FERC Lets Stakeholders Take a Stab at CAISO?s MD02

A key California Independent System Operator (CAISO) strategy to increase market supplies?residual unit commitment?should be limited, according to some attending a March 3-5 Federal Energy Regulatory Commission technical conference. ?We want the whole idea [of residual unit commitment] to go away as soon as resource adequacy is in place,? said Tony Braun, attorney for the California Municipal Utilities Association. Katie Kaplan, manager of state policy affairs for the Independent Energy Producers, said absent resource adequacy, unit commitment should be in play. But the process needs to be transparent, generators need to be adequately paid, and CAISO needs to clearly define its resource needs. The California Public Utilities Commission this January approved a framework for resource adequacy aimed at ensuring that the state can meet its energy needs, but many details remain to be worked out. According to Steven Greenleaf, CAISO director of regulatory relations, residual unit commitment is needed as a ?backstop? measure. Specifically, it would allow CAISO to commit generators ahead of time so that unused capacity is ready to generate if it appears that demand for power might exceed supply that has been lined up. Suppliers would be paid for costs to start up and run plants at minimum levels, even if no energy is used. Costs would be picked up first by suppliers who did not ?fully schedule their actual needs? because they created the energy shortfall, according to CAISO. Confusion about details of this proposal as well as other ideas being floated by CAISO in its market redesign abounded. One attendee called for clarification of the problem the unit commitment proposal is meant to solve. Another wanted to know which resources were being discussed for unit commitment. Asked why there is so much fuzziness on issues, IEP?s Kaplan said, ?The reason people are confused is that there is no stakeholder process at CAISO? in which these issues are being discussed. ?There?s lots of communications to and from market participants on some of these issues,? countered Gregg Fishman, CAISO spokesperson. But the stakeholder process ?can be more inclusive, and we?re working on it.? For both CAISO and stakeholders, this is a recurring theme. Some elements of market redesign have been put in place since initial plans were unveiled in 2002. But the huge undertaking, supposed to have been finished in 2002, has met both technical hurdles and sometimes an unwillingness on FERC?s part to allow CAISO authority to make changes in the market. This FERC-sponsored technical workshop was an attempt by federal regulatory staff to understand the nuances of several pending parts of the grid operator?s market design, MD02, including the residual unit commitment. According to Fishman, FERC has approved the residual unit commitment concept and CAISO hopes to implement the provision next year.

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FERC Lets Stakeholders Take a Stab at CAISO?s MD02

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