CAISO’s Board of Governors on Thursday approved limits on wheel-throughs during strained system conditions, despite opposition from utilities in the Desert Southwest and Pacific Northwest and a lack of support from the Governing Body of the ISO’s Western Energy Imbalance Market.

The measure would prioritize serving CAISO native load over some wheel-throughs when the ISO’s transmission system is congested during times of peak summer demand. It is one of a series of summer readiness actions CAISO pushed through this year to avoid the rolling blackouts and energy emergencies of August and September. (See EIM Governing Body OKs Summer Readiness Measures.)

The ISO identified transmission constraints as a factor in the Aug. 14-15 blackouts. (See CAISO Says Constrained Tx Contributed to Blackouts.)

CAISO management said the plan is a temporary fix to the problem of self-scheduled wheel-throughs receiving higher priority than imports or internal generation needed to serve ISO load. It requires out-of-state entities seeking to serve their own reliability needs to request high-priority wheel-throughs 45 days in advance from CAISO.

The plan is scheduled to sunset in May 2022 and be replaced by the longer-term results of a stakeholder initiative scheduled to start next month, the ISO said.

“Our proposed enhancements are designed to fairly balance the need to reliably serve ISO load and also provide open access to the ISO transmission system with limited changes that we can implement by this summer,” said Greg Cook, executive director of market and infrastructure policy.

Those challenging the plan include the Bonneville Power Administration, several smaller Northwest utilities and a coalition of Southwest utilities: Arizona Public Service, Salt River Project, NV Energy and Tucson Electric Power. They said the plan is inequitable and runs counter to FERC’s open-access rules.

“We recognize the difficulty of this issue, and we really want to emphasize that it isn’t the desire of any of us to have any unserved load this summer across the entire Western Interconnection,” Bobby Olsen, director of supply trading and fuels at Salt River Project, told the board. “Unfortunately, we’re just not at a point where we can endorse the final proposal, as it still fails for several reasons.”

A major concern, Olsen said, is that the plan fails to “recognize or accommodate priority for transactions within the 45-day window … [and] so could effectively limit Southwest access to reliable energy necessary to overcome generation outages and other unforeseen contingent events on our system that have historically been accommodated by market purchases.”

In addition, he said, “this proposal really disregards foundational open-access principles by failing to respect the priority of transmission offered by neighboring” balancing authorities. Instead, CAISO is attempting “to supersede that prioritization and substantially restrict access to its own transmission system when it deems conditions warrant” it.

Mark Holman, managing director of power for Powerex, said the proposal differentiates between imports meant to serve CAISO load and wheel-throughs to serve the Desert Southwest, which also experienced strained system conditions during last summer’s extreme heat waves.

John Prescott, chair of the Western EIM Governing Body, told the board that the body had voted 4-1 on Monday not “to opine” in its advisory role on the plan but believed CAISO should quickly seek FERC input and work to develop a more durable long-term solution.

Body members also heard from the Southwest and Northwest opponents Monday. (See EIM Governing Body Rejects CAISO Summer Plan.)

“The concerns expressed to us about this proposal are valid,” Prescott said. “The core issue is a collision of two very different paradigms for transmission allocation” serving native load in an ISO and wheel-throughs to other parts of the West. “We don’t believe this issue has appeared in any other parts of the country.”

The Governing Body found the matter “particularly complex and vexing especially in a compressed time,” as CAISO fast-tracked it to adoption in about four months.

Governors Vote

CAISO Board Chair ​Angelina Galiteva thanked Prescott for the EIM’s work on the issue but ultimately voted for the plan.

“We do acknowledge that stakeholders across the spectrum remain concerned about the interim proposal,” Galiteva said. “Some people [think it] goes too far in addressing the needs for native load customers in California, [while others in California feel] it does not go far enough.”

Southern California Edison was among several entities that said the proposal had been revised to the point where it would not ensure a reliable supply of imports during system constraints. A prior version of the plan did not include the 45-day notice provision, which could continue to give wheel-throughs equal priority to CAISO load-serving capacity, SCE said.

Others said the proposal struck a difficult balance. The ISO’s Department of Market Monitoring (DMM) and Market Surveillance Committee (MSC) each endorsed the provision as a carefully crafted measure meant to prevent shortfalls this summer.

DMM Executive Director Eric Hildebrandt said the department believed the measure adheres to FERC’s open-access rules. “FERC seems to have made it clear that open access really applies to transmission that is not needed to serve native load,” he said.

James Bushnell, professor of economic at the University of California Davis and a member of the MSC, said CAISO was designed with an open transmission system in which rising prices were meant to limit wheel-throughs. That didn’t happen last summer, he said, requiring the new limits.

CAISO Governor Jan Schori said she had found the DMM and MSC endorsements helpful and decided that preventing further outages this summer was the top priority.

“I think that across all load-serving entities in the West, the first obligation is to keep the lights on, and that didn’t happen last summer,” Schori said. “So we know we have to address the issues that we can address and get it done by this summer while working towards a better overall long-term solution.”

The board also voted to approve other, less controversial summer readiness measures dealing with exports and load priorities. The provisions will be submitted to FERC, which CAISO hopes will approve the measures for implementation by this summer.