FERC on Oct. 30 approved a raft of CAISO tariff changes intended to ease temporary restrictions on wheeling power through the ISO’s grid under emergency conditions.

The approval came despite numerous protests from Western entities that considered the revised wheel-through rules to still be overly biased in favor of CAISO’s native load (ER23-2510).

CAISO implemented interim wheel-through restrictions in 2021 as part of a package of changes meant to promote summer reliability following the rolling blackouts and energy emergencies of summer 2020.

The rules reprioritized wheel-throughs so energy transfers between balancing authority areas in the Northwest and Southwest could no longer take precedence over capacity needed to serve CAISO native load. Under the rules, non-CAISO entities were required to apply at least 45 days in advance to designate high-priority wheel-throughs needed for reliability, giving the wheels equal standing with CAISO native load.

Until that time, CAISO — unlike other RTOs/ISOs — had never established mechanisms within its tariff to set aside transmission capacity to serve native load, notably not including native load requirements in its transmission commitments when calculating available transmission capacity (ATC).

Additionally, CAISO never adopted a transmission reservation system to protect its ability to serve native load when the ISO is constrained.

“Instead, when there was insufficient transmission capacity to support all intertie transactions, CAISO’s market software determined the priority order in which self-schedules would be curtailed using real-time market parameters known as penalty prices that were set forth in a business practice manual,” FERC noted in its Oct. 30 order.

In March 2022, FERC upheld its 2021 approval of CAISO’s wheeling restrictions, rejecting a rehearing request by the Arizona Corporation Commission and a coalition of Arizona utilities, including Arizona Public Service and Salt River Project, which argued CAISO’s rules discriminated in favor of the ISO’s load (ER21-1790).

But the commission at the time also pointed to continued divisions over the rules in the region and directed CAISO to “work with stakeholders to design and file a just and reasonable and not unduly discretionary or preferential long-term solution as expeditiously as possible.”

Changing Formulas

The CAISO tariff changes approved Oct. 30 are intended to give wheel-through transactions at the ISO’s interties the same scheduling priority as that of imports serving the ISO’s load. At the same time, the changes also elevate the scheduling priority of serving native load by altering CAISO’s ATC calculation to set aside intertie capacity for that load.

Under the new rules, CAISO will estimate ATC at the interties “monthly across a rolling 13-month horizon and daily across a seven-day horizon to derive the amount of transmission capacity available for entities seeking a monthly or daily Wheeling Through Priority,” the commission said in its order.

In its calculation for estimating the ATC for wheel-throughs at an intertie, CAISO will subtract both existing transmission commitments (ETComm) and the transmission reliability margin (TRM) from the total transfer capability (TTC) on the line. Under a new formula, the definition of ETComm is revised to include transmission ownership rights (TOR) and existing transmission contracts (ETC) — as it currently does — as well as transmission capacity for wheeling through priorities and native load needs, including native load growth in the applicable time horizon.

“CAISO states that it will initially determine the amount of transmission capacity to serve native load needs at each intertie for each calendar month based on the highest MW quantity of total RA and non-RA import supply under contract dedicated to serving CAISO load serving entities’ load as demonstrated by RA showings, and showings of historical contract information regarding non-RA import supply, at the intertie for that same calendar month during the previous two years,” FERC notes.

Powerex, NV Energy, the Arizona utilities and the Electric Power Supply Association (EPSA) argued CAISO’s proposal for calculating ATC would be “unduly preferential” to native load and would result in the ISO setting aside more intertie capacity than necessary to reliably serve its load.

Powerex contended CAISO’s own data indicates the availability of intertie capacity for priority wheel-throughs would be much lower under the new rules than under the current interim measures. NV Energy complained about a lack of clarity in how CAISO will calculate ATC values.

The Western Power Trading Forum (WPTF) and EPSA argued the proposed ATC calculation would set aside intertie capacity for native load without requiring CAISO load-serving entities to show they have contracted firm resources in a timely manner, whereas external LSEs could secure wheeling only through priority if they meet a power supply contract requirement.

The commission brushed aside those concerns, and others, in approving CAISO’s ATC calculation.

“As a threshold matter, we find no merit in any suggestion by protestors that CAISO is not entitled to set aside intertie capacity that is needed to serve CAISO load, or that it is unduly discriminatory in principle for CAISO to reserve this capacity for native load before making ATC available to external load serving entities,” the commission wrote.

The commission added that “one of the core elements” of FERC’s open access policies “is the ability of transmission providers to include in their tariffs certain protections to ensure reliable service to native and network load customers. [FERC] Order No. 888 establishes that public utilities may reserve existing transmission capacity for native load and reasonably foreseeable network transmission customer load growth.”

‘Inherent Tension’

FERC also approved CAISO’s proposed process for requesting and using priority wheel-throughs. For the monthly request window, the process will require a scheduling coordinator to request a wheeling-through priority no earlier than 12 months before the month for which it seeks the priority and not later than one month before the effective date of the priority. Daily wheeling-through priorities can be requested no sooner than seven days before and no later than one day before the priority effective date.

Protestors once again contested the provision that a wheel-though request must be supported by an executed firm power supply contract. CAISO said the contract requirement was an extension of its interim wheel-through tariff provisions and consistent with the requirement for external LSEs seeking to obtain an allocation of congestion revenue rights in the ISO. The grid operator said the contract requirement helps ensure that limited ATC on the interties is accessible to those that show they need it to serve their load and comparable to how RA contracts demonstrate the same need for CAISO LSEs.

The commission said that when it accepted CAISO’s interim scheduling priority rules in 2021, it explained that the firm contract requirement was not preferential for CAISO because it functions as “reasonable proxy that allows external load serving entities to demonstrate that they plan to use the CAISO grid to serve load in a manner that is comparable to CAISO load serving entities.”

“We find that the commission’s reasoning in that case applies with equal force here because the central issue is still the inherent tension between CAISO’s need to use intertie capacity to serve its own load and third parties’ ability to access that capacity,” the commission wrote.