Briefing

  • In comments submitted to the California Independent System Operator (CAISO) on recent performance data for its Extended Day-Ahead Market (EDAM), multiple commenters—including staff from the California Public Utilities Commission (CPUC) Energy Division—pointed out data discrepancies or unclear methodologies and asked CAISO to publish more of the methodology behind its conclusions.
  • CPUC staff noted in comments filed August 12 that "it is unclear why CAISO made a 592.50 MW load adjustment on June 11" and questioned the logic behind CAISO's August 4 adjustment of 3,590 MW.
  • California's "Six Cities" (Anaheim, Azusa, Banning, Colton, Pasadena, and Riverside) filed comments August 13 requesting an ongoing cost-benefit analysis of EDAM, citing the "extremely high resource commitment" by CAISO and market participants versus the "negligible benefits" in the market's first two months.

Deep Dive

CAISO's EDAM is the West's first day-ahead market, launched in May. PacifiCorp is EDAM's first non-CAISO participant and remains the only one, but Portland General Electric plans to join October 1.

"EDAM's total gross benefits for May and June were $11.38 million across the entire market. Of that, the CAISO balancing authority area (BAA) had gross benefits of $5.96 million," the Six Cities wrote in their comments. "However... the CAISO BAA transferred $2.67 million in congestion revenue to PacifiCorp, about 45% of its gross benefits."

The Six Cities further noted that "a comparison of costs and benefits received by balancing areas participating in EDAM and the Western Energy Imbalance Market (WEIM) should guide the allocation of future market cost responsibilities. Benefits received from participating in EDAM or WEIM should be at least roughly proportional to market cost responsibilities."

CPUC staff comments questioned CAISO's load adjustment calculations for insufficient imbalance reserve up capacity (IRU) on June 11 and August 4. CPUC staff wrote they understand CAISO's operating procedures require "procuring 100% of IRU requirements at the 97.5% probability level when load exceeds 42,000 MW, but the June 11 day-ahead load forecast was 37,000 MW."

"Therefore, it would be very helpful if CAISO could explain the reason for the residual unit commitment (RUC) load adjustments on June 11 (particularly hour 14, as well as other hours)," CPUC staff wrote.

CPUC staff also said the August 4 adjustment "appears larger than expected." At that time, the system appeared to be "fully resourced" to meet the published demand by covering 90% of potential outcomes, but even if CAISO was addressing more uncertainty by procuring enough load to cover 97.5% of outcomes, the additional 3,590 MW "is four times the amount of need," CPUC staff said.

"It is difficult to understand how moving from the 90% uncertainty level to the 97.5% level would increase the need by nearly five times (i.e., from about 900 MW to 4,400 MW, or about 900 MW + about 3,600 MW)," staff wrote.

"I think the strongest point in the Energy Division comments is that the data currently public does not allow stakeholders to reproduce the calculations behind some of CAISO's key results," energy and regulatory analyst Michael Cade said in comments to Utility Dive. "That discrepancy alone does not prove the adjustments are wrong. CAISO used a separate, higher uncertainty benchmark to calculate these adjustments."

"The Energy Division's concern is that the published data does not show how that calculation produced the 592.5 MW and 3,590 MW adjustments," he said.

Cade also said "similar concerns apply" to the Six Cities' challenge of CAISO's $11.38 million EDAM benefit estimate. "CAISO reported the total and its allocation among the three participating balancing areas, but did not provide the underlying counterfactual results or a dollar breakdown by benefit component," he said.

In CPUC staff comments, they noted CAISO "stated" at a previous meeting that it had run a counterfactual analysis "comparing CAISO day-ahead market results with EDAM day-ahead market results," and asked CAISO to share those results at the next Market Performance and Planning Forum.

Wholesale power marketer Powerex Corp. filed comments August 14 asking CAISO to report "congestion revenue based on the congestion cost areas where market participants pay." The company wrote that it is currently "unclear how much of the $37.6 million in constraint-related congestion revenue within the California ISO BAA was paid by market participants in PacifiCorp West and PacifiCorp East."

These stakeholder comments were filed in response to CAISO's Q3 Market Performance and Planning Forum held July 30. According to CAISO's website, its Q4 Market Performance and Planning Forum is "tentatively" scheduled for October 29.