RSS Feed for Proposed Revision Request - 1402

PRR - 1402

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Initial Comment for PRR - 1402

Description: 1. The cost-verification language on page 23 was removed. Are reference level change requests still the trigger for the $1,000/MWh soft bid cap to be raised as per FERC 831? 2. On page 32, section 3(a) mentions the fuel costs used by the CAISO to calculate reference levels. How do SC’s know what these fuel costs are? Will the CAISO make this information transparent in CMRI?
-By MichaelVolpePGE (Pacific Gas & Electric Company) on Tuesday, February 15, 2022 10:36:05 AM

Response: #1 Yes, this remains the case. The language was removed to ensure that Attachment P was the primary source of information on how the energy bid cap is set and how SCs can bid above the soft energy bid cap. #2 Good question. The answer is different for RTM and DAM. For RTM, the fuel region prices are posted to OASIS. For most DAM trade dates, the prices are not posted publically because of confidentially concerns from one of our vendors. However, you can back into them using the default energy bids and default commitment costs posted to CMRI and the formulas posted in the BPM for Market Instruments Attachments D and G, respectively. Alternatively, you can consult the WEB_ICE trading platform between 8-9AM on days on which the gas markets are actively trading Next Day gas. This is the source of the DAM fuel region gas prices for most trading days.
-By Martin, Michael on Tuesday, February 22, 2022 11:23:22 AM

Initial Comment for PRR - 1402

Description: SRP has identified a change in the aftermarket cost recovery in Section O.3.1 related to incremental versus average fuel pricing. SRP requests CAISO provide clarification on methodology changes from accepting the highest priced fuel cost to accepting a weighted average. There is concern that if the Scheduling Coordinator is a net-exporter from a particular resource, an average cost methodology might cover the costs to generate at base schedules submitted but would not cover the cost to export to the EIM footprint. SRP recommends the marginal costs be used to determine after cost market recovery.
-By Jerret Fischer (SRP) on Tuesday, February 15, 2022 3:35:19 PM

Response: The CAISO policy team discussed this with SRP on Friday 2/18/22 and are still working on a resolution.
-By Martin, Michael on Tuesday, February 22, 2022 7:58:17 AM

Announcement for PRR - 1402

Description: The ISO is placing PRR 1402 on hold to allow more time to respond to questions. This will be discussed at the March BPM meeting and then opened up again for recommendation comment period at that time to allow full stakeholder comment period. If you have questions, please email BPM_CM@caiso.com.
-By Hines, Nicole on Wednesday, March 2, 2022 10:02:11 AM

Initial Comment for PRR - 1402

Description: In Response to SRP Comments: The CAISO appreciates SRP’s feedback on these proposed BPM edits. The case that SRP brings up is unique to WEIM entities that procure fuel for the purposes of meeting their base schedule and then make an incremental fuel purchase for the purpose of participating in the WEIM. In this case, the incremental fuel purchase can indeed form the basis of the after-market cost recovery request. The CAISO added an example – Example 4 in section O.3.2 – to illustrate how this would work numerically.
-By Hines, Nicole on Tuesday, March 22, 2022 2:20:06 PM

Recommendation Comment for PRR - 1402

Description: SRP thanks the CAISO for considering using a marginal gas price rather than a weighted average to ensure WEIM entities may recover costs for exports. SRP is generally supportive of Example 4 given in section O.3.2 but would like some additional clarification: • What documentation would be needed to support the case where fuel was needed to meet EIM dispatch and to base the actual costs on the highest gas price? • Can next day gas procured to meet anticipated EIM dispatch also be used to represent actual fuel costs? In some cases, Scheduling Coordinators (SCs) may procure additional gas to ensure they can meet exports awards from the EIM. This ensures that they manage risk of penalties for over-burning or other reliability impacts. SRP also recommends adjusting the bullet “If there were multiple procurements for a quantity of fuel, the SC may only recover the actual costs paid for fuel. In such cases, the SC must provide all gas purchases for the applicable trade date and market as well as a calculation of the weighted-average gas price paid. See section O.3.2 for some example calculations of actual fuel costs.” This bullet refers to a weighted-average cost method which would not be applicable to Example 4 for EIM entities. SRP recommends rephrasing to “In such cases, the SC must provide all gas purchases for the applicable trade date and market as well as a calculation of a weighted-average gas price paid. For EIM Participating Resources, the SC may submit the marginal price(s) instead of the weighted-average if the incremental gas supply was used to support EIM exports.” Finally, SRP requests clarification on how transition cost reference level adjustments are incorporated into reference level changes or after market recovery. Are these costs able to be adjusted based on fuel costs similar to startup costs?
-By Jerret Fischer (SRP) on Tuesday, April 12, 2022 3:58:18 PM

Announcement for PRR - 1402

Description: The ISO is placing PRR 1402 on hold to allow time to review and respond to questions received during the PRR process.
-By Hines, Nicole on Friday, April 22, 2022 8:12:22 AM

Recommendation Comment for PRR - 1402

Description: CAISO is working with SRP on addressing concerns. This PRR will not progress to a final decision until complexities are addressed.
-By Martin, Michael on Wednesday, April 27, 2022 2:28:03 PM

Response: SRP thanks the CAISO for considering using a marginal gas price rather than a weighted average to ensure WEIM entities may recover costs for exports. SRP is generally supportive of Example 4 given in section O.3.2 but would like some additional clarification: • What documentation would be needed to support the case where fuel was needed to meet EIM dispatch and to base the actual costs on the highest gas price? The CAISO thanks SRP for this question and believes that this is a useful addition to the BPM. In consultation with SRP, the CAISO has made edits to Example 4 in the BPM which hopefully addresses this question. • Can next day gas procured to meet anticipated EIM dispatch also be used to represent actual fuel costs? In some cases, Scheduling Coordinators (SCs) may procure additional gas to ensure they can meet exports awards from the EIM. This ensures that they manage risk of penalties for over-burning or other reliability impacts. Yes, so long as the portion of the purchase can be demonstrated to have been procured to meet the EIM dispatch. The CAISO made a minor edit to help clear this up. SRP also recommends adjusting the bullet “If there were multiple procurements for a quantity of fuel, the SC may only recover the actual costs paid for fuel. In such cases, the SC must provide all gas purchases for the applicable trade date and market as well as a calculation of the weighted-average gas price paid. See section O.3.2 for some example calculations of actual fuel costs.” This bullet refers to a weighted-average cost method which would not be applicable to Example 4 for EIM entities. SRP recommends rephrasing to “In such cases, the SC must provide all gas purchases for the applicable trade date and market as well as a calculation of a weighted-average gas price paid. For EIM Participating Resources, the SC may submit the marginal price(s) instead of the weighted-average if the incremental gas supply was used to support EIM exports.” The CAISO thanks SRP for this suggestion and the CAISO has made the update to the BPM. Finally, SRP requests clarification on how transition cost reference level adjustments are incorporated into reference level changes or after market recovery. Are these costs able to be adjusted based on fuel costs similar to startup costs? The CAISO thanks SRP for this request and has added a clarification to the BPM to speak to this point. Default Transition Costs cannot currently be updated prior to the market running but can be adjusted through the after-market cost recovery process. We are exploring software changes to provide the functionality to allow adjustments before the market runs. --- Kevin Head, CAISO
-By Martin, Michael on Friday, May 20, 2022 3:25:22 PM

Announcement for PRR - 1402

Description: See May 20 Edits attached
-By Martin, Michael on Friday, May 20, 2022 3:39:54 PM

Recommendation for PRR - 1402

Proposed Language:

Recommendation based upon modified submission

Action: Approve the BPM PRR as modified.
Effective Date: 01/01/0001

Final Decision for PRR - 1402

Final Decision: Approve the May 20 version of Attachment O
Stakeholder Comment: SRP agreed
Action: Adopt the recommendation as modified
Effective Date: 06/14/2022