References -
- FERC, Docket ER24-872, 1/12/2024, effective 4/1/2024.
- FERC, Docket ER25-54, 10/8/2024 effective 1/1/2025.
2.1 -
- “Comply with Operating Instructions" (CAISO Tariff Section 37.2).
- “Submit Feasible Bids and Submissions to Self-Provide" (CAISO Tariff Section 37.3).
- “Comply with Availability Reporting Requirements" (CAISO Tariff Section 37.4).
- “Provide Factually Accurate Information" (CAISO Tariff Section 37.5).
- “Provide Information Required by CAISO Tariff" (CAISO Tariff Section 37.6).
- “Provide Monitoring Data" (CAISO Tariff Section 37.7).
2.2 - Conduct that potentially violates the Rules of Conduct which CAISO administers are listed in “Administration” (CAISO Tariff Section 37.1.5) and include failures to provide accurate and timely SQMD, failure to comply with generator availability reporting requirements, etc.
3. - Changed "initial review" to "preliminary investigation" throughout
3.2 - Self-reports of conduct that potentially violates the Rules of Conduct
Exhibit 3-2 - Updated flow chart to reflect new process
Exhibit 3-3 - Update flow chart to reflect new process.
3.3 -
(a) Market Participants have 30 calendar days to respond to the allegations before the CAISO determines the results of the investigation including whether a Sanction is required.
(b) On completion of an investigation, the CAISO notifies relevant Market Participants of the results of its investigation and of any applicable Sanctions.
(c) If the investigation does not identify a violation, the CAISO informs relevant Market Participants that no action is being taken by the CAISO.
(d) If the investigation concludes that a Rule of Conduct was violated and that a Sanction is required by the Tariff, the results of its investigation state that the Market Participant whose conduct gave rise to the Sanction may obtain immediate review of the CAISO's determination by directly appealing to FERC within 30 days from the date of the results of review notice as described in Section 37.8.10 of the CAISO Tariff. If the Market Participant appeals with FERC within 30 days and communicates the FERC Docket number to the CAISO, any financial penalty associated with the Sanction is tolled pending FERC's ruling on the appeal. Otherwise, the CAISO proceeds to administer Sanctions as described in Section 3.4.
3.3.4 - Sanctions may only be assessed if the CAISO issues a notice of review within 90 calendar days of the CAISO's discovery of the events subject to investigation. The CAISO may assess Sanctions under CAISO Tariff Section 37 up to one year after discovery of the events constituting a violation of the Rules of Conduct, but no later than three years after the date of the violation. The CAISO's discovery date for Rules of Conduct violations is recorded as the date that the CAISO business unit responsible for the Rule of Conduct in question became aware of the violation. That awareness is established either through business unit review (manual or automated) of market data or via a self-report.
3.3.5 – Results of Review
CAISO Tariff 37.8.5, Results of Review
At the conclusion of its investigations, the CAISO determines whether a violation occurred or not and notifies the Market Participant in its results of review notice. If the CAISO determines that no violation occurred, the results of review states “no violation" and that the CAISO considers the matter closed. If a violation did occur, the results of review states that the investigation found that a violation did occur and describes any applicable Sanction required by the CAISO Tariff.
3.4 - CAISO Tariff 37.8.6, Assessment of Sanctions
CAISO Tariff 37.9, Administration of Sanctions
Where the CAISO has determined that a violation occurred and where that violation requires a Sanction, the CAISO administers the Sanction through a process that includes the following steps:
- Determination of Sanctions (Section 3.4.1).
- Notification of Affected Parties (Section 3.4.2).
- Settlement of Penalties (Section 3.4.3.1).
- Market Participant Appeals to FERC (Section 3.4.3.2).
Exhibit 3-4 describes the process the CAISO uses to administer Sanctions. The CAISO first determines the appropriate Sanction in accordance with the CAISO Tariff and notifies the Scheduling Coordinator/Market Participant of the Sanction along with its results of review. The Market Participant has the right to directly appeal Rules of Conduct Sanctions imposed by the CAISO to FERC. Financial penalties which are not appealed to FERC within 30 days of the results of review notice are subsequently invoiced through the CAISO Settlement Process, but no sooner than 30 days from the results of review notice. Further details of this process are provided in the following sections.
Exhibit 3-4 – New sanction administration process
3.4.2 -
CAISO Tariff Section 37.9, Administration of Sanctions
As stated in Section 3.3.5, at the conclusion of its investigation the CAISO determines whether a violation occurred and communicates the results of its review including any applicable Sanction to the responsible Scheduling Coordinator and all Market Participants the Scheduling Coordinator represents that are liable for the penalty[2]. If the Sanction is a financial penalty, the CAISO also provides the following information:
- Description of the penalty, including identity of the Market Participant(s) that committed the violation and the amount of the penalty.
Specification of whether penalty is modified pursuant to CAISO Tariff Section 37.4.4.
3.4.3 -
Penalties for Rules of Conduct violations, as well as market adjustments for inaccurate, late, or missing Meter Data, are invoiced through the CAISO Settlement Process and will appear on a Settlement Statement no sooner than 30 days after the CAISO has provided its results of review. Market Participants may appeal penalties assessed by the CAISO to FERC. The CAISO holds the proceeds of penalties collected in a trust account, allocating them after the completion of the calendar year during which they were assessed to Market Participants that have not incurred a penalty during that calendar year under CAISO Tariff Section 37, in proportion to GMC paid per CAISO Tariff Section 37.9.4.
3.4.3.1 – Title now “Settlement of Penalties"
3.4.3.2 –
Title - Market Participant Appeals to FERC
Body - Penalties assessed under CAISO Tariff Section 37 may be appealed to FERC as outlined in CAISO Tariff section 37.8.10. If a Scheduling Coordinator or a separate responsible Market Participant desires to appeal the CAISO's determination that the tariff requires a financial penalty for a particular matter, the applicable Scheduling Coordinator must provide the FERC Docket number for the appeal to the CAISO within the CIDI case for the Rules of Conduct event within 30 days from the results of review notice to qualify for penalty tolling. Additionally, a Scheduling Coordinator that appeals to FERC is requested to direct service of its appeal to the CAISO Legal Department via e-recipient@caiso.com. Serving the Legal Department, however, does not substitute for providing the Docket number in the CIDI case.
If FERC denies an appeal, the CAISO will assess the penalty on a subsequent Settlement Statement, after notice (ordinarily within the CIDI case for the Rules of Conduct event) to the relevant Scheduling Coordinator has been given.
3.4.4 - CAISO distributes these funds to eligible Market Participants, through Scheduling Coordinators. Ineligible Market Participants are generally those Market Participants that were assessed a financial penalty during the calendar year, and are described in detail in CAISO Tariff Section 37.9.4.
The penalty funds are distributed by CAISO as follows:
- After the end of each calendar year, each Scheduling Coordinator that is an ineligible Market Participant or that represented an ineligible Market Participant during that calendar year will identify the amount of GMC paid…
3.5 - The CAISO retains records of Rules of Conduct investigations per CAISO Tariff Section 37.8.9 and as required by the CAISO Record Retention Policy, The record of investigation includes copies of the notifications issued to Market Participants and all data that the CAISO considered relating to the following issues: a) whether the Rules of Conduct were violated; b) any information that the Market Participant provided to indicate that a violation did or did not occur; and c) whether any separate Market Participant was responsible for the violation.