EIM Map 0312

Current and future members of CAISO's Western Energy Imbalance Market. 

The effort in California to better prepare the electric grid for the coming summer became more official this week as Western Energy Imbalance Market officials approved a series of rule changes aimed at improving reliability.

The EIM Governing Body on March 10 voted to approve a new way to evaluate resource sufficiency, operational coordination and market pricing during times of tight supply in the California Independent System Operator. The package now goes to the CAISO Board of Governors, which is due to consider it at its next meeting. The changes also require approval by the Federal Energy Regulatory Commission.

"The enhancements are focused on changes that are feasible for both the ISO and market participants to implement by summer 2021," a memorandum to the board from Anna McKenna, CAISO's interim vice president of market policy and performance, says. "Management plans to address potential longer-term changes in upcoming stakeholder processes."

CAISO has moved quickly on the initiatives, issuing a draft proposal Feb. 18 that scaled back the original plan after market participants weighed in (see CEM No. 1629). The changes are meant to help the state avoid a repeat of August 2020, when CAISO was forced to implement rolling outages due to inadequate reserves.

One aspect of the rules would alter CAISO's resource-sufficiency test, which is meant to ensure there is adequate generation and that balancing authority areas don't have to lean on each other for power. The evaluation includes a capacity test and a flexible-ramp sufficiency test that, if failed, disallow a BAA from transferring energy beyond the amount scheduled in the previous market interval.

For the capacity test, the proposed rule would require each BAA to submit sufficient energy schedules and bids to account for uncertainty in net load—load with rooftop solar removed—as well as schedules and bids for its forecast load. This will help ensure each BA has sufficient capacity to meet its actual net load, including load that might be different than forecast, CAISO said.

The resource evaluation also has a "flexible-ramping test" that accounts for net load uncertainty, but the test only looks at ramp rate capability between market intervals, and does not ensure each BAA has sufficient overall capacity to meet its forecast net load or that it accounts for net load uncertainty, CAISO said. The changes would require net load uncertainty to also be included in the flexible-ramping test. The net load uncertainty amount used in the resource-sufficiency evaluation is determined by similar principles that the ISO's market systems use for the real-time market's flexible-ramping product procurement, McKenna said in her memo.

The Bonneville Power Administration in a March 10 letter to CAISO said that it feels it is imperative to make sure the resource-sufficiency evaluation is "accurate, effective, and equitably applied to all EIM Entities."

"We remain concerned that the changes proposed to date do not fully address the deficiencies that cause significant inaccuracies in the resource sufficiency evaluation results and we request addressing these deficiencies be highly prioritized in the upcoming resource sufficiency stakeholder initiative," the letter to the board from BPA Vice President of Bulk Marketing Suzanne Cooper says. BPA requested additional analysis to determine if proposed changes resolve the potential for a BAA to inappropriately pass the resource-sufficiency evaluation during emergency conditions.

CAISO said it also fixed software errors that caused inaccuracies in resource-sufficiency evaluation during the August outages. The errors affected the way the resource-sufficiency evaluation accounted for capacity with partial outages as well as energy interchanges between BAAs. CAISO is also making other software changes to provide better coordination between BAAs in the EIM—especially in tight conditions—that do not require tariff changes.

Also within the new rules are changes to the ways in which the real-time market models energy interchanges into the CAISO BAAs at intertie scheduling points that are sourced from adjacent BAAs in the EIM. This resulted from a review of the August events that found there was incorrect information in certain situations.

Proposed is a requirement for EIM BAAs to use an automated market feature that updates the EIM balancing authority area's "mirror resource" when the ISO market awards an import at an ISO intertie scheduling point that was sourced from the EIM balancing area. The mirror resources model the energy interchange out of the EIM balancing authority area, but it is currently optional to use the automated update process, CAISO said. An oversight in updating a mirror resource's schedule during the tight August conditions caused operational issues, it said.

The EIM Governing Body also approved changes to CAISO's market pricing when system conditions are tight and the ISO system operators are "arming load" to meet the BAA's contingency reserve requirements and using resources previously providing contingency reserves to serve load, CAISO said. Energy from generation the ISO is releasing from contingency reserves would be priced at a bid cap—either $1,000/MWh or $2,000/MWh as proposed by CAISO's parameters currently being considered by FERC. ISO system operators "arm load" by contacting electric distribution companies and having them configure their systems to immediately shed certain portions of their load in the event the ISO experiences an unexpected supply loss, CAISO said. 

"Under current market rules, prices can decrease in this situation because the price of the energy bids of the supply resources put into the real-time market can be below the current real-time market price," the memo says. "Because the EIM does not manage or optimize operating reserves for other balancing authority areas that participate in the EIM, this change will not apply to energy from operating reserves managed by EIM entities."

At the meeting, CAISO Vice President of Power Systems and Market Technology Khaled Abdul-Rahman updated the Governing Body on the status of EIM participation. Five entities are currently in parallel operations, having passed readiness criteria, and are preparing for go-live, including Balancing Area of North California-Phase 2/Western Area Power Administration; Turlock Irrigation District; Los Angeles Department of Water & Power; Public Service Company of New Mexico; and NorthWestern Energy.

Entities due to join in 2022 include Avista Utilities; BPA; Tacoma Power; Tucson Electric Power; and Xcel Energy-Colorado, with Avangrid and El Paso Electric set to join in 2023.

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