1. Updates on Energy Imbalance Market in the West, and CAISO Outage Management System
Presentation to WECC Market Interface Committee
March 24, 2015
Jim Price, Senior Advisor, Market Development & Analysis, CAISO

2. Update on Outage Management System (OMS)
Affects entities with reporting obligations to CAISO
Purposes include management of increasing numbers of outage requests, management of complex outages, process efficiency, detailed reporting
For more detail:
Effective date 2/26/2014 for market participants
ISO completed the migration of all users
Historical data remained in SLIC on read-only basis

3. Update on Energy Imbalance Market
Previous MIC briefings presented details of Energy Imbalance Market: 7/2013, 10/2013, 3/2014, 7/2014, 10/2014
Status of Energy Imbalance Market Implementation:
Full operation with PacifiCorp: 11/1/2014
Benefits analysis confirms pre-implementation study
NV Energy operational 10/1/2015
NVE filed their OATT revisions 3/6/2015
Puget Sound Energy operational 10/1/2016
Phase 1 EIM Enhancements proposal to Board: 3/26/2015
EIM Transitional Committee stakeholder process on EIM governance
Issued issue paper 1/5/2015 and straw proposal 3/19
Next meeting: 3/31

4. Energy Imbalance Market offers real-time market functions to broader region
Builds on existing market: automated dispatch resolves imbalance & avoids congestion
Situational awareness enhances reliability
No critical mass required, and no exit fees
Easily scalable, low-cost, low risk option for new participants
Preserves BAA autonomy, including compliance, balancing, and reserve obligations

5. 15-minute transfers between PacifiCorp and ISO

6. EIM is projected to provide significant net benefits
ISO/
PacifiCorp study (in millions)
NV Energy study on incremental benefits
(in millions)
Puget Sound Energy study on incremental benefits
Annual benefits
$ $129.0
$9.0 - $18.0 (2017)
$ $29.0 (2022)
$ $24.3 (sub-hourly dispatch & flexibility reserve)
Start-up costs
approx. $ ($2.5 to ISO)
approx. $ ($1.10 to ISO)
approx. $14.2
Annual on-going costs
approx. $3.00
($1.35 to ISO)
approx. $2.60
($0.75 to ISO)
approx. $3.5
Benefits tracking will include savings from:
Reduced flexibility reserves
Re-optimization in real-time with least cost generation
Reduced renewable energy curtailment by leveraging geographical diversity of loads and resources in the market footprint

7. Method of calculating actual benefits
COMPARE:
Cost of the EIM optimized dispatch
Transfers in15 minute market
Excludes benefits from 5 min. market and flexible ramping
TO:
Counterfactual cost of dispatch without EIM optimization
Without intra-hour transfers between PacifiCorp and ISO that would not occur but for the EIM.

8. Results for 4th Quarter 2014 are consistent with pre-implementation benefit analysis and are reasonable
BAA
November
December
Total
ISO
$0.65
$0.59
$1.24
PACE
$1.05
$1.26
$2.31
PACW
$1.39
$1.03
$2.42
$3.09
$2.88
$5.97
Benefits reflect:
More efficient dispatch, both inter and intra-regional in the 15-minute market
Reduced renewable energy economic or manual curtailment
Subsequent reports will quantify the reduced flexibility reserves needed by both BAAs and 5-minute dispatch benefits

9. EIM prices stabilized after November 14
15-minute Market Aggregate Price, PAC West
15-minute Market Aggregate Price, PAC East
Waiver effective
Waiver effective

10. Main causes for MW undersupply infeasibilities
Outages, derates/rerates management
Timely informing the market about out-of-market actions impacting energy balance
Wind forecast accuracy and managing wind deviations
Data and software issues
Within the hour interchange schedule variations
Load forecast variation and load biasing coordination
Network and resources model discrepancies
5 minute rate of change constraint on some BPA transmission interfaces
Waiver of pricing rules lets prices be set by economic bids rather than constraint violations – effective 11/14/2014 through refund date for continuing FERC process to examine these transitional issues

11. EIM year one enhancements are proposed for Board approval March 26
Management of EIM Transfers and Intertie Scheduling Limits
GHG flag and cost based bid adder
EIM administrative charge redesign
Administrative pricing rules
Flexible ramping constraint BAA combinations
Settlement rules for non-participating resources
Phase 2 effort will consider transmission usage charges plus other enhancements

12. Governance proposal is designed to give regional entities a voice in decision-making
2014
2015
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Organize sectors nomination/ranking
Issue paper issued 1/5/2015,
Straw Proposal issued 3/19,
Next meeting 3/31
Board decision & committee start-up
Transitional Committee is an advisory committee to ISO Board
11-12 members
Open meeting policy
Advise on early operational phase of EIM
Develop long-term EIM governance proposal
Long term governance structure
Stakeholder process
Board approval of governance proposal

13. Resources available for EIM
CBT - Introduction to the Energy Imbalance Market
This Computer Based Training provides a high level overview of the Energy Imbalance Market
CBT - How the Energy Imbalance Market Works –
This Computer Based Training describes the roles and responsibilities of the key players in EIM and the business processes that will take place.
EIM Stakeholder processes
EIM Business Process Manual
Imbalance Market

14. EIM is operational and producing intended benefits for customers