FERC approved a $528,000 settlement March 20 that ends a dispute between EDF Trading North America and CAISO over fuel cost recovery.
The settlement approved by FERC’s order (ER25-526) resolves all issues that had been set for hearing.
EDF Trading has served as scheduling coordinator and fuel supplier for CXA La Paloma, which was also a party to the settlement. CXA La Paloma owns the 1,124-MW natural gas-fired La Paloma power plant in Kern County, Calif.
EDF Trading filed a request in July 2021 to recover “prudently incurred fuel costs” that were not reimbursed through market revenues Feb. 16, 2021. On that date, CAISO committed two units at La Paloma through its Residual Unit Commitment (RUC) process, which the ISO describes as a reliability function for committing resources and procuring RUC capacity not reflected in the day-ahead schedule.
But CAISO did so using gas prices to compensate La Paloma “that were well below the actual gas costs incurred,” EDF Trading wrote in a fuel cost recovery application filed with FERC on July 29, 2021 (ER21-2579).
The cost-recovery issues with CAISO arose from “a perfect storm of events,” including an “untimely notice from CAISO, a long holiday weekend and an extreme weather event,” EDF Trading said in the filing.
CAISO had planned to implement changes to its cost-recovery procedures in early 2021 through tariff changes known as the Commitment Costs and Default Energy Bid Enhancement (CCDEBE).
On Sunday, Feb. 14, 2021, CAISO sent out a notice saying it would begin deploying CCDEBE the following day, which was Presidents Day, a holiday. The notice failed to give the two days advance warning that CAISO had promised, according to EDF Trading’s filing.
That Sunday and Monday were also when Winter Storm Uri was striking Texas. EDF Trading said it faced “operational difficulties” due to rolling blackouts and internet problems.
CAISO denied recovery of fuel costs from the Feb. 16 La Paloma commitment, because the request to adjust the reference level using actual fuel costs was not made before 8 a.m. Feb. 15, EDF Trading said in its filing.
But the actual fuel costs weren’t known at that time, EDF Trading said, because CAISO didn’t commit the units as part of RUC until later that day.
“Equity requires ensuring that EDFT and La Paloma are not penalized for CAISO’s failure to timely plan and notify market participants, particularly when EDFT and La Paloma ultimately performed and ensured system reliability,” the filing said.
In February 2024, CXA La Paloma was purchased by Capital Power Investments LLC. Interest in the cost-recovery proceeding was retained by the seller, CXA La Paloma Holdco LLC.