Attachment G
PROCESS FOR ADDRESSING
MARKET ISSUES
G.Process for Addressing Market Issues
- Reporting of Market Issues
1.1.In the event that the CAISO discovers a possible Market Issue,[1] the CAISO will conduct a preliminary investigation and evaluation of the issue to determine whether a Market Issue has occurred. If theCAISO determines that it is probable that a Market Issue did occur, as soon as reasonably practicable, theCAISO will notify the CAISO Department of Market Monitoring (DMM).
1.2.If the CAISO determines that there is sufficient reliable information to believe that it is probable that a Market Issue occurred the CAISO, in collaboration with DMM as appropriate, will conduct a preliminary analysis of the probable Market Issue.
1.3.If theCAISOfurther confirms the observed event(s) consist(s) of a probable Market Issue, to the extent that communication of the existence of a probablethe Market Issue does not pose a breach of confidentiality and does not potentially create incentives for adverse market behavior, the CAISO will communicate to Market Participants the occurrence of a probablethe Market Issue and a description of the issue as known at that time, as soon as reasonably practicable. This communication is likely to occur through the CAISO’s market related participant conference calls, but may also occur through market notices. To the extent that theprobable Market Issue only affects specific market participants and does not affect the market as whole, the CAISO will communicate privately separately with the affected Market Participants.
1.4.As soon as reasonably practicable after the CAISO makes a communication as described in Section 1.3, based on the significance of the issue and whether there is a material market impact, the CAISO will may post on its website a Technical Market Issue Bulletin that will include the information discussed in Section 1.5. The CAISO will endeavor to post the Technical Market Issue Bulletin within one-hundred and eighty sixty (60180) days after the communication specified in Section 1.3. In the event that the CAISO is not able to complete the report within one-hundred and eighty sixty (60180) days, the CAISO will post a status report on the one-hundred and eightiethsixtieth (60th180th) day with an expected completion date.
1.5.Subject to the confidentiality restrictions, the Technical Market Issue Bulletin will include, as appropriate:
1.5.1.A description of theprobable Market Issue and tariff implications as appropriate, as described further in Section 2.
1.5.2.A description of the time frame involved.
1.5.3.A description of financial effects of the probable Market Issue, as described further in Section 2.
1.5.4.A description, including a time table as appropriate, of steps planned or taken to address the probable Market Issue.
1.5.4.In the event that the Market Issue impacts CAISO Market prices for which the Price Correction Time Horizon as described in Section 8 of the Business Practice Manual for Market Operations has expired, the CAISO will identify the impacted CAISO Market prices in the Market Issue reportBulletin. The CAISO also will identify whether there is good cause to consider correcting such prices. The determination of good cause will be based on the assessment,to the extent feasible, of the impact on the market as a whole, the impact to individual Market Participants and sectors of the market, and on the feasibility and administrative burden of resettling based on the prices if they were to be corrected.
1.5.5.A description, including a time table as appropriate, of steps planned or taken to address the Market Issue.
1.5.5.1.5.6.A description of any necessary tariff revisions or any other requests for relief the CAISO intends to pursue with the Federal Energy Regulatory Commission, if applicable, as described in section 3.
- Analysis of Probable Market Issue
The depth and scope of any analysis conducted by the CAISO willdepend on the feasibility of conducting a viable cause and financial analysis that provides meaningful results. For example, in some instances it may not be technically feasible to actually replicate market outcomes via an alternative method or approach, in which case any feasible evaluation may be limited to mere estimates based on limited information and not actual market results. Also, in some cases while it may be may be technically feasible to replicate the market outcome to evaluate the cause and financial impact, doing so may be so administrativelyburden renderingburdensome as to render the analysis impractical. The CAISO will evaluate these factors on a case by case basis to determine the optimal level of analysis and will explain any limitations of the analysis conducted and an assessment of the feasibility and administrative burden of potential remedies if appropriate.
2.1.Market Issue Analysis. In the event that the CAISO identifies a probable Market Issue, the CAISO will investigate and analyze the observed market results and processes that are affected by the probable Market Issue. This analysis will serve as the basis for the CAISO’s actions to remedy the issue both from a regulatory and production perspective. The conclusions of this analysis, subject to confidentiality requirements and provided the disclosure of the information does not potentially provide incentives for adverse market behavior, will be included in the Technical Market Issue Bulletin as discussed in Section 1.5 above.
2.2.Financial effect. The CAISO will perform an analysis of the financial effect of a probablethe Market Issue. To the extent feasible and practicable, this analysis will be based ona number of factors including: the number of impacted intervals, the number of impacted market participants, and the value impact to market participants, as feasible.
- ISO Actions
In the event that the ISO determines that a Market Issue exists, based on all known and reliable information, the ISO will determine whether or not good cause exists to seek regulatory relief from the Federal Energy Regulatory Commission, including but not limited to a waiver of the applicable ISO Tariff.
3.1.Regulatory Actions
In the event that the ISO determines to seek regulatory relief from the Federal Energy Regulatory Commission, including but not limited to a waiver of the applicable ISO Tariff, if feasible, the ISO will inform its stakeholders of this intent through the Market Issue Bulletin discussed in Section 1.5 above, or through a Market Notice. To the extent permissible and practical given the circumstances of the Market Issue, the ISO will then solicit comments regarding its intended course of action prior to submitting the appropriate pleadings with the Federal Energy Regulatory Commission. In such cases, the ISO will subsequently seek appropriate regulatory relief to implement adjustments.
3.2.Non-Regulatory Actions
In the event that the ISO determines not to seek regulatory relief from the Federal Energy Regulatory Commission, if feasible, the ISO will inform its stakeholders of this intent through the Market Issue Bulletin discussed in Section 1.5 above, or through a market notice. In such cases, the ISO will subsequently implement adjustments deemed appropriate and as permitted pursuant to or consistent with the ISO tariff to address the Market Issue.
3.Regulatory Actions
In the event that the CAISO determines a Market Issue exists and, based on all known and reliable information good cause exists to seek regulatory relief from the Federal Energy Regulatory Commission, including but not limited to a waiver of Section 35.3 of the CAISO Tariff, if feasible the CAISO will inform its stakeholders of this intent through the Technical Bulletin discussed in Section 1.5 above, or through a Market Notice. To the extent permissible and practical given the circumstances of the Market Issue, the ISO will then solicit comments regarding its intended course of action prior to submitting the appropriate pleadings with the Federal Energy Regulatory Commission. In such cases, in the event that the regulatory relief includes the request for permission to correct prices outside of the Price Correction Time Horizon as defined in Section 8 of the Business Practice Manual for Market Operations, to the extent practical and appropriate, the CAISO will seek regulatory relief to implement the price correction for a retroactive period not exceeding sixty (60) calendar days from the Trading Day on which the Market Issue was identified, or the date on which the Market Issue was rectified on a going forward basis.
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[1]A Market Issue consists of but is not limited to market design flaws, software implementation and modeling anomalies or errors, market data anomalies or errors, and economic inefficiencies that have a material effect on the CAISO Markets. Market Issues do not consist ofmay relate to, but are handled separately from: 1) Energy or Ancillary Services prices found to be erroneous and corrected pursuant to the price correction process within the Price Correction Time Horizon as described in Section 8 of the BPM for Market Operations; or 2) Market Participant disputes managed through the Settlements dispute process described in Sections 11 and 13 of the CAISO Tariff.