CAISO Imbalance Charges means the CAISO Charges, costs andpenalties, set forthin EXHIBIT G, that are assignedby the CAISO to the CAISO GlobalResourceIdentificationNumber(s) for the Generating Facility. The Six Cities take no position on this aspect of the DAME second revised straw proposal at this time. 4. Regarding the mitigation of imbalance reserve bids, Bonneville struggles to understand the need for mitigation when resource adequacy resources are required to bid in $0 during the transition period. CAISOs statement that requiring imbalance reserves to be registered15-min dispatchable will attract additional 15 minute bid import schedules is a flawed assumption. . PPC believes this is a topic that will grow in importance as the grid continues to transition away from traditional dispatchable resources to meet capacity needs. WPTF believes applying a bid cap equal to that of spinning reserves rather than applying mitigation using the local market power mitigation mechanism will provide the following benefits: As summarized by the CAISO at the beginning of this effort, one of the objectives of this market design change is to come out of the day-ahead market better situated going into real-time in a way that it has sufficient energy to meet uncertainty and granularity differences. Shell Energy urges the CAISO to provide a counterfactual case with respect to need for DAME without EDAM. WPTF believes the answer to this requires an understanding of the existing RA program rules, which have not been summarized nor described well thus far within this initiative. CAISO began the western EIM in the fall of 2014 with PacifiCorp as the initial cooperating entity. Also in light of EDAM, we believe the CAISO must consider two possible futures - one with and one without EDAM - and that there are fundamental design differences based on whether EDAM moves forward. Resources with energy costs above the real-time energy bid cap will need to incorporate the financial risk of being subject to the real-time cap into their imbalance reserve up and reliability capacity up bids. The CAISO has indicated that the resource adequacy requirements will have to ensure that resource adequacy resources provide sufficient imbalance reserve capacity bids to meet the imbalance reserve requirements. Additional details are needed to better assess the application of the Dynamic Competitive Path Assessment (DCPA) formulation in RUC. D.21-07-014 Decision on Track 3B.2 Issues, pp. CESA acknowledges and supports the CAISOs decision to modify the schedule of DAME in order to align with the EDAM initiative, thus removing the need for the contentious transition period in which IR-eligible resources would have been required to submit $0 IR bids. CAISO also operates an Energy Imbalance Market (EIM), which currently includes CAISO and other balancing authority areas in the western United States. The Six Cities would not opposemodification of the residual unit commitment process to include procurement of downward flexibility as a standalone modification. Respectfully, SDG&E opposes the DAME initiative, but with caveats. It is unclear whether these two things are possible or true. In view of the fact that most of Californias energy requirements are met through transactions in the CAISOs Day-Ahead Market, it is critical that any proposals for significant modifications to the current Day-Ahead Market design appear likely to provide benefits that exceed the costs and complexities of implementation and avoid creating unintended consequences or opportunities for extracting payments that exceed the value of services actually provided. On April 30, 2021, FERC accepted the California Independent System Operator Corporation's ("CAISO") submission of two proposals to revise its Tariff to amend provisions for its Energy Imbalance Market ("EIM"). For example, how would the IRU/IRD constraints shown in Figure 7 work for a limited duration resource, would the storage resource be subject to any bidding or dispatch restrictions leading up to the award hour(s)? MRP also supports the CAISOs proposal for using deployment scenarios to ensure IRU deliverability. Lindsey Schlekeway (Lindsey.schlekeway@pacificorp.com). [16] The CPUC also requires contract lengths of at least ten years for most resources procured to meet Integrated Resource Planning (IRP) targets. Please see the comments linked in question 1. [1] Testimony of Jeff Billinton On Behalf of the California Independent System Operator, Rulemaking (R.) 20-11-003, Jan. 11, 2021, Table 2 at 12. CAISOs previous proposal called for a single MPM pass prior to IFM that would mitigate energy, imbalance reserve, and reliability capacity offers. Thus a resource may price the risk into the IRU capacity offer only to have it mitigated to a level that no longer reflects that risk; the mitigation of the IRU offers essentially makes the CAISOs solution to the real-time energy bid cap ineffective. We support a path forward where the benefit of imbalance reserves can be realized without jeopardizing the viability of the CRR market. This is a positive development, but it puts additional pressure on setting the IR requirements appropriately. WPTF would like to better evaluate and discuss if it makes sense to use a local market power mitigation test based on transmission congestion to identify the ability to exercise market power in a capacity product. The CAISO should proceed cautiously with new market power mitigation measures and draw upon previous FERC determinations of appropriate market power mitigation measures. Eliminating the RA RT MOO in conjunction with the potential for coming out of the day-ahead market with less than 100% of IRU/IRD procured will only likely result in additional out of market actions. [4] The amount of IRU/D and RCU/D RA resources must offer is not discussed in the current Proposal. As Bonneville noted in that initiative, Bonneville markets wholesale power from the energy-limited FCRPS to meet preference load, risk-adjusted marketing objectives for surplus power, and reliability obligations in its BAA after meeting non-power constraints. We support the use of a quantile regression approach for determining the imbalance reserve requirements and request more detail regarding the specifics of the calculation. SRP requests that these questions be answered in the next version of the second revised straw proposal and discussed at an upcoming initiative meeting. Additionally, if RA resources are relieved of their must offer obligation after the day-ahead, the CAISO market would not receive the full benefit of having all resources and their attributes that have already been paid for available to meet grid needs. 12-15. We also believe additional discussion is warranted regarding whether or not the 15-minute eligibility should be a configurable parameter rather than in the Tariff. CAISO has proposed to procure the full Imbalance Reserve requirement rather than utilize a demand curve which would procure Imbalance Reserves based on the probability the capacity is needed in real-time. However, the CAISO should include stakeholders in a re-evaluation of the products and any other implemented changes. Initially the thought was this impact would be minimal - which is the same justification the CAISO is providing in this initiative. This leaves the resource with only 10 MWs of remaining capacity. In its second set of EIM enhancements, CAISO proposed to allow EIM participants the option not to have CAISO settle unaccounted for energy within an EIM participants BAA, which results in a charge or credit to the affected EIM entity and can cause potential cost shifting in an EIM entitys unaccounted for energy settlement. Only flexible RA capacity must submit economic offers. The past implementation challenges of flexible ramping products in real-time have emphasized the need for avenues to discuss future improvements in the same forum used to discuss the need for market enhancements. RC up ensures additional capacity is committed to cover the CAISOs forecast of demand if the IFM clears below that forecast. The Six Cities support the proposed EIM Governing Body advisory role classification. Participating in bid-offer-recommendation engine for reserve/price prediction in ERCOT, CAISO. [1] The transition period would last from fall 2022 until the EIM entities are able to procure the products, possibly January 1, 2024. PGP would like CAISO to consider lifting this exclusion for days when there is a Flex Alert in place, which will ensure that all resources are able to supply RCU and IRU when they are most needed for reliability. CAISO has stated the Imbalance Reserves are an important component of EDAM and the product increases the benefits of EDAM. The CAISOs third revised straw proposal includes several mitigation-related rules for imbalance reserves, and reliability capacity offers and imposing a real-time energy bid cap associated with imbalance reserve awards. The California Public Utilities Commission (CPUC) estimates that LSEs perform forward contracting at least three years ahead for about 61% of expected RA needs. Load-serving entities (LSEs) would be double-charged for those services through payment of the RA contract, which assumes a zero-dollar RUC payment requirement, and the CAISO market costs of procuring IR and RC at non-zero rates. The CAISO proposes to implement a real-time energy bid price cap on all resources that receive an imbalance reserve up or reliability capacity up award. Absent any additional details, WPTF is concerned that the current formulation will inherently underestimate the available supply of counterflow and thus lead to over-mitigation and increased Type I errors. And the proposed solution is then to mitigate capacity bids using an energy-based transmission flow mitigation process designed to identify local market power. [15] This means that roughly 24,627 MW worth of RA contracts are executed for service at least three years out. A better approach may be to explore whether there are ways to align configuration, eligibility and pricing of these products so that a direct deviation settlement would be possible. SEIA supports the CAISO proposal to create the Imbalance Reserve and Reliability Capacity products. PG&E appreciates the CAISO for continuing its efforts to improve the DAME proposal. Under the existing RA program, resources are procured to be available through real-time to serve California load. Transmission grid operator CAISO increased complexity to simplify the integration of renewables. Bonneville reiterates that the limitation on resources to submit only a single price offer for a single quantity for imbalance reserve capacity does not allow suppliers to offer imbalance reserves based on additional costs, including opportunity costs and/or transmission costs, as the amount of imbalance reserves offered increases. REV asks that the CAISO more fully explain its reasoning behind its expectation that IRU opportunity costs would perfectly match FRP opportunity costs such that it would be a double-payment to compensate resources for both products. If any of these scenarios are determined to be uncompetitive, energy bids will be mitigated. Although the Six Cities oppose most elements of the RUC revisions set forth in the Third Revised Straw Proposal for the reasons discussed in their response to Item 3 above, the Cities would not oppose modification of the RUC process to include procurement of downward flexibility. The current Proposal does not include any such estimation, though an earlier proposal implied the IRU requirement could be between 0 to 5,000 MW.[7]. DAME Straw Proposal, February 3, 2020, p. 39. If the CAISO moves forward with a real-time energy bid cap on all resources that receive an imbalance reserve up and reliability capacity up award, the CAISO should not also put those same resources at risk of having their availability bids mitigated. Please provide your organizations comments on Real-Time Market Ramp Deviation Settlement. If in real-time the variable energy resource can only generate 75 MW, the CAISO BAA is left short 25 MW or must procure 25 MW from another resource yet having paid a day-ahead capacity premium to the variable energy resource for output it could not realize. Any future default capacity bid calculations must accurately reflect opportunity costs for hydro resources. Under this scenario, the IFM market will hit the penalty parameter associated with the IRU/IRD products, signaling to the market that there was insufficient supply even though there was enough supply just priced at a point that seemed too high. 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