3.5Inter-SC Trades

CAISO facilitates Inter-SC Trades (ISTs) of Energy, Ancillary Services, and IFM Load Uplift Obligation through the settlement process. ISTs do not have any impact on the scheduling or dispatch of resources. They affect only the financial settlement process. Only trades that SCs want to settle through CAISO are submitted in the IST process. All other trades are settled bilaterally between individual SCs. There is no limit on the number of ISTs each SC may participate in.

ISTs for the Day-Ahead Market may be submitted beginning seven days prior to the Trading Day up to 12:00 hours (HE 12)11:00 hours (HE 11)the day prior to the Trading Day. ISTs for the Real-Time Market may be submitted beginning at 00:00 hours the day prior to the Trading Hour up to 45 minute prior to the Trading Hour.

Inter-SC Trades in the RTM are submitted incrementally to the DAM Inter-SC Trades.

3.5.1Inter-SC Trades of Energy

The role of Inter-SC Trades (IST) of Energy is to facilitate contractual deliver and settlement of bilateral power purchase contracts. Inter-SC Trades are a settlement service that the CAISO offers to parties of bilateral contracts as a means to offset CAISO settlements charges against the bilateral contractual payment responsibilities. CAISO facilitates Inter-SC Trades of Energy through the settlement process. An IST of Energy consists of a quantity in MWs traded between two SCs for a specific Trading Hour at a specific location. There are two types of ISTs:

Physical Trades (PHY) – where the Inter-SC Trade is backed by a physical resource (applies to Generating Units only). There is no limit on the number of PHY ISTs in which an SC can participate. The SC for the physical resource that supports the PHY can submit a Bid, including a Self-Schedule Bid into the relevant market. In the event that sufficient Generation is not scheduled to meet the quantity of the PHY IST, the difference is converted to a Converted Physical Trade (CPT) and settled at the relevant Trading Hub price.

ISTs at Aggregated Pricing Nodes that are also defined Trading Hubs or LAPs (APN) – where the IST is not backed by a physical resource. SC’s may participate in one APN IST per SC counterparty at each APN Location, that is either a defined Trading Hub or LAP, per Trading Hour. For example, there can only be one IST per hour between SC1 and SC 2 at the Existing Generation Zone Trading Hub NP15. The CAISO will facilitate ISTs (APN) only at Existing Zone Generation Trading Hubs and Default LAPs.

3.5.2Inter-SC Trades of Ancillary Services

CAISO also facilitates ISTs of Ancillary Services obligation, i.e., the obligation to pay AS Charges for the amount of Demand represented by the SC. There are four types of AS that SCs can trade:

Regulation Up

Regulation Down

Spinning Reserve

Non-Spinning Reserve

An IST of AS consists of a quantity in MWs traded between two SCs for a specific Trading Hour and for a specific Ancillary Service type[1]. The IST of AS is a trade of the obligation to pay CAISO charges for Ancillary Services. CAISO settles with the two parties to the trade based on the quantity of the AS Obligation traded times the user rate for the AS Inter-SC Trades for the specific Trading Hour. Once the SC responsible for the Demand has traded its AS obligation, the SC to which the obligation has been traded may meet that obligation with Self-Provided AS or purchasing AS from CAISO.

Since CAISO charges a single user rate for each AS per hour, separate ISTs for AS are not required for both the DAM and the RTM. Hence, SCs may submit ISTs for Ancillary Services only in RTM beginning 0000 hours of the day prior to the Trading Day and up to 45 minutes prior to the Trading Hour. This is based on CAISO Tariff Sections 28.2.3, 28.2.2 and 6.5.4.1.2.

3.5.3Inter-SC Trades of IFM Load Uplift Obligation

CAISO facilitates ISTs of the IFM Load Uplift Obligation[2] between SCs. Inter-SC Trades of IFM Load Uplift Obligation enable a SC to transfer any amount of the IFM Load Uplift Obligation (MW) to another SC. An IST of IFM Load Uplift Obligation consists of a quantity in MWs traded between two SCs for a specific Trading Hour of the IFM.

Since CAISO charges a single user rate for IFM Load Uplift Obligation per hour, separate ISTs for IFM Load Uplift Obligation are not required for both the DAM and the RTM. Hence, SCs submit ISTs only in the RTM for IFM Load Uplift Obligation beginning 0000 hours of the day prior to the Trading Day, up to 45 minutes prior to the Trading Hour. Trades of IFM Load Uplift Obligation are not location specific, since CAISO calculates a system-wide user rate for this charge. This is based on CAISO Tariff Sections 28.2.3, 28.2.2 and 6.5.4.1.2.

[1] Since CAISO charges a single system wide tariff for each AS, specification of a location for AS ISTs is not required.

[2] IFM Load Uplift Obligation is calculated net of the cost of AS.