that reporting the marginal emissions rate will improve market transparency and help stakeholders and market participants understand the GHG shadow price. This may also help evaluate the performance of the market.

4. Total emissions by jurisdiction. This may be one helpful metric to jurisdictions with non-pricing programs in the interim as more user-friendly tools are developed to facilitate market participation for entities within those jurisdictions.

4. Problem Statements:

a.Please identify if you are willing to be a problem statement / sub-problem statement sponsor. This could entail leading a discussion on the rationale behind the problem statement and facilitating a discussion with other working group members. b. Provide your organization’s comments on the consolidated problem statements and prioritization:

As indicated above, RNW supports the expansion of the ISO's reported metrics for improved market transparency. The consolidated problem statements could more explicitly note the metrics requested by stakeholders along with a brief explanation of the anticipated impact. Perhaps this could be an expansion of consolidated problem statement 6, though it appears one of the metrics discussed above is somewhat embedded in consolidated problem statement 5b. 

RNW also emphasizes the importance of consolidated problem statement 7 which addresses the lack of market mechanisms for states with non-pricing GHG policies. The ISO would benefit from early investment in an effort to identify market mechanisms that would support the needs of jurisdictions with non-pricing policies. We suggest one of the upcoming working group meetings focus entirely on the overarching topic "Beyond Price-based GHG policy,” but we also encourage the ISO to treat non-pricing policies as a cross-cutting issue.  For example, we suggest that in meetings related to "Emissions tracking and accounting," any potential unintended consequences or barriers to a future non-pricing GHG accounting framework be addressed or noted. This would treat non-pricing programs as a sort of subtopic under matters related to "Emissions tracking and accounting," which will ideally facilitate a smooth expansion of emissions tracking and accounting to entities operating within these non-pricing GHG reduction programs in the foreseeable future, keeping this emerging framework area on track for development and future implementation.
 

5. Problem Statements for Reference:

1. The optimization does not take the explicit cost of secondary dispatch into account, and therefore may not balance optimized attribution with constraints to limit secondary dispatch. 2. The current GHG design does not limit attribution to only capacity above the baseline which results in the potential for secondary dispatch. 3. Attribution is not scale-able because it creates the potential for secondary dispatch. This secondary dispatch could increase with market expansion. 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. 5. When there are multiple unlinked GHG regulation areas or different reporting requirements by different states, market participation may result in double counting, undercounting, or inconsistent counting of emissions. Variations of this issue include: a. Using both total WEIM transfer data and cost based accounting b. Using both total WEIM transfer data and cost based accounting c. Between unlinked jurisdictions if one area uses generation based accounting and another area uses load based accounting 6. The ISO does not provide all metrics desired by market participants. This includes: a. Demonstration of the impact of the market on decarbonization and renewable curtailment. b. Information is lacking to LSEs in jurisdictions with non-priced emissions reduction policies to fulfill reporting obligations with state policy such as market imports to serve load. This could undermine efforts to decarbonize as the unspecified emissions rate used by states with an absolute reduction program fails to reflect the accuracy of generation and consumption at a local level. c. Costs of GHG to end-use customers 7. There is not a market mechanism in states with a declining cap on emissions for: a. Utilities to ensure load is served by generation and wholesale market transfers that meet those emission reduction targets b. Utilities to offer generation to the market on a portfolio basis (regardless of point of consumption) that meets the state’s emissions target over a given time period c. Reflecting both the declining cap and a price on carbon in the market for states that have both requirements

1. Provide a summary of your organization’s comments on the January 11, 2024 GHG Coordination working group discussion:

The Salt River Project Agricultural Improvement and Power District (SRP) acknowledges the efforts of the CAISO in the recent GHG Coordination Working Group session. SRP appreciates the inclusive and comprehensive discussions that reviewed the GHG attribution mechanisms, particularly in the context of EDAM and WEIM. SRP also appreciates the working group’s focus on the complexities and challenges in multi-jurisdictional coordination and emissions tracking. However, SRP encourages the CAISO to continue to review the specifics of GHG attribution with a focus on how mechanisms align with stakeholder corporate GHG reduction sustainability goals alongside state mandates. SRP believes that addressing this alignment is important for GHG coordination and accounting.

2. Provide your organization’s comments or remaining questions on the ISO’s overview of the mechanics of GHG attribution in EDAM and WEIM:

SRP appreciates the CAISO providing an overview of the attribution mechanics. This information sets a good baseline for understanding. SRP has no further questions at this time. 

3. If your organization suggested GHG metrics, please provide the problem statement the metric relates to (or if none exists, please draft one and provide it), any regulatory requirement associated with providing the data, and the details associated with the metric (metric, cadence, granularity, etc.). Please also provide any feedback to the discussion on GHG metrics.

SRP appreciates the CAISO summarizing GHG metrics requested by all stakeholders.  SRP is supportive of the CAISO submitting meter data for renewables directly to the Western Renewable Energy Generation Information System (WREGIS), facilitating the validation of Renewable Energy Credits (RECs) and addressing double counting concerns.

To better understand the implications of average or residual emission factors, SRP requests the CAISO provide additional numerical examples with actual or simulated data. These examples should show calculation methodologies for an “average” or “residual” emission rate, to give stakeholders a better understanding of which calculations accurately aligned with their state-mandated requirements or corporate goals. Ideally, the calculation examples should illustrate which resources would be counted in an average/residual emission rate for both the GHG zone and non-GHG zone when California is a net importer, net-exporter, etc.

SRP agrees with stakeholder feedback to incorporate a mechanism to claim energy from resources outside of a GHG zone, such as those dedicated to serving load in regions like Arizona. This approach would more accurately reflect the average/residual emission rate and ensure that forward contracts for resources dedicated to serve retail load or other BA loads are honored and represented in the market. 

SRP proposes a revision to Problem Statements #6 and #7 to address both state mandates and corporate policy goals. SRP strongly recommends rewording Problem Statement #6(b) to include corporate programs. For example:

Information is lacking to LSEs in jurisdictions with non-priced emissions reduction policies to fulfill reporting obligations with state or corporate policy such as market imports to serve load. This could undermine efforts to decarbonize as the unspecified emissions rate used by states with an absolute reduction program or utilities with voluntary emission reduction goals fail to reflect the accuracy of generation and consumption at a local level.

SRP also strongly recommends incorporating corporate goals into Problem Statement #7. For example:

There is not a market mechanism for BAs with state mandates or corporate policy dictating a declining cap on emissions for:

a. Utilities to ensure load is served by generation and wholesale market transfers that meet those emission reduction targets

b. Utilities to offer generation to the market on a portfolio basis (regardless of point of consumption) that meets the state’s/company’s emissions target over a given time period

c. Reflecting both the declining cap and a price on carbon in the market for states/companies that have both requirements

4. Problem Statements:

a.Please identify if you are willing to be a problem statement / sub-problem statement sponsor. This could entail leading a discussion on the rationale behind the problem statement and facilitating a discussion with other working group members. b. Provide your organization’s comments on the consolidated problem statements and prioritization:

a. SRP will not be sponsoring any problem or sub-problem statements at this time but will continue to maintain a role as an active participant in the working group.

b. SRP appreciates the CAISO re-evaluating and prioritizing problem statements based on stakeholder feedback. The shift in prioritization of Problem Statement #6 aligns with SRP’s focus on enhancing GHG reporting metrics.

5. Problem Statements for Reference:

1. The optimization does not take the explicit cost of secondary dispatch into account, and therefore may not balance optimized attribution with constraints to limit secondary dispatch. 2. The current GHG design does not limit attribution to only capacity above the baseline which results in the potential for secondary dispatch. 3. Attribution is not scale-able because it creates the potential for secondary dispatch. This secondary dispatch could increase with market expansion. 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. 5. When there are multiple unlinked GHG regulation areas or different reporting requirements by different states, market participation may result in double counting, undercounting, or inconsistent counting of emissions. Variations of this issue include: a. Using both total WEIM transfer data and cost based accounting b. Using both total WEIM transfer data and cost based accounting c. Between unlinked jurisdictions if one area uses generation based accounting and another area uses load based accounting 6. The ISO does not provide all metrics desired by market participants. This includes: a. Demonstration of the impact of the market on decarbonization and renewable curtailment. b. Information is lacking to LSEs in jurisdictions with non-priced emissions reduction policies to fulfill reporting obligations with state policy such as market imports to serve load. This could undermine efforts to decarbonize as the unspecified emissions rate used by states with an absolute reduction program fails to reflect the accuracy of generation and consumption at a local level. c. Costs of GHG to end-use customers 7. There is not a market mechanism in states with a declining cap on emissions for: a. Utilities to ensure load is served by generation and wholesale market transfers that meet those emission reduction targets b. Utilities to offer generation to the market on a portfolio basis (regardless of point of consumption) that meets the state’s emissions target over a given time period c. Reflecting both the declining cap and a price on carbon in the market for states that have both requirements

1. Provide a summary of your organization’s comments on the January 11, 2024 GHG Coordination working group discussion:

SCE appreciates the CAISO’s willingness to work the working group and taking the time to discuss fundamental definitions and issues that play a front and center role in the GH working group. 

Overall, SCE appreciates CAISO’s pacing of the GHG working group and thinks it can work through the key issues/problems by the time EDAM goes live in 2026.  However, this pacing could be put at risk if the working group focuses less on the key issues and concentrates on problem statements that appear high priority but do little to help solve key problems.  Specifically, Problem Statement #6, the metrics problem statement, is still opaque because it doesn’t identify specific data types and whether they even exist, nor does it indicate how the metrics would be analyzed or what problem statements would be addressed by the desired, though specified, metrics.  Rather, the CAISO and this working group must focus their attention on those problem statements pose specific questions and seek to analyze an issue and implement solutions and changes to address the issue.  Thos problems statements that look to analyze and understand the issues with attribution and secondary dispatch clearly are of a higher priority and should be regarded as such. 

2. Provide your organization’s comments or remaining questions on the ISO’s overview of the mechanics of GHG attribution in EDAM and WEIM:

SCE appreciates CAISO providing an overview on the mechanics of GHG attributions.   SCE believes the meeting helped educate stakeholders by providing them a good foundation for further understanding GHG attribution.   SCE also appreciates CAISO providing calculations for GHG bid caps, eligible GHG capacity, and potential secondary dispatch. 

The formula CAISO provided to calculate potential secondary dispatch was particularly important to address, but the conversation did not go far enough in explaining the exact details of what would be considered secondary dispatch.   Rather, the calculation only provided a rough estimate of the “bucket” that could be counted for secondary dispatch.  It would be helpful if CAISO could provide details on which resources out of that bucket would be considered secondary dispatch.  Furthermore, it appears that CAISO’s formula for calculating potential secondary dispatch could be too simple and not accurate because it undermines the optimization of resources between two non-GHG zones. 

3. If your organization suggested GHG metrics, please provide the problem statement the metric relates to (or if none exists, please draft one and provide it), any regulatory requirement associated with providing the data, and the details associated with the metric (metric, cadence, granularity, etc.). Please also provide any feedback to the discussion on GHG metrics.

In light of the recent GHG working group discussions, it’s clear that stakeholders are highly interested in a greater set of GHG metrics from CAISO.  While SCE encourages data transparency as much as practicable, CAISO’s highest priority of issues/problem statements in this working group should be afforded to more discrete and identifiable issues such as those associated with attribution and secondary dispatch.  Nevertheless, the are certain key metrics that SCE believes would be important to provide, including total emissions, marginal emissions rate, and emissions intensity. With these metrics, stakeholders could be better informed of the GHG impacts of their respective operations, helping parties identify and create GHG reduction goals, and to advocate for future policy decisions. Specifically, the total emissions metric provides a snapshot of the overall environmental footprint, the marginal emissions rate provides insight on the cost of emitting resources which can be used to help shape how organization bid resources into the market, and emissions intensity offers insight into the efficiency of operations.  

Of all desired metrics, and as SCE has mentioned in previous comments, the marginal emissions rate would be most helpful as it would provide further transparency to the market.   Furthermore, having the metric would give GHG-regulated states, such as California and Washington, the ability to compare emission rates within the market and those calculated by agencies like CARB.   This will potentially allow market participants greater ability to identify missing emissions.   

? 

4. Problem Statements:

a.Please identify if you are willing to be a problem statement / sub-problem statement sponsor. This could entail leading a discussion on the rationale behind the problem statement and facilitating a discussion with other working group members. b. Provide your organization’s comments on the consolidated problem statements and prioritization:

SCE cannot commit at this time to sponsoring a specific problem statement but is evaluating the opportunity..   

5. Problem Statements for Reference:

1. The optimization does not take the explicit cost of secondary dispatch into account, and therefore may not balance optimized attribution with constraints to limit secondary dispatch. 2. The current GHG design does not limit attribution to only capacity above the baseline which results in the potential for secondary dispatch. 3. Attribution is not scale-able because it creates the potential for secondary dispatch. This secondary dispatch could increase with market expansion. 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. 5. When there are multiple unlinked GHG regulation areas or different reporting requirements by different states, market participation may result in double counting, undercounting, or inconsistent counting of emissions. Variations of this issue include: a. Using both total WEIM transfer data and cost based accounting b. Using both total WEIM transfer data and cost based accounting c. Between unlinked jurisdictions if one area uses generation based accounting and another area uses load based accounting 6. The ISO does not provide all metrics desired by market participants. This includes: a. Demonstration of the impact of the market on decarbonization and renewable curtailment. b. Information is lacking to LSEs in jurisdictions with non-priced emissions reduction policies to fulfill reporting obligations with state policy such as market imports to serve load. This could undermine efforts to decarbonize as the unspecified emissions rate used by states with an absolute reduction program fails to reflect the accuracy of generation and consumption at a local level. c. Costs of GHG to end-use customers 7. There is not a market mechanism in states with a declining cap on emissions for: a. Utilities to ensure load is served by generation and wholesale market transfers that meet those emission reduction targets b. Utilities to offer generation to the market on a portfolio basis (regardless of point of consumption) that meets the state’s emissions target over a given time period c. Reflecting both the declining cap and a price on carbon in the market for states that have both requirements

1. Provide a summary of your organization’s comments on the January 11, 2024 GHG Coordination working group discussion:

See below.

2. Provide your organization’s comments or remaining questions on the ISO’s overview of the mechanics of GHG attribution in EDAM and WEIM:

Vistra appreciates the CAISO team walking through its view of its requirements that it must align its approach to greenhouse gas (GHG) attribution with its requirement to satisfy the “CAISO least-cost dispatch principles”. Vistra remains concerned that CAISO’s approach to GHG attribution may not align with least-cost dispatch principles. Based on fundamental economic principles, when a market consciously decides to incorporate negative environmental externality into finding the efficient equilibrium price, the accurate total production cost will necessarily increase to reflect the cost of that externality. But, the focus should not be whether or not total production costs are increased. CAISO’s goal should be to ensure that it accurately reflects total production costs, including externalities, particularly given CAISO has made the explicit decision to reflect GHG attribution. This is the right economic outcome, consistent with least cost dispatch principles.

We believe the CAISO market has already adopted the decision to incorporate the negative externality through internal resources offers including the cost of compliance and through determining a marginal GHG clearing price that values the marginal cost of increasing net export energy assumed to be delivered to the GHG area so the market can evaluate the trade-off of incremental internal versus external generation including the cost of compliance represented in the GHG bid adders. However, given limitations with the attribution methodology the market valuation of that trade-off is inaccurate in certain market instances, and the market incorrectly decides to increase reliance on external resources instead of internal generation that was more economic. We request CAISO clarify that least-cost dispatch principles include ensuring that the negative externalities are accurately valued first so that the least-cost dispatch is accurate and efficient after accounting for the externality.

Separately, while there was a lot of focus on secondary dispatch, the CAISO has yet to focus on the problem statement that Vistra has been raising through the Extended Day-Ahead Market greenhouse gas working group and in our board letter on the first order dispatch impacts to internal greenhouse gas area resources when the marginal GHG clearing price fails to accurately capture the negative externalities associated with the net export energy above what is already serving external areas’ loads – first order impact of inappropriately displacing less expensive internal GHG area resource. We request the CAISO please provide an overview of your mechanics not only from the perspective of the external GHG area resources but also from the internal GHG area resources. Vistra would appreciate CAISO providing specific information on market outcomes to internal resources to enable stakeholders to better understand both the volume and type of resources that were not awarded or dispatched, potentially due to this concern.

3. If your organization suggested GHG metrics, please provide the problem statement the metric relates to (or if none exists, please draft one and provide it), any regulatory requirement associated with providing the data, and the details associated with the metric (metric, cadence, granularity, etc.). Please also provide any feedback to the discussion on GHG metrics.

Vistra submitted GHG metric requests in our January 30, 2023 Joint Letter to the Western Energy Imbalance Market Governing Body and California ISO’s Board of Governors on the Extended Day-Ahead Market specifically with our concerns with the existing GHG framework and specific GHG metric requests.[1] Vistra resubmits our GHG metric requests below, which should shed light on all four problem statements to some extent.

The following is a detailed description of information that would enable stakeholders to better understand the GHG emissions associated with increased electricity production by different types of resources located in different EIM entities. The aggregated metrics described below are analogous to similar information previously released by the CAISO or by its Department of Market Monitoring for specific time periods, and should not raise any confidentiality concerns. The results of the below analysis should provide a more accurate picture of the types of resources that are incrementally dispatched in the WEIM when California or Washington (once implemented) was receiving imports from the external non-GHG regulation areas. The results of the analysis will also provide a more accurate estimate of the average and total GHG emissions associated with WEIM imports serving load in the GHG regulation area(s), which can be compared to the GHG emissions of the resources “deemed” by the CAISO’s GHG approach and to the emissions factors for unspecified imports used by environmental regulators in GHG-pricing states to require after the fact compliance for secondary dispatches, or resource shuffling impacts.

Request 1: Average resource fuel mix of incremental output dispatched in the Western EIM, by EIM BAA and by month since January 2021.

Using CAISO 5-minute data on each EIM Participating Resource, separately for each EIM BAA:

1. Calculate positive incremental output (above base schedules) for each EIM Participating Resource;
2. Sum all positive incremental output quantities for each resource fuel type (i.e., hydro, natural gas combined cycle, natural gas peaker, coal, renewable, and other) in each EIM BAA.
3. Sum the incremental output for each resource fuel type over all 5-minute intervals in each month.
   1. Calculate each resource fuel type’s percent share of total incremental output for each month.
4. Estimate incremental GHG emissions by multiplying the incremental output quantity of each resource fuel type by an estimated GHG emissions factor for that resource fuel type[2].
   1. Calculate the estimated GHG emissions rate by dividing the total increment GHG emissions, above, by the total increment output.

Output 1-1: Percent share, by resource fuel type, of incremental output for each EIM BAA, for each month since January 2021.

Output 1-2: Estimated GHG emissions rate, for each EIM BAA, for each month since January 2021.

Request 2: Average resource fuel mix of EIM net exports, by EIM BAA and by month since January 2021.

For each month and for each EIM BAA:

1. Identify the 5-minute intervals in which the EIM BAA was a net exporter in the Western EIM.
2. For each 5-minute interval identified in Step 1:
   1. Sum the positive incremental output of each resource fuel type.
   2. Calculate each resource fuel type’s share of total incremental output.
   3. Allocate the net export quantity to each resource fuel type by multiplying the net export quantity by the percent share of each resource fuel type.
3. Sum the allocated net export quantity for each resource fuel type over all 5-minute intervals identified in Step 1 for each month.
   1. Calculate each resource fuel type’s percent share of total EIM net exports for each month.
4. Multiply the allocated monthly net export quantity for each resource fuel type by the estimated GHG emissions factor for that fuel type.
   1. Sum the estimated GHG emissions across all resource fuel types.
   2. Divide the above by the monthly net export quantity.

Output 2-1: Percent share, by resource fuel type, of EIM net exports for each EIM BAA in each month since January 2021.

Output 2-2: Average GHG emissions factor for EIM net exports for each EIM BAA, by month since January 2021.

Request 3: Average resource fuel mix of EIM imports serving California load, by month since January 2021.

1. For each month, identify 5-minute intervals in which California BAAs received WIEM net imports.
2. For each interval in Step 1:
   1. Identify each EIM BAA that was a net exporter in the Western EIM in the same interval.
   2. Sum allocated net export quantity per resource fuel type for all WEIM BAAs identified in Step 2a.
   3. Calculate each resource fuel type’s share of total EIM net exports
   4. Allocate the California net import quantity to each resource fuel type by multiplying the California net import quantity by each resource fuel type’s percent share of total EIM net exports from Step 2.c.
3. Sum the allocated California net import quantity for each resource fuel type for all 5-minute intervals identified in Step 1 for each month.
   1. Calculate each resource fuel type’s percent share of total California net imports for each month.
4. Multiply the allocated monthly California net import quantity for each resource fuel type by the estimated GHG emissions factor for that fuel type.
   1. Sum the estimated GHG emissions across all resource fuel types.
   2. Divide the above by the monthly California net import quantity.

Output 3-1: Percent share, by resource fuel type, of EIM net imports serving California load, by month since January 2021.

Output 3-2: Average GHG emissions factor for EIM net imports serving California load, by month since January 2021.

[1] Vistra Letter on Extended Day-Ahead Market decision, January 30, 2024, https://www.caiso.com/Documents/VistraPublicComment-DecisiononExtendedDay-AheadMarket-Jan30-2023.pdf.

[2] For example, 0 MT/MWh for hydro, wind, solar and nuclear generation; 0.424 MT/MWh for natural gas combined cycle generation; 0.6 MT/MWh for natural gas combustion turbine; and 1.0 MT/MWh for coal-fired generation.

4. Problem Statements:

a.Please identify if you are willing to be a problem statement / sub-problem statement sponsor. This could entail leading a discussion on the rationale behind the problem statement and facilitating a discussion with other working group members. b. Provide your organization’s comments on the consolidated problem statements and prioritization:

As mentioned above, Vistra noticed in the last working group session that CAISO is focusing almost exclusively on secondary dispatch and losing sight of the other important problem statement that is a first order impact to resources internal to GHG areas being inappropriately displaced when the marginal GHG clearing price is suppressed relative to the external emission rates supporting any net import transfer. Please see the excerpt below from Vistra’s board letter with the problem statement that we would like to see prioritized in this problem statement list.

“A well-functioning market should ensure reasonably accurate greenhouse gas price formation and resulting market outcomes. Vistra is concerned that the EDAM GHG proposal may not achieve this goal because it will over-credit capacity from external resources, and consequently that our non- and lower-emitting resources in the California GHG regulation area will be displaced in preference for higher emitting external resources due to the market design.”[1]

Vistra’s view of the problem statement is that we would like to also focus on issues with attribution leading to increased risks of uneconomically displacing internal generation in addition to the secondary dispatch issue. Our primary concern is with the real life risks imposed on our internal GHG generation dispute the investments we have made to provide better than class average emission rates or to provide new clean energy storage resources with no emission rates. If the uneconomic displacing of our generation occurs due to a limitation in the GHG design that unfairly harms generation inside the GHG area.

Vistra recommends CAISO combine problem statements 1-3 as they all appear to relate to limitations with the attribution leading to potential adverse outcomes including displacing internal economic resources or increasing secondary dispatch. Vistra is happy to sponsor, or co-sponsor, a problem statement combining 1-3 that includes adverse impacts of uneconomically displacing internal GHG resources due to limitations with the GHG attribution approach.

[1] Vistra letter to the WEIM Governing Body and CAISO Board of Governors, January 30, 2023, page 1.

5. Problem Statements for Reference:

1. The optimization does not take the explicit cost of secondary dispatch into account, and therefore may not balance optimized attribution with constraints to limit secondary dispatch. 2. The current GHG design does not limit attribution to only capacity above the baseline which results in the potential for secondary dispatch. 3. Attribution is not scale-able because it creates the potential for secondary dispatch. This secondary dispatch could increase with market expansion. 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. 5. When there are multiple unlinked GHG regulation areas or different reporting requirements by different states, market participation may result in double counting, undercounting, or inconsistent counting of emissions. Variations of this issue include: a. Using both total WEIM transfer data and cost based accounting b. Using both total WEIM transfer data and cost based accounting c. Between unlinked jurisdictions if one area uses generation based accounting and another area uses load based accounting 6. The ISO does not provide all metrics desired by market participants. This includes: a. Demonstration of the impact of the market on decarbonization and renewable curtailment. b. Information is lacking to LSEs in jurisdictions with non-priced emissions reduction policies to fulfill reporting obligations with state policy such as market imports to serve load. This could undermine efforts to decarbonize as the unspecified emissions rate used by states with an absolute reduction program fails to reflect the accuracy of generation and consumption at a local level. c. Costs of GHG to end-use customers 7. There is not a market mechanism in states with a declining cap on emissions for: a. Utilities to ensure load is served by generation and wholesale market transfers that meet those emission reduction targets b. Utilities to offer generation to the market on a portfolio basis (regardless of point of consumption) that meets the state’s emissions target over a given time period c. Reflecting both the declining cap and a price on carbon in the market for states that have both requirements

Not applicable.

1. Provide a summary of your organization’s comments on the January 11, 2024 GHG Coordination working group discussion:

WRA appreciates the ISO’s efforts to identify reporting metrics for further investigation and development. As EDAM enters the West and a greater portion of load is served through markets, it is essential to develop robust and transparent reporting mechanisms that demonstrate market benefits and facilitate compliance with the variety of state greenhouse gas reduction requirements. Please see below our interest in various reporting metrics and in co-sponsoring a problem statement.

2. Provide your organization’s comments or remaining questions on the ISO’s overview of the mechanics of GHG attribution in EDAM and WEIM:

Thank you to Kevin Head for providing this educational overview.

3. If your organization suggested GHG metrics, please provide the problem statement the metric relates to (or if none exists, please draft one and provide it), any regulatory requirement associated with providing the data, and the details associated with the metric (metric, cadence, granularity, etc.). Please also provide any feedback to the discussion on GHG metrics.

1. Market total average emissions. Addresses problem statements 6 and 7. This metric informs the other requested metrics below. We recommend hourly data provided by the ISO monthly.
2. Market average marginal emissions. Addresses problem statements 6 and 7. This metric demonstrates the impact of changes to generation and load which provides valuable information for planning. We recommend hourly data at a BA or zonal level provided by the ISO monthly.
3. Market residual emissions. Addresses problem statements 5, 6, and 7. This metric helps prevent the double counting of claims and is therefore important to the workability of the diverse state regulatory programs across the West. We recommend hourly data provided by the ISO monthly.
4. Total emissions by jurisdiction. Addresses problem statements 5, 6, and 7. This metric provides consistent tracking of progress for state and utility GHG reduction targets, essential for regulatory compliance. We recommend monthly data provided by the ISO monthly.

4. Problem Statements:

a.Please identify if you are willing to be a problem statement / sub-problem statement sponsor. This could entail leading a discussion on the rationale behind the problem statement and facilitating a discussion with other working group members. b. Provide your organization’s comments on the consolidated problem statements and prioritization:

WRA is interested in being a problem statement co-sponsor. We prefer to sponsor problem statement #6, followed by problem statement #7. We have conducted substantial work on greenhouse gas tracking and reporting that will support the needs and capabilities of multiple market operators, utilities, state regulatory programs, and large energy customers.

We support the consolidated problem statements. While WRA generally supports the stakeholder-identified prioritization and appreciates the particular focus on problem statement #6, we consider problem statement #7 a much higher priority than it currently sits on the list. It is critical to the ability of entities outside CA and WA to participate in the market.

5. Problem Statements for Reference:

1. The optimization does not take the explicit cost of secondary dispatch into account, and therefore may not balance optimized attribution with constraints to limit secondary dispatch. 2. The current GHG design does not limit attribution to only capacity above the baseline which results in the potential for secondary dispatch. 3. Attribution is not scale-able because it creates the potential for secondary dispatch. This secondary dispatch could increase with market expansion. 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. 5. When there are multiple unlinked GHG regulation areas or different reporting requirements by different states, market participation may result in double counting, undercounting, or inconsistent counting of emissions. Variations of this issue include: a. Using both total WEIM transfer data and cost based accounting b. Using both total WEIM transfer data and cost based accounting c. Between unlinked jurisdictions if one area uses generation based accounting and another area uses load based accounting 6. The ISO does not provide all metrics desired by market participants. This includes: a. Demonstration of the impact of the market on decarbonization and renewable curtailment. b. Information is lacking to LSEs in jurisdictions with non-priced emissions reduction policies to fulfill reporting obligations with state policy such as market imports to serve load. This could undermine efforts to decarbonize as the unspecified emissions rate used by states with an absolute reduction program fails to reflect the accuracy of generation and consumption at a local level. c. Costs of GHG to end-use customers 7. There is not a market mechanism in states with a declining cap on emissions for: a. Utilities to ensure load is served by generation and wholesale market transfers that meet those emission reduction targets b. Utilities to offer generation to the market on a portfolio basis (regardless of point of consumption) that meets the state’s emissions target over a given time period c. Reflecting both the declining cap and a price on carbon in the market for states that have both requirements

1. Provide a summary of your organization’s comments on the January 11, 2024 GHG Coordination working group discussion:

WPTF appreciates the opportunity to provide these brief comments on the CAISO’s sixth GHG working group. When referring to problem statements in the following comments, WPTF is referencing the numbering of the consolidated problem statements as presented by the CAISO during the working group meeting.

2. Provide your organization’s comments or remaining questions on the ISO’s overview of the mechanics of GHG attribution in EDAM and WEIM:

WPTF agrees with the CAISO’s thinking that its GHG attribution mechanism must align with least cost dispatch principles. WPTF encourages the CAISO to recognize that within this principle, its important that negative environmental externalities are appropriately reflected. When negative externalities are appropriately reflected through the market, it will likely result in “increased” total production costs in the objective function but this increase is the right outcome because the lower cost result is not fully reflecting the externality. WPTF believes the CAISO should consider reframing its requirement described on slide 12 to reflect the consideration of ensuring the negative externality is appropriately considered in the least cost dispatch. 

3. If your organization suggested GHG metrics, please provide the problem statement the metric relates to (or if none exists, please draft one and provide it), any regulatory requirement associated with providing the data, and the details associated with the metric (metric, cadence, granularity, etc.). Please also provide any feedback to the discussion on GHG metrics.

In the interest of transparency and the availability of data to enable regulators, market participants and the public broadly to be able to assess effectiveness of the market design in addressing secondary dispatch, WPTF suggested that the CAISO publish a) average GHG/MWh data for various portions of the market (e.g. the footprint as a whole, for resources within each GHG pricing area, and for energy deemed to each GHG pricing area), b) a residual average GHG/MWh for energy from resources outside the GHG pricing area that is not deemed to a GHG pricing area or claimed by a market participant, and c) a GHG metric reflecting the GHG/MWh of the marginal fossil resource within the market footprint. We believe that all of these metrics can and should be calculated for hourly intervals, but could be published less frequently with a delay (e.g. retroactively for each week). Consideration should also be given to the usefulness of rolling up hourly data into daily, seasonal or annual averages. All of these metrics are related to consolidated problem statement #6 and in some sense indirectly related to problem statement #5.

WPTF is not aware of any current regulatory requirement for the provision of these metrics. However, we note that several states, including Oregon and Colorado, require load-serving entities to report on energy and associated emissions from market purchases, including from organized markets. While some of this energy would qualify as specified, much would not. This unspecified market energy is currently assigned either a default rate (i.e. Oregon) or a regional, Emissions and Generation Resource Integrated Database (EGRID) emission rate (i.e. Colorado). Given the fact that the default emission rate adopted by Oregon (and California) is over 15 years old, and EGRID emission rate is a static, annual average emission rate, there is growing interest among regulators and market participants to develop more accurate methods. WPTF considers that a residual average emission rate, as we have proposed, would be appropriate for accounting for unspecified EDAM/EIM purchases under state regulatory programs in the future. Further, WPTF considers evaluating whether if static emission rates are used that this residual average emission rate by hour that could vary by season or month(s) would be a more accurate approach than the static annual rate currently being used.

4. Problem Statements:

a.Please identify if you are willing to be a problem statement / sub-problem statement sponsor. This could entail leading a discussion on the rationale behind the problem statement and facilitating a discussion with other working group members. b. Provide your organization’s comments on the consolidated problem statements and prioritization:

WPTF appreciates the way in which the CAISO consolidated the problem statements as it allows for a much more manageable and organized flow of issues/topics, but has a few additional suggestions and clarifications. First, problem statements 1, 2, and 3 seem as though they can be consolidated into one given they are related to the issue around the current attribution methodology, which may result in inappropriately displacing internal GHG resources in preference for incrementing an external resource leading to secondary dispatch. Related to the prioritization, WPTF is generally supportive of the prioritization with data and transparency being a top priority such that we can assess the magnitude of additional issues. Furthermore, given the significance of price formation in general, WPTF strongly encourages the CAISO to also place the price formation problem statement as a top priority alongside the secondary dispatch issue as that too can impact proper price signals and exacerbates the secondary dispatch issues.

We would like to take this opportunity to provide clarification as it relates to problem statement #4. First, we appreciate the CAISO providing a robust and thorough discussion as to what the current marginal GHG price is and what it is not. We believe that this has identified an area where there is a policy decision to be made and thus warrants further consideration. The CAISO walked through what the marginal GHG cost today represents. Furthermore, the CAISO also highlighted what it is not; it is not the (1) GHG cost of the marginal resource or (2) marginal GHG cost of all resources dispatched to serve load within the GHG area. Take for example the scenario used by the CAISO to illustrate the price formation. A resource in the GHG area submits an energy bid of $35/MWh and sets the SMEC; some portion of the $35/MWh is the energy cost and some portion the GHG cost. Furthermore, a resource with a $30/MWh energy bid and $5/MWh GHG bid adder outside the GHG area is deemed to serve load in the GHG area and sets the marginal GHG price at its $5/MWh GHG bid adder and the external energy clearing price at $30/MWh. Thus, the total LMP is $35/MWh in the GHG area and $30/MWh outside with the marginal GHG cost being $5/MWh. However, what if the $35/MWh internal bid that sets the SMEC actually represents a $28/MWh energy cost and $7/MWh GHG cost. Does it still make sense for the marginal GHG price to be $5/MWh even though there is a resource dispatched with a $7/MWh GHG cost? To be clear, in this example, the resource with the highest GHG cost also happens to be the resource setting the SMEC. There are likely other scenarios whereby the resource with the highest GHG cost is not the same resource setting the SMEC. For example, if a storage resource offering $35/MWh to discharge is the marginal resource internal to the GHG area then the marginal clearing price could represent $35/MWh opportunity costs associated with a discharge award and $0/MWh in GHG costs. WPTF believes all of these situations warrant discussion to help the stakeholder community have a robust discussion around what the marginal GHG price should reflect in light of market design goals of the formation of locational marginal prices. Within this discussion, it would also be useful to think through how the price formation would differ if all resources submit separate GHG bid adders, not just those in non-GHG regulated areas.

5. Problem Statements for Reference:

1. The optimization does not take the explicit cost of secondary dispatch into account, and therefore may not balance optimized attribution with constraints to limit secondary dispatch. 2. The current GHG design does not limit attribution to only capacity above the baseline which results in the potential for secondary dispatch. 3. Attribution is not scale-able because it creates the potential for secondary dispatch. This secondary dispatch could increase with market expansion. 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. 5. When there are multiple unlinked GHG regulation areas or different reporting requirements by different states, market participation may result in double counting, undercounting, or inconsistent counting of emissions. Variations of this issue include: a. Using both total WEIM transfer data and cost based accounting b. Using both total WEIM transfer data and cost based accounting c. Between unlinked jurisdictions if one area uses generation based accounting and another area uses load based accounting 6. The ISO does not provide all metrics desired by market participants. This includes: a. Demonstration of the impact of the market on decarbonization and renewable curtailment. b. Information is lacking to LSEs in jurisdictions with non-priced emissions reduction policies to fulfill reporting obligations with state policy such as market imports to serve load. This could undermine efforts to decarbonize as the unspecified emissions rate used by states with an absolute reduction program fails to reflect the accuracy of generation and consumption at a local level. c. Costs of GHG to end-use customers 7. There is not a market mechanism in states with a declining cap on emissions for: a. Utilities to ensure load is served by generation and wholesale market transfers that meet those emission reduction targets b. Utilities to offer generation to the market on a portfolio basis (regardless of point of consumption) that meets the state’s emissions target over a given time period c. Reflecting both the declining cap and a price on carbon in the market for states that have both requirements