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CAISO board OKs proposal to lower demand response barriers

From the August 8, 2017 issue of Public Power Daily

Originally published August 7, 2017

By Peter Maloney
Contributing Writer

The board of governors of the California Independent System Operator on July 26 approved a proposal that would lower barriers for the participation of demand response in the state’s wholesale power market.

The CAISO board also agreed to a recommendation from the ISO’s management that would make permanent temporary restrictions on natural gas use by power generators that were put in place after the Aliso Canyon gas leak discovered in October 2015.

The proposal approved by the CAISO board gives DR providers three new performance evaluation methods. Providers sought the new evaluation methodologies in order to better reflect the performance of different types and configurations of demand response.

The existing tariff only provides a day-matching customer load baseline performance evaluation methodology that has to be used for all providers, from residential to industrial.

Stakeholders felt that methodology was not robust enough to match how DR was actually being used, so CAISO is adopting three new classes of baseline performance evaluation methodologies. They are a control group methodology, a weather-matching methodology, and a day-matching methodology applicable for retail customers.

The existing methodology looks back at customer load for 10 similar days to establish a baseline. Proxy demand resources and reliability demand response resources are then compensated based on their performance relative to that baseline.

CAISO says tests have proven that the day-matching methodology is accurate for many medium and large commercial and industrial customers, but does not “perfectly capture” the performance of smaller resources. In response, a CAISO stakeholder group came up with the three new methodologies.

The control group methodology evaluates the energy consumption of similar but non-participating customers to establish a baseline of what load patterns would have been absent the dispatch.

The new retail customer day-matching methodology estimates what electricity usage would have been absent dispatch, relying exclusively on usage data from dispatched customers and uses the load patterns from a subset of non-event days to estimate the baseline for the dispatch day.

The weather-matching methodology uses the load patterns with the most similar weather conditions during a subset of non-event days to estimate the baseline for the dispatch day.

Gas usage limits

In a separate action, CAISO’s board agreed to make gas usage limits permanent. Citing “continuing restrictions on using the Aliso Canyon gas storage facility,” CAISO made permanent gas constraints that were set to expire Nov. 30, 2017. One of those measures limits the amount of gas power generators can burn during gas supply shortages.

For example, if four generators were each burning 25 million British thermal units, and the gas company was trying to balance generation burn schedules and supply, the gas constraint would tell the generators to burn no more than their schedules.

Those restrictions have proved to be very effective at reducing the risk of power supply interruptions, so they are being made permanent, said CAISO spokesman Steven Greenlee. The limits also provide an alternative to jeopardizing the curtailment of residential gas customers, he said.

On July 19 the California Public Utilities Commission increased the limits on how much gas can be injected into the Aliso Canyon facility. Aliso Canyon has a total storage capacity of 86 billion cubic feet of gas, but capacity was lowered to 15 Bcf after the leak was discovered. The CPUC has now cleared Aliso Canyon to inject gas up to 28% of the facility’s capacity.


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