FERC granted CAISO‘s request to remove the sunset date on the Western Energy Imbalance Market Assistance Energy Transfer feature, which has been used by more than 10 of the market’s balancing area authorities in recent years.

CAISO originally planned to end the AET feature Dec. 31, but asked FERC to allow it to keep the program in place to accommodate BAAs that continue to experience supply constraints during certain trading intervals in the WEIM (ER25-3491).

Under the WEIM tariff, when a BAA has insufficient supply or ramping capacity, CAISO can use the AET feature to limit the amount of market transfers into and out of the BAA. The BAA receives a surcharge based on the lower of either the failure amount or of the final incremental transfer amount.

The WEIM resource sufficiency evaluation shows whether a BAA has enough capacity and flexibility to meet forecast demand and uncertainty. The evaluation has four tests: a feasibility test, a balancing test, a capacity test and flexibility test. CAISO’s AET feature is open to a BAA that fails the capacity and/or the flexibility test.

Before the AET feature was implemented in 2023, if a BAA failed a capacity or flexibility test, they became ineligible to receive incremental energy transfers from other balancing areas in the WEIM, CAISO said in its Sept. 23 filing with FERC to extend AET.

Supporters of the AET extension include the Balancing Authority of Northern California, NV Energy and CAISO’s Department of Market Monitoring (DMM).

In the past two years, DMM has not found that a BAA systematically relies on the AET feature, DMM said in Oct. 14 comments to FERC.

“AET transfers occur relatively infrequently, and at relatively low volumes with low associated cost when they do occur,” DMM said in the comment filing.

However, DMM said it still has outstanding concerns about the feature, such as its potential to allow BAAs to inappropriately lean on the WEIM footprint for capacity, and for the possibility for surcharges to apply to WEIM transfers that are not the direct result of selecting the program, the order says. However, neither of these concerns requires immediate action: Each could be addressed in future revisions of the AET feature, DMM said, according to the order.

As part of the approved order, CAISO will also adjust the AET feature to exempt surcharges that occur when a BAA fails the resource sufficiency evaluation, as long as the BAA works with its reliability coordinator to ensure reliable operations, the order says. This change will help ensure WEIM participants do not need to weigh potential surcharge liabilities against prudent reliability-driven actions, the order says.

When CAISO launches its Extended-Day-Ahead Market (EDAM) next year, participants in that market will also be able to access the AET feature, the ISO said in the Sept. 23 filing.