Southwest Power Pool's response to Federal Energy Regulatory Commission questions about its plan to launch a new Western Energy Imbalance Service next year was laden with misunderstandings about how the existing Western Energy Imbalance Market operates, California Independent System Operator said in a recent filing with the commission.
Cal-ISO and SPP are jockeying for position to offer energy imbalance services across the US West. The EIM, started in 2014 by Cal-ISO and PacifiCorp, has since added nine participants and plans to add 10 more by 2022. SPP's WEIS would be an alternative to the EIM and has commitments from seven entities including Tri-State Generation and Transmission Association. It is scheduled to start up on Feb. 1, 2021, if it can timely secure the necessary approvals from FERC.
SPP filed its proposal for implementing the WEIS in the Western Interconnection on Feb. 21, and received notice from FERC on April 20 that its filing was deficient (ER20-1059, ER20-1060).
The grid operator on May 22 submitted additional information that FERC said was needed to process the tariff filing. SPP at that time asked the commission to issue an order "as soon as practicable, but no later than July 21." Its original filing had sought FERC sign-off by May 21 to remain on track for the February 2021 launch of the WEIS market.
Eliminating confusion
Cal-ISO in a June 12 filing with the commission said it was weighing in "for the sole purpose of clarifying the record and eliminating any potential confusion regarding the EIM design and operation."
According to Cal-ISO, SPP inaccurately suggested that the EIM uses a path-based approach to congestion management, rather than a flow-based approach which WEIS intends to use. Cal-ISO clarified that its approach was flow-based, but respected physical transmission and power balance constraints within EIM balancing authority areas as well as physical and scheduling limits that cause intertie constraints between balancing authority areas.
"This enables the EIM to function in a multi-balancing authority area environment in a compatible and complementary manner with the [tariff-regulated] bilateral energy market that co-exists with the EIM, while respecting the transmission rights of third parties and scheduled transactions in the bilateral market," Cal-ISO said.
Because the EIM defers to the balancing authority responsibility for reliability of the transmission system within the area it operates, SPP indicated the EIM was flawed for unnecessarily introducing intermediary determinations.
Cal-ISO challenged that the assertion "misses the point of the multi-balancing-authority area environment in which the EIM operates, and is confusing."
The EIM takes on a "forward look ahead function" to handle dispatch, unit commitment, resource configuration management and congestion management in a way that respects bilateral transactions, Cal-ISO said. The balancing authorities are relied on for the provision of advance information needed by the EIM, to operate their energy management systems in line with the EIM's five-minute instructions, and to maintain reliability between those five-minute dispatches.
Oversimplified relationship
Cal-ISO said SPP was oversimplifying the relationship it has as the market operator with the other participants in the EIM. A "direct relationship between the market operator and the participating resources ensures both the separation of functions from the transmission operations as well as the integrity of bidding and participation by third party resources," Cal-ISO said, adding that it was "inaccurate to suggest that the EIM unnecessarily concentrates the market operator relationship with the balancing authority."
Cal-ISO also shot down SPP's criticism that the EIM did not rely on updated real-time information to assess transmission availability and real-time inputs into the market. "The EIM market operator receives all updates of transmission system and other pertinent operational information directly from the entity responsible for reliability of the transmission system within the participating balancing authority area, the balancing authority, and incorporates that information directly into the EIM optimization," Cal-ISO said.
Further, the grid operator contended that SPP's comment that the EIM's primary function was to optimize transfers between balancing authority areas "suggests a deep misunderstanding of the EIM mechanisms designed to ensure it operates appropriately in a multi-balancing authority area environment while respecting the existing bilateral transmission marketplace."
Countering SPP's remarks, Cal-ISO said the EIM's objective was "to minimize the total cost of serving energy demand of the entire EIM area" while simultaneously respecting "the boundaries between balancing authority areas, the responsibilities of the entities that manage them, and the transmission rights that connect them."
