California ISO adopts distributed energy measures

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The California ISO board, at its recent meeting, approved rules to increase the participation of distributed energy resources, such as rooftop solar facilities, in the California ISO market, adopted a budget for 2016, and clarified the rules for the governance body to oversee the Western energy imbalance market.

The meeting took place over Dec. 17 and Dec. 18, when the California ISO board adopted a 2016 budget of $195.3 million, which is a reduction of more than $3 million from the current budget. The 2016 budget is also $7 million below the $202 million cap set by federal regulators, the California ISO said in a Dec. 18 statement.

Aiming to enhance the use of distributed energy resources following the adoption of a framework for distributed energy resources aggregation last July, the California ISO board chose to eliminate distributed energy resources limitations that were previously adopted to mitigate adverse effects of distributed energy resources aggregation related to the California ISO’s ability to assess congestion or constraints on the transmission system.

The framework limited distributed energy resources aggregation across multiple pricing nodes and said that energy storage aggregations across multiple pricing nodes must operate in the same mode – such as charging or discharging, but not a mix of the two, Keith Casey, vice president of market and infrastructure development with the California ISO, said in a Dec. 10 memorandum to the board.

After implementation of the framework, the California ISO no longer believes that the limitations are needed to manage congestion or other transmission constraints, according to the memo.

The limitations are not needed as long as distributed energy resources aggregations provide a net response at the pricing node that is consistent with the California ISO dispatch instruction and consistent with applicable distribution factors, Casey said.

While one stakeholder expressed concern about distributed energy resources aggregation providing dual use as a retail and wholesale resource, those issues are being explored in the California ISO’s energy storage and distributed energy resources stakeholder initiative and in the energy storage proceeding at the California Public Utilities Commission, Casey said.

The board authorized the California ISO to seek tariff changes at FERC to implement the change on distributed energy resources aggregation.

California ISO management “will continue to explore further enhancements to offer greater flexibility to distributed energy resources seeking to participate in the ISO market,” including changes to telemetry and/or metering requirements for distributed energy resources, the memo added.

“The ISO is exploring some of these enhancements with stakeholders this year under the energy storage and distributed energy resources initiative, and will explore others in 2016 and beyond as the ISO gains operational experience with [distributed energy resources] aggregations,” the memo said.

The board also approved two recommendations from the EIM Transitional Committee to establish a charter and create a selection process – through a nominating committee – for the planned EIM governing body. The board in September approved the new governance structure for the EIM, widening the market oversight to allow regional stakeholders to have input on market rules since entities outside of California were joining the EIM.

The board approved amendments to the California ISO corporate bylaws establishing the authority of the EIM governing body. The EIM governing body will oversee and approve market rules in EIM-related matters before submitting them to the California ISO board, and the California ISO board will not approve tariff amendments within the primary authority of the EIM governing body without its prior approval, according to the amendments.

The five-member EIM governing body had not been selected yet, and it will be established by representatives of all EIM stakeholders. The California ISO board adopted rules for the nominating committee, which will nominate a slate of candidates for the governing body based on the consensus of its voting members, according to the Dec. 18 policy outlining the EIM governance policy.

The voting members of the nominating committee will include representatives from the following sectors:

• EIM entities

• Participating transmission owners

• Publicly owned utilities

• Suppliers and marketers of generation and energy service providers

• The body of state regulators

For the state regulators’ sector, the EIM Transitional Committee has said that it will include regulators from the states in which the EIM operates, and that group will update state regulatory agencies about the EIM. The California ISO has said that over time, it expects state regulators to develop their own view about how to charter and house their input for the EIM governance structure.

The EIM balances supply and demand in several states and enhances efficiency in the dispatch of generation resources to meet demand, including improved access to renewable resources in multiple states over the territories of the California ISO and PacifiCorp, the California ISO has said.

NV Energy became a participating member on Dec. 1, while Puget Sound Energy and Arizona Public Service have signed agreements with the California ISO to participate starting in October 2016. Portland General Electric intends to join the EIM in October 2017, and Idaho Power is considering joining the market.

The integration of NV Energy “went very smoothly,” California ISO President and CEO Steve Berberich said in a Nov. 15 memorandum to the California ISO board.

“Initial results have been very positive with significant flows between the ISO and NV Energy, and between NV Energy and the PacifiCorp East” region, Berberich said.

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