2006 Resource Adequacy Draft Tariff - Section 40 - Clean

ARTICLE V – RESOURCE ADEQUACY

40Resource Adequacy

40.1Applicability

This Section 40 applies to all Load Serving Entities serving Load within the CAISO Control Area. For purposes of this Section 40 of the CAISO Tariff, Load Serving Entity is defined as (1) all entities serving retail Load under the jurisdiction of the California Public Utilities Commission (hereinafter “CPUC”), including an Electrical corporation under section 218 of the California Public Utilities Code (hereinafter “PUC”), an Electric service provider under section 218.3 of the PUC, and a Community choice aggregator under section 331.1 of the PUC (hereinafter collectively “CPUC Load Serving Entities”) and (2) all entities serving retail Load in the CAISO Control Area not within the jurisdiction of the CPUC including (i) a local publicly owned electric utility under section 9604 of the PUC, (ii) the State Water Resources Development System commonly known as the State Water Project, and (iii) any Federal entities, including but not limited to Federal Power Marketing Authorities, that serve retail Load (“non-CPUC Load Serving Entities”). Load Serving Entity shall not include a Metered Subsystem that follows its Load under Section 4.9.9 of the CAISO Tariff.

40.2Submission of Monthly Resource Adequacy Plan

Each Scheduling Coordinator for a Load Serving Entity serving Load within the CAISO Control Area must provide the CAISO with a monthly Resource Adequacy Plan. The monthly Resource Adequacy Plan provided to the CAISO by Scheduling Coordinators for each CPUC Load Serving Entity for whom it schedules Demand within the CAISO Control Area shall be submitted on the schedule and in the form approved by the CPUC. The monthly Resource Adequacy Plan provided to the CAISO by Scheduling Coordinators for each non-CPUC Load Serving Entity for whom it schedules Demand within the CAISO Control Area shall be submitted on the last day of the second month prior to the compliance month (e.g., March 31 for May) and in the form set forth on the CAISO’s Website. The monthly Resource Adequacy Resource Plan for non-CPUC Load Serving Entities should identify the resources it will rely upon to satisfy its Planning Reserve Margin under Section 40.4 for the relevant reporting month and must apply the Net Qualifying requirements of Section 40.5.2.

40.2.1Resource Adequacy Plan Compliance

The CAISO will evaluate whether each monthly Resource Adequacy Plan submitted by a Scheduling Coordinator on behalf of a Load Serving Entity satisfies the Load Serving Entity’s obligation to procure sufficient Net Qualifying Capacity to comply with its Planning Reserve Margin under Section 40.4. If a Scheduling Coordinator for a CPUC Load Serving Entity submits a Resource Adequacy Plan that fails to demonstrate compliance with resource adequacy rules adopted by the CPUC, the CAISO will notify the CPUC of the identified deficiency. If a Scheduling Coordinator for a non-CPUC Load Serving Entity submits a Resource Adequacy Plan that fails to demonstrate compliance with either the resource adequacy rules adopted by the applicable Local Regulatory Authority or obligations set forth in this Section 40 of the CAISO Tariff, the CAISO shall notify the Local Regulatory Authority of the identified deficiency and if the deficiency is a failure to comply with the applicable Planning Reserve Margin under Section 40.4, the CAISO will charge the Scheduling Coordinator for the deficient non-CPUC Load Serving Entity X$/MW, which shall reflect 150% of the monthly cost of new capacity, for each MW the Resource Adequacy Plan is short of its Planning Reserve Margin. For report month January 2007, that charge will be X$/MW, which shall reflect 300% of the monthly cost of new capacity, for each MW the Resource Adequacy Plan is short of its Planning Reserve Margin.

40.3Demand Forecasts

The monthly Resource Adequacy Plan must include a Demand Forecast as follows:

1. For CPUC Load Serving Entities, the Demand Forecast shall be the Demand Forecast required by the CPUC.
2. For non-CPUC Load Serving Entities, the Demand Forecast shall be based on the non-CPUC Load Serving Entity’s monthly non-coincident peak Demand for its Service Area, for its MSS area, or in each Service Area of an Original Participating TO in which the non-CPUC Load Serving Entity serves Load, unless the non-CPUC Load Serving Entity agrees to utilize a coincident peak determination provided by the California Energy Commission for such non-CPUC Load Serving Entity. Scheduling Coordinators for non-CPUC Load Serving Entities must provide data and/or supporting information, as requested by the CAISO, for the Demand Forecasts required by this Section for each non-CPUC Load Serving Entity.
3. Planning Reserve Margin

A Planning Reserve Margin shall be that quantity or percentage of capacity in MWs that exceeds the Demand Forecast set forth in Section 40.3. The monthly Resource Adequacy Plan must include a Planning Reserve Margin as follows:

1. For CPUC Load Serving Entities, the Planning Reserve Margin shall that adopted by the CPUC.
2. For non-CPUC Load Serving Entities, the Planning Reserve Margin shall no less than 115% of the Demand Forecast set forth in Section 40.3(b).

40.5Determination of Resource Adequacy Capacity

Resource Adequacy Capacity shall be the quantity of capacity in MWs from a resource listed in a Resource Adequacy Plan. Resource Adequacy Capacity cannot exceed a resource’s Net Qualifying Capacity.

40.5.1Qualifying Capacity

Qualifying Capacity is the capacity from a resource prior to application of the Net Capacity provisions of Section 40.5.2. The criteria for determining the types of resources that may be eligible to provide Qualifying Capacity and for calculating Qualifying Capacity from eligible resource types may be established by the CPUC or other applicable Local Regulatory Authority and provided to the CAISO. The CAISO shall use the criteria provided by the CPUC or Local Regulatory Authority to determine and verify, if necessary, the Qualifying Capacity of all resources listed in a Resource Adequacy Plan; however, to the extent a resource is listed by one or more Scheduling Coordinators in their Resource Adequacy Plans, which apply the criteria of more than one regulatory entity that leads to conflicting Qualifying Capacity values for that resource, the CAISO will accept the methodology that results in the highest Qualifying Capacity value. Only if a Local Regulatory Authority has not established any Qualifying Capacity criteria, or chooses to rely on the criteria in this Tariff, will the provisions of Section 40.13 apply.

40.5.2Net Qualifying Capacity

Net Qualifying Capacity is Qualifying Capacity, determined under the criteria provided by the CPUC or other Local Regulatory Authority or, if such criteria is not provided by the CPUC or Local Regulatory Authority, under Section 40.13 of this Tariff, reduced, as applicable, based on: (1) testing and verification and (2) deliverability restrictions. The Net Qualifying Capacity determination shall be made by the CAISO pursuant to the provisions of this CAISO Tariff. The CAISO shall produce a report, posted to its website and updated from time to time, setting forth the Net Qualifying Capacity of Participating Generators. All other resources may be included in the annual report under this Section upon their request. Any disputes as to the CAISO’s determination regarding Net Qualifying Capacity shall be subject to the CAISO’s alternative dispute resolution procedures.

40.5.2.1Deliverability Within the CAISO Control Area

In order to determine Net Qualifying Capacity from a Generating Unit, the CAISO will determine that the Generating Unit is available to serve the aggregate of Load by means of a deliverability analysis. The deliverability analysis shall focus on peak Demand conditions. The CAISO will update the deliverability baseline analysis on an annual basis, or more frequently in accordance with Good Utility Practice. To the extent the deliverability analysis shows that the Qualifying Capacity of a Generating Unit is not deliverable to the aggregate of Load under the conditions studied, the Qualifying Capacity of the Generating Unit will be reduced on a MW basis for the capacity that is undeliverable. The CAISO will utilize its interconnection process and procedures under Section 25 of the CAISO Tariff to prevent degradation of the deliverability of an existing Generating Unit that could result from the interconnection of additional Generation.

40.5.2.2Deliverability of Imports

The CAISO shall, by means of an annual deliverability study, establish the total import capacity for each import path to be allocated to Load Serving Entities serving Demand in the CAISO Control Area for Resource Adequacy planning purposes. The study results shall be posted by the CAISO on the Web Site, and shall be incorporated by Scheduling Coordinators for Load Serving Entities into their respective Resource Adequacy Plans. For the purpose of accounting for import Resource Adequacy Capacity, the import capability of the system will be allocated by the CPUC for CPUC Load Serving Entities; however, import capacity associated with (i) Existing Transmission Contracts, (ii) Transmission Ownership Rights, and (iii) resource commitments outside the CAISO Control Area of non-CPUC Load Serving Entities, as of October 27, 2005, shall be reserved for holders of such commitments as part of the deliverability study and will not be subject to allocation under the rules established by the CPUC. Resource commitments outside the CAISO Control Area of any Load Serving Entity entered into after October 27, 2005 will be given identical allocation priority. This allocation does not guarantee or result in any actual transmission service being allocated and is only used for determining the maximum Resource Adequacy capacity that can be credited towards satisfying a Scheduling Coordinator’s Resource Adequacy obligation. Upon the request of the CAISO, Scheduling Coordinators must provide the CAISO with information on existing import contracts and any trades or sales of their load share allocation. Such information will be subject to the confidentiality provisions of this Tariff. The CAISO will inform the CPUC of Resource Adequacy Plan submitted by a Scheduling Coordinator for a CPUC Load Serving Entity that exceeds its allocation of import capacity. The CAISO will inform the Scheduling Coordinator for a non-CPUC Load Serving Entity that its Resource Adequacy Plan exceeds the non-CPUC Load Serving Entity’s allocation of import capacity and will either (i) reduce all import Resource Adequacy Capacity on a pro rata basis or (ii) reduce a specific import Resource Adequacy Capacity resource as instructed by the Scheduling Coordinator to equal the allocated amount of import capacity.

40.6Submission of Supply Plans

Scheduling Coordinators representing Generating Units, System Units or System Resources supplying Resource Adequacy Capacity shall provide the CAISO with a monthly supply plan (“Supply Plan”) on the last day of the second month prior to the compliance month (e.g., March 31 for May) and in the form set forth on the CAISO’s Website, listing their commitments to provide Resource Adequacy Capacity to an Load Serving Entity for the reporting month.

40.6.1Compliance with Supply Plan Obligation

Scheduling Coordinators representing Generating Units, System Units or System Resources supplying Resource Adequacy Capacity that fail to provide the CAISO with a monthly Supply Plan as set forth in Section 40.3 of this CAISO Tariff, shall be subject to Enforcement Protocol Section 6.1 of the CAISO Tariff.

40.7Must-Offer Obligations

40.7.1Applicability

The requirements of Section 40.7 shall apply to (a) all Participating Generators, and (b) all persons, regardless of whether the person is a “public utility” as defined in Section 201 of the Federal Power Act, that own or control one or more non-hydroelectric Generating Units or System Units or System Resources located in California, or a dynamically scheduled System Resource from which energy or capacity is either: (i) sold through any market operated by the CAISO, or (ii) transmitted over the CAISO Controlled Grid. Each person described in this Section 40.7.1 is referred to in the CAISO Tariff as a “Must-Offer Generator.” The requirements of this Section 40.7 shall apply to all non-hydroelectric Generating Units located in California that are owned or controlled by a Must-Offer Generator. To the extent a Must-Offer Generator offers Resource Adequacy Capacity listed on a Load Serving Entity’s Resource Adequacy Plan, and on its Scheduling Coordinator’s Supply Plan, that Must-Offer Generator will also be a RA Must-Offer Generator.

40.7.2Available Generation

For the purposes of Section 40.7, a Must-Offer Generator’s “Available Generation” from a non-hydroelectric Generating Unit or System Unit shall be: (a) the Generating Unit’s or System Unit’s maximum operating level adjusted for any outages or reductions in capacity reported to the CAISO in accordance with Section 9.3.9 or 40.7.3 and for any limitations on the Generating Unit’s or System Unit’s operation under applicable law, including contractual obligations, which shall be reported to the CAISO , (b) minus the Generating Unit’s or System Unit’s scheduled operating point as identified in the CAISO’s Final Hour-Ahead Schedule, (c) minus the Generating Unit’s or System Unit’s capacity committed to provide Ancillary Services to the CAISO either through the CAISO’s Ancillary Services market or through self-provision by a Scheduling Coordinator, and (d) minus the capacity of the Generating Unit committed to deliver Energy or provide Operating Reserve to the Must-Offer Generator’s Native Load.

40.7.3Reporting Requirements for Non-Participating Generators

So that the CAISO may determine the Available Generation of all Must-Offer Generators, Must-Offer Generators that are not Participating Generators shall be required to file with the CAISO, for each non-hydroelectric Generating Unit located in California they own or control: (i) the Generating Unit’s minimum operating level; (ii) the Generating Unit’s maximum operating level; and (iii) the Generating Unit’s ramp rates at all operating levels; and (iv) such other information the CAISO determines is necessary to determine available generation and to dispatch Must-Offer Generators. In addition, Must-Offer Generators that are not Participating Generators must, consistent with the notification obligations of Participating Generators and in order to comply with the intent of this Section 40.4, notify the CAISO, as soon as practicable, of any Planned Maintenance Outages, Forced Outages, Force Majeure Event outages or any other reductions in their maximum operating levels or Resource Adequacy Capacity during the relevant month.

40.7.4Obligation To Offer Available Capacity

Except as set forth in Sections 40.7.5 and 40.7.6, all Must-Offer Generators shall offer to sell in the CAISO’s Real Time Market for Imbalance Energy, in all hours, all their Available Generation as defined in Section 40.7.2.

40.7.5Submission of Bids and Applicability of the Proxy Price

For each Operating Hour, Must-Offer Generators shall submit Supplemental Energy bids for all of their Available Generation to the CAISO in accordance with Section 34.2; however, short-start RA Must-Offer Generators listed on the monthly Resource Adequacy Plans of non-CPUC Load Serving Entities shall make Available Generation available to the CAISO either (i) in accordance with Section 4.9 of the CAISO Tariff and provisions of their Metered Subsystem Agreement, if applicable, or (ii) by submission of Supplemental Energy bids for all Available Generation that may be accompanied by an “Emergency Only” flag that limits the CAISO’s dispatch of such Available Generation to circumstances when the CAISO has issued a warning or emergency notice of an actual or imminent System Emergency. For purposes of this Section, “short-start” resources are those RA Must-Offer Generators with start times plus minimum run times of 120 minutes or less. In addition, the CAISO shall calculate for each gas-fired Must-Offer Generator, in accordance with Section 40.10.1, a Proxy Price for Energy.

If a Must-Offer Generator fails to submit a Supplemental Energy bid for any portion of its Available Generation for any Dispatch Interval, the un-bid quantity of the Must-Offer Generator’s Available Generation will be deemed by the CAISO to be bid at the Must-Offer Generator’s Proxy Price, except short-start RA Must-Offer Generators of non-CPUC Load Serving Entities will be deemed to have bid at the RA Must-Offer Generator’s Proxy Price with an Emergency Only flag, for that hour if: (i) the applicable Generating Unit or System Unit is a gas-fired unit and (ii) the Must-Offer Generator has provided the CAISO with adequate data in compliance with Sections 40.7.7 and 40.7.3 for the applicable Generating Unit or System Unit. For all other Generating Units or System Units owned or controlled by a Must-Offer Generator, the un-bid quantity of the Must-Offer Generator’s Available Generation will be deemed by the CAISO to be bid and settled in accordance with Section 11.2. In order to dispatch resources providing Imbalance Energy in proper merit order, subject to the limitations on short-start RA Must-Offer Generators of non-CPUC Load Serving Entities, the CAISO will insert this un-bid quantity into the Must-Offer Generator’s Supplemental Energy bid curve above any lower-priced segments of the bid curve and below any higher-priced segments of the bid curve as necessary to maintain a non-decreasing bid curve over the entire range of the Must-Offer Generator’s Available Generation.