Deliverability Methodology – Written Stakeholder Comments ... · Deliverability Methodology –...

ISO/M&ID/M&IP/KGJ 1 10/3/13

Deliverability Methodology – Written Stakeholder Comments and ISO Responses1

Company/Person Submitted By Stakeholder Comment ISO Response

Bay Area Municipal Transmission Group (BAMx).

BAMx consists of Alameda Municipal Power, City of Palo Alto Utilities, and City of Santa Clara, Silicon Valley Power

Barry Flynn (888-634-7516 and [email protected]), and

Pushkar Wagle (888-634-3339 and [email protected])

Our comments focus on some of the underlying assumptions in the process and the need for additional cost/benefit considerations in the methodology. Lack of comment on any particular aspect of the methodology should not be interpreted as support for it.

BAMx would like to acknowledge the CAISO’s efforts in assembling this Technical Paper. The paper makes significant progress in increasing the transparency of the Deliverability Assessment Methodology (DAM) for stakeholders so that both the process and the underlying assumptions are better understood. Understanding the DAM and its role in Resource Adequacy (RA) in the CAISO Balancing Area is important as the provision of Full Capacity Deliverability Service (FCDS) for variable generation has driven extensive transmission expansion with more permit applications for large transmission projects on the horizon. BAMx has been urging the CAISO to engage in a stakeholder process around the DAM for the last fifteen months given the significant impact on costs DAM will have when applied to lower capacity value variable resources. We are concerned whether these large transmission costs associated with FCDS using the DAM are necessary for the cost effective interconnection of variable energy resources seeking to provide a RA product required under their Power Purchase Agreements (PPAs) with the Load Serving Entities (LSEs). We look forward to working with the CAISO and other stakeholders to assure a reliable and economic transmission infrastructure.

Particularly useful elements of the Technical Paper are the examples that demonstrate the implementation of DAM. There are four key areas, where the CAISO has helped BAMx in understanding some of the confusions that

1 Written stakeholder comments were due August 22, 2013 on the “Generator Interconnection and Deliverability Study Methodology Technical Paper” that was posted on July 2, 2013, and supplemented by the presentation and discussion during the July 25, 2013 stakeholder training web conference.

mailto:[email protected]





stakeholders have had about DAM.

First, we understand that the stressed dispatch of generating resources (which the CAISO calls “Pmax”) is well below nameplate capacity of those resources in DAM. We note the CAISO’s use of the term “Pmax” to describe the stressed dispatch is in itself is a source of confusion as this term is already commonly used in the industry to mean the rated power or the maximum generation potential of a generation unit. Therefore BAMx recommends using a different term to signify a stressed dispatch level.

Second, the CAISO has provided a more detailed explanation of the “diversity adder” concept, which has improved our understanding of the CAISO’s rationale for including them in developing a generation dispatch. However, as articulated in our comments later, we do not believe that the CAISO should be using any further adders over and above the CPUC’s diversity adders that are used to quantify the resource Net Qualifying Capacity (NQC).

Third, the CAISO has demonstrated via several examples, that the CAISO has used renewable generation tripping Special Protection Schemes (SPS) to address potential thermal overloads resulting from certain contingency events.2

Fourth, although it was not entirely clear from the technical paper, during the July 25th stakeholder call, the CAISO clarified that not only Energy Only Deliverability Status (EODS), but also Full Capacity Deliverability Status (FCDS) resources are part of congestion management mitigation under DAM. In other words, the redispatch of FCDS generation can be

First: The ISO will improve the clarity in the labeling of maximum dispatch level in the deliverability methodology. Second: See ISO response below Third: The ISO uses both renewable and conventional generation tripping to address both thermal overloads, stability, and voltage stability concerns. Fourth: The ISO deliverability methodology is for the purpose of counting resources for resource adequacy capacity planning in the year-ahead and month-ahead time frames. It is not for purposes of day ahead and real time operation. The ISO utilizes a security

2 The generation tripping SPSs are modeled in the examples for Northern California Deliverability Constraint and Mitigation, Desert Area Deliverability Constraints and Mitigations Example (TPP) and Desert Area Deliverability Constraints and Mitigations Example (GIP) with certain ceilings for tripped generation amounts.



considered to be feasible as a mechanism under DAM to mitigate the identified reliability concern as part of a mitigation plan. We request that the CAISO confirm the use of FCDS generation as part of the congestion management mitigation plan as some of the statements included in the July 2nd Technical Paper seemed contrary to that understanding. For example, the CAISO states the following in the “Mitigation of NERC Reliability Standard Compliance Concerns “section of the Technical Paper.

“As we saw, Order 2003 intended EODS generation to compete with existing generation in order to get access to the transmission system. Therefore the use of congestion management to mitigate delivery constraints identified in EODS interconnection studies is expected. …On the other hand, Order 2003 required that FCDS generation must be deliverable without displacing existing full capacity generation under summer peak load conditions. Therefore, FCDS generation must be deliverable along with the other FCDS generation in the local area during summer peak load conditions under a variety of severely stressed system conditions. As described earlier, the deliverability methodology only addresses certain dispatch conditions during summer peak load conditions. If reliability concerns are identified during non-summer peak load conditions, or under generation dispatch conditions beyond those specified in the deliverability methodology, then congestion management is recommended as the mitigation, when it is feasible, for FCDS generation.”

In the remaining portion of these comments BAMx focuses on the following four areas, which identify some of the remaining concerns that it has with the application of DAM by the CAISO:

1. The CAISO DAM identifies generation in excess of NQC Requirements;

constrained economic dispatch model, based on actual system conditions for that immediate time frame, to ensure the reliable operation of the system. FCDS and EODS classifications are not considered in the day ahead and real time market. The deliverability methodology is a methodology for establishing a “variety of severely stressed system conditions” to ensure that generation relied upon for resource adequacy capacity planning is deliverable to the aggregate of ISO load during resource shortage conditions. Because, resource shortage conditions are most likely to occur during maximum load conditions, the deliverability methodology is focused on summer peak load conditions. However, for dispatch conditions more severe than those established by the methodology generation redispatch is an acceptable mitigation measure. Also, for load conditions other than the summer peak load condition, generation redispatch is also an acceptable mitigation measure. Please see responses below.



2. DAM is not dictated by FERC Order 2003 and CPUC adoption of the CAISO Deliverability Methodology (D.04-10-035);

3. DAM may not be an appropriate mechanism to identify network upgrades for larger areas;

4. Urgent Need for a Broader Stakeholder Process to Discuss the CAISO Deliverability Assessment Methodology—Need for additional examples.

The CAISO DAM identifies generation in excess of NQC Requirements

The CPUC NQC is based on the “exceedance method,” i.e., the individual generation project’s level of production exceeded in 70% of peak hours specified by the CPUC, using a rolling average of three years of data. There is also a “diversity adjustment” based on the 70% exceedance level for all similar resources in the state. In other words, CPUC’s NQC amounts based upon 70% exceedance level already includes a diversity adder. However, the CAISO DAM uses exceedance levels of 20% to 50%, which means the CAISO studies interconnecting generators at a much higher level of output than what the CPUC allows jurisdictional LSEs to count towards their RA obligations. (A lower exceedance threshold equates to higher generation assumptions.) In Table 1, we summarize a comparison of the level of generation dispatch modeled as a share of a resource nameplate capability in DAM and the RA credit that wind resource may receive.

Table 1: A Comparison of Generation Dispatch in DAM and Actual NQC used for RA Purposes

Gen Mix Pmax as a Percent of Nameplate

Exceedance Wind Solar Mix of Types 50% 40% (South)

28% (North) 85%



Primarily Solar 20% 100%

Primarily Wind 20% 64% (South) 51% (North)

Actual NQC for RA Purposes (Average over Years 2011-13)

70% + Diversity Adder

22.43% 84.78%

Although the solar dispatch modeled under DAM is close to its NQC value when it’s a mix of types, the wind dispatch of 40%-64% is considerably higher than the typical NQC of 22.43% of its Nameplate capacity. And when it is primarily solar, even the dispatch for solar exceeds its NQC value.

Furthermore, based on the examples included by the CAISO in its Technical Paper, there seems to be some inconsistencies in how the generation dispatch was modeled. See Table 2 below. For example, please confirm whether the Solar PV requesting FCDS was modeled at 100% of nameplate capacity in the Borrego and Central California studies, whereas it was modeled at 85% of its nameplate capacity in the remaining studies because Borrego and Central California area studies exclusively (primarily) contained solar resources. Also, in the North of Lugo deliverability assessment, the solar thermal units were modeled at 100% of their nameplate capacities, whereas they were modeled at 85% of their nameplate capacities in the Desert Area examples.

Table 2: A Comparison of Generation Dispatch in DAM as Modeled in Different Study Areas

The ISO will review the identified potential inconsistencies.



We believe that the 20% and 50% exceedance values were developed heuristically. There has not been any opportunity provided to the stakeholders to assess whether these values are optimistic or pessimistic based on operations data. Moreover, DAM is sensitive to the size of the project.

The 70% exceedance level on generation production is for the counting of resources towards the 115% resource adequacy requirement across the ISO system, and assumes perfect deliverability of resources. The use of the 50% and 20% exceedance assumptions are required to account the localized production variations that need to be addressed in a transmission deliverability analysis. This is similar to the use of a 1 in 2 load forecast for resource adequacy versus a 1



For example, the results will be different in an area with twenty 50 MW projects versus fifty 20 MW projects, even if they are in the same geographic location with the same Points of Interconnection.

Moreover, the CAISO has not provided justification for the modeling of energy-limited resources. In DAM, it is not evident that any consideration is given to historic dispatch patterns of existing resources. While traditional transmission planning may assume generation levels in small areas are close to their nameplate levels, for larger areas traditional transmission planning frequently looks at historical generation patterns. For example, when assessing the adequacy of the transmission system in northern California, traditional transmission planning would consider the historical wet, average and dry year hydroelectric generation levels.

DAM needs to be modified to exclude resource adjustment outside the CAISO BA (specifically resources in the Balancing Authority of Northern California (BANC) such as the Central Valley Project generation in the CAISO example). Resources outside the CAISO BA should be modeled at their expected generation levels and flows across the interconnection interface maintained within rating and contract limits.

In summary, we have several concerns; first, we believe that Stakeholders deserve a more complete review of the rationale and calculations involved in establishing the output levels that the CAISO uses in its interconnection studies

in 10 load forecast for transmission analysis. A 1 in 2 is a 50% exceedance level and a 1 in 10 load forecast is a 10% exceedance level. The deliverability methodology allows a variation of initial dispatch conditions between 80% and 95% which can be utilized to address areas with numerous small units that are expected to have higher output levels. The objective of the deliverability methodology is to ensure the deliverability of generation during resource shortage conditions. Therefore, the use of historical data would need to be based on resource shortage conditions. However, resource shortage conditions are rare, so there is insufficient historical data. As described in the paper the deliverabilty methodology is based on similar methodologies utilized by other ISOs and RTOs and was



for specific generation assumptions for particular generation technologies.

Second, as the CAISO acknowledged during the stakeholder meeting, these assumptions need to be updated based on the most currently available data. Third, if both existing and new generation resources are assessed beyond their historical/expected NQC commensurate with the RA credit that they receive, then any incremental generation dispatch needs to be subject to an economic test.

DAM is not dictated by FERC Order 2003 and CPUC adoption of the CAISO DAM (D.04-10-035)

Contrary to the CAISO’s claim, BAMx does not believe that DAM is dictated by FERC Order 2003. The CAISO position that “congestion management curtailment of FCDS generation is not an acceptable mitigation measure in the deliverability study” does not align with FERC Order 2003. FERC Order 2003 Paragraph 769 focuses on comparability of service associated Network Resource Interconnection Service (NRIS) and explicitly notes that NRIS does not necessarily eliminate congestion. FERC Order 2003, Appendix C LGIP Section 3.2.2.2 states that “The Interconnection Study for NRIS shall ensure that Large Generating Facility's interconnection is studied at peak load, under a variety of severely stressed conditions, to determine whether, with the Large Generating Facility at full output, the aggregate of generation in the local area can be delivered to the aggregate of load on the Transmission Provider’s Transmission System, consistent with the Transmission Provider’s reliability criteria and procedures.” This section further states “This approach assumes that some portion of existing Network Resources are displaced by the output of the Interconnection Customer's Large Generating Facility. NR Interconnection Service in and of itself does not convey any transmission service.” However,

established over the course of numerous stakeholder meetings from 2004 through 2006. The ISO agrees that the intermittent generation production level data used in the studies needs to be updated. The ISO agrees that for dispatch conditions more severe than those established by the methodology generation redispatch is an acceptable mitigation measure. Also, for load conditions other than the summer peak load condition, generation redispatch is also an acceptable mitigation measure.



contrary to the FERC Order 2003 quoted above, the CAISO states “On the other hand, Order 2003 required that FCDS generation must be deliverable without displacing existing full capacity generation under summer peak load conditions.”

FERC has not been overly prescriptive in the methodology that a regional entity uses to identify transmission needed to support resource adequacy other than to require that the aggregate of generation can be delivered to the aggregate of load. Also, congestion may still occur even when the identified transmission upgrades are in place. Therefore, FERC Order 2003 should not be viewed as a driver of the methodology used to determine the amount of transmission needed to support Resource Adequacy.

An important consideration is that the initial baseline Deliverability Analysis performed in 2005 did not identify the need for any major transmission investment. As such, the question of whether the methodology provides an appropriate balance of cost and reliability did not arise. Also, because deliverability was deemed an RA counting mechanism, we understand it was not anticipated that the need for deliverability would drive major transmission upgrades. Moreover the regulatory, market and generation resource environment in 2005 was quite different from what exists today. In 2005, a very small portion of the generation mix consisted of Variable Energy Resources (VER), which have significantly lower levels of reliability and flexibility relative to that of conventional fossil-fired generation. Moreover, DAM pre-dates MRTU and the use of LMP and has never been reassessed in light of new market design. A decision by the CPUC premised upon its lack of objection to a criterion declaring all existing resources were deliverable in 2005, does not necessarily imply an endorsement of today’s application of the current CAISO’s deliverability requirements for massive amounts of VERs that are proposing to interconnect to the grid. The CPUC decision that omitted any specifics on the CAISO's deliverability assessment methodology implied that the concerns on the

The baseline deliverability analysis demonstrated that the methodology was not overly conservative. It was assumed that the transmission system was not overbuilt, so if the methodology had been overly conservative then it would have identified the need for major transmission upgrades. The deliverability methodology was established at the same time the MRTU was under development, and was designed with the assumption that the ISO would have an LMP market design. The deliverability methodology has been applied to demonstrate that California can reach the 33% RPS goal with the currently planned transmission system. This finding was initially challenged by the industry but has now been generally accepted.



methodological issues needed some attention.3 See an excerpt from page 55 of the Decision D.04-10-035 below.

"The comments on this topic describe several unresolved methodological issues that parties seek to have addressed. Fortunately, CAISO’s determinations that historical imports are deliverable and that non-deliverability issues for generation within pockets can be mitigated by transmission upgrades allows us to proceed with the first cycle of RAR showings, before the methodological issues are resolved. We urge the CAISO to consider, through its stakeholder process, the concerns raised in comments on the methodological issues, including those raised by Calpine, Constellation, FPLE, PG&E, and Sempra Global."

DAM may not be an appropriate mechanism for identifying network upgrades for larger areas

As mentioned earlier, the stakeholders should have the opportunity to reassess the key assumptions and the various details on the CAISO DAM. In addition, further investigation and stakeholder engagement is needed to determine whether DAM is the best possible way to determine Delivery Network Upgrades (DNUs) for large areas. From the examples that the CAISO has provided for relatively small areas such as Whirlwind, Borrego and ECO, except for the level of generation represented, the application of DAM used to determine how new generation projects could deliver the output of the new plants to the aggregate of load for resource adequacy counting purposes appears to be reasonable. However, what does the deployment of DAM mean for a significantly larger footprint such as the Desert area, Northern California or Central California? BAMx believes that when the “generation pocket” becomes a large portion of the overall system, the situation is different than the initial concept of a generation

As indicated by the footnote in the comments, the excerpt is from Decision D. 05-10-042. Decision D. 05-10-035 addressed both import deliverability and allocation and internal generation deliverability. The majority of methodological issues raised were focused on the import deliverability and allocation. Furthermore, as requested by the CPUC, the ISO held a stakeholder process and addressed the concerns raised in comments. With the implementation of GIDAP, ratepayer funded upgrades for large areas are considered in the TPP rather than in the interconnection study process.

3 Decision 05-10-042, “ Opinion On Resource Adequacy Requirements,” October 27, 2005



pocket. Such large system constraints should be considered under the TPP rather than the GIP. For example, almost all resources in northern California are shown to be impacted by a deliverability constraint on the SCE system south of Vincent.

We have seen that applying DAM to large areas has resulted in excessive and unneeded DNUs in the GIP studies, such as the Desert Area. In reassessing the application of DAM to large areas, the CAISO should consider relaxing certain conservative assumptions that drive the unneeded and excessive DNUs rather than excluding these DNUs after the fact. Such relaxation of assumptions may include, but not limited to, limiting the queued generation to its NQC, raising the DFAX circle from 5% to 10% at least while modeling Category C contingencies, etc. We believe that such potential solutions should be debated in a stakeholder process.

Urgent Need for a Broader Stakeholder Process to Discuss the CAISO Deliverability Assessment Methodology—Need for additional examples

As we indicated above, BAMx is thankful to the CAISO for providing several selected examples to illustrate DAM. Other examples would be helpful in providing additional clarity on the DAM. For example, the results with respect to Distributed Generation (DG) Deliverability are counter-intuitive. The DG Deliverability analysis shows no deliverability in the East Bay area of the San Francisco Bay Area. This is a load pocket with not only a local RMR requirement, but also one that relies on the use of SPS to drop load for Category B and C contingencies. Discouraging DG due to lack of FCDS by DAM is counter-productive, especially in areas with existing reliability problems and insufficient transmission capacity to serve load under Category B contingencies.

Additional examples that illustrate the application of DAM to areas where major deliverability transmission projects are being considered, but have not yet

Please see response above as well as the Deliverability Study Methodology technical paper regarding the modeling of intermittent resources. All other resources are modeled at their NQC or lower. The ISO has observed that PJM does use a 10% DFAX for category C contingencies. However, PJM does not rely on SPS for category C contingencies except on a temporary basis. Because the ISO does rely on SPS as a permanent mitigation the need for transmission upgrades under the ISO framework is comparable or less than other established deliverability methodologies. There was approximately 800 MW of DG in the San Francisco Bay Area assessed for deliverability in the DG Deliverability study. Approximately 600 MW of that amount was found to be deliverable. A few subpockets which are already generation rich were identified where the deliverability of DG was determined to be problematic. The use of generation tripping to mitigate overloads on the west of Devers lines has been



received regulatory approval (e.g. West of Devers Reconductoring Project and Coolwater-Lugo 230kV Project) would be very informative. The West of Devers Reconductoring was identified as a DNU in one of the Transition Cluster studies in Summer 2010 for a Category C contingency. We seek more information on that study. For instance, whether the West of Devers SPS comprised of tripping generation on loss of West of Devers 230kV lines and Devers - Valley 500kV lines was considered in that study. We know that unlike DAM, traditional planning standards would have allowed for load-dropping SPS under the Category C contingency that drove the DNU comprising the West of Devers Reconductoring project.

One additional reason that BAMx believes that now is a good time to re-assess the elements of the methodology is because the queue management process has only been moderately successful in getting rid of "deadwood" projects and the current methodology continues to produce excessive and un-needed DNUs. It is evident from the last round of Stakeholder comments, that there is wide support among stakeholders with varying interests to better understand the CAISO Deliverability Assessment Methodology and its implications.4 We are aware that the CAISO has limited resources and needs to prioritize its efforts accordingly and while GIDAP has been an important advancement, it does not solve this problem. We appreciate that the CAISO has taken several steps to unclog the generation interconnection queue, comprising the queue management efforts, the cluster studies deliverability reassessment, and the generator project downsizing initiative, etc. Despite these positive steps and given that queue currently includes three to four times the renewable generation capacity needed to meet the State’s 33% RPS goal, there will still likely be numerous transmission projects going forward at ratepayers’ expense far beyond what is needed to provide sufficient RA to reliably serve load. Given its

maximized. The ISO Grid Planning Standards, SPS Guidelines prevent the use of load shedding to as mitigation for transmission impacts caused by the interconnection of new generation. Thanks for the comments. However, BAMx has not provided any basis for the statement that “there will still likely be numerous transmission projects going forward at ratepayers’ expense far beyond what is needed to provide sufficient RA to reliably serve load.” In fact, with the implementation of GIDAP it is actually unlikely that transmission projects will forward at ratepayers’ expense far beyond what is needed to provide sufficient RA to reliably serve load. At this time the ISO disagrees that a stakeholder process is warranted to reevaluate the DAM.

4 See Stakeholder comments on Dec 4, 2012 training meeting at http://www.caiso.com/planning/Pages/GeneratorInterconnection/Default.aspx.

http://www.caiso.com/planning/Pages/GeneratorInterconnection/Default.aspx



significant impact on generation and transmission resource development in the future, BAMx urges the CAISO to continue and accelerate this stakeholder dialogue to reevaluate its DAM.

California Wind Energy Association (CalWEA)

Dariush Shirmohamma Nancy Rader Tom Solomon (Winston Strawn for CalWEA)

CalWEA would like to acknowledge CAISO’s efforts in preparing this educational paper on its deliverability assessment methodology. The Technical Paper and the stakeholder call have greatly improved the transparency of both the process and the underlying assumptions and methodology that CAISO uses in performing its deliverability assessment. Prior to the release of the Technical Paper, CalWEA had been engaged with the CAISO for a number of years in order to better understand the CAISO’s deliverability assessment methodology. Through these efforts, CalWEA had shared its concerns about the methodology with the CAISO. Unfortunately, the Technical Paper only confirms our view that the methodology suffers from major flaws that are imposing substantial unnecessary costs on California ratepayers. The Basic Problems with the CAISO Deliverability Assessment Methodology CalWEA will not repeat its many detailed technical criticisms of the CAISO deliverability assessment methodology, which can be found in several sets of previous comments already submitted to the CAISO. However, CalWEA outlines here the basic high-level problems with the CAISO deliverability assessment methodology:

• Improper study basecase: The cornerstone of a proper snapshot transmission study, such as the one used for the deliverability assessment, is the study basecase. In turn, the most important component of a study basecase is the dispatch of system resources. A meaningful snapshot transmission study should reflect the prevailing practices for dispatching supply and demand resources. For example, the resource dispatch should either be based on economic dispatch, as dictated by the CAISO’s Market Redesign and Technology Upgrade

The ISO Deliverability study methodology has been utilized to establish that the amount of generation deliverability created by the Tehachapi transmission project is greater than 7200 MW. This amount should be compared to the 4500 MW capability associated with the Tehachapi transmission project based on the traditional study methodology. This fact contradicts the notion that the ISO deliverability study methodology is imposing substantial unnecessary costs on California ratepayers. FERC Order 2003 specifies that the deliverability study should be based on transmission study conditions utilized for resource adequacy planning. Transmission study conditions for resource adequacy planning should be based on resource shortage conditions during summer peak load. The ISO deliverability study methodology is designed to



(MRTU) congestion management, or historic dispatch, as dictated by contract. While CAISO’s selection of summer peak load for its deliverability study is completely understandable, the use of a generation dispatch which is solely intended to stress the transmission system (something that MRTU was designed to avoid for actual system operation) is incorrect. This basic error in the basecase resource dispatch lays the first building block for CAISO deliverability studies that are biased towards triggering massive and unnecessary transmission upgrades, as further explained below. • Improper study criteria: The applicable national and regional reliability organizations (NERC and WECC) have not developed any criteria or transmission study methodology for deliverability assessments. These organizations have, however, developed clear criteria and methodologies for studying system reliability using snapshot transmission studies. These criteria and methodologies are fundamentally intended to prevent uncontrolled loss of load under single and credible multiple contingencies. In contrast, the broad objective of a deliverability study -- which is not clearly defined or described by the CAISO —should be to ensure that the intended deliverable capacity of an interconnecting generator can reach demand. If it does not, the load is not dropped like it would be in a transmission system reliability study; rather, the load is met by another generator and a portion or all of the intended deliverable capacity of the interconnecting generator becomes undeliverable. Hence, the study is, in effect, a commercial study rather than a reliability study. Yet, by stating that only the deliverable capacity of a generator can provide resource adequacy (RA) capacity, the CAISO is attempting to establish an indirect tie between its deliverability assessment and system reliability. Based on this indirect tie, CAISO then justifies using the NERC/WECC transmission reliability criteria and study methodology, such as the study of multiple contingencies for its deliverability assessment. What is lost in this approach is the reality that not every generator providing the system RA capacity relied upon to meet the RA

identify meaningful basecase snapshot conditions aligned with resource shortage scenarios and in a consistent and repeatable manner. Using this methodology results in moderate transmission upgrades for moderate amounts of generation such as the amount needed to meet the 33% RPS goal.



requirement of 115% to 117% of the forecast peak load (which already accounts for and accommodates many contingency conditions) needs to reach every load center at all times under the most critical multiple transmission contingency condition. Indeed, the CAISO acknowledged in the stakeholder call on the Technical Paper that its deliverability assessment methodology would require generators very close to major load centers in Northern CA to be able to deliver their output into the Los Angeles basin under multiple contingency conditions, in extreme contrast to actual operating practices, in order to be considered deliverable. In any case, combining an unrealistic dispatch that is solely intended to maximally stress the transmission system with a worst case multiple transmission system contingency assures the ongoing need for network delivery upgrades at a high cost to developers and, ultimately, to consumers. • Improper dispatch level for deliverable renewable resources: Based on the CPUC’s approved methodology, the Qualifying Capacity (QC) of a wind generator (the fraction of the generator’s capacity that can qualify for RA capacity) is typically only about 10 to 20 percent of its nameplate rating. However, the CAISO studies wind resources at more than 40% of their nameplate rating in its deliverability studies, which only further stresses the grid. Similar over-dispatch relative to QC also occurs with solar PV resources (DG or otherwise). A solar PV QC is typically around 70 to 80 percent of its nameplate capacity. Yet CAISO dispatches solar PV generators at 100% of their nameplate capacities in its deliverability study. Such over-dispatch of renewable resources does not translate to any benefit to the ratepayers or the generators who would have to fund deliverability transmission upgrades for RA capacity that they will not receive. • Improper use of transmission mitigation solutions: As noted above, the CAISO deliverability assessment methodology identifies a need for deliverability upgrades where, CalWEA believes, none is warranted. At

The ISO deliverability study methodology is designed to ensure that resources in a particular generation pocket are deliverable 80% of the time during summer peak load conditions. It is not designed to ensure generation is deliverable at all times. The ISO deliverability study methodology is designed to ensure that resources in a particular generation pocket are deliverable to the aggregate of ISO load. It is not designed to ensure generation is deliverable to any particular load center. It certainly does not require that a resource must be deliverable to all load centers. The ISO local capacity studies are the primary mechanism to ensure that generation is deliverable to load centers. Please see responses to BAMx above regarding the assumptions for modeling intermittent generation.



the same time, the solution to such upgrades, jointly developed by the CAISO and its Participating Transmission Owners (PTOs), are not the least-cost solution to the identified need. To cite one example, the deliverability network upgrade identified by the CAISO and SCE in 2010 for the desert southwest generation projects in the Transition Cluster (TC) was the West of Devers (WOD) upgrade ($1B+, 8+ year transmission project). A review of the CAISO regional planning discussions in years prior to 2010 shows that the WOD upgrade may have been necessary for other reasons before the CAISO Transition Cluster was even formed. Yet, the CAISO deliverability assessment methodology eventually tied the WOD upgrade to the TC desert southwest generation projects, rendering many of them economically unviable. However, later in 2011, the CAISO noted that the same level of deliverability for TC desert southwest generators could be achieved with a simple addition of some air core reactors and an N-2 SPS system (~$50M, 2–year transmission upgrade). Despite this determination, CAISO and SCE decided to label the low-cost upgrade as an interim deliverability solution only.

Based on the methodological flaws described above, it was not surprising to see very counter-intuitive and absurd outcomes from the CAISO’s Phase 1 deliverability assessments in the Queue Cluster 5 process. Those assessments showed generators seeking to interconnect very close to major load centers in Northern California triggering massive transmission upgrades in Southern California because the dispatch used in the deliverability study required the generators’ output to be capable of reaching the Los Angeles basin under an N-2 contingency condition.

The WOD Devers constraint was identified as a problem prior to the Transition Cluster and was mitigated by the installation of an SPS. However, this SPS was not an adequate mitigation measure as more generation in the queue developed. Based on the amount of generation in the queue, the WOD upgrade project was identified as needed. In order to allow some of the generation in the queue to come on-line an interim upgrade was identified. However, the interim upgrade is not sufficient to ensure deliverability of all generation in the queue so the permanent WOD upgrade is still needed. As indicated earlier, the deliverability methodology provides reasonable results that are commensurate the amount of generation in the study area. As documented in the Queue Cluster 5 Phase l Interconnection Study Report, Group Report in SCE’s Northern System, there are 262 generator projects totaling 25,484MW, in the queue up to and include Cluster 5 projects, which contribute to the South of Vincent constraint. This is the constraint that is referenced in the comment. The ISO BAA has roughly 50,000 MW of load, so the amount of new generation north of this constraint was roughly half of the load in the ISO. This amount of generation would be in



It is unfortunate that some generation developers and even PTOs seem to have the view that the deliverability assessment is intended to prevent curtailment of interconnecting and existing generators in a study area. As clearly indicated by the CAISO, the deliverability assessment is only intended to establish eligibility for all or part of the nameplate capacity of a generator to provide RA capacity and will not address generation curtailment. In fact, given the singular system

addition to the existing generation and imports north of the constraint which are roughly adequate to serve the existing load north of the constraint. Therefore, the 25, 484 MW of new generation was mostly surplus generation. Based on the ISO’s deliverability methodology 18,900 MW of the 25, 484 MW could be deliverable. In very rough terms 18,900 MW of surplus generation north of the constraint could be added and still be deliverable. It does not seem counterintuitive that some of this generation would flow through the constraint to Southern California during a resource shortage condition primarily caused by loss of resources in Southern California. It also does not seem counterintuitive that more than 18,900 MW of new generation north of the constraint might be constrained by that constraint. The ISO deliverability assessment focuses on system conditions during a resource shortage. There is a direct relationship between curtailment of generation during these conditions and the ISO’s deliverability assessment methodology.



condition that the deliverability assessment covers (an unrealistic system dispatch saddled with multiple contingencies), CalWEA contends that there is no direct relationship between the CAISO’s deliverability assessment and the system conditions that could lead to generation curtailments under MRTU markets. Where Should We Go From Here Rather than arguing about the fundamental “flaws” that CalWEA perceives in the current CAISO deliverability assessment methodology, CalWEA suggests that a more productive approach would be for stakeholders, the CAISO, and the CPUC to engage in a fresh dialogue about the need for, and purpose of, a CAISO deliverability assessment. As noted above, the CAISO performs its deliverability assessment for the sole purpose of establishing the eligibility of generating capacity to provide RA capacity. However, the RA program was created, and continues to be administered, by the CPUC. Since the CPUC is the entity that sets the RA obligations for the load-serving entities under its jurisdiction, the CPUC should establish the standards to be applied in determining whether, and to what extent, a given generator’s capacity should be eligible to satisfy those RA obligations, including the transmission study criteria to be used in a deliverability assessment if one is deemed necessary. For example, as described above, the total sum capacity of all RA capacity procured for a period of time must add up to at least 115% to 117% of maximum load during that time period. By establishing a requirement for RA capacity beyond maximum forecast load, the CPUC has already evaluated and adopted a requirement that is intended to ensure that the system can handle multiple resource contingencies. To the extent that there is a need to set a standard for a deliverability assessment, the CPUC is capable of establishing this too. CalWEA does not offer any criteria for such a dialogue except that the outcome should be a more rational approach to deliverability assessment and none of the previously approved network deliverability upgrades should be reconsidered.

Thanks for the comments. As indicated above, there are no fundamental flaws with the ISO deliverability assessment methodology. It provides reasonable and intuitive study results. Therefore, at this time the ISO does not believe it is warranted to allocate the considerable resources and time that it would take to reevaluate the ISO’s deliverability assessment methodology through a lengthy stakeholder process.



A Quick Fix Can Help Ease the Pain for Now Citing the potential for gaming by generators, CAISO currently prevents a generator from initially getting in the queue with an Energy Only (EO) interconnection request and then rejoining a later queue, potentially after COD, and requesting partial or full deliverability status. CalWEA believes that, particularly in light of the recent GIDAP reforms, CAISO’s concerns for disallowing such an interconnection strategy are outdated and raise the cost of achieving the state’s RPS goals. As a result, CalWEA requests that CAISO modify its tariff and business processes in order to allow generators to choose to enter the queue as an EO resource and at a later time and depending on the needs of their LSE, ask for deliverability by re-entering the queue, similar to interconnection options offered by other RTOs and ISOs.

Division of Ratepayer Advocates Charles Mee, Senior Utilities Engineer [email protected] (415) 703-1147 Selena Huang, Regulatory Analyst [email protected] (415) 703-5247 Traci Bone, Attorney [email protected] (415) 703-2048

As a result of its preliminary review of the Deliverability Study Methodology, DRA offers the following observations, which range from specific concerns regarding the Deliverability Study Methodology to more general concerns regarding higher level policies potentially implicated by the adoption of a Deliverability Study Methodology. A. All CAISO Transmission Planning Should Ensure Economic Investment In Transmission As the CAISO approaches transmission planning, and proposes various methodologies to facilitate that planning, it is important for it to keep in mind a number of state laws and policies intended to guide all energy planning in the state. As the CAISO is well-aware, ensuring resource adequacy (“RA”), consistent with state law and Commission decisions, is a critical component to California’s energy policy. One of the CAISO’s roles in this policy is to identify the appropriate level of transmission needed to ensure the balance between the generation supply ordered by the Commission and the load demand forecasted by the California Energy Commission. In short, the CAISO is responsible for determining the necessary transmission resources to ensure that generation is



delivered to load. To this end, the CAISO also plays a role in ensuring that all RA investments, whether for generation or transmission, are economic. The state law mandating resource adequacy places priority on “economic and needed” generating capacity. It provides:

(a) The commission, in consultation with the Independent System Operator, shall establish resource adequacy requirements for all load-serving entities. (b)In establishing resource adequacy requirements, the commission shall achieve all of the following objectives:

(1) Facilitate development of new generating capacity and retention of existing generating capacity that is economic and needed.5

Clearly, if RA generation requires too much transmission, it can quickly become uneconomic. Consequently, to ensure compliance with § 380(b)(1), any study methodology relied upon by the CAISO to develop transmission plans should address how such transmission plans will facilitate development of “economic and needed” power supply capacity, including both generation and transmission. To the extent assumptions embedded in such studies promote excess or potentially uneconomic transmission, they should be explained, examined, and reconsidered. The idea that the CAISO should play a role in helping the Commission to identify the appropriate balance between generation and transmission is not novel. As the CAISO stated in its 2012 to 2016 Strategic Plan:

The ISO will provide independent analysis and perspective on what the system needs when and where. This will help key decision makers as they consider how much renewable and related generation resources to buy, [and] which transmission lines to approve and when. . .”6

B. The Need For Full Deliverability, Or Any Deliverability Study, Should Be Considered In Light Of California’s Generation Oversupply Situation

5 1 California Public Utilities Code, §§ 380(a) and 380 (b)(1) (emphases added). 6 http://www.caiso.com/Documents/2012-2016StrategicPlan.pdf, Pages 4-5.



Keeping in mind the need to consider whether investment is “economic and needed,” DRA believes that the Deliverability Study Methodology should be used to ensure that generation can be delivered when supply is not enough to meet demand. However, this does not mean that the need for “full deliverability” should be assumed or required. There are many instances where “energy only” or “partial deliverability” is sufficient. This is because we are in an era of generation oversupply that does not appear to be waning. In the past decade, renewable resources, energy efficiency, demand response, and distributed generation have significantly increased California’s power supply. Retirement of traditional generation resources has not matched that growth. Thus, for transmission planning purposes, future supply will typically exceed demand. Given such conditions, it is critical that the CAISO acknowledge that the proposed Deliverability Study Methodology may be unnecessary or impractical, or should be tailored to more specific situations where supply does not meet demand. It appears that the current Deliverability Study Methodology fails to take such a circumspect approach. The Technical Paper setting forth the Study Methodology appears to assume that all generation from a study area must be capable of transfer to another area. It states:

The goal of the proposed ISO Generator Deliverability Study Methodology (“Study Methodology”) is to determine if the aggregate of generation output in a given area can be simultaneously transferred to the remainder of ISO Control Area”.7

From this statement, it appears that the Study Methodology focuses upon accommodating surplus generation from one area that exceeds the need for that area by providing transmission to move that excess generation to another area. The assumption that surplus generation should be made “fully deliverable” to the rest of the CAISO service area does not appear to take into account the

The ISO deliverability study methodology is utilized for purposes of implementing the ISOs GIDAP. GIDAP addresses the concerns in these comments. Constraints identified by the methodology are classified as Area Constraints and Local Constraints. Generation interconnecting in amounts that are consistent with expected amounts and locations of needed generation are only responsible for local constraints. Local constraints are mitigated by Local Delivery Network Upgrades (LDNU). LDNUs tend to be small scale upgrades needed to provide deliverability for smaller amounts of

7 “Generator Interconnection and Deliverability Study Methodology Technical Paper, CAISO, July 2, 2013, Page 18.



economic consequences of such an assumption or requirement. DRA’s concern that such assumptions will lead to the construction of unnecessary transmission is compounded by the fact that generators are not required to pay for the network upgrades required to obtain full deliverability. DRA understands that generators must only provide up-front funding for network upgrades, and that money is then repaid to the generator over a five year period following the Commercial Operation Date of that generation project. As a result, generators may have an incentive to pursue full deliverability because the costs are ultimately spread to all ratepayers who pay the transmission access charge (TAC), rather than absorbed as a business expense by an individual generator. DRA is concerned that decisions requiring full deliverability and Deliverability Network Upgrades are being made in an environment where there is sufficient RA capacity to meet the RA requirement without the additional burden of full deliverability. DRA is concerned that a full deliverability requirement will encourage the construction of potentially “useful, but not used” transmission infrastructure. To respond to this concern, the CAISO should describe the basis for requiring full deliverability before a generator can qualify as an RA resource given current conditions, and how the construction of “useful but not used” transmission can be avoided. Among other things, the CAISO should consider whether a generator’s RA qualification could be limited to that capacity which is deliverable, and full deliverability for its remaining capacity would not be required. C. Specific Assumptions In The Deliverability Study Methodology Appear to Overestimate Transmission Needs In its preliminary review of the Deliverability Study Methodology, DRA focused on assumptions in the Study Methodology that could be inconsistent with the overarching goal of balancing transmission needs with generation supply and load demands. DRA is concerned that in a period of significant over-supply of generation, additional transmission to accommodate full deliverability of all

generation within a smaller area to the aggregate of ISO load. LDNU are driven by deliverability constraints for a small group of generators electrically close to each other. LDNU are more specific to the actual interconnection points of the generators. Generators can choose to be partially deliverable. The deliverability study methodology applied in



generators who request Full Capacity Delivery Status may not be needed or economic. To this end, DRA discovered at least two assumptions embedded in the Study Methodology that could result in recommendations for more transmission than is needed to strike the appropriate balance among transmission, generation, and load. First, it appears that the Study Methodology assumes decreased generation output in all areas outside the study area. This approach raises several concerns. If transmission is recommended, approved, and constructed based on this assumption, generation in non-study areas may need to be curtailed in order to maintain balance between supply and demand . In addition, there does not appear to be any basis provided for this assumption, and making such assumptions on a case by case basis seems to be inconsistent with a systematic approach to performing transmission planning. Finally, such an assumption, if relied upon for transmission recommendations, promotes uneconomic transmission investment. Second, it appears that the Study Methodology assumes unusually low exceedance levels to determine a given generator’s transmission needs. Relying on lower than necessary exceedance levels could promote uneconomic construction of transmission. The lower the exceedance level, the higher the number of megawatts that are assumed to require delivery, and the more transmission that is needed. The Study Methodology appears to rely on exceedance levels from 20 to 50% and provides no basis for these numbers. By comparison, the CPUC uses a 70% exceedance level in determining the Net Qualifying Capacity of renewable generators. In response to both concerns described above, DRA proposes that the CAISO should explain the basis for its adopted assumptions, and consider adjustment, if appropriate, to ensure that such assumptions do not result in CAISO recommendations for uneconomic transmission investment.

the context of GIDAP is designed to ensure that decisions to approve new rate-based transmission can be based on a comprehensive planning approach that addresses all the needs of the transmission system holistically and thereby makes most cost-effective use of ratepayer funding Please see ISO responses to BAMx regarding the modeling of intermittent generation. In addition to reviewing the ISO technical paper on the Deliverability Methodology, please also review the ISOs GIDAP proposal document. http://www.caiso.com/Documents/FinalProposal-TransmissionPlanning_GeneratorInterconnectionProceduresIntegration.pdf As described in the GIDAP paper, the interconnection process and the Transmission Planning Process (TPP) have been aligned in GIDAP. The ISO TPP is aligned annually with

http://www.caiso.com/Documents/FinalProposal-TransmissionPlanning_GeneratorInterconnectionProceduresIntegration.pdf






D. The Deliverability Study Methodology Should Incorporate Assumptions Relied Upon By The CPUC To Develop The Utilities Long Term Procurement And Resource Adequacy Plans DRA has not yet reviewed all of the assumptions in the Study Methodology. However, to the extent that assumptions embedded in the Methodology include forecasts of future generation, load, or RA needs, such assumptions should be consistent with Commission determinations in its Long Term Procurement and Resource Adequacy proceedings, which include load forecasts from the California Energy Commission. The CAISO should identify assumptions in the Study Methodology touching on these issues and confirm that its assumptions are consistent with Commission-adopted assumptions. Where inconsistent, the CAISO should coordinate with the Commission to establish common assumptions. E. The CAISO’s Should Coordinate With The Commission To Establish Common Assumptions For The TPP And Should Identify Tradeoffs Among Resources That Can Inform The Need For Transmission Investment Similar to the point above, the CAISO in its Transmission Planning Process (TPP) should work with the Commission to establish common assumptions regarding load demand and generation supply. Using these assumptions, DRA would like to see better alignment in the TPP assessment of the tradeoffs to be made between generation, transmission, and other alternatives, including energy efficiency, demand response and reactive support. This type of analysis should then be used to inform the Deliverability Study Methodology and the need for transmission investment. DRA proposes that in an era of growing distributed generation, energy efficiency, demand response, and reactive support, there may be no need for “full deliverability” to meet RA requirements. F. Development Of The Study Methodology Should Be Transparent And Responsive To All Parties

the Commission adopted assumptions through an open stakeholder process.



DRA supports an open and transparent stakeholder process to provide a better understanding and further review of the Study Methodology. Specifically, the CAISO should provide all stakeholders regular opportunities for input into the development process, and should ensure that the Study Methodology assumptions, and the bases for those assumptions, are disclosed. Finally, the CAISO should respond to party input. Because the Study Methodology is germane to many planning and investment decisions, stakeholders should have sufficient opportunity to review the methodologies and assumptions developed by the CAISO. Before finalizing any study methodologies and assumptions, the CAISO should consider stakeholder recommendations and explain to all stakeholders why it has or has not adopted each recommendation.

Thanks for the comments. Based on positive feedback from stakeholders regarding the content of the technical paper, we believe that the transparency concerns regarding the ISO deliverability methodology have been addressed. In addition, at this point in time, the general issues raised do not warrant the allocation of considerable resources needed to embark on a stakeholder process to recreate or fine tune the deliverability study methodology.

California Public Utilities Commission Keith White [email protected]

Clarification and discussion of the CAISO’s deliverability assessment methodology has been of great interest to stakeholders for some time, and this recent Paper will greatly aid understanding and discussion of assessment methods and issues. It clearly represents substantial effort by CAISO staff, for which we express our appreciation. CPUC Staff recognize that deliverability and the appropriate level of conservatism regarding assessment methodology and actual infrastructure needs for deliverability are important but difficult topics. This is especially apparent when dealing with variable resources such as wind and solar, large groups (“generation pockets”) of resources studied for deliverability, or especially for the combination – large groups of variable resources. Thus, CPUC Staff’s comments focus strongly on deliverability assessment methodology for variable generation and for large study groups. The CAISO’s Paper provides a very helpful basis for having this discussion, for which we strive to keep an open mind regarding the appropriate level of conservatism. Before addressing these and other topics, CPUC Staff request that the CAISO provide insight into this overarching question: How will deliverability assessment methods and challenges change as resource, transmission and RA planning are increasingly coordinated such as through Generator Interconnection and

The ISO has in the process of completed the Cluster 5 studies under GIDAP. As a matter of good practice, the ISO will review these results and assess the need for changes to the




Deliverability Allocation Procedures (“GIDAP”) reforms, and with gradually receding impact of large amounts of previously queued generation projects needing to be studied under earlier vintage interconnection procedures? Requested responses from the CAISO are generally italicized in the text below. 1. The CAISO Should Justify and Clarify the Level of Statistical Conservatism in Setting Stressed Dispatch Levels for Variable Generators. The Paper helpfully clarifies the rationale for setting stressed dispatch levels for variable generators, i.e., wind and solar, for deliverability assessment purposes. Specifically, the Paper describes how, within a study group, the stressed dispatch level for variable generators having the greatest impact on a limiting transmission constraint is set to the 50% exceedance level (or 20% exceedance level in study groups containing only a limited number of variable generators of one type, wind or solar). For other wind/solar generators in a study group, the stressed dispatch is not pushed as high, but is still above the 70% exceedance level used for establishing qualifying capacity (QC) for resource adequacy (RA) credit. The 50% exeedance level represents a generator’s MW output level that is expected to be exceeded exactly 50% of the time during those summer afternoon hours representing resource adequacy stress conditions for which deliverability for RA purposes is assessed. For comparison, the 70% exceedance level used to determine a generator’s RA-qualifying capacity (QC) represents a lower output level, since a wind or solar generator’s output might exceed 50 MW for 50% of stress condition hours, yet the output level expected to be exceeded for 70% of stress condition hours might be only 25 MW. (These numbers are only illustrative.) Importantly, the Paper clarifies that stressed dispatch levels are set substantially higher than the QC (70% exceedance) level for wind and solar generators for the following reason. Individual variable generators’ output will in some hours fall short of an RA credit level based on 70% exceedance, but other variable

deliverability assessment methodology. Please see ISO’s response to BAMx regarding the modeling of intermittent generation.



generators should simultaneously be exceeding their RA levels (with a 70% probability on average). Thus, variable generators overall should be providing at least their aggregate RA capacity level of output. However, for such output balancing to occur across all variable generators systemwide, variable generators or at least a sufficient portion of them must be able to deliver output somewhat above their RA level, some of the time. This is qualitatively clear, as clarified by the Paper. However, what is not clear is whether stressed levels of wind and solar dispatch assumed for deliverability assessments are appropriately but not overly conservative for RA purposes. Thus, the CAISO should develop and discuss with stakeholders an evaluation of the type outlined below, to clarify the conservatism of stressed dispatch assumptions for variable generators.

a) For several of the example cases in the Paper, such as those discussed in more detail below, the CAISO’s deliverability assessment methodology should be applied as presented in the Paper. This produces an aggregate stressed dispatch level for the combined set of variable generators within a study group, representing the aggregate variable generator MW needing to be delivered from the group. b) For hours representing the summer afternoon RA stress period in question, the outputs of wind and solar generators in different locations across the system, both inside and outside the study group, should be assigned probability distributions calculated from historical output data or from wind speed/solar radiation data.8 c) The resulting aggregate probability distribution for all (combined) wind and solar generators in a study group should be calculated. This distribution

The ISO will consider such an exercise further, but the resources needed to perform this work would need to be allocated based on the relative priority of this work compared to other ISO work.

8 In conjunction with operational flexibility studies and other applications, the CAISO has collected, processed and analyzed large amounts of data on wind and solar temporal and spatial resource patterns, and associated variable generator output patterns. This information can be (has already been) used to develop probability distributions for wind and solar generator output.



would then be truncated at the aggregate stressed dispatch level assumed for the deliverability assessment.9 This gives the probability distribution for overall delivered wind and solar generation for the study group (if conservatively assumed to never exceed the stressed dispatch level). d) The probability distribution for delivered wind and solar generation outside the study group (based on diverse output profiles) would similarly be truncated at a comparable margin above the NQC/QC level. This assumed margin would have to be appropriately determined and is consequential. It should be consistent with the margins being assumed for deliverability study groups, i.e., with aggregate stressed dispatch for variable generation substantially exceeding the aggregate NQC/QC level. It could fall somewhat below the 50% exceedance level but significantly above 80% of the 50% exceedance level. The rationale for this is as follows. First, for most variable generators in study groups the potential stressed dispatch level (referred to as Pmax) to which the most constraint-impacting generators are dispatched is set to the 50% exceedance level (but being set to the higher 20% exceedance level in some situations). Second, the initial dispatch of variable generators before applying stressed upward dispatch is set to 80% of Pmax. e) This would allow estimation of the probability that aggregate systemwide wind and solar generation during RA stress period hours (inside plus outside the study group) would fall below the systemwide aggregate RA (70% exceedance) level for variable generators. This probability should be interpreted with caution, recognizing that the deliverability assessment is already assuming that low probability transmission outage (N-1, N-2) is occurring. f) Also, sensitivities could be examined in which the assumed (needing to be

9 For example, assume that a study group’s variable generators have been assigned an aggregate stressed dispatch of 1000 MW that is well above the QC level. Also assume that the probability distribution for these generators’ aggregate output during the stress hours (ignoring deliverability) gives a 35% probability of aggregate output exceeding 1000 MW, taking into account diversity of profiles among the different resources in the study group. Then, the computed probability distribution for the aggregate output deliverable from the study group’s variable generators would be truncated at 1000 MW, thus assigning 35% probability to the 1000 MW output level.



deliverable) stressed dispatch for variable generation is lower or higher both inside the study group and systemwide, using alternative truncations of the deliverable output distributions.

CPUC Staff tries to avoid a preconception as to whether the CAISO’s deliverability assessment methodology as applied to variable generators is overly conservative. However, this issue has been of great interest and contention for some time, and significantly impacts amounts and costs of transmission identified to make large amounts of variable generation RA deliverable. Also, this issue clearly has reliability implications. The methodology currently used to set stressed dispatch levels for variable generators is apparently significantly (not wholly) heuristic, judged on the usefulness and intuitive reasonableness of its results. As requested here, it would be informative and reassuring for stakeholders to gain better insight into the fundamental probabilistic implications and conservatism of the level of stressed dispatch being assumed for wind and solar generators under stressed conditions for which deliverability is tested. 2. Large “Generation Pockets” (Study Groups) and Complex Constructed Dispatch Scenarios May Produce Deliverability Assessments of Uncertain Realism or Utility, Which Should be Further Evaluated and Discussed. The most straightforward situation for deliverability assessment might involve a moderately sized “study group” of generators located in a limited area with limited electrical connections to the rest of a much larger overall system containing the bulk of generation and load. However, when the study group itself contains many generators and MW of different types dispersed over a large area, the choice of appropriate dispatch scenarios appears to be very open ended and ambiguous, yet can have a large impact on results of a deliverability assessment. First, large amounts of queued generation can produce large deliverability study groups driving identification of large transmission additions for deliverability, despite the reality that much lesser amounts of queued generation will

The implementation of the deliverability study methodology in the context of GIDAP addresses this concern. Furthermore, the methodology limits study groups to the 5% DFAX circle; limits



realistically come on line, producing much lower transmission stresses. This practical dilemma was recognized in the CAISO’s technical bulletin limiting the amount of queued generation to be assumed deliverable within deliverability assessments for very large study groups in Queue Clusters 1-4. The CAISO should clarify the extent to which deliverability assessments and/or identified delivery network upgrades going forward will (or will not) continue to be complicated by deliverability needs of large amounts of queued generation that will not ultimately come on-line. Second, large deliverability study groups generally (whether containing queued or existing generators) increase potential arbitrariness and ambiguity in construction of generator dispatch scenarios. With a large study group, many varied dispatch scenarios are possible and even plausible. Many generators in a large study group (e.g., 56 GW in the Paper’s study case 9) may not be directly involved in an interconnection process and may be physically distant from generation projects involved in the interconnection process (e.g., generation north of the Bay Area impacting a constraint on the edge of the South Coast load center in case 9). There may be no clearly appropriate way to establish a dispatch scenario in this situation. Yet, a few hundred MW of modeled overload on constrained facilities may be driven by apparently modest variations among seemingly plausible dispatch assumptions applied to thousands of MW of study group generators, many of which are distant from and not associated with the potential new generation driving a deliverability assessment. It becomes implausible to push the dispatch for all generators in a large study group too high, especially given finite system load. This is recognized by the CAISO’s methodology which does seek a balance between conservatism versus realistically possible dispatch. But, how high is appropriate, and how this choice is based on objective criteria, heuristics (intuitively reasonable assumptions and results), or a combination of the two – needs to be more fully explained by the CAISO, especially making use of the Paper’s established cases. The CAISO should provide additional explanation of criteria for constructing

the number of generation projects assumed to be fully available to 20 units; and limits the amount of generation increased to 1500 MW. Please see response to the first item. Dispatching up the generators in study group with the highest impact addresses all other



dispatch scenarios for large study groups. This should include addressing why, within a study group, it would not make sense to preferentially dispatch upward those generators having the lowest impact on a constraint per MW of generator output (i.e. low DFAX), rather than those generators having the highest impact, since the former would in the aggregate provide more RA deliverability under a given transmission contingency scenario. If the generators having a lower DFAX are considered to be too electrically removed from the constraint to be treated in such a manner, the CAISO should clarify why these generators should be included in the study group at all, for purposes of setting stressed dispatch levels. Third, as a study group becomes large relative to the entire system, it becomes more challenging to balance assumed dispatch inside vs. outside the study group in a realistic manner. It makes sense to dispatch non-study group generators downward only so far. Higher dispatch of some generators outside the study group could in fact mitigate a constraint, as illustrated by Facility Loading Adder (FLA) examples in the Paper’s study cases, analogous to dispatching upward on the load side of a constraint. In the event of very high loads plus transmission outage, such adjustments would be reasonable. Thus, the CAISO should explain and discuss why constraint mitigation in the form of selective beneficial upward dispatch on the downstream side of a deliverability-limiting constraint (with offsetting downward dispatch elsewhere) should not be modeled to a significant degree, rather than being computed within limited bounds and assigned implicit impacts on the constraint (but not directly modeled) under the FLA component of the deliverability assessment methodology.10 Below, aspects of four of the Paper’s study cases are briefly discussed in order to augment the above generic discussion with specific examples.

possible generation dispatch scenarios. Dispatching generators in the study group with the lowest impact would not address any of the other possible dispatch scenarios. The ISO does utilize the FLA to a significant degree. This is what allowed 18900 MW of surplus generation to fit north of a constraint limited to 8500 MW of flow, in the example discussed in the CALWEA comments and responses above.

10 Under the FLA procedure described in the Paper, consideration of constraint-mitigating upward dispatches on the downstream side of a constraint (downstream from the generation pocket) is limited to identification of sufficient dispatch upward (versus the initial dispatch) only to equal the MW of the incremental upward stressed dispatch for those remaining top 20 (in terms of constraint impact) generators within the generation pocket that have not yet been assigned a stressed (upward) dispatch. This constraint-mitigating dispatch is only identified, not actually modeled. If it were actually modeled there would have to be offsetting downward dispatches elsewhere outside or within the generation pocket - - which could in fact be realistic.



Study Case 7: Desert Area Constraints (from TPP) with Victorville-Lugo Overload. In this case the study group consists of about 15 GW (nameplate), and the constraint involves a link between the LADWP and CAISO systems.

o CAISO explains that part of the solution involves an SPS to trip about 1400 MW of generation in the Red Bluff and Colorado River (substations) areas. There should be further explanation of when and to what MW magnitude such tripping is considered acceptable for constraint mitigation within a deliverability assessment, and what implications this has for the NQC status of the generators subject to SPS tripping. Also, how do the same principles apply for an apparently similar SPS mitigation (stated to involve about 1200 MW) in case 8 below? o Since flow from the LADWP system to the CAISO system is involved in the modeled constraint, the CAISO should explain what is assumed in the study case regarding flow from the LADWP system over the Victorville-Lugo line. Apparently this is treated as a specified flow (not individual generator dispatch). The flow should be large over the 500 kV line, but where this assumed flow is defined is unclear (not in Table 7.1 showing flows on ties). o The Victorville-Lugo overload appears to be driven most strongly by the assumed stressed (upward) dispatch of Ormond Beach units 1 and 2, to full capacity from an initial dispatch of zero, and also (treated via FLA) stressed upward “dispatch” of certain branch groups (“BG”, i.e., imports) from an initial dispatch of zero to higher levels. The CAISO should explain why it is appropriate and not overly conservative to assume that Ormond Beach 1 and 2 are dispatched at full capacity. The CAISO should also explain more fully the rationale for setting both the initial (zero) and stressed “dispatch” for BGs, including how the upper BG dispatch corresponds to RA capacity assigned to LSEs over these BG. o On page 107 the Paper states (for Case 7)

“…. Figure 7.12 and Figure 7.13 show the power flow on the system, using a traditional study methodology, with upgraded Lugo – Eldorado

The ISO SPS guidelines in the ISO Grid Planning Standards limits generation tripping to 1400 MW for category C contingencies. A generation’s NQC status is not adversely affected by being connected to an SPS. Table 7.1 shows the assumed import schedule on the Victorville-Lugo line. Ormond Beach units were assumed off in the base case but had the highest individual flow impact due to the amount they could be moved from pgen to pmax and their associated distribution factor. If they had been assumed officially retired, the other units would have been dispatched and the loading on the constraint would have been similar. Some BGs have historically unutilized ETCs and TORs (encumbrances). These encumbrances are assigned to LSEs for RA capacity. However, they are only assumed utilized in the stressed dispatch cases pursuant to the methodology.



500kV line operating with 70% compensation. In Figure 7.13 the Lugo-Victorville is loaded to 102% of its emergency rating and would require additional upgrades. Under the deliverability methodology these remaining overloads would be mitigated using congestion management.”

Please clarify if the above statement means that generator dispatch used by the “traditional study methodology” is considered extremely improbable under peak load conditions, so that anything approaching such dispatch might at most limit energy delivery in a few hours of the year. (How) does the CAISO conduct or plan to conduct 8760-hour energy (as opposed to RA) delivery studies? Study Case 8: Desert Area Generation (Interconnection Process Example) with Lugo-Eldorado Overload. The study group (generation pocket) contains about 16 GW nameplate, virtually all consisting of queued renewables.

o The greatest impact on the constraint comes from dispatching “Mesquite” in Arizona from an initial dispatch of zero upward to a stressed dispatch of 1500, further increased to 1845 MW under the FLA procedure. The latter represents about 95% of nameplate capacity. The CAISO should clarify what kinds of generators (e.g., solar and thermal) Mesquite contains, how the assumed stressed dispatch of the Mesquite solar generators is consistent with the overall dispatch methodology regarding variable generation, and how the stressed Mesquite dispatch corresponds (a) to Table 8.1 summarizing imports, and (b) to RA capacity allocated to LSEs over the relevant interties (which interties?) o Under the FLA procedure Tehachapi generation outside of the case 8 study group, initially dispatched at zero, is dispatched (or considered as being dispatched) upward as a Lugo-Eldorado constraint mitigation measure,

The deliverability methodology is designed to ensure that resources in a generation pocket are deliverable roughly 80% of the time during peak load conditions. The traditional study methodology identified a dispatch condition that occurs less than 20% of the time during summer peak load conditions. The ISO uses production simulation analysis to address 8760 congestion analysis under average system conditions for economically driven transmission need analysis. Mesquite was outside of the study area initially established for base case development purposes. However, it was identified by the study tools to be inside the study group established by the 5% DFAX. Based on the Pmax and Nameplate information in the example, Mesquite is 700 MW solar PV and 1250 MW conventional thermal generation. The assumed dispatch is consistent with the methodology. It is internal generation so it is not an import addressed by Table 8.1. Existing Tehachapi generation and generation known to be under construction in Tehachapi is



having a negative flow impact on the constraint. The CAISO should explain why the Tehachapi area generation was initially dispatched at zero and if this represents an unrealistic or problematic consequence of dispatching a large study group upward and consequently dispatching other generation downward. Also please explain why it would not be realistic and appropriate to assume additional beneficial (constraint-mitigating) upward dispatch of generators outside of the study group, beyond the limited amount identified (indirectly accounted for but not modeled) via the FLA procedure. o Study case 8 is stated as identifying need for a new Red Bluff-Valley line to mitigate the Lugo-Eldorado overload, but describes this upgrade as qualifying for removal from the delivery network upgrade requirement based on the CAISO’s technical bulletin11 addressing limitation of the identification of delivery network upgrades in Cluster 1-4 deliverability assessments, due to the much greater than needed amounts of generation in those clusters. Please describe which other identified delivery network upgrades similarly qualify for removal from delivery network requirements identified in interconnection studies, including any such upgrades identified in the Paper’s other study cases. o On page 131 the Paper states

“In general, the traditional study methodology stresses the system more than the deliverability study methodology and indicates the need for

dispatched at 80%. Uncertain Tehachapi generation that may not be constructed is initially dispatched at 0%. Please see response above regarding the FLA. This technical paper was for educational and example purposes and was not meant to comprehensively address specific commercial questions. However, the Cluster 1-2 Technical Paper: http://www.caiso.com/Documents/TechnicalReport_cluster1_2DeliverabilityRe-Assessment.pdf provides the requested information for Clusters 1-2. For Clusters 3-4, similar upgrades were identified and then removed based on the same Technical Bulletin. For specific information on Clusters 3-4 please see the Phase II group reports on the ISO Market Participant Portal. The ISO reference to traditional study methodologies was to interconnection study methodologies employed prior to the advent of the deliverability study methodology. These

11 “...... A delivery network upgrade originally identified during the GIP Phase II interconnection study process for the current cluster (i.e., clusters 1 and 2) may be removed from the Phase II study results if the upgrade is not needed in the current transmission plan and satisfies at least one of the following criteria: (a) The network upgrade consists of new transmission lines 200 kV or above, and has capital costs of $100 million or greater; or (b) The network upgrade has a capital cost of $200 million or more”

http://www.caiso.com/Documents/TechnicalReport_cluster1_2DeliverabilityRe-Assessment.pdf

http://www.caiso.com/Documents/TechnicalReport_cluster1_2DeliverabilityRe-Assessment.pdf



congestion management even if all the generators are deliverable for Resource Adequacy purposes.”

Other than situations involving off-peak wind generation, what other generator interconnection situations (locations, periods, types of generators) is the CAISO aware of that produce likely substantial need for congestion management? Study Case 9: South of Vincent Deliverability Constraints. This study case contains an enormous study group (generation pocket) of about 56 GW nameplate, which acutely exemplifies issues and concerns regarding large study groups and construction of dispatch scenarios. The “south of Vincent” constraints consist of overload of a Vincent 500/230 kV transformer bank limiting flows southward from Vincent into the South Coast load center.

o This study case apparently finds a very large amount of new generation (subject to deliverability assessment) to be undeliverable and page 165 of the Paper describes removal of 1044 MW of such generation (nameplate) from the Tehachapi area. The CAISO should clarify what the ultimate “solution” is here. Would the removed 1044 MW be permanently denied RA deliverability? Are the CAISO’s technical bulletin provisions regarding limitation of identified deliverability requirements for Cluster 1-4 generation projects being applied, such that identified major delivery network upgrades in excess of identified needs under the Transmission Plan are being removed? o Large drivers of the modeled south of Vincent overload appear to be increase dispatch of Gates (Avenal?) , Contra Costa (Oakley?) and Tesla-Bellota 230 kV line (hydro?) from zero under the initial dispatch to the methodology’s 1500 MW limit under stressed dispatch (and then higher, after applying the FLA procedure). The CAISO should clarify the rationale for both

studies were focused on identifying potential constraints and did not necessarily quantify the economic impacts of the identified constraints. However, one other obvious situation is the interconnection of energy only deliverability status generation. In addition, off-peak in general is likely to experience substantial need for congestion management. This constraint was identified as an Area Constraint in Cluster 5 pursuant to GIDAP. Based on the 33% renewable portfolios in the transmission planning process, it is expected that the interconnection queue process will settle out through the procurement processes and that no upgrades will be needed for this identified potential constraint. In addition, please see responses above regarding this constraint. Pursuant to the methodology, queued generation outside of the initially identified study area and generation with a high potential of retirement in the near future, can be initially dispatched at zero in order to balance loads and resources in the model.



the zero initial dispatch and large upward stressed dispatch, for these units. o Among the 56 GW (nameplate) of generation in the study group is a large amount of solar and wind generation. Some solar units in the Westlands and Midway-Diablo areas are dispatched at roughly the 80% of the 50% exeedance level for both initial and stressed dispatch, while many others are dispatched at zero for both initial and stressed dispatch. The CAISO should clarify how the choice between dispatch at zero and dispatch at (approximately) 80% of the 50% exceedance level12 was determined among these solar units. o Application of the FLA procedure (after reaching the 1500 MW limit on incremental stressed dispatch) identified Southern California generators in the load center (El Segundo) and in the desert whose upward dispatch (relative to initial dispatch) would significantly reduce the constrained facility overload. The CAISO should explain why it would not be reasonable to assume additional beneficial upward dispatch from selected Southern California generators to further alleviate the constraint. It would be very helpful to summarize the Case 9 load-generation balance as follows: Load-Gen Balance, Study Case 9

Gen. Pocket (Study Group Area)

Other SP26

Other NP26

Load (1-in-5 peak MW)

Nameplate Gen. MW - Existing - Queued

Pursuant to the methodology all existing units and units within the initially identified study area are initially dispatched at the derated level (e.g. 80% level). For this study area, it is known that Path 26 is a major factor, and that Path 26 is likely to be fully utilized during resource shortages south of Path 26. Therefore some new resources north of Path 26 were initially dispatched to reflect high utilization of Path 26. In response to increasing generation south of Path 26 please see response above regarding assumptions on Path 26 flow during a resource shortage South of Path 26. Generation interconnection base cases are posted on the ISO Market Participant Portal. Using the PSLF program to report the Area table, one could add area 24 and 22 load and generation respectively to get south of Path 26 and area 30 to get north of Path 26 values.

12 The 50% exceedance level is presented as being about 85% of nameplate capacity.



Stressed Dispatch Including FLA, MW - Existing - Queued

o Do the above-mentioned issues indicate that this study group is too big for realistic analysis, and/or that dispatching study group generation upward requires pushing other generation downward in ways that worsen the constraint to an unrealistic degree? If so, what is the solution?

Study Case 10: Path 43 (North of SONGS) Deliverability Constraint. This study case involves a study group (generation pocket) of about 9.5 GW nameplate (3.5 of which is queued) consisting of the entire SDG&E area. This presents an interesting situation in that the deliverability constraint arises from trying to export northward out of what is generally considered to be a load pocket having reliability concerns. The Path 43 constraint involves overloading of one of four 230 kV lines flowing power northward from SONGS under normal conditions, caused by flowing power northward (to SONGS) out of the SDG&E area. The mitigation is addition of a new 230 kV line between the Capistrano and Serrano substations.

o If Path 43 overload occurs under modeled normal conditions, (how) would the CAISO also study greater overloading (and greater mitigation needs) under N-1 and N-2 outages of one or two of the Path 43 lines. If not, why not? o Would this modeled overload and resulting identified deliverability network upgrade be avoided by technical bulletin provisions regarding not identifying deliverability upgrades driven by excessive amounts of Custer 1-4 generation? o The greatest flow impact on the constraint appears to come from existing and queued thermal (plus 600 MW nameplate Imperial PV) generation. The CAISO should explain why, in such deliverability assessment circumstances,

In response to increasing generation south of Path 26 please see response above regarding assumptions on Path 26 flow during a resource shortage South of Path 26. Path 43 is a rated WECC path and has a rating of 2430 MW. At its rated flow level, Path 43 can withstand all single and simultaneous double contingencies. In this example Path 43 flow is at its WECC Path rating of 2430 MW. Yes. Path 43 is a constraint that is addressed by the Cluster 1-4 technical bulletin provisions. Pursuant to the methodology, all existing generation is initially dispatched at its derated output level (80% of NQC).



full dispatch of both SONGS units (this was prior to the retirement announcement) and Encina 4-5 is appropriate and not overly conservative. Also, with SONGS gone, what types of adjustments would the CAISO make to these initial and stressed dispatches? o Why does traditional dispatch (Figure 10.6) not show overload on Path 43? o If there is excess modeled generation in the San Diego area that is generally a load pocket, why would it not make sense to dispatch down the San Diego generation having the greatest per-MW impact on the constraint (high DFAX) and dispatch up other San Diego generation, as well as redispatching constraint-mitigating generation outside of the load pocket? o Under the FLA procedure, the most effective constraint-relieving dispatch (per MW of dispatch upward) was at Gates (Avenal CC?). This is distant from Path 43. Why were there not more effective constraint-mitigating dispatch options closer to the San Diego area? As mentioned previously, why would it not be realistic and appropriate to assume a greater amount of constraint-mitigating dispatches outside of the study group? It would be very helpful to summarize the Case 10 load-generation balance as follows: Load-Gen Balance – Study Case 10

With SONGS retired it is removed from the model. Figure 10.6 shows Path 43 at 143% of its WECC Path Rating. Pursuant to the methodology, it is assumed that there are forced outages of generation across the ISO system, as well as some unforeseen generation retirements, and some generation reserves distributed across the system in the initial generation dispatch. This is described in section 1 of the technical paper. The methodology then identifies the worst case generation dispatch scenario pursuant to the provisions in the methodology designed to identify reasonable dispatch scenarios. This is also described in section 1 of the technical paper. Just as the generation groups for maximizing generation and stressing the constraint are limited to the most impactful 20 units and 1500 MW, the generation groups for mitigating the constraint are limited to the most impactful 20 units and 1500 MW. The methodology is designed to not assume that larger numbers of units will all be available to be dispatched at full output, due to the low probability of that event. This is described in section 2 of the technical



Gen. Pocket (SDG&E Study Group Area)

Other SP26

NP26

Load (1-in-5 peak MW) Nameplate Gen. MW - Existing - Queued

Stressed Dispatch, Including FLA, MW - Existing - Queued

3. The CAISO Should Explain, Assess and Discuss with Stakeholders Why N-2 Contingences are Not Overly Conservative for Deliverability Assessments that Already Consider 1-in-5 Peak Loads and Upward-Stressed Dispatch, for a System Having a Substantial Planning Reserve Margin. This should include consideration of whether N-2 may be overly conservative where transmission linkages to the broader system (potential contingencies) are few, generation pockets are small, and/or where constraint-mitigating redispatch outside of the load pocket is not being modeled. 4. CPUC Staff Request that CAISO Consider and Discuss How Deliverability Assessment Especially for Variable Generators Might be Affected if RA Needs and Contributions Were in the Future Calculated Using a Probabilistic Equivalent Load Carrying Capability (ELCC) Method. While using ELCC would most directly affect calculation of system reliability and the reliability/RA contributions of particular resources, there could also be implications for how deliverability assessments are conducted, especially regarding variable generators and outages of both resources and transmission.

paper. Please see comment above regarding the availability of information requested in a similar table. Please see section 1 of the technical paper regarding NERC compliance and N-2 contingencies. In addition, given that generation dropping SPS can be utilized to mitigate N-2 contingencies, the impacts are usually mitigated at a reasonably low cost. The CAISO assumes it would be part of any initiative to consider ELCC and would be prepared to discuss deliverability in that context at that time.



5. Use of the Term “Pmax” in The Deliverability Assessment Context Can Be Confusing When Pmax is Used in Other Ways for Other Kinds of Studies. “Pmax” is defined for deliverability studies as the highest level to which generators may be dispatched under a “stressed” dispatch within a study group to test deliverability. This is substantially less than the maximum potential output for variable and constrained-use “baseload” (e.g., cogen) generators. For wind and solar, however, this Pmax is greater than the QC or NQC (RA credit) level. Overall, generators’ Pmax for deliverability studies may differ from what is assumed in reliability (for serving load) studies, and may be inappropriate for production simulation. This varied use of the term “Pmax” has already resulted in some confusion. Perhaps a specialized term could be used to refer to a generator’s maximum output level assumed under stressed dispatch for deliverability study purposes (such as “Pstress”), with accompanying explanation that for deliverability assessment the Pmax input to power flow software is set to this “Pstress” (or however labeled) level. 6. There Should be Continuing Explanation and Discussion Regarding Deliverability Assessment Issues, Due to Implications for Infrastructure Planning and Reliability, and Due to the Complexity and Limited Transparency of the Process. Such discussion should pursue topics 1 through 4 above, as well as other important issues identified by stakeholders.

Please see response to a similar comment from BAMx above. Thanks for the comments. Based on positive feedback from stakeholders regarding the content of the technical paper, we believe that the transparency concerns regarding the ISO deliverability methodology have been addressed. In addition at this point in time, the general issues raised do not warrant the allocation of considerable resources needed to embark on a stakeholder process to recreate or fine tune the deliverability study methodology. All identified issues have been addressed above.

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