By Robert Mullin

CAISO is seeking stakeholder input on developing procedures to ensure that the Energy Imbalance Market’s governing body and participants have a say in ISO policy initiatives that affect the operation of the market.

The objective is to create a “guidance document” that spells out how CAISO staff should interact with the EIM, including a schedule for notifying the market’s governing body about ISO initiatives and the processes by which that body and EIM market participants will provide feedback on the issues.

The EIM governing body was appointed in June and convened its first meeting in late August. (See EIM Governing Body Convenes First Meeting, Selects Leadership.)

The idea for the guidance document originated with the EIM’s Transitional Committee, the West-wide stakeholder group that was responsible for creating the market’s overall governance plan.

“The purpose of [the plan] was to give stakeholders throughout the region a voice in the market rules that affect the EIM,” CAISO Lead Counsel Dan Shonkwiler said during an Oct. 11 call to discuss a draft proposal for the document. He said it is now up to the ISO to translate that plan into actual procedures.

Driving the effort is the fact that the governing body and the ISO’s Board of Governors hold overlapping authority over the approval of policies that affect both the EIM and the ISO’s broader market.

“The core of this [effort] is that the Board of Governors has delegated a part of its authority related to [Federal Power Act] Section 205 filings to amend the ISO Tariff to the EIM governing body,” Shonkwiler said.

That delegation of authority gave rise to the concept of “primary authority” for the EIM’s governing body: the right to approve or reject Tariff amendments specific to the operations of the EIM. When body members vote to approve a change, the board is expected to give “great deference” to the decision and place the matter into a consent agenda.

For amendments covering general market rules that also affect the EIM, the governing body is expected to play an “advisory” role in the initiative process, but it will not have a vote on the outcome.

Initiatives designated as “hybrid”— proposals that would amend multiple Tariff provisions affecting both the EIM and the ISO at-large — get more complicated treatment.

If the EIM is the primary driver of such an initiative, approval authority falls to the governing body.  If the ISO is driving the changes, the governing body has primary authority over EIM-specific elements only.  In either case, the ISO board must issue the final decision through a full vote.

The guidance document will seek to describe exactly how the governing body will exercise its advisory function for initiatives over which it has no voting power.

More important, the document will detail the process by which the governing body and EIM stakeholders can voice opinions about the ISO’s “tentative decisional designation” for an initiative.

To facilitate that process, the ISO is proposing to provide quarterly updates to the governing body about all upcoming initiatives including its decisional designations. After receiving an update, the body can decide which general ISO initiatives will require its advisory contributions. If the body thinks an initiative has been designated incorrectly, it can take up the matter with ISO staff, possibly heading off a future dispute over decisional authority.

After receiving stakeholder comments on a draft final proposal, ISO management would decide on an initial designation. If the chair of either the governing body or the board objects to the designation, they will meet to discuss the matter. In cases when the two disagree on a proper classification, a dispute resolution process is triggered in which public comment is solicited followed by a combined vote of both the governing body and the board.

CAISO is also proposing to implement a procedure that would split up hybrid initiatives to facilitate decisions.

Comments on the guidance document are due Oct. 18. The ISO plans to present a proposal to the EIM governing body in late November and seek approval from the board in mid-December.

With the Oct. 1 addition of Arizona Public Service and Puget Sound Energy, the EIM now has four market participants, with other additions expected over the next two years. (See Smooth EIM Transition for Arizona Public Service, Puget Sound Energy.”)