December 5, 2016 Presentation to the WSPP Executive … · December 5, 2016 Presentation to the WSPP Executive Committee . Confidential and Proprietary | 2 2 Purpose Update on:

1 Confidential and Proprietary | 1

December 5, 2016

Presentation to the WSPP Executive Committee


Purpose

Update on:

• Background • EIM operations since go-live • Share issues seen by EIM operations as a whole

3 Confidential and Proprietary |

Energy Imbalance Market (EIM) Background

• EIM is the California ISO’s system that balances electricity supply and demand imbalances every five minutes with lowest cost energy available in a broader region across EIM entities with a more diversified portfolio of generation resources

• Through participation in this market, APS will preserve its autonomy, improve renewable energy integration • Estimate $7 to $18 million production cost savings per year for APS customers

BA BA

BA BA

BA BA

BA BA

Today: Each BA balances supply and demand

Tomorrow with EIM: EIM offers balancing across BAs

• Smaller pools of balancing resources: a less efficient way to manage risk

• More expensive • More challenging to integrate wind and

solar

• More diverse resource portfolio: more efficient

• Serving the next MW for least cost • Increased flexibility and responsiveness for

wind and solar integration BA: Balancing Authority

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Discipline, Accuracy, Visibility


6/1 11/1 7/1 8/1 9/1 10/1

2016 2015

Regulatory Timeline 3/1 File OATT w/FERC

9/1 File Readiness Certification w/FERC

6/1 – 8/7 Initiation & Planning

8/7 – 10/30 Detailed Design

10/26 – 3/4 Vendor Build & Testing

3/7 – 5/30 APS Testing

5/1 – 10/1 Market Simulation & Go-Live

Energy Imbalance Market (EIM) Project Timeline

6/15 – 8/31 OATT Changes

9/1 – 2/1 OATT Stakeholder Process

5/16 – 8/19 Customer Outreach

11/1 12/1 1/1 2/1 3/1 4/1 5/1 6/1 7/1 8/1 9/1 10/1

OATT: Open Access Transmission Tariff MBR: Market Based Rates

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4/7 File MBR w/FERC

Go Live!



Deciphering Operations Thus Far

• Overall EIM operations is going very well – Systems, People, Processes

• EIM produces massive amounts of data

– Movements by potentially every unit, every 5 minutes of every day – Comparison of those movements to targets, base schedules, avoided costs, etc.

• APS still refining post analysis processes to be able to get a complete picture of “how APS

is doing” especially as it relates to cost savings to the customers – Initial settlement statements appear to have charge codes within reasonable

expectations

• Despite this, there are still indicators to observe and use to take corrective action – The following slides list some of this information

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EIM Performance Metrics & Energy Flow

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Sufficiency Tests Target* Oct 1 -31

Balancing 95% 94% Flexible Ramp 95% 99% Capacity 95% 99%

Note*: To be finalized pending additional work defining targets

Market Infeasibilities

Target Oct 1 - 31

15-minute Market 0% 0.3%

5-minute Market <5% 0.2%

Flex Ramp Test

Target * Nov 1 -5

Flex Up TBD 88%

Flex Down TBD 76%


CAISO produces daily graphs to see how APS is performing

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EIM Transfers Example November 18

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APS Generation Fleet is running differently in EIM

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• Starting more often and for fewer run hours

• See comparisons to budget and previous year on this slide


Issues In EIM

• Generation Outages – Most instances of failure points are when inputting “market outages” – Communication between Fossil, ECC, and M&T can continue to improve as market

timelines are extremely important

• CAISO introduced a “Flex Ramp Product” on November 1st which is designed to have EIM entities carry less “flex reserves” due to diversity benefits of the whole footprint

– Flex reserves is not an ancillary product and in no way changes APS BAA reliability obligation

– What it means for Fossil: there may be times you expect to be dispatched a certain way, but the market will hold back your capacity to serve this flex reserve requirement, which APS will be compensated for

• Continued learning on how CAISO interprets APS unit parameters in the GRDT

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Flex Ramp Product Introduction

• On November 1, CAISO launched a flexible ramping product that will allow the ISO to procure sufficient ramping capability via

economic bids

• The objective of the flexible ramp product is to build dispatch flexibility in terms of ramping capability in Real Time Dispatch to

meet imbalances that may arise in the future.

– Imbalances can arise due to load and supply variability and uncertainties

• Since the implementation of the Flex Ramp Product on Nov. 1, APS has struggled to consistently pass the Flexible Ramp Test

with the same consistency previously demonstrated

– Other EIM entities we talked to are also having the same issues and have similar questions as APS

– Insufficient flex capacity results in EIM transfers being set to the level of the last viable solution

• Causes for failures are:

– Lack of a full understanding of how this new product actually works (APS did not test this during Market Readiness

because CAISO did not have it deployed at the time)

– System issues and errors on the CAISO side

– PCI errors due to incorrect modeling of product on our side

• APS has had several conversations with the CAISO; a detailed list of questions have been developed and additional training

with CAISO SMEs is being scheduled

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Problems and Lessons Learned

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• Timeframe for completion of project was

compressed (15-16 months)

• Change management is extremely

important

• Think carefully about what information is

needed to manage bidding and operations

(develop tools to summarize data)

• CAISO load forecasting process not as

accurate as APS’

• Flex Ramp Requirement product causing

more failures than expected

Documents

December 5, 2016 Presentation to the WSPP Executive … · December 5, 2016 Presentation to the WSPP Executive Committee . Confidential and Proprietary | 2 2 Purpose Update on: