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CAISO board OKs enhancements for imbalance market

The California ISO board on Dec. 14 voted to increase automation and tweak the modeling that can be used in its energy imbalance market, or EIM, in part to ease integration of Powerex Corp. into the market next spring.

"Powerex strongly supports these enhancements, which largely seek to automate the ability to inform the EIM of activity that is already permitted and that already occurs today, albeit through manual processes," the company, a power marketing unit of BC Hydro and Power Authority, said in recent comments to the grid operator.

In addition to EIM changes, the CAISO board of governors approved an innovative way to model and respond to transmission outages. And the board agreed to allow project developers to put their transmission deliverability requests on hold for an additional year, amid a lull in contracts with renewable energy resources. CAISO will now make any necessary filings with the Federal Energy Regulatory Commission to implement the changes.

Regarding the EIM, the board decided to change its rules so that a model that was traditionally used for storage can also be used more broadly in the ISO market. The non-generator resource, or NGR, model reflects the ability of storage to seamlessly move from injecting energy to withdrawing energy from the grid, according to a memo to the board.

CAISO later made a new version of the model, named the core NGR model, so that it could be used for distributed energy resources as well. When it was implementing this version of the model, the grid operator realized it could be used in even more ways, such as modeling Powerex's upcoming participation in the EIM.

Powerex eyes revised model as it joins EIM

The EIM extends the real-time balancing features of CAISO's organized market to areas outside the grid operator's footprint. Powerex, the first non-U.S. participant to join the EIM, is slated to start participating in the market in April 2018.

"The core NGR model is useful for this because it can model an aggregation of resources participating in the EIM," according to a memo from Keith Casey, CAISO's vice president of market and infrastructure development.

Powerex is the main stakeholder looking to use the core NGR model in this way, but it is available to all market participants inside and outside the ISO, Don Tretheway, the grid operator's senior adviser on market design policy, told the board.

In reviewing other uses of the model, CAISO decided it needed to apply additional rules for core NGR. The resource must be capable of generating energy, it cannot be eligible to count as resource adequacy capacity, and certain resources may be subject to local market power mitigation rules, the memo said.

The board also approved EIM changes that would automate existing manual processes, facilitate bilateral settlements, and improve modeling accuracy.

Innovative plan to respond to outages

Meanwhile, the CAISO board also approved key changes to the model it uses to respond to transmission line outages. "This is a highly innovative proposal," Ben Hobbs, chair of the CAISO Market Surveillance Committee, told the board. "There is nothing like this at any of the other ISOs."

Instead of a predefined rule of what to do in an emergency, the modeling changes allow the system to determine the best way to get back to operating limits, Hobbs explained. While this idea has been discussed in theory for decades, the technology now exists to take this approach, he added.

The change helps CAISO ensure that there is enough generation available to quickly return electrical flows to normal levels after a power line goes out. Currently, the ISO uses exceptional dispatch to call on these generators, and the generators are not compensated for making this capacity available, according to a memo on the issue.

The changes approved by the board Dec. 14 would improve this process by explicitly modeling the capacity needed to return flows to normal levels after a transmission outage. This so-called corrective capacity would be modeled in the day-ahead and real-time markets and would receive a locational marginal corrective capacity price, the memo said.

"This enhanced modeling will improve the market dispatch, decrease operator reliance on inefficient minimum online commitment constraints, decrease operator out-of-market actions, and appropriately compensate resource capacity the ISO relies on in the event of a transmission contingency," the memo said.

The grid operator had agreed to address this issue as part of a settlement with FERC and the North American Electric Reliability Corp. related to the 2011 Pacific Southwest blackout, the memo noted.

The board also approved a measure to allow renewables developers to put their transmission deliverability requests on hold for an additional year, for a total of two years, while they wait for a contract with a utility. Currently, 30 projects are parked in the process and 20 of those projects would be eligible to park for a second year under the changes, ISO Manager of Interconnection Resources Bob Emmert told the board.

The change is needed because utilities have slowed their procurement of renewables as they near their requirement to get 33% of power from renewables by 2020, and utilities are not yet procuring for the requirement to get 50% from renewables by 2030, Emmert said.

Kate Winston is a contributing reporter to S&P Global Platts, which, like S&P Global Market Intelligence, is owned by S&P Global Inc.