As natural gas markets experience continued volatility, due to extreme cold winter weather in other parts of the country, the California ISO is seeking approval of the Federal Energy Regulatory Commission (FERC), through an emergency filing, to accelerate the implementation of its FERC Order No. 831 compliance for energy cost recovery in two phases. The ISO is seeking an effective date of today Feb. 17, 2021, for the first phase, and an effective date of no later than March 21, 2021, for the full implementation of its compliance with FERC Order No. 831, as previously approved by FERC in Docket No. ER19-2757-000.

In the first phase, the ISO is seeking authority to implement the element of FERC Order No. 831 that allows suppliers to submit fuel costs where the incremental energy bid is above $1000 per megawatt-hour (MWh). If costs incurred can be manually verified, the ISO will provide after-the-fact cost recovery through an uplift payment. This will provide immediate assurance that suppliers are not at risk due to higher than normal fuel costs and will help provide access to gas resources during these volatile conditions. Scheduling Coordinators must still enter bids up to the $1,000/MWh bid cap but will need to follow the manual reference level change process of the Commitment Cost and Default Energy Bid Enhancement (CCDEBE) process to recover costs above $1,000/MWh.

In order for requests to be eligible for after-the-fact cost recovery of bids above $1,000/MWh, Scheduling Coordinators must follow a similar process used for manual reference level change requests under CCDEBE which includes:

• Scheduling Coordinators must submit their request via a Customer Inquiry, Dispute and Information (CIDI) ticket by 8:00 a.m. of the business day on which the applicable ISO Market is executed.
• Scheduling Coordinators must submit the actual or expected fuel costs to be used in the calculation of their incremental bids in the request to the ISO to validate.
• For gas-fired resources, the Scheduling Coordinator must submit the gas fuel cost only and not include the gas transportation cost.
• In the submission of the request, the Scheduling Coordinator must include contemporaneously available information that shows that its resource’s actual or expected fuel costs or fuel-equivalent costs exceed the fuel or fuel-equivalent costs used to calculate the resource’s incremental bids.
• Scheduling coordinators need to identify the request is for incremental bids to differentiate the request from manual request for reference bids

After today, the ISO will endeavor to implement the full FERC Order 831 compliance as previously approved by FERC, which will also authorize the ISO to verify fuel price increases before the market run so that our market prices appropriately reflect those costs.