A stakeholder initiative to help ensure resource adequacy this summer is headed to the CAISO Board of Governors later this month with the goal of implementing its first phase of measures by June 1.

The initiative, which began in 2018 but was fast-tracked last year, proposes RA enhancements to avoid shortfalls like those California experienced in August and September, when energy emergencies and rolling blackouts highlighted weaknesses in the state’s RA planning and procurement.

A key proposal requires generators to find substitute resources during planned outages. Another part of the plan seeks to make sure storage batteries can serve as RA resources during times of strained supply. A third would expand CAISO’s backstop procurement authority to local areas that are resource insufficient.

“The objective of this ongoing effort is to ensure the CAISO’s resource adequacy rules and tools remain relevant and guide the procurement of capacity that can reliably and sustainably support the rapidly evolving needs of the grid all hours of the year,” a final written proposal said.

CAISO staff and stakeholders discussed the proposal during a call Feb. 23. The board will vote on the plan at its March 24-25 meeting.

The planned outage component “will require all planned outages for RA resources to bring full substitute capacity for the outage to be approved,” Karl Meeusen, senior adviser for infrastructure and regulatory policy, said in the session.

“We considered whether or not to have some sort of ‘hey, you got close enough’ standard,” he said. “However … because we have shaped monthly RA requirements,” CAISO decided that replacing 100% of the capacity on planned outages would better ensure “that the month-by-month RA obligations and requirements continue to be fulfilled on an everyday basis.”

A root-cause analysis of the Aug. 14-15 rolling blackouts found CAISO had 514 MW of planned outages that were not replaced on Aug. 14 and 421 MW of planned outages that were not replaced on Aug. 15. (See CAISO Issues Final Report on August Blackouts.)

Of those, “the largest planned outage [of a natural gas plant] had been approved for maintenance in June but had extended into peak summer months without providing replacement capacity,” the root-cause report said. “This outage was effectively a forced outage because the resource could not come back online even if the CAISO’s [restricted maintenance operations] notification would have canceled the planned outage.”

Under the plan, extensions of planned outages would be treated as separate outages and would also require substitute capacity.

Stakeholders generally opposed the planned outage substitution requirement, Meeusen said. Some said there is sufficient excess non-RA capacity, and substitution is not needed. Others contended there is not enough substitute capacity available.

Meeusen responded to the arguments.

“The presence of non-RA or the lack of substitute capacity should not relieve an RA resource of its obligation to be available to the ISO,” he said. “You have sold a product and service … to be available to the ISO’s market. That’s what [you are] being paid for. If you can’t do that, then what are the ramifications? Our proposal simply says that if you can’t do that, you find somebody that can.”

A lack of substitute capacity means a generator waited too long to contract for it or that resources are badly needed — a bad time to take planned outages, he said.

Meeusen emphasized that the first phase of the plan is likely a temporary solution for this summer, while a second more-permanent phase, with additional RA proposals, will go before the Board of Governors in the second and third quarters of 2021. A final draft of that proposal is due April 21.

A second fast-tracked summer 2021 initiative also is heading to the Board of Governors on March 24-25. It proposes changes to CAISO market rules meant to avoid shortfalls. (See CAISO Speeds Rule Changes to Avoid Shortfalls.)

Making Sure Storage Works

A lack of storage for renewable resources contributed to last summer’s shortfalls during severe Western heat waves in mid-August and during Labor Day weekend. That led to emergencies in the net-peak hour, when solar ramped down but demand remained high in the early evenings. Having more storage resources that are charged and ready for emergencies would help, CAISO and the California Public Utilities Commission (CPUC) said.

The CPUC ordered utilities to procure at least 3,300 MW of additional capacity this year, most of it storage. The ISO is expecting 1,800 MW of storage capacity to come online by Aug. 1, adding to the current 550 MW of dispatchable storage on its system.

“Increased levels of energy storage necessitate assurance of a minimum level of stored energy available during the net load evening peak to meet operational needs,” the proposal said. The plan’s primary requirement is that storage resources have a minimum state of charge (MSOC) to serve summer peaks and net peaks under strained conditions.

Gabe Murtaugh, lead policy developer at CAISO, said that with the expected retirements of aging natural gas plants in the next few years, “it’s absolutely going to be necessary that we have a few thousand megawatts of [additional] storage generation, and … it’s also critical that we get those few thousand megawatts of storage generation charged” before they are needed.

The MSOC plan also proved controversial among CAISO stakeholders. In response to their concerns, the ISO made several changes including applying the MSOC only on days when system conditions are very tight and only applying it to RA storage resources.

CAISO does not intend MSOC as a permanent fix; it intends to ask FERC to authorize its use of two years, Murtaugh said in his presentation. At the same time, the ISO is planning to launch a new stakeholder initiative focusing on energy storage enhancements to develop a long-term means for ensuring there is sufficient storage to meet high summer demand, he said.

Local Backstop Procurement

CAISO is also proposing to expand its statewide backstop procurement authority to local areas and sub-areas that are resource deficient. The third element in the RA plan was the least controversial, the ISO said in its final proposal.

“While most parties did not comment on this element in the draft final proposal, of the nine entities that did offer comments, a majority of commenters supported this policy as a common-sense expansion of the CAISO’s backstop authority to ensure local reliability needs in the face of increased reliance on availability limited resources,” the paper said.

Supporters included CalCCA, which represents the state’s community choice aggregators and resisted an earlier CPUC proposal to name Pacific Gas and Electric and Southern California Edison as central procurers for load-serving entities (LSEs) in their jurisdictions, including CCA’s.

Regarding the ISO’s local backstop plan, “CPUC Energy Division staff were …  supportive as long as the local-capacity-requirement technical studies clearly identify what use limitations exist in each local area and sub-area so that LSEs and the new central procurement entity could utilize this information to direct procurement upfront,” the proposal said.

CAISO said it would be best to make its criteria clear.

“The CAISO will continue to outline the requirements for all applicable local areas and sub-areas, and these will be clearly described in the LCR reports by charts and graphs with the energy needs during peak as well as year-round conditions, before LSE procurement begins,” it said. “These graphs will also show transmission capability during emergency conditions for the applicable local areas and sub-areas.”