Recent Experience in the CAISO Energy

Imbalance Market

Paul Wetherbee

Director, Energy Supply Merchant

September 15, 2017

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Agenda

• EIM Basics

• Lessons Learned

• Q & A

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EIM Basics

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EIM Basics: What an EIM is

• EIM stands for Energy Imbalance Market

• An EIM is an automated sub-hourly economic

optimization of loads and resources

• The market is operated by a Market Operator who

optimizes resources within the EIM footprint

• Market Participants voluntarily bid in resources and the

Market Operator runs an automated economic

dispatch every five minutes

• Only the most economic resources are dispatched

subject to transmission congestion

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EIM Basics: What an EIM is Not

• An EIM is not a Regional Transmission Organization

(RTO)• All participating balancing authorities maintain control of their assets

and associated reliability compliance obligations

• The EIM does not affect a balancing authority’s contingency reserve

obligations or reserve sharing agreements

• An EIM does not require that parties consolidate

balancing authority areas

• EIM Participants are not required to bid• Participants voluntarily make available generation resources that will

be optimized to balance load and generation every five minutes

across the EIM footprint

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EIM Basics: How an EIM Works

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Lessons

Learned, so far

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Lesson 1 – Diversity of Connections is Key

• PSE is directly connected to PACW but one step removed from

CAISO.

• PACW dedicates transmission to connect to CAISO which results

in payments for congestion

Market Performance Average Hourly Imports to PACW

(October-December 2016)

From DMM’s Q4 2016 Report on Market Issues and Performance

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Diversity of Load and Resources +

Connectivity = Benefits

IPCO has great connectivity to PACE,

PACW, NVE

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Lesson 2 – PSE Thermal Operations are

changing

• More cycling of combined cycle plants

• More runtime for simple cycle plants

• Better understanding of operational and maintenance

costs

• Flexibility of plants is valuable

• Lower PMINs

• Higher PMAX

• Faster startup times

• Shorter minimum runtimes

• A/S capabilities

• Ramp rate

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Example Plant Operations

as EIM Participating

Resource

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Lesson 3: Flexible Hydro is Valuable

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Lesson 4 – CAISO is Impressive but not

Perfect

Areas for Improvement

• VER and load forecasting accuracy and processing time is area for improvement

• Improvements desired for MSG modeling

• Flexible ramping test methodology may require revisions

• Balancing test doesn’t take into account startup MWs

Positives

• CAISO daily report review and informative stakeholder process

• Turnaround is quick for submitted requests and questions

Key Takeaways

• Collaborate with CAISO and other EIM entities through forums and stakeholder process

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Lesson 5 – Get smart and nimble to deliver

results

• Operational excellence in EIM requires the right

people, tools, and strategies to deliver results

• Level of sophistication is rising steadily as PSE SMEs are

emerging in all areas.

• EIM team is applying analysis and collaboration to come up

with solutions. Recent examples include:

✓Root cause analysis and mitigation for Front Office

balancing test failures.

✓Regulation allocation algorithm by Load Office.

✓Revamped cost analysis for participating resources by

engineers, thermal asset management, Front Office

analysts.

✓Data analysis tool implementation by IT group.

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Questions