Capacity Procurement Mechanism Significant Event - Intent to Solicit and Designate Capacity; Informational Call 7/2/21
The California ISO is seeking capacity it can procure under its Capacity Procurement Mechanism (CPM) to address a CPM significant event.
The ISO tariff defines a CPM significant event as a “substantial event, or a combination of events, that is determined by the ISO to either result in a material difference from what was assumed in the resource adequacy program for purposes of determining the Resource Adequacy Capacity requirements, or produce a material change in system conditions or in CAISO Controlled Grid operations, that causes, or threatens to cause, a failure to meet Reliability Criteria absent the recurring use of a non-Resource Adequacy Resource(s) on a prospective basis.”
On June 29, 2021, Marybel Batjer, President, California Public Utilities Commission, and David Hochschild, Chair, California Energy Commission, sent a letter to Elliot Mainzer, President of the ISO. (See joint statement and letter here) The letter cites several significant changes in the assumptions underlying the resource adequacy program and in system conditions, including: (1) significantly reduced hydroelectric production due to worsening drought conditions; (2) unforeseen limitations on output of thermal resources; (3) extreme heat events that have begun unseasonably early; (4) planned online dates for several new
resources have been delayed beyond the summer; (5) further development of demand-side resources in response to emergency procurement authorizations remains uncertain; (6) resources sufficient to meet peak demand are not always adequate to support peak demand net of wind and solar generation (i.e., the net peak demand); and (7) the timeline of the resource adequacy compliance processes provide limited ability to address the changed conditions in the near term. The June 29 letter requests the ISO use its tariff-based authority to procure additional capacity in response to these factors. The ISO has concluded that the combination of these factors constitutes a CPM significant event that may last through October. The ISO expects to use its CPM authority to address this
Under section 43A.4.2.1 of the ISO tariff, in designating CPM capacity the ISO will first look to meet its minimum designation criteria from capacity offered to the intra-monthly CPM competitive solicitation process (CSP) for the month in which the designation will begin. If there is insufficient capacity from those offers to meet the ISO’s needs, the ISO may then offer CPM designations to capacity not offered into the intra-monthly CSP. If the ISO cannot meet its minimum designation criteria from both capacity offered and not offered in the CSP, then the ISO “may reassess and lower the minimum criteria.”
The ISO intends its minimum criteria to cover capacity available at least during the net peak hours (4 p.m.-9 p.m.) and, for imports, that are both deliverable to the ISO at the delivery intertie and supported by firm transmission (or reasonably equivalent) rights to the delivery intertie.
Regardless of whether the capacity was offered to the CSP, the CPM significant event designations are for an initial 30-day term with a potential 60-day extension if the ISO determines the CPM significant event is likely to extend beyond the initial 30-day term and the scheduling coordinator accepts the 60-day extension. Capacity not offered to the CSP will be compensated at the CPM soft offer cap or at a higher price calculated per a cost-based formula in the ISO tariff and approved through a filing with the Federal Energy Regulatory Commission. Scheduling coordinators with non-resource adequacy capacity that is available and willing to receive a significant event CPM designation during this significant event should contact the ISO through a Customer Inquiry, Dispute
and Information (CIDI) ticket as soon as possible, and preferably by July 7. In addition to submitting a CIDI ticket, parties with capacity available to meet this significant event should also submit offers to the intra-monthly CSP for August, September, and October.
When submitting a CIDI ticket, please submit with the subject line “Summer 2021 CPM Significant Event” and include the following information:
MW available and eligible for CPM
Dates the capacity is available to serve as CPM capacity
If the scheduling coordinator is likely to accept a 60-day designation extension were it offered
If the scheduling coordinator intends to seek compensation above the soft offer cap through a cost showing approved by the Federal Energy Regulatory Commission
For informational purposes, scheduling coordinators that would accept a designation based on compensation above the soft offer cap justified on a basis other than the tariff-based formula should also contact the ISO through a CIDI ticket with the above-noted subject line and resource information.
The ISO will hold a public stakeholder call to discuss this matter on Friday, July 2, 2021.
Technical support: call the AT&T Help Desk at 1-888-796-6118
Please notify the ISO of potential availability by CIDI or, if that is not feasible, by contacting ISO Customer Service at 916-608-7320. For questions, please contact Abdul Mohammed-Ali at 916-671-9678.