Comments on Discussion paper and Mar 03 discussion

1. Please provide your organization’s feedback on the approach to the Working Group’s goals, process, evolution of the Discussion paper, and Stakeholder Recommendations (pg. 2-5) in the DDEMI Discussion Paper. Any suggestions to improve the Working Group process or deliverables?

The California Community Choice Association (CalCCA) appreciates the opportunity to comment on the Demand and Distributed Energy Market Integration (DDEMI) Working Group and Discussion Paper. As described in detail in the sections below, CalCCA recommends, in summary, that the California Independent System Operator Corporation (CAISO): 

• Prioritize: (1) improving the simplicity and accuracy of performance evaluation methodologies; (2) enhancing the economic-based demand response participation models through a modified proxy demand resource (PDR) model that considers exports; and (3) exploring distributed energy resource (DER) participation in wholesale markets and pathways for advancing demand flexibility; 

• Provide an educational session early on in the working group process to help newer market participants learn about market participation options and related issues being explored in this initiative; and 

• Seek to minimize implementation barriers and complexity associated with the performance evaluation methodologies while ensuring accurate performance calculations. 

2. Please provide your organization’s feedback on the overarching themes/areas and the associated scope items for problem statement formulation. Are there any additional themes/areas or individual scope items which should be explored further?

The CAISO should prioritize the following three themes within this initiative: 

1. Performance Evaluation Methodologies: The current baseline methodologies create a high barrier to entry for smaller load-serving entities and program operators, including community choice aggregators. Simplifying and improving the accuracy of the baseline methodologies can help promote market diversity and competition, and accelerate the integration of clean resources. This supports state policy goals and overall market efficiency. DERs will play a key role in the state’s portfolio and address local reliability and community needs. CalCCA supports exploring the items advanced by stakeholders, including: (1) modifying the control group settlement methodology; (2) moving the baseline methodologies to the business practice manuals; (3) using device-level measurement; and (4) creating alternative baseline methodologies. 

2. Economic-based Demand Response Participation Models: The PDR model used for economic demand response participation will benefit from a holistic review to ensure it accurately reflects resource capabilities and minimizes barriers to participation. CalCCA supports evaluating a modified PDR (mPDR) model to more accurately reflect the capabilities of PDR resources that can export. The mPDR model has the potential to better account for the full capabilities of behind-the-meter (BTM) resources with storage. CalCCA also recommends that within this holistic assessment of economic Demand Response (DR) participation models, the CAISO should: (1) clearly document how to use the Demand Response Registration System Application Program Interface to increase the ability of market participants to develop their own processes that use it; (2) maintain clear data requirements to allow market participants to prepare for upcoming changes; and (3) enable easier maintenance of accurate registration records. 

3. Distributed Energy Resource Participation: The current participation models for BTM storage should be re-evaluated to ensure they fully account for battery capabilities. CalCCA supports exploring BTM storage participation in the wholesale markets, as described in the discussion paper. The CAISO should also explore microgrid participation in the wholesale markets?and the resource adequacy (RA) program (including obtaining a net qualifying capacity, must-offer obligations, etc.). 

3. Please provide your feedback on any specific topics that require further information/reference in order to facilitate substantive stakeholder conversation.

Early in the working group process, the CAISO should host an educational session on its existing DR and DER market participation models to help newer market participants learn about pathways for market participation and related issues. CalCCA proposes the following topics be addressed in this session: 

• Differences between supply-side and load-modifying participation pathway requirements; 

• Existing supply-side market participation models for DR and DER; 

• Registration requirements and maintenance of DR and DER registrations; 

• Participation requirements, data requirements, and existing baseline methodologies; and 

• California Public Utilities Commission and CAISO jurisdictional responsibilities and rules for obtaining RA credit for each participation model. 

4. What feedback do you have on the challenges shared by Stakeholder presentations regarding service level load measurement & validation needed for control groups? Do the M&V and Performance Evaluation Methodology (PEM) options available today address the needs of diverse technologies? Are there additional technical challenges (e.g., technology-specific curtailment, control group validation, energy storage baselines) that should be considered in the working group?

CalCCA appreciates the stakeholder presentations on performance evaluation methodologies from Leap, Pacific Gas and Electric Company (PG&E), and Nostromo Energy. As described in section 2, above, CalCCA supports exploring improvements to the baselines, focused on increasing simplicity and accuracy. The Leap and PG&E presentations demonstrate that accuracy and participation benefits can be realized through the control group methodology. This methodology is not widely used due to implementation barriers, including difficulty accessing non-participant meter data.[1] Modifications to the baseline methodologies should seek to minimize implementation barriers and complexity such that market participants can leverage the baseline methodology that most accurately measures the performance of their resources.

[1]           See PG&E presentation: https://stakeholdercenter.caiso.com/InitiativeDocuments/Presentation-PGE-Settlement-Methodology-Mar-03-2025.pdf; and Leap presentation: https://stakeholdercenter.caiso.com/InitiativeDocuments/Presentation-Leap-Prescriptive-Baselines-Mar-03-2025.pdf.

5. What topic(s) would your organization be interested in presenting (what is the problem/issue seeking to be addressed)? Which stakeholders would it impact?

CalCCA has no particular topics to be presented at this time but may be interested in presenting on issues as the initiative progresses. 

1. Please provide your organization’s feedback on the approach to the Working Group’s goals, process, evolution of the Discussion paper, and Stakeholder Recommendations (pg. 2-5) in the DDEMI Discussion Paper. Any suggestions to improve the Working Group process or deliverables?

CDWR-SWP supports the structure and topics that the CAISO has listed in the Discussion paper.

CDWR-SWP believes that among the DDEMI Working groups, feasibility should be the highest-ranking criterion for topics. Bringing the impact of Demand Response (DR) to the market increases the probability of success of DR having a large impact. CDWR-SWP proposes adopting the format of the Price Formation Working Groups, which operate across two phases simultaneously. This format primarily focuses on the main topics while allowing for continued discussions on other topics simultaneously. This keeps all stakeholders engaged with both Working Groups without restarting after the main topics have already produced policy.  

2. Please provide your organization’s feedback on the overarching themes/areas and the associated scope items for problem statement formulation. Are there any additional themes/areas or individual scope items which should be explored further?

The feasibility of existing models under the DR that can be expanded or enhanced to enable these resources to meet demand in the Real-Time Market (RTM) should be a core focus of the primary working group. One of the biggest opportunities is enabling demand-side resources to submit bids in Real-Time (RT) That added flexibility would support reliability, reduce curtailments, limit out-of-market actions, and unlock additional revenue by expanding participation across technologies.

Right now, most demand resources in the CAISO market can’t bid economically in RTM. Enhancing DR models -- especially through Real-Time Load Bidding (RTLB)—would improve market efficiency and align well with CAISO’s broader goals. For example:

• Feasibility: Establishing RTLB for PL is a feasible market solution and CDWR-SWP already has demonstrated (pre-MRTU) the capability to bid into the RTM if the market solution existed. CAISO also has DR data and experience pre-MRTU to leverage toward a market solution.
• Market Efficiency: Letting demand bid during On-Peak hours would lower costs by providing cheaper supply. During periods of over-generation or low load, RTLB bids to increase load could help avoid unnecessary curtailments.
• Competition: Allowing demand to compete on price means lower-cost demand is prioritized, helping drive down supply-side costs too.
• Public Policy Alignment: The CEC recommends load flexibility during key times as essential in its SB 846 Report to support the goals outlined in SB 846, which include achieving 7,000 MW of load-shift resources by 2030[1]. Further, RTLB positively impacts renewable generation by reducing curtailment during over-generation conditions, consistent with the state’s RPS goals.

Proposed Problem Statement for RTLB:

Currently, most DR resources, including Participating Load (PL), have no mechanism for bidding in the RTM, though some can bid in the DAM. The inability for PL to bid into the RTM means more out-of-market dispatches of such resources. It also (a) deprives the markets of reliability benefits (through bids to curtail loads in high demand periods), (b) deprives the markets of the ability to reduce curtailment of renewables (through bids to increase loads during low demand periods), and (c) deprives ratepayers of the opportunity for lower costs where additional generation need not be purchased. 

CAISO should:

1. Review historical data to evaluate the benefits of RTLB, especially during curtailment periods in Spring, Fall, and peak load events.
2. Explore how to open up full demand-side participation in RTM. This includes enabling PL to submit economic bids tied to the Pseudo Generation portion in both directions—reductions and increases. For example, CDWR-SWP’s PL could offer this today if allowed, bringing valuable services to the market.
3. Identify and implement necessary tariff and BPM changes to support this.

[1] California Energy Commission, Senate Bill 846 Load-Shift Goal Report figure at 2-3. https://www.energy.ca.gov/publications/2023/senate-bill-846-load-shift-goal-report

3. Please provide your feedback on any specific topics that require further information/reference in order to facilitate substantive stakeholder conversation.

CDWR-SWP intends to present on the potential benefits of RTLB in the upcoming working groups. It also actively encourages stakeholders, including CAISO, to contribute data that highlights these benefits. Such data may be derived from previous studies, estimates, or even pre-MRTU findings. This information can then be expanded and integrated to illustrate the advantages of RTLB for DR models, like PL. This collaborative effort would provide stakeholders with a clearer understanding of how RTLB could enhance market efficiency and economic outcomes. 

4. What feedback do you have on the challenges shared by Stakeholder presentations regarding service level load measurement & validation needed for control groups? Do the M&V and Performance Evaluation Methodology (PEM) options available today address the needs of diverse technologies? Are there additional technical challenges (e.g., technology-specific curtailment, control group validation, energy storage baselines) that should be considered in the working group?

No comments at this time.

5. What topic(s) would your organization be interested in presenting (what is the problem/issue seeking to be addressed)? Which stakeholders would it impact?

As stated in our previous comments, CDWR-SWP plans to present at the upcoming working group on its participation in DR for its Participating Load over the past several years, showcasing the benefits it has provided to the grid through pump load reductions via non-spin reserves. The presentation will highlight the frequency with which CAISO has requested CDWR-SWP to reduce its load during contingencies to support market stability and grid reliability. Additionally, CDWR-SWP will present on the benefits of enhancing DR, particularly through RTLB (through either the increase or decrease in load).

To that end, as part of the Demand and Distributed Energy Market Integration initiative, CDWR-SWP proposes that CAISO revise market rules and/or enhance the existing Participating Load model to enable RT energy bidding—an option already available for the Proxy Demand Response–Load Shift Resource model under the existing DR framework.

This enhancement would significantly increase the utilization of CDWR-SWP’s PL within DR. CDWR-SWP’s wholesale load, operating as Participating Load, has long played a key role in reshaping CAISO’s load profile by reducing peak demand. With more flexible market rules, it could make even greater contributions to load reshaping. Enabling a market mechanism for RT load bids would allow resources to adjust ramping more dynamically, mitigating peaks and valleys in the system.

CDWR-SWP believes that allowing PL under DR to bid in RT will positively impact other stakeholders, particularly solar resources, by improving market efficiency and reducing the curtailment of resources during over-generation conditions. This change could also help stabilize RT prices, particularly by mitigating the deepening of the "duck curve," which is expected to become more pronounced as additional solar resources come online over the next 5–10 years. Additionally, CDWR-SWP supports efforts by other stakeholders to enable RTLB for DR resources that perform reliably.

1. Please provide your organization’s feedback on the approach to the Working Group’s goals, process, evolution of the Discussion paper, and Stakeholder Recommendations (pg. 2-5) in the DDEMI Discussion Paper. Any suggestions to improve the Working Group process or deliverables?

The California Efficiency + Demand Management Council (Council) and Leapfrog Power, Inc. (Leap) appreciate this opportunity to comment on the March 3 Demand and Distributed Energy Market Integration (DDEMI) Working Group (Working Group).

DDEMI Working Group Process

The Discussion Paper provides the following key components leading up to the policy development phase of the working group:

1. Define high-level principles for participation model design for demand and distributed energy resources;
2. Form problem statements reflecting stakeholder concerns;
3. Align on priorities and establish a proper meeting cadence to balance bandwidth;
4. Illustrate challenge areas by exploring current ISO market operations, functionality, and processes; and
5. Determine action items for each challenge area to develop policy enhancements. 

These elements in this sequence appear to be a good approach toward developing concrete stakeholder initiatives that will improve opportunities for demand response (DR) and distributed energy resource (DER) participation in the CAISO market, so no changes to these five are necessary.  However, one corollary for consideration is that, when possible, the Working Group identify and exploit opportunities where multiple problem statements can be addressed through the same initiative.  This may be an implicit within the Working Group process but to the extent it is not, it should be included in some way.

In addition, the Council and Leap would recommend that DDEMI’s policy development phase allow certain proposals or changes to be “fast-tracked” based on stakeholder prioritization and ease of implementation.  If stakeholders determine that a particular policy proposal has consensus support and minimal additional refinement is needed to implement, CAISO should move to implement these proposals at the end of the scoping phase – or even in the middle of the scoping phase, if proposals are scoped incrementally. 

The proposal to move baseline methodologies from CAISO’s tariff to its Business Practice Manual (BPM) is one such proposal that could be expedited this way, since it is simply a re-organizing of CAISO’s documentation that does not require any actual policy changes.  It would also be prudent to sequence this before other adjustments being considered to CAISO’s Performance Evaluation Methodologies (PEMs), so that any subsequent changes to these PEMs do not all require a FERC-approved tariff change to implement.

DDEMI Working Group Deliverables

The CAISO proposes that the Discussion Paper serve as a stakeholder resource by documenting Working Group discussions and vetted problem statements that are recommended for policy development.  The Council and Leap support the inclusion of these two elements in order to document the basis for future stakeholder initiatives.  The scope of the Working Group will include some complex issues, so it will be useful for stakeholders to be able to have this information for future reference.  Also, the Appendix should continue to be used as a central location for links to additional important reference documents as they are discussed during the Working Group sessions.

DDEMI Working Group Topics

Based on early discussions and stakeholder proposals, the Discussion Paper lists the following initial categories for discussion:

1. Expansion of current performance evaluation methodologies, including recognition of registration and metering alternatives
2. New or expanded economic-based demand response participation models (e.g., proxy demand resources)
3. New or expanded reliability-based demand response participation options (e.g., reliability demand response resources)
4. Distributed energy resource direct participation or indirect market optimization options
5. Expanding demand-side bidding options
6. Demand flex-direct market participation or indirect market optimization options

The Council and Leap recommend no major changes at this point, as these appear to accurately capture the topics discussed so far.  However, the Council and Leap would like to point out that categories #5 and #6 are somewhat duplicative, as both are described as addressing stakeholders desire to explore participation models for load with the CAISO markets.  It may be possible to consolidate these two categories by moving the single discussion item listed under category #5 into category #6.

DDEMI Working Group Principles

The Discussion Paper lists the following market design principles:

1. Efficiency
   1. Market optimization produced least cost results while maintaining reliability.
2. Competition
   1. Market rules expand competition to the benefit of consumers and allow flexible demand and smaller-scale resources to participate like conventional, large-scale generators.
3. Feasibility
   1. Operationally feasible; the market can solve within prescribed timelines
   2. Feasible implementation.
4. Simplicity
   1. Market design elements are not overly complicated
5. Reliability/Compliance
   1. Reliability and compliance standards are reflected in market design
6. Facilitate states’ public policies, to the extent practicable

As the Council stated in the February 21 Joint DR Parties comments, these principles are all appropriate and should be retained.  In addition, as recommended in the February 21 comments, the “Utilization” principle should be added and be defined as “cost-effective DR capacity is visible and accessible to CAISO, maximizing its use as a grid resource.”  This principle is intended to help ensure that the CAISO is appropriately considering the capacity benefits that DR can provide when making its decisions on which proposals to advance.

2. Please provide your organization’s feedback on the overarching themes/areas and the associated scope items for problem statement formulation. Are there any additional themes/areas or individual scope items which should be explored further?

DDEMI Working Group Problem Statements

The Discussion Paper recommends that “problem statements…identify how current CAISO processes need to improve to address the challenge area.  Problem statements should offer a clear path to analysis and proposal development that satisfy the working group principles.” These parameters are appropriate and do not need to be changed.  Similarly, the Council and Leap believe that the existing themes/areas and individual scope items are broadly comprehensive, so no additional items need to be added at this time.

3. Please provide your feedback on any specific topics that require further information/reference in order to facilitate substantive stakeholder conversation.

Proposed Problem Statements and Discussion Topics

The Discussion Paper provides six initial draft problem statements and discussion topics:

1. Performance Evaluation Methodology
2. Economic-based Demand Response Participation Model
3. Reliability-based Demand Response Participation
4. Distributed Energy Resource Participation
5. Expanding demand side bidding options
6. Enhancing demand flexibility market options

These generally capture the topics, but it is not clear that the Performance Evaluation Methodology (PEM) as currently written contemplates a PEM for thermal energy storage.  This is a very specific technology not currently served in the CAISO market, so it is not clear whether it would be covered under “alternative baseline methodologies” (the third item under the PEM topic).  To provide the necessary certainty, the Council and Leap recommend the following modification (added language underlined):

3. Explore the utilization of device level measurement, and creation of alternative baseline methodologies, and development of a PEM modeled on the Meter Generator Output PEM for thermal energy storage.

In addition, the Economic-based Demand Response Participation Model should be modified to leave open the possibility that the intended outcome of a Modified Proxy Demand Resource (mPDR) – to recognize behind-the-meter (BTM) energy storage exports – might also be achievable by simply modifying the existing PDR product.  The Council and Leap recommend the following modification to acknowledge that mPDR can be implemented as an expansion of PDR rather than as a new DR model entirely:           

2. Create a new variant of PDR called mPDR, or expand the existing PDR product to include a participation option that incorporates the features of the mPDR proposal, to more accurately reflect load reductions of PDR participants with behind-the-meter storage or Rule 21 exports.

For Distributed Energy Resource Participation, aspects of the second scoping item might be redundant with the mPDR reference under the Economic-based Demand Response Participation Model because the ultimate purpose of the mPDR is to facilitate BTM energy storage participation in the CAISO market.  Also, the second item under this topic lacks specificity.  To address both issues, the Council and Leap recommend the following modification:

2. Explore other issues connected to behind-the-meter storage participation in wholesale markets to the extent they are not addressed elsewhere.

4. What feedback do you have on the challenges shared by Stakeholder presentations regarding service level load measurement & validation needed for control groups? Do the M&V and Performance Evaluation Methodology (PEM) options available today address the needs of diverse technologies? Are there additional technical challenges (e.g., technology-specific curtailment, control group validation, energy storage baselines) that should be considered in the working group?

This question appears to have left out a request for feedback on the presentation provided by Nostromo of its proposal for a Thermal Metered Generation Output (TMGO) PEM for thermal energy storage (TES).  As Nostromo demonstrated, such a PEM would result in a more accurate measurement of TES performance compared to simply using a Day Matching baseline at the customer meter level because the Conversion Factor (of avoided BTUs from the TES to avoided electricity) varies from one day to the next.  Nostromo’s proposal appears to be geared toward “cold” TES and as such, its proposal involves the use of sub-meters to measure the reduced electrical consumption of a customer’s chillers when the cold TES is activated.  However, consideration should be given for expanding the TMGO PEM proposal to include “hot” TES.  In contrast to the Nostromo cold TES product, hot TES could be used to reduce space or water heating load.  To address this, the TMGO PEM proposal could be made more generic by requiring electric sub-meters for either the facility chiller or the facility space and/or water heater.  The CAISO should designate this proposal for further consideration.

PG&E’s Proposal to Revise Demand Response Control Group Settlement Methodology highlighted the problem created by the Control Group PEM requiring all customers comprising a control group to be registered in the CAISO’s Demand Response Registration System (DRRS) which is problematic due to the legal and operational issues described by PG&E.  To address this problem, PG&E’s Proposal 1 is to remove DRRS registration requirements for customers comprising “Matched” control groups.  Proposal 2 would address the pre-existing differences between Control and Treatment group load profiles.  Although supportive of PG&E’s efforts to expand the use of control group baselines in CAISO, the Council and Leap would like to emphasize that third-party DR providers do not have the capability to use “Matched” control groups (and therefore are limited to “Hold-out” control groups) because they are not able to access the load profiles of customers not enrolled with them.  This points to the need for control group load profiles that are accessible to all DR providers, not only the IOUs.

This final point provides a good segue to the Leap proposal, Prescriptive Baselines in CAISO which addresses the operational barriers of using the current Control Group PEM for frequent dispatches.  In contrast to the Control Group PEM which measures DER performance against a smaller group of non-participants and requires DR providers to have access to non-participant data, or withhold some of their customers from being dispatched, Leap proposes a Prescriptive Baseline that measures DER performance against the average historical load of similar customers.  Using this approach, control groups that are accessible by all types of DR providers can be created in advance.  This proposal is a creative approach to addressing the existing problems associated with existing performance measurement of frequently-dispatched resources and the absence of third-party DR provider access to “Matched” Control Groups.  Leap’s proposal could be paired with PG&E’s Proposal 1 to eliminate the DRRS registration requirement and may render moot PG&E’s Proposal 2.  The CAISO should designate this proposal for further consideration.

5. What topic(s) would your organization be interested in presenting (what is the problem/issue seeking to be addressed)? Which stakeholders would it impact?

The Council and Leap are happy to present on the Modified Proxy Demand Resource and Device-Level Measurement proposals.  Below is a problem description for each of these proposals as well as impacted stakeholders.  In addition, the Council and Leap submit as an attachment a recent white paper that Leap published on regulatory measures that would increase DR participation in CAISO’s wholesale market.  This white paper provides additional detail on the two proposals listed below, and it also situates them within a broader set of regulatory reforms that would support market integration of DERs in California. 

1. Modified Proxy Demand Resource

Stakeholders Impacted: Any entity that operates export-capable Proxy Demand Resources in the CAISO market.

Problem Description: Currently, performance calculations for PDR participants with behind-the-meter (BTM) energy storage exclude measured exports of energy past the customers’ meter, even if those participants hold Rule 21 export permits. This can significantly reduce the amount of BTM battery capacity that is available for CAISO to dispatch.  Past studies have shown that residential battery capacity is often more than twice the average household load. However, without a mechanism in place to enable and credit batteries for exporting this power back to the grid, DR providers will not bid this additional capacity into the wholesale market.

The mPDR proposal addresses this issue by allowing a DR resource’s performance to be assessed at the resource level (rather than the meter level) as long as aggregate net load of storage and non-storage customers at the sub-LAP level is greater than zero.  This would mean that performance in DR events will be measured at the sub-LAP rather than the individual customer meter.  If a Rule 21-compliant battery exports power to the grid, it will lower the effective load at that sub-LAP, showing an overall improved performance in that DR event and allowing the aggregator managing that battery to nominate that battery’s full capacity for that event.  Net exports across the sub-LAP “virtual meter” (i.e. a situation where the sub-LAP load is negative) will not be counted, so from an operating perspective this would only ever look like a load reduction at the relevant sub-LAP.

2. Device-level Measurement:

Stakeholders Impacted: Any non-IOU entity that operates DR resources in the CAISO market.

Problem Description: Currently, very few IOU customers are enrolled in a DR program, so the vast majority of existing smart devices are not currently measured or controlled for the purpose of demand flexibility.  One major obstacle to participating in a market-integrated DR program is the requirement that electricity customers authorize their meter data to be shared via their IOU’s Click-Through Process (CTP), a cumbersome process with a relatively high drop-off rate.  In Leap’s experience, less than half of potential DR participants that begin this enrollment process are able to successfully enroll in their selected DR program.

The CAISO has established baseline options such as the Electric Vehicle Service Equipment (EVSE) and Metering Generator Output (MGO) PEMs that allow electric vehicles and BTM batteries to use device-specific load data to measure DR performance directly.  However, customers using these options are still required to go through the CTP to be registered in CAISO’s DRRS, removing one of the primary benefits of using device-level data to evaluate DR performance. 

The California Energy Commission has recently tested the use of direct device enrollment in its Demand Side Grid Support (DSGS) program, and it found that allowing BTM storage customers to enroll outside the CTP significantly increased participation.  Rather than authorizing data sharing via the CTP, participants in the DSGS program consent to sharing their data via their contract with their device provider.  In the first year that this enrollment option was offered, the amount of participating battery capacity exceeded the battery capacity that third-party DR providers had enrolled in Resource Adequacy.

In addition, directly-measured devices in CAISO are currently required to meet overly strict accuracy standards that excludes most residential technologies.  CAISO’s Metering BPM establishes a 0.2 percent accuracy requirement for DER Devices, which is applied if local regulatory standards do not exist.  However, this standard is not aligned with more recent accuracy requirements established by the CPUC for EVSE.  Where possible, metering accuracy standards should be recalibrated so as to not unduly obstruct DERs from making use of these device-level measurement options, referencing experience in programs like the DSGS program that have adopted different standards while maintaining accurate measurements of device performance.

Furthermore, if CAISO were to enable greater use of device-level data for a wider range of technologies, including TES, heat pump water heaters, and smart thermostats, it would allow for more flexible participation by DR providers in CAISO’s market.  If the utility meter is used to measure DR performance, then all devices behind that meter need to be managed by the same entity.  By contrast, if the use of device-level data was expanded, then each device could conceivably be bid into the CAISO market by a separate entity.  With California homes increasingly hosting multiple DERs managed by different companies, this type of flexibility will be key to supporting large-scale participation of these resources in Resource Adequacy.

Overall, removing the above-mentioned barriers to the use of device-level data would provide a range of important benefits:

1. 1. Dramatically increased participation of DERs in the CAISO market;
   2. Faster and more accurate measurement of load curtailment;
   3. Improved situational awareness for CAISO operators with visibility into the quantity and types of devices responding to market signals;
   4. Dual participation in conflicting programs can be identified at the device level;
   5. Greater customer choice of DR provider for devices, aggregators, or IOUs.

1. Please provide your organization’s feedback on the approach to the Working Group’s goals, process, evolution of the Discussion paper, and Stakeholder Recommendations (pg. 2-5) in the DDEMI Discussion Paper. Any suggestions to improve the Working Group process or deliverables?

Comments on Demand and Distributed Energy Market Integration

Department of Market Monitoring

March 28, 2025

Summary

The Department of Market Monitoring (DMM) appreciates the opportunity to comment on the Demand and Distributed Energy Market Integration Discussion Paper and Working Group dated March 3, 2025.[1] In these comments, DMM adds to our previous comments from the ISO’s Demand and Distributed Energy Market Integration (DDEMI) Working Group Meeting on February 5, 2025.[2] DMM includes additional comments on the issue of baseline methodologies, and cautions against adding new baseline methodologies unless necessary. DMM recommends improving the “control group” baseline methodology, but cautions against the proposed “prescriptive” baseline methodology.

Comments

DMM cautions against adding additional baseline methodologies unless necessary. Currently there are a large number of baseline methodologies available to demand response providers. Very few of these baseline methodologies are in use, and additional baseline methodologies can be prone to errors, miscalculations, and potential strategic gaming.

The existing baselines include a “control group” methodology. This methodology works by using like-for-like resources, and comparing the differences in demand when a resource is dispatched versus not to calculate the response. This approach is a commonly used and accepted technique in economic studies to measure treatment effects. However, as of September 2024, this approach has not been used by any resource.[3]

Pacific Gas and Electric has proposed improvements to the control group methodology, and DMM generally agrees improvements can be made to encourage use of this methodology.[4] The proposal includes registration and methodological improvements that would improve the selection of the control group by including a larger pool of like-for-like resources, and refine the measurement of a demand response event for the resources that are scheduled.

One demand response provider (Leap) proposes a similar methodology to the control group methodology called a “prescriptive” baseline. This approach is currently used in a California Energy Commission program.[5] The prescriptive baseline is conceptually similar to a control group, but uses a state average, and the baseline is set in advance of the operational two-years.

DMM cautions against this approach because it does not meet a like-for-like standard. Demand response resources are often contingent on ambient conditions, and a state average overlooks differences in time and space to generate a counterfactual to estimate demand response. As a result, DMM does not recommend implementing prescriptive baselines as they have been proposed, because they fail to incorporate nearly identical load patterns and conditions that are requisite in the control group methodology.

[1] Demand and Distributed Energy Market Integration Working Group Discussion Paper, California ISO, March 3, 2025: https://stakeholdercenter.caiso.com/InitiativeDocuments/Discussion-Paper-Demand-Distributed-Energy-Market-Integration-Mar-03-2025.pdf

[2] Comments on Demand and Distributed Energy Market Integration, Department of Market Monitoring, February 21, 2025: https://www.caiso.com/documents/dmm-comments-on-demand-and-distributed-energy-market-integration-feb-05-2025-working-group-feb-21-2025.pdf

[3] Ibid.

[4] Proposal to Revise Demand Response Control Group Settlement Methodology, Pacific Gas and Electric, March 3, 2025: https://stakeholdercenter.caiso.com/InitiativeDocuments/Presentation-PGE-Settlement-Methodology-Mar-03-2025.pdf

[5] Prescriptive Baselines in CAISO, Leap, March 3, 2025: https://stakeholdercenter.caiso.com/InitiativeDocuments/Presentation-Leap-Prescriptive-Baselines-Mar-03-2025.pdf

2. Please provide your organization’s feedback on the overarching themes/areas and the associated scope items for problem statement formulation. Are there any additional themes/areas or individual scope items which should be explored further?

Please see the PDF attached below the final question for DMM's fully formatted complete set of comments. For the reader's convenience, the complete text of the comments is pasted in response to #1, but there may be some formatting errors.

3. Please provide your feedback on any specific topics that require further information/reference in order to facilitate substantive stakeholder conversation.

Please see the PDF attached below the final question for DMM's fully formatted complete set of comments. For the reader's convenience, the complete text of the comments is pasted in response to #1, but there may be some formatting errors.

4. What feedback do you have on the challenges shared by Stakeholder presentations regarding service level load measurement & validation needed for control groups? Do the M&V and Performance Evaluation Methodology (PEM) options available today address the needs of diverse technologies? Are there additional technical challenges (e.g., technology-specific curtailment, control group validation, energy storage baselines) that should be considered in the working group?

Please see the PDF attached below the final question for DMM's fully formatted complete set of comments. For the reader's convenience, the complete text of the comments is pasted in response to #1, but there may be some formatting errors.

5. What topic(s) would your organization be interested in presenting (what is the problem/issue seeking to be addressed)? Which stakeholders would it impact?

Please see the PDF attached below the final question for DMM's fully formatted complete set of comments. For the reader's convenience, the complete text of the comments is pasted in response to #1, but there may be some formatting errors.

1. Please provide your organization’s feedback on the approach to the Working Group’s goals, process, evolution of the Discussion paper, and Stakeholder Recommendations (pg. 2-5) in the DDEMI Discussion Paper. Any suggestions to improve the Working Group process or deliverables?

Recommend clear agenda times for specific topic areas for working group meetings published ahead of time. This will help faciliate participation by organizations with interest in only specific working group topics. 

2. Please provide your organization’s feedback on the overarching themes/areas and the associated scope items for problem statement formulation. Are there any additional themes/areas or individual scope items which should be explored further?

No comment at this time

3. Please provide your feedback on any specific topics that require further information/reference in order to facilitate substantive stakeholder conversation.

No comment at this time

4. What feedback do you have on the challenges shared by Stakeholder presentations regarding service level load measurement & validation needed for control groups? Do the M&V and Performance Evaluation Methodology (PEM) options available today address the needs of diverse technologies? Are there additional technical challenges (e.g., technology-specific curtailment, control group validation, energy storage baselines) that should be considered in the working group?

No comment at this time

5. What topic(s) would your organization be interested in presenting (what is the problem/issue seeking to be addressed)? Which stakeholders would it impact?

CLECA would be interested in presenting on the following topics:

Reliability-based Demand Response Participation

3. Explore methods to consider fixed costs in economic dispatch decisions for RDRRs.

4. Allow RDRRs to reflect minimum on-times greater than one hour, to more accurately reflect RDRR run times.

1. Please provide your organization’s feedback on the approach to the Working Group’s goals, process, evolution of the Discussion paper, and Stakeholder Recommendations (pg. 2-5) in the DDEMI Discussion Paper. Any suggestions to improve the Working Group process or deliverables?

CALSSA appreciates CAISO staff providing the discussion paper and believes that an evolving discussion paper summarizing working group discussions is a helpful tool to ensure that CAISO staff and participants have a clear understanding of staff’s and participants’ positions and concerns. This will create a shared foundation as the group moves into articulating and assessing problem statements. It will be helpful for future iterations of the discussion paper to clearly point to changes from prior iterations by both summarizing and tracking changes (i.e., providing a redlined version).

Providing working group meeting materials at least two business days before a meeting would enable participants to be better informed and prepared to actively participate. 

The working group includes a broad range of interested stakeholders. CAISO should consider occasionally forming topic-area subgroups to have opportunities for more-focused discussion, while balancing the usefulness of focused discussion with the importance of informing all working group members and working toward prioritization of issues.

For the initial stage of the working group, 3- to 4-week intervals between meetings will best allow participants to provide broad input. It is especially helpful to provide sufficient time for participants to submit written input between meetings when requested. If there are subgroup meetings, the schedule for the full working group should take into account those additional meetings. More frequent meetings would be helpful once the working group has finalized problem statements and areas that will be addressed through the group.

Approximately 2-3 weeks should be sufficient for written comments in most cases.

2. Please provide your organization’s feedback on the overarching themes/areas and the associated scope items for problem statement formulation. Are there any additional themes/areas or individual scope items which should be explored further?

CALSSA, along with a number of other working group participants, would like the working group to explore opportunities to better enable market participation by behind-the-meter (BTM) batteries, reflecting their full capabilities for real-time dispatch that goes beyond load reduction and is inclusive of exported energy. Additionally, we are very open to exploring how best to integrate BTM batteries into the CAISO market, whether through modifying existing participation models or developing new models.

CALSSA appreciates CAISO staff’s efforts to identify major themes and topic areas. The task of distilling feedback from multiple disparate participants and creating useful categories or themes is a challenge, especially when some issues are interrelated or cross categories. We offer these comments with the recognition that it is more important to address the substance of stakeholder issues than their categorization. 

In our comments on February 21, CALSSA identified a number of issues that we would like the working group to address, related to market participation of BTM batteries. At the time, we presented these as issues that would be addressed through changes to the PDR model. When reviewing how the issues we identified are reflected in the themes/areas and specific items, we see some of those issues categorized under different themes, while some are not clearly identified among the themes and scoped items. 

During the March 3 meeting, we discussed the question of where issues for BTM batteries best fit. The discussion paper includes a scoped item under the theme of Distributed Energy Resource (DER) Participation (theme 4) for “Explore behind-the-meter storage participation in wholesale markets.” There are good reasons why it may be better to consider BTM batteries under theme 4 rather than under the PDR theme (Economic-Based Demand Response Participation Model, theme 2), including that batteries can do more than offset load and that their operation often does not raise the concerns that demand participation does (for example, customer fatigue associated with repeated requests to reduce energy use). 

Therefore, we appreciate and support this as a scoped item, as long as it is understood to include issues that participants have called out as important for the working group to consider regarding market participation by BTM batteries. These include the following issues identified in CALSSA’s comments submitted on February 21.

• More fully accounting for battery performance, including exported energy (beyond the extent to which mPDR addresses this).
• Addressing customer enrollment barriers.
• Enabling device-specific market participant registration.
• Exploring device-level performance measurement and evaluation, and exploring improvements to existing baseline methodologies that pose challenges for BTM batteries.
• Considering issues relevant to BTM batteries’ participation in Resource Adequacy that are partly or fully within CAISO jurisdiction.

We recognize that some of these issues appear elsewhere in the CAISO categorization. For example, theme 1, Performance Evaluation Methodology, refers to exploring device level measurement and alternative baseline methodologies, and theme 2, PDR, refers to conducting a holistic refresh of PDR programs and updating baseline methodologies. But we believe that it is important to specifically address these as issues for BTM batteries. 

We also wish to call out some other issues related to BTM battery participation that the working group should consider, whether viewed as encompassed in these issues or as separately articulated issues:

• Clarifying when and how BTM batteries can participate in the CAISO market and in other programs for providing grid services (such as ones offered by IOUs and CCAs), including both programs that are designed specifically for batteries and other load flexibility programs for which batteries are eligible.
• Exploring how to fully value and compensate BTM batteries’ diverse capabilities, to incentivize their participation.

Additionally, we are very open to exploring whether BTM batteries could be better integrated into the CAISO market through another model rather than PDR. We want to highlight that there are tradeoffs with different models. For example, the CPUC has not developed a qualifying capacity value for resources that use the DERP model, and that model is not compatible with Rule 21 interconnection. This working group should aim to avoid and minimize obstacles like this, that make participation in Resource Adequacy participation more difficult. That may mean thinking carefully about how to address issues, including how to categorize them and how to form problem statements and work toward solutions that incorporate considerations of how market participants can use market models in viable business strategies.

3. Please provide your feedback on any specific topics that require further information/reference in order to facilitate substantive stakeholder conversation.

CALSSA appreciates that CAISO has asked this question again. In our March 21 comments we expressed interest in CAISO staff discussing its experience with Demand Side Grid Support Option 3 (BTM battery virtual power plants) and Emergency Load Reduction Program subgroups in which BTM batteries have participated, including its experience with BTM resources exporting to the grid.

On March 3, CAISO staff presented information related to performance measurement methodologies for demand response, and said that there would be more discussion of these methodologies in the next working group meeting. It would be useful for the continued discussion to touch on issues that CAISO staff and stakeholders have identified with the use of the existing methodologies.

We would also like the working group to provide information on bidding strategies and settlement processes applicable to BTM batteries, in both the day-ahead and real-time markets. 

We encourage CAISO staff to continue to ask this question as the working group continues work to identify and assess problem statements.

4. What feedback do you have on the challenges shared by Stakeholder presentations regarding service level load measurement & validation needed for control groups? Do the M&V and Performance Evaluation Methodology (PEM) options available today address the needs of diverse technologies? Are there additional technical challenges (e.g., technology-specific curtailment, control group validation, energy storage baselines) that should be considered in the working group?

The presentations by Leap and PG&E articulated some challenges posed by existing M&V methodologies, which would be useful topics for working group attention. The Leap presentation, in particular, reflects concerns similar to ones that CALSSA members have expressed, and which led us to ask the working group to consider issues in performance evaluation and improvements to baseline methodologies. 

Existing methodologies do not fully address the needs of BTM storage. Limitations on counting exported energy are the topmost issue, which overlaps with other issues including meter-level measurement, accounting for solar generation without undervaluing response during events, and recognizing device performance independent of site load. Such issues can create significant disincentives for participation by diminishing performance measurement despite event-responsive dispatch. Methodologies should recognize the value of event response by resources that operate more regularly on non-event days than, for example, some traditional demand response resources. 

We support the working group exploring ways to improve on existing settlement methodologies, particularly for BTM storage, including considering ways to better enable control group methodologies and whether to incorporate prescriptive baselines. CALSSA members have experience with the prescriptive baseline approach in the Demand Side Grid Support’s Option 3 pathway, and can discuss that approach in comparison with CAISO methodologies. We hope the working group will provide an opportunity for a robust discussion of the challenges and potential solutions.

5. What topic(s) would your organization be interested in presenting (what is the problem/issue seeking to be addressed)? Which stakeholders would it impact?

CALSSA previously said that we may want to present on obstacles to market participation for BTM batteries through CAISO participation models (PDR/RDRR and DERP), and on comparative experiences and learnings from participating in other ISO/RTOs with BTM batteries. We will communicate with CAISO staff if we believe it would be useful for CALSSA to present on these topics.

1. Please provide your organization’s feedback on the approach to the Working Group’s goals, process, evolution of the Discussion paper, and Stakeholder Recommendations (pg. 2-5) in the DDEMI Discussion Paper. Any suggestions to improve the Working Group process or deliverables?

No comments at this time. 

2. Please provide your organization’s feedback on the overarching themes/areas and the associated scope items for problem statement formulation. Are there any additional themes/areas or individual scope items which should be explored further?

No comments at this time. 

3. Please provide your feedback on any specific topics that require further information/reference in order to facilitate substantive stakeholder conversation.

No comments at this time. 

4. What feedback do you have on the challenges shared by Stakeholder presentations regarding service level load measurement & validation needed for control groups? Do the M&V and Performance Evaluation Methodology (PEM) options available today address the needs of diverse technologies? Are there additional technical challenges (e.g., technology-specific curtailment, control group validation, energy storage baselines) that should be considered in the working group?

The California Energy Storage Alliance (CESA) appreciates the opportunity to comment on the DDEMI discussion paper and stakeholder presentations.  CESA supports Nostromo’s proposal to utilize a thermal PEM which will accurately reflect behind-the-meter thermal energy storage performance.  The approach is similar to the metered generation output (MGO) PEM developed to reflect behind-the-meter electrical energy storage.  Similar to the MGO PEM, the thermal PEM will utilize interval-metered data to precisely reflect the electricity demand reduction from reducing electrical load when the thermal energy storage is being utilized to provide thermal BTUs.  The conversion of measured thermal BTUs to its electrical equivalent provides similar accuracy to the MGO PEM approach, exceeds the accuracy of using a baseline methodology, and solves for a real problem in accurately valuing the performance of thermal energy storage.

CESA also encourages consideration of moving PEM out of tariffs and into BPMs to allow for additional flexibility that would simplify implementation of evident improvements such as that proposed by Nostromo.

Additionally, CESA supports further exploration of the problem presented by LEAP that the existing baseline methodology reduces DER dispatch capabilities by penalizing frequent dispatch.

5. What topic(s) would your organization be interested in presenting (what is the problem/issue seeking to be addressed)? Which stakeholders would it impact?

No comments at this time. 

1. Please provide your organization’s feedback on the approach to the Working Group’s goals, process, evolution of the Discussion paper, and Stakeholder Recommendations (pg. 2-5) in the DDEMI Discussion Paper. Any suggestions to improve the Working Group process or deliverables?

Nostromo Energy appreciates the CAISO soliciting stakeholder comments and presentations for their March 3rd, 2025, Demand and Distributed Energy Market Integration Initiative Working Group.  Nostromo Energy was honored to present our materials outlining a proposed Thermal Energy Storage PEM framework to CAISO staff and stakeholders and appreciated the active engagement on this important concept.  

We also wish to thank the other presenters for their contributions to the workshop and their clear commitment to advancing the DDEMI discussion.  The detail and breadth of the presentations illustrates that there can be no single solution to the effective integration and use of Demand Response, and Nostromo believes that this ongoing dialogue will be a key driver to enable CAISO to integrate new Demand Response technologies towards meeting the objectives of California Senate Bill 846 to bring 7 GW of “shift” resources into the market by 2030.  

Nostromo Energy believes that this active engagement with, and by stakeholders is a valuable element of the initiative process and commends the CAISO for their active support and solicitation of diverse solutions in the DDEMI space.  We look forward to continuing this collaborative process through the ongoing DDEMI workshops but do caution that these discussions should not delay important elements from moving forward once they have been identified.

In support of the efficiency principle Nostromo Energy believes that there are some items already in discussion, such as moving the PEM calculation processes from the Tariff to a BPM, that are ripe for policy advancement through a CAISO issue paper & straw proposal in an accelerated first phase while allowing more time for other, more complicated discussions to remain in the working group process.

2. Please provide your organization’s feedback on the overarching themes/areas and the associated scope items for problem statement formulation. Are there any additional themes/areas or individual scope items which should be explored further?

Nostromo Energy believes that the overarching themes that the CAISO has identified in the recent discussion paper help illuminate the principles that were outlined in the earlier working group session and provide a strong starting point for further discussions.  

Nostromo strongly supports prioritizing the discussion on shifting the specifics of all PEM calculation processes into an appropriate BPM, instead of the Tariff, to allow CAISO to more easily expand and revise PEM methodologies and enable rapidly changing technologies to be effectively incorporated into the market. In line with this Nostromo also supports LEAP Energy’s proposal on the benefits of prescriptive baselines so that the full benefit of dispatchable resources can be more easily offered to the CAISO market.

3. Please provide your feedback on any specific topics that require further information/reference in order to facilitate substantive stakeholder conversation.

N/A

4. What feedback do you have on the challenges shared by Stakeholder presentations regarding service level load measurement & validation needed for control groups? Do the M&V and Performance Evaluation Methodology (PEM) options available today address the needs of diverse technologies? Are there additional technical challenges (e.g., technology-specific curtailment, control group validation, energy storage baselines) that should be considered in the working group?

The continued identification of specific technological processes and opportunities is of considerable value to the market.  Nostromo has found that the existing PEM methodologies are of limited use in establishing the accurate performance of its existing Thermal Energy Storage installation and are concerned that other new and/or developing technologies will also experience similar difficulties unless addressed, possibly preventing GWs of dispatchable resources from integrating with the market quickly and effectively.

The current PEMs are limited in their applicability to demand response resources as they do not reflect the current needs of the market. For purposes of efficiency Nostromo believes that it is important to prioritize improving PEMs for technologies that are online and ready to participate in the market.

5. What topic(s) would your organization be interested in presenting (what is the problem/issue seeking to be addressed)? Which stakeholders would it impact?

Nostromo Energy would again like to thank the CAISO for allowing us to engage the stakeholder community directly with the Thermal Energy Storage PEM concept and are always open to continuing this discussion as desired.

1. Please provide your organization’s feedback on the approach to the Working Group’s goals, process, evolution of the Discussion paper, and Stakeholder Recommendations (pg. 2-5) in the DDEMI Discussion Paper. Any suggestions to improve the Working Group process or deliverables?

PG&E appreciates the direction provided by the DDEMI Discussion Paper for organizing discussions and facilitating collaboration in the WG process culminating in Stakeholder Recommendations for future policy development. 

PG&E requests that CAISO provide a more explicit timeline for the WG to ensure progress toward actionable outcomes. 

2. Please provide your organization’s feedback on the overarching themes/areas and the associated scope items for problem statement formulation. Are there any additional themes/areas or individual scope items which should be explored further?

PG&E concurs with the thematic areas identified by CAISO and believes they accurately represent the topics to be formalized into problem statements through the DDEMI WG process.   

PG&E suggests that the Economic-based Demand Response Participation Model thematic area includes consideration of the factors necessary for the mPDR participation model to be eligible for Resource Adequacy. 

3. Please provide your feedback on any specific topics that require further information/reference in order to facilitate substantive stakeholder conversation.

None.

4. What feedback do you have on the challenges shared by Stakeholder presentations regarding service level load measurement & validation needed for control groups? Do the M&V and Performance Evaluation Methodology (PEM) options available today address the needs of diverse technologies? Are there additional technical challenges (e.g., technology-specific curtailment, control group validation, energy storage baselines) that should be considered in the working group?

PG&E is encouraged by the potential benefits of the Prescriptive Baseline and looks forward to working with stakeholders on making Prescriptive Baselines accurate and statistically robust. PG&E has identified a few items below for consideration and provides a comparison to the Load Impact Protocol (LIP) based ex-post impact estimates. The LIP-based approach is considered to be an accurate and statistically robust methodology, utilized for CPUC’s Resource Adequacy and Cost-Effectiveness proceedings as well as CEC’s Integrated Energy Policy Report. PG&E notes that there are differences between the Load Impact Protocol (LIP) based ex-post impact estimates and the Prescriptive Baseline methodology that is used in the California Energy Commission’s Demand Side Grid Support Option 3 program referenced in LEAP’s presentation.  

In Figure 1, PG&E presents load impact evaluation results of Emergency Load Reduction Pilot (ELRP) Virtual Power Plant (VPP) event performance in program year 2024 for battery exporting residential customers participating in group A4. The Prescriptive Baseline calculates performance based on a fixed percentage of the battery’s nameplate capacity whereas the LIP approach models patterns of battery usage based on temperature, time of day, and customer demographics. When comparing individual customer performance, the Prescriptive Baseline results in nearly 1 kW more performance than LIP, or a 25% difference. It would be ideal if the Prescriptive Baseline results were more comparable to the LIP results.  

Figure 2 presents the 24-hour load profile of these same customers, comparing the average event day’s observed load with baselines developed using LIP and Prescriptive Baseline methodologies. The graph illustrates the issue with using a constant baseline. The shaded red area represents the difference between the two baselines during the average ELRP event. Note that the Prescriptive Baseline is the same value for all hours, as it is a product of a customer’s constant battery capacity rather than a customer’s actual, variable energy usage. Due to this approach, the Prescriptive Baseline may not account for hourly variation in discharge patterns and risks double counting pre-existing load response to other price signals or incentives (e.g. TOU prices and/or Energy Export Credits). The LIP baseline, on the other hand, accurately captures battery charge and discharge patterns on non-event days and incentive arbitrage on hours surrounding the event.  

5. What topic(s) would your organization be interested in presenting (what is the problem/issue seeking to be addressed)? Which stakeholders would it impact?

None.

1. Please provide your organization’s feedback on the approach to the Working Group’s goals, process, evolution of the Discussion paper, and Stakeholder Recommendations (pg. 2-5) in the DDEMI Discussion Paper. Any suggestions to improve the Working Group process or deliverables?

PacifiCorp supports the approach set out by the CAISO which reflects stakeholder input and recommendations during the working group process into a discussion paper format. This approach has proven to be successful in other working groups, as the discussion paper acts as a living document, to track where stakeholder conversations have gone throughout the working group process. PacifiCorp believes the content outlined in the discussion paper thus far captures the concerns raised by stakeholders. In addition, PacifiCorp found the matrix provided by the CAISO of different DR participation models very helpful in level setting the different models and requirements of each offering. 

2. Please provide your organization’s feedback on the overarching themes/areas and the associated scope items for problem statement formulation. Are there any additional themes/areas or individual scope items which should be explored further?

No comment at this time.  

3. Please provide your feedback on any specific topics that require further information/reference in order to facilitate substantive stakeholder conversation.

PacifiCorp found the introductory educational session of current baseline methodologies helpful and looks forward to continued discussion on this topic in the next working group meeting. For additional topics, PacifiCorp would like the working group to spend more time on the options for device level participation. This topic was briefly referenced during the last call and warrants more discussion as some DER programs are at the device level, and it was apparent that these resource types have not been successfully registered with CAISO, leaving a gap in valuable resource participation. Enhancements to the CAISO’s baseline methodologies to better incorporate these resource types would provide benefits to the market for both economic opportunities and reliability purposes. The Company has a fleet of demand response programs at the device level and heard interest from stakeholders on the topic.  

During the stakeholder the CAISO stated that it is within the scope of the working group to expand the DR offerings to incorporate a reliability demand response participation model for all market participants. PacifiCorp is keenly interested in this topic and would like more discussion in subsequent meetings on the criteria that would qualify a program to fit this bucket as many of our current programs are used for this purpose. The development of this additional participation model will likely require new baseline methodologies to be created as it would need to be formed based on the needs of the participants.  

4. What feedback do you have on the challenges shared by Stakeholder presentations regarding service level load measurement & validation needed for control groups? Do the M&V and Performance Evaluation Methodology (PEM) options available today address the needs of diverse technologies? Are there additional technical challenges (e.g., technology-specific curtailment, control group validation, energy storage baselines) that should be considered in the working group?

PacifiCorp thanks Nostromo, Pacific Gas & Electric, and Leapfrog for their presentations on baseline methodology challenges and proposals. From the PacifiCorp perspective, the key takeaway is that the current baseline methodologies offered by the CAISO require further consideration and enhancement. As referenced by the Department of Market Monitoring’s comments, many baselines aren’t widely utilized today by market participants and the presentations provided a reason as to why that might be. PacifiCorp underscores a key point made which is that market participants desire more frequent economic participation than what is possible through the current baseline methodology offering. Increased demand response program participation attracts more supply to the market which assuages the impending high demand and can act as a reliability backstop with the integration of additional participation models and baselines. 

PG&E discussed the hinderances of control group baselines which is a methodology that, per CAISO’s business practice manual, requires 150 end-users who are geographically similar, so they experience same patterns and grid conditions are the treatment group. PG&E’s presentation identified barriers in retrieving and registering data from non-demand response participant metering, leaving this option difficult to implement. As discussed during Leapfrog’s presentation, the current day matching baseline methodology requires a program to refrain from dispatching for 45 days prior to an event to establish a measurement baseline. This is restrictive participation model dampers demand response usage within the market to uphold the baseline, creating obstacles for participation. PacifiCorp could agree that day matching has worked for loads that do not dispatch frequently but new programs are positioned to dispatch more frequently, working to guard against the anticipated high demand penetration that was forecasted by the Western Electricity Coordinating Council1. Leapfrog’s presentation provided a proposal for “Prescriptive Baselines” which utilizes historical data rather than day-of data with similar load shapes. PacifiCorp supports further exploration of this proposal.  

5. What topic(s) would your organization be interested in presenting (what is the problem/issue seeking to be addressed)? Which stakeholders would it impact?

PacifiCorp is not interested at this time. 

1. Please provide your organization’s feedback on the approach to the Working Group’s goals, process, evolution of the Discussion paper, and Stakeholder Recommendations (pg. 2-5) in the DDEMI Discussion Paper. Any suggestions to improve the Working Group process or deliverables?

PGE thanks the CAISO for kicking off a well-organized working group process. PGE believes WEIM-only participants may have unique policy perspectives. PGE would welcome additional attention to WEIM-only entities, whether as a dual-track or subgroup process.

2. Please provide your organization’s feedback on the overarching themes/areas and the associated scope items for problem statement formulation. Are there any additional themes/areas or individual scope items which should be explored further?

PGE is working to refine our problem statement formulation to guide working group participation.  Overall, PGE’s goal is to be able to bid our DR/DER resources into the EDAM and/or EIM market for economic and reliability purposes. PGE recommends that this working group first inventory barriers to participation (telemetry, bidding requirement, baseline methodology, etc.).

3. Please provide your feedback on any specific topics that require further information/reference in order to facilitate substantive stakeholder conversation.

PGE believes the working group could benefit from policy learning from other RTO/ISO markets, dependent on the perspectives of other commenting entities.

4. What feedback do you have on the challenges shared by Stakeholder presentations regarding service level load measurement & validation needed for control groups? Do the M&V and Performance Evaluation Methodology (PEM) options available today address the needs of diverse technologies? Are there additional technical challenges (e.g., technology-specific curtailment, control group validation, energy storage baselines) that should be considered in the working group?

PGE is still working through understanding these concepts and their impacts. PGE has concerns about baseline methodologies and PEMs due to our 2022 pilot program creating PDRs from industrial DR programs. When attempting to create the PDRs, our evaluation identified that the CAISO approved baseline methodologies were >30% lower than PGE’s rigorous 3rd party performance evaluations. PGE believes there are significant differences to consider in baseline methodologies for the different regions and different CAISO participation – our balancing authority customers, climate, and market is different, and our programs operate differently.

PGE understands the CAISO's need to accurately assess each resource within the CAISO BA, given the multiple utilities and companies involved, to ensure fair payments or charges. However, WEIM/EDAM Entities are distinct, particularly in how nonperformance risk is managed and allocated. Accordingly, it is appropriate to explore developing an approach that is specific for WEIM entities in governing DR participation in the market.

To better understand PEM and baseline methodology structures, PGE asks that the CAISO explore various scenarios outlining operational variance between the different options. For example, the CAISO could consider the following scenario:

For a future hour, PGE has a planned DR event of 100 MWs.  This DR event is a combination of DR resources, including residential and industrial. All are PGE programs within the PGE BA. The load forecast for the hour is 4,000 MWs, and for simplicity, PGEM will serve the remaining 3,900 MWs with PGE generation. Entering the hour, the DR event underperforms – only 50 MWs of the expected 100 MW materialize. What happens from here?

Lacking real-time telemetry, the PGE BA would know only that the BA is not balanced, and our ACE likely negative. (Assuming perfect balance previously, the BA ACE would be -50 MWs). From here, the BAO or the WEIM Entity has several options:

• Riding the ACE, resulting in the deficiency being charged to the BA via inadvertent interchange.

• Allowing the regulating unit to deviate from the market DOT (automatically or manually) to balance the system without taking action in the market

• Entering a Load Bias for the market to make an adjustment

• Entering a Load Bias and a Manual Dispatch

PGE would like to run through such a scenario to discuss the outcomes of the different options available to the EIM Entity. How would the baseline methodology and PEM be applied to the resource, and how would the energy be settled?

A separate issue that PGE would like to explore is right sizing metering and telemetry requirements.  Currently, telemetry requirements are more stringent for resource aggregation over 10 MW.  Additionally, DR programs are not allowed to have a bid curve—they are all or nothing.  This leads to a situation where DR programs are broken into 10MW segments, rather than being offered into the market at the programmatic level, creating management challenges for WEIM Entities.  Additionally, being able to offer DR programs on a bid curve would enhance the opportunities for economic participation of load.  PGE has received inquiries from large commercial customers who would like to offer their DR into the EDAM on an economic basis.  CAISO’s current program rules do not allow for this approach.

PGE would also like to identify how these programs can move from being self-scheduled today to a bid-based program in the EDAM.

5. What topic(s) would your organization be interested in presenting (what is the problem/issue seeking to be addressed)? Which stakeholders would it impact?

PGE is open to presenting on our existing DR programs and the company goals which drive our participation in the working group. PGE is interested in explaining why a robust and expanded participation model within the CAISO market is key to achieving our targets.

PGE believes these changes would be of use to the entire market, with benefits including reliability and cost savings for PGE customers and those of other LSEs choosing to grow their DR/DER market participation.

1. Please provide your organization’s feedback on the approach to the Working Group’s goals, process, evolution of the Discussion paper, and Stakeholder Recommendations (pg. 2-5) in the DDEMI Discussion Paper. Any suggestions to improve the Working Group process or deliverables?

Sunrun appreciates the effort by CAISO staff in providing the discussion paper and believes that an evolving document summarizing working group discussions is an effective tool to ensure both CAISO staff and participants have a clear understanding of each other’s positions and concerns. This will establish a common foundation as the group moves forward in developing and evaluating problem statements. For future versions of the discussion paper, it would be helpful to highlight changes from previous iterations by summarizing and tracking those modifications (such as providing a redlined version).

Distributing working group meeting materials at least two business days in advance would allow participants to be better informed and prepared for active engagement.

Given the broad range of stakeholders involved in the working group, CAISO should consider occasionally creating smaller topic-specific subgroups to allow for more in-depth discussions, while still balancing the need for focused dialogue with the importance of keeping all working group members informed and working toward issue prioritization

2. Please provide your organization’s feedback on the overarching themes/areas and the associated scope items for problem statement formulation. Are there any additional themes/areas or individual scope items which should be explored further?

Sunrun appreciates CAISO staff’s efforts to identify major themes and topic areas. We have participated in the CAISO market using the PDR model in the past to provide resource adequency with CCAs through our behind the meter residential solar and storage fleets. Due to significant challenges described below, we have decided to exit CAISO market. When reviewing how the issues we identified are reflected in the themes/areas and specific items, we see some of those issues categorized under different themes, while some aren’t clearly identified in the themes and scoped items. 

Therefore, we appreciate and support this as a scoped item, as long as it is understood to include the issues identified in comments submitted on February 21. Sunrun identified the following:

• More fully accounting for battery performance, including exported energy (beyond the extent to which mPDR addresses this)

• Addressing customer enrollment barriers

• Enabling device-specific market participant registration

• Exploring device-level performance measurement and evaluation, and exploring improvements to existing baseline methodologies that pose challenges for BTM batteries

• Considering issues relevant to BTM batteries’ participation in Resource Adequacy that are partly or fully within CAISO jurisdiction

We are also open to exploring alternative ways to integrate BTM batteries into the CAISO market, beyond the PDR model. It's important to note that different models come with their own tradeoffs. For instance, the CPUC has yet to establish a qualifying capacity value for resources using the DERP model. This working group should focus on minimizing challenges like this that hinder participation in Resource Adequacy. This may involve carefully considering how to address these issues, including how to classify them, craft problem statements, and work towards solutions that account for how market participants can leverage market models in sustainable business strategies.

3. Please provide your feedback on any specific topics that require further information/reference in order to facilitate substantive stakeholder conversation.

4. What feedback do you have on the challenges shared by Stakeholder presentations regarding service level load measurement & validation needed for control groups? Do the M&V and Performance Evaluation Methodology (PEM) options available today address the needs of diverse technologies? Are there additional technical challenges (e.g., technology-specific curtailment, control group validation, energy storage baselines) that should be considered in the working group?

While we acknowledge and align with the challenges highlighted by Leap and the approach they’ve been exploring to fairly assess the capacity performance of DERs, Sunrun believes it’s crucial to continue examining these issues and engage in discussions about potential solutions for a new M&V approach for behind-the-meter assets before recommending any specific proposal. The current performance evaluation methods, such as the 5-in-10 or 10-in-10 baseline measured at the utility meter level, do not fully capture the capacity and energy contributions to the wholesale market—especially for behind-the-meter storage, which not only supports self-consumption but can also export to the grid.

5. What topic(s) would your organization be interested in presenting (what is the problem/issue seeking to be addressed)? Which stakeholders would it impact?

1. Please provide your organization’s feedback on the approach to the Working Group’s goals, process, evolution of the Discussion paper, and Stakeholder Recommendations (pg. 2-5) in the DDEMI Discussion Paper. Any suggestions to improve the Working Group process or deliverables?

Tesla generally agrees with the DDEMI Discussion Paper’s Working Group goals, topics and processes. However, under DDEMI Working Group Principles, we recommend that under Principle #4 for Simplicity, an additional bullet should be added stating: “Programs and tariffs should be designed in such a way that enrollment, telemetry, performance measurement and other features are as simple and straightforward for customers as possible.”

2. Please provide your organization’s feedback on the overarching themes/areas and the associated scope items for problem statement formulation. Are there any additional themes/areas or individual scope items which should be explored further?

Tesla appreciates the incorporation of some of the topics that we raised in our Feb. 21 comments, particularly regarding exploration of device-level measurement. However, the current high-level descriptions and categorization of the themes leaves us uncertain as to whether other issues (such as enrollment and device-level registration) that we raised in our initial comments are reflected. While it is entirely possible that Theme #4 Distributed Energy Resource (DER) Participation, and Theme #2, Economic-based Demand Response Participation Model, cover some of the topics below, we recommend more explicit inclusion of these topics be incorporated into the themes:

1. Crediting battery energy storage for exported energy beyond what may be addressed by mPDR, which is likely needed to incentivize aggregations of small residential customers whose battery capacity exceeds their home’s minimum daily load.
2. Simplifying customer PDR enrollment and addressing other enrollment barriers.
3. Allowing  for PDR registration at the device level.
4. Consideration of allowing shorter dispatch event windows for Resource Adequacy Purposes.
5. Consideration of expanding the PDR model to include other services, such as frequency regulation.

Tesla addressed each of these recommendations in greater depth in our Feb. 21 comments.

3. Please provide your feedback on any specific topics that require further information/reference in order to facilitate substantive stakeholder conversation.

Tesla does not recommend additional topics beyond what is mentioned in our February 21 comments and in our answer to prompt #2 above.

4. What feedback do you have on the challenges shared by Stakeholder presentations regarding service level load measurement & validation needed for control groups? Do the M&V and Performance Evaluation Methodology (PEM) options available today address the needs of diverse technologies? Are there additional technical challenges (e.g., technology-specific curtailment, control group validation, energy storage baselines) that should be considered in the working group?

Tesla reiterates challenges we raised in our Feb. 21 comments regarding challenges regarding measurement and verification. PDR settlement, measurement and verification should be at the device level. This will allow different aggregators to settle multiple programs within the same premise. Aggregators should have the option to settle at the device providing the service using telemetry from that device, which provides better, more granular data, allows aggregators to streamline customer registration, provides aggregators access to the necessary data for operations and settlement, and lays the groundwork for more sophisticated service enabled by the better data. This approach would help lay the groundwork for the approach above of registering the site in multiple programs without needing to worry about conflicts.

5. What topic(s) would your organization be interested in presenting (what is the problem/issue seeking to be addressed)? Which stakeholders would it impact?

Tesla would like to present on DER wholesale market participation in other jurisdictions, such as in ERCOT.

1. Please provide your organization’s feedback on the approach to the Working Group’s goals, process, evolution of the Discussion paper, and Stakeholder Recommendations (pg. 2-5) in the DDEMI Discussion Paper. Any suggestions to improve the Working Group process or deliverables?

Voltus appreciates the broad scope of the Working Group and the openness to including additional problem statements and discussion topics over time. We further appreciate the ISO's offer to host additional workshops or provide further education on key subject areas as needed. 

Voltus is generally comfortable with the proposed process, including the structure of the Discussion Paper and process to evolve it, but notes that for problem statements that are narrowly stated with clear implied solutions, step nos. 4 and 5 ("Illustrate challenge areas by exploring current ISO market operations, functionality, and processes" and "Determine action items for each challenge area to develop policy enhancements" (pg. 3)) may be moved through expeditiously to reach the policy development phase. 

As to the Working Group principles (pg. 4), Voltus reiterates a comment made in its Feb. 21 comments: the principles should incorporate a direct reference to the goal of making available to CAISO more MW of cost-effective, reliable capacity. Voltus had recommended "effectiveness"; the Joint DR Parties had similarly recommended "utilization". During the March 3 Working Group meeting, it was mentioned that these concepts are already implicit in the existing principles. While this may be true, there remains value in more explicitly pointing to effectiveness/utilization as a principle against which to measure policy changes. Voltus seeks clarification on the downsides of including such a principle. 

If there is consensus against adding an additional principle, the idea of utilization/effectiveness could be incorporated through a description to the current principle no. 6, "Facilitate states’ public policies, to the extent practicable," by adding specific reference to facilitating the California Energy Commission’s 2030 load shift goal of 7 GW, the California Public Utility Commission's reliability goals, and California’s 2045 carbon neutrality goal. Policy goals for states outside California associated with WEIM entities could also be referenced.

2. Please provide your organization’s feedback on the overarching themes/areas and the associated scope items for problem statement formulation. Are there any additional themes/areas or individual scope items which should be explored further?

Voltus broadly appreciates the overarching topic areas as effective given the set of issues that have been raised so far. We are hopeful that the DDEMI initiative will open up entirely new resources to reduce ratepayer costs while increasing reliability. 

Voltus takes this opportunity to make two comments on topics/initiatives:

1. Reiterating the significant opportunity of device level measurement, submetering, and enhanced M&V

As discussed in Voltus's Feb. 21 comments, there are major opportunities for unlocking additional cost-effective capacity via better support of new resource types. 

The problem: It is now possible to have multiple virtual power plant technologies co-located behind a single utility meter, but most often, only one or two of those VPP technologies is monetizable, because current measurement and/or baseline methodologies make it difficult or impossible to discern the benefits that each individual technology is providing. Operations of one technology may mask grid benefits provided by another technology due to noisy interaction effects between VPP operations, and current M&V methodologies cannot parse this noise. 

The opportunity: Approving, where appropriate, less stringent meter-accuracy standards that allow cost-effective, non-utility meter submetering for a wider set of VPP technologies and direct measurement of their grid impacts. Similarly, new baseline methodologies and M&V approaches would enable better quantification of certain DER types, including smaller assets. The key point here is the need to decouple the impacts of each technology, so that the risk/reward can be quantified (and settled) individually for each. This approach opens the possibility of multiple third parties providing grid services revenues for a single customer, increasing competitiveness and maximizing available technologies.

To summarize: 

• Device-level telemetry would allow recognition of small responsive loads that can be decoupled from the site’s total load.

• Acceptance of a wider array of meter topologies and accuracies would recognize the variety of DER technologies in the market today. 

• Submetering would allow sites with mixed loads and DERs to participate in both dynamic rates and traditional demand response.

2. Reiterating the significant opportunity of the mPDR concept

Also as discussed earlier comments, the mPDR participation model would unlock significant new capacity for the grid. Based on its expected impact and broad support, this initiative should be prioritized for near-term policy development in Phase I of the Demand and Distributed Energy Market Integration effort.

The problem: Export/net injection by BTM resources co-located at customer loads is not monetizable by existing CAISO market participation models (namely the PDR participation model). This presents an insurmountable barrier to BTM storage market growth, because the only available pathways to monetizing export today rely upon short-term pilot programs—namely, the Demand Side Grid Support (DSGS) pilot program and the Emergency Load Response Program (ELRP)—that are not likely to continue and are thus not “bankable”. There is a need for a permanent participation model for providing both energy and capacity revenues for exporting resources and support investment in these resources, akin to the tried-and-true participation models available to large generating assets. 

The opportunity: There is an abundance of potential to deploy additional BTM and distributed capacity physically capable of exporting. We believe there is a multi-GW opportunity to cost-effectively deploy these storage assets behind the meter, and in a way that offers a shorter time to commercial operation than large generating assets.

3. Please provide your feedback on any specific topics that require further information/reference in order to facilitate substantive stakeholder conversation.

4. What feedback do you have on the challenges shared by Stakeholder presentations regarding service level load measurement & validation needed for control groups? Do the M&V and Performance Evaluation Methodology (PEM) options available today address the needs of diverse technologies? Are there additional technical challenges (e.g., technology-specific curtailment, control group validation, energy storage baselines) that should be considered in the working group?

Voltus broadly supports the presentations of Leap and Nostromo. 

5. What topic(s) would your organization be interested in presenting (what is the problem/issue seeking to be addressed)? Which stakeholders would it impact?

Please see Voltus's Feb. 21 comments.