A working group focused on gas resource participation in CAISO-run markets held its second meeting this week, with stakeholders saying they don’t receive enough advance information to make good decisions on gas procurement.

CAISO is hosting the gas resource management (GRM) working group to explore challenges that stakeholders face while participating in the Western Energy Imbalance Market and potentially the extended day-ahead market, which is under development.

The working group process will result in an “action plan” that CAISO will use in potentially crafting future initiatives.

During Tuesday’s workshop and in written comments, stakeholders discussed the challenges of gas procurement.

Salt River Project (SRP) pointed to what it called a “mismatch between when gas is traded, when gas is scheduled, and when power awards are made by the organized market.”

“It is critical to know the quantity of gas required to meet load/market awards so that the correct amount can be scheduled,” SRP said in written comments.

SRP said reliability risks may be created, such as in situations when intraday gas isn’t available to buy.

Alan Meck, a business and economics advisor at San Diego Gas & Electric, described the problem as “lack of foresight.”

“You have to figure out … am I going to go ahead and buy the gas and then potentially be stuck holding the bag?” Meck said during Tuesday’s meeting. “Or am I going to not [buy the gas] and potentially get an energy schedule going into real time and then have to pay the real-time price?”

Stakeholders including SDG&E and PacifiCorp said their limited ability to store gas adds to the problem. And recent increases in variable energy resource capacity have made forecasts more uncertain when it comes to gas procurement.

Timeline Alignment

The working group is expected to revisit a topic CAISO has explored: a potential alignment of electric and gas market timelines.

CAISO said its previous analysis of such an alignment found it wouldn’t be in the interest of market participants. In particular, the switch would require business process changes, and earlier timelines might increase forecast inaccuracy.

The ISO has asked working group members to weigh in on whether those issues still are a concern.

On other topics, the Northern California Power Agency proposed a discussion of how hydrogen could be incorporated into the markets.

“Any effort or interest now in incorporating how hydrogen fits into gas resource management will only provide compounding benefits in the future,” NCPA said in written comments.

Salt River Project wants to see more discussion of multi-stage generators, which are units with multiple operating configurations.

“SRP would like to emphasize the importance of multi-stage generators (MSGs) and that enhancements in their management have the potential to significantly impact efficiency and reliability,” SRP said in written comments.

Existing Tools

Vistra Corp. noted that CAISO previously discussed gas resource management issues in a 2016 paper called “Commitment Cost and Default Energy Bid Enhancements” (CCDEBE). The CAISO board then approved a CCDEBE proposal in 2018.

“Vistra strongly encourages the CAISO to examine its existing tools and procedures’ effectiveness and to implement the remaining elements of CCDEBE as soon as possible,” Vistra Corp. said in written comments. “After which, a discussion on whether new tools and procedures are needed can be held.”

Mark Richardson of CAISO, who facilitated Tuesday’s session, said CAISO will examine what previously was approved — but hasn’t been implemented yet — before the next working group meeting.

In addition to Tuesday’s session, the GRM working group met on July 27. After each meeting, CAISO plans to release a discussion paper that summarizes the working group’s conversation.

The next working group meeting is scheduled for Sept. 18.