Temporary Suspension of Resource Operations BBB Issue Paper - - PowerPoint PPT Presentation

Temporary Suspension of Resource Operations

BBB

Issue Paper

Stakeholder Conference Call May 19, 2017 9:00 a.m.–12:00 p.m. Pacific Time Keith Johnson Infrastructure and Regulatory Policy Manager

Agenda

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Time Item Speaker

10:00-10:15 Plan for Stakeholder Engagement Jody Cross 10:15-10:30 Background Keith Johnson 10:30-10:45 Scope of Initiative Keith Johnson 10:45-11:10 Existing Processes Deb Le Vine 11:10-11:45 Identified Issues Keith Johnson 11:45-12:00 Next Steps Jody Cross

PLAN FOR STAKEHOLDER ENGAGMENT

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Stakeholder Process

Temporary Suspension of Resource Operations

Straw Proposal Additional Papers

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POLICY DEVELOPMENT

Stakeholder Input

We are here

Issue Paper Revised Straw Proposal Draft Final Proposal

Board

Straw Proposal

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The plan is to present proposal to CAISO Board for approval on November 1-2, 2017.

• To facilitate development of a final proposal, there will be

several iterations of proposals

– Straw proposal – Revised straw proposal* – Draft final proposal

• Stakeholders are encouraged to provide written

comments after each proposal is posted and discussed

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* Depending on how this initiative unfolds, it may be possible to go directly from straw proposal to draft final proposal

Stakeholder Process Schedule

ccc

Temporary Suspension of Resource Operations

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Document Date Milestone Issue Paper May 10 Post issue paper May 19 Hold stakeholder call May 30 Stakeholder written comments due Straw Proposal June 21 Post straw proposal June 28 Hold stakeholder call July 13 Stakeholder written comments due Revised Straw Proposal August 9 Post revised straw proposal * August 16 Hold stakeholder call August 29 Stakeholder written comments due Draft Final Proposal September 11 Post draft final proposal September 18 Hold stakeholder call October 2 Stakeholder written comments due Final Proposal November 1-2 Present for approval at Board meeting * Depending on how this initiative unfolds, it may be possible to go

directly from straw proposal to draft final proposal

BACKGROUND

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Some resource owners have requested ability for owner to temporarily suspend operation of its resource.

• Initiative was identified in 2017 Stakeholder Initiatives

Catalog

• CAISO committed to hold a stakeholder process in 2017

– Explore opportunities to accommodate owner taking its resource

• ut of service for extended period of time

– When owner believes economic conditions cannot support its continued operation

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Initiative will consider conditions where suspension may

• ccur, and compensation, if any, if a request is denied.
• Conditions under which owner may be able to take

resource temporarily out of service

– For non-physical reasons – Including economic reasons

• Form of compensation, if any, CAISO would provide if it

denies owner’s request

• How permitting suspensions would interact with other

requirements of tariff, contracts, grid and market

• perations

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CAISO committed to undertake this initiative during the FERC process related a now-denied complaint.

• On June 17, 2016 La Paloma Generating Company filed

a complaint against CAISO

• It submitted multi-month outage requests for several

units because it did not anticipate continued operation of units would be economic

• CAISO denied requests because

– Outage requested on economic, rather than physical reasons – Request did not represent appropriate use of outage management system as allowed by tariff

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Complaint (continued)

• On October 3, 2016 FERC ruled CAISO’s denial of
• utages was reasonable under tariff

– Only permissible reasons for outage include planned maintenance, new construction, or other work – Cannot grant requests for outages for economic reasons such as those at issue in complaint

• Parties suggested FERC order CAISO to revise its tariff

– To allow for outages based on economic considerations – Procure capacity if CAISO denies outage request (at least in case of non-resource adequacy capacity)

• CAISO agreed to begin a stakeholder process in 2017

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SCOPE OF INITIATIVE

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Scope of initiative is limited to addressing circumstances highlighted in La Paloma complaint.

• Initiative will look at

– Conditions under which CAISO may allow a Participating Generator to temporarily suspend operation of its resource for non-operational issues – What compensation, if any, should be paid if CAISO denies a request for suspension

• Solution will likely involve process and new method(s) for

requesting and reporting suspension of operations

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Scope (continued)

• Also will establish conditions under which switching
• perations from one balancing authority area to another

would be allowed and how resource availability provisions would be applied

• Scope does not include discussion of potentially allowing

economic outages in general but are there other mechanisms to request temporary suspension of unit

– CAISO’s position is outages submitted through outage management system should generally be taken only for situations where there is physical reason for change in status

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EXISTING PROCESSES

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Section 11 of BPM* for Generator Management includes three scenarios for retirement of resources.

• Scenario 1 - Retiring unit wishes to reserve its

deliverability and has either

– Been approved for affidavit repowering process, or – Entered interconnection queue to be studied for repowering

• Scenario 2 - Retiring unit wishes to reserve its

deliverability but has not yet

– Committed to or completed assessment for repowering, or – Entered interconnection queue after determination it is ineligible for affidavit repowering process

• Scenario 3 - Retiring unit that will not repower and has

no need to reserve its deliverability

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* “BPM” is acronym for Business Practice Manual.

Retiring unit has several conditions it must fulfill to retire unit and maintain its deliverability on grid.

• BPM defines steps Participating Generator is required to

take under each scenario

• Applicable agreements must be revised
• Unit must demonstrate actively engaged in construction
• f replacement generation within three years of retiring

to retain its deliverability status

• Annually CAISO will check on status of repowering

progress

• Suspending or mothballing a unit is similar to scenario 2
• n previous slide

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The current BPM has several timing considerations for suspensions.

• Participating Generator must provide notice to CAISO

– If unit is repowering and desires to retain its deliverability, 60 calendar days in advance of retiring so that CAISO can determine if unit is needed for reliability – If unit is permanently retiring and does not want to retain its deliverability, 90 calendar days in advance of retiring so that CAISO can determine if unit is needed for reliability

• Under BPM for Generator Management, if unit does not
• perate at end of three-year period or cannot demonstrate

that it is in active construction then it loses its full capacity deliverability status

• CAISO only allows a unit to not generate for one year before

CAISO requires Participating Generator to develop a plan

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IDENTIFIED ISSUES

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Thus far, the CAISO has identified seven issues.

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Issue Discussion Whether Suspension Allowed Whether CAISO may allow a Participating Generator to temporarily suspend operation of its Generating Unit for economic reasons, and conditions under which CAISO would grant request Whether Compensation Paid If CAISO may allow a Participating Generator to temporarily suspend operation of its Generating Unit, form of compensation, if any, CAISO would provide Participating Generator if CAISO denies request to take Generating Unit out of service

Thus far, the CAISO has identified seven issues.

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Issue Discussion Time Limits CAISO may want to establish a limit on minimum and maximum amount of time Generating Unit can suspend its operations

• Amount of time might be tied to next resource adequacy

(“RA”) procurement cycle and Participating Generator would need to reapply for suspension?

Timeline CAISO will need to establish specific timeline for requesting suspended operation, allowing for CAISO evaluation of loss of unit for a period of time, and notification of approval and denial

Issues (continued).

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Issue Discussion “Return-ability” Is there a level of “return-ability” that would need to be maintained while Generating Unit is in suspension? Either skeleton crew on-site or x days to return to service? RA Treatment (suspension) If Participating Generator has temporarily suspended

• peration, it seems during that time period the

Generating Unit should not be eligible to be used as RA resource in a RA showing RA Treatment (“switching”) Generating Unit that has suspended operations in one balancing authority area and is now operating in an adjacent balancing authority area should not be able to be counted as RA resource in the area for which it has suspended operation

NEXT STEPS

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Next Steps

• Request stakeholders submit written comments by close
• f business on May 30

– Use template provided on website at: Comment Template – Submit to mailbox: initiativecomments@caiso.com

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