UNITED STATES OF AMERICA

FEDERAL ENERGY REGULATORY COMMISSION

Before Commissioners: Joseph T. Kelliher, Chairman;

Nora Mead Brownell, and Suedeen G. Kelly.

+--------------------------------------------+----------+-------------+
| California Independent System              | Docket   | ER          |
|                                            | No.      | 98-3760-000 |
| Operator Corporation                       |          |             |
+--------------------------------------------+----------+-------------+

ORDER ADDRESSING OUTSTANDING ISSUES RELATING TO CALIFORNIA

INDEPENDENT SYSTEM OPERATOR CORPORATION

(Issued June 7, 2006)

**[Introduction and Background]{.underline}**

1.  On July 15, 1998, the CAISO submitted a proposed \"Clarification\"
    amendment to the CAISO\'s open access transmission tariff (CAISO
    Tariff), which contained, among other things: (1) a clarification
    matrix listing numerous corrections and changes to its Tariff;
    and (2) a matrix listing 230 issues which were raised by intervenors
    in prior proceedings but remained unresolved or pending before the
    Commission. The CAISO proposed a procedure to address issues that
    were raised, but not addressed, in connection with previous ISO
    filings.

2.  In *California Independent System Operator Corp.*,[^1] the
    Commission directed the CAISO and the parties to develop a list of
    all active issues, to negotiate resolutions with respect to as many
    of these issues as possible, and to file a report with the
    Commission within 120 days of the date of the order. The Commission
    directed that the report include a stipulation of outstanding issues
    that had been resolved through settlement, and issues that remained
    for resolution by the Commission.

3.  On March 11, 1999, the CAISO filed its \"Outstanding Issues
    Report,\" which included a matrix of approximately 680 issues that
    the parties had raised in several ISO-related proceedings.[^2] From
    this universe of issues, the report identified issues that had been
    resolved and issues that participants agreed were ripe for
    Commission resolution. Further, the CAISO report included procedural
    proposals agreed upon by the participants to (1) submit a settlement
    for resolved issues and (2) undertake to resolve the remaining
    issues.

4.  In an April 28, 1999 Order, the Commission established procedures to
    incorporate resolved issues into a settlement and directed the CAISO
    to file a joint statement of issues identifying unresolved issues
    and identifying the proponents who advocate a change in the status
    quo for each issue.[^3] On January 4, 2000, the CAISO filed a Joint
    Statement of Issues in which the parties identified the Outstanding
    Issues that remained to be litigated. The Joint Statement of Issues
    grouped the issues under alphabetical headings: Issue A (issues
    concerning ancillary services) through Issue O (rehearing issues).
    The parties filed initial briefs (on February 14, 2000), answering
    briefs (on April 10, 2000) and reply briefs (on May 8, 2000).

5.  The parties to this proceeding previously intervened in the
    proceedings cited in footnote 2 of this order. Appendix A to this
    order lists the full names of the parties and their abbreviated
    names as used in this order. In the body of this order, we refer to
    the parties by their abbreviated names.

6.  By order issued on November 22, 2002, the Commission addressed
    outstanding rehearing requests, and it stated that remaining
    Outstanding Issues would be addressed in future Commission orders
    and may be subject to further procedures.[^4]

7.  In a letter to the CAISO, dated March 11, 2003, the Commission staff
    noted the passage of time and the significant changes in the
    operations of the CAISO, and it requested that the CAISO work with
    the parties to identify which of the Outstanding Issues remain open
    and contested, and thus, require a Commission determination. On
    October 16, 2003, the CAISO filed an updated Identification of
    Outstanding Issues, including the proponents of each issue. By order
    issued on November 19, 2004 (*November 19 Order*),[^5] the
    Commission addressed Outstanding Issues concerning ancillary
    services requirements, market monitoring, metered subsystems and
    metering protocols, and it dismissed a range of other issues as moot
    or withdrawn.[^6]

8.  In the meantime, the CAISO, with guidance from the Commission, has
    been involved in a stakeholder process to comprehensively redesign
    the CAISO market. On September 22, 2005, the CAISO filed
    non-substantive, organizational changes to the CAISO Tariff. The
    purpose of those changes was to transform the CAISO Tariff into a
    more straightforward and transparent document and establish a more
    workable tariff structure for the CAISO to, in turn, revise the
    CAISO Tariff to reflect its planned Market Redesign and Technology
    Upgrade (MRTU).[^7] On February 9, 2006, in Docket No. ER06-615-000,
    the CAISO filed proposed MRTU revisions to the CAISO Tariff. The
    proposed effective date for the MRTU revisions is November 1, 2007.
    The MRTU proceeding is pending.

9.  In this order, we address several of the remaining Outstanding
    Issues. These issues concern outages, portfolio bidding, scheduling,
    settlements, transmission pricing and losses, the Transmission
    Control Agreement, and the dispatch protocol.[^8] The proponents and
    their abbreviated names are listed in Appendix A to this order. We
    note that several of the Outstanding Issues raised by proponents
    concern CAISO Tariff provisions that would be deleted under the
    proposed MRTU revisions as no longer relevant under the CAISO's
    market redesign or would be superseded by proposed provisions.
    Because the MRTU filing grew out of an extensive stakeholder
    process, we regard it as a significant change in circumstances since
    the Outstanding Issues were briefed. Here, we summarily dismiss a
    number of issues since they have been/or will be addressed in the
    MRTU proceeding.[^9] These issues are identified in Appendix B.
    Where proponents of these issues still have concerns, it is more
    appropriate to raise such concerns in the MRTU proceeding.

    **[Discussion]{.underline}**

**[Issue G - Outages]{.underline}**

> **G.2. [May parties challenge the CAISO's reasons for rejecting a
> requested maintenance outage or requested change to an Approved
> maintenance outage provided pursuant to section 2.3.3.5.3 of the CAISO
> Tariff (renumbered as section 9.3.6.8 in the current
> tariff),]{.underline}**[^10] **[and does the CAISO's amendment to
> section 2.3.3.5.3 properly implement the directive from the *October
> 1997 Order*?]{.underline}**

10. Under the CAISO Tariff, the CAISO, acting through the CAISO Outage
    Coordination Office, has the duty to coordinate and approve all
    maintenance outages of facilities in the CAISO Controlled Grid. As
    originally proposed, the CAISO Tariff would have allowed the CAISO
    to reject any requested maintenance outage that it considered likely
    to have a detrimental effect on the efficient use and reliable
    operation of the CAISO Controlled Grid. In their protest of the
    original filing, Southern Cities contended that an operator obliged
    to comply with an ISO order under section 2.3.3.5.3 should be able
    to call on the CAISO to justify its instructions after the fact. The
    *October 1997 Order* interpreted Southern Cities' protest as "simply
    \[a\] request that the \[o\]perator be allowed to call on the CAISO
    to explain its instructions after the fact," rejected the CAISO's
    argument that such a provision would undermine the CAISO's
    authority, and directed the CAISO to amend section 2.3.3.5.3 to
    allow an operator to request an after-the-fact explanation of ISO
    instructions.[^11] The CAISO revised section 2.3.3.5.3 to do so, but
    the CAISO's revision further provided that such explanation would be
    "for informational purposes only and without affecting in any way
    the finality or validity of the determination."

11. The proponents[^12] oppose the informational-only scope of the
    CAISO's after-the-fact explanations of its rejections of maintenance
    outage requests. They argue that, on an after-the-fact basis, the
    operator should be able to contest the validity of the CAISO's
    instruction through the alternative dispute resolution process to
    provide a mechanism to correct any inappropriate actions regarding
    maintenance outages. They assert that an explanation serves no
    purpose if it cannot provide a basis for resolution of a dispute
    over whether ISO instructions were appropriate or serve as guidance
    for future determinations. They argue that an explanation for
    informational purposes only would not be binding on the CAISO and
    that operators would not know if they could rely upon the CAISO's
    explanation in similar circumstances in the future, thus adding
    uncertainty to the CAISO's policies and practices. They also express
    concern that if an operator pursued remedies under the CAISO Tariff
    or before the Commission, the CAISO would be free to change its
    explanation in such a proceeding. They also argue that the *October
    1997 Order* does not state that the CAISO's explanations shall be
    for informational purposes only.

12. The CAISO responds that section 2.3.3.5.3 does not limit the flow of
    useful information between operators. It also asserts that it
    remains willing to consider whether, on a prospective basis, it
    needs to change the policies and circumstances under which it
    cancels or reschedules planned transmission maintenance outages.
    Further, the CAISO asserts that the tariff language does not prevent
    an entity that questions the validity of an ISO order from pursuing
    remedies available under the CAISO Tariff or before the Commission.

    **[Commission Determination]{.underline}**

13. As noted above, the *October 1997 Order* interpreted Southern
    Cities' protest as simply a request that the CAISO provide an
    after-the-fact explanation of its actions upon request by an
    operator, and no party challenged that interpretation on rehearing
    of the *October 1997 Order*. Further, the *October 1997 Order* did
    not, either in response to Southern Cities' protest or on its own
    motion, direct the CAISO to establish new procedures to allow an
    operator to make an after-the-fact challenge to an outage
    determination. In directing the CAISO to revise section 2.3.3.5.3 to
    allow an operator to request an after-the-fact explanation, the
    Commission found that such a provision would allow the flow of
    useful information between operators.[^13] That is all that the
    *October 1997 Order* required, and the CAISO has complied with the
    directive. If proponents are dissatisfied with the CAISO's
    explanations, they may pursue remedies under the CAISO Tariff.

**[Issue H - Portfolio Bidding]{.underline}**

> **H. [Does the CAISO's prohibition of portfolio bidding for
> inter-zonal access, ancillary services, and supplemental energy
> discriminate against in-area non-incumbents and create inefficiencies
> in the market?]{.underline}**

14. CAISO Tariff section 2.2.11 (information to be submitted by
    scheduling coordinators to the CAISO) and, in particular, section
    2.2.11.2.2,[^14] does not allow for portfolio bidding and requires
    that only location-specific resources and loads be used in the
    bidding process through which inter-zonal transmission rights are
    acquired. Proponents,[^15] the CAISO and the California Commission
    agree that they do not want the Commission to make a merits
    determination concerning the portfolio bidding issue pending the
    outcome of the CAISO's congestion management process. In the MRTU
    proceeding, the CAISO proposes to delete section 30.2 of the CAISO
    Tariff as superseded by a proposed new MRTU bid submission process.
    Therefore, we dismiss Issue H from the Outstanding Issues
    proceeding.

    **[Issue J - Scheduling]{.underline}**

    **J.1 [Should the Schedules and Bids Protocol (SBP) 2.3 temporary
    requirement that scheduling coordinators schedule and bid within the
    physical capability of their generating units be made permanent, or
    should this requirement be eliminated?]{.underline}**

15. The CAISO adopted this provision on a temporary basis in Amendment
    No. 6, because it was concerned that there were inadequate economic
    incentives to counteract imbalances that may result from
    implementing the sub-hour settlement period in stages. The CAISO
    also stated that it would propose to replace the temporary provision
    with permanent measures to improve reliability when it filed a
    comprehensive tariff amendment implementing a sub-hour settlement
    period pursuant to the CAISO staging plan.

16. In its initial brief, Metropolitan argues that the protocol should
    be made permanent. Metropolitan is concerned that not requiring
    scheduling coordinators to submit realistic schedules creates
    opportunities for gaming, exacerbating the CAISO's intra-zonal
    congestion management problems. It also expresses doubt as to
    whether stakeholders would support the CAISO's new proposal. The PX
    withdrew its request to eliminate the temporary provision, stating
    that its concerns were addressed by the CAISO's adoption of a
    ten-minute settlement period.[^16]

17. In its answering brief, the CAISO argues that, to address market
    incentives for uninstructed deviations, it would propose 10-minute
    settlements of uninstructed imbalance energy. According to the
    CAISO, this will allow more accurate and timely price signals
    regarding the imbalance energy market. The CAISO argues that further
    consideration of Issue J.1 should take place in the context of the
    CAISO's filing of its 10-minute settlement proposal. In its reply
    brief, filed after the CAISO submitted the proposal (Amendment No.
    29), Metropolitan disagrees that the CAISO's 10-minute settlement
    proposal addresses its concerns.[^17]

    **[Commission Determination]{.underline}**

18. In Amendment No. 29 to the CAISO Tariff, the CAISO settles
    scheduling coordinators' obligations in the imbalance energy
    real-time market on a 10-minute basis rather than hourly. SBP 2.3
    currently contains the requirement that scheduling coordinators for
    generators schedule and bid within the physical capability of their
    generating units. Thus, Metropolitan's concern that the requirement
    remains in the CAISO Tariff is satisfied. If the CAISO proposes to
    remove or amend the requirement in SBP 2.3 in the future, we would
    examine such a proposal at that time. Since SBP 2.3 remains in the
    CAISO Tariff, we need not address whether the adoption of 10-minute
    settlements would, in lieu of SBP 2.3, satisfy Metropolitan's
    concern.[^18]

    **J.3. [Has the CAISO unreasonably delayed establishing more than
    one scheduling coordinator at a single meter?]{.underline}**

19. The original CAISO Tariff did not permit market participants to
    utilize more than one scheduling coordinator and prohibited more
    than one scheduling coordinator from using a single meter. In the
    *October 1997 Order*, the Commission directed the CAISO to
    coordinate with all interested scheduling coordinators to develop
    rules for allocating trades through a single meter.[^19] The CAISO
    sought rehearing, which is pending and which we address here. The
    CAISO also submitted a compliance filing to amend the CAISO Tariff,
    as directed by the Commission. However, the CAISO has not revised
    its protocols or developed software to allow more than one
    scheduling coordinator at a single meter.

20. Proponents[^20] argue that the CAISO, in its staging plan, committed
    to enable multiple scheduling coordinators at a single meter but did
    not project a date for implementation. They further argue that this
    issue is a high priority among market participants, but the CAISO's
    failure to develop the necessary software hinders the move away from
    existing protocols.

21. The CAISO argues that when it polled market participants in 1999,
    enabling market participants to utilize multiple scheduling
    coordinators was not identified as a priority. Further, the CAISO
    argues that modifying its systems as proposed by proponents would be
    complex and extremely costly, with the costs being borne by all
    market participants while benefiting only a few particular entities.
    It does not believe that the benefits justify the costs. The CAISO
    also contends that there are other, more cost-effective ways to
    associate the dispatch of a generator with two or more accounts that
    would be potentially more robust than the software changes requested
    by proponents. It offers two examples. First, there could be a
    contractual agreement among two or more participants whereby the
    single invoice rendered by the CAISO for that meter can be allocated
    among them as they wish. Second, they could enter into an agreement
    to allocate billing and settlement responsibility while still
    utilizing one scheduling coordinator for the meter.[^21] The CAISO
    argues that a similar result could be achieved via inter-scheduling
    coordinator trades. The CAISO requests that the Commission permit
    the CAISO to continue with other higher priority modifications to
    the Tariff and instead allow the CAISO to evaluate the best approach
    for achieving the results desired by proponents, with a report due
    to the Commission on the results of its evaluation.

    **[Commission Determination]{.underline}**

22. The CAISO effectively prohibits multiple scheduling coordinators at
    a single meter by virtue of not having developed the software
    necessary to implement the corresponding Tariff revision ordered by
    the Commission. The CAISO's argument that market participants do not
    place a high priority on this issue, a position disputed by
    proponents, is misplaced. The Commission determined that it was a
    high priority for the CAISO to have this capability in place. It
    stated:

    We agree with BPA, ECI and others that the ISO should permit
    Eligible Customers to be represented by more than one Scheduling
    Coordinator. As recognized by the ISO/PX, an entity could
    potentially trade through one or more non-PX Scheduling Coordinators
    in the bilateral market to secure most of its energy requirements
    and also purchase stand-by or any additional requirements through
    the PX, which is another Scheduling Coordinator. We recognize that
    for many Market Participants, the ability to trade through more than
    one Scheduling Coordinator is an essential feature that will enable
    them to efficiently procure and utilize various resources. However,
    as noted by the ISO, the ability of a customer to utilize more than
    one Scheduling Coordinator depends on the development of the proper
    software and development by Scheduling Coordinators of rules for the
    allocation of trades through a single meter. Consistent with our
    earlier discussion, we require the ISO to inform us on the progress
    of the software development. To the extent that the ISO anticipates
    that the software will not be ready by the start of the ISO
    operations, the ISO should promptly notify the Commission and
    request whatever extensions are necessary. In addition, we direct
    the ISO to coordinate efforts with all interested Scheduling
    Coordinators in the development of rules for allocating trades
    through a single meter. . . . We emphasize that we consider the
    development of the necessary software and trade rules to be a
    critical priority of the ISO that should be accomplished in as quick
    a time frame as possible.\[[^22]\]

23. Further, while the Commission acknowledged that the CAISO would have
    to develop the software to implement the Tariff modification, there
    has been time for the CAISO to have made progress on this issue.
    Therefore, we direct the CAISO to address this issue with
    stakeholders, either to develop the software necessary to implement
    the Tariff revision ordered by the Commission or to propose
    alternatives. We further direct the CAISO to provide the Commission
    with a report on its progress in addressing this issue within three
    months of the date of this order. Such report should also include
    the CAISO's timeline for addressing the issue.

    **[Issue K - Settlements]{.underline}**

    **K.1. [Are the review and notification of errors periods for
    preliminary settlement statements reasonable?]{.underline}**

24. Section 11.6.1.2 of the CAISO Tariff[^23] allows a period of eight
    days from the issuance of a preliminary settlement statement for a
    scheduling coordinator to notify the CAISO of any errors. The
    proponents[^24] express concern that the CAISO could treat the
    provision as requiring a scheduling coordinator to bring a dispute
    to the CAISO within eight days instead of another, longer period
    that may be permitted under the Tariff. The proponent, Cities/M-S-R,
    originally requested that section 11.6.1.2 be amended to include the
    following provision: "A failure to identify a billing error in no
    way affects a Scheduling Coordinator's right to challenge a bill
    until the expiration of any relevant statute of limitations." In its
    answering brief, SDG&E supports this position.

25. Amendment No. 22 to the CAISO Tariff included a provision that a
    scheduling coordinator would have ten days from the issuance of a
    final settlement statement to notify the CAISO of any errors. In
    that proceeding, Cities/M-S-R expressed the same concern with
    respect to the final settlement statement process that they express
    here with respect to the preliminary settlement statement process.
    The Commission accepted the CAISO's proposal, determining that
    "\[t\]he ten-day final bill validation period does not represent a
    'statute of limitations,' as feared by Cities/M-S-R, since the
    tariff provides Scheduling Coordinators with the ability to bring a
    dispute before the CAISO Governing Board at any time."[^25] In their
    reply brief, Cities/M-S-R argue that the Commission's determination
    concerning Amendment No. 22 validates their position and urge the
    Commission to make a similar holding here regarding the preliminary
    bill validation period. SDG&E further asserts that adoption of the
    requested additional language is necessary because, in SDG&E's
    experience with the CAISO, the CAISO has treated the bill validation
    period as a statute of limitations for disputing bills.

    **[Commission Determination]{.underline}**

26. We find here, as we previously found with regard to the ten-day
    final bill validation period,[^26] that the ten-day preliminary bill
    validation period does not represent a statute of limitations
    regarding billing disputes since the tariff allows scheduling
    coordinators to bring disputes before the CAISO Governing Board at
    any time. We deny SDG&E's request to require the CAISO to reflect
    this determination in the CAISO Tariff as unnecessary since SDG&E
    seeks such relief based only on its unsubstantiated allegation that
    the CAISO has not abided by the Commission's previous determination
    regarding the final settlement validation period. SDG&E does not
    indicate that it filed a complaint concerning its allegation, and we
    are unaware of it having done so. The CAISO is obligated to act in
    accordance with its Tariff as interpreted by the Commission. Thus,
    revising the Tariff to expressly reflect our determination here is
    unnecessary.

    **[Issue L -- Transmission Pricing and Losses]{.underline}**

    **L.3. [With respect to the CAISO's neutrality
    adjustment]{.underline}:**

    **L.3.a. [Is the CAISO's neutrality adjustment sufficiently defined
    and should it be included as a formula rate in the CAISO
    Tariff?]{.underline}**

    **L.3.b. [Should there be a cap on the amounts that can be
    collected?]{.underline}**

    **L.3.c. [What items are properly included in the neutrality
    adjustment?]{.underline}**

    **L.3.d. [How should the charges be allocated?]{.underline}**

27. The neutrality adjustment (section 11.2.9 of the current CAISO
    Tariff) provides a mechanism to recover five specific categories of
    costs (or payments of credits), which are not covered in other parts
    of the CAISO's Tariff, enabling the CAISO to maintain a
    revenue-neutral position.

28. Joint proponents[^27] challenge the neutrality adjustment, as it was
    proposed by the CAISO in Amendment No. 6. They argue that the
    neutrality adjustment should not be accepted as a formula rate in
    the tariff. They argue that data inputs for formula rates must be
    easily identifiable and verifiable, but the CAISO's data inputs
    either constitute, or are developed from, data held by the CAISO.
    They claim that the CAISO has refused to disclose to stakeholders
    the components of the charges and how they are calculated. However,
    if formula rate treatment is allowed, proponents believe that there
    should be a cap of 2 mills/kWh, and that the CAISO should be
    required to make a filing with the Commission to recover amounts
    above the cap. Proponents also oppose the proposed allocation of
    charges, arguing that a more refined methodology is needed. They
    urge that the CAISO be required to prepare a report on the
    neutrality adjustment and its proposed allocation of those charges.
    Proponents also seek to exclude unaccounted for energy (UFE)-related
    costs[^28] from the adjustment with respect to municipal utilities
    to avoid improper UFE charges that arise from retail service outside
    their systems.

29. The CAISO responds that the neutrality adjustment is a reasonable
    means of settling cash imbalances. Further, it cites its
    then-proposed Amendment No. 27 to cap the charge. In addition, it
    states that the CAISO has already committed to study potential
    actions that can be taken to reduce the neutrality adjustment.

    **[Commission Determination]{.underline}**

30. Issues concerning the CAISO Tariff's neutrality adjustment
    provisions have been resolved or superseded by subsequent changes to
    the neutrality adjustment provisions in subsequent proceedings.
    Specifically, in the CAISO's Amendment No. 27, the neutrality
    adjustment charge was capped at \$.095/MWh.[^29] The cap is
    reflected in section 11.2.9.1 of the S&R Tariff. This resolves
    Issues L.3.b.

31. Regarding Issues L.3.a and L.3.c, the Commission directed the CAISO
    to file a report detailing its neutrality adjustment charges. The
    CAISO filed a report, and the Commission accepted it.[^30] The
    proceeding concerning the CAISO's report provided a forum for
    parties to raise issues concerning the definition of, and the items
    properly included in, the neutrality adjustment charge, and no
    further consideration of those issues is necessary here. Therefore,
    Issues L.3.a and L.3.c have been resolved.

32. With respect to the UFE cost issue, the 2002 Rehearing Order
    required the CAISO to revise the CAISO Tariff to reflect that all
    market participants with revenue-quality meters at ISO take points
    should be allowed to pay their own UFE calculated separately with
    data from their own meters.[^31] In a July 25, 2003 order, the
    Commission accepted the CAISO's compliance filing.[^32] Thus, the
    UFE cost issue, Issue L.3.d, has been resolved.[^33]

33. Accordingly, we dismiss Issue L.3.

    **L.5. [Do UFE charges comport to the CAISO Tariff? Should the CAISO
    Tariff be clarified or revised?]{.underline}**

34. The remaining proponent on this issue is PG&E.[^34] PG&E previously
    objected to the CAISO's loss calculation methodology, which was an
    input to the UFE allocation among utility distribution companies.
    PG&E acknowledges that the CAISO's Amendment No. 22 to the CAISO
    Tariff addressed its objection to its satisfaction. However,
    Amendment No. 22 became effective prospectively only, and PG&E
    expresses concern about the accuracy of UFE charges for the
    retroactive period before Amendment No. 22 became effective - from
    April 1, 1998 through February 1, 2000. Southern Cities answers that
    PG&E's argument is a collateral attack on the Commission's
    determination in its order addressing Amendment No. 22 that any
    changes that result from the *Unresolved Issues Proceeding* would be
    applied prospectively only.

    **[Commission Determination]{.underline}**

35. We dismiss PG&E's argument here as an improper collateral attack on
    our prior determination that rejected the same argument. In the
    order on Amendment No. 22, the Commission stated in pertinent part:

    \[B\]ecause the instant filing incorporates aspects of the loss
    formula that are pending in the Unresolved Issues proceeding in
    Docket No. ER98-3760-000, and because that proceeding may result in
    revisions to the current formula, the methodology approved herein
    will remain subject to the outcome of that proceeding. *Any changes
    that result from that proceeding will, however, be applied on a
    prospective basis only*.\[[^35]\]

    The Commission denied PG&E's request for rehearing on this issue,
    reaffirming its decision that it would not retroactively apply any
    changes in the methodology.[^36] Accordingly, Issue L.5 has been
    resolved, and we dismiss it.

    **L.6. [With respect to Settlement and Billing Protocol, Appendix A,
    section 3.2, should "metered consumption" be changed to "metered
    Demand"?]{.underline}**

36. SMUD raises an objection regarding the calculation of the Grid
    Management Charge in Appendix A of the Settlement and Billing
    Protocol. Specifically, SMUD argues that the phrase "monthly metered
    consumption" should be changed to "monthly Demand," because it is
    uncertain what is included in "consumption." The CAISO responds that
    the Grid Management Charge formula, included in Appendix F of the
    CAISO Tariff, provides the definition of "monthly metered
    consumption." The CAISO further argues that the definition is part
    of the specific terms that were agreed upon as part of the Grid
    Management Charge settlement that the Commission approved in Docket
    No. ER98-211-000, *et al*.[^37]

    **[Commission Determination]{.underline}**

37. In the current Tariff, the Settlement and Billing Protocol is
    designated as Appendix N. The MRTU filing indicates that the CAISO
    plans to update Appendix N. If SMUD continues to have the same
    concerns regarding settlement and billing, then it may raise such
    issues in the MRTU proceeding. Accordingly, we dismiss Issue L.6.

    **L.7. [Should the less costly alternatives to transmission
    expansion identified in CAISO Tariff section 3.2.1.2 be priced at
    the greater of a cost-based rate or the revenues foregone (i.e., the
    opportunity cost) in providing them?]{.underline}**[^38]

38. The proponent, DWR, requests that we not decide this issue in the
    Unresolved Issues proceeding, but instead allow the issue to be
    addressed through the stakeholder process. DWR also requests that
    the Commission provide certain guidance to the CAISO in its
    consideration of the issue, *i.e*., that the CAISO make the use of
    off-peak transmission rates the top priority for consideration. DWR
    believes that the CAISO's need for guidance from the Commission is
    shown by the CAISO's desire for more demand response and its
    confusion at the lack of demand response.

39. The CAISO opposes DWR's request for guidance as inappropriately
    limiting the scope of the stakeholder process and as contrary to the
    Commission's decision on Order No. 2000 not to dictate the outcome
    of RTO collaboration processes. The CAISO further argues that DWR's
    request is premature, because DWR will have an opportunity to
    participate in the stakeholder process and might be satisfied with
    the outcome of that process. The California Commission agrees that
    the issue should be addressed in the stakeholder process rather than
    in the Unresolved Issues proceeding.

40. We dismiss this issue from the Outstanding Issues proceeding in view
    of DWR's request to address the matter through the stakeholder
    process. However, we deny DWR's request to issue the requested
    guidance to stakeholders, so as to allow the matter to be addressed
    through the stakeholder process in the first instance.

    **L.8. [Is the CAISO's failure to permit discounting in its
    wheeling-out rates arbitrary and unreasonable, resulting in
    transmission service that is substantively worse than the quality of
    service contemplated in Order No. 888?]{.underline}**

41. When the CAISO originally submitted the CAISO Tariff, it explained
    that it might consider providing discounted transmission service in
    the future.[^39] The Commission denied intervenor requests to order
    the Tariff amended to permit discounting. With regard to a
    protester's concern that generators in the Southwest would be
    "trapped" in California absent discounts, the Commission also
    directed the CAISO to address the discounting issue in its future
    firm transmission rights proposal and in the alternative rate
    methodology proposal provided for in section 7.1.6 of the CAISO
    Tariff.[^40]

42. According to WPTF and Enron, the Commission declined to require the
    CAISO to offer discounting in the *October 1997 Order* to expedite
    the implementation of the CAISO. They assert that the CAISO has been
    involved in negotiating an alternative rate methodology pursuant to
    section 7.1.6, but it did not hold any stakeholder meetings on the
    issue of discounting of the wheeling-out charge. Instead, section
    7.1.4.1 of the CAISO Tariff continues to prohibit the CAISO from
    discounting. Proponents argue that this is unjust and unreasonable,
    and they request that the CAISO Tariff be revised to establish a
    price cap that can be discounted, consistent with the pro forma
    OATT.

43. According to WPTF and Enron, no social benefit is gained if
    generating and transmission capacity go unused because the CAISO is
    unable to sell wheeling services at discounted prices. Further, they
    contend that the lack of a discount locks generation in California,
    leading to artificially lower prices that deviate from an efficient
    market outcome. They also argue that permitting the CAISO to
    discount its access charge would put it on the same plane as other
    ISOs, citing NEPOOL and PJM as examples.[^41] They also argue that
    the CAISO's refusal to discount is inconsistent with the rate
    treatment accorded the CAISO for pricing ancillary services.[^42]

44. The CAISO and SCE challenge proponents' standing to raise this
    issue. They argue that because no party sought rehearing of the
    *October 1997 Order* on this issue, the Commission's determination
    became final. They also dispute proponents' arguments. The CAISO
    further argues that the issue is more appropriately addressed
    through the stakeholder process.

45. Proponents dispute that that they lack standing to raise this issue,
    but they also agree that the issue should be deferred pending the
    outcome of the stakeholder process.

    **[Commission Determination]{.underline}**

46. The *October 1997 Order* declined to require the CAISO to offer
    discounted transmission rates, stating:

    The Commission has never required that transmission providers offer
    discounted transmission rates for a particular service. Moreover,
    while the CAISO may elect to submit a discounting proposal in the
    future, we will not require the CAISO to do so at this time in light
    of the pressures and time constraints of implementing the CAISO. Any
    future discounting proposal will require balancing the interests of
    Transmission Owners, who may face a reduced contribution to their
    fixed transmission costs, and Generators, who may benefit from
    discounted transmission rates. However, the discretion as to whether
    to discount a transmission rate, and the extent of that discount is
    ultimately up to the Transmission Owner whose facilities will be
    utilized. Any such future discounting proposal must be made in the
    context of a Participating Transmission Owner's rate proposal
    because the CAISO is only responsible for collecting the revenue
    requirement.\[[^43]\]

47. In addition, in that order, the Commission rejected the protesters'
    argument that the CAISO's refusal to discount would lock in
    generation in California to the detriment of the market. Although
    WPTF and Enron claim to have standing to raise this issue, they do
    not state that they sought, nor do we see where they sought,
    rehearing of the *October 1997 Order* on the discounting issue.
    Consequently, we reject their argument as an untimely request for
    rehearing of the *October 1997 Order*. This decision is without
    prejudice to reexamination of the discounting issue in a stakeholder
    process.

    **[Issue M -- Transmission Control Agreement]{.underline}**

    **M.1. [Whether the CAISO properly complied with the requirement
    from the *October 1997 Order* to include in section 2.3.1.3.2 of the
    CAISO Tariff an adequate reference to section 5 of the Transmission
    Control Agreement (TCA) placing limits on the CAISO's ability to
    establish new reliability criteria?]{.underline}**

48. In the *October 1997 Order*, the Commission directed that section
    2.3.1.3.2 of the CAISO Tariff be revised:[^44]

    With regard to Western's concern that section 2.3.1.3.2 gives the
    \[CAISO\] too much discretion in fashioning new reliability
    criteria, we agree that this section should specifically reference,
    and be consistent with, section 5 of the \[TCA\]. Section 5.1.5 of
    the \[TCA\] provides that the \[CAISO\] will consult with
    Participating Transmission Owners and other Market Participants,
    through the \[CAISO\] Technical Advisory Committee, in developing
    and promulgating Applicable Reliability Criteria for the CAISO
    Controlled Grid.

49. In response, the CAISO revised section 2.3.1.3.2 to read "The CAISO
    may establish planning and Operating Reserve criteria more stringent
    than those established by \[the Western Systems Coordinating Council
    (WECC)\] and \[the North American Electric Reliability Council
    (NERC)\] or revise the Local Reliability Criteria subject to and in
    accordance with the provisions of the TCA." This provision has been
    renumbered as section 7.3.2 and reads as follows:

    The CAISO Governing Board may establish planning guidelines more
    stringent than those established by NERC and WECC as needed for the
    secure and reliable operation of the CAISO Controlled Grid. The
    CAISO may revise the Local Reliability Criteria subject to and in
    accordance with the provisions of the TCA.

50. Proponents Cities/M-S-R argue that the CAISO Tariff includes only a
    general reference to the TCA and that the CAISO has not complied
    with the Commission's directive. They request that the CAISO revise
    the Tariff specifically to require that the CAISO consult with
    participating transmission owners and other market participants
    through a stakeholder process. The CAISO responds that its revision
    already references subjects described in section 5 of the TCA and,
    thus, complies with the Commission's directive. Further, it contends
    that proponents do not identify any practical deficiency or
    confusion resulting from section 2.3.1.3.2. Therefore, the CAISO
    contends that there is no need to modify section 2.3.1.3.2 further.
    The CAISO also contends that the Commission did not require that
    section 2.3.1.3.2 specifically reference section 5.1.5 of the TCA.

    **[Commission Determination]{.underline}**

51. The *October 1997 Order* said to "*specifically reference*, *and* be
    consistent with, section 5" (emphasis added). The point of requiring
    that the Tariff refer to section 5 of the TCA was to emphasize that
    the provision for a consultation process provides a limit on the
    CAISO's discretion. Accordingly, we direct the CAISO to revise
    section 7.3.2 of the Tariff to change "in accordance with the
    provisions of the TCA" to read "in accordance with section 5 of the
    TCA."

    **[Issue N -- Other Issues]{.underline}**

    **N.2. [Whether Dispatch Protocol (DP) 3.8.1 and DP 3.9.1, which
    state that the CAISO will provide certain information regarding the
    status of the system to adjacent control areas, are unduly
    discriminatory and preferential by failing to make that information
    available to market participants?]{.underline}**

52. DP3.8.1 provides that information regarding changes in the status of
    an interconnection, changes in an interconnection's total transfer
    capability, and situations that could affect the reliability of an
    interconnection, is to be shared with the CAISO and adjacent control
    areas. In the current Tariff, DP 3.8.1 is redesignated as section
    34.3.6.6. DP3.9.1 provided that each existing operating entity was
    to report to the CAISO any change or potential change in
    transmission equipment status, or any change in the existing
    operating entity's transmission system that could affect grid
    reliability. However, the CAISO deleted DP3.9.1 from the current
    Tariff as unnecessary.

53. Dynegy states that the CAISO regularly collects information from
    neighboring control areas and existing operating entities under
    existing operating agreements (*e.g*., from SMUD) related to the
    status of their transmission systems. Dynegy argues that the
    information disclosed to the CAISO by adjacent control area
    operators and existing operating entities pursuant to the protocols
    is the type of information that is appropriately disclosed on OASIS.
    Dynegy further argues that disclosure of this information is also
    necessary to be consistent with the Commission's decision to require
    source and sink information in the short-term market to be posted on
    the OASIS. Dynegy argues that the information that the CAISO
    collects should be disclosed to the entire market, to promote the
    competitiveness of electricity markets and foster greater confidence
    in the integrity of OASIS systems.

54. The CAISO argues that Dynegy misunderstands the general requirement
    that the transmission function be unbundled from the wholesale sales
    function. It cites Order No. 889's[^45] provision for unbundling to
    "prevent abuses based on preferential access to information and
    other discriminatory behavior." It contends that the information
    described in DP 3.8.1 is a typical exchange necessary to promote
    reliable operation of interconnected systems.

    **[Commission Determination]{.underline}**

55. Section 37.6 of our regulations concerns information to be posted on
    the OASIS.[^46] It requires that the information posted on the OASIS
    must be in such detail and the OASIS must have such capabilities as
    to allow transmission customers to, among other things: (1) request
    transmission services offered by transmission providers, resellers,
    and other providers of ancillary services; and (2) clearly identify
    the degree to which transmission service requests or schedules were
    denied or interrupted. Section 37.6 also requires that the
    transmission capability that is expected to be available on the
    transmission provider's system and the total transmission capability
    be calculated and posted for each posted path. It also requires that
    posted information on constrained paths be updated when transactions
    are reserved or service ends or whenever the total transmission
    capability estimate for the path changes by more than ten percent.
    The CAISO's protocols must be consistent with the requirements of
    section 37.6 with regard to the information it posts concerning its
    own system. However, section 37.6 does not require the CAISO to
    collect for, and disclose to, its transmission customers information
    about neighboring transmission systems. To the extent that a
    potential transmission customer wishes to obtain the type of
    information about a transmission provider required under section
    37.6, it may go to the OASIS of that transmission provider.
    Therefore, we dismiss Issue N.2.

[The Commission orders]{.underline}:

The Outstanding Issues are hereby addressed, as discussed herein.

By the Commission.

( S E A L )

Magalie R. Salas,

Secretary.

**APPENDIX A**

**Parties that Filed Briefs Individually or Jointly**

Public Utilities Commission of the State of California (California
Commission)

California Independent System Operator Corporation (CAISO)

California Power Exchange Corporation (California PX or PX)

Cities of Redding, Santa Clara and Palo Alto, California, and the M-S-R
Public Power Agency (Cities/M-S-R)

California Department of Water Resources (DWR)

Dynegy Power Marketing, Inc. (Dynegy)

Enron Power Marketing, Inc. (Enron)

Metropolitan Water District of Southern California (Metropolitan)

Pacific Gas and Electric Company (PG&E)

San Diego Gas & Electric Company (SDG&E)

Sacramento Municipal Utility District (SMUD)

Southern California Edison Company (SCE)

Cities of Anaheim, Riverside, Azusa, Banning and Colton, California
(Southern Cities)

Transmission Agency of Northern California (TANC)

The Utility Reform Network and the Utility Consumers Action Network
(TURN/UCAN)

City of Vernon, California (Vernon)

Western Power Trading Forum (WPTF)

**APPENDIX B**

**[Summarily Dismissed Outstanding Issues]{.underline}**

**[Issue J - Scheduling]{.underline}**

> **J.4. Does the limitation in section 2.5.22.4.1 of the CAISO Tariff
> on the capability of market participants to withdraw supplemental
> energy bids unreasonably bind a generator to an ISO obligation without
> any compensation?**

Section 2.5.22.4.1. was redesignated as section 34.2.1.1 in the current
Tariff. The contested provision is proposed to be deleted under MRTU.

**[Issue L -- Transmission Pricing and Losses]{.underline}**

> **L.1. Is the CAISO's use of hour-ahead generation meter multipliers
> (GMM) and ex post GMMs an unreasonable condition of service or harmful
> to the market?**

In the proposed MRTU revisions, the CAISO proposes to adopt a new
methodology for transmission pricing and losses based on locational
marginal cost pricing (LMP).[^47] Part of that proposed change includes
the deletion of the CAISO Tariff's references GMMs.

> **L.2. Whether the default usage charge is insufficiently detailed,
> unreasonable, or discriminatory, and whether the existing default
> usage charge should be rejected and replaced by a charge that reflects
> the zonal price differential based on an adjusted market clearing
> price determined from capital generation bids?**

The default usage charge provision, previously section 7.3.1.3 of the
CAISO Tariff, was redesignated as section 27.1.2.3 and is proposed to be
deleted under MRTU.

**L.4. With regard to metered subsystems, existing contracts, or
non-converted transmission contracts, should Scheduling Protocol (SP)
4.2.1(c) and Schedule and Bids Protocol (SBP) 2.2.2 be revised to
recognize that transmission losses may be dealt with by a scheduling
party's system according to existing protocols in use for those
contracts and not according to ISO protocols?**

Under MRTU, the CAISO proposes to eliminate the use of GMMs and instead
use marginal transmission losses. With respect to the two CAISO Tariff
provisions challenged by proponents: (1) SP 4.2.1(c), was redesignated
as Appendix Y and would be deleted under MRTU as unnecessary; and (2)
SBP 2.2.2, was redesignated as section 30.4.1.2 of the Tariff and would
be deleted under MRTU as superseded by the new MRTU bid submission
process (proposed section 30 of the MRTU revisions to the CAISO Tariff).

[^1]: 84 FERC ¶ 61,217 (1998).

[^2]: The issues were raised in the following proceedings: *Pacific Gas
    and Electric Co., et al.*, 81 FERC  61,122 (1997) (*October 1997
    Order*); *Pacific Gas and Electric Co., et al.*, 81 FERC  61,320
    (1997); *California Independent System Operator Corp.*, 82 FERC 
    61,312 (1998) (accepting ISO Tariff Amendment No. 1 with
    modification and rejecting Amendment Nos. 2 and 3); *California
    Independent System Operator Corp.*, 82 FERC  61,327 (1998)
    (accepting ISO Tariff Amendment Nos. 4, 5 and 6 with modification);
    *California Independent System Operator Corp.*, 83 FERC  61,209
    (1998) (accepting ISO Tariff Amendment No. 7 with modification); the
    CAISO's June 1, 1998 Compliance Filing in Docket Nos. EC96-19-029
    and ER96-1663-030; and the CAISO\'s clarification in Docket No.
    ER98-3760-000.

[^3]: *California Independent System Operator Corp*., 87 FERC ¶ 61,102
    (1999) (April 1999 Procedural Order).

[^4]: *Pacific Gas and Electric Co., et al.*, 101 FERC ¶ 61,219 at P 1 &
    n.2 (2002) (*November 22 Rehearing Order*).

[^5]: *California Independent System Operator Corp.*, 109 FERC ¶ 61,183
    (2004), *reh'g granted*, 112 FERC ¶ 61,350 (2005).

[^6]: The issues that the *November 19 Order* deemed to be moot or
    withdrawn included some sub-issues within Issues G-N.

[^7]: *See* *California Independent System Operator Corp. and Pacific
    Gas and Electric Co*., 114 FERC ¶ 61,199 (2006).

[^8]: The Commission plans to address the last remaining Outstanding
    Issues in a future order. Those issues are Issue B (dispatch,
    congestion management and overgeneration), Issue C (existing rights)
    and Issue N.3 (notice of cessation of scheduling for an eligible
    customer).

[^9]: It is not our intent in this order to pre-judge any issue in the
    MRTU proceeding.

[^10]: Numerous CAISO Tariff sections were renumbered in the revisions
    to simplify and reorganize the CAISO Tariff. While we note the
    current section numbers of the relevant tariff provisions, we also
    refer to the CAISO Tariff section numbers as they were in 2000 when
    the parties filed briefs on the Outstanding Issues.

[^11]: *October 1997 Order*, 81 FERC ¶ 61,122 at 61,512.

[^12]: TANC and Southern Cities.

[^13]: *October 1997 Order*, 81 FERC at 61,512.

[^14]: These sections are designated as sections 30.2 and 30.2.2.2 in
    the current Tariff.

[^15]: WPTF, Enron and Dynegy.

[^16]: The PX has since ceased operations except for wind-up functions.

[^17]: The CAISO filed Amendment No. 29 between the time of its
    answering brief and Metropolitan's reply brief. The Commission
    conditionally accepted Amendment No. 29 for filing. *California
    Independent System Operator Corp*., 91 FERC ¶ 61,324 at 62,117-18
    (2000).

[^18]: We note that SBP 2.3 has been redesignated as section 30.2.2A in
    the current Tariff and that the proposed MRTU revisions would delete
    section 30.2.2A as superseded by the proposed new MRTU submission
    process. Any concerns about the new proposal to remove section
    30.2.2A must be raised in the MRTU proceeding.

[^19]: 81 FERC ¶ 61,122 at 61,509.

[^20]: Dynegy, Turlock and CAC.

[^21]: As an example, they cite an agreement between PG&E, a trade
    association for qualifying facilities (QFs) and the PX that enabled
    QFs with power purchase agreements with PG&E to sell their excess
    energy to third parties, including the CAISO.

[^22]: 81 FERC ¶ 61,122 at 61,509.

[^23]: In the proposed MRTU revisions, the CAISO proposes to redesignate
    it as section 11.19.7.1.2, but it does not propose any substantive
    changes.

[^24]: Cities/M-S-R.

[^25]: *California Independent System Operator Corp.*, 89 FERC ¶ 61,229
    at 61,686 (1999), *order on reh'g*, 90 FERC ¶ 61,315 (2000).

[^26]: *Id*.

[^27]: Joint proponents on Issue L.3 are Dynegy, Southern Cities,
    Cities/M-S-R, and Vernon.

[^28]: The tariff defines UFE as the difference in energy between the
    net energy delivered into the utility distribution company service
    area (adjusted to utility distribution company service area
    transmission losses) and the total metered demand within the utility
    distribution company service area (adjusted to distribution losses).

[^29]: *See* *California Independent System Operator Corp*., 94 FERC ¶
    61,268 at 61,934, *order on reh'g*, 102 FERC ¶ 61,274; *see also
    California Independent System Operator Corp*., 94 FERC ¶ 61,266 at
    61,927-28.

[^30]: *C**alifornia Independent System Operator Corp.*, 105 FERC ¶
    61,021 (2003), *order on reh'g*,106 FERC ¶ 61,205 (2004).

[^31]: *2002 Rehearing Order*, 101 FERC ¶ 61,219 at P 16-18, *order on
    clarification*, 103 FERC ¶ 61,042 at 11-12 (2003).

[^32]: *California Independent System Operator Corp*., 104 FERC ¶ 61,129
    at P 6-14 (2003).

[^33]: An issue raised in relation to the UFE charges is addressed in
    Issue L.5 below.

[^34]: The CAISO's Identification of Outstanding Issues in *Unresolved
    Issues Proceeding*, Docket No. ER98-3760-000 (filed Sept. 17, 2003)
    also lists Vernon, Metropolitan and DWR, and Southern Cities as
    proponents on Issue L.5. However, in that Identification of Issues,
    Vernon indicates that Issue L.5 is no longer applicable to Vernon.
    Metropolitan and DWR considered the issue to be open only to the
    extent that the Commission had not yet acted on the CAISO's
    compliance filing pursuant to the *2002 Rehearing Order*. As noted
    above, the Commission accepted the CAISO's compliance filing
    concerning UFE charges. Accordingly, this issue is moot with regard
    to Metropolitan and DWR. Southern Cities raise their concerns about
    UFE charges in the context of the neutrality adjustment, discussed
    in Issue L.3 above.

[^35]: 89 FERC ¶ 61,229 at 61,686 (emphasis added).

[^36]: 90 FERC ¶ 61,315 at 62,043.

[^37]: *See California Independent System Operator Corp*., 83 FERC ¶
    61,247 (1998).

[^38]: Section 3.2.1.2 (Reliability Driven Projects), has been
    renumbered as section 24.1.2.

[^39]: *October 1997 Order*, 81 FERC ¶ 61,122 at 61,505-06.

[^40]: *Id*. at 61,506. Section 7.1.4.1 is renumbered as section
    26.1.4.1 under MRTU..

[^41]: WPTF and Enron cite *New England Power Pool*, 83 FERC ¶ 61,045 at
    61,234 (1998) (requiring NEPOOL to reinstate pro forma tariff
    language that permits, but does not require, discounts on
    point-to-point rates); *Pennsylvania-New Jersey-Maryland
    Interconnection*, 81 FERC ¶ 61,257 at 62,246 (1997) (requiring PJM
    to submit a revised tariff to comply with Order No. 888-A, and to
    reflect the approach to discounting taken by the Commission in Order
    No. 888-A), *order on clarification*, 82 FERC ¶ 61,103 (1998).

[^42]: They cite *California Independent System Operator Corp*., 89 FERC
    ¶ 61,169 (1999) (accepting a proposal that gives the CAISO
    discretion to lower the price it is willing to pay for ancillary
    services by an unspecified amount in the event that it determines
    that the markets are not workably competitive); and *Pacific Gas and
    Electric Co., San Diego Gas & Electric Co. and Southern California
    Edison Co*., 77 FERC ¶ 61,204 (1996) (holding that in the absence of
    a demonstration that the seller does not have market power in
    ancillary services, rates for such services should be cost-based and
    established as price caps, from which transmission providers may
    offer discounts to reflect cost variations or to match rates
    available from any third party).

[^43]: *October 1997 Order*, 81 FERC ¶ 61,122 at 61,505-06.

[^44]: *Id*. at 61,457.

[^45]: *Open Access Same-Time Information System and Standards of
    Conduct*, Order No. 889, 61 Fed. Reg. 21,737 (1996), FERC Stats. &
    Regs., Regs. Preambles ¶ 31,037 (1996), *order on reh\'g*, Order No.
    889-A, 62 Fed. Reg. 12,484 (1997), FERC Stats. & Regs., Regs.
    Preambles ¶ 31,049 (1997), *reh\'g denied*, Order No. 889-B, 81 FERC
    ¶ 61,253 (1997), *aff\'d in part and rev\'d in part sub nom.*
    Transmission Access Policy Study Group v. FERC, 225 F.3d 667 (D.C.
    Cir. 2000), *aff\'d sub nom. New York v. FERC*, 535 U.S. 1 (2002).

[^46]: 18 C.F.R. § 37.6 (2005).

[^47]: *See California Independent System Operator Corp.*, 105 FERC ¶
    61,140 at P 14, P 37, P 75-78 (2003) (accepting the CAISO's
    conceptual proposal to use marginal losses).