# Presentation: 785414

## “The Transmission System Today”California ISO’s Experience

- Kellan Fluckiger
- Chief Operations Officer

**Keep the Lights on Conference**
- Monday, February 28, 2000
- DoubleTree Hotel, Portland, OR

## The Cal-ISO Vision

**Reliability through Markets**
- Ensure reliable transmission system operation
**Ensure open transmission access**
- Facilitate and rely on competitive markets
- Innovate through consensus

## CAISO Timeline

- AB 1890 signed

**Sept. ‘96     May ‘97    ****	****July ‘97 -****	****April - Dec. ****	****Jan. - Dec. ****	****	****Jan. - Dec.****	****	****Mar.’98 ****	****	****1998****	****	**** 1999****	****	****   2000****	**

- First Staff is Hired

- ISO Staff & Executives hired

- Training

- Applications & infrastructure delivered

**Start-up**

**CAISO **
**Start **
**Date**
** ****3/31/99**

**1st Summer**
- Peak Load   44,927 MW

**2nd Summer**
- Peak Load   45,884 MW

- Market Redesign & Improvements

- Market Redesign & Improvements

**3rd Summer**
- Peak Load   46,250 MW???

- Redesign 2000

## Components of “Reliability through Markets

- Real-Time Markets

- Ancillary Services Markets

- Out-of-Market Calls (OOM)

- Emergency Measures

- Forward Energy Markets

## Current Issues

**Current Issues**

- Summer 2000 Load/Generation Picture
- CAISO’s Grid Planning Process
- Price Caps
- Outage Coordination
- Congestion Management - Redesign 2000
- Maintenance management responsibility
- Generator Interconnections

## Summer 2000 Load/Generation Picture

**Summer 2000 Load/Generation Picture**

- 1998 Peak - 44,927 MW (8/3/98)
- In-area: 37,747 MW
- Net Imports: 7,180 MW
- 1999 Peak - 45,884 MW (7/12/99)
- In-area generation: 37,506 MW
- Net Imports: 8,378 MW
- 2000 Peak Load Forecast Normal Summer: 46,250 MW
- Reasonable Extreme Hot Summer: 48,940 MW
- Reasonable Extreme Cool Summer: 43,900 MW

## Need for New Generation Resources

- Tremendous growth in load in this state
- Older plants are reaching end of useful life
- Need for local generation for voltage support
- Margins are very tight

## 2000 Supply Picture - Market Imports

- Normal Summer: 7,600 MW to 8,400 MW
- Northwest:	6,000 MW to 6,200 MW
- Southwest:	900 MW to 1,100 MW
- Other:	700 MW to 1,100 MW
- Hot Summer: 6,500 MW to 7,100 MW
- Northwest:	6,000 MW to 6,200 MW
- Southwest:	0 MW to 200 MW
- Other:	500 MW to 700 MW

## CAISO’s Grid Planning Process	

**CAISO’s Grid Planning Process****	**

- Five-Year Expansion Plan for the CAISO Controlled Grid
- 2001-2003 Reliability Must-Run Technical Study of the ISO-Controlled Grid
- Use of Competitive Solutions

## Coordinated ISO Planning Process

- PTOs Perform Transmission Expansion Plans
- ISO & Stakeholder Review of PTO Plans
- ISO Review & Approval Considerations of PTO Plans
- ISO Performs Composite Study

## Outage Coordination

**Outage Coordination**

- Reduced margins on the system make scheduling of outages very challenging
- Need to work with PTOs and neighboring transmission owners to schedule outages for maintenance work.
- Need to give market advanced information on planned transmission line outages
- RMR cost related to planned transmission outages goes back to the PTO (incentive to minimize length of outage)
- Impact of “No-Touch Days”

## Congestion Market Description

**Congestion Market Description**

- Congestion is defined in the **forward markets** (day-ahead and hour-ahead) as a condition where there is insufficient available transmission capacity to accommodate all preferred energy schedules.
- Congestion in **real time** is defined a a condition where there is insufficient transmission capacity available to accommodate imminent load, generation, and interchange conditions, or to permit using all the bids in the BEEP stack for real-time energy imbalance.

## Congestion Management & Pricing

- 	_Inter-Zonal_
- Three Active Zones
- Who Pays - SC’s who use
- 	constrained TX
- Frequent Occurrence
- Allocates TX capacity
- Adjustment Bids
- Costly to Relieve

- 	_Intra-Zonal_
- Occurs within a zone
- Who Pays - All SC’s in a zone, based on their metered demand
- “Infrequent and Small”
- Adjustment Bids
- Supplemental Energy bids
- Reliability-Must Run
- Market Power

## Zonal configuration of ISO grid

**Zonal configuration of ISO grid**

**ZONE NP15**

**ZONE SP15**

**San Francisco**

**Los Angeles**

** ****ZP26**

****** ****Morro Bay**

****** ****Diablo Canyon**

**Qualifying  facilities**

-  
-  

******  ****Midway       Substation**

**Generation  19,363MW    42.9%**
**Load 50.3%**

******Vincent    Substation**

**ZONE**

** ****Helms**            

**Generation  3,756   8.4%**
**Load 4.8%**

**Generation  21,927 MW   48.7%**
**Load 44.9%**

## CONG Redesign 2000

- Pricing Signals more Specific
- Reduce OOM Calls
- Impact on Generator Interconnection
- Impact on Grid Planning

## Maintenance Management Responsibility

**Maintenance Management Responsibility**

- CAISO has an oversight responsibility to ensure PTO’s are doing transmission & substation maintenance
- New Availability Measures
- Established a Maintenance Coordination Committee (MCC)

## Generator Interconnections

- Large Queue
- Need for Consistent Policy
- Part of CONG Redesign

## Monthly Energy Flows and Congestion Costs - Day Ahead Market

**Monthly Energy Flows and Congestion Costs - Day Ahead Market**

**COI (Imports from Oregon to California )**

**0**

**500**

**1,000**

**1,500**

**2,000**

**2,500**

**4/98**

**5/98**

**6/98**

**7/98**

**8/98**

**9/98**

**10/98**

**11/98**

**12/98**

**1/99**

**2/99**

**3/99**

**4/99**

**5/99**

**6/99**

**7/99**

**8/99**

**9/99**

**10/99**

**11/99**

**12/99**

**Avg Hourly MW**

**$0**

**$1**

**$2**

**$3**

**$4**

**$5**

**$6**

**$7**

**$8**

**$9**

**Monthly Costs **

**($Millions)**

- Congestion Costs

- Avg Final MW

- Avg Initial MW

**Month**

**Notes:**
Utilization of the transmission system increased significantly in 1999, reflecting increased volume on interstate and intrastate transmission lines. Congestion increased accordingly in 1999 compared to the CAISO’s first year of operation.  The increase in congestion occurred predominantly on the major transmission paths into the CAISO’s northern zone from the southern zone (Path 15) and into Northern California from Oregon (COI).

The lines in the figures above shows the average hourly initial and final flows scheduled on these major transmission paths in the day-ahead market by month. The difference between the initial and final schedules reflects the amount of energy curtailed due to congestion. The average final schedule (Avg. Final MW) reflects the amount of energy imported into the CAISO’s northern zone that is subject to any congestion charges occurring in an hour due to the need to curtail initial schedules.     

Increased demand for imports (due to higher loads and lower hydro), as well as line derations on Path 15 and COI during many hours caused increased congestion into the ISO northern zone (NP15).  The available transmission capacity (ATC) on Path 15 from Southern to Northern California was derated during much of the late summer and fall months due to outages at the Diablo Canyon nuclear plant. 

## Reform of Ancillary Services Markets Has Reduced A/S Costs Dramatically 

**Notes:**
Ancillary Service (A/S) costs have dropped dramatically in the CAISO’s second year of operation.  From April through December 1999, A/S costs have averaged about $1.87/MWh of total system load served, or about 5.6% of total market energy costs.  During these same months in 1998, A/S costs averaged about $3.86/MWh of load served, or about 13.1% of total market energy costs.  Thus, total A/S costs have dropped by more than 50% in 1999 compared to CAISO’s first year of operation.

The drop in A/S costs is attributable to a variety of factors, including increased participation in the ISO’s markets, fewer hours of extremely high peak loads, and a variety of modifications in A/S procurement practices, including:
A decrease in the quantity of A/S purchased per MWh of load 
Strategic deferment of purchases from the day-ahead to the hour- ahead market
Separate procurement and pricing of upward and downward regulation
Implementation of the Rational Buyer protocol, which allows substitution of “higher quality” A/S (such as Regulation and Spinning reserve) for “lower quality” A/S (such as Non-Spinning and Replacement Reserve).