Briefing on California ISODynamic Transfers Stakeholder Process

For WECC Seams Issues Subcommittee MeetingMay 4, 2010

Jim Price, Lead Engineering SpecialistCalifornia ISO, Market Analysis & Development

2

Background:Dynamic Transfer Functionality

Uses of Dynamic Scheduling Functionality Load Following / Real Time Balancing Energy Dispatch Split Unit Share (Jointly Owned Units) Ancillary Services / Regulation Imports “Intermittent” Generation Import Scheduling Facilitate Implementation of Pseudo-Ties

Pseudo-Tie Transfer of BA Jurisdiction (Scheduling, Balancing Energy,

Regulation, Outage Coordination) Pseudo-Tie Generator treated as internal Participating

Generator by Attaining BA

CAISO Balancing AuthorityCAISO Balancing AuthorityImport @ designated Physical Tie

500 MW

Native Balancing AuthorityNative Balancing Authority

Generator or logical determined output is telemetereddirectly to the CAISO EMS

Dynamically Scheduled Generating Facility

Physical Ties between CAISO and Native BA

Ties between the ISO and other BAs

Dynamic Schedules

Pseudo Ties

ISO (Attaining) Balancing Authority

Native Balancing Authority

100 MW

Net Scheduled Interchangeis zero due to the Pseudo-tie “Export”offsetting Physical Tie “Import”

Generator output is telemetereddirectly to the ISO EMS

ISOPTG

GeneratingFacility

Non-Contiguous ISOBalancing Authority

Physical Ties betweenthe ISO and Native BA

Physical Ties between the ISO and other BAs

“Import” @ designated Physical Tie

100 MW

“Export” @ Pseudo Tie

Slide 5

Outline of Dynamic Transfers Stakeholder Process

Straw Proposal clarifies ISO tariff supporting dynamic imports, facilitates imports of renewable resources, and adds pseudo-tie imports to tariff Proposals apply to both dynamic scheduling and pseudo-ties

Few exceptions: allocation of dynamic schedules’ deviations, pseudo-tie layoffs

Key dates (stakeholder meetings 7 days after documents): Issue Paper published 11/30/2009 Straw Proposal published 3/10/2010 Supplement to Straw Proposal published 4/29/2010

Stakeholder meeting 5/6/2010 (http://www.caiso.com/2779/2779b9ca24600.html for details)

Draft Final Proposal to be published 5/20/2010 ISO Board of Governors meeting 7/26-27/2010 FERC filing in August

Current ISO tariff supports dynamic scheduling

Allows imports of energy and AS, provided that:

a) Such dynamic scheduling is technically feasible and consistent with NERC and WECC reliability standards,

b) All operating, technical, and business requirements for dynamic scheduling functionality of ISO’s Dynamic Scheduling Protocol, or standards on ISO website, are satisfied,

c) Scheduling Coordinator executes a Dynamic Scheduling Agreement, and

d) All affected native and intermediary BAAs each execute an operating agreement with the ISO related to the operation of dynamic functionality.

Issue for intermittent resources is how to meet standards and requirements.

Slide 6

Slide 7

Scope of Dynamic Transfers Stakeholder Process

Issues addressed in Stakeholder Process: Congestion management within ISO markets:

Curtailment rules Dispatchability requirements Transmission reservations and utilization Data and forecasting requirements

Locational modeling and pricing Aggregation of conventional and/or renewable resources Scope of studies of intertie transfer limits for dynamic imports Pro rata allocation of deviations among BAAs Layoffs from pseudo-ties Dynamic exports Generator-only BAAs

Other issues are being addressed in other ways or being deferred to other general policy forums

Issue Forum for consideration of issue

Management of increased load following and regulation requirements

Stakeholder processes starting in Q2: AS Market Product Review, Scheduling & Dispatch Enhancements for Intermittent Resources

Responsibility for operating reserve No tariff change needed

Extension or modification of Participating Intermittent Resource Program

Stakeholder process starting in Q2: Scheduling & Dispatch Enhancements for Intermittent Resources

Pseudo-tie loads Develop using pilots before tariff change

Interconnection standards and system operations

Current stakeholder process: Interconnection Standards Review for Renewable Integration

Transmission planning Current stakeholder processes: e.g., Renewable Energy Transmission Planning Process (RETPP)

Uninstructed deviation penalty Existing tariff enables ISO to obtain needed compliance

Certification of ancillary services Existing tariff enables ISO to certify performanceSlide 8

Meeting standards and requirements

ISO dispatches dynamic resources for congestion management and energy balance (and other requirements), and needs prompt response

Current tariff measures dynamic resources’ response as tolerance band around schedules & dispatches

Meaningful “dispatch” of intermittent resources requires updates of real-time conditions “Dispatching” to current delivery is workable but provides no

knowledge of future delivery. Option will allow 5-minute updates of availability for 2-hour look-

ahead. (Note: can be seen as intra-hour schedule changes)

Meaningful compliance will be for operating orders

Locational modeling for dynamic transfers

ISO’s Full Network Model places generation at actual location, and includes external transmission

Dynamic scheduling and pseudo-tie agreements establish actual location of resource-specific system resources

Modeling dynamic resources at actual location provides accurate congestion management, based on value of resource in ISO markets Constraints enforced only within ISO, Marginal losses only computed within ISO

To avoid disparities between ISO’s dispatch and resources’ response, ISO will use locational price (LMP) Same price applies to layoffs from pseudo-ties

Slide 11

Aggregation of “electrically close” conventional and/or renewable resources Both the native and

attaining BAs have roles in approving aggregations.

ISO will use WECC’s USF zones, within BAA boundaries, to determine what external resources are “electrically close” from ISO perspective.

Dynamic import study objectives

Slide 12

• ISO tariff allows the ISO to establish limits to the amount of ancillary services and/or energy imported into the ISO BAA, whether delivered dynamically or statically.

• Study will determine any limitations on dynamic transfer of variable resources into ISO BAA while shaping and firming energy within the ISO BAA due to:

• Impacts to existing path limits that accommodate planned hourly variations from 20 minute ramping period

• Voltage control issues• Risk to stability or excitation of low frequency modes of oscillation

• ISO will coordinate studies with our neighboring BAs