A few months back, the Federal Energy Regulatory Commission directed Deutsche Bank Energy Trading LLC to show cause why it shouldn’t be assessed a civil penalty of $1.5 million and be made to...
Declaring Emergencies in California: The Realities of ISO Operation
Similar to our internal generation resources, whether or not the CAISO gets the full capacity of these resources depends on the limitations of these units and the relationship with exports. Due to exports, the maximum net dependable dynamics is closer to 1,300-1,450 MW.
For our example dates, the CAISO was able to count on 42 percent to 78 percent of dynamic schedules.
Reserve Requirements: How much to maintain Reliability
To achieve a high degree of reliability, maintain frequency and avoid loss of firm load following the loss of generation resources or transmission system components, the CAISO adheres to the Western Systems Coordinating Council's (WSCC's) Minimum Operating Reliability Criteria (MORC). The CAISO's ability to maintain MORC requirements has consistently become more difficult to meet since 2000. The CAISO's percentage of operating reserves generally falls between 6.5 percent and 7.5 percent.
For the example dates, the CAISO was in a Stage 2 or Stage 3 situation for most of these days with difficulty in meeting WSCC required operating reserves each day without additional resources and conservation efforts.
While observers may criticize the CAISO's methodology to calculate its requirements, the CAISO does not and cannot include emergency out-of-market purchases in its calculation of "available market supply." The CAISO supports its methodology on the grounds that such calculations are based on the view that emergencies should be called upon when the ISO cannot purchase sufficient energy under its tariff. Since the CAISO cannot force suppliers outside its control area to provide power, the actual supply that is "available" to the CAISO is ultimately the supply that can be voluntarily sold and delivered to the ISO. Out-of-market purchases represent purchases that must be made to meet reliability criteria (absent some other authority or market mechanism) when insufficient power is offered through the hourly energy markets upon which California's market design is based.
Focusing on Demand-Side Resources: CAISO's Demand Reduction Programs
While established demand reduction programs can offset some anticipated supply, demand reduction efforts can not be dependably forecast or measured. Thus, there is low confidence in deferring emergency declarations based on uncertain and unmeasured demand responses. As individual demand metering progresses and demand programs become more widely practiced, the CAISO will consider heavier reliance on such measures in the declaration of emergencies.
While the CAISO has difficulty in forecasting or measuring demand reduction programs, it has experienced very significant conservation efforts that have assisted in averting firm load curtailments. Under some instances, the CAISO has experienced up to 11 percent of voluntary conservation in recent months.
Furthermore, interruptible load curtailments are currently associated with SCE's air conditioner cycling and agricultural pump load programs. There was approximately 2,800 MW of interruptible service available for use from the utility distribution companies (UDCs) for mitigation of emergencies; however, only 400 MW is available currently because of the following: 1) PG&E has exhausted their 500 MW curtailment of industrial load earlier this year; and 2) penalties can not be administered to 1,940 MW of contracted load in SCE's and SDG&E's industrial load programs due to CPUC's decision 01-01-056 dated Jan. 29,