Business Practice Manual for
Market Operations
Version 2
Last Revised: October 14, 2009
CAISO Business Practice Manual BPM for Market Operations
Approval History
Approval Date: March 23, 2009
Effective Date: March 31.2009
BPM Owner: Deborah Le Vine
BPM Owner’s Title: Director of Market Services
Revision History
Version / Date / Description /1 / 3-23-2009 / Version Release
2 / 10-14-2009 / PRR # 39 – Changes were made to Appendix C Section C.4.1 to reflect new expected energy types arising from implementation of new exceptional dispatch codes.
TABLE OF CONTENTS
1. Introduction 1
1.1 Purpose of CAISO Business Practice Manuals 1
1.2 Purpose of this Business Practice Manual 2
1.3 References 3
2. Market Operations Overview 4
2.1 Market Entities 4
2.1.1 CAISO 4
2.1.2 Scheduling Coordinators 5
2.1.3 Participating Generators 5
2.1.4 Constrained Output Generator 5
2.1.5 Participating Loads 6
2.1.6 Non-Participating Loads 13
2.1.7 Utility Distribution Companies 13
2.1.8 Metered Subsystems 13
2.1.9 Balancing Authority Areas 14
2.1.10 Participating Transmission Owners 15
2.1.11 System Resource 16
2.2 Products & Services 16
2.2.1 Energy 16
2.2.2 Ancillary Services 17
2.2.3 Residual Unit Commitment Capacity 17
2.2.4 Congestion Revenue Rights 18
2.3 CAISO Markets 18
2.3.1 Day-Ahead Market Processes 20
2.3.2 Real-Time Market Processes 21
2.4 Roles & Responsibilities 24
2.4.1 Utility Distribution Companies 24
2.4.2 Metered Subsystems 24
2.4.3 Participating Transmission Owners Information 26
2.4.4 Participating Generators & Participating Loads 27
2.4.5 Scheduling Coordinator Responsibilities 28
2.5 Market Information 29
2.5.1 Resource Static Data 30
2.5.2 Bids 30
2.5.3 Inter-SC Trades 34
2.5.4 Existing Transmission Contracts, Transmission Owner Rights, & Converted Rights 34
3. Full Network Model 35
3.1 Model Description 35
3.1.1 Real-Time Data 36
3.1.2 Generation Distribution Factors 37
3.1.3 Modeling Point 38
3.1.4 Load Distribution Factors 38
3.1.5 Aggregated Pricing Nodes 40
3.1.6 Losses 41
3.1.7 Nomograms 45
3.1.8 Transmission Element & Transmission Interfaces 47
3.1.9 Scheduling Points 48
3.2 Locational Marginal Prices 49
3.2.1 LMP Disaggregation 50
3.2.2 System Marginal Energy Cost 57
3.2.3 Marginal Cost of Losses 57
3.2.4 Marginal Cost of Congestion 58
3.3 Market Interfaces 58
4. Ancillary Services 59
4.1 Ancillary Services Regions 59
4.1.1 Ancillary Services Region Definition 59
4.1.2 Ancillary Services Region Change Process 63
4.2 Ancillary Services Requirements 63
4.2.1 Self-Provided Ancillary Services 65
4.2.2 Conversion of Conditionally Qualified SPAS to Energy 69
4.2.3 Conversion of Conditionally Unqualified SPAS to Qualified SPAS 69
4.2.4 Other Details of SPAS 70
4.2.5 Ancillary Service Award Allocation on Energy Bids 70
4.2.6 Regulation Up & Down Requirements 73
4.2.7 Operating Reserve Requirements 73
4.2.8 Maximum Upward Capacity Constraint 75
4.3 Ancillary Services Procurement 76
4.3.1 Ancillary Services Procurement in Day-Ahead Market 77
4.3.2 Ancillary Services Procurement in Real-Time Market 78
4.4 Ancillary Services Marginal Prices 79
4.5 Ancillary Services Considerations 80
4.6 Ancillary Services Certification & Testing Requirements 82
4.6.1 Regulation Certification & Testing Requirements 82
4.6.2 Spinning Reserve Certification & Testing Requirements 83
4.6.3 Non-Spinning Reserve Certification & Testing Requirements 83
5. Existing Transmission Contracts, Converted Rights & Transmission Ownership Rights 85
5.1 Continuation of Rights & Obligations 85
5.1.1 Existing Transmission Contracts 85
5.1.2 Converted Rights 86
5.1.3 Non-Participating Transmission Owners 87
5.1.4 Transmission Ownership Rights 87
5.1.5 TOR Scheduling Time Line Requirements 88
5.1.6 TOR Scheduling Requirements 89
5.1.7 ETC and CVR Scheduling Time Requirement 91
5.1.8 ETC and CVR Scheduling Requirements 93
5.1.9 Scheduling Priority for Transmission Rights 94
5.1.10 ETC, CVR & TOR Settlement 95
5.1.11 Transmission Rights & Curtailment Instructions (TRTC) 96
5.1.12 ETCs, CVRs and TORs Treatment in the Release of CRRs 98
5.2 Available Transfer Capability Calculation 98
5.2.1 ATC Calculation before DAM Closes 98
5.2.2 ATC Calculation After DAM Completes & Before RTM Closes 98
5.2.3 ATC Calculation After RTM Completes 99
6. Day-Ahead Market Processes 100
6.1 Pre-Market Activities 100
6.1.1 Congestion Revenue Rights 100
6.1.2 Full Network Model Build 100
6.1.3 Bid Information 100
6.1.4 Outage Information 101
6.1.5 CAISO Demand Forecast Information 101
6.1.6 Determine Operating Transfer Capability 102
6.1.7 Before Day-Ahead Market is Closed 102
6.1.8 Overgeneration Condition 103
6.2 Day-Ahead Market Timeline 104
6.3 Scheduling Coordinator Activities 105
6.3.1 Submit Bids 105
6.3.2 Interchange Transactions & e-Tagging 106
6.3.3 Respond to Day-Ahead Market Published Schedules & Awards 107
6.4 CAISO Activities 107
6.4.1 Accept Day-Ahead Market Inputs 107
6.4.2 Disseminate Pre-Market Information 107
6.4.3 Disseminate Post Market Close Information 108
6.4.4 Procedures for Closing the Day-Ahead Market 108
6.4.5 Execute Day-Ahead Market Applications 109
6.4.6 Publish Reports to Scheduling Coordinators 109
6.4.7 Resource Commitment 111
6.5 Market Power Mitigation & Reliability Requirement Determination 112
6.5.1 Reliability Requirement Determination & Local Market Power Mitigation 112
6.5.2 Day-Ahead RMR 114
6.5.3 Competitive Path Criteria 115
6.5.4 Default Energy Bids 115
6.5.5 Bid Adder for Frequently Mitigated Units 116
6.6 Integrated Forward Market 117
6.6.1 IFM Inputs 117
6.6.2 IFM Constraints & Objectives 119
6.6.3 Co-optimization of Energy & Ancillary Services 121
6.6.4 Market Clearing 121
6.6.5 Adjustment of Non-Priced Quantities in IFM 122
6.6.6 IFM Outputs 131
6.6.7 Energy Settlement 132
6.7 Residual Unit Commitment 133
6.7.1 RUC Objective 134
6.7.2 RUC Inputs 134
6.7.3 RUC Execution 147
6.7.4 RUC Outputs 148
6.8 Extremely Long-Start Commitment 150
7. Real-Time Processes 151
7.1 Differences from IFM 152
7.1.1 Real-Time Market Timelines 153
7.1.2 Real-Time Dispatch Principles 154
7.2 Scheduling Coordinator Activities 155
7.2.1 Submit Bids 155
7.2.2 Interchange Transactions & e-Tagging 156
7.2.3 Respond to Commitment & Dispatch Instructions 156
7.3 CAISO Activities 159
7.3.1 Accept Hourly HASP & Real-Time Market Inputs 159
7.3.2 Close Real-Time Market 163
7.3.3 Execute Real-Time Applications 163
7.3.4 Publish Real-Time Market Reports to Scheduling Coordinators 164
7.4 MPM-RRD for Real-Time 165
7.5 Hour-Ahead Scheduling Process 166
7.5.1 Hourly Schedule Changes 166
7.5.2 Dispatch Priorities 167
7.5.3 HASP Inputs 167
7.5.4 HASP Constraints & Objectives 170
7.5.5 HASP Outputs 172
7.6 Real-Time Unit Commitment 173
7.6.1 Real-Time Unit Commitment Inputs 174
7.6.2 Real-Time Ancillary Services Procurement 174
7.6.3 Real-Time Unit Commitment Constraints & Objectives 175
7.6.4 Real-Time Unit Commitment Outputs 176
7.6.5 Real-Time Unit Commitment Pricing 176
7.7 Short-Term Unit Commitment 176
7.7.1 Short-Term Unit Commitment Inputs 177
7.7.2 Short-Term Unit Commitment Constraints & Objectives 177
7.7.3 Short-Term Unit Commitment Outputs 178
7.8 Real-Time Economic Dispatch 178
7.8.1 Real-Time Economic Dispatch Inputs 180
7.8.2 Real-Time Economic Dispatch Constraints & Objectives 182
7.8.3 Real-Time Economic Dispatch Outputs 187
7.9 Real-Time Contingency Dispatch 194
7.9.1 Real-Time Contingency Dispatch Inputs 195
7.9.2 Real-Time Contingency Dispatch Constraints & Objectives 196
7.9.3 Real-Time Contingency Dispatch Locational Marginal Prices 196
7.9.4 Real-Time Contingency Dispatch Outputs 197
7.10 Real-Time Manual Dispatch 197
7.10.1 Real-Time Manual Dispatch Inputs 198
7.10.2 Real-Time Manual Dispatch Constraints & Objectives 199
7.10.3 Real-Time Manual Dispatch Outputs 199
7.10.4 Procedures In the Event Failure of the RTPD/RTD Market Processes. 199
7.11 Exceptional Dispatch 201
7.11.1 System Reliability Exceptional Dispatches 201
8. Post Market Activities 204
8.1 Price Validation 204
8.1.1 Market Validation 205
8.1.2 General Scope of Price Corrections 206
8.1.3 Scope of Price Corrections for DAM 207
8.1.4 Scope of Price Corrections for RTM 207
8.1.5 Price Correction Process 208
8.1.6 Procedures 210
Attachments:
Attachment A: Market Interfaces
Attachment B: Competitive Path Assessment
Attachment C: Expected Energy Calculation
Attachment D: Commitment Cost Determination
List of Exhibits:
Exhibit 11: CAISO BPMs 1
Exhibit 21: CAISO Markets – Overview Timeline 19
Exhibit 31: Generator Telemetry Data from EMS to RTM 36
Exhibit 32: Load Telemetry Data from EMS to RTM 36
Exhibit 33: Connectivity Node Data from SE to RTM 37
Exhibit 34: Load Aggregation Point 39
Exhibit 35: Modeling Point 40
Exhibit 36: CAISO Power Balance Relationship 42
Exhibit 37: Marginal Losses - Conceptual Model 44
Exhibit 38: Nomogram 46
Exhibit 39: Market Interfaces 58
Exhibit 41: Summary of Initial AS Regions 61
Exhibit 42: Qualification Process of Submissions to Self-Provide an AS 68
Exhibit 61: Day-Ahead Market Timeline 105
Exhibit 62: Generating Unit Commitment Selection by Application 111
Exhibit 63: Day-Ahead Market Clearing Price for Energy – Ignoring Marginal Losses & Congestion 122
Exhibit 64: Capacity Available for RUC 144
Exhibit 65: RUC Start Up, Minimum Load, & Availability Bid Eligibility 144
Exhibit 71: HASP/STUC/RTUC Timelines 154
Exhibit 72: Real-Time Applications 163
Exhibit 73: Real-Time Market Clearing Price for Energy (Ignoring Marginal Losses & Congestion) 172
Exhibit 74: Advisory Schedule from HASP 173
Exhibit 75: RTED Timeline 179
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Version 2 Last Revised: Oct 14, 2009
CAISO Business Practice Manual BPM for Market Operations
1. Introduction
Welcome to the CAISO BPM for Market Operations. In this Introduction you will find the following information:
Ø The purpose of CAISO BPMs
Ø What you can expect from this CAISO BPM
Ø Other CAISO BPMs or documents that provide related or additional information
1.1 Purpose of CAISO Business Practice Manuals
The Business Practice Manuals (BPMs) developed by CAISO are intended to contain implementation detail, consistent with and supported by the CAISO Tariff, including: instructions, rules, procedures, examples, and guidelines for the administration, operation, planning, and accounting requirements of CAISO and the markets. Exhibit 1-1 lists CAISO BPMs.
Exhibit 11: CAISO BPMs
TitleBPM for Market Operations
BPM for Market Instruments
BPM for Settlements & Billing
BPM for Scheduling Coordinator Certification and Termination
BPM for Congestion Revenue Rights
BPM for Candidate CRR Holder Registration
BPM for Managing Full Network Model
BPM for Rules of Conduct Administration
BPM for Outage Management
BPM for Metering
BPM for Reliability Requirements
BPM for Credit Management
BPM for Compliance Monitoring
BPM for Definitions & Acronyms
BPM for Change Management
BPM for the Transmission Planning Process
1.2 Purpose of this Business Practice Manual
This BPM for Market Operations covers the rules, design, and operational elements of the CAISO Markets. The BPM is intended for those entities that expect to participate in the CAISO Markets, as well as those entities that expect to exchange Power with the CAISO Balancing Authority Area.
This BPM benefits readers who want answers to the following questions:
Ø What are the roles of CAISO and the Scheduling Coordinators in the CAISO Markets?
Ø What are the concepts that an entity needs to understand to engage in the CAISO Markets?
Ø What does a Market Participant need to do to participate in the CAISO Markets?
Ø What are the market objectives, inputs, and outcomes?
Although this BPM is primarily concerned with market operations, there is some overlap with other BPMs. Where appropriate, the reader is directed to the other BPMs for additional information.
If a Market Participant detects an inconsistency between BPMs, it should report the inconsistency to CAISO before relying on either provision.
The provisions of this BPM are intended to be consistent with the CAISO Tariff. If the provisions of this BPM nevertheless conflict with the CAISO Tariff, the CAISO is bound to operate in accordance with the CAISO Tariff. Any provision of the CAISO Tariff that may have been summarized or repeated in this BPM is only to aid understanding. Even though every effort will be made by the CAISO to update the information contained in this BPM and to notify Market Participants of changes, it is the responsibility of each Market Participant to ensure that he or she is using the most recent version of this BPM and to comply with all applicable provisions of the CAISO Tariff.
A reference in this BPM to the CAISO Tariff, a given agreement, any other BPM or instrument, is intended to refer to the CAISO Tariff, that agreement, BPM or instrument as modified, amended, supplemented or restated.
The captions and headings in this BPM are intended solely to facilitate reference and not to have any bearing on the meaning of any of the terms and conditions of this BPM.
1.3 References
The definition of acronyms and words beginning with capitalized letters are given in the BPM for Definitions & Acronyms.
Other reference information related to this BPM includes:
Ø Other CAISO BPMs
Ø CAISO Tariff
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Version 2 Last Revised: Oct 14 2009
CAISO Business Practice Manual BPM for Market Operations
2. Market Operations Overview
Welcome to the Market Operations Overview section of the CAISO BPM for Market Operations. In this section, you will find the following information:
Ø A high-level description of the structure and operations of the CAISO Markets
Subsequent sections “drill down” in greater detail. Included in subsequent sections are the following topics:
Ø Market activities which consist of:
§ The buying and selling, transmission of Energy or Ancillary Services into, out of, or Wheeling Through the CAISO Balancing Authority; and the allocation of transmission
§ The request or receipt of Congestion Revenue Rights through allocations or auctions
Ø Products and services that are traded in the CAISO Markets
Ø CAISO Markets which consist of:
§ Day-Ahead Market, which includes the Integrated Forward Market (IFM) and the Residual Unit Commitment (RUC)
§ Real-Time Market processes, which includes the Hour-Ahead Scheduling Process (HASP) and the Real-Time Market (RTM)
§ Objectives, inputs, and outputs
Ø Roles and responsibilities according to market activities
Ø Market Information, which consists of resource static data, Bids, Inter-SC Trades
2.1 Market Entities
The entities that engage in the operation of the CAISO Markets are described in the following subsections.
2.1.1 CAISO
CAISO is a non-profit public benefit corporation that:
Ø Has Operational Control of transmission facilities of all Participating Transmission Owners
Ø Is the Balancing Authority Area Operator for the CAISO Balancing Authority
Ø Administers the CAISO Markets
2.1.2 Scheduling Coordinators
It is important to note that all business with the CAISO Markets, except for acquisition and holding of Congestion Revenue Rights (CRRs), must be conducted through CAISO-approved and registered entities called Scheduling Coordinators (SCs). The primary responsibilities of SCs include as applicable :