Comments on Issue paper and straw proposal

1. Please provide a summary of your organization’s comments on the Washington WEIM Greenhouse Gas Enhancements issue paper/straw proposal and August 22, 2022 stakeholder call discussion:

The Bonneville Power Administration (BPA) appreciates the CAISO’s efforts to determine a method to support EIM entity reporting of greenhouse gas (GHG) emissions in accordance with the Washington Department of Ecology’s (Ecology) GHG Reporting Rules (WAC 173-441).  BPA’s Balancing Authority Area (BAA) spans across multiple states, including Washington, Oregon, Idaho, Montana, and California.  Over 60 percent of BPA’s firm power sales are to retail utilities located in Washington and BPA sells roughly 50 percent of the power consumed in the state. 

BPA supports development of a method that provides a reasonably accurate determination of the volume of EIM imports into Washington that is consistent with 1) Ecology’s current GHG Reporting rules, 2) BPA’s participation in the EIM and the net imports it makes in the EIM as a BAA, and 3) BPA’s statutory directives as a federal power marketing administration.  BPA is writing these comments with the intent of sharing them with Washington Ecology staff, as well as addressing them to CAISO.

With respect to the CAISO’s straw proposal, BPA suggests the following:

1. Modeling Washington Borders and the Demand Forecast.  BPA requests the CAISO not model its Washington borders and create a unique WA forecast at this time.  Instead, BPA will report imports into WA resulting from its participation in the EIM as follows:  BPA will use the real-time negative imbalance energy included in its EIM settlement statements and will allocate that volume on a proportionate basis to its Washington load (similar to the CAISO’s proposed reporting method for emissions year 2022). 
2. Updating GHG Reference Costs.  BPA’s resources will not be registered with Ecology as having a GHG compliance obligation as they are not considered in-state generation under Washington’s cap-and invest-program, the Climate Commitment Act (CCA).  Therefore, no GHG cost adder should be included in the reference levels for BPA’s participating resources.

2. Provide your organization’s comments on modeling Washington borders and the demand forecast, as discussed in section 3.1:

Determining an appropriate method for identifying imports into Washington for the EIM (or any organized market) is complicated because, unlike California, BAAs in the Pacific Northwest do not necessarily align with state borders.  For Washington, BPA is one of three BAAs that have multi-state boundaries that include Washington.  Additional stakeholder discussion is needed to arrive at an appropriate method for accounting for imports from an organized market into Washington or another state with a GHG pricing program where participating entities’ BAAs span across state lines. 

This discussion needs to occur in close coordination with state air quality regulators such as Ecology, with reporting and compliance rules developed in sync with development of GHG accounting market design.  In this way, the market design can be developed to meet the needs and intent of the state program and the rules for the state program can be developed in a way that reflect the realities and constraints of the market design.  This has not occurred sufficiently to-date.  BPA recognizes that Washington’s timelines for implementing its cap-and-invest program are aggressive and have not enabled sufficient time for this collaborative work to occur before the 2023 program year.  Consequently, BPA recommends the CAISO not move forward with these proposed updates for reporting year 2023 and beyond until this collaborative work can be completed.  Reporting of EIM imports into Washington can be achieved by BPA without the proposed updates.

Specific to Washington’s CCA and this straw proposal, Ecology’s GHG Reporting rules direct “the retail provider, marketer, or asset controlling supplier that conducts an electricity transaction through the EIM that results in EIM power being delivered to final point of delivery in Washington state” to report power imported via the EIM. (WAC 173-441-124 (2)(c)(iii)).  Such power is imported as unspecified power. (WAC 713-441-124 (3)(a)(2)(iii)(F)).  At the same time, the GHG reporting rules direct an Asset Controlling Supplier (ACS) to report power that comprises its system, including unspecified sources such as the EIM.[1] (WAC 173-441-124 (3)(b)(iii)).  The concept of an ACS was originally created for BPA by the California Air Resources Board to acknowledge that BPA, by federal statute, markets power from its system to its customers.  The ACS concept was later adopted by Washington for the CCA. 

BPA’s system includes generation from the federal hydropower system and Columbia Generating Station as well as other specified and unspecified purchases.  The ACS emission factor includes all of BPA’s net imports via the EIM, not just those as calculated as assigned to Washington.  Thus, imports to BPA’s system from the EIM are included in BPA’s ACS emission factor and in turn reported as imported into Washington proportionate to BPA’s sales to Washington utilities.  This pro rata approach is consistent with BPA’s statutory directive to sell power from its system to its firm power customers.

The CAISO’s proposed approach presents several problems.  First, it would result in a different calculated volume of EIM imports into Washington than the ACS pro rata approach described above.  The CAISO’s proposed approach is counter to BPA’s understanding of Ecology’s GHG reporting rules as applied to an ACS.  The CAISO’s proposed approach also appears inconsistent with BPA’s governing statutes.  Finally, the proposed approach lacks any correlation between the BAA’s participation in the EIM and its total net imports to the volume of EIM imports attributed to its Washington load.

BPA’s understanding of the CAISO’s proposed approach is that the CAISO would create aggregation points for the Washington load in BPA’s BAA, essentially attempting to create a Washington area of BPA’s BAA.  The CAISO would not assign generation to the Washington area of BPA’s BAA because under Washington’s program “[e]lectricity from a system that is marketed by a federal power marketing administration [such as BPA] shall be construed as ’imported electricity,’ not electricity generated in the state of Washington.” (RCW 70A.65.010 (42)(c)).  Therefore, the proposed CAISO calculation would determine that the entire EIM demand for the WA area of BPA’s BAA was met with EIM imports.  BPA’s understanding is this would be the outcome even if BPA as a whole was a net exporter in the EIM in the same time period.  This outcome is inconsistent with BPA’s governing statutes and physics given the magnitude of federal generation physically located in Washington. 

It is not clear to BPA how the CAISO’s proposed update impacts or relates to the power balance constraint and BPA requests the CAISO provide examples to demonstrate how the calculation would work in practice.  BPA is concerned the proposed update would have additional implications for BPA’s participation in the EIM and GHG accounting.  For example, BPA would like to understand whether the proposed update would result in BPA (or the non-Washington portion of BPA’s BAA) becoming largely a net exporter because the majority of BPA’s load is in Washington but BPA’s participating generation would not be modeled as in Washington.  If this is the result, would it impact the volume of BPA’s resources that are eligible to be deemed delivered to California at BPA’s low-carbon ACS emissions factor?  If so, it could negatively impact BPA’s ACS emissions factor in future years while at the same time BPA’s Washington load would be calculated to be imported power via the EIM at an unspecified emission factor.  This outcome does not make sense and would be inequitable to BPA’s Washington load.

The CAISO’s proposed calculation is not just skewed in BPA’s situation.  It would also be inaccurate if, to use an extreme example, all of BPA’s resources were considered in-state and modeled as such, resulting in essentially no EIM imports ever being calculated as assigned to WA load.  Extreme examples like this help demonstrate that the CAISO’s proposed approach does not provide for a more accurate accounting as the CAISO stated in its August 22, 2022 workshop.  In a less extreme scenario where BPA’s resources were assigned to non-Washington and Washington areas of its BAA based on actual physical location of the generation, the CAISO’s proposed approach would still over or underestimate the volume of EIM imports resulting from BPA’s participation in the EIM that are then assigned to BPA’s Washington load.  This is because the calculation is dependent on the load to generation ratio in the Washington versus non-Washington area of a BAA.  The proposed calculation fails to consider that the dispatch of BPA’s resources and BPA’s participation in the EIM is for the benefit of its entire footprint irrespective of what state the load and generation is located in. 

Therefore, BPA requests that at this time the CAISO not model BPA’s Washington borders and create a unique WA forecast.  Instead, BPA will report imports into Washington resulting from its participation in the EIM by using the real-time negative imbalance energy included in its EIM settlement statements and allocating that volume on a proportionate basis to its Washington load.  BPA understands this approach to be similar to the CAISO’s proposed reporting method for emissions year 2022.  This reporting will be provided by BPA to Ecology consistent with Ecology’s GHG Reporting Requirements, including requirements for ACS reporting.

Finally, while BPA’s suggested method for calculating EIM imports to Washington will work for BPA for the near-term future, further discussion will be needed on this topic in the event Ecology develops a more robust accounting and compliance mechanism for the EIM.  Likewise, BPA notes the need for additional discussion for the EDAM, where the CAISO is proposing the same method for determining EIM imports for states with GHG pricing programs such as Washington.  BPA looks forward to exploring with the CAISO how the approach can be refined and tailored to reflect the portion of BPA’s EIM imports that should be appropriately assigned to WA load. 

[1] BPA caveats that the unspecified sources included in the calculation of the ACS emission factor should be consistent with emissions that are covered under the program.  If Ecology does not include EIM imports as covered emissions under the cap-and-invest program, then in calculating BPA’s ACS emission factor Ecology should not include emissions from EIM imports to BPA’s system.  BPA would still expect to report EIM emissions to Ecology consistent with the GHG Reporting Rules regarding ACS reporting.

3. Provide your organization’s comments on updating greenhouse gas reference costs, as described in section 3.2:

BPA understands that the purpose of the GHG reference cost is to include in the reference levels the cost for Washington in-state generation to comply with Washington’s program.  That is because in-state generation is covered under Washington’s program.  But under WA’s program “electricity from a system that is marketed by a federal power marketing administration [such as BPA] shall be construed as “imported electricity,” not electricity generated in the state of Washington.” (RCW 70A.65.010 (42)(c)).  Therefore, while BPA does have generation that is physically located within the geographical boundaries of Washington, it is not construed as in-state generation under the cap-and-invest program.  Accordingly, the CAISO should not include a GHG cost adder in the reference levels for BPA’s participating generation.

4. Provide your organization’s comments on WEIM GHG reporting, as described in section 3.3:

To reiterate BPA’s response in question 2 above, BPA will report imports into Washington resulting from its participation in the EIM by using the real-time negative imbalance energy included in its EIM settlement statements and allocating that volume on a proportionate basis to its Washington load.  BPA understands this approach to be similar to the CAISO’s proposed reporting method for emissions year 2022.  This reporting will be provided by BPA to Ecology consistent with Ecology’s GHG Reporting Requirements, including requirements for ACS reporting.

5. Provide your organization’s comments on the proposed WEIM Governing Body role, as described in section 4:

The WEIM Governing Body’s role should be limited to the updated GHG reference levels used in bid mitigation and related rules.  There should be no role for the WEIM Governing Body for modeling the Washington Border and modeling the demand forecast in Washington as BPA requests the CAISO not make these updates.

6. Provide any additional comments on the Washington WEIM Greenhouse Gas Enhancements issue paper/straw proposal and August 22, 2022 stakeholder call discussion:

BPA appreciates the CAISO’s engagement with BPA on this topic and looks forward to additional discussions – this year and next – on how to appropriately account for imports to the Washington load in BPA’s BAA, in both the EIM and EDAM.

1. Please provide a summary of your organization’s comments on the Washington WEIM Greenhouse Gas Enhancements issue paper/straw proposal and August 22, 2022 stakeholder call discussion:

PG&E believes the proposed enhancements are generally proper to support the GHG reporting of Washington WEIM Entities. PG&E understands that the proposed enhancements will be limited to Washington WEIM entities and in real-time markets. The CAISO, however, shared in the stakeholder meeting, August 22, 2022, while this initiative will not apply the enhancements to CAISO BAA and other BAAs and will not be applied in the day-ahead market, similar approaches will be developed and extended to CAISO and other BAAs in E-DAM in future. In this context, PG&E requests that:

• the CAISO continues to share developments of related enhancements for resources aggregation and calculation of GHG reference levels.
  • We request the CAISO to reference the proposed enhancements of this initiative in future efforts, e.g., E-DAM, for stakeholders’ better understanding the interaction of all GHG related developments.
• the CAISO clarifies the interplay between the proposed enhancements and the existing GHG cost-based reference level and bidding structure.
  • PG&E is concerned about potential systematic arbitrage based on CAISO reference prices, given that the difference between the cost-based reference levels of California and Washington (State) could result in arbitrage in bids’ GHG components.   
• the CAISO monitors the change in quantities (MW) and prices of transfers (imports and exports) of Washington WEIM Entities to the rest of EIM areas and share data with stakeholders.
  • The proposed enhancements could affect resource bids due to normal economic adjustment of the market or due to gaming behaviors. PG&E believes monitoring and sharing the data in the initial implementation period will benefit for identifying any anomalies and provide references to future GHG enhancements for other BAAs and E-DAM.   

2. Provide your organization’s comments on modeling Washington borders and the demand forecast, as discussed in section 3.1:

See comments above. 

3. Provide your organization’s comments on updating greenhouse gas reference costs, as described in section 3.2:

See comments above. 

4. Provide your organization’s comments on WEIM GHG reporting, as described in section 3.3:

See comments above. 

5. Provide your organization’s comments on the proposed WEIM Governing Body role, as described in section 4:

See comments above. 

6. Provide any additional comments on the Washington WEIM Greenhouse Gas Enhancements issue paper/straw proposal and August 22, 2022 stakeholder call discussion:

No additional comments. 

1. Please provide a summary of your organization’s comments on the Washington WEIM Greenhouse Gas Enhancements issue paper/straw proposal and August 22, 2022 stakeholder call discussion:

PPC appreciates CAISO’s efforts to develop a methodology for Washington State WEIM Entity greenhouse gas (GHG) reporting for emissions.  Accurate accounting of GHG emissions is critical both for entities that are subject to Washington’s reporting requirements and also for entities that serve those utilities subject to reporting requirements.  Inaccurate accounting could significantly impact Washington utilities’ ability to demonstrate their compliance with state mandates, and accounting tools that are not compatible with current operations may create unnecessary or overly burdensome changes to existing deliveries between entities in the region.

Our understanding is that CAISO’s proposal to define a “Washington state boundary” for the purposes of GHG reporting would cause deliveries from multistate entities serving their customers’ within Washington to essentially be treated as imports to those Washington entities.  We are concerned this proposed approach could result in inaccurate accounting and potentially require some burdensome work arounds for those multi-state entities who serve Washington load – including BPA serving its preference customers.  We are concerned about the unintended consequences of this approach, including the potential risk that entities within Washington will “deemed” to be importing unspecified resources, and be inaccurately assigned GHG emissions when they are actually being served by clean resources, such as BPA’s system. CAISO should remove the “Washington state boundary” approach in its next proposal, and work with multistate entities and their customers to develop an alternative approach. 

A longer-term solution to tracking GHG impacts to Washington utilities will be needed for both EDAM and EIM once Washington Ecology opens its rulemaking on the treatment of EIM imports.  To ensure this longer-term effort is robust, accurate, and does not result in unintended consequences similar to those described above, PPC requests the following:

• CAISO should provide specific examples of how any GHG tracking proposal would be applied, including examples that demonstrate how deliveries from a multistate supplier would impact the GHG emissions assigned to entities within Washington.
• Using these examples, CAISO should work with both multi-state suppliers, like BPA, and those being served by multi-state suppliers, such as BPA’s preference customers, to identify potential solutions which would address the issues identified above and any other unintended consequences.

We appreciate CAISO taking on this issue and working collaboratively with Washington policymakers and stakeholders to develop a for reporting methodology for GHG emissions which will help Washington entities participating in the WEIM to meet their reporting obligations.  We look forward to continuing these discussions and exploring potential solutions with CAISO, policymakers, and stakeholders.

2. Provide your organization’s comments on modeling Washington borders and the demand forecast, as discussed in section 3.1:

No comments at this time.

3. Provide your organization’s comments on updating greenhouse gas reference costs, as described in section 3.2:

No comments at this time.

4. Provide your organization’s comments on WEIM GHG reporting, as described in section 3.3:

See above.

5. Provide your organization’s comments on the proposed WEIM Governing Body role, as described in section 4:

No comments at this time.

6. Provide any additional comments on the Washington WEIM Greenhouse Gas Enhancements issue paper/straw proposal and August 22, 2022 stakeholder call discussion:

No comments at this time.

1. Please provide a summary of your organization’s comments on the Washington WEIM Greenhouse Gas Enhancements issue paper/straw proposal and August 22, 2022 stakeholder call discussion:

Clarity is needed in the Ecology rulemaking

The CCA directs Ecology to develop a methodology to identify the electricity importer for transactions in a centralized electricity market, such as the WEIM[1]. And it grants Ecology until October 2026 to do so.  The current reporting rules are vague and include a definition of “electricity importer” that, for electricity imported through a centralized market, defines the electricity importer as the “retail provider, marketer, or asset controlling supplier that conducts an electricity transaction through the EIM that results in EIM power being delivered to a final point of delivery in Washington State.” 

Outside of imports to Washington via the WEIM, the CCA reporting rules establish different reporting regimes for entities who can be identified as the electricity importer via an e-Tag, and multi-jurisdictional entities who import and export on a system basis for a system that does not necessarily align with state boundaries.  In addition, reporting responsibility in some cases hinges upon whether the Bonneville Power Administration (BPA) has elected to participate in the program.  The current Ecology rules do not clearly articulate treatment of WEIM imports for multi-jurisdictional entities versus entities who are wholly inside Washington.  Nor do they articulate responsibility for reporting WEIM imports that are delivered to BPA’s balancing authority if BPA elects not to participate in the program.  In general, if BPA does not participate, the obligation cascades down to a subsequent retail or wholesale customer.  However, in the context of imports via the WEIM, it is unclear how the subsequent customer would be identified.

In the absence of further clarity in the rules, it is not apparent what how the modeling changes proposed by CAISO will benefit our largest present concern regarding EIM transactions: entities reporting to Ecology. Until clarity is achieved in rulemaking, the Washington Utilities believe that settlement statements and load ratio allocations will adequately capture electricity emissions imported into Washington via the WEIM and will allow better alignment with reporting for electricity imported via the bilateral market.

[1] WAC 173-446 - Washington State Department of Ecology

2. Provide your organization’s comments on modeling Washington borders and the demand forecast, as discussed in section 3.1:

Modeling the Washington border

The ISO proposes to model the geographic boundaries of Washington by assigning state locational values to various pricing nodes, scheduling points, and resources in its WEIM entities’ master files and presumably, in the ISO’s network model. While this type of analysis could be informative to the Ecology rulemaking, it is not necessary to formally adopt these changes at this time until stakeholders can be assured any model would be consistent with the first-jurisdictional deliverer approach and the California Mandatory Reporting Requirement. Such a process should have a sufficient design phase and involve WEIM participants to ensure generating resources, contracts, multi-state BAAs, and the Bonneville Power Authority (BPA) are accurately represented in the model.

If the WEIM entities rely on settlement statements for their GHG reporting, it is not necessary at this time to attempt to model the Washington geographic boundaries. Generating resources that are “in” the Washington GHG zone should be designated at this time only for the purposes of calculating an updated default energy bid for those resources. Modeling of the geographic boundaries of Washington demand should be undertaken as part of the larger EDAM GHG design discussions.

Modeling the demand forecast in Washington

To differentiate load inside versus outside of Washington for reporting purposes, the ISO proposes to forecast demand based on WEIM load aggregation points (ELAPs), which are at the BAA level. The ISO will then distribute the demand to custom load aggregation points (CLAPs) with those BAAs inside and outside the state of Washington, using load distribution factors. Under this approach, the ISO will continue to enforce a power balance constraint at the BAA level but will be able to identify within its market optimization WEIM entities’ demand within the state of Washington.

If the WEIM entities rely on settlement statements for their GHG reporting, it is not necessary at this time to attempt to differentiate load inside versus load outside Washington for reporting purposes. Modeling of Washington demand should be undertaken as part of the larger EDAM GHG design discussions.

3. Provide your organization’s comments on updating greenhouse gas reference costs, as described in section 3.2:

Updating GHG reference costs

The ISO proposes to revise its calculations of cost-based reference levels for the WEIM generating resources inside Washington’s GHG regulation area by using Washington-specific GHG allowance prices when calculating a GHG-emitting generating resource’s default energy Bid and default commitment costs. Additionally, the ISO proposes to modify its tariff to specify for which states the CAISO obtains GHG allowance prices and authorize the ISO’s use of updated GHG allowance prices in Washington generating resources’ reference levels. The ISO proposes to modify the GHG cost adders for generating resources registered with Ecology as having a GHG compliance obligation.

The Washington Utilities agree the GHG reference costs should be updated to account for the additional costs associated with dispatching those resources.  

4. Provide your organization’s comments on WEIM GHG reporting, as described in section 3.3:

Developing reports to support the WEIM entities

For emissions year 2022, to be reported to Ecology in 2023, the ISO proposes utilities use their settlement statements that include their real-time net negative imbalance energy transactions for the purposes of reporting WEIM “imports” into Washington State. The Washington Utilities believe this approach may require some further discussion and adaptation for each of the reporting entities – particularly multi-state utilities. But it could provide the underlying data needed to reasonably support the reporting requirements.

For emissions year 2023, the ISO proposes to provide data for the entities to report based on its model of the geographic boundaries of Washington by assigning state locational values to various pricing nodes, scheduling points, and resources in its network model. Without judging the merits of this approach as it pertains to the dispatch and other algorithms and methods of the ISO, the Washington Utilities think this approach is premature until further clarification is made in the Ecology rulemaking directed by the legislature to address centralized market transactions.  

5. Provide your organization’s comments on the proposed WEIM Governing Body role, as described in section 4:

None at this time.

6. Provide any additional comments on the Washington WEIM Greenhouse Gas Enhancements issue paper/straw proposal and August 22, 2022 stakeholder call discussion:

None at this time. 

1. Please provide a summary of your organization’s comments on the Washington WEIM Greenhouse Gas Enhancements issue paper/straw proposal and August 22, 2022 stakeholder call discussion:

WPTF appreciates the opportunity to provide comments on the CAISO’s Washington WEIM Greenhouse Gas Enhancements issue paper and straw proposal. It is our understanding that the Washington GHG regulations and compliance obligation details for the 2023 are not yet final, and that Ecology must undertake a formal rule-making prior to 2026 to determine the entity with the compliance obligation for imports to the state that occur through organized markets, including the WEIM. As such, we wonder if the prudent step at this point is to not make any changes to the WEIM market itself but rather use the information already available from market settlements to help entities with the reporting obligations until the Washington regulations are more clearly defined and the compliance obligation determined. WPTF is concerned that while the proposed changes are intended to solely support reporting obligations, if implemented as currently proposed, there is a lack of clarity and understanding as to what, if any, market dispatch and pricing impacts will occur. thus we seek additional clarification.

2. Provide your organization’s comments on modeling Washington borders and the demand forecast, as discussed in section 3.1:

We are generally supportive of the CAISO modeling the WA GHG area based on geographical boundaries but do question (1) if its necessary at this point and (2) why the CAISO hasn’t applied a similar modeling approach to the CA GHG area.

Modeling the GHG area based on BAA boundaries rather than state boundaries has been a known deficit in the current CA GHG program.  There are some areas of the CAISO BAA that are outside CA but modeled as within the GHG area and some areas of other BAAs inside CA but not modeled as within the GHG area. We urge the CAISO to apply equitable treatment to all areas that fall under a GHG regime.

WPTF respectfully requests additional information on how the CAISO plans to model the Washington boundary and why this approach, at this time, is necessary. We also question the CAISO’s assertion that modeling the state boarder for multi-state BAA would be more accurate than an alternative approach whereby the multistate entities simply apportion their EIM purchases to Washington load. While we understand the need to model the WA boundary for supply and load if and when the Washington Department determines that resource scheduling coordinators will have a compliance obligation for imports to Washington via organized markets, we wonder if such a change is necessary at this time given the lack of clarity in the Washington program and further rulemaking that must occur. Further deferring this modeling change until Washington has conducted its rulemaking on organized markets would enable a comprehensive solution for the Washington program to be implemented all at once. Otherwise, CAISO runs the risk of distorting market dispatch and prices as a result of moving ahead of the regulatory process. Additionally, WPTF would like to better understand how the CAISO plans to treat BPA’s generation and load. It is our understanding that the cap-and-trade program treats BPAs load as within Washington but their generation as outside of Washington. Thus, additional details on how this will be modeled, and the expected dispatch and pricing outcomes of the modeling approach, would also be appreciated.

3. Provide your organization’s comments on updating greenhouse gas reference costs, as described in section 3.2:

WPTF is generally supportive of the default energy bids reflecting the marginal costs a resource is subject to.  The CAISO appropriately notes that Washington allowance price information will not be known until after the first Washington auction occurs and vendor index data is available. The straw proposal further notes that staff will explore use of a proxy price until allowance index price data is available, but questions whether use of a proxy is even necessary if no allowances have been issued. WPTF strongly believes that use of a proxy data will be necessary because Washington resources will incur a carbon obligation for emissions as of January 1, 2023, regardless of the timing of allowance issuance. Thus, we encourage the CAISO to start engaging with stakeholders on various ways in which a proxy price may be determined and/or modified as the compliance year progresses without access to an allowance index price.

It is WPTF’s understanding that participating resources within the Washington state boundary will have a carbon cost associated with their emissions, but resources supporting a transfer/import into Washington will not. Therefore, WPTF would like the CAISO to confirm that Washington emitting resources must include their expected carbon costs in their energy bids, but resources outside Washington do not need to submit GHG bids or bid adders for attribution to Washington load. Assuming the above is accurate, then Washington resources will be competitively disadvantaged and not incrementally dispatched by the EIM if other resources without a compliance obligation (non-Washington and lower cost due to absence of compliance obligation) are available.  This outcome is a not a consequence of the CAISO’s proposal, but rather a consequence of the Washington Department of Ecology’s failure to determine the compliance obligation for WEIM imports. None-the-less, WPTF considers it important for market participants to better understand how the CAISO’s approach to implementing the Washington program will impact bidding, dispatch, and pricing within the WEIM .Thus we respectfully request that the CAISO have an open dialogue with stakeholders on the impact the proposed changes will have on the market dispatch and prices.

4. Provide your organization’s comments on WEIM GHG reporting, as described in section 3.3:

WPTF has several concerns about how CAISO proposes to support GHG reporting for EIM imports to Washington. First, in the straw proposal and presentation, the CAISO asserts that “the Department of Ecology will treat all transactions in the WEIM used to serve load within Washington as imported energy.” We disagree with this interpretation. Paragraph 3(a)(ii) of WAC 173-441-124, which includes the requirement to report unspecified power obtained from the EIM, applies only to imported or exported electricity – it does not create any obligation to report GHG emissions associated with EIM transactions sourced from Washington BAAs.

Given this, WPTF would like to better understand how the CAISO proposes to determine net EIM imports to Washington to support reporting by Washington EIM entities in the 2023 reporting year. Presumably any EIM dispatch of EIM entity participating resources will be deducted to determine each EIM entity’s net purchase. But how will CAISO determine whether a Washington EIM entity’s purchase is served by generation by a non-Washington BAA (and thus considered an import under Washington’s regulations) rather than served by generation in a BAA from a Washington BAA? For instance, if Puget Sound Energy is a net EIM purchaser in an interval when Tacoma PUD is a net EIM seller, how will CAISO determine the import quantity? Similarly, if power is wheeled through one Washington BAA, through another, and out of the state, how will CAISO identify this so as to determine the volume of imported electricity.

Additionally, we would like clarification of how Washington EIM generation that is deemed delivered to California will be treated in determining the volume of net EIM transfers into Washington and how determination of the volumetric quantity of imports into Washington would compare to how the determination is made under the California cap and trade program? Specifically, in the circumstance where there is a deemed delivery to California will the net import calculation for Washington incorporate this deemed (but non-physical) export and if so, how? 

5. Provide your organization’s comments on the proposed WEIM Governing Body role, as described in section 4:

No comment.

6. Provide any additional comments on the Washington WEIM Greenhouse Gas Enhancements issue paper/straw proposal and August 22, 2022 stakeholder call discussion:

We strongly encourage the CAISO to consider waiting to make modeling changes to the market to support WA GHG program until Washington Department of Ecology has conducted its rulemaking on organized market imports. It would be unfortunate to implement changes intended to help with reporting but have unintended consequences on the overall market dispatch and pricing. WPTF believes at this point that the next best step is to (1) inform entities and the regulators how they can use existing market results and settlement data to support reporting requirements and (2) pause making any changes to the actual market itself, with the exception of providing carbon costs in default energy bids.