By Robert Mullin
FERC on Thursday approved CAISO’s agreements to procure frequency response from the Bonneville Power Administration (ER17-408) and Seattle City Light (ER17-411).
The contracts are intended to help the ISO comply with NERC reliability standard BAL-003-1, which requires each balancing authority area to carry sufficient capability to respond to a frequency event. System operators must maintain the grid at a frequency of 60 Hz or risk instability that could lead to cascading blackouts.
CAISO signed the deals after conducting a competitive solicitation that examined each bidder’s previous frequency response performance as well as comparing the costs of procuring transferred capacity against those for obtaining regulation-up service within the ISO’s market. The commission agreed with the ISO’s finding that transfers represented the lowest-cost option.
Rich in fast-ramping hydroelectric resources, BPA and City Light are both well-positioned to provide frequency response capacity to third parties.
Under the agreements, BPA and City Light will provide CAISO with frequency response and document their performance with NERC for the compliance year beginning Dec. 1, 2016. In the event of nonperformance, either entity will be liable for covering any fines levied against the ISO.
FERC’s acceptance of the agreements is subject to the clarification of a September order in which the commission approved the ISO’s competitive solicitation process.
CAISO sought clarification on whether the commission would recognize contracts that allow a counterparty balancing area to provide transferred frequency response to it based on the ISO’s annual frequency response obligation under the NERC standard (ER16-1438).
Without that clarification, the ISO contended, counterparties could interpret the decision as requiring them to maintain a net actual interchange measure in response to every single frequency disturbance event.
“Such a requirement would make it virtually impossible for the CAISO to contract for transferred frequency response quantities because balancing authorities cannot assure such a measure in response to every disturbance event,” the ISO said in its request for clarification.
