California Public Utilities Commission staff have publicly challenged CAISO EDAM load-balancing methodology, citing mathematical inconsistencies that could delay grid integration for new loads.

The California Public Utilities Commission’s Energy Division staff has requested that the California Independent System Operator publish the methodology behind data discrepancies in its newly launched Western day-ahead market, EDAM. EDAM debuted in May, with PacifiCorp serving as its inaugural—and still only—non-CAISO participant, though Portland General Electric is scheduled to join on Oct. 1. According to comments from the Six Cities coalition, “EDAM gross benefits for May and June totalled $11.38 million for the entire market. Of the total amount, gross benefits to the CAISO BAA were $5.96 million,” the group wrote. “However … the CAISO BAA transferred $2.67 million in congestion revenues to PacifiCorp, amounting to about 45% of the attributed gross benefits.” The Six Cities added that “a comparison of costs and benefits accruing to the [Balancing Authority Areas] participating in the EDAM and the [Western Energy Imbalance Market] should guide the allocation of responsibility for market costs going forward. Benefits received from participating in either or both of the EDAM and WEIM should be at least roughly proportional to responsibility for market costs.”

CPUC staff also questioned CAISO’s mathematical approach to load adjustments made on June 11 and Aug. 4 following a shortage of Imbalance Reserve Up (IRU) capacity. Staff noted that while CAISO’s operating procedure requires it to “procure 100 percent of the IRU requirement at the 97.5 percent level when load exceeds 42,000 MW,” the day-ahead load forecast for June 11 was only 37,000 MW. “Therefore, it would be helpful if CAISO could explain the reason for the [Residual Unit Commitment] load adjustments on June 11th, specifically for [hour fourteen], but for the other hours as well,” CPUC staff wrote. Adjustments on Aug. 4 “[seemed] larger than one would expect,” staff observed. Although the system appeared “fully resourced” to meet published requirements by covering 90% of potential outcomes, CAISO instead procured enough load to cover 97.5% of outcomes, resulting in an additional 3,590 MW. Staff noted this extra volume is “four times as much of the requirement,” adding, “It is difficult to understand how moving from the 90 percent uncertainty to the 97.5 percent uncertainty would increase the requirement nearly fivefold (i.e., from ~900 MW to 4,400, or ~900 MW + ~3600 MW).”

Energy and regulatory analyst Michael Cade highlighted transparency concerns in comments to Utility Dive. “I think the strongest element of Energy Division's comments is that currently available public data don’t allow stakeholders to reproduce the calculations behind some of the CAISO's key results,” Cade wrote. “That discrepancy alone doesn't show that the adjustments were wrong. CAISO uses a separate, higher uncertainty benchmark to calculate them.” He clarified that “Energy Division's concern is that the published data don't show how that calculation produced adjustments of 592.5 MW and 3,590 MW.” Cade noted that “a similar concern applies” to the Six Cities’ questions regarding CAISO’s $11.38 million EDAM benefits estimate. “CAISO reports the total and its allocation among the three participating balancing areas, but not the underlying counterfactual results or a dollar breakdown by benefit component,” he said. In its own comments, CPUC staff pointed out that CAISO had previously indicated it ran a counterfactual “comparing the CAISO day-ahead market results with the EDAM day-ahead market results,” and urged the ISO to share those findings at the next Market Performance and Planning meeting.

Separately, wholesale electricity marketer Powerex Corp. submitted comments on Aug. 14 requesting that CAISO report “congestion revenue based on the area where market participants paid the congestion cost.” Currently, “it is unclear how much of the $37.6 million in congestion revenues associated with constraints in the California ISO BAA were paid by market participants in PacifiCorp West and in PacifiCorp East,” the company stated. These stakeholder remarks were filed in response to CAISO’s Market Performance and Planning Forum Q3 meeting on July 30. According to the ISO’s website, the Q4 forum is tentatively scheduled for Oct. 29.