By Jason Fordney
CAISO said Wednesday there is no turning back on its departure from Peak Reliability in September 2019.
California’s grid operator has been studying its recent move to become a reliability coordinator (RC) since early last year, and ISO officials have extensively reviewed the proposal to offer RC services to others, CAISO Vice President of Operations Eric Schmitt said during a Jan. 17 conference call.
“We didn’t wake up on that morning” and decide to become a RC, Schmitt said, noting that the ISO on Jan. 2 gave Peak notice that it was departing.
“We were reluctant to do that, to be honest with you,” Schmitt said. “But it’s pretty evident that the marketplace is changing.” He added that the Western Interconnection is “is going to be even more complicated as we go forward.” Having notified Peak, CAISO must now become its own RC. “The horse is out of the barn,” he added.
The ISO hopes other Western balancing authorities will sign up for its RC services. Its timeline calls for comments on the plan by mid-May, a rate proposal to be submitted to its Board of Governors in late June, a FERC filing in August and final approval in October. The effort also requires approval from the Western Electricity Coordinating Council, the Regional Entity that develops the West’s reliability standards.
CAISO is asking that potential customers sign nonbinding letters of intent by March 1 that make them part of the implementation process and that in the future they will sign reliability service agreements.
Schmitt said CAISO will continue to work closely with Peak throughout the transition. “We have enjoyed a great relationship with Peak,” he said. “We expect that relationship will continue.”
When announcing its departure, CAISO cited its expectation that the Vancouver, Wash.-based Peak will be forced to increase its fees because of Mountain West Transmission Group’s likely departure from the RC, as well as Peak’s recent announcement that it has partnered with PJM to offer competitive market services in addition to reliability services in the West. (See CAISO to Depart Peak Reliability, Become RC and Peak, PJM Detail Western Market Proposal.)
CAISO knows what it takes to obtain certification as an RC and has a transferable skill set for RC services, Schmitt said. The ISO is a registered balancing authority and already performs some reliability functions for its participating transmission owners, such as outage coordination, next-day planning analysis, and real-time grid monitoring and assessment.
New services in CAISO’s RC area would include system operating limit methodology, review of system-wide restoration plans, stakeholder processes and other services. It also plans to offer some non-RC services, such as hosting advanced applications and physical security risk assessment that will involve separate charges. CAISO will need to add personnel to support RC functions such as customer service, NERC/WECC compliance and technology positions. There would be an RC representative in each of the ISO’s two control centers located in Folsom and Lincoln.
The ISO had other public meetings on the RC proposal scheduled for Jan. 18 in Phoenix, Ariz., and Jan. 19 in Portland, Ore. Details of the initiative are provided on a new RC website.