FERC gave fast-track approval Thursday to CAISO Tariff changes meant to discourage sellers from failing to deliver on import energy bids (ER20-1890).
The changes are partial fixes to ongoing problems that may have contributed to the energy emergencies of August and September. The import issues are being addressed more fully in the ISO’s Resource Adequacy Enhancements Initiative. (See related story, CAISO Seeks ‘Firm’ Tx for Resource Adequacy.)
“CAISO states that the proposed revisions address problems arising from significant amounts of undelivered intertie transactions in the CAISO market and will improve system reliability and price stability,” FERC said.
In its filing, CAISO said imports from neighboring balancing authority areas serve up to 25% of load at times. Undelivered imports can undermine reliability, skew market prices and cause inefficient use of transmission paths.
CAISO asked FERC to approve increased charges for non-delivery and enhanced rules for intertie schedules and e-Tags by Oct. 1. The commission agreed the changes would help.
“Taken together, these revisions improve CAISO’s current Tariff rules, which otherwise may not sufficiently incentivize a market participant to deliver an awarded intertie transaction,” it said.
Two commenters, CAISO’s Department of Market Monitoring and Powerex, contended the ISO needs more substantial, long-term solutions to its import problems.
“Powerex states that intertie non-deliveries have contributed to emergency conditions in CAISO and contends that delivery failures reflect CAISO’s inability to distinguish firm energy supply from non-firm energy, unit-contingent energy and speculative supply in dispatch, pricing and settlement,” FERC wrote. “Powerex argues that even if CAISO’s proposed measures reduce intertie delivery failures, the displacement of firm energy in CAISO markets by speculative and non-firm supply will continue to create reliability challenges and price spikes.”
Similarly, the DMM expressed concern that CAISO meets too much of its resource adequacy requirements with imports and that current rules could allow “high-priced day-ahead import bids that are not backed by resources that are available in the real-time market.”
FERC agreed that CAISO “should continue to work with stakeholders to develop solutions to the market design challenges raised in the comments.”
“We encourage CAISO to further improve its rules for intertie transactions through the ongoing Resource Adequacy Enhancements and Day-Ahead Market Enhancements stakeholder initiatives,” it said.