CAISO Public

Energy Imbalance Market Design Overview

Jim Price, Senior Advisor, Market Development & Analysis California ISO

jprice@caiso.com August 7, 2015, Puget Sound Energy

CAISO Public

Topics for discussion

• Overview of EIM market offering & benefits • Participant roles involved in EIM • Base schedule, resource plan, & resource sufficiency • Other inputs to market • How bids are used • Market results and settlement • References: links to material beyond what is covered

here

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CAISO Public

CAISO & EIM markets provide a responsive foundation for matching changes in supply & demand

Real Time Market

Manage energy flows on transmission grid with telemetry and 1-minute state estimator solutions

Update FNM for RT conditions

Dispatch balancing energy/ ancillary service

Hourly market for 24 hours of next day

Establish energy and ancillary service schedules

Manage congestion (transmission access) using Full Network Model (FNM)

Determine residual unit commitment requirements

Day Ahead Market (CAISO)

Hourly & 15-minute Scheduling

As start of real-time (RT) market, schedule energy and ancillary services for static hourly interchange and for 15-minute intervals

Manage congestion using FNM

As one of 4 RT pre-dispatch processes, establish unit commitment & advisory schedules for internal & dynamic resources

60 Hz

Load Generation

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CAISO Public

Energy Imbalance Market is an easily-scalable extension of real-time market to broader region

• Builds on existing market: automated dispatch facilitates renewables, resolves imbalance & avoids congestion

• Situational awareness enhances reliability

– FERC staff paper assessed EIM reliability benefits: http://www.caiso.com/Documents/QualitativeAssessment-PotentialReliabilityBenefits-WesternEnergyImbalanceMarket.pdf

• No critical mass required. No exit fees • Easily scalable, low-cost, low risk,

voluntary option for new participants • Preserves BAA autonomy, including

compliance, balancing, and reserve obligations

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CAISO Public

Changing resource mix over the next 10 years presents new operational challenges

• Over 20,000 MW of wind and solar capacity is expected to be interconnected by 2020 – Increased supply volatility

• Potential changes to load patterns as a result distributed generation and electric vehicles – Changing, less predictable load patterns

• Approximately 18,000 MW of thermal generation will be repowered or retired by 2020 – Uncertainty surrounding thermal resources o Phase out 12,000 MW of coastal plants with once-through

cooling o Greenhouse gas reductions limit replacement generation o Water flow management affects hydro availability

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CAISO Public

What benefits can be realized through EIM?

• Inter-regional and intra-regional dispatch cost savings: – BAAs start the hour with matched generation and forecasted load, but

deviations occur within hours – that is, imbalance energy – Security constrained economic dispatch automatically resolves imbalance &

avoids congestion, at least cost • Optimization of unused transmission capacity within participants’

ownership or rights • Greatest savings with single footprint, but can function even without

transfers

• Flexibility reserves, renewable integration, reduced renewable curtailment: – All BAs maintain reserves for contingency events – Most BAs procure extra flexibility to balance variable supply and demand – EIM combines geographical diversity of load and resources

• Increased reliability: Information that improves operational awareness and responsiveness to grid conditions across a large footprint (difficult to quantify)

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CAISO Public

EIM provides significant net benefits and will operate in eight western states

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PacifiCorp NV Energy Puget Sound Energy

Arizona Public Service

Go Live November 2014

November 2015 Fall 2016 Fall 2016

Peak Demand (MW)

9,500 8,148 4,912 7,000

~ Annual benefits (in millions)

$21-$129 $9-$18 (2017), $15-$29 (2022)

$18-$30 $7-$18

~ Start-up costs (in millions)

$20 $11.2 $14.2 $13.5

~ Annual on-going costs (in millions)

$3 $2.6 $3.5 $4

CAISO Public

Operating benefits over consistent with earlier benefit analysis, over $21 million for first 8 months

BAA Nov-Dec 2014

Jan-Mar 2015

April-June 2015 *

ISO $1.24 M $1.45 M $2.46 M

PACE $2.31 M $2.62 M $3.26 M

PACW $2.42 M $1.19 M $4.46 M

Total $5.97 M $5.26 M $10.18 M

Benefits include: • Efficient, automated

dispatch, both inter- and intra-regional, by 15- and 5-minute intervals

• Reduced renewable energy curtailment through resource & load diversity

• Reduced flexibility reserves (measured for PacifiCorp, to be added in future reports for CAISO)

• Benefits increase with more transfer volume between BAAs and higher market prices

* The April-June 2015 analysis includes both 15 minute and 5-minute benefits. Prior reports only quantified 15-minute benefits.

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CAISO Public 9

A resource is dispatched at its location, and is paid the nodal price

Load pays the weighted average price of all load nodes in the Load Aggregation Point (LAP)

Basics of EIM operation & settlement

These examples are not meant to reflect actual resource or load locations

Base schedule: Forward energy schedule, including hourly load forecasts, generation schedules, and interchange schedules, as the baseline for EIM’s financial settlements. Resource plan: How to balance supply and demand and ensure resource sufficiency: • Load, generation, and

interchange base schedules • Energy bids from participating

resources • Ancillary service plans Other data: Outages, metering/ telemetry, transmission capacity

CAISO Public

Several key roles are involved in enabling EIM participation

• EIM Entity is a balancing authority that enables EIM to occur in its area. By enabling EIM and coordinating with its area’s loads, resources and transmission service providers, all load and generation imbalances within its area will settle through the EIM.

– EIM Entity Scheduling Coordinator coordinates and facilitates EIM for one or more EIM Entities, and is responsible for resource plans and financial settlements on behalf of non-participating resources and loads.

– Base Schedule Coordinator submits base schedules and resource plans. – EIM Transmission Service Provider controls transmission in the EIM Entity

BAA, and voluntarily informs EIM Entity that it is making its transmission available for EIM.

• EIM Participating Resource is a resource within the EIM Entity represented by a Scheduling Coordinator that has voluntarily offers economic bids for availability in EIM’s real-time market, subject to EIM Entity’s eligibility requirements.

– EIM Participating Resource Scheduling Coordinator is certified to bid in ISO markets, submits bid, reports outages, and receives settlements and invoices.

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ESC

PRSC

CAISO Public

EIM Entities and Participating Resources determine key aspects of participation

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EIM Entity determines: • Eligibility of resource types

(generators, participating loads & demand response, non-generator resources, etc.)

• Types of eligible dynamic transfers (dynamic schedules, pseudo-ties)

• Eligibility of 15-minute economic bidding on its interties

• Requirements of transmission service within its BAA

• Definition of Load Aggregation Points • Settlement of EIM charges or credits

to entities within its BAA

EIM Participating Resource determines:

• Registration to participate in EIM

• Hour-to-hour quantity and price of economic bids

CAISO Public

The EIM implementation process depends on information from EIM Entity and EIM Participating

Resources, including:

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Agreements

Metering and

telemetry

Modeling (to 3 MW generator size for

PacifiCorp) Resource

parameters

CAISO Public

Prior to each dispatch, EIM receives a variety of inputs to automatically assess the entire footprint

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Reliability benefits Economic benefits

CAISO Public

EIM participants submit base schedules and resource plans to initiate the market

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CReal-Time Market

Application

- CMRI -EIM Balance &

Feasibility Reports

Balance & Feasibility ResultsPowerflow(balance & feasibility)

Base Schedules

Base Schedule

- SIBR -EIM Base Schedules

Rules & workflowParticipating

resources

Non-participating

resources

Base Schedules Visibility & override

EIM Entity

supply/load MW mismatch, supply and load base schedules,

network flow MW overloads

Financially Binding Base Schedules

Financially Binding Base Schedules

Loads

Financially Binding Base Schedules

Base Schedules

EIM Entity Scheduling Coordinator has full visibility of all base schedules.

CAISO Public

After advisory feedback period, interactive resource sufficiency evaluation prevents “leaning” among BAAs

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15-minute dispatch intervals (4.5 hour look-ahead)

T-75: Base schedules and energy bids due (Resources) T-55: Updated base schedules are submitted if necessary (Resources)

T-20: E-tagging deadline (Entity SC)

T

(T = start of the hour) T-60: Results of sufficiency test published (Balanced? Feasible transmission? Sufficient flexible ramping?)

T-45: Results of sufficiency test published

T-40: Updated base schedules are submitted if necessary (Entity SC)

T-37.5: Start of Market 1 optimization

X:00 X:30 Y:00 X:15 X:45

T-22.5: 15-minute scheduled awards published

Market Operator

EIM Market Participants

5-minute dispatch intervals (65-minute look-ahead)

Resource sufficiency

tests:

Balanced load and

generation?

Free of congestion?

Sufficient ramping

capability?

CAISO Public

15-minute market (FMM) allows ISO intertie bidding, using transmission profile on dynamic schedule e-Tag

to manage EIM transfers

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ISO EIM Entity BAA EIM Transfer Limit

Transmission Profile on e-Tag

Biddable nodes Non-biddable nodes (non-participating resources)

Both an overall intertie scheduling limit and an EIM transfer limit apply

in FMM

Only the EIM transfer capacity offered through EIM Entity is

available in RTD (also constrained by variable transfer limit)

CAISO Public

Real-time outputs

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CAISO Public

Market systems for publishing results depend on purpose of the outputs

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CAISO Public

Automated Dispatch System sends real-time binding instructions

Energy dispatch to meet imbalance requirements

15-minute reserves, e.g., for flexible ramping

Resource startup and shut down instructions

Dispatch of static system resources

Contingency and exceptional dispatches

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CAISO Public

Participant-specific market results are available in Customer Market Results Interface, through Market

Participant Portal (https://portal.caiso.com/)

CMRI – Market results – MW Market results - $ Base schedule information

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CAISO Public

Oasis.caiso.com provides extensive public information

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Prices • Locational marginal

prices • Constraint shadow prices • Fuel and reference prices

Transmission • Available capacity • Usage • Outages

System demand • Demand forecasts • Wind & solar forecasts

Ancillary services • Reserve requirements • Market awards • Actual reserves

Energy • Load and resource

schedules • Exceptional dispatch • Market power mitigation • Resource adequacy • Virtual bidding • Losses

Congestion revenue rights • Auction clearing prices • Inventory of awards

Public Bids • Market bids with certain

fields masked, with 90-day delay

CAISO Public

The ISO settles with scheduling coordinators, who allocate payments and charges to the appropriate customers.

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Market Operator settles deviations of EIM Participating Resources from base schedules at LMP of resource locations.

For resources that do not participate in EIM, Market Operator settles with EIM Entity Scheduling Coordinator, who is responsible for settlement of deviations from their base schedules.

CAISO Public

Real-time energy charge codes reflect cost causation. Primary settlement: instructed and uninstructed imbalance

energy.

Illustrative set of common charge codes (See http://www.caiso.com/Documents/ChargeCodeMatrix-EnergyImbalanceMarket.xls for further detail)

Instructed Imbalance Energy (IIE)

Uninstructed Imbalance Energy (UIE)

Other settlements Bid Cost Recovery (ensures resources recover daily RT costs, recovered within BAA with EIM Transfer considered) Unaccounted for Energy (UFE) Congestion Offset (neutrality accounts by BAA) Marginal Losses Offset (neutrality accounts by BAA) Imbalance Energy Offset (can shift costs or payments between BAAs based on EIM Transfers) Greenhouse Gas Emission Cost Revenue EIM Administrative Charge ($0.19/MWh imbalance energy)

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CAISO Public

When resources deviate from dispatches (or base schedules), other resources must be

dispatched to maintain balance.

Meter = 12 MW

Uninstructed Imbalance

Energy = 2 MW, as payment for

delivered energy

Inst

ruct

ion

10 M

W

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Inst

ruct

ion

10 M

W

Meter = 7 MW

Uninstructed Imbalance Energy = -3 MW,

charged to resource for undelivered energy

Instructed imbalance energy is the energy in dispatch instructions, then uninstructed imbalance energy is the

difference between the dispatch and meter.

CAISO Public

Settlement statement timeline provides prompt clearing, with later changes limited to

unresolved disputes or FERC decisions

• Initial settlement statement – T+3B (uses estimated settlement meter data)

• Recalculation settlement statement – T+12B, T+55B – Disputes due T+26B, T+77B

• Recalculation settlement statement – T+9M through T+36M (optional) – Disputes limited to only incremental charges

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CAISO Public

Recap: EIM extends ISO‘s real-time market experience and systems to EIM participants

• Optimized 15- and 5-minute interval dispatch accounts for operating characteristics and constraints of participating resources as well as the underlying transmission

• Multi-interval look-ahead horizons anticipate changes in system conditions and ensure flexibility of dispatch, to efficiently manage system balance and congestion

• Short-term unit commitment allows efficient economic dispatch, recognizing state-of-art renewable energy forecasts, hydro limits, complexity of resources like combined-cycle, and other factors

• The result is efficient use of transmission offered by EIM participants & cost reduction to consumers

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CAISO Public

What changes for reliability entities?

If you are: Balancing Authority • Current NERC and WECC responsibilities

will not change • May commit resources as they do today • Manage interchange tagging

• Will be EIM Entities • Will submit balanced schedules to the

Market Operator • Will communicate with Market Operator

about outages and operating limits

Transmission Owner, Transmission Operator, Transmission Service Provider (TSP)

• TSP determines available transmission capability (ATC) and prior commitments, to inform Market Operator of capacity available for EIM Transfers

• No other change in role or responsibilities

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CAISO Public

What changes for market participants? If you are:

Utility affiliated with EIM Entity

• Submits load and resource information to Market Operator as well as EIM Entity BA

Other Utility in EIM Entity BAA

• Submits load and resource information to Market Operator as well as EIM Entity BA

Resource (e.g., merchant generator) in EIM Entity BAA

• If electing to participate in EIM as an EIM Participating Resource

• Communicate availability through SC • Provide outage information to Market

Operator as well as EIM Entity BA • Respond to dispatch instructions

Scheduling Coordinator • Submits bids and schedules for EIM participants

• Receives settlement statements and invoices from ISO

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CAISO Public

Resources available for EIM

• CBT - Introduction to the Energy Imbalance Market This Computer Based Training provides a high level overview of the Energy Imbalance Market http://content.caiso.com/training/Introduction%20to%20EIM/My%20Articulate%20Projects/Introduction%20to%20the%20Energy%20Imbalance%20Market/player.html

• CBT - How the Energy Imbalance Market Works – This Computer Based Training describes the roles and responsibilities of the key players in EIM and the business processes that will take place. http://content.caiso.com/training/HowEIMWorks/player.html

• EIM Stakeholder processes and tariff filings http://www.caiso.com/informed/Pages/StakeholderProcesses/EnergyImbalanceMarket.aspx

• EIM Business Process Manual http://bpmcm.caiso.com/Pages/BPMDetails.aspx?BPM=Energy Imbalance Market

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CAISO Public

Additional Information

CAISO Public

California ISO is one of 9 ISO/RTOs in North America, providing open, non-discriminatory transmission access

Responsibilities: • Reliability, grid planning, outage coordination • Market development, operations, monitoring

CAISO manages approximately 80% of California’s electricity load – 50,270 MW record peak demand (7/24/2006) – $8.5 billion annual market (2012) – 60,703 MW in-state power plant capacity – 16,470 MW import capacity – 26,024 circuit-miles of transmission lines – 30 million people served – 246 million annual megawatt-hours of electricity

delivered (2012) – 38,000 generation & transmission outages per

year – 26,500 market transactions per day

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23% renewables (biogas, biomass, geothermal, small hydro, solar, wind)

10% nuclear 7% large hydro (2014 drought,

more commonly ~14%) <1% coal <1% oil 59% natural gas

CAISO Public

EIM Transitional Committee is finalizing a governance proposal for EIM matters

Governance Implementation

Revised Proposal

TC Approval

Straw Proposal

Issue Paper

ISO Board

Approval

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Jan 2015 Spring Summer Fall 2016

• Transitional Committee is an advisory committee to ISO Board consisting of 13 members

• The committee is following an iterative stakeholder process for the development of the governance proposal

• Transitional Committee’s proposal to be finalized in August and presented to the ISO board in September. It outlines: o relationship between ISO Board and EIM body o nature and degree of the influence over EIM rules o makeup and criteria for board members o process for selecting new members o formation of an advisory body of state regulators

CAISO Public

Changing resource mix leads to changes in pattern of net load for dispatch, with new needs for market products

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Load

& N

et L

oad

(MW

)

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

14,000

16,000

18,000

20,000

22,000

24,000

26,000

28,000

30,000

32,000

34,000

Load, Wind & Solar Profiles -- Base Scenario January 2020

Net_Load Load Wind Total Solar

Win

d &

Sol

ar (M

W)

6,700 MW in 3-hours

7,000 MW in 3-hours

12,700 MW in 3-hours

Net Load = Load - Wind - Solar

CAISO Public

New events (like negative energy prices indicating risk of over-generation) introduce new opportunities

for economy energy, load management, etc.

Example, April 12, 2014: Coincident 8300+ MW of wind & solar was 35% of total 23,450 system

load, dropping net load to 15,000 MW. With limited decremental bids, energy prices were zero or negative

(blue dots) for 43% of 5-minute RTD intervals. 34

-40

-20

0

20

40

60

80

14,000

15,000

16,000

17,000

18,000

19,000

20,000

21,000

22,000

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23

5-Minu

te En

ergy P

rices

($)

ISO's

Net L

oad (

MW)

ISO's Net Load vs. Average 5-Minute Energy PricesApril 12, 2014

Net Load MCP_RTD 5-Min_Prices<=Zero 5-Min_Prices>$100

CAISO Public

Market Operator (ISO) determines load and resource forecasts, and runs and settles the market.

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• Initial optimization starts to manage congestion and refine inputs

• Market optimization ensures physical resource feasibility by refining network constraints, iterating between network analysis and optimization

• Optimization uses Mixed Integer Programming

CAISO Public

ISO markets build on full network model & energy management system (EMS) state estimator

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Detailed network model is foundation for grid (EMS) & market operations: • Both model Western region, mostly the same

• Real-time market starts from current state estimator solution o 167,000 telemetry data

points, including 17,000 for PacifiCorp, adding 11,000 for NV Energy

o State estimator solves every minute, including contingency analysis

CAISO Public

Day-ahead advisory process for EIM runs with ISO’s market, for feedback on feasible scheduling

By close of ISO’s day-ahead market, EIM Entity BSC submits base schedules for participating and non-participating resources to the Market Operator.

The process begins 7 days before the operating day. EIM Entity SC may submit demand forecasts to the ISO. The ISO provides hourly demand forecasts to the market.

10:00 1:00

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ISO’s day-ahead market models EIM Entity BAA and informs EIM Entity of issues to address..

CAISO Public

Building on FERC Order 764 with financially binding 15- and 5-minute functions promotes market efficiency

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CAISO EIM Day Ahead Schedule

15-Minute Unit Commitment & Energy Schedule, and Incremental AS Awards

5-minute Real-Time Dispatch

15-Minute Unit Commitment & Energy

Schedule

Base Schedule (basis of financial

settlement)

Settlements apply to incremental changes from previous market process

CAISO Public

EIM Entity’s base schedule should be balanced prior to start of real-time market

Demand (load, exports, & losses)

Resource plans: base schedules

– Self-scheduled resources – Base generation schedules – Intertie schedules

Resource plans also include: – Ancillary services reservations protected

from dispatch – Operational characteristics (e.g., ramp rate) – Economic Bids

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=

Base schedule must be balanced or they will be adjusted prior to start of EIM.

CAISO Public

Under- and over-scheduling penalties provide incentives for balanced base schedules

• No exposure to penalty if EIM Entity using Market Operator forecast – If Market Operator demand forecast differs from EIM Entity SC base

schedule supply by >1%, then deemed to be using own forecast and subject to penalties

• If EIM Entity is using own load forecast for base schedule – If load imbalance exceeds 5% (but at least 2 MW) of actual demand,

then • Price for excess demand = 125% of the LAP’s Locational Marginal Price

(LMP) • Price for excess supply = 75% of applicable LMP

– If load imbalance exceeds 10% of LAP, then • Price for excess demand = 200% of the LAP LMP • Price for excess supply = 50% of applicable LMP

• Revenue collected over day allocated to EIM Entities that have not incurred a scheduling penalty in any hour of the day

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CAISO Public

Energy bids provide the ability to cover fluctuations in load.

Economic Bid

Bid range

$20

$30

$10

$40

$50

MW

$/MWh

20 35 30 25 40 45 50 55

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$35 Clearing price

CAISO Public

Economic bids in resource plan ensure real-time balance, feasibility and flexibility of deviation from base schedules

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(Forward energy schedule; including hourly generation and

interchange schedules, as a baseline for financial settlements).

Actual operation

Bid range

Resource Plan: Available resources to balance supply and demand and evaluate resource sufficiency. Comprised of: • Load,

generation and interchange base schedules

• Energy bids from participating resources

• Ancillary service plans

Hourly base schedules

Base schedules must be within economic bid ranges (e.g., the base schedule for a participating resource with a bid from 10 to 100 MW could not exceed 100 MW.)

CAISO Public

Along with forecasts & market inputs, current operational data are also needed: metering, outages,

transmission • Telemetry data is communicated from the EIM Entity to the

Market Operator via ICCP.

• With implementation of the EIM, ISO allows scheduling coordinators and other entities submitting meter data for EIM resources to submit meter data in the following granularity levels: a) Generation for participating generators at 5-minute

intervals; non-participating generators at 5, 15 or 60-minute intervals.

b) Interties at 5-minute intervals. c) Load at 5, 15 or 60-minute intervals.

• Metering standards are determined by local regulatory authority.

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CAISO Public

Given the inputs, market determines optimal dispatch and resulting 15- & 5-minute locational marginal prices (LMPs)

Supply bids

Demand

Locational Marginal

Price ($/MWh)

Market Clearing

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• Energy: Changes in system demand and supply cause incremental dispatches. Uniform system energy price differs by location due to congestion and losses.

• Congestion: Due to limited transmission capacity or outages, lowest-priced electricity can’t flow freely

• Loss: Energy is lost as it flows through the grid. LMPs include incremental change when serving additional load.

• Greenhouse Gas: California regulations apply to resources that serve load in CAISO BAA. Optimization dispatches for least cost, recognizing compliance costs. GHG component compensates resources and avoids charges to non-CA load. Separate bid component shows availability for dispatch.

CAISO Public

Real-Time Economic Dispatch (RTD) meets energy balance in 5-minute intervals 45

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CAISO Public

Ramping capacity ensures sufficient flexibility in RTD to manage the probability of varying grid conditions, and

enable sharing of diversity

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Energy Energy

Flexible ramping: • Secures ramping capability in 15-

minute market & RT dispatch • Forward-looking procurement,

considering future uncertainty • Compensates resources whose

dispatch is held back in financially binding interval to meet future ramping needs

• Allocates costs to movement that requires others to be dispatched

Product enhancements (Fall 2016): • Add bidding & flexible downward

ramping • Replace flexible ramping

constraint compensation & cost allocation

CAISO Public

Real-time self-schedules (e.g., forecasted VER output, e-tag curtailments, reloads) may be updated

before 15-minute intervals

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FMM interval

T-5: FMM Energy Schedule e-Tag Deadline

T-40: Schedule change can be reflected in FMM dispatch, as instructed imbalance energy

T-22.5: FMM Energy Schedule Awards

T

T-37.5: FMM Optimization Starts

37.5 Minutes

20 Minutes

Intertie changes up to 20 minutes before 15-minute intervals are allowed but may be limited by e-tag’s transmission reservations.

Any difference between the FMM intertie schedule and change in self-schedule will be settled at the RTD price, not FMM price, until FMM can

recognize schedule change. .

CAISO Public

Price stability after November 14 shows importance of current knowledge of outages, operator response, and

sufficient available resources

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15-minute Market Aggregate Price, PacifiCorp West

15-minute Market Aggregate Price, PacifiCorp East

Waiver effective

Waiver effective

CAISO Public

Various factors caused PacifiCorp’s initial MW undersupply

• Outages, derates/rerates management • Timely informing the market about out-of-market actions impacting

energy balance • Wind forecast accuracy and managing wind deviations • Data and software issues • Within the hour interchange schedule variations • Load forecast variation and load biasing coordination • Network and resource model discrepancies • 5 minute rate of change constraint on some transmission

interfaces Waiver of pricing rules let prices be set by economic bids rather than constraint violations. CAISO is proposing ongoing transition mechanism and readiness criteria for new EIM Entities.

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CAISO Public

Outage rates for participating gas and coal capacity in PacifiCorp West averaged about 10 percent

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CAISO Public

Outage rates for participating gas and coal capacity in PacifiCorp East averaged about 15

percent – but much higher in some hours

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CAISO Public

Transmission service uses simple principles

• EIM Entities make transmission capacity available through dynamic e-Tag and transmission registry: – EIM Participating Resources can offer contracted capacity, and EIM

Entities offer unsold capacity – confirmed through standard dynamic e-Tag – Network service within EIM Entities allows redispatch up to network

capacity – EIM coordinates transmission usage with EIM participants’ Transmission

Service Providers (e.g., Bonneville Power Administration (BPA) in PacifiCorp’s case)

– EIM transfers respect both scheduling rights and actual flow constraints. – ISO constantly updates EIM Entities’ NSI to reflect EIM transfers

• Reciprocity: To consider bids equally on economic merit, initial design proposed no incremental charge for transmission for EIM transfers between EIM Entities – EIM maintains existing transmission rate structures within EIM Entities

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CAISO Public

For PacifiCorp, separate static and dynamic schedules manage EIM transfers within variable transfer limits (VTL)

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FMM Intervals FMM run starts at T-37.5 using 15-minute

Limit = 150

En=145 En=140 En=140 En=150 Results Published

T-22.5

Dynamic e-Tag TR = 50 En = 50 (updated after the hour)

Static e-Tag TR = 150 En = 145 = FMM

• Before bid closure, PacifiCorp creates dynamic and static e-tags across COI with transmission profiles for maximum allowed EIM flows on COI.

• EIM produces 15-minute awards at T-22.5 minutes for each FMM interval, updates the static e-tag (four times per hour), then issues 5-minute dispatches within these intervals within BPA’s VTL limits.

• After the hour, the dynamic e-Tag’s energy profile is updated to the hourly average of 5-minute dispatches.

Illustrative example: TR rights available for EIM = 200 MW VTL = ±50 MW

CAISO Public

EIM year one enhancements are pending at FERC

• Scalability of EIM design: – Optimal management of multiple EIM transfer limits – Flexible ramping constraint BAA combinations

• Compliance with 6/19/2014 FERC Order: – Greenhouse Gas flag and cost based bid adder

• Implementation details: – EIM administrative charge redesign – Administrative pricing rules (price to use in market

disruption) – Settlement rules for non-participating resources

• Phase 2 (just started) will consider transmission usage charges plus other enhancements

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