This note is being sent to all scheduling coordinators in connection with scheduling energy storage resources in the ISO’s markets. Energy storage resources have megawatt hour energy limits, limits on frequency of battery cycling, as well as depth of charge/discharge limitations. The ISO understands that in some cases these limits are the result of maintenance contracts and/or negotiated warranty arrangements in which the resource operator faces additional costs for maintenance and/or augmentation of battery cells, if the resource is operated in a manner that is inconsistent with agreed-upon terms.
The ISO does not currently have rules that allow energy storage resources to manage these types of limitations through the use of the outage management system. The ISO is exploring options in its Energy Storage and Distributed Energy Resources Phase 2 initiative to determine whether market enhancements are appropriate to manage such constraints. Materials related to this initiative are available on the ISO website at:
http://www.caiso.com/informed/Pages/StakeholderProcesses/EnergyStorage_DistributedEnergyResourcesPhase2.aspx.
Until any such market enhancements (and their associated tariff amendments) are put into effect, market participants should only use outage cards to report de-rates of resources due to physical reasons. Nothing herein precludes scheduling coordinators for battery resources from reflecting the cost of operating their resource or managing their resource’s state of charge through the submission of economic bids. 
