By Robert Mullin

A new, “expedited” CAISO initiative seeks to establish a process for selecting and procuring black start resources, needed to restore segments of California’s transmission system in the event of regional outages.

The effort will follow an ambitious timeline: The ISO hopes to present a plan to its Board of Governors for approval in May.

The initiative represents the second phase of a 2013 undertaking to address NERC reliability standard EOP-005-2, which required transmission operators to draw up plans for system restoration in the event of widespread blackouts.

The ISO decided to explore the procurement issue after identifying a need for additional black start resources in the transmission-constrained San Francisco Bay Area.

“This need is the impetus for this stakeholder initiative,” Scott Vaughan, CAISO lead grid assets engineer, said during a Jan. 24 call to kick off the effort.

CAISO staff have determined that, unlike in Southern California, where black start resources are more evenly distributed near major load centers and can provide more rapid restoration, resources serving the Bay Area are relatively far from population centers.

Under current practice, ISO and transmission owner restoration plans rely on black start resources either owned by a utility or acquired through a long-term contract. For a TO plan, a utility is able to recover the costs for resources through retail rates. Generation providing black start capability under the ISO’s plans are subject to a three-party agreement among the ISO, the applicable TO and the generator for a zero-price term.

Still, CAISO’s Tariff allows it to enter into black start service contracts for payment. If specific costs are not outlined in a contract, then the resource will be paid as exceptional — or out-of-market — dispatch and is entitled to bid cost recovery. The Tariff also outlines that scheduling coordinators can be required to pay for the service.

The new initiative would likely modify the current approach to procuring black start capability by ensuring that costs are spread beyond just the transmission-owning utility.

“Any such procurement would benefit all transmission customers in the area, yet may not result in the allocation of costs to all transmission customers if procured by the investor-owned utility,” said an ISO issue paper, released Jan. 17, in reference to the Bay Area’s specific need. “For instance, non-bundled customers taking service from a community choice aggregator, electric service provider or municipal utility in the area that rely on the black start capability may not face any cost allocation.”

CAISO has floated two ideas for cost allocation. The first would have the ISO enter black start contracts and charge all scheduling coordinators, rather than specific TO areas, for incremental black start capability. The other idea would entail it shifting cost allocation to local transmission access charge areas and recovering the costs from TOs as reliability service costs.

The Bay Area, however, poses unique challenges for black start procurement. One is the lack of eligible resources there.

“The ISO has said that there is a relatively small set of units from which this service could be procured,” said Brian Theaker, director of market affairs at NRG Energy. “Will the ISO disclose what that subset of units is?”

CAISO staff were reluctant to wade into that aspect of the issue before laying out a framework for procurement.

“At this point, we were not planning on getting into any more of the details around the specific requirement in the area or how we would go about procuring,” said Neil Millar, CAISO executive director of infrastructure development. “The goal right now is to land on the cost allocation process and the procurement process itself that would set out how we would go about doing this.”

Robert Jenkins of Flynn Resource Consultants picked up on Theaker’s theme.

“I was looking for what kind of characteristics is the ISO valuing in identifying this small number of units,” Jenkins said. “Is it geography? Is it size? Is it connectivity” to the ISO’s system? He added that he would be interested in learning more about the scope of the market when that information became available.

Millar responded by offering some qualifications, pointing out that CAISO wanted stakeholders to consider the procurement issue within the context of the relatively small number of resources eligible to participate in the market.

“It’s not a case of any generator located anywhere in the system,” Millar said. “Location does matter very much and there’s a relatively small subset, so that could affect people’s input on how we should go about planning this procurement process to pick a couple of units out of a relatively small subset.”

Bonnie Blair, a consultant representing the “Six Cities” utilities of Anaheim, Azusa, Banning, Colton, Pasadena and Riverside, pressed the ISO on the importance of the location of the resources.

Millar explained the “piecemeal” approach of restoring a part of the system after a blackout. The ISO starts by first bringing up a black start resource, then energizing individual transmission lines and “picking up other generators, a bit of load, more generators, then more load” to reach into the affected areas.

“So as you keep considering sources further and further away, you quickly get to where the time it would take to do all those steps wipes out the benefit of getting the resource in the first place,” Millar said.

Paul Nelson, electricity market design manager at Southern California Edison, wanted more specifics on the timeframe for acquiring the resources.

“Is this something that needs to be done in 2017, 2018?” Nelson asked. “Because that impacts the approaches for procuring it.”

“We’d like to have some sort of contractual arrangement by the beginning of 2018 or end of 2017,” Vaughan replied, adding that the small set of potential resources are not identified as black start capable and would likely require upgrades.

Theaker questioned whether the ISO schedule for completing the initiative was realistic, given the need to deal with issues of “compensation, context, structure and cost allocation,” as well as to draw up a straw proposal.

“It’s highly aggressive, but I think it is realistic,” Vaughan responded.

“Then I’d encourage you to identify some near-term milestones in terms of what has to be in place [and] when, in order to get this ready — not only for the board meeting in May, but also lay out the milestones for getting [resources procured by January 2018], as we’ve just discussed,” Theaker said.

Comments on the issue paper must be submitted to CAISO by Jan. 31. The ISO will publish a straw proposal Feb. 14.