EIM Leaders OK Governance ‘Guidance’ Proposal

CAISO

Dec 5, 2016

The Western Energy Imbalance Market governing body voted to implement procedures to ensure market participants have input into CAISO policy initiatives.

By Robert Mullin

The Western Energy Imbalance Market’s governing body voted to implement procedures to ensure market participants have input into CAISO policy initiatives that affect the market.

The CAISO staff’s proposed “guidance document” sketches out how ISO staff will interact with the EIM, providing a schedule for notifying the governing body about ISO initiatives and laying out the processes by which body members and EIM participants will provide feedback on proposed policy changes.

ISO staff initiated development of the document in October in response to a recommendation by the EIM’s Transitional Committee — the West-wide stakeholder group charged with developing the market’s governance plan. That committee decided to leave it to market participants to parse out that plan into specific procedures. (See CAISO Seeks Process to Keep EIM, Governing Body in the Policy Loop.)

“The Transitional Committee envisioned a more user-friendly document, something that’s different from corporate bylaws or the charter for EIM governance,” CAISO General Counsel Dan Shonkwiler told the EIM governing body during its Nov. 30 meeting. “It may be a more accessible document for stakeholders trying to understand what you do and how to interact with you.”

eim energy imbalance market — EIM Map | *CAISO*

Not a Rubber Stamp

Governing body member Valerie Fong said her support for the guidance document came only “after a number of questions and comments that were addressed and are answered very specifically through” the final proposal.

“This isn’t just a rubber-stamp ‘OK,’” Fong said ahead of the vote to approve the document. “It took a lot of work on Dan’s part to consider the comments and suggestions — and the questions” submitted by EIM stakeholders.

The proposal still requires approval by the ISO board, which is expected to issue a decision on the matter during its December meeting.

Significantly, the guidance document provides solutions to the overlapping authority between the ISO board and the EIM governing body resulting from the EIM’s delegation of a portion of its authority over Federal Power Act Section 205 filings to the ISO.

The document describes how ISO staff and board members will interact with the EIM governing body to determine whether a proposed Tariff amendment affecting the EIM falls under the body’s “primary authority” — giving EIM leaders the right to effectively approve or reject an amendment.

In those instances, the ISO board — which technically retains final authority over all Tariff changes — is expected to give “great deference” to the governing body’s decisions and place those matters into a consent agenda.

The document also spells out an “advisory” — and non-voting — role for the governing body regarding policy initiatives covering general market rules that also affect the EIM.

‘Hybrid’ Initiatives

“Hybrid” initiatives — proposals that would amend multiple Tariff provisions affecting both the EIM and the ISO at-large — will get more complicated treatment. In cases when the EIM is the key driver of an initiative, primary authority will fall to the governing body. In other cases, the body could retain primary authority over just EIM-specific portions of a broader ISO initiative — a sort of line-item veto power.

EIM Governing Board members left to right: Fong, Prescott, Howe, Linvill, Schmidt | CAISO — EIM Governing Board members left to right: Fong, Prescott, Howe, Linvill, Schmidt | *CAISO*

The governing body will also have a voice in how any policy initiatives are designated with respect to primary authority, providing the body the right to challenge any “initial” designation made by ISO management.

In the event that the governing body objects to an initiative’s final designation, the body chair — currently Christine Schmidt — can trigger a dispute resolution process ultimately involving a joint session of the body and the ISO board.

In response to requests by current and future EIM members, the final document also clarifies that CAISO’s Department of Market Monitoring and Market Surveillance Committee should interact directly with the EIM governing body in the same manner in which both groups currently consult with the ISO board.

On Oct. 1, Arizona Public Service and Puget Sound Energy joined the EIM, which launched in November 2014 with PacifiCorp and NV Energy. Portland General Electric and Idaho Power are expected to join in 2017 and 2018 respectively. Others that have indicated an interest in joining are Mexico’s Baja California Norte, the Sacramento Municipal Utility District and Seattle City Light. (See Council OKs Seattle City Light Bid to Explore Joining EIM.)

Western Energy Imbalance Market (WEIM)