Comments on Straw proposal

1. Please provide your organizations comments on adjusting the timeline for the release of the draft transmission plan from the end of January to the end of March, targeting approval in each year’s May Board of Governors meetings.

ACP-California supports CAISO’s proposal to adjust the timelines for release of the draft transmission plan and targeted CAISO Board approval of the final transmission plan, given the complexities that are faced in assessing various alternatives and need to consider increasing load and resource requirements. We appreciate CAISO’s response to PG&E and SCE’s concerns about impacts on the next planning cycle and generator interconnection process but encourage additional detail and language around impacts to other processes [such as the Integrated Resource Planning (IRP) process and Maximum Import Capability (MIC)] be added to the written version of the proposal. We encourage this because it will be important for stakeholders to be able to see, in writing, how CAISO envisions implementing this change while not materially affecting other processes that are dependent on the draft and final transmission plans. And, in instances where there may be an impact, for CAISO to explain how it plans to address it when this timing change is implemented.  

2. Please provide your organizations comments on enabling approvals for major long lead time transmission projects needed beyond the current 10 year planning horizon.

It is imperative for CAISO to have the ability to look out at transmission needs beyond the current 10-year horizon. This is essential not only because of the ramp up in resource and transmission needs that are projected to occur in the next 10+ years, but also because of the delays that have been experienced in getting transmission projects permitted, constructed, and placed in service. ACP-California therefore strongly supports CAISO’s proposal to enable approvals of major long-lead time transmission projects beyond the 10-year horizon. We encourage CAISO to expeditiously seek any necessary inputs/assumptions from the CPUC or CEC that may be required to facilitate implementation of this change. It will be critical to get those processes moving, as CAISO should seek to begin implementing this capability with the 2023-24 TPP and it will, of course, take some time for these entities to develop the critical inputs/assumptions upon which CAISO’s assessments will rely.

3. Please provide your organizations comments on retaining policy-driven transmission upgrade capacity for the specific policy purpose for which it was developed.

ACP-California strongly supports CAISO’s proposal to retain policy-driven transmission capacity for the specific policy purpose for which it was enabled. Having this capability will be critical to ensuring that the state’s policy objectives, including the necessary resource diversity to achieve those goals, can be realized. It is also crucial to ensuring that transmission capacity is used in an efficient manner. We also appreciate CAISO’s willingness to apply these provisions, where appropriate, to transmission on the existing system (which could be critically important in unique areas of the CAISO system such as utilization of the excess transmission capacity in the Diablo region for offshore wind). While ACP-California supports CAISO’s proposal to retain transmission capacity for specific public policy purposes, additional details and specifics are needed to better ensure this policy’s application is appropriately targeted and narrow and does not have unintended negative implications. We urge CAISO to add additional details to the Revised Straw Proposal that provide more specificity on:

1. What constitutes “clear and direct” public policy directive from the state to trigger CAISO’s use of this provision
2. How the limited use and application of this retention process would ensure deliverability already allocated on the system will remain intact
3. How and when CAISO would implement this process, including whether it would be voluntary or compulsory and how CAISO would notify stakeholders of its implementation

While ACP-California requests development of additional details and processes to implement this policy change, these requests should not be mistaken for a lack of support for the direction CAISO is heading on this proposal. As stated in prior comments, ACP-California greatly appreciates CAISO’s efforts to consider solutions to help better align the procurement, interconnection, transmission planning, and MIC allocation processes. We support CAISO’s efforts to seek to address this misalignment and help facilitate more efficient use of transmission to meet the state’s public policy and reliability needs. We agree with CAISO that the proposal can be deemed just and reasonable by FERC, especially with the recent FERC order on PJM’s proposal to address New Jersey’s public policy requirements. But, as outlined below, also urge CAISO to provide additional specificity on how it will implement the proposal to ensure that it is just and reasonable and will not unduly harm existing resources nor be overly broad in its application. In the Revised Straw Proposal, we encourage CAISO to provide more specificity on the following items.

First, ACP-California urges CAISO to clarify what “clear and direct” public policy direction would look like and what does not constitute such direction. We recommend that CAISO specify the types of clear and direct public policy direction that might enable the retention of capacity using this process. Examples of clear and direct policy direction from the state could include direction from the state legislature or Governor to accommodate/develop certain resource types in the state, direction from the CPUC in an Order that it is the CPUC’s intent to ensure transmission capacity is available for specific resource types/characteristics in certain areas of the system, or other similar direction. CAISO should seek to ensure that the policy direction is not overly broad in its implementation. For instance, if CAISO were to interpret the base case portfolios communicated by the CPUC for the TPP as such policy direction, this could lead to a situation where CAISO would need to reserve all capacity on the system for the specific resource types from the CPUC portfolios. ACP-California would oppose this type of broad implementation of this proposed policy, as it would severely restrict flexibility to developers and load-serving entities in concurrently meeting their objectives and state policy. We expect this type of implementation would also lead to concerns from existing generators that have been allocated deliverability. To address these concerns and ensure targeted application of this process, in the Revised Straw Proposal we urge CAISO to specify what it would consider to constitute clear and direct policy direction from the state and to also specify that the entirety of the CPUC’s resources portfolios would not constitute sufficient direction for CAISO to retain capacity.

Second, it would be helpful for CAISO to address how it believes this process change would impact deliverability allocations to resources that have already secured them. Ideally, CAISO can explain why this proposed approach would not have an adverse impact on resources that have an existing deliverability allocation. While ACP-California believes CAISO can reserve transmission capacity for public policy purposes without negatively impacting resources that have received a deliverability allocation, a description from CAISO explaining how and why that would be the case will likely be helpful in securing additional support for this proposal.

Finally, CAISO should provide additional details on when and how it would utilize this process. At this time, it is not clear if CAISO would be compelled to reserve capacity or if CAISO would simply have the option to do so. It is also not clear exactly when the proposal would be implemented including whether it would impact projects currently in the CAISO queue (and their ability to secure a TPD allocation) or if it would only apply to projects on a going forward basis, presumably starting with Cluster 15. Moreover, it will be important for CAISO to be transparent with stakeholders regarding when and where this process is being used. We ask CIASO to propose a notification process and outline any requirements that resources may need to meet in order to obtain public policy capacity that has been reserved. It would be helpful to include these details in the proposal so that stakeholders can thoroughly consider the proposal and its implications, and potentially suggest modifications, prior to it being implemented. And we look forward to working with the CAISO team to review the specifics of the proposal and think through implementation details.

While ACP-California requests additional details and discussions, and assurances that this policy will not be applied on an overly broad basis, we strongly support CAISO’s efforts to address this issue. Ensuring that transmission capacity can be utilized for the public policy purpose for which it was approved can help ensure that transmission capacity is effectively used and that the diverse resources needed to meet state policy goals can be procured and delivered to load. ACP-California appreciates CAISO’s proposal to address this important issue and looks forward to working with CAISO and other stakeholders to develop and refine specifics around the implementation of this policy.

4. Please provide additional comments your organization has on the transmission planning process enhancements initiative.

1. Please provide your organizations comments on adjusting the timeline for the release of the draft transmission plan from the end of January to the end of March, targeting approval in each year’s May Board of Governors meetings.

 AES Clean Energy supports delaying the draft transmission plan from the end of January to the end of March.  However, AES Clean Energy urges the CAISO to work with transmission owners to provide updates to the stakeholders in regards to the transmission upgrades approved or recommended for Board of Governors approval. Any changes in the base case development can affect the generation interconnection process.  Given the short time frame between the end of March to the cluster window opening in April, it is important that the CAISO provides generation developers with up-to-date information on the projects approved within the Transmission Planning Process.

2. Please provide your organizations comments on enabling approvals for major long lead time transmission projects needed beyond the current 10 year planning horizon.

 AES Clean Energy supports approving projects beyond the current 10-year planning horizon.  AES Clean Energy appreciates the CAISO’s efforts to create coordination between the transmission planning process (TPP), CPUC’s integrated resource plan, and the generator interconnection process.

Although stakeholders have concerns regarding load uncertainty in the longer term, AES Clean Energy believes it is imperative for CAISO to be proactive in approving transmission. The CAISO’s 20-Year Transmission Outlook and 2022-2023 TPP base case sensitivity analysis has indicated the need for additional transmission to meet the state’s electrification goals, load growth, increase resource requirements, and Senate Bill 100 requirements.  Approving transmission projects beyond the current 10-year time horizon will help prepare the state to proactively address expected load growth, while accounting for coordination of current transmission projects, generation development growth, and transmission buildout delays during permitting and construction. In addition, the prevalence of extreme weather events has already demonstrated the need for additional resiliency benefits of a robust, timely transmission planning process.

To minimize discrepancies, AES Clean Energy encourages CAISO to continue coordinating with the CEC and the CPUC to ensure appropriate load forecasts are used in the integrated resource plan and the TPP.

3. Please provide your organizations comments on retaining policy-driven transmission upgrade capacity for the specific policy purpose for which it was developed.

AES Clean Energy appreciates the CAISO’s desire to ensure available transmission capacity for resources to meet the state’s policy objectives.  However, the proposal does not provide sufficient implementation details for stakeholders to fully vet its consequences. AES Clean Energy believes CAISO’s proposal is premature at this time, and that the CAISO should take additional time to further develop this proposal in consultation with stakeholders.

The CAISO should clarify whether this policy would only apply to new transmission or also include previously approved policy-driven transmission. If the CAISO intends to include already approved transmission lines, then they should allow existing projects in the queue to utilize penalty-free withdrawal provisions to reduce harm to interconnection customers. The CAISO should also identify the resources that can qualify to interconnect under this policy, such as CPUC’s IRP portfolios.  Once identified, the CAISO should develop a mechanism/screening tool to verify resources requesting interconnection qualify under this policy, and allow projects to withdraw from the queue penalty-free if they fail this screening. In the interest of transparency and fairness, the CAISO should make all the criteria and evaluation methodology available to the public.

Next, the CAISO should specify how it intends to treat deliverability of the resources that qualify for use of these lines in the interconnection process. Would these projects be studied in the same cluster process; how would non-qualifying resources that wished to interconnect near these public policy transmission lines be treated in terms of identifying additional network upgrades? Additionally, how would CAISO modify its transmission planning deliverability (TPD) allocation under this policy based on identified resources and location?  It is unclear whether or not these policy-driven resources would be treated differently during the TPD allocation process compared to the remainder of the non-policy driven resources seeking TPD.  For example, would the TPD requirements for allocations to Interconnection Customers with PPAs with non-LSEs adopted in CAISO’s Interconnection Process Enhancements Phase 2 apply?[1]

AES Clean Energy encourages CAISO to consider adopting elements of the subscription model as proposed by Golden State Clean Energy.[2]  Under this model, policy-driven resources seeking transmission capacity can apply during an open season, rather than CAISO retaining transmission capacity.  This would eliminate the potential for undue discrimination under the Federal Power Act as stated by numerous stakeholders.[3]

Given the sparse details on how the CAISO would actually implement this proposal, AES Clean Energy does not believe the CAISO is ready to move forward with a draft final proposal in October. AES Clean Energy recommends postponing bringing this proposal for the Board of Governors' approval until full implementation details are available and have undergone stakeholder review. It is imperative that stakeholders are provided with a flushed-out proposal given the material impact of this proposal. AES Clean Energy would not object to the CAISO moving forward with the first two items as BPM changes in advance of completing this portion of the initiative.

[1] The CAISO adopted requirements for non-LSEs to be eligible for TPD allocations, including a minimum 5-year PPA and demonstration of a contract selling the RA capacity to an LSE with a RA obligation for a minimum term of 1-year or deposit in lieu.   See CAISO’s Interconnection Process Enhancements Phase 2 Final Proposal here: http://www.caiso.com/InitiativeDocuments/Presentation-InterconnectionProcessEnhancements2021Phase2-Sep20-2022.pdf

[2] Golden State Clean Energy Issue Paper Comments

[3] Golden State Clean Energy Issue Paper Comments, LSA Issue Paper Comments, Rev Renewables Issue Paper Comments, and SCE Issue Paper Comments

4. Please provide additional comments your organization has on the transmission planning process enhancements initiative.

 AES Clean Energy has no further comments.

1. Please provide your organizations comments on adjusting the timeline for the release of the draft transmission plan from the end of January to the end of March, targeting approval in each year’s May Board of Governors meetings.

Avangrid Renewables supports the proposed timeline adjustment to facilitate analysis of the CEC’s high electrification scenario portfolio.

2. Please provide your organizations comments on enabling approvals for major long lead time transmission projects needed beyond the current 10 year planning horizon.

Avangrid Renewables supports enabling approval of projects beyond the current 10-year horizon. For major transmission lines and upgrades contemplated in the TPP, approval through the CAISO process is often the first step in a 10-year or longer design and permitting process before achieving COD. Furthermore, the CAISO has forecast through the 20-year outlook the need for several new intra- and inter-state transmission lines to access best-in-class but remote wind resources from Wyoming, Idaho, New Mexico and offshore California. Assessment and approval of this portfolio of transmission projects over the next two decades will be time and capital intensive. A longer time horizon for the TPP process will enable the CAISO to appropriately phase their analyses and approvals so that all necessary projects can feasibly come online by the time they’re needed, and in coordination with the timelines of renewable resource development. Given the magnitude of new renewable and transmission deployment needed to achieve SB 100, it is not reasonable to expect all infrastructure to arrive “just in time” under an ordinary 10-year planning cycle.

3. Please provide your organizations comments on retaining policy-driven transmission upgrade capacity for the specific policy purpose for which it was developed.

Avangrid Renewables supports the proposal for the CAISO to establish a mechanism through which to retain policy-driven transmission upgrade capacity to achieve an upgrade’s underlying policy purpose. The CAISO may approve policy-driven transmission projects based on their necessity in fulfilling a state policy objective, such as accessing diverse resources with unique value to the CAISO system, or fulfillment of other project public benefits (e.g., Environmental Justice or economic development purposes). In these cases, a transmission project might not be approved but for the policy-driven objective which justifies it. Therefore, it is reasonable for the CAISO to retain transmission upgrade capacity for those policy-driven purposes, rather than allowing easier-to-deploy but less valuable resources to absorb the new capacity. Policy-driven upgrades will in most cases enable access to location-constrained and or long-lead time resources which must be co-developed with transmission in order to be brought online in the future. Offshore wind resources off the coast of California and geothermal resources in the imperial valley are two examples of resources which might warrant policy-driven transmission approvals and capacity retention. As we pursue increasing levels of renewables on the system, resource diversity will be critical to promoting reliability in the face of weather or wildfire-based outages, supply chain disruptions, and land-use pressure. To promote resource diversity, policymakers must create mechanisms through which all valuable resources can fairly compete. A completely level playing field which ignores very real differences between the development requirements and timelines of different technologies and resources does not in fact promote “fairness” and will instead limit the diversity of “winners” in a future portfolio.

Avangrid Renewables agrees with ACP-CA that the CAISO should only be authorized to retain transmission capacity in the case of a clear and direct policy direction from a state authority. We agree with the CAISO that it is appropriate to specify resources eligible for capacity retention as specifically as defined in state policy.

We also agree that there may be some unique circumstances in which state policy direction warrants retention of existing but newly open transmission capacity. One instance of this would be the transmission capacity and associated deliverability that will become available following retirement of the Diablo Canyon Power Plant with associated points of interconnection accessible to offshore wind from the Morro Bay wind energy area. Retirement of major thermal resources elsewhere in the state may also warrant capacity retention in order to facilitate location-constrained, high-value resources that can help replace the retired capacity.

However, the CAISO should contemplate with stakeholders an appropriate process for aligning the standard interconnection process and cluster studies with TPP policy-driven capacity retentions. The proposal raises questions about how a non-policy driven project that submits an interconnection request at a POI that will be part of a policy-driven upgrade should be processed. The answer may depend on when (which cluster) an interconnection customer enters the queue in relation to when the policy-driven project is proposed or later approved as part of a TPP cycle. While we are confident the CAISO can develop a fair process to resolve these questions, they should be resolved upfront before a TPP policy is implemented.

4. Please provide additional comments your organization has on the transmission planning process enhancements initiative.

n/a

1. Please provide your organizations comments on adjusting the timeline for the release of the draft transmission plan from the end of January to the end of March, targeting approval in each year’s May Board of Governors meetings.

The California Community Choice Association (CalCCA) has no comments on this topic at this time.

2. Please provide your organizations comments on enabling approvals for major long lead time transmission projects needed beyond the current 10 year planning horizon.

CalCCA generally supports the California Independent System Operator (CAISO) approving major long-lead-time transmission projects when the CAISO identifies needs beyond the current 10-year planning horizon. The time it takes to complete major transmission projects, the increased demand in the California Energy Commission’s (CEC’s) high electrification scenarios, and the projected new resource build will likely necessitate project approvals beyond the current 10-year planning horizon.

Some stakeholders expressed concerns with approving transmission projects with needs in the longer-term due to increased uncertainty of load or resource needs and locations. This is an important consideration particularly given the potential customer affordability implications of approving a long-lead-time transmission project only to see it be canceled or underutilized. The CAISO’s response to those concerns provides a workable process for balancing uncertainty with the advancement of long-lead-time transmission projects. The CAISO indicated that it can assess the uncertainty of project cancellation or underutilization for long-lead-time projects. Upon this assessment, the CAISO may not seek approval of long-lead-time transmission upgrades in the current planning cycle and instead continue to assess the need for them in future planning cycles. The CAISO should evaluate uncertainty when making decisions to approve projects longer than 10 years out and share that evaluation with stakeholders, as it does in the existing Transmission Planning Process (TPP) when it evaluates the various alternatives for addressing reliability, economic, and policy-driven needs today. As described in item 3 below, the CAISO should take a more proactive role in informing where resources should locate to mitigate the concern around the uncertainty of resources and their location more than 20 years out.

3. Please provide your organizations comments on retaining policy-driven transmission upgrade capacity for the specific policy purpose for which it was developed.

The CAISO proposes to set aside the capacity of policy-driven transmission upgrades needed for specific resources included in the California Public Utilities Commission (CPUC) portfolios. Under this proposal, the CAISO would incorporate the capacity of the portfolio resources into the generator interconnection and transmission plan deliverability allocation studies. This would ensure the capacity of the transmission upgrade approved for policy resources reflected in the CPUC portfolio is not allocated to resources other than the types of resources in the policy portfolio.

This proposal is reasonable as it would provide more certainty that transmission capacity will be available for projects developed for policy purposes. Limiting the application of the straw proposal to only circumstances with a clear, direct policy directive from an applicable state authority and releasing the held-back transmission capacity after a certain period of time, or if policy portfolios change is appropriate. Further, it would be beneficial to base policy portfolios on resource attributes, rather than particular technologies. Attribute-based policies increase the state’s access to resources providing comparable reliability and environmental benefits.

In addition, the CAISO should take a more proactive role in informing where to site new resource build where transmission capacity already exists or will exist after the completion of projects approved in the TPP. The CAISO should coordinate this role with the CPUC’s resource portfolios and busbar mapping developed in the Integrated Resource Planning process, and environmental and land use mapping performed by the CEC. This would enhance the ability for load-serving entities to make procurement decisions that minimize the need for network upgrades later on by signaling in advance where transmission will exist in the future.

To better optimize new resource siting and procurement decisions, three things must be known:

1. Locations with the potential for the highest quality resources;
2. Locations with land available for new resource build given existing infrastructure, legally protected areas, etc.; and
3. Locations with exiting transmission capacity or locations suitable for new transmission build.

For item 1, the CAISO and state agencies could use the Competitive Renewable Energy Zones (CREZ) approach as a model to identify locations with the best potential for high-quality renewable resources. During the early years of renewable integration, CREZs were developed to identify areas with high densities of best-quality resources while minimizing new transmission facilities necessary to access new renewables to meet state policy goals. These zones were used to rank locations for resource development on an economic and environmental basis.[1] The CAISO could incorporate a similar approach to inform the best locations to procure new resources to minimize unnecessary time and cost impacts of new interconnection upgrades.

For item 2, the CEC’s land use screens can inform where there is new resource potential considering other uses of state land.

For item 3, the CAISO must inform the sites where existing transmission exists, or where new transmission build is feasible. This last item is a critical piece of the puzzle because deciding where to build new resources is critically dependent on the transmission to make the resources deliverable. The CAISO, in conjunction with the CPUC and CEC, should work to ensure all three of these elements can be communicated to stakeholders to accelerate and optimize procurement.

[1]             https://www.westerngrid.net/wp-content/uploads/2012/07/tste-olsen-2200111-x.pdf

4. Please provide additional comments your organization has on the transmission planning process enhancements initiative.

CalCCA has no comments at this time.

1. Please provide your organizations comments on adjusting the timeline for the release of the draft transmission plan from the end of January to the end of March, targeting approval in each year’s May Board of Governors meetings.

CESA does not oppose the ISO’s proposal to extend the timeline for the Draft Transmission Plan, thereby shifting the Transmission Planning Process (TPP) timeline by a couple months and impacting the approval of the Final Transmission Plan. However, given the need to ensure timely transmission approvals, we encourage the ISO to strive to meet the original timeline, or identify changes to studies and processes to return to the original timeline for the next TPP cycle.

2. Please provide your organizations comments on enabling approvals for major long lead time transmission projects needed beyond the current 10 year planning horizon.

With no changes from the proposal detailed in the Issue Paper, CESA generally supports the Straw Proposal regarding long lead-time transmission projects in terms of how the ISO will work with the other agencies (CEC, CPUC) on developing long-term (i.e., 15+ year) forecasts. However, without further detail on the uncertainty analysis of load or resource needs and location for transmission needs, it is hard for stakeholders like CESA to provide meaningful feedback. To the degree possible, CESA requests that the ISO detail its criteria on the uncertainty analysis and thresholds (if any) as to whether the ISO would move forward with a long lead-time transmission project. Non-wires alternatives such as energy storage can also play a role in mitigating this uncertainty given its potential as a multiple-use resource (generation or transmission) – a mitigation measure that should be explored in this initiative. The allocation and mapping methodology will also inform the uncertainty analysis, so CESA will engage in the relevant CEC and CPUC processes to understand and shape them.

3. Please provide your organizations comments on retaining policy-driven transmission upgrade capacity for the specific policy purpose for which it was developed.

In the Straw Proposal, the ISO mostly provided key clarifications and offered suggestions on a proposal for retaining policy-driven transmission upgrade capacity. For CESA, while not opposing the retention of transmission upgrade capacity for a specific policy purpose, we were most concerned with how the specific policy purpose would be defined in a way that is non-discriminatory and open access. To this end, CESA focused our comments on the Issue Paper on how such transmission upgrades should be retained for specific policy-based resources using technology-neutral attributes. In response in the Straw Proposal, the ISO agreed that it should avoid technology specificity where possible in the ISO’s Tariff, but still deferred to how “resources” are specified by state policies and authorities. CESA appreciates the clarification with the focus on attributes-based consideration and understands that this matter will need to be addressed and defined in the CPUC’s Integrated Resource Planning (IRP) processes.

Given that specific resources or resource types for policy-driven transmission upgrade capacity is outside the ISO’s control, CESA believes that it is important to ensure market-efficient use of new transmission upgrade capacity. Since the in-service date of new transmission upgrade capacity and the online date of new policy-driven resources are difficult to perfectly align, all other resources should be able to leverage this transmission capacity (i.e., interim deliverability) until the policy-driven resource for which the transmission capacity is retained comes online. We greatly appreciate the ISO’s clarification and affirmation in this regard, as well as those affirming the open use of excess capacity, release reserved capacity if future portfolio changes reduce or eliminate the need for the reservation, and time-limited reservation period (e.g., 7 years). Having off-ramp criteria and processes and maximizing the use of the new policy-driven transmission upgrades in terms of capacity and time period represent critical details for this proposal.

4. Please provide additional comments your organization has on the transmission planning process enhancements initiative.

As part of this initiative, CESA proposes an additional issue for consideration regarding how economic transmission projects could be requested and studied in the TPP to better support battery storage development in local areas, where energy storage is often limited by insufficient local generation and transmission constraints to access system generation energy. As a result, limits are placed on energy storage charging in local areas under contingency scenarios and caps are placed on how much four-hour energy storage can support Local Capacity Requirement (LCR) needs on a one-for-one basis. Instead, these limits could be addressed through greater generation capacity located in the local area and/or longer-duration energy storage resources, but it may also be addressed through transmission upgrades to increase the system charging capabilities for the energy storage resources. However, to CESA’s knowledge, such studies or projects for local energy storage resources cannot be requested in the TPP or the generator interconnection process. We request that the ISO consider this proposal in this initiative.

1. Please provide your organizations comments on adjusting the timeline for the release of the draft transmission plan from the end of January to the end of March, targeting approval in each year’s May Board of Governors meetings.

CPUC staff recognizes the need for this adjustment, despite the potential downside for management of CPUC processes such as IRP. The adjusted timeline may limit the degree with which future TPP results can inform various IRP planning processes that have strict deadlines and are often scheduled around the already established TPP timeline. Additionally, though CAISO’s current proposal focuses on extending the timeline for latter steps of a typical TPP cycle, if the timing of earlier steps, such as the publication of preliminary results (typically scheduled for November) were to change, it would become even more challenging than it already is to use the TPP preliminary results to inform IRP’s portfolio mapping for the next TPP cycle, which usually starts only a few months later. 

However, we also acknowledge and commend CAISO staff’s desire to improve the TPP process.  We recognize the extension of the time for the approval of the annual Transmission Plan will begin within this current 2022-2023 TPP cycle, so the next Transmission Plan will be brought to the CAISO Board for approval in May 2023.

2. Please provide your organizations comments on enabling approvals for major long lead time transmission projects needed beyond the current 10 year planning horizon.

CPUC staff supports this proposal and commends the CAISO for its ongoing efforts to contribute to transmission planning beyond a 10-year horizon. 

We note that the CAISO will be conducting a “high electrification” sensitivity study as part of this TPP cycle for which, at the CPUC’s request, the planning scenarios will extend to 2035. We anticipate IRP modeling will increasingly consider resource needs beyond ten years as the state accelerates initiatives to achieve a carbon-free electricity grid by 2045.  So a further planning horizon beyond ten years for base case analysis would be a helpful enhancement for the coordination between IRP portfolios and the CAISO planning analysis.  CPUC staff further notes that the recently enacted SB 887 requires the CPUC to convey 15-year portfolios by March 31, 2024.

We appreciate CAISO’s foresight and willingness to include long lead-time transmission projects in in its TPP analysis.   

3. Please provide your organizations comments on retaining policy-driven transmission upgrade capacity for the specific policy purpose for which it was developed.

CPUC staff reiterates its support for setting aside capacity of policy-driven transmission upgrades that are needed for specific resources included in the CPUC portfolios. CPUC staff especially appreciates the CAISO’s recognition that increasing the maximum import capability is the best way to ensure that capacity for out-of-state resources can be retained within the interconnection and deliverability processes. 

We encourage the CAISO’s efforts to finalize this proposal, draft tariff language and bring forth this important TPP enhancement to the CAISO Board.  

The interactions between the transmission planning, interconnection and LSE procurement processes can create challenges for meeting ambitious milestones and goals for rapid achievement of a carbon-free grid.  CPUC staff applauds the CAISO for pursuing this proposal and we urge priority for necessary tariff changes to implement this constructive approach.

4. Please provide additional comments your organization has on the transmission planning process enhancements initiative.

N/A

1. Please provide your organizations comments on adjusting the timeline for the release of the draft transmission plan from the end of January to the end of March, targeting approval in each year’s May Board of Governors meetings.

Cal-Western continues to support this enhancement. The planning process has become more complicated. It is important to build enough time into each TPP cycle to allow the CAISO to properly evaluate high electrification scenarios and portfolios that add significant resource additions to reduce carbon emissions and have a chance of meeting SB 100 goals.

California Western Grid especially encourages the CAISO to also use the added time in the 2022-23 TPP cycle to evaluate transmission needs from the CPUC 2035 30 MMT high electrification portfolio, integrate the CAISO LCRA studies and Battery Study from the 2020-21 TPP (Appendix G) to identify and approve high priority long lead time transmission additions into load centers that are found needed and are consistent with the 20-Year Outlook.

2. Please provide your organizations comments on enabling approvals for major long lead time transmission projects needed beyond the current 10 year planning horizon.

California Western Grid supports proposed enhancement #2 - Coordination with other planning processes and enable the ISO to approve major long lead time transmission projects needed beyond the current 10-year planning horizon

 However, we believe the CAISO Straw Proposal inappropriately delays the implementation of enhancement #2. The Strawman Proposal states at page 7:

The CAISO, starting with the 2023-2024 transmission planning process, will work with the CEC and the CPUC regarding input assumptions beyond the 10-year planning horizon.

Why are we waiting until the 2023-24 TPP?

In the past several years, the CAISO has warned repeatedly in various pleadings at the CPUC and in public forums, that we need to start planning and approving new transmission immediately. Now with the passage of SB 887 the California State Legislature and the Governor have said they not only agree, but we need to urgently start planning and approving needed transmission to connect the massive number of new renewables and storage required by SB 100 and deliver that clean energy load centers.

SB 887 specifically states:

(f) On or before January 15, 2023, the commission shall request the Independent System Operator to do both of the following:

(1) Identify, based as much as possible on studies completed before January 1, 2023, by the Independent System Operator and projections provided before January 1, 2023, by the commission and the Energy Commission, the highest priority transmission facilities that are needed to allow for increased transmission capacity into local capacity areas to deliver renewable energy resources or zero-carbon resources that are expected to be developed by 2035 into those areas.

(2) Consider whether to approve transmission projects identified pursuant to paragraph (1) as part of its 2022–23 transmission planning process. [emphasis added]

The message of urgency SB 887 could not be clearer. Use studies already completed, supplemented by new studies from the 2022-23 TPP, to identify needed high priority transmission, and prioritize new transmission into transmission constrained local capacity areas.

While the Legislature can not order the CAISO to approve needed transmission, the Legislature encourages the CAISO to act in the current 2022-23 TPP. Further, the Legislature identifies CAISO’s FERC tariff obligation to plan transmission to accommodate State policy needs and states it is the Legislature’s intent that CAISO take notice of the State policies expressed in SB 887. In SB 887 the Legislature describes the need for new transmission as “urgent;” and transmission solutions for transmission constrained load centers should be resolved “promptly;” and that given the scale of transmission found needed in the CAISO’s 20-Year Transmission Outlook, CAISO must act “proactively.” SB 887 also emphasizes that the CAISO must plan for transmission projects, considering the long and uncertain lead-times to ensure the transmission is ready when needed.  It is worth noting that SB 887 was unanimously approved by both the Senate and Assembly, a rare occurrence reflecting an equally rare consensus.

The CPUC echoed the same sense of urgency with the October 6, 2022 Draft IRP Ruling on resource portfolios to be used in the CAISO TPP process. The draft ruling says beginning on page 7:

The July 1, 2022, [CPUC] letter recommendations were intended to encourage the CAISO to consider identifying transmission needs, not only from study of the 38 MMT base case, but also from the study of the 30 MMT sensitivity, for approval within the 2022-2023 TPP. Using both the base case and the sensitivity will give CAISO a broader set of information from which to consider transmission investments. And, considering that the 30 MMT High Electrification sensitivity passed to 2022-2023 TPP is very similar to the 30 MMT HE portfolio proposed above as the 2023-2024 TPP base case, CAISO staff may be able to get a “head start” on identifying any associated transmission needs by considering the results of the 30 MMT High Electrification sensitivity in making transmission investment recommendations to its board in the 2022-2023 TPP cycle [emphasis added]

The CAISO simply cannot ignore the State Policy direction from the Legislature and the Governor, in addition to the CPUC and the CAISO’s own 20-Year Transmission Outlook. It is time to start with the current 2022-23 TPP cycle to approve significant high priority long-lead time transmission projects, particularly the highest priority projects that add transmission capacity into transmission constrained load centers. The Strawman Proposal needs to be amended to reflect this urgency.

Accordingly, the CAISO Strawman Proposal Page 7 needs to be amended as follows:

The CAISO, starting with the 2022-23  2023-24 transmission planning process, will work with the CEC and the CPUC regarding input assumptions beyond the 10-year planning horizon

Fortunately, the CPUC had the foresight to provide the CAISO with a 2035 30 MMT HE portfolio that can and should be used in this 2022-23 TPP to identify and approve high priority transmission. The findings in this 2022-23 planning cycle should be integrated with the findings from the CAISO 20-year transmission outlook and the CAISO’s 2020-21 TPP LCRA and Battery studies.

As California Western Grid stated above, the California Legislature, Governor and CPUC expect no less, and all have urged the CAISO to begin planning and approving long-lead time transmission projects in this 2022-23 TPP. Clearly the least regrets course of action.

There is no time to delay. It is time to be proactive. The CAISO and others have mentioned that new transmission can take 10 years or more to plan, permit and build. This may be optimistic. A Clean Air Taskforce report from October 2022 lists transmission projects greater than $50 million that have been approved by the CAISO over the last 10 years and observes at page 10:

Major transmission projects take years to complete and major projects in California often require twice as much time as originally anticipated[1]

California Western Grid also observes that our recent discussion with major transmission equipment vendors have indicated that due to world-wide demand for equipment and the limited number of suppliers, a very long lead time for orders of essential transmission components. Orders made today for transformers and HVDC convertors can expect delivery in late 2027 and 2028. Waiting another year to approve transmission projects will push out timing slots for manufacturing and delivery an additional 1-2 years into the future. This problem is sure to get worse for urgently needed California projects as the rest of the nation, not to mention the world, just like California, is poised for a major transmission building initiative to support each State’s clean air initiatives.  The ability to have certainty for cost and schedule of projects will become more problematic.

California Western Grid urges the CAISO adopt enhancements described in the Strawman proposal and in this 2022-23 TPP to get a jump on the current backlog of needed transmission. California Western Grid applauds the roadmap provided in the CAISO’s 20-Year Transmission Outlook and urges the CAISO to get started on the significant new transmission that will be needed in 10-12 years, beginning with this 2022-23 TPP, by first focusing on load centers like the LA Basin that have the worst air quality significantly harming disadvantaged communities.

The State Legislature, Governor and CPUC have provided the policy direction and encouragement; it is now up to the CAISO to implement.

[1] See Clean Air Taskforce, Growing the Grid: A Plan to Accelerate California's Clean Energy Transition, October 2022, Figure 4, pg. 10

3. Please provide your organizations comments on retaining policy-driven transmission upgrade capacity for the specific policy purpose for which it was developed.

California Western Grid supports this proposed improvement to the current transmission planning process. It is important to build long-lead time transmission ahead of, and in anticipation of new resources. In the case of offshore wind, the resource development may entail lengthy leasing and site assessment processes, with substantial costs to the winning lessee. During that lengthy resource development periods, wind developers need to be assured transmission will be available when the resources come online.

The CAISO Strawman Proposal may provide a way to provide that assurance, but there is little detail in the Strawman Proposal regarding how the CAISO will identify and earmark specific locations and amounts of transmission to be set aside to fulfill policy objectives, including off shore wind connectivity.

California Western Grid encourages the CAISO to continue to work with stakeholders as the details of this proposal are fleshed out.

Page 9 of the Strawman Proposal contains the following statement:

California Western Grid Suggested applying the policy to transmission into load pockets as well as out of generation pockets.

• The ISO agrees that transmission into load pockets is important, not only for reliability and economic purposes, but ultimately for compliance with the state’s clean energy goals. However, we believe that type of transmission planning can be managed through the normal transmission planning process, without the need to reserve capacity for certain resources.

California Western Grid agrees that reserving transmission into load pockets can be managed through normal transmission planning processes, if the ‘normal’ transmission planning processes evolves. For example, the ‘normal’ transmission planning process for 2022-23 TPP should include enhancements in this Strawman proposal and the ‘normal’ planning process should evolve to incorporate significant new mandates such as fulfilment of state policy from SB 887 and draft CPUC guidance to evaluate and approve needed transmission based on the 30 MMT HE portfolio.

California Western Grid urges the CAISO adopt enhancements described in the Strawman proposal and in this 2022-23 TPP to get a jump on the current backlog of needed transmission. California Western Grid applauds the roadmap provided in the CAISO’s 20-Year Transmission Outlook and urges the CAISO to get started on the significant new transmission that will be needed in 10-12 years, beginning with this 2022-23 TPP, by first focusing on load centers like the LA Basin that have the worst air quality significantly harming disadvantaged communities.

4. Please provide additional comments your organization has on the transmission planning process enhancements initiative.

Comments of California Western Grid on CAISO’s September 22, 2022, Strawman Proposal Proposing Transmission Planning Enhancements

10-14-22

Three Rivers Energy Development, LLC (TRED) is an Independent Transmission Developer that is developing the proposed Pacific Transmission Expansion Project (“PTE Project” or “PTEP”) on behalf of California Western Grid Development, LLC. (“California Western Grid”). The PTE Project is a 2,000 MW controllable HVDC subsea transmission cable that the California Independent System Operator (“CAISO”) has found will allow new and existing supply, including OSW to be available to the Diablo Canyon 500 kV switchyard, or new offshore wind, to be delivered to the LA Basin and the Big Creek Ventura areas, which would reduce local capacity requirements among solving other issues. The PTE Project is described in Section 4.8.8 of the 2020-2021 CAISO Transmission Report issued March 24, 2021. The PTE Project is also currently being restudied by the CAISO as part of 2022-2023 CAISO Transmission Planning Process (“TPP”).

We are pleased to submit these comments on behalf of California Western Grid regarding the Transmission Planning Process (“TPP”) Enhancements Strawman Proposal dated September 22, 2022. We commend the CAISO for recognizing that changes to the TPP are needed immediately if the CAISO is going to be able to plan and approve transmission to accommodate the tripling of clean energy resources the 2021 Joint Agency Report to the Legislature found is necessary to meet Senate Bill100 goals.

The CAISO has proposed three enhancements

1. Adjust the timeline for releasing the draft transmission plan each planning cycle from the end of January to the end of March
2. Coordinate with other planning processes and enable the ISO to approve major long lead time transmission projects needed beyond the current 10-year planning horizon
3. Retain policy-driven transmission upgrade capacity for the resources that meet the specific policy purpose for which it was developed

As described in more detail below, California Western Grid supports all three of these proposed enhancements. However, we believe the CAISO Straw Proposal inappropriately delays the implementation of issue #2. The Strawman Proposal states at page 7:

The CAISO, starting with the 2023-2024 transmission planning process, will work with the CEC and the CPUC regarding input assumptions beyond the 10-year planning horizon.

Why are we waiting until the 2023-24 TPP?

In the past several years, the CAISO has warned repeatedly in various pleadings at the CPUC and in public forums, that we need to start planning and approving new transmission immediately. Now with the passage of SB 887 the California State Legislature and the Governor have said they not only agree, but we need to urgently start planning and approving needed transmission to connect the massive number of new renewables and storage required by SB 100 and deliver that clean energy load centers.

SB 887 specifically states:

(f) On or before January 15, 2023, the commission shall request the Independent System Operator to do both of the following:

(1) Identify, based as much as possible on studies completed before January 1, 2023, by the Independent System Operator and projections provided before January 1, 2023, by the commission and the Energy Commission, the highest priority transmission facilities that are needed to allow for increased transmission capacity into local capacity areas to deliver renewable energy resources or zero-carbon resources that are expected to be developed by 2035 into those areas.

(2) Consider whether to approve transmission projects identified pursuant to paragraph (1) as part of its 2022–23 transmission planning process. [emphasis added]

The message of urgency SB 887 could not be clearer. Use studies already completed, supplemented by new studies from the 2022-23 TPP, to identify needed high priority transmission, and prioritize new transmission into transmission constrained local capacity areas.

While the Legislature can not order the CAISO to approve needed transmission, the Legislature encourages the CAISO to act in the current 2022-23 TPP. Further, the Legislature identifies CAISO’s FERC tariff obligation to plan transmission to accommodate State policy needs and states it is the Legislature’s intent that CAISO take notice of the State policies expressed in SB 887. In SB 887 the Legislature describes the need for new transmission as “urgent;” and transmission solutions for transmission constrained load centers should be resolved “promptly;” and that given the scale of transmission found needed in the CAISO’s 20-Year Transmission Outlook, CAISO must act “proactively.” SB 887 also emphasizes that the CAISO must plan for transmission projects, considering the long and uncertain lead-times to ensure the transmission is ready when needed.  It is worth noting that SB 887 was unanimously approved by both the Senate and Assembly, a rare occurrence reflecting an equally rare consensus.

The CPUC echoed the same sense of urgency with the October 6, 2022 Draft IRP Ruling on resource portfolios to be used in the CAISO TPP process. The draft ruling says beginning on page 7:

The July 1, 2022, [CPUC] letter recommendations were intended to encourage the CAISO to consider identifying transmission needs, not only from study of the 38 MMT base case, but also from the study of the 30 MMT sensitivity, for approval within the 2022-2023 TPP. Using both the base case and the sensitivity will give CAISO a broader set of information from which to consider transmission investments. And, considering that the 30 MMT High Electrification sensitivity passed to 2022-2023 TPP is very similar to the 30 MMT HE portfolio proposed above as the 2023-2024 TPP base case, CAISO staff may be able to get a “head start” on identifying any associated transmission needs by considering the results of the 30 MMT High Electrification sensitivity in making transmission investment recommendations to its board in the 2022-2023 TPP cycle [emphasis added]

The CAISO simply cannot ignore the State Policy direction from the Legislature and the Governor, in addition to the CPUC and the CAISO’s own 20-Year Transmission Outlook. It is time to start with the current 22-23 TPP cycle to approve significant high priority long-lead time transmission projects, particularly the highest priority projects that add transmission capacity into transmission constrained load centers. The Strawman Proposal needs to be amended to reflect this urgency.

Issue #1 - Adjust the timeline for releasing the draft transmission plan each planning cycle from the end of January to the end of March

Cal-Western continues to support this enhancement. The planning process has become more complicated. It is important to build enough time into each TPP cycle to allow the CAISO to properly evaluate high electrification scenarios and portfolios that add significant resource additions to reduce carbon emissions and have a chance of meeting SB 100 goals.

California Western Grid especially encourages the CAISO to also use the added time in the 2022-23 TPP cycle to evaluate transmission needs from the CPUC 2035 30 MMT high electrification portfolio, integrating the CAISO LCRA studies and Battery Study from the 2020-21 TPP (Appendix G) to identify and approve high priority long lead time transmission additions into load centers that are found needed and are consistent with the 20-Year Outlook.

The State Legislature, the Governor and the CPUC expect no less.

Issue #2 - Coordinate with other planning processes and enable the ISO to approve major long lead time transmission projects needed beyond the current 10-year planning horizon

California Western Grid also strongly supports this proposal as an enduring enhancement to the Transmission Planning Process. However, we need to begin long range planning now, in the current 2022-23 TPP.

Accordingly, the CAISO Strawman Proposal Page 7 needs to be amended as follows:

The CAISO, starting with the 2022-23  transmission planning process, will work with the CEC and the CPUC regarding input assumptions beyond the 10-year planning horizon

Fortunately, the CPUC had the foresight to provide the CAISO with a 2035 30 MMT HE portfolio that can and should be used in this 2022-23 TPP to identify and approve high priority transmission. The findings in this 2022-23 planning cycle should be integrated with the findings from the CAISO 20-year transmission outlook and the CAISO’s 2020-21 TPP LCRA and Battery studies.

As California Western Grid stated above, the California Legislature, Governor and CPUC expect no less, and all have urged the CAISO to begin planning and approving long-lead time transmission projects in this 2022-23 TPP. Clearly the least regrets course of action.

There is no time to delay. It is time to be proactive. The CAISO and others have mentioned that new transmission can take 10 years or more to plan, permit and build. This may be optimistic. A Clean Air Taskforce report from October 2022 lists transmission projects greater than $50 million that have been approved by the CAISO over the last 10 years and observes at page 10:

Major transmission projects take years to complete and major projects in California often require twice as much time as originally anticipated[1]

California Western Grid also observes that our recent discussion with major transmission equipment vendors have indicated that due to world-wide demand for equipment and the limited number of suppliers, a very long lead time for orders of essential transmission components. Orders made today for transformers and HVDC convertors can expect delivery in late 2027 and 2028. Waiting another year to approve transmission projects will push out timing slots for manufacturing and delivery an additional 1-2 years into the future. This problem is sure to get worse for urgently needed California projects as the rest of the nation, not to mention the world, just like California, is poised for a major transmission building initiative to support each State’s clean air initiatives.  The ability to have certainty for cost and schedule of projects will become more problematic.

Issue #3 - Retain policy-driven transmission upgrade capacity for the resources that meet the specific policy purpose for which it was developed

California Western Grid supports this proposed improvement to the current transmission planning process. It is important to build long-lead time transmission ahead of, and in anticipation of new resources. In the case of offshore wind, the resource development may entail lengthy leasing and site assessment processes, with substantial costs to the winning lessee. During that lengthy resource development periods, wind developers need to be assured transmission will be available when the resources come online.

The CAISO Strawman Proposal may provide a way to provide that assurance, but there is little detail in the Strawman Proposal regarding how the CAISO will identify and earmark specific locations and amounts of transmission to be set aside to fulfill policy objectives, including off shore wind connectivity.

California Western Grid encourages the CAISO to continue to work with stakeholders as the details of this proposal are fleshed out.

Page 9 of the Strawman Proposal contains the following statement:

California Western Grid Suggested applying the policy to transmission into load pockets as well as out of generation pockets.

• The ISO agrees that transmission into load pockets is important, not only for reliability and economic purposes, but ultimately for compliance with the state’s clean energy goals. However, we believe that type of transmission planning can be managed through the normal transmission planning process, without the need to reserve capacity for certain resources.

California Western Grid agrees that reserving transmission into load pockets can be managed through normal transmission planning processes, if the ‘normal’ transmission planning processes evolves. For example, the ‘normal’ transmission planning process for 2022-23 TPP should include enhancements in this Strawman proposal and the ‘normal’ planning process should evolve to incorporate significant new mandates such as fulfilment of state policy from SB 887 and draft CPUC guidance to evaluate and approve needed transmission based on the 30 MMT HE portfolio.

California Western Grid urges the CAISO adopt enhancements described in the Strawman proposal and in this 2022-23 TPP to get a jump on the current backlog of needed transmission. California Western Grid applauds the roadmap provided in the CAISO’s 20-Year Transmission Outlook and urges the CAISO to get started on the significant new transmission that will be needed in 10-12 years, beginning with this 2022-23 TPP, by first focusing on load centers like the LA Basin that have the worst air quality significantly harming disadvantaged communities.

The State Legislature, Governor and CPUC have provided the policy direction and encouragement; it is now up to the CAISO to implement.

Marty Walicki, 

Managing Partner

Three Rivers Energy Development, LLC                                        October 14, 2022 

[1] See Clean Air Taskforce, Growing the Grid: A Plan to Accelerate California's Clean Energy Transition, October 2022, Figure 4, pg. 10

1. Please provide your organizations comments on adjusting the timeline for the release of the draft transmission plan from the end of January to the end of March, targeting approval in each year’s May Board of Governors meetings.

CalWEA generally supports the proposed timeline adjustment, but requests that CAISO review the timeline of the generation interconnection process to ensure the two-month shift does not adversely impact the generation interconnection studies such as CAISO’s Annual Reassessment Process. 

2. Please provide your organizations comments on enabling approvals for major long lead time transmission projects needed beyond the current 10 year planning horizon.

CalWEA supports enabling approvals for major long-lead-time transmission projects needed beyond the current 10-year planning horizon, which is also now required under SB 887, which was recently signed into law. 

In addition, SB 887 requires the CPUC to request the CAISO to “Identify, based as much as possible on studies completed before January 1, 2023, by the [CAISO] and projections provided before January 1, 2023, by the commission and the Energy Commission, the highest priority transmission facilities that are needed to allow for increased transmission capacity into local capacity areas to deliver renewable energy resources or zero-carbon resources that are expected to be developed by 2035 into those areas,” and to “[c]onsider whether to approve transmission projects identified pursuant to paragraph (1) as part of its 2022–23 transmission planning process.”  We urge CAISO to anticipate this request and to timely meet the Legislature’s and the Governor’s unambiguous request to start approving backbone transmission projects that will clearly be needed to meet the state’s policy goals.

Beyond addressing this immediate directive, CalWEA urges CAISO to develop a clear and transparent process for selecting upgrades that support long-term planning goals.  In CalWEA’s comments on the 20-year conceptual plan, we outlined such an approach wherein longer-term planning could be effectively integrated into the regular TPP cycle:  To identify near-term upgrades that advance the long-term plan, CalWEA recommends that the CAISO work with the CPUC and CEC to develop a least-regrets longer-term planning process in which three significantly different, but plausible, ~20 year resource scenarios be created for which actual (rather than conceptual) transmission plans are independently developed. Those upgrades that are common to all three scenarios should move forward in the annual TPP cycle for presentation to the CAISO board for approval. Those upgrades that are common to two out of the three scenarios should be considered in the annual TPP cycle as replacement (and potentially more costly) solutions to address reliability, economic and/or policy upgrades that are identified in the TPP. 

CalWEA expects this approach will identify the backbone upgrades that will be needed to achieve the state’s SB 100 goals regardless of resource mix.  Such upgrades will be needed to deliver renewable energy and storage from any of multiple possible locations. Some backbone upgrades, particularly subsea upgrades that connect to major load centers, such as the Bay Area or LA Basin, can also relieve local transmission constraints, thereby accommodating the major load growth expected in these areas due to transportation, household, and industrial electrification.

However, establishment of such a process should not delay any backbone upgrades that may be identified in the 2022-23 TPP cycle, including upgrades identified pursuant to SB 887 and those that can be supported by the 2035 high electrification sensitivity and other sensitivity portfolios that the CPUC transmitted for use in this cycle.

Finally, the CAISO should harmonize the assumptions in the long-term planning and the annual TPP cycle.  In particular, in the methodology used in the 20-year conceptual plan to determine deliverability, CAISO assumed that energy storage resources are fully charged, but not producing in the peak consumption study, which nearly corresponds to the Secondary System Need (SSN) test in the CAISO’s on-peak deliverability assessment. This assumption appropriately recognizes that, when solar generation is abundant, dispatchable resources, such as storage, are likely to have low output, or even negative output (charging), to get ready for later hours when fast net-load ramping and high net-load conditions (corresponding to the HSN scenario) must be managed by the system operator.  This realistic assumption should also be made in the regular TPP cycle, along with other reforms that promote more efficient grid utilization, discussed in response to the next question. 

3. Please provide your organizations comments on retaining policy-driven transmission upgrade capacity for the specific policy purpose for which it was developed.

The concept of reserving policy-driven transmission upgrade capacity for specific resources at certain locations is appealing for certain concentrated and location-specific resources with long development lead-times, such as offshore wind.  However, the concept requires substantial additional consideration regarding policy, legal, and technical aspects, and more traditional approaches should be considered.

Policy and Legal Aspects

In looking to New Jersey as the model, as the proposal does, it is important to recognize the many steps that New Jersey and PJM have taken to achieve the overall policy to reserve capacity for offshore wind.  CAISO and the State of California would need to emulate at least the more critical components of these steps:

• Place cost-allocation procedures in tariff

• • PJM’s Operating Agreement has an existing provision permitting PJM to enter into a “State Agreement Approach” with a state governmental entity (authorized by such state) to allow such entity to be responsible for the allocation of all costs of a proposed transmission expansion or enhancement that addresses state public policy requirements identified or accepted by the state.  The CAISO tariff would likely need to be tailored so only California load-serving entities under CPUC jurisdiction would be responsible for the transmission costs.

• Establish state policies to develop transmission for offshore wind

• • New Jersey formally set forth a state policy to expand the transmission system to accommodate a buildout of 7,500 MW of offshore wind generation by 2035.
  • The New Jersey Board of Public Utilities (NJ BPU) then issued an order requesting that PJM, pursuant to the State Agreement Approach (SAA), open a competitive proposal window to solicit transmission proposals to interconnect and ensure deliverability of 7,500 MW of offshore wind generation by 2035.  The NJ BPU also negotiated with PJM, and filed with the Commission, a study agreement to implement this proposal.
  • The SAA Agreement establishes processes for the review and selection of specific transmission projects, which may be onshore and/or offshore facilities, to effectuate New Jersey's public policy goals.
  • Under the SAA Agreement, PJM evaluates and develops recommendations on transmission project proposals that are submitted in the competitive proposal window to facilitate NJ BPU-designated generation. The NJ BPU subsequently decides whether to sponsor one or more of PJM's recommended projects.
  • The SAA Agreement specifies that any SAA Project would be controlled by PJM and subject to its open access policies.
  • All transmission costs related to the SAA Project are to be recovered from customers in a state or group of states that agrees to be responsible for the project(s), rather than other PJM customers. However, while offshore projects could reserve capacity on the new SAA Project, they will be required to go through the regular interconnection process to identify any Network Upgrades and Interconnection Facilities other than the SAA Project necessary for their interconnection

• Select benefitting generators

• • The SAA Agreement provides that NJ BPU has the right to assign the “SAA Capability” created by an SAA Project to offshore wind generators or other public policy resources chosen in NJ BPU's solicitation process (“NJ BPU-designated generators”). “SAA Capability” rights would only apply to future capacity rights created by the project, not to existing rights as contemplated by CAISO. 
  • The SAA Agreement provides that any SAA Capability not initially assigned within a period no later than two years from the last solicitation date in the NJ BPU solicitation schedule will be released for use by entities other than NJ BPU-designated generators, subject to the cost sharing provision.  CAISO and the state need to consider what its plan would be for release of capacity after an initial solicitation process; it may take many years to build out each offshore wind resource area. 
  • Under the SAA Agreement, a NJ BPU-designated generator must proceed through the interconnection process and execute an interconnection service agreement to be awarded Capacity Interconnection Rights.

In line with the steps above, California should contemplate how to address non-CPUC-jurisdictional CAISO load-serving entities.  These LSEs may or may not be subject to the state’s SB 100 requirements and could be subject to state offshore wind requirements. The state should consider whether these LSEs should be covered under a state transmission policy for offshore wind. (Without it, it is unclear how these entities will be able to contract for offshore wind, which the SB 100 Joint Agency Report identified as an important component of the statewide SB 100 portfolio.)   

Technical Aspects

CAISO’s proposed policy to reserve capacity for specific resources at certain locations could have impacts on other resources due to the meshed nature of the network.  In some cases, reserving capacity would reduce deliverability of other resources even if the other deliverability issues are not relevant to the resources that the capacity is reserved for. In other cases, reserving capacity could cause over-subscription of deliverability available to other resources and require more transmission upgrades in the future.[1] Therefore, if CAISO moves forward with this concept, the process must be well-designed to facilitate certain resource development while preventing adverse impacts on interconnection requests already in the study process.

Technically, there are two ways to reserve the transmission capacity for the specific resources mandated by state policy (State Policy Resources). First, when studying other projects in the generation interconnection process, CAISO could exclude the transmission upgrades approved for the State Policy Resources until such resources submit an interconnection request.  However, while the transmission upgrades earmarked for the State Policy Resources would be reserved, transmission capacity on the existing system would not and other resources could utilize such existing capacity that may be necessary for State Policy Resources to deliver the energy to the grid.  As a result, further upgrades (beyond those contemplated by the earmarked transmission upgrades) may be necessary to interconnect the State Policy Resources.  Therefore, reserving capacity from a particular transmission upgrade for a State Policy Resource may not help the intended resource developer with all necessary costs of interconnection.

Second, CAISO could add representative generators for the state mandates (Representative Generators) as firm commitments in its on-going generation interconnection studies for other projects. Thus, other generation projects seeking deliverability would only have access to the capacity remaining after considering such firm commitments. Given the mismatch between the CPUC’s portfolios and the current generation queue,[2] this approach, on the one hand, would adversely impact the available deliverability for generators already in the queue and, on the other hand, would not ensure there is enough transmission capacity for the Representative Generators. In addition, Representative Generators may help to relieve certain existing transmission constraints and other generator’s interconnections may benefit from such relief.  However, because the Representative Generators may not interconnect to the grid for an extended period, the other generators that benefit from their interconnection may not be deliverable for a long time when the Representative Generators are eventually built.

Considering the tentatively planned offshore wind development in California, these issues would arise predominantly at the North Coast, which has a severe lack of transmission. The closest bulk transmission (Malin – Round Mountain 500kV lines) is more than a hundred miles away. CAISO has envisioned onshore HVDC lines to the bulk transmission system. The capacity of the HVDC lines could be preserved for offshore wind projects. However, there are also transmission constraints south of Round Mountain that will limit the delivery of offshore wind and other generation projects in the PG&E north area. The CPUC is now considering a 2035 base case portfolio with 1.6 GW at Humboldt (and a sensitivity case with 3 GW at Humboldt and 5 GW elsewhere on the North Coast). Even if CAISO were to approve more downstream transmission upgrades and preserve the capacity for 1.6 GW, the remainder will be quickly absorbed by the queued generation. Unless the CPUC adopts a much more aggressive offshore wind figures in its 2035 base case, the CAISO may have to constantly chase the policy goal and approve more and more transmission upgrades to support both the offshore wind and other resources in the PG&E north area.

The Central Coast has abundant transmission, especially after Diablo Canyon’s retirement. The issue with the Central Coast is more about how much offshore wind is assumed to interconnect to the onshore grid at 500kV, and when it will interconnect, as offshore wind helps to relieve the nearby transmission constraints, such as Gates 230/500kV transformer constraint. The new resources interconnecting at 230kV or below in Fresno and Kern areas rely on the offshore wind resources for deliverability and face NQC reductions until enough offshore wind resources are operational. Offshore wind projects are now planned with greater turbine density, such that the Morro Bay areas to be leased by BOEM later this year could support on the order of 6 GW of capacity.  Barring reforms to the CAISO’s deliverability methodology (discussed below), and assuming Diablo Canyon will retire by 2030, it may be necessary to add another 500kV line from Diablo either to Gates or Midway.

More Traditional Approach

Given the difficulties and controversy associated with carving out transmission capacity for the specific resources, particularly at the North Coast, a more traditional approach may be preferable.  Namely:

1. The state should provide offshore wind developers (and any other preferred long-lead-time resources that have been identified as needed) with the market certainty required to secure generation interconnection through normal processes.  This would ideally come from a legislative procurement requirement; second-best from a CPUC procurement requirement. 

2. Clear state requirements would allow the CAISO to conclusively plan for policy upgrades.  CAISO has adjusted the 2022-2023 portfolio to cover all generating resources with transmission plan deliverability allocations. This should be carried forward in future portfolio development. With proper timing, the practice could ensure that there is sufficient transmission capacity for the resources in the IRP portfolio in every transmission plan deliverability allocation cycle.

3. Per existing rules, new TPD capacity becomes available for subscription immediately upon approval by CAISO, thus it is essential that (a) upgrade approvals be timed such that developers are in a position to file and secure an interconnection agreement under the CAISO’s tariff, and (b) developers have secured power purchase agreements (PPAs), because CAISO assigns TPD rights on a priority basis and gives developers holding PPAs the highest priority.  While this will not ensure that all planned resources obtain TPD capacity, it will give them a strong opportunity.

A complementary strategy would be for CAISO to make more efficient use of the existing and new transmission assets by reforming unreasonable assumptions in the deliverability assessments used in its transmission planning and interconnection studies. Such reforms would deliver substantial ratepayer benefits while increasing the capacity that can be accommodated by newly planned capacity.  CalWEA believes, for example, that the appropriate energy storage assumption used in the CAISO’s long-term conceptual plan, noted above in response to question 2, would likely substantially reduce the $30 billion estimated cost of the transmission upgrades that were identified in that plan.

It is important that, as we plan for a major transformation of the grid, we promote the efficient use of the existing grid, which will significantly reduce the upgrades and associated costs required to interconnect the same amount of capacity.  CalWEA has explained at length elsewhere why eliminating the SSN test, as well as reforms to the HSN test, are central to that goal.[3]  This reformed methodology should be applied in long-term planning as we reimagine the future grid. 

[1]Assuming CAISO reserves capacity by not including certain transmission upgrades in TPD allocations for other resources, the TPD available to other resources could be higher than it should be when the transmission upgrade makes other deliverability constraints worse.

[2] For example, the TPP could be planning for 1.6 GW of offshore wind at the North Coast when there is already 5 GW of other types of resources that could use up that capacity. Some of the 5 GW may already have PPAs but are not being counted in the RPS portfolio mapping as contracted or generic resources.

[3] See CalWEA’s September 23, 2022, comments CAISO’s Draft 2023 Policy Initiatives Catalog, available here.

4. Please provide additional comments your organization has on the transmission planning process enhancements initiative.

No additional comments at this time. 

1. Please provide your organizations comments on adjusting the timeline for the release of the draft transmission plan from the end of January to the end of March, targeting approval in each year’s May Board of Governors meetings.

Calpine does not necessarily object to this proposal.  However, it is unclear whether this proposal to delay the presentation of the draft transmission plan would affect the schedule for determining local capacity requirements.   Should this proposal delay the Board approval of the LCR requirements, it could negatively compress the negotiation and capacity and energy contracting period available to market participants.  

2. Please provide your organizations comments on enabling approvals for major long lead time transmission projects needed beyond the current 10 year planning horizon.

No comments. 

3. Please provide your organizations comments on retaining policy-driven transmission upgrade capacity for the specific policy purpose for which it was developed.

Calpine understands and supports the concept of uniting transmission planning with generation interconnection, particularly in an environment where such a strong secular change in the generation fleet is demanded by State policy.  Transmission planners at both the CAISO and Participating Transmission Owners have been placed in the untenable position where they are forced to react to hundreds of gigawatts seeking interconnection rather than proactively building the network that can meet the State’s goals.

With this said, given the absence of a detailed proposal from the CAISO, it is very difficult to provide substantive comments. In general, we understand the proposal as a “build and they will come” strategy.  A proposal to build transmission into a resource-rich area would be approved as a “policy-driven” upgrade, some party would be commissioned to build the project and the capacity of that project would be held solely for designated and preferred (“designated”) resources. 

It would be very helpful for the CAISO to hold a workshop and lay out a specific example of this process so that market participants could understand and improve the CAISO’s proposal.  For now, however, Calpine offer the following thoughts.

Design the program for permissible rather than undue discrimination.

On its face, this proposal is discriminatory.  Arguments to the contrary are misplaced and not productive.  But discrimination is not inherently a violation of the Federal Power Act (FPA).  Indeed, if discrimination was not permissible under specific circumstances, we would all pay the same wholesale and retail prices regardless of demand elasticity, pay the same income tax rate regardless of income level and pay the same total cost for a 4-year college degree regardless of the university attended.

Undue discrimination on the other hand, is not permitted by the FPA.  Undue discrimination, among other things, might result in unjust and unreasonable outcomes.  And most relevant in this proposal, undue discrimination can pick winners and losers in a competitive market– a position antithetical to the mission of the CAISO.  Ultimately, FERC or the courts will decide whether the CAISO final proposal is just and reasonable and not unduly discriminatory.  However, a proposal holds promise of FERC approval if it has narrow applicability, contains highly specific cost allocation and program details, is responsive to explicit guidance from a state legislative authority and does not interfere with the rights of others.

The proposal should preserve and not diminish the deliverability of existing resources.

We all know that alternating current flows through the path of least resistance.  Adding high-voltage transmission to the network changes the flows across that grid.  Those changes could disrupt deliverability allocated to existing (and queued) resources.  “Preserving” incremental transmission for designated resources must not diminish the NQC or deliverability (FCDS) of existing resources or expose those resources to incremental operational risks such as remedial action schemes.  Finally, those existing resources should not be expected to fund incremental capital necessary to maintain their pre-established rights. 

The proposal must sort out intertemporal and definitional interconnection issues.

Presumably, there are projects already in the interconnection queue that would benefit by this socialization of transmission access.  These early-mover projects may have been required to fund Area or Local Deliverability Network Upgrades and could be progressing forward with contracts and construction.  The gateway projects considered in the instant proposal could make ANDUs or LDNUs foundationally imperative, or on the other hand, make them redundant or unnecessary.  

The CAISO must sort out not only the technical overlaps (to reduce unneeded spend) but also sort out the relative deliverability rights of early movers compared to those “who came later because it was built”. 

• What modifications must, for example, be made to the deliverability allocation process? 
• Will first-in, first- served still be used, but limited to specifically designated resources?
• Will interim deliverability be granted to any and all requesting resources, pending the development of a designated resource? 
• Will all designated resources receive a right-of-first refusal to deliverability when they reach COD? 
• If demand for deliverability exceeds the transmission capability, how will the CAISO allocate the deliverability between designated resources?

Additionally, the CAISO should clarify how one qualifies to receive this preferential deliverability from a transmission project.

• If the proposal applies to all network-connected transmission is there a shift factor minimum qualification? 
  • If a resource only has, for exaample, a 5 percent shift factor across the new line – does it receive a preference on deliverability? 
  • Alternatively, if a non-designated resource has a 5 percent or greater shift factor on the new line, is it prohibited from obtaining deliverability?
• Should this proposal only apply to radial lines built into resource rich areas (e.g., transmission built to isolated geothermal or offshore wind resources)?

The CAISO must clarify matters associated with cost allocation. 

The CAISO has apparently patterned this proposal as a “build and they will come” mechanism – explicitly allowing designated resources (only) to interconnect up to 7 years after the facility goes into service. 

The CAISO should explain the cost responsibilities and allocations from the inception to conclusion of such a project.  

• Would the PTOs be fully responsible for project financing? 
• Would it be treated similarly to a reliability upgrade, where the PTO securitizes the project with its regulatory books, builds the project and all costs are socialized? 
• Are none of the costs of the project funded (even if temporarily) by the benefitting resource on the line? 
• How does the CAISO plan to resolve the real potential for discrimination in cost allocation between early designated movers (who might bear significant upgrade costs) and the late comers who might be able to obtain deliverability at no cost?   

The CAISO should clarify its proposal with respect to MIC.

There are only one or two sentences in the Straw Proposal regarding the treatment of the Maximum Import Capacity (MIC).  However, the possible implications of those sentences could be extremely significant. 

The CAISO should clarify whether it is departing from the historic practice of only allocating MIC to LSEs through its 13-step process or whether it is contemplating a preferential reservation of incremental or existing MIC for designated resources.  In Calpine’s view, a preferential allocation of MIC to new, designated resources alone, would be unjust and unreasonable given that no other resource can obtain that attribute.  If the CAISO is revisiting its historic allocation, it should consider an auction-based allocation mechanism open to all users (resource owners, marketers, and LSEs) as Calpine has previously advocated.

4. Please provide additional comments your organization has on the transmission planning process enhancements initiative.

No further comments.  Thanks.

1. Please provide your organizations comments on adjusting the timeline for the release of the draft transmission plan from the end of January to the end of March, targeting approval in each year’s May Board of Governors meetings.

  Fervo has no comments on this proposed change.

2. Please provide your organizations comments on enabling approvals for major long lead time transmission projects needed beyond the current 10 year planning horizon.

  Fervo supports the proposal to enable approvals for transmission projects beyond the 10 year horizon. Given the volume of projects and complexity involved in conducting studies and alternative analyses, it is not only appropriate, but prudent to extend the planning horizon and allow for approval of projects that are greater than 10 years out. This is particularly appropriate when considering the time requirements for acquiring right-of-ways and securing permit approvals.

3. Please provide your organizations comments on retaining policy-driven transmission upgrade capacity for the specific policy purpose for which it was developed.

  Fervo supports the ISO’s proposal to retain transmission capacity in support of public policy directives for new and existing transmission. Fervo recommends that the tariff language be drafted in such a manner that focuses on attributes such as zero-emission resources with high capacity factors. The efficient utilization of transmission capacity on a 24/7 basis, particularly for resources using constrained import paths reduces the average cost of transmission on a per kilowatt-hour basis and promotes economic and social benefits.

  Fervo agrees with ACP-California’s suggestion that the policy be applied to existing transmission infrastructure as appropriate in aligning with public policy directives from the CPUC, Legislature, or Governor.

4. Please provide additional comments your organization has on the transmission planning process enhancements initiative.

  Fervo has no further comment at this time. We look forward to reviewing the post draft final proposal participating in this initiative.

1. Please provide your organizations comments on adjusting the timeline for the release of the draft transmission plan from the end of January to the end of March, targeting approval in each year’s May Board of Governors meetings.

LS Power supports the proposed timeline change. 

2. Please provide your organizations comments on enabling approvals for major long lead time transmission projects needed beyond the current 10 year planning horizon.

LS Power supports assessing transmission needs beyond the current 10 year horizon. 

3. Please provide your organizations comments on retaining policy-driven transmission upgrade capacity for the specific policy purpose for which it was developed.

Conceptually, LS Power supports this idea.  We also encourage CAISO to look for ways to accommodate resource types that are complementary to the resource for which the transmission was developed.  This will help maximize the utilization of transmission and aid the State in meeting its clean energy goals timely and at the lowest cost.  For example, if transmission is being developed for offshore wind (OSW), other resources with complementary attributes, such as solar or energy storage, may be accommodated on the same transmission path without significant impacts to the OSW due to the divergent production patterns of the resources.

Also, consideration should be given to allocating portions of the transmission being developed to serve multiple policy needs/resource types such as wind and geothermal to the extent they fill a similar need.  Further, CAISO should consider opportunities to upsize transmission projects to accommodate additional policy needs as identified in the sensitivity portfolios.

4. Please provide additional comments your organization has on the transmission planning process enhancements initiative.

LS Power does not have any additional comments at this time.

1. Please provide your organizations comments on adjusting the timeline for the release of the draft transmission plan from the end of January to the end of March, targeting approval in each year’s May Board of Governors meetings.

LSA does not object to the CAISO’s proposal for the TPP timeline adjustment, since the CAISO has clarified that this will not delay issuance of Reassessment reports, or draft NQC/EFC values for the following compliance year.

2. Please provide your organizations comments on enabling approvals for major long lead time transmission projects needed beyond the current 10 year planning horizon.

 LSA strongly supports the CAISO’s proposal to allow approvals for major transmission projects needed beyond the current 10-year transmission horizon.  However, LSA still supports the two-part structure it proposed earlier, where lower-cost efforts for upgrades where need is not completely certain could be approved on a preliminary basis to shorten the development timeline, and final approval coming later when the need is more certain and heavier expenditures start to be needed.

LSA believes that any cost for this preliminary work would be outweighed by the benefits of timely completion of the upgrades receiving final approval, and the flexibility to delay that final approval to ensure that only needed upgrades are approved (instead of granting approval and later revoking it, a not-unusual occurrence today).

LSA understands the CAISO’s concern with applying this concept where approved transmission projects are subject to competition, since this early work is usually part of the competitive package.  However, this concept would not confound that competitive process; the CAISO could hold that competitive solicitation as usual.

The preliminary work would be performed by the eventual winner, with the understanding that the winner would construct the project later after final CAISO approval.

This is really the case in practice anyway.  Today, the CAISO can always review the need for a project, and cancel if it is not found to be needed later even after the competitive award is made.  LSA’s proposal would simply make that process explicit, with the final approval given first for the preliminary work, and later for the project procurement and construction.

3. Please provide your organizations comments on retaining policy-driven transmission upgrade capacity for the specific policy purpose for which it was developed.

 LSA understands the reason why the CAISO is proposing this new policy for what we have called here “Applicable Resources.”  However, we continue to have concerns about both the concept and the implementation feasibility.  Specifically:

• The CAISO (working with the CPUC) should consider other possible approaches to achieve the same objectives without such preferential treatment.

• If this policy is implemented, the CAISO should:

• Only apply the new policy to capacity approved after the policy is implemented.

• Regularly report on the amount of “excess” upgrade capacity available to other projects, either permanently or temporarily.

• Regularly review the amount of capacity needed for this purpose, and release capacity no longer needed for use by other projects.

• Better explain (in this initiative or a follow-on effort) the mechanics of how this policy would be implemented, for both inside-CAISO and out-of-state imports, particularly (for the former) where study clusters or TPD Allocation Groups contain both Applicable Resources and other projects.

IIsues with the concept

The CAISO has clarified that any new policy like the one proposed would only apply under strong state direction.  LSA appreciates that clarification.  This principle would require the CAISO to clearly state the explicit state direction and objective relied on for each application of the concept.

LSA continues to believe that application of this policy should include consideration of alternative approaches for achieving these policy goals, such as CPUC directions to jurisdictional LSEs to contract for Applicable Resources earlier.  If those resources have PPAs, they can qualify for high-priority positions in the CAISO’s TPD Allocation process under current rules in the areas where the additional capacity enables additional deliverability, without any special treatment in the Interconnection Study or TPD Allocation process.

For example, PPAs can be executed even before study data are available, subject to later study results.  If the later studies find that upgrades exceed the specified limits, the developer or off-taker can agree to absorb the additional amount, or the contract can be canceled.  This type of structure can be used to enable earlier LSE contracting with Applicable Resources, so preferences in the TPD Allocation or Interconnection Studies processes are not needed, and it is not that unusual in other jurisdictions.

If the CAISO implements a preferential policy, LSA appreciates the CAISO’s further clarifications that the capacity approved for Applicable Resources can be used for other resources:

• To the extent that it exceeds capacity needed for the Applicable Resources.  Transmission projects are “lumpy” and/or can enable capability elsewhere in the system from Applicable Resource location.  That additional capability should be made available to other resources.

• On a temporary basis, until the Applicable Resources are constructed and operating – e.g., to enable Interim Deliverability, or earlier interconnection than would otherwise be accommodated.  This temporary use can be especially helpful in the early years, when solar and wind resources will still retain significant RA value under ELCC, exceedance, or other counting methodologies that may be adopted.  LSA notes, however, that such interim use would not facilitate development of other resources, only enable those already under development to receive deliverability somewhat sooner.

The CAISO should be required to specifically state, and update annually, estimates of capacity available to others in these two categories for upgrades approved pursuant to this policy, to provide assurance that the policy is only applied to the extent needed and does not unduly restrict access by others to approved transmission capability.

Finally, LSA strongly believes that this policy should apply only to new approved CAISO system capacity, for the specific purposes that the approval was based.  LSA is disturbed by the CAISO’s statements in the stakeholder meeting (e.g., Slide 27 of the meeting presentation) that this policy could apply to capacity enabled by previously approved transmission projects not approved only for Applicable Resources.  Those statements seem inconsistent with the concept, and projects already in the queue are depending on that capacity to acquire or retain their deliverability.  It would be highly inequitable for the CAISO to effectively change that purpose after the fact.

Implementation feasibility

Generally, as explained further below, LSA is concerned that some of the new capacity may be set aside for Applicable Resources that may not eventually materialize, or may not materialize in the locations where the CAISO has assumed (and has planned transmission to accommodate them), especially given the longer time horizon proposed in this initiative.  There should be a process for ongoing review of approved transmission projects that would allow for “release” of this capacity to use by other technologies, using transparent criteria and timing.

The Straw Proposal does not adequately explain the mechanics of how this policy would be applied, for either CAISO-area or imported Applicable Resources. 

With respect to CAISO-area Applicable Resources, Policy-Driven Upgrades approved in the TPP could enable interconnection and/or deliverability of Applicable Resources, i.e., would seem to apply to both TPD Allocations and also to Interconnection Studies (including annual Reassessments), and not just the former.  However, most of the discussion in the Straw Proposal and at the stakeholder meeting continues to concern only the TPD Allocation process. 

In both Interconnection Studies and TPD Allocations, will the CAISO use different base cases and studies for Applicable Resources vs. other resources?  How would these analyses be performed where Applicable Resources and other resources are in the same study cluster?

Finally, how will the CAISO implement its commitment to allow the “extra” capacity in upgrades approved through this policy (see above) to be available to others?  Will only portions of such upgrades be included in the base cases of studies and allocations for other resources?

With respect to imported Applicable Resources, there are several areas of significant uncertainty.  It seems like the new policy would enable additional imports of Applicable Resources through:

• Approving additional Maximum Import Capability (MIC) along transmission paths connecting to the expected intertie points for these imported resources; and

• Reserving the additional MIC only for CAISO-area LSEs having PPAs with those resources. 

As with the TPD Allocation and other internal processes, LSA requests that the CAISO better describe the mechanics of this process for imports.

The CAISO may approve MIC to accommodate wind or geothermal imports, but the capacity in the transmission that are eventually built could be used for other resources.  For example, many of the areas with high wind-energy potential – one resource cited as an Applicable Resource – also have significant solar potential.  Will the CAISO allow the MIC approved to accommodate Applicable Resources to be used for other resources imported over the same transmission lines?

Given the above unresolved implementation details for both inside-CAISO and import Applicable Resources, LSA recommends that the CAISO also take one of these courses of action, if it proceeds with this policy:

• Address these implementation details in this initiative, delaying adoption of the policy if necessary (a feasible path, given the proposed longer timeline for draft and final Transmission Plans).

• Address these implementation details through a follow-on workshop or similar forum, once this initiative is concluded.

4. Please provide additional comments your organization has on the transmission planning process enhancements initiative.

 LSA has no further comments at this time.

1. Please provide your organizations comments on adjusting the timeline for the release of the draft transmission plan from the end of January to the end of March, targeting approval in each year’s May Board of Governors meetings.

REV Renewables (REV) supports including this issue in scope. REV agrees it may be necessary to change the timeline for approval of the final plan in order to allow for sufficient time to conduct analysis for the plan. However, given the quick turn around between March and May of the draft final plan and voting, REV suggests that CAISO provide a stakeholder call in January to provide an update on any changes in analysis and conclusions.

2. Please provide your organizations comments on enabling approvals for major long lead time transmission projects needed beyond the current 10 year planning horizon.

REV continues to support enabling approvals for major long lead time transmission projects needed beyond the 10-year planning horizon. California has significant energy resource needs in order to meet its 100% clean energy goals and, given the long timelines for planning and constructing transmission projects, it necessary to start planning early to bring the transmission and resources online in a timely manner.

3. Please provide your organizations comments on retaining policy-driven transmission upgrade capacity for the specific policy purpose for which it was developed.

REV continues to support proactive transmission planning for policy-driven upgrade needs since transmission availability will be an important part of enabling California to meet its clean energy goals. REV requests more clarity on specific criteria that CAISO proposes to use to retain policy-driven transmission capacity. REV maintains that transmission capacity development should be technology neutral for any project that can help meet the state’s clean energy goals, and CAISO should not withhold any capacity for specific projects. If capacity is reserved for specific resource types, it may result in underutilization of transmission capacity and ratepayer assets.

In particular, REV is concerned that CAISO would consider applying this policy to existing transmission as well as new capacity. If CAISO moves forward with this position, REV suggests transparent criteria for deeming an existing transmission resource a policy asset, and that any projects currently in the interconnection queue be given priority to the policy need.

REV also requests more information about the time duration for which the capacity would be held by resource types (CAISO noted it would be different for “very long-lead time resources” compared to other resources but does not specify what that includes). REV also notes, depending on the time duration recommended, starting the clock from when the transmission resource is online may be too long. A transmission project may take 5-10 years to come online, and resources could start planning their projects shortly after the transmission project is approved. Adding time on top of the transmission online date, e.g. seven years for long-lead time as noted in the straw proposal, could allow 12-17 years for projects to come online, which may be excessive depending on the resource.

4. Please provide additional comments your organization has on the transmission planning process enhancements initiative.

 REV has no further comments at this time.

1. Please provide your organizations comments on adjusting the timeline for the release of the draft transmission plan from the end of January to the end of March, targeting approval in each year’s May Board of Governors meetings.

none

2. Please provide your organizations comments on enabling approvals for major long lead time transmission projects needed beyond the current 10 year planning horizon.

Generally SDG&E supports CAISO's proposal for approval of long lead time transmission, which is one of the keys to reaching the state's clean energy goals. However, SDG&E believes that CAISO has enough information to approve these projects in the current TPP cycle. The longer term load forecast (currently the High Electrification Sensitivity Scenario), cases, mitigation can all be accommodated in the current process.

SDG&E agrees with "ADMINISTRATIVE LAW JUDGE’S RULING SEEKING COMMENTS ON ELECTRICITY RESOURCE PORTFOLIOS FOR 2023-2024 TRANSMISSION PLANNING PROCESS" (https://docs.cpuc.ca.gov/PublishedDocs/Efile/G000/M497/K509/497509406.PDF), where it is stated that:

The July 1, 2022, letter recommendations were intended to encourage the CAISO to consider identifying transmission needs, not only from study of the 38 MMT base case, but also from the study of the 30 MMT sensitivity, for approval within the 2022-2023 TPP. Using both the base case and the sensitivity will give CAISO a broader set of information from which to consider transmission investments. And, considering that the 30 MMT High Electrification sensitivity passed to 2022-2023 TPP is very similar to the 30 MMT HE portfolio proposed above as the 2023-2024 TPP base case, CAISO staff may be able to get a “head start” on identifying any associated transmission needs by considering the results of the 30 MMT High Electrification sensitivity in making transmission investment recommendations to its board in the 2022-2023 TPP cycle.

SDG&E also points out that there is broad industry-wide support to approve long lead time transmission as soon as possible as seen in the discussion put forth in FERC's transmsision planning/cost allocation NOPR process (https://www.ferc.gov/media/rm21-17-000). 

3. Please provide your organizations comments on retaining policy-driven transmission upgrade capacity for the specific policy purpose for which it was developed.

None

4. Please provide additional comments your organization has on the transmission planning process enhancements initiative.

None

1. Please provide your organizations comments on adjusting the timeline for the release of the draft transmission plan from the end of January to the end of March, targeting approval in each year’s May Board of Governors meetings.

Support.

2. Please provide your organizations comments on enabling approvals for major long lead time transmission projects needed beyond the current 10 year planning horizon.

Support.

3. Please provide your organizations comments on retaining policy-driven transmission upgrade capacity for the specific policy purpose for which it was developed.

SEIA is generally supportive of the conceptual proposal to withhold transmission capacity from policy-driven transmission upgrades to support the policy for which the upgrade was developed but is concerned with the lack of implementation details provided here. Based on the proposal as written, SEIA understands that transmission capacity built to support the policy-driven development of specific resources will be withheld for that specific resource type, but CAISO is less clear on implementation of the carve-out for public policy capacity that supports CPUC portfolio resources. How will CAISO determine the resource type eligible for the carve-out if the state policy motivating a public policy transmission solution does not call out a specific resource type? Will the transmission capacity go to the resource type that “triggers” the need for the upgrade? How will CAISO make that determination? Will the portfolio resources deemed undeliverable have access to the upgrade capacity? Will resources currently in the queue be eligible for this transmission capacity and, if so, how will they be treated against new interconnection requests? When and how will excess capacity be released to resources not included in the specific state policy?

SEIA believes the implementation details for this proposal are crucial to its success and effectiveness. It is hard to evaluate this proposal as it is written given the lack of those details. SEIA recommends that CAISO break-out this component of the proposal and further develop the implementation details through the stakeholder process prior to writing the draft final proposal. 

4. Please provide additional comments your organization has on the transmission planning process enhancements initiative.

No additional comments.

1. Please provide your organizations comments on adjusting the timeline for the release of the draft transmission plan from the end of January to the end of March, targeting approval in each year’s May Board of Governors meetings.

The Six Cities do not oppose the proposed changes to the timing of these steps in the Transmission Planning Process. 

2. Please provide your organizations comments on enabling approvals for major long lead time transmission projects needed beyond the current 10 year planning horizon.

The Straw Proposal on this topic does not include enough detail to enable stakeholders to fully assess the CAISO’s proposal.  The Six Cities continue to urge the CAISO to provide more information concerning the criteria that will be used to approve transmission projects that are needed beyond the current ten-year planning horizon and are determined to have long lead-times.  The Six Cities are not necessarily opposed to the CAISO’s proposal to implement within the Transmission Planning Process Business Practice Manual changes to address the need for long lead-time projects that meet projected requirements outside of the standard planning horizon, but request that the CAISO identify key elements of its proposal within this initiative (as opposed to the BPM change management process).  Such elements include, for example, how long lead-time projects will be identified; what criteria will be used to assess needs beyond ten years; what study information is needed to assess longer term needs; how the results of studies discussing needs beyond ten years will be provided to stakeholders and addressed in the CAISO’s Transmission Plan or other documents; what stakeholder input will be considered and when; the extent to which previously-approved long lead-time projects may be reevaluated; and any other criteria or conditions that might be applicable to both the identification of post-ten-year requirements and any projects necessary to address those long-term needs.  The CAISO’s clarification that it will “work with” relevant state agencies (i.e., the CPUC and the California Energy Commission) to address input assumptions beyond ten years and the development of forecasts and input assumptions (see Straw Proposal at 7) is constructive, but, once again, the proposal is thin on the details of this anticipated process.

3. Please provide your organizations comments on retaining policy-driven transmission upgrade capacity for the specific policy purpose for which it was developed.

The Six Cities remain concerned about this element of the Straw Proposal, and that is in part because the CAISO has not addressed the Six Cities’ previous comments on this topic.  As outlined in their comments on the Issue Paper, regulatory authorities other than the CPUC direct resource procurement within California.  This includes the local regulatory authorities for each of the Six Cities, for example.  The Six Cities are concerned that if the CAISO advances its proposal to reserve transmission capacity (including deliverability) for policy-driven projects identified by the CPUC (which does not have jurisdiction to oversee the Six Cities’ procurement activities), the ability of the Six Cities to obtain transmission capacity and deliverability for resources that they identify as necessary to meet their own resource adequacy and/or energy requirements may be reduced.  In particular, the CAISO should consider whether the policy portfolios provided by the CPUC (which the Six Cities understand the CAISO will use to identify the resources necessitating capacity set-asides) reasonably reflect procurement approaches by non-CPUC-jurisdictional LSEs.  The Six Cities raised this comment in response to the Issue Paper, and the Straw Proposal does not address it.

Relatedly, the Straw Proposal does not address how and for whom the capacity reservations will be set aside—namely, whether the reserved capacity will be allocated to resources directly or to LSEs for use in their procurement activities.  Given that CAISO transmission customers, which are generally LSEs, ultimately pay for the cost of any new CAISO transmission infrastructure or required upgrades through the Transmission Access Charge, allocating capacity set-asides to resources is likely inappropriate.  If allocated to LSEs, would the allocations be on a pro rata basis or according to some other methodology? 

The proposal likewise fails to clarify what type of resources (or resource procurement) will result in capacity set-asides.  For example, the CAISO explains that the proposal should be “targeted only to circumstances with a clear and direct public policy directive from an applicable state authority.”  (Straw Proposal at 8.)  It would be useful to clarify what constitutes an “applicable state authority” in this context; does this refer to legislative actions, CPUC authorizations for procurement, or something else?  And, as noted above, how is non-state-directed procurement addressed in this proposal?  As another example of where added clarity concerning eligibility is needed, in response to comments regarding the resources that may be associated with capacity set-asides (see id.), the CAISO agrees that any set-asides should be technology neutral, opines about how the CAISO would like regulatory agencies to define public policy projects, and concludes that it is “appropriate to specify resources as specifically as they are defined in state policy.”  If the CAISO’s proposal is to set aside capacity for all of the resources in a portfolio based on the results of policy studies each year, how will the CAISO address year-over-year differences in the underlying CPUC portfolios and account for any prior year procurement by LSEs?  Additionally clarification concerning what the CAISO’s proposal is and how it will be implemented is necessary. 

Finally, the Six Cities ask that the CAISO provide more information regarding how the CAISO will account for transmission capacity set-asides within its interconnection and deliverability allocation processes and whether the CAISO foresees any interaction of the proposed set-asides with the calculation and allocation of Maximum Import Capability.    

The next iteration of the CAISO’s proposal in this initiative should include comprehensive and detailed information and examples regarding this topic.  Absent significant additional detail, this topic may not be ready for inclusion in a Draft Final Proposal. 

4. Please provide additional comments your organization has on the transmission planning process enhancements initiative.

The Six Cities have no additional comments at this time.

1. Please provide your organizations comments on adjusting the timeline for the release of the draft transmission plan from the end of January to the end of March, targeting approval in each year’s May Board of Governors meetings.

Vistra supports the CAISO proposal.

2. Please provide your organizations comments on enabling approvals for major long lead time transmission projects needed beyond the current 10 year planning horizon.

Vistra conceptually supports the proposal. Vistra requests the CAISO:

• Provide more details in the next iteration on how the CAISO would identify that a transmission expansion project would take more than ten or more than fifteen years to obtain the necessary approvals and complete the project.
• Discuss in more detail how the proposal may be useful to advance a process consistent with that in the FERC Notice of Proposed Rulemaking on transmission as discussed in more detail below.
• Confirm the CAISO position on Vistra’s concern that there could be an incentive structure to preference recommending longer lead time projects at the expense of shorter lead time projects needed for nearer term needs.

The FERC Notice of Proposed Rulemaking on Building for the Future Through Electric Regional Transmission Planning and Cost Allocation and Generator Interconnection[1] (“NOPR”) proposes a long term scenario requirement that would:

“Propose to require that public utility transmission providers: (1) use a transmission planning horizon no less than 20 years into the future in developing Long Term Scenarios and reassess and revise those scenarios at least once every three years; (2) incorporate a set of Commission-identified categories of factors that may affect transmission needs driven by changes in the resource mix and demand into their Long Term Scenarios; (3) develop a plausible and diverse set of at least four Long-Term Scenarios; (4) use “best available data” (as defined in the Specificity of Data Inputs section below) in developing their Long-Term Scenarios; and (5) consider whether to identify geographic zones with the potential for development of large amounts of new generation.”[2]

Vistra believes the CAISO proposal in this effort is consistent with the long term scenario requirement, while preparing for such a requirement in advance through establishing a process around which types of projects would be advanced in the longer planning horizon.

We request the CAISO further develop the details on this proposal and make space for a discusson on whether its process is aligned or diverges from the more details proposed requirements in the NOPR. For example, the specificity of data inputs requirement reference above states:

“We propose to require that public utility transmission providers use “best available data inputs” when developing Long-Term Scenarios. By “best available,” we do not imply that there is a single “best” value for each data input that public utility transmission providers must use, but rather that best practices are used to develop that data input. We propose to define “best available data inputs” as data inputs that are timely and developed using diverse and expert perspectives, adopted via a process that satisfies the transparency planning principle described above,  and that reflect the list of factors that public utility transmission providers must incorporate into Long-Term Scenarios…We propose to require that public utility transmission providers in each transmission planning region update all data inputs each time they reassess and revise, as necessary, their Long-Term Scenarios, which, as explained above, we propose to require they do at least every three years.”[3]

Vistra believes that the CAISO straw proposal is initially consistent with the data specificity requirement by proposing to use California Energy Commission’s current Integrated Energy Policy Report forecasts which look out fifteen years, and they could be used along with a base portfolio from the CPUC that will also look out fifteen years starting with the 2023-2024 Transmission Planning Process Portfolios[4]. However, the NOPR if approved for these requirements will require the data and portfolios to be expanded to at a minimum a twenty year timeframe. We understand this proposal to be able to scale out to the minimum twenty-year scenario horizon if it is adopted, although that will require additional work on CEC and CPUC side to expand their horizons. Vistra asks the CAISO to confirm our understanding that this proposal will initially be to study a 15 year horizon and if NOPR is adopted to work with the state agencies to develop the inputs to scale this proposal up to a twenty year study horizon.

Our single concern with the proposal is that it has the potential to create an incentive to favor long lead time expansion projects over shorter lead time projects. We are concerned that consumers’ appetite for transmission costs associated with recommended projects could put pressure on the CAISO to feel it needs to balance trade-offs between overall costs and which projects to approve, in which case we believe shorter term projects addressing nearer term needs should not be overlooked in light of desire to recommend longer lead projects. We respectfully ask the CAISO to confirm that it shares this principle or clarify in the alternative. We further ask that CAISO explain how it will ensure that recommending long lead time expansion projects do not result in failing to recommend shorter lead time expansion projects that will more expeditiously unlock deliverability benefits.

[1] Building for the Future Through Electric Regional Transmission Planning and Cost Allocation and Generator Interconnection, Docket No. RM21-17-000,         179 FERC ¶ 61,028, April 21, 2022.

[2] Id at Page 82.

[3] Id at Paragraph 130, 131, and 132.

[4] ALJ Fitch Ruling Seeking Comments on Electricity Resource Portfolios for 2023-2024 Transmission Planning Process, Rulemaking 20-05-003, October 7, 2022, Page 4, https://docs.cpuc.ca.gov/PublishedDocs/Efile/G000/M497/K509/497509406.PDF.

3. Please provide your organizations comments on retaining policy-driven transmission upgrade capacity for the specific policy purpose for which it was developed.

Vistra opposes the CAISO proposal as it has been proposed. The CAISO proposal would require a process that is very complex to identify the “policy resources” that the transmission capacity should be retained and prone to dispute because these policy resources change on an annual basis as the state revises and updates the portfolios.

The transmission capacity available to be allocated to interconnection projects is the result of the combination of transmission upgrades triggered by prior clusters socialized across the groups conditionally assigned those upgrade costs, upgrades triggered by and self-funded by individual interconnection projects, and all transmission projects recommended by the Transmission Planning Process across any reliability, policy, or economic projects. The aggregate impact of the combination of any advanced projects results in the transmission capacity available for the commercial operation date a project is seeking. It is extremely hard to separate out from the available transmission capacity the portion of that capacity to which the policy resources are associated. The complexity of this task becomes more prone to error because these portfolios change annually.  Further, FERC’s transmission planning NOPR would require CAISO to use multiple scenarios to identify the equivalent of policy-driven projects.  The scenarios will help identify “least regrets” projects that are not associated with any specific scenario. This will further complicate the identification of specific policy resources driving specific transmission projects,

If CAISO were able to address the technical challenges of identifying policy-driven projects, this proposal could transform the technically focused busbar mapping process into a much more commercially relevant process.  Presumably, one method of implementing this proposal would deem a generation or storage project a policy-driven project based on whether the project was at a busbar that was part of the portfolio studied in the transmission plan.  Project developers would thus have a very strong incentive to litigate the busbar mapping process.  The current busbar mapping process would thus likely need substantial revisions to address what would become legitimate concerns by project developers that their projects not be commercially disadvantaged.

Vistra respectfully requests the CAISO not move forward with this proposal. Vistra encourages the CAISO to provide for use of open seasons or other comparable tools to elicit concrete commitments from interconnection customers, ideally using a structure where developers put “skin in the game” in exchange for rights to newly created transmission capacity to facilitate its interconnect with full capacity deliverability status. This is an approach that will better ensure that the projections for new generation, which could be the basis for tens of billions of dollars of transmission grid investment, are as solid as possible. Vistra strongly agrees with Golden State Clean Energy in its comments on the CAISO’s issue paper, stating:

“Reserving transmission through a subscriber-based model, in contrast to transmission funded through the TAC, has proven permissible while still respecting open access principles. A subscriber-based model is more in line with CAISO’s discussion of withholding transmission service, so CAISO should examine how a subscriber-based model can be part of a solution here. CAISO has recently proposed to implement a new subscriber-based PTO model to facilitate the TransWest Express Transmission Project, which creates a timely opportunity to discuss more broadly how a subscriber-based PTO model could fit within CAISO transmission planning.”[1]

Vistra supports Golden State Clean Energy and joins its encouragement that the CAISO should propose an open season as a solution to this problem in our Transmission NOPR initial comments[2]. Like merchant transmission, the CAISO could hold an open season to assess commercial interest in the transmission project, and a willingness to pay, for new interconnection capacity within the identified region. In California, there are challenges with the existing process because transmission was developed in anticipation of resource development, but without a firm plan for how the new interconnection capacity would be allocated. We believe the proposal herein is attempting to address this issue. While Vistra agrees with the issue, we oppose the proposed solution.

Instead what is needed is a means by which a financial commitment to pay for required network upgrades can be made to obtain deliverability rights which then allows the market, including potential PPA parties, to engage with the generator that has assumed such obligation in return for the deliverability rights. One option for confirming the financial viability of long-term planned network upgrades would be to allow a planning region to incorporate a two-stage request for commercial interest and later interconnection open season process (also called subscriber model) for its long-term upgrades planned in support of resource development plans.

The planning entity would identify the zones requiring new transmission capacity to support new resource development and stair-step levels of MW increases in transmission system deliverability that could be planned. Generation resources would then be invited to submit valid commercial expressions of interest in the increased transmission capacity. This step would be similar to the requests for interests used in merchant transmission development. This initial information input can serve to (1) test and establish the scale of the interest of developers that are part of changing the resource mix, and (2) assess the benefits to developers (and their customers) of building in particular locations. Thereafter, upon identification of a specific set of network upgrades, a commercial open season could be instituted by which all or a portion of the rights to new transmission capacity are allocated via an open, nondiscriminatory open season process. Similar to merchant transmission projects, customer acquiring such rights would be obligated to pay for their relative share of the upgrade costs. Further, open season awards would fairly allocate the costs of the network upgrades to generators that see, and realize, a value in that investment.

The proposed combination of a Request for Interest (RFI) for initial evaluation of commercial interest followed by later allocation of interconnection rights via an open season would address two key elements of effective planning. An RFI ensures that the consideration of new generation development in the transmission planning process is well informed by commercial realities and the generation development market to the greatest extent possible. Likewise, an open, non-discriminatory auction of interconnection rights mirroring the Commission’s merchant transmission precedent provides for an efficient realization of planned transmission capacity and just and reasonable cost allocation. This will help ensure that regional transmission planning does not result in unduly high transmission rates as a result of overbuilding transmission infrastructure, or cause transmission infrastructure to be developed in locations that do not in the end support commercially viable generation siting. Further, utilization of RFIs and open seasons will increase generation input and engagement at the planning stage in a manner that does not distort the efficient operation of the competitive generation development market, which will be implementing the investments needed to realize the anticipated “changes in the resource mix.”  Finally, an open season would effectively reserve interconnection capacity for the policy-driven generation and storage projects for which interconnection capacity was developed.

Vistra believes the CAISO use of the PJM Order takes the FERC order out of context of the nature of how California state policy inputs to the TPP are developed as generic resources rather than by identifying specific projects. CAISO cites the FERC orders statement:

“Other generators are not similarly situated to those designated by New Jersey because only the latter address New Jersey’s Public Policy Requirements under the State Agreement Approach. As result, it is not unduly discriminatory or preferential for New Jersey, via NJ BPU, to exclude generators from the set of “future users” considered in the cost sharing provision.”[3]

New Jersey state action was different than the use of a planning portfolio with generic resource expansion and instead the state identified specific interconnection projects directly. Given the difference in the facts and circumstances that FERC would consider in any filing supporting this proposal and the PJM filing, Vistra does not believe the PJM order sets a presumptive precedence. Instead, the CAISO will need to defend any proposal is not unduly discriminatory or unduly preferential, which will be difficult with the proposal as it stands. Further, The PJM State Agreement Approach approved by FERC released withheld interconnection capacity after a defined period if it remained unutilized.  We urge the CAISO to revise the proposal to an open season, subscriber-model, or comparable tool to avoid these challenges.

If against Vistra’s encouragement, the CAISO moves forward, CAISO must at a minimum provide clear business process details for this proposal. These details should describe how:

• If CAISO will try to carve out existing transmission capacity available today how the amount associated with the “policy resources” could be identified and what policy portfolio or combination of portfolios it would be using to associate with existing capacity.
• How the CAISO will identify the incremental transmission capacity made available solely due to the policy portfolio triggering a recommended project due to policy studies while ensuring any incremental transmission capacity from reliability or economic driven projects are not erroneously included in that estimate.
• How the CAISO will identify the eligibility for resources to access this carved out transmission capacity when it is competing for Transmission Plan Deliverability.
• What methodology will the CAISO implement on an annual basis an adjustment to the eligible policy resources and the policy driven transmission capacity being carved out for those projects for use in the next transmission plan deliverability process.
• The time period after which unused deliverability will be made available to non-policy designated resources.

We strongly encourage the CAISO to avoid the need to develop these details and instead move forward the open season, or subscriber model.

[1] Comments on CAISO Transmission Planning Process Enhancements Issue Paper, Golden State Clean Energy, August 4, 2022, https://stakeholdercenter.caiso.com/Comments/AllComments/f805b201-1605-4058-8322-8e57f18f28ca#org-63f7693c-38f8-4117-a12a-7dcec8916935.

[2] Comments of Vistra Corp., RM21-17-000, August 17, 2022, https://elibrary.ferc.gov/eLibrary/filedownload?fileid=45A5B320-C13F-CFD0-A657-82AD8C200000.

[3] Order Accepting Agreement, Docket No. ER22-902-000, 179 FERC ¶ 61,024, Paragraph 46, https://www.pjm.com/directory/etariff/FercOrders/6280/20220414-er22-902-000.pdf.

4. Please provide additional comments your organization has on the transmission planning process enhancements initiative.

Vistra has spent time analyzing the Transmission Economic Assessment Methodology used in the CAISO economic studies. We do not believe detailed aspects of the TEAM as implemented today is academically sound and have identified a few specific areas for improvement.

We provide two examples of issues we observe:

• Generators are being flagged as utility owned generation in the TEAM methodology that are not utility owned generation – we know this because we are a competitive power provider and we own assets being flagged erroneously this way.
• All congestion revenues are being treated as a benefit to loads, which is inaccurate because a portion of those congestion rents are allocated out to congestion revenue right holders due to the auction above and beyond what congestion revenue rights were allocated to loads through the allocation, this is overestimating the congestion revenue benefits in the TEAM calculation.

We provide these two examples to illustrate to the CAISO that its Transmission Planning Enhancements need to include a review of the economic study methodologies as well including TEAM. We would like to partner with CAISO and stakeholders to improve the economic study methodologies going forward to support economic projects that benefit the system.