By Jason Fordney
CAISO and Pacific Gas and Electric are opposing the terms of a reliability-must-run agreement for two California natural gas-fired plants that Calpine submitted with federal regulators early this month, complicating an arrangement set to take effect at the beginning of next year.
The ISO and PG&E filed separate protests with FERC over the terms of the RMR agreement for the Yuba City and Feather River plants, filed with the commission Nov. 2 by Calpine subsidiary Gilroy Energy Center. CAISO designated the units as RMR in March, but the ISO told FERC that Gilroy had not supported provisions related to scheduling coordinator charges, greenhouse gas emissions and gas prices.
CAISO is increasing its use of out-of-market RMR payments to keep units online, raising concerns that its market is not producing the price signals sufficient to support units needed to provide reliable electric service. The ISO’s Board of Governors early this month approved the third RMR of this year, for Calpine’s Metcalf Energy Center. (See Board Decisions Highlight CAISO Market Problems.) Costs are borne by utility ratepayers such as those of PG&E.
CAISO in its protest did not ask FERC to reject the application but to set it for settlement before the effective date of Jan. 1.
“There are also technical issues with the inputs to the other rate schedules as well, which the CAISO anticipates can be addressed through the exchange of information during settlement discussions and through further informal exchanges between the parties,” the ISO said.
PG&E said FERC should approve the RMR rates for Jan. 1, subject to refund, and launch a separate proceeding “under Section 206 of the Federal Power Act to examine whether the RMR program in the CAISO tariff is unjust and unreasonable.” The utility said “the RMR designations were premature” and will increase costs.
PG&E also noted the increased use of RMR units in recent years.
“After years of decreasing use, such that a minimal number of facilities were designated as RMR units, the CAISO has designated three new RMR units in PG&E’s service territory for 2018 alone,” PG&E said.