CAISO Response to Comments

CAISO Response to Comments

Commenter / Comment / Response
NextEra / Procedural Propriety- The CAISO Should Not Make Policy Changes through the
BPM Change Management Process
The CAISO proposal constitutes a policy change with implications for assets owners of
wind and solar resources that need to be thoughtfully considered and evaluated in astakeholder forum. It is not appropriate for the Business Practices Manual (“BPM”)
Proposed Revision Request (“PRR”) process. / PRR 1004 is not a policy change, but rather reinforces existing tariff requirements applicable to EIRs, as discussed in more detail below.
NextEra / PRR 1004 Conflicts with Tariff Section 37.2.1.1 Regarding Deviation from
Dispatch Instructions
The change is concerning due the implications for wind and solar resource market
obligations. PRR 1004 would provide for CAISO’s issuance of direct instructions to
Eligible Intermittent Resources (“EIR”) to not exceed their Dispatch Operating Target
(“DOT”). This sets an obligation for EIRs to follow the CAISO’s Automatic Dispatch
System (“ADS”) Dispatch Instructions. This obligation does not currently exist in the
Tariff. Specifically, Tariff Section 37.2.1.1 (“Compliance With Orders Generally –
Expected Conduct”) clearly states that generators are not required to follow such
instructions:
Deviation from an ADS Dispatch Instruction shall not constitute a
violation of this Section 37.2.1.1.
While there are potential economic implications resulting from resources not following
their dispatch, there exists neither a tariff obligation nor authority for the CAISO to
impose such an obligation. Therefore, this proposal conflicts with the current tariff and
should be proposed through a stakeholder initiative process. / Tariff Section 37.2.1.1 is part of the CAISO’s Rules of Conduct that are administered by FERC (See Tariff Section 37.1.5). This section provides that deviation from an ADS dispatch instruction does not constitute a violation of the Rules of Conduct as contained in Section 37. This section does not state that “generators are not required to follow such instructions” as stated by NextEra. Nor does this statement exempt generators from having to comply with other parts of the tariff.
To the contrary, the CAISO tariff specifies in numerous places that market participants must comply with dispatch instructions. In addition, the tariff provides specific actions to be taken by the Scheduling Coordinator if a unit is unable to comply with a dispatch instruction. See for example, the following tariff sections:

• 4.2.1 Comply With Dispatch Instructions And Operating Orders

With respect to this Section 4.2, all Market Participants, including Scheduling Coordinators, Utility Distribution Companies, Participating Transmission Owners, Participating Generators, Participating Loads, Demand Response Providers, Balancing Authorities (to the extent the agreement between the Balancing Authority and the CAISO so provides), and MSS Operators within the CAISO Balancing Authority Area and all System Resources shall comply fully and promptly with the Dispatch Instructions and operating orders, unless such operation would impair public health or safety. A Market Participant is not required to comply with a CAISO operating order if it is physically impossible for the Market Participant to perform in compliance with that operating order. Shedding Load for a System Emergency does not constitute impairment to public health or safety. The Market Participant shall immediately notify the CAISO of its inability to perform in compliance with the operating order.

• 4.2.2 Implementation Of Instructions

All Market Participants shall respond to CAISO instructions with no more delay than specified in the response times set out in the CAISO Tariff, Operating Procedures and Business Practice Manuals.

• 4.5.3 Responsibilities Of A Scheduling Coordinator

Each Scheduling Coordinator shall be responsible for:
4.5.3.11 Day-Ahead Market Published Schedules and Awards
Starting-up units and timely achieving specified operating levels in response to Dispatch Instructions, in accordance with CAISO published Schedules and awards;

• 4.6.1.1 Operate Pursuant to Relevant Provisions of CAISO Tariff

Participating Generators shall operate, or cause their facilities to be operated, in accordance with the relevant provisions of this CAISO Tariff, including, but not limited to, the operating requirements for normal and emergency operating conditions specified in Section 7 and the requirements for the dispatch and testing of Ancillary Services specified in Section 8.
(ii) In the event that a Participating Generator cannot meet its Generation schedule as specified in the Day-Ahead Schedule, or comply with a Dispatch Instruction, whether due to a Generating Unit trip or the loss of a piece of equipment causing a reduction in capacity or output, the Participating Generator shall notify the CAISO, through its Scheduling Coordinator, at once. If a Participating Generator will not be able to meet a time commitment or requires the cancellation of a Generating Unit Start-Up, it shall notify the CAISO, through its Scheduling Coordinator, at once.

• 7.6.1 Actions For Maintaining Reliability Of CAISO Controlled Grid

The CAISO shall obtain the control over Generating Units that it needs to control the CAISO Controlled Grid and maintain reliability by ensuring that sufficient Energy and Ancillary Services are procured through the CAISO Markets. When the CAISO responds to events or circumstances, it shall first use the generation control it is able to obtain from the Energy and Ancillary Services Bids it has received to respond to the operating event and maintain reliability. Only when the CAISO has used the Energy and Ancillary Services that are available to it under such Energy and Ancillary Services Bids which prove to be effective in responding to the problem and the CAISO is still in need of additional control over Generating Units, shall the CAISO assume supervisory control over other Generating Units. It is expected that at this point, the operational circumstances will be so severe that a Real-Time system problem or emergency condition could be in existence or imminent. Each Participating Generator shall take, at the direction of the CAISO, such actions affecting such Generator as the CAISO determines to be necessary to maintain the reliability of the CAISO Controlled Grid. Such actions shall include (but are not limited to):
(a) compliance with Dispatch Instructions including instructions to deliver Energy and Ancillary Services in Real-Time pursuant to the AS Awards, Day-Ahead Schedules and FMM Schedules, and FMM AS Awards;

• 7.7.5 Emergency Guidelines

The CAISO shall issue guidelines for all Market Participants to follow during a System Emergency. These guidelines shall be consistent with the specific obligations of Scheduling Coordinators and Market Participants referenced in Sections 7.7.10, 7.7.11, 7.7.2, 7.7.2.3 and 7.7.4(1). All Market Participants shall respond to CAISO Dispatch Instructions with an immediate response during System Emergencies.

• 16.5.1 System Emergency Exceptions

As set forth in Section 4.2.1, all Market Participants, including Scheduling Coordinators, Utility Distribution Companies, Participating TOs, Participating Generators (which includes Pseudo-Ties of Generating Units to the CAISO Balancing Authority Area), Participating Loads, Demand Response Providers, Balancing Authorities (to the extent the agreement between the Balancing Authority and the CAISO so provides), and MSS Operators within the CAISO Balancing Authority Area and all System Resources must comply fully and promptly with CAISO Dispatch Instructions and operating orders, unless such operation would impair public health or safety. The CAISO will honor the terms of Existing Contracts, provided that in a System Emergency and circumstances in which the CAISO considers that a System Emergency is imminent or threatened, holders of Existing Rights must follow CAISO operating orders even if those operating orders directly conflict with the terms of Existing Contracts, unless such operating orders are inconsistent with the terms of an agreement between the CAISO and a Balancing Authority. In the event of a conflict between the CAISO Tariff and an agreement between the CAISO and a Balancing Authority, the agreement will govern. For this purpose CAISO operating orders to shed Load shall not be considered as an impairment to public health or safety. This section does not prohibit a Scheduling Coordinator from modifying its Bid or re-purchasing Energy in the Real-Time Market.

• 34.13 Means Of Dispatch Communication

The CAISO dispatches Regulation by AGC to Participating Generators and, for Dynamic System Resources, through dedicated communication links that satisfy the CAISO's standards for external imports of Regulation. The CAISO communicates all other Dispatch Instructions electronically, except that, at the CAISO's discretion, the CAISO may communicate Dispatch Instructions by telephone, or facsimile. Scheduling Coordinators shall confirm the Dispatch Instructions that are communicated orally by repeating them to the CAISO employee providing the Dispatch Instruction. Except in the case of deteriorating system conditions or an actual or threatened System Emergency, and except for Dispatch Instructions for Regulation, the CAISO sends all Dispatch Instructions to the Scheduling Coordinator. The recipient Scheduling Coordinator shall immediately communicate the Dispatch Instruction to the operator of the resource. The CAISO may, with the prior permission of the applicable Scheduling Coordinator, communicate with and give Dispatch Instructions to the operators of the resource directly without having to communicate through their Scheduling Coordinator. The CAISO shall record the communications between the CAISO and Scheduling Coordinators relating to Dispatch Instructions in a manner that permits auditing of the Dispatch Instructions, and of the response of the resources, as applicable. In situations of deteriorating system conditions or System Emergency, the CAISO reserves the right to communicate directly with the resource(s) as required to ensure System Reliability. Scheduling Coordinators are required to advise the CAISO immediately of any change in resource availability that prevents the recipient of a Dispatch Instruction from performing in accordance with that Dispatch Instruction.

• 34.13.1 Response Required By Resources To Dispatch Instructions

Resources must: (a) unless otherwise stated in the Dispatch Instruction, comply with a Dispatch Instruction immediately upon receipt; (b) respond to all Dispatch Instructions in accordance with Good Utility Practice; (c) meet voltage criteria in accordance with the provisions in the CAISO Tariff; (d) meet any applicable Operational Ramp Rates; (e) respond to Dispatch Instructions for Ancillary Services within the required time periods and (in the case of Participating Generators providing Regulation) respond to AGC from the EMS; and (f) if a time frame is stated in a Dispatch Instruction, respond to a Dispatch Instruction within the stated time frame.
NextEra / PRR 1004 Does Not Consider the Technical Capability of Wind and Solar
Facilities to Respond to Five-Minute Dispatch Instructions
PRR 1004 provides for the CAISO issuance of direct instructions to EIRs not to exceed
their dispatch target regardless of whether the resource had an economic offer in the
market. This is problematic since many wind and solar resources do not economically
offer into the market because they do not have the technical capability to follow a fiveminute
dispatch instruction. To NextEra’s knowledge, the CAISO does not maintain an
active list of those resources that have the ability to follow a five-minute dispatch
instruction and those that do not have such ability. Under this proposal, the CAISO would
have to notify the scheduling coordinator for the resource to follow their five-minute
dispatch and then the scheduling coordinator would have to notify the plant - which may
or may not be able to manually adjust its output to the desired level, and certainly could
not adjust it every five minutes. According to this proposal, the plant would not only be
subject to economic consequences, but it would be in violation of CAISO rules.1 / The numerous CAISO tariff requirements to respond to dispatch instructions apply to resources regardless of their fuel source.
NextEra / Terminology and Operating Protocols Require Specificity and Elaboration
In defining these rules, the CAISO uses several undefined and vague terms. The PRR
states that the CAISO would take these actions due to “system operational issues such as
local congestion or over supply.” Also, “the CAISO may dispatch down an EIR SelfSchedule,
even when the Scheduling Coordinator did not submit an Economic Bid for the
EIR during an oversupply condition or to resolve congestion…” The vague nature of the
language in the PRR raises concerns for asset owners working to understand the ability to
comply with the regulations and the financial implication of the new rules as they relate
to commercial agreements. For example, management of local congestion is addressed
through market optimization and should not be considered a system operational issue.
Moreover, the CAISO tariff defines “Over-generation” and there exists an Overgeneration
Procedure, neither of which is referenced here. NextEra encourages the
CAISO to use consistent and defined language so that energy and resource adequacy
commercial transactions can reflect CAISO terms and practices.
Conclusion
NextEra appreciates the opportunity to comment on the CAISO’s proposal.
Sincerely, / Adjustments to self schedules will be made consistent with Tariff Sections 31.4 and 34.12, as stated in PRR 1004.
NextEra notes that management of local congestion is addressed through market optimization. Units that fail to follow dispatch instruction undermine market optimization.
PRR 1004 is not designed to address overgeneration as defined in the tariff. Overgeneration is “a condition that occurs when total Supply exceeds total Demand in the CAISO Balancing Authority Area.” Units must follow dispatch instructions to avoid causing overgeneration conditions.
SCE / The CAISO should provide transparency on the cause of downward dispatch The PRR seems to imply that a negative SUPP signal is only sent to dispatch down a VER that has been economically bid into the market or to signal a congestion or oversupply event. However, through CIDI tickets and other ADS data queries, we have uncovered negative SUPP instructions for non-economically bid VERs that were not curtailed due to congestion or oversupply, such as perceived ramping constraints (based on previous DOT and RDT ramp rate), erroneous data, or misjudging the sunrise/sunset. In these instances, the resource should be allowed to produce as able. Therefore, the proposed language should be clarified to indicate that an EIR must follow all market-based (i.e. due to economic bidding) and reliability-based Dispatch Instructions. And the CAISO should clarify what constitutes a reliability-based dispatch and the mechanisms through which Scheduling Coordinators will know that a Dispatch Instruction is reliability-based. Currently, a negative SUPP instruction is not a clear indication of a reliability-based need. / A decremental dispatch can be issue to a resources regardless if it has economic bids or self schedules. The difference between having economic bids or self schedules is only on the priority of the resources to be issue a decremental bid. Although a self schedule will generally lead to a higher priority it does not insulate a resource from being decremented. The market will first exhaust all the economic bids to balance supply and demand or to manage congestion. After that, resources with self schedules will be reduced until the condition is resolved. This priority is defined generally in the Tariff and the specific penalty prices and sequencing are defined in the BPM for Market operations. When the market clears the optimal dispatches are obtained and they are the result of cost minimization and enforcement of all constraints enforced in the market, including transmission constraint and resources constraints (such as ramp rates).
SCE / SCE strongly urges the CAISO to do the following:
1. Issue explicit verbal dispatch instructions, in addition to
the ADS DOT instructions
2. Document the system operational issues that led to the
downward dispatch: local congestion or over supply /

1. The CAISO has been issuing Dispatch Instructions through ADS and will continue to do so. It is unreasonable to expect that the CAISO follow up on all dispatch instructions with a verbal communication. Nothing in this PRR is intended to change the format in which the CAISO issues its Dispatch Instructions as provided in the CAISO tariff.

1. The reason for the downward dispatch is not relevant to the requirement to follow dispatch instructions.

SCE / In CAISO Tariff section 34.11.2 – mitigating Overgeneration constitutes an Exceptional Dispatch. In CAISO Tariff Appendix A Definitions - Overgeneration is defined as “A condition that occurs when total Supply exceeds total Demand in the CAISO Balancing Authority Area.” SCE recommends that CAISO provide an explicit Tariff definition for “over supply”, if “over supply” is not the same as Overgeneration. / A dispatch instruction consistent with tariff Sections 31.4 or 34.12 is not an exceptional dispatch. Such an instruction occur prior to an overgeneration condition, in an attempt to avoid the occurrence of overgeneration.
Oversupply is a condition where the supply exceeds the demand and the market is required to relax the power balance constraint. The ISO has a procedure in place to address overgeneration, which is a condition once the market has exhausted all its means to resolve it. The market may relax the power balance constraint as part of its market clearing process and one tool the market has to handle such is the instruction of generation curtailments.
CAISO has indicated that the current Expected Energy Type codes EDE and DRE will be used to track the curtailed VER dispatches, SCE is concerned that using the same Expected Energy Type codes for different purposes will create unintended consequences in settlements calculation. Currently EDE is paid in two separate charge codes (depending on the Bid Price vs RT LMP) and is subject to Bid Cost Recovery. / We are not creating additional Expected Energy types. It will be incorporated within the current Expected Energy calculation methodology.
SCE / SCE requests the CAISO to clarify the economic consequences (charge codes and formulas) and the process associated with the deviation investigation. / PRR 1004 does not modify economic consequences or the process associated with the deviation investigation.