Notice

07/31/2024

REQUESTED ACTION

Information only

CATEGORIES

Markets
Information Technology

Price Formation Enhancements: Rules for Bidding Above the Soft Offer Cap Activation effective 8/1/24

The California ISO’s Price Formation Enhancements: Rules for Bidding Above the Soft Offer Cap implementation via Default Energy Bids (DEBs), Scheduling Infrastructure and Business Rules (SIBR) and Market will be active for effective trade date August 1, 2024 onwards.

 

This initiative makes modifications to the rules for bidding above the soft offer cap for resources; especially allowing resources with intra-day opportunity costs to reflect those costs in their energy bids:

 

  • Revise the cap on all DEBs from $1,000/MWh to $2,000/MWh (“Uncap the DEB”). This would allow hydro and other resources to bid up to a value that reflects the opportunity costs above $1,000/MWh as defined by their DEB

 

  • Modify the bid cap for energy storage resources to provide comparable bidding flexibility using a proxy value as max ($1000, DEB, 4th highest Maximum Import Bid Price (MIBP), highest cost verified bid) in the real-time market only.

 

DEBs

  • Replace the $1000/MWh cap on Default Energy Bids (DEBs) with a value of $2000 in internal system
  • Replace the $1000/MWh cap on Negotiated Default Energy Bids (NDEBs) Calculation with a value of $2000

 

SIBR

Bid Cap rule updates for Non Generation Resource (NGR):

  • Build a function turn on the new bid cap rules using effective date
  • Cap the Day-Ahead Market(DAM)/Real-Time Market (RTM) energy bid for the non-NGR resource-specific generating resources at max($1000, DEB, Adjusted DEB from Reference Level Change Request (RLCR)
  • Set Daily NGR MIBP to 4th highest MIBP for the trading day with latest MIBP
  • Identify hourly highest cost verified bid for each trading hour in RTM
  • Cap the energy bids for Non Generation Resource – Limited Energy Storage Resource (NGR-LESR) at max ($1000, DEB, 4th highest MIBP, highest cost verified bid) for Trade Hour (TH) in RTM
  • Cap the energy bids for all NGR at max ($1000, DEB) for TH in Trade Day (TD) in DAM
  • Cap the energy bid for NGR that not registered as LESR at max ($1000, DEB) in RTM

 

Market

  • For the Storage DEB calculation, Change the Storage DEB bid CAP limit from $1000 to $2000

 

The CAISO continues efforts on modification of the Maximum Import Bid Price (MIBP) hourly energy shaping factor, as discussed with Stakeholders at the May 28, 2024 MIBP Workshop, separately from this activation. This additional change will be managed through a subsequent Business Practice manual change.

 

 

The release and project information is available in the Release User Group presentations available on the Release User Group webpage and on the Release Planning webpage

Contact information

Please contact Trang Vo at tvo@caiso.com with any questions. For issues, contact the ISO Service Desk at (916) 351-2309 or (888) 889-0450.

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