By Jason Fordney

CAISO’s Department of Market Monitoring on Wednesday discussed the ISO’s third-quarter market results with participants, but it referred a stakeholder query about a key development in the market to the ISO itself.

“It was an eventful quarter,” Lead Market Monitoring Analyst Amelia Blanke said during her presentation in the conference call.

The department noted that day-ahead system marginal prices hit $770/MWh on Sept. 1, when CAISO’s load came within 150 MW of its all-time system peak of 50,270 MW, set in July 2006. The Monitor said high temperatures and demand, along with the evening ramp-down of solar production caused the price surge. (See Tight Supplies, Solar Ramps Drive CAISO Summer Spikes.)

Powerex analyst Mike Benn pointed out that “load biasing” in CAISO has increased dramatically over the past year. Load biasing seemed to be too large, especially in the morning and evening hours when the system is ramping, Benn said, questioning whether the procedure was being used to correct inherent market flaws rather than adjust short-term deviations.

Load bias, also called “imbalance conformance,” describes the last-minute adjustments an operator makes to the load forecast ahead of a market run to account for potential inaccuracies and inconsistencies in the forecast. There are multiple reasons for adjusting loads, including managing load and generation deviations, automatically correcting time errors, variations in schedule interchange, reliability events and software issues.

“That is a valid question,” Director of Market Monitoring Eric Hildebrandt told Benn. “I think that should be passed on to the ISO. That is exactly why we provide this kind of information for stakeholders like yourself.” He added that CAISO “addressed the issue in various forums.”

CAISO indicated that third-quarter load adjustments in the hour-ahead and 15-minute markets climbed from about 600 MW last year to more than 1,100 MW this year.

In an attempt to address the issue, the ISO on Nov. 29 issued a straw proposal for “imbalance conformance enhancements” to clarify its authority to use the tool and implement process changes. The ISO expects to post a final draft proposal Jan. 24 and seek approval from the ISO Board of Governors in March. The DMM has voiced its support for the proposal.

The department said that most of the high prices during the quarter occurred as a result of high bids clearing the market, with extremely high bids in many instances clearing after use of the “load bias limiter.” Introduced in 2012, the limiter adjusts load in the market model to better reflect actual conditions during the market’s pricing run so that power balance is no longer being violated, reducing the potential for a “penalty parameter” to drive up the clearing price.

The DMM also said total payments for the ISO’s flexible ramping product were about $5.1 million in the third quarter, down from $7.5 million in the previous quarter. About 55% of payments during the quarter were made to generators in the ISO rather than external units.