FERC accepts Cal-ISO annual study plans to asses local capacity requirements

Houston — The US Federal Energy Regulatory Commission has accepted the California Independent System Operator's tariff filing to align its annual study of local capacity procurement requirements with current reliability mandates and transmission planning standards.

There were no comments, protests or motions filed by the December 30 deadline and the tariff revisions are accepted for filing, effective February 1, as requested, according to the FERC letter. Requests for rehearing by FERC may be filed within 30 days of the order, which was issued Friday.

BACKGROUND

The December 9 tariff filing (ER20-548) made clear the ISO's responsibility to calculate local capacity area resource procurement obligations, and the California Public Utilities Commission's role in using its own methodology to allocate those obligations to load serving entities.

The alignment sought through the filing is intended to ensure that load serving entities' approach to procuring local capacity area resources is consistent with how the ISO plans for transmission system reliability through its transmission planning process.

The ISO asked FERC to act on its filing before February 1 to avoid having to push back the regular schedule for conducting the local capacity technical study and risk delaying the PUC's resource adequacy proceedings.

The final study results must be available for the PUC by May 1 in order for the state utility regulator to adopt by mid-July its decision allocating resource adequacy requirements.

ANNUAL STUDY

The ISO conducts a local capacity technical study every year that informs local serving entities of procurement requirements tied to the minimum amount of resources needed in each local capacity area.

In turn, local serving entities submit annual and monthly resource adequacy plans to the ISO laying out the resources procured to satisfy these local capacity area requirements. The grid operator reviews the plans to ensure sufficient capacity and can use its capacity procurement mechanism authority to fill any gaps in resource procurement efforts.

The specificity of the study's criteria have not kept pace with mandatory transmission planning standards crafted by the North American Electric Reliability Corp. and evolving regional standards set by the Western Electricity Coordinating Council and the ISO itself.

When NERC, WECC or Cal-ISO reliability criteria call for transmission system reinforcement but the local capacity technical study criteria does not, load serving entities are prohibited from undertaking "resource procurement in lieu of Cal-ISO-identified transmission alternatives, even if such procurement would be economically or environmentally preferred," the grid operator said in its filing with FERC.

While the grid operator "can direct the construction of transmission upgrades, it cannot direct load serving entities to develop and/or procure generation or other non-transmission alternatives to meet reliability needs," the filing said.

REVISIONS

The ISO has proposed replacing the specific list of contingencies — potential unplanned outages that are taken into consideration when operating the system — studied in the local capacity technical study with language directing assessment of "all the contingencies and appropriate performance levels required by mandatory standards including, but not limited to, NERC , WECC and [Cal-ISO] planning standards."

This "will better align local capacity technical study procurement requirements and long-term resource planning requirements, which in turn will provide a level playing field for the development and procurement of new resources or other non-transmission solutions as alternatives to address identified transmission needs and meet the mandatory standards," the ISO states in the filing.

The tariff revisions would also limit the applicability of a requirement to mitigate against voltage collapse and dynamic instability to areas that experienced a load drop of at least 250 MW. But any risk of cascading outage would free the ISO to pursue mitigation in areas with less load.

"Practically, this means that [Cal-ISO] will establish local capacity requirements that will avoid loss of load during these extreme events in local areas with load in excess of 250 MW," the grid operator said, adding the proposal would "continue to go beyond NERC minimum requirements." Extreme event contingencies involve the loss of a single transmission element followed by the loss of two transmission lines.