Proposed Revision Request Detail Help
PRR Life Cycle*********Closed
PRR Details
PRR #
1190
Title Local power market mitigation enhancements hydro default energy bid option energy imbalance market transfer limit
Date Submitted 9/5/2019 10:36 AM
PRR Category C
Priority Normal
Owner Batakji, Jamal (CAISO)
Status Closed
Status End Date 11/12/2019 11:59 PM
Related BPM Market Instruments
BPM Section Attachment B, D
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Existing Language
 
See attached
Proposed Language
 
See attached
Reason For Revision
 
These changes are to support the Local Market Power Mitigation Enhancements 2018 Project (LMPME), it offers a new Hydro Default Energy Bid Option which is described in Attachment B and Attachment D.  The Tariff amendment for LMPME is ER19-2347. Additional changes to Attachment B to support EDSER3 changes for Fall 2019.
Effective date: November 13, 2019
Click here to view the Recommendation Details for this PRR
BPM PRR Submitter

Batakji, Jamal (CAISO)
Modified BPM language proposed by the PBM Chnage Management Coordinator

No modifications to the original PRR are proposed.
Identification of the authorship of comments

Comments were received, and CAISO will post a response for recommendation.
Action

Approve the BPM PRR as submitted

N/A
Statement of apparent requirements of the BPM PRR

Local power market mitigation enhancements hydro default energy bid option energy imbalance market transfer limit
Priority and rank for any BPM PRR requiring a CAISO system change

N/A
Proposed effective date(s) of the BPM PRR

Fall 2019
Other recommended actions

No other recommended actions on this PRR.
Click here to view the Final Decision for this PRR
Final Decision

The ISO will adopt the BPM change as proposed in the recommendation.
Stakeholder Comment

Comments submitted and CAISO posted responses accordingly

Effective Date

12/4/2019
Action

Adopt the recommendation as originally issued

Market Participants still have some concerns in regards to some of the changes as captured in the comments section. Since the additional concerns came in after the recommendation comment period expiration (Oct 15th), CAISO will consider changes to the policy due to Market Participants concerns, but these changes will be tracked on a separate new PRR.
Announcements
No Announcements has been posted for this PRR.
Impact Analysis
Impact Analysis not available.
Initial Comments
Powerex Comments PRR 1190 - LMPM Hydro DEB
9/23/2019 12:17 PM
Logged By - Mike Benn (Powerex)
---------------------------------------------
CAISO does not propose any changes to the BPM due to these reasons:

Regarding “I. Treatment of Long-Term Transmission Rights In The Calculation Of The Long-Term Geographic Component Of The DEB”. The ISO designed the equations for the weighting of additional hubs to account for the possibility that a resource with a 100 MW Pmax could have rights to sell 100% of that capacity to two different additional hubs.  So if a resource has rights to sell 100 MW to NP15 at $40 and rights to sell 100 MW at Mid-C for $10, the maximum in the long-term component would be $40 and fully weighted on the ability to sell to the higher priced hub.

Regarding “II. Inclusion Of Alberta As A Relevant Electric Pricing Hub”.  The ISO has evaluated the Alberta Flat and Peak index and determined neither index currently meets FERC liquidity requirements detailed at https://elibrary.ferc.gov/idmws/common/opennat.asp?fileID=10297524  
If this index meets the liquidity requirements in the future, the CAISO will consider adding Alberta as an additional electric pricing hub.
9/30/2019 3:24 PM
Responded By - Batakji, Jamal (CAISO)
Recommendation Comments
ISO Response to Stakeholder Comments:
The ISO will accommodate the changes that were originally requested by PowerEx. Accordingly, the ISO Team is conducting the preliminary analysis of proposed changes. Once the new requirements are approved, the ISO will create a new PRR documenting the new methodology.
11/6/2019 7:45 AM
Logged By - Payton, Julia (CAISO)
Seattle City Light supports the comments submitted by Powerex and BPA on CAISO’s LMPM enhancements and the revisions to CAISO’s Business Practice Manual for Market Instruments.  In particular, Seattle has concerns with the description of the calculation and the approach proposed by CAISO as it may not appropriately and accurately reflect the true opportunity cost of a hydro resource participating in the EIM, and does not align with the policy intent or the tariff.  City Light agrees with Powerex’s interpretation of the tariff and their proposed approach to the weighting of the long-term component of the DEB and believes this accurately reflects a hydro resources opportunity cost and related DEB.

If you have any questions, please feel free to reach out.


SARAH DAVIS | EIM PROGRAM MANAGER
ENERGY INNOVATION AND RESOURCES
SEATTLE CITY LIGHT
sarah.davis@seattle.gov
TEL (206) 684-3148
10/25/2019 10:48 AM
Logged By - Payton, Julia (CAISO)
Public Generating Pool (PGP) echoes the concerns raised by Powerex, BPA, Seattle and others regarding the hydro DEB calculation in PRR 1190. Specifically, PGP believes the approach proposed for weighting prices within the long-term component of the hydro DEB does not align with the draft tariff language implementing the LMPM initiative and may result in a default energy bid that does not appropriately reflect the opportunity cost of a hydro resource. The draft BPM appears to assume that all of the output that is not sold at a given “additional hub” must be sold at the default hub, regardless of whether the default hub price represents the lowest price amongst other additional hubs. PGP believes the true opportunity cost of a hydro resource with multiple trading hubs is best reflected by calculating the transmission-weighted average price for each pricing term included in the long-term component, as described in the comments submitted by Powerex.
PGP thanks CAISO for the opportunity to provide feedback on the draft PRR and we would be happy to answer any questions or discuss further.

 
Lea Fisher, Senior Policy Analyst
Public Generating Pool
541-231-5019
lfisher@publicgeneratingpool.com
http://www.publicgeneratingpool.com/
10/25/2019 10:48 AM
Logged By - Payton, Julia (CAISO)
EWEB supports the comments submitted by Powerex, BPA, PGP, and others regarding the hydro DEB calculation in PRR 1190. Specifically, EWEB firmly believes that the approach CAISO proposed for weighting prices within the Long Term Component of the hydro DEB will result in a default energy bid that does not accurately or appropriately reflect the opportunity cost of a hydro resource.  It is EWEB’s position that Powerex’s interpretation of the tariff is accurate, and EWEB is in full support of Powerex’s documented approach to opportunity cost in the Long Term Component.  Should you have any questions regarding the weighting approach described therein, or its impact upon EWEB or similarly situated northwest entities, please feel free to reach out at your convenience.  Thank you for your time and attention.

Best Regards,

Matthew A. Schroettnig | Power Resources Counsel | Eugene Water & Electric Board |
(o) 541-685-7496 | (c) 541-913-6065 | (e) matthew.schroettnig@eweb.org |
10/25/2019 10:47 AM
Logged By - Payton, Julia (CAISO)
Bonneville would like to better understand the intent of the proposed BPM language that seems to weight the default hub higher than may be appropriate and potentially discounts the contributions from other long-term market hubs that are not as geographically proximate.  This proposed weighting outlined in the BPM does not appropriately reflect the opportunity costs faced by Bonneville, or any other market participant, when that market participant has the storage capability and transmission rights to deliver energy either to the default hub, NP-15 or SP-15 (for example – could be these or other hubs in practice) in one or more specified time horizons.  Bonneville’s understanding is that Powerex has provided extensive documentation to CAISO that appropriately reflect opportunity costs in the Long Term Component.  We have conferred with Powerex on their submission and support the weighting approach their submission describes.  If there are any questions or concerns you have for Bonneville regarding that weighting approach, we would be happy to address those with you.

Mark Symonds
Business Transformation Office
Bonneville Power Administration
905 NE 11th Avenue
Portland, OR 97232
mcsymonds@bpa.gov
10/23/2019 2:11 PM
Logged By - Payton, Julia (CAISO)
Powerex comment submitted 10/23/19
by Mike Benn  Mike.Benn@powerex.com
10/23/2019 11:01 AM
Logged By - Payton, Julia (CAISO)
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