111 Woodmere Road, Suite 190, Folsom, CA 95630

111 Woodmere Road, Suite 190, Folsom, CA 95630

Office: 916-608-9060 Fax: 916-608-9861

COMMENTS OF 8MINUTENERGY RENEWABLES

ON PROPOSED INTERTIE RA DELIVERABILITY BPM LANGUAGE

8minutenergy Renewables, Inc. (8me) appreciates the opportunity to comment on the CAISO’s proposed Business Practice Manual (BPM) language (Proposal), posted June 13th, to implement the results of the Deliverability of Resource Adequacy (RA) Capacity on Interties initiative. This initiative is intended to:

·  Identify transmission upgrades needed for the “base case resource portfolio” to achieve state policy objectives (e.g., 33% Renewables Portfolio Standard RPS)) that is defined in the annual CAISO Transmission Planning Process (TPP);

·  Conduct a Deliverability Assessment in the TPP to:

Ø  Determine Delivery Network Upgrades (DNUs) needed to ensure simultaneous RA deliverability to the aggregate of load; and

Ø  Establish Maximum Import Capability (MIC) values for RA counting purposes at interties where historic flows do not reflect the expected future flows in the base case resource portfolio, both with current capacity and as the identified upgrades are placed into service.

8me comments on the Proposal focus on:

·  The objectives of Step 4 of the new process – the Deliverability Assessment; and

·  Treatment of interim downstream transmission constraints impacting RA deliverability for multiple interties, and/or both import and internal resources.

Our comments also address the CAISO’s June 15th posted response to 8me’s comments on implementation of the overall framework – specifically, on the timing of the initial Deliverability Assessment for generation in the Imperial Irrigation District (IID) area.

Step 4 – Deliverability Study

As noted above, the Deliverability Study will accomplish two purposes – determine any Delivery Network Upgrades (DNUs) needed to accommodate the TPP base case resource portfolio, and establish a new “MIC Baseline” for RA counting purposes at interties where historical flows have been low relative to those expected base-case flows. However, the Proposal mentions only identification of DNUs, and not establishment of MIC values that can be used before those transmission additions come on-line. Import resources, and their potential Load-Serving Entity (LSE) buyers, need those interim MIC values in order to negotiate the Power-Purchase Agreements (PPAs) needed to achieve the TPP base case resource portfolio.

The CAISO should effectively conduct the same annual “Operational Partial and Interim Deliverability Assessment” for import RA counting purposes that it is considering in the Generator Interconnection Process Phase 2 (GIP-2) for internal resources. In order to facilitate commercial PPA arrangements, that assessment would:

·  Establish RA values for generator resources for the following year, beginning the year before their expected Commercial Operation Dates (CODs); and

·  Estimate RA values for each year thereafter until all DNUs are in-service, on an advisory-only basis, considering the latest known information on generation and transmission development.

Likewise, Step 4 for the corresponding import RA deliverability process should both: (1) establish the MIC values for the following year based on the RA deliverability of the current intertie facilities; and (2) provide advisory RA values for each year thereafter, until all DNUs are completed, based on expected generation and transmission development.

Treatment of interim downstream transmission constraints

The Proposal does not address situations where downstream transmission constraints could limit RA deliverability before all DNUs are in place. This situation – e.g., West of Devers (WOD) constraints, depending on the relative development timing for: (1) internal generation development along the “I-10 corridor;” (2) import generation development in the IID area and in Arizona/southwest; and (3) implementation of the interim and final WOD transmission solutions, and related transmission upgrades.

In these situations, the CAISO Deliverability Study will have to determine how to allocate available RA deliverability capability between internal generation, and between internal and import generation, on an interim basis. 8me suggests that, to the extent possible, the CAISO establish a flexible allocation process that would effectively treat RA deliverability at the constraint point (e.g., WOD) as it does import RA deliverability today.

That is, the CAISO would:

·  Allocate deliverability at that constraint point to LSEs, using the 13-step process now used for RA imports; and then

·  Let the LSEs decide how to use their allocations to best meet their RA needs from the various sources feeding into that constraint point.

If the tradeoff between RA-deliverable MWs is not one-to-one between those supply sources, the CAISO could establish ratios (e.g., 1 MW from Location A would count the same as 0.9 MW from Location B) that the LSEs could use in their decision-making.

Given the large amount of generation in the CAISO queue that will likely never be built and the inflexibility of the MIC-establishment process even after these most recent reforms (e.g., MICs based on the formula using historic flows cannot be decreased even where LSEs are not using them fully to meet RA needs), this is the best way to target available RA deliverability to the resources most likely to be developed.

Timing of initial Deliverability Assessment

The CAISO’s 2010/2011 Transmission Plan (Plan) effectively already conducted Steps 1-3 of the new process for imports from IID at Mirage-Devers. The analysis conducted for the Plan constructed a “base case” 33% RPS portfolio (Portfolio 4, the “hybrid” scenario) and determined the upgrades needed to achieve that portfolio, i.e., the Path 42 Upgrade. That package of upgrades was included in the Plan and, since the identified cost was less than $50 million, approved by CAISO Management.

However, the Plan did not take that critical next step – the Deliverability Assessment needed to confirm that, given the interim WOD upgrade, the imports that would be accommodated by the Path 42 Upgrade would be deliverable for RA purposes (or, if not, the level of RA deliverability that could be provided and the expected timing for full deliverability).

8me believes that the CAISO has actually conducted sufficient analysis, in the Plan and for other related studies of the Path 42 Upgrade, to determine that generation flows using all the resulting transmission capacity would be fully deliverable to load without further study. If that is the case, the CAISO should simply confirm that fact.

However, if that is not the case, the CAISO should conduct an expedited Deliverability Assessment to determine RA deliverability of imports over Path 42, with both current capacity and the planned upgrades. Similarly, the Imperial Valley Deliverability Assessment is critical to be completed in parallel with Path 42 as the IID resources will necessarily flow across both of these interties to the CAISO BAA. The Sunrise need statement identified resources from the IID system when it was approved several years ago. The ability to utilize this new renewable transmission line for physical deliveries is only several years away. It is critical the Deliverability Assessments be concluded for Sunrise flows to provide certainty in the markets and commercial processes.

IID-area generation projects to serve CAISO-area loads are scheduled to come on-line starting in late 2013 and early 2014 in conjunction with the completed IID network upgrades, and it is unrealistic to expect that PPAs can be concluded in time to accommodate that schedule if no RA deliverability information is provided until approval of the CAISO’s 2011/2012 Transmission Plan in early 2012. We greatly appreciate all of the expeditious work of the staff on these issues and encourage their timely completion.

We understand that the CAISO is currently conducting the GIP Cluster 1/Cluster 2 Phase II interconnection studies, and that the procedures in this stakeholder process will not be completed until after those studies are issued in July. However, the CAISO should then quickly undertake any Deliverability Assessment needed to either confirm full RA deliverability of the enhanced Path 42 capacity beginning in late 2013 or provide (on an advisory basis, if needed) the RA deliverability that could be expected at that point (and, preferably, in the following years).

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