Addendum to Market Operations BPM Version 45

Due to Aliso Canyon gas-electric coordination initiative and the interim tariff revisions from June 2nd, 2016 through November 30, 2016. This Addendum will address the modificationto Version 45 of the Market Operations BPM as follows;

Number / Feature / Tariff Section Numbers / Effective Date / BPM section / Existing section in MO BPM / Modified section in MO BPM
1 / Make two-day ahead advisory schedules available with the clarification that they are not financially binding or operationally binding / 6.5.2.2.3 / 6/2/2016 / 6.4.6, 6.7.4 / See below / See below
5 / Modifications to STUC so that STUC does not use Day-Ahead bids of resources not scheduled in day-ahead that do not have a real-time market must offer obligation / 34.6 / 6/2/2016 / 7.7 / See below / See below
6 / Introduce a constraint as needed into the CAISO’s market processes to limit the affected gas area burn to a maximum or minimum / 27.11 / 6/2/2016 / 6.6.5 / See below / See below
7 / Special tariff to deem selected constraints uncompetitive / 39.7.2.2 / 6/2/2016 / 6.5.3 / See below / See below
10 / Clarification that it has authority to suspend virtual bidding in the event that the CAISO identified market inefficiencies / 7.9.2 (d) / 6/2/2016 / 2.5.2.4 / See below / See below

Number 1

6.4.6Publish Reports to Scheduling Coordinators

The following is a summary of the Day-Ahead reports available to SCs for online viewing after the DAM has completed its execution[1]:

Day-Ahead Generation Market Results – Schedules of all generating resources.

Day-Ahead Load Market Results – Schedules of both Participating Loads and Non-Participating Loads from the DAM.

Convergence Bid Clearing Results – Virtual Supply Awards and Virtual DemandAwards from the IFM.

Day-Ahead RUC Capacity – Incremental capacity amount committed or scheduled in the RUC, above the Day-Ahead Schedule.

Two Day-Ahead Residual Unit Commitment (RUC) Advisory Schedules – Advisory RUC schedules produced from the second trade day of the two Day-Ahead market run.

Day-Ahead Import/Export Schedules – Import and export Schedules from the DAM.

Day-Ahead Start-Up & Shutdown Instructions – Commitment instructions of all resources from the DAM.

Day-Ahead Ancillary Services Awards from accepted Bids and qualified Self-Provision – Awards for AS MW quantity, by AS type and resource from the DAM.

Day-Ahead MPM Results – Information about the “Mitigated” Bid that is used if the original Bid is modified in the MPM process. In addition the following MPM results will be published for informational purposes: LMPs at all PNodes and Apnodes with market resources associated with physical bids; shadow prices for all binding constraints; competitive path determination for all binding constraints; and reference bus identification.

Non-Participant Price Curves – Information on the Default Energy Bids supplied by an independent entity used in MPM. Day-Ahead Inter-SC Trades – Inter-SC Trade schedules for both Inter-SC Trades at Aggregate Pricing Nodes and Physical Trades , for both Inter-SC Trades of IFM Load Uplift Obligation and Ancillary Services from the DAM

Day-Ahead Resource Energy Prices – Resource-specific (LMPs and ASMPs).

Day-Ahead Resource Ancillary Service Prices – Resource- specific ASMPs.

Self-Provided AS Awards.

Day-Ahead Unit Commitments - Resources that are self-committed or CAISO committed by the IFM or RUC process in the Day-Ahead Market

Default RMR Minimum Load & Startup Cost Bid Curves - Independent entity-supplied default Minimum Load and Start-Up cost bid curves used in the Market Power Mitigation process. This applies to RMR units only.

Day-Ahead LMPs at all Pnodes for informational purposes.

Extremely Long-Start Resource Startup Instructions - Startup instructions resulting from the Extremely Long-Start Commitment (ELC) process.

Day-Ahead Reliability Must Run (RMR) Dispatches – RMR units that either have an energy schedule (from the IFM run) and / or an RMR dispatch

Conformed Dispatch Notice (CDN) - Summary of the Day-Ahead Energy Schedules, Ancillary Service Awards, RMR Dispatches, Competitive Constraint Run results of RMR resources. This is available on CMRI.

Shadow prices for the interties – Shadow prices for the interties are available in OASIS.

Volume of Virtual Awards - System wide total Virtual Supply Awards and Virtual Demand Awards

Maximum MW limit per Eligible PNode and EligibleAPNode– Maximum nodal MW limit used to apply the Position Limits to Virtual Bid

Hourly Prices due to Convergence Bidding for CRR Adjustment Report – Hourly LMP differentials between Day-Ahead Market and Real-Time Market used for CRR revenue adjustments caused by Virtual Bids under the CRR Settlement Rule.

Binding Transmission Constraints due to Convergence Bidding for CRR Adjustment Report – Provides listing and status of PNodes associated with transmission constraints and whether their binding constraints were due to Virtual or physical Bidding activity in IFM. This report provides support information for CRR revenue adjustments applied under the CRR Settlement Rule.

Flow Impact Due to Convergence Bidding for CRR Adjustment Report -Reports hourly MW flow contributions for transmission constraints impacted by SCs submitting Virtual Bids on behalf of a Convergence Bidding Entity that is also a CRR Holder. This report provides support information for CRR revenue adjustments applied under the CRR Settlement Rule.

Number 5

7.7Short-Term Unit Commitment

This section is based on CAISO Tariff Section 34.6, Short-Term Unit Commitment.

At the top of each Trading Hour, immediately after the FMM and the RTUC forthe same interval is completed, CAISO performs an approximately five-hour STUC run using SCUC and the CAISO Forecast of CAISO Demand to commit Medium Start Units and Short-Start Units with Start-Up Times greater than the Time Horizon covered by the FMM.

The Time Horizon (see Exhibit 7-1) for the STUC optimization run extends three hours beyond the Trading Hour for which the FMM optimization was run, and replicates the Bids used in that Trading Hour for these additional hours.

CAISO replicates Bids each time the hourly STUC is run by utilizing: (1) bids previously submitted in RTM by Scheduling Coordinator for that Trading Hour; or (2) the clean bid from the DAM if the resource has a Day-Ahead schedule or received a start-up instruction in RUC for the trading hour, or if the resource has a Real-Time must offer obligation for that trading hour, to utilize the most recently available Bids. A Start-Up Instruction produced by STUC is considered binding if the resource could not achieve the target Start-Up Time (as determined in the current STUC run) in a subsequent RTUC run as a result of the Start-Up Time of the resource.

A Start-Up Instruction produced by STUC is considered advisory if it is not binding, i.e., when the resource can achieve its target Start-Up Time (as determined in the current STUC run) in a subsequent RTUC run based on its Start-Up Time. A Start-Up Instruction produced by STUC that results in a change in Commitment Status is issued after review and acceptance of the Start-Up Instruction by the CAISO Operator, in accordance with Section 6.3 of the CAISO Tariff.

The STUC only de-commits a resource to the extent that resource’s physical characteristics allow it to be brought back online at the end of the Time Horizon. This requirement is needed because RTUC is unaware of future commitments that a resource may have beyond the Time Horizon.

STUC does not produce prices for Settlement. The STUC process only commits units needed for meeting Real Time imbalances. To the extent a unit is committed via STUC, a Start-Up instruction is provided to that resource (via ADS). Whether or not the resource is eligible for Start Up and Minimum Load Bid Cost Recovery is determined through a series of calculations described in the BPM for Settlement and Billing, Section 12.

Number 6

6.1

6.2

6.3

6.4

6.5

6.6

6.6.1

6.6.2

6.6.3

6.6.4

6.6.5Adjustment of Non-Priced Quantities in IFM

This section is based on CAISO Tariff Section 31.4, Uneconomic Adjustments in the IFM.

All Self-Schedules are respected by SCUC to the maximum extent possible and are protected from curtailment in the Congestion Management process to the extent that there are Economic Bids that can relieve Congestion. If all Effective Economic Bids in the IFM are exhausted, resource Self-Schedules between the resource’s Minimum Load and the first Energy level of the first Energy Bid point is subject to adjustments based on the scheduling priorities listed in Section 6.6.5.3.

Through this process, imports and exports may be reduced to zero, Demand Schedules may be reduced to zero, and Price Taker Demand (LAP Load) may be reduced. However, prior to reducing Load the following process is used to ensure that LAP Load is not reduced unnecessarily.

Market Parameter Values

This section provides the specific value settings for a set of ISO market parameters that are used for adjusting non-priced quantities in the market optimizations.

The parameter values are organized into three sections by market process: the Integrated Forward Market (IFM), the Residual Unit Commitment (RUC), and the Real Time Market (RTM). The parameters in these tables are also known in the jargon of mathematical optimization as “penalty factors,” which are associated with constraints on the optimization and which govern the conditions under which constraints may be relaxed and the setting of market prices when any constraints are relaxed. Importantly, the magnitude of the penalty factor values in the tables for each market reflect the hierarchical priority order in which the associated constraint may be relaxed in that market by the market software.

Integrated Forward Market (IFM) Parameter Values

Penalty Price Description / Scheduling Run Value[2] / Pricing Run Value / Comment
Market energy balance / 6500 / 1000 / Market energy balance is the requirement that total supply equal the sum of total demand plus losses for the entire system. In the IFM energy balance reflects the clearing of bid-in supply and demand; in the MPM component of the DAM it reflects the scheduling of bid-in supply against the ISO demand forecast.
Transmission constraints: Intertie scheduling / 5000 / 1000 / Intertie scheduling constraints limit the total amount of energy and ancillary service capacity that can be scheduled at each scheduling point.
Reliability Must-Run (RMR) pre-dispatch curtailment (supply) / -6000 / -150 / The ISO considers transmission constraints when determining RMR scheduling requirements. After the ISO has determined the RMR scheduling requirements, the market optimization ensures that the designated capacity is scheduled in the market.
Pseudo-tie layoff energy / -6000 / -150 / Pseudo-tie layoff energy is scheduled under contractual arrangements with the Balancing Authority in whose area a pseudo-tie generator is located.
Transmission constraints: branch, corridor, nomogram (base case and contingency analysis) / 5000 / 1000 / In the scheduling run, the market optimization enforces transmission constraints up to a point where the cost of enforcement (the “shadow price” of the constraint) reaches the parameter value, at which point the constraint is relaxed.
Gas-burn nomogram / 5000 / 1000 / In the scheduling run, the market optimization enforces gas-burn constraints up to a point where the cost of enforcement (the “shadow price” of the constraint) reaches the parameter value, at which point the constraint is relaxed.
Transmission Ownership Right (TOR) self schedule / 5900, 5900 / 1000, -150 / A TOR Self-Schedule will be honored in the market scheduling in preference to enforcing transmission constraints.
Existing Transmission Contract (ETC) self schedule / 5100 to 5900, 5100 to 5900 / 1000, -150 / An ETC Self-Schedule will be honored in the market scheduling in preference to enforcing transmission constraints. The typical value is set at $5500, but different values from $5100 to $5900 are possible if the instructions to the ISO establish differential priorities among ETC rights. For some ETC rights the ISO may use values below the stated scheduling run range if that is required for consistency with the instructions provided to the ISO by the PTO.
Converted Right (CVR) self schedule / 5500, 5500 / 1000, -150 / A CVR Self-Schedule is assigned the same priority as the typical value for ETC Self-Schedules.
Ancillary Service Region Regulation-up and Regulation-down Minimum Requirements / 2500 / 250 / In the event of bid insufficiency, AS minimum requirements will be met in preference to serving generic Self-Scheduled demand, but not at the cost of overloading transmission into AS regions.
Ancillary Service Region Spin Minimum Requirements / 2250 / 250 / Spinning reserve minimum requirement is enforced with priority lower than regulation up minimum requirement in scheduling run.
Ancillary Service Region Non-Spin Minimum Requirements / 2000 / 250 / Non-spin reserve minimum requirement is enforced with priority lower than spin minimum requirement in scheduling run.
Ancillary Service Region Maximum Limit on Upward Services / 1500 / 250 / In the event of multiple AS regional requirements having bid insufficiency, it is undesirable to have multiple constraints produce AS prices equaling multiples of the AS bid cap. An alternative way to enforce sub-regional AS requirements is to enforce a maximum AS requirement on other AS regions, thereby reducing the AS prices in the other regions without causing excessive AS prices in the sub-region with bid insufficiency.
Self-scheduled CAISO demand and self-scheduled exports using identified non-RA supply resource / 1800 / 1000 / Pursuant to section 31.4, the uneconomic bid price for self-scheduled demand in the scheduling run exceeds the uneconomic bid price for self-scheduled supply and self-scheduled exports not using identified non-RA supply resources.
Self-scheduled exports not using identified non-RA supply resource / 1150 / 1000 / The scheduling parameter for self-scheduled exports not using identified non-RA capacity is set below the parameter for generic self-schedules for demand.
Regulatory Must-Run and Must Take supply curtailment / -1350 / -150 / Regulatory must-run and must-take supply receive priority over generic self-schedules for supply resources.
Price-taker supply bids / -1100 / -150 / Generic self-schedules for supply receive higher priority than Economic Bids at the bid cap.
Conditionally qualified Regulation Up or Down self-provision / -405 / NA / Conversion of AS self-schedules to Energy pursuant to section 31.3.1.3 received higher priority to maintaining the availability of regulation, over spinning and non-spinning reserve.
Conditionally qualified Spin self-provision / -400 / NA / Conversion of AS self-schedules to Energy pursuant to section 31.3.1.3 receives higher priority to maintaining the availability of spinning reserve, over non-spinning reserve.
Conditionally qualified Non-Spin self-provision / -395 / NA / This penalty price for conversion of self-provided non-spinning reserves balances the maintenance of AS self-schedules with ensuring that the conversion to energy occurs before transmission constraints are relaxed.
Conditionally unqualified Reg Up or Down self-provision / -195 / NA / In instances where AS self-provision is not qualified pursuant to the MRTU tariff, the capacity can still be considered as an AS bid, along with regular AS bids. The price used for considering unqualified AS self-provision is lower than the AS bid cap, to allow it to be considered as an Economic Bid.
Conditionally unqualified Spin self-provision / -170 / NA / Same as above.
Conditionally unqualified Non-Spin self-provision / -155 / NA / Same as above.

Residual Unit Commitment (RUC) Parameter Values

Penalty Price Description / Scheduling Run Value / Pricing Run Value / Comment
Transmission constraints: Intertie scheduling / 2000 / 250 / The Intertie scheduling constraint retains higher relative priority than other RUC constraints.
Market energy balance -under procurement / 1600 / 0 / The RUC procurement may be less than the Demand forecast if the CAISO has committed all available generation and accepted intertie bids up to the intertie capacity.
Transmission constraints: branch, corridor, nomogram (base case and contingency analysis) / 1250 / 250 / These constraints affect the final dispatch in the Real-Time Market, when conditions may differ from Day-Ahead.
Gas-burn nomogram / 1250 / 250 / In the scheduling run, the market optimization enforces gas-burn constraints up to a point where the cost of enforcement (the “shadow price” of the constraint) reaches the parameter value, at which point the constraint is relaxed.
Maximum energy limit in RUC schedule / 1500 / 250 / Limits the extent to which RUC can procure energy rather than unloaded capacity to meet the RUC target. For MRTU launch the limit will be set so that the total energy scheduled in the IFM and RUC will be no greater than 99% of the RUC target unless this limit is relaxed in the RUC scheduling run.
Limit on quick-start capacity scheduled in RUC / 250 / 0 / Limits the amount of quick-start capacity (resources that can be started up and on-line within 5 hours) that can be scheduled in RUC. For MRTU launch the limit will be set to 75%.
Day-Ahead energy schedules resulting from the IFM run / 250 / 0 / These values preserve schedules established in IFM in both the RUC scheduling run and pricing run.
Market energy balance -over procurement / 200 / 0 / Market energy balance when the RUC procurement may be more than the Demand forecast.

Real Time Market Parameters