Comments on 10/9 and 10/23 meeting

1. Please submit your organization's overall feedback on the Resource Adequacy Modeling and Program Design (RAMPD) Track 2 meetings held on 10/9 and 10/23.

ACP-California appreciates CAISO staff’s time and engagement at the October 9 and October 23 meetings, and the opportunity to hear perspectives from other stakeholders. The meetings were helpful in clarifying several elements of the second revised straw proposal. At the same time, a number of stakeholders from across diverse sectors have requested additional analysis to support the proposed redesign before it proceeds and yet that analysis has not yet been presented, leaving stakeholders unable to adequately evaluate the proposal before us and understand its impacts. In particular, many parties have asked that implementation of reforms to RAAIM and related items be delayed to prioritize the coordination of CAISO’s RA rules with UCAP implementation. And numerous parties have also asked for an analysis to substantiate expected reliability benefits before applying RAAIM to VERs.  CAISO should also consider taking an indicative vote on the proposals promoted by CAISO staff and the alternative pathways recommended by stakeholders to get a definitive picture of the concerns with the staff approaches.

ACP-California urges CAISO to thoroughly consider the cost impacts of implementing a riskier RAAIM construct as compared to the expected reliability benefits. Implementing less predictable RAAIM framework, while applying it to VERs, will require generators to incorporate risk premiums into new RA contracts at a time when the combination of trade, tariff, tax and inflationary impacts are already raising prices. The administrative burden for both generators and the CAISO, and the potential that some existing contracts may need to be re-opened to price in the additional risk, are additional costs to consider in evaluating a new RAAIM framework. Thus, we ask CAISO to provide additional analysis to support its proposal and help stakeholders better weigh the tradeoffs of the changes CAISO is proposing.  This is not the first time that ACP-California and other parties have requested this analysis, creating frustration that CAISO continues to move forward without first performing this fundamental work.. 

With respect to the proposed new application of RAAIM to VERs, ACP-CA understands from the October 23 presentation that CAISO’s objective is to “promote more consistent accountability across the RA fleet.” We appreciate CAISO’s acknowledgment that it “recognizes the limitations of the proposed approach and seeks feedback on alternative pathways for VER treatment.” For the reasons discussed in Question 3, ACP-CA believes the most practical pathway at this time is to retain the existing VER exemption as there are legitimate reasons why VERs should be treated differently, such as the need for VERs to generate RECs to be economic, which does not exist in other resource types.  Simply using “consistent accountability,” without any analysis for the tradeoffs of being “consistent,” ignores the reasons for different treatment in the past and provides no analytical basis to justify this change.  Retaining the existing RAAIM exemption for VERs should not create any reliability concerns and will avoid the significant implementation, contractual, and administration lift that would be imposed by applying RAAIM to VERs

ACP-CA wishes to highlight the affordability context in which this initiative is moving forward and to ask CAISO to carefully and specifically consider its proposal in this context. The proposed changes to RAAIM would add new risks to RA contracts across the CAISO footprint and would expand the types of generators subject to these risks. The additional risk created by this proposal is likely to result in higher risk premiums for RA contracts and those higher prices will ultimately make their way to customers, at a time when affordability is a central concern for California policymakers and ratepayers.

ACP-CA appreciates CAISO’s decision to move the Track 2 Board decision to Q1 2027 but we encourage CAISO to use this additional time to step back and consider larger questions, including whether RAAIM is still needed once UCAP is in place when combined with the new products created by DAME for day ahead market reliability. ACP-California asks CAISO to first fully address UCAP implementation and then reconsider if it is necessary to retain RAAIM and what RAAIM reforms are needed, including whether it is necessary to eliminate the VER exemption for RAAIM. When CAISO next proposes RAAIM reforms, it should clearly articulate what additional reliability benefits such a change would offer, relative to the anticipated implementation lift and contracting impacts associated with the proposal.

2. Please submit your organization's overall feedback on the second revised straw proposal that was posted on 10/2.

ACP-CA continues to have concerns that the proposal will have negative impacts on generators (and ultimately ratepayers) while offering limited benefits.

The proposed redesign would increase suppliers’ financial exposure in several, meaningful ways. Under the proposal, penalties would be priced at the day-ahead LMP and at $2,000/MWh. While they would be limited to up to twice the CPM soft offer cap, this is an entirely new exposure for resources that are exempt today. Shifting to a system conditions-based structure a would also be a major change for generators subject to RAAIM today. Sellers will need to account for these new, structural risks in the context of their contracts, whether or not they actually face penalties. ACP-CA believes it would be valuable for CAISO to consider the potential magnitude of these costs and weigh them against the expected reliability benefits, especially with the introduction of UCAP and DAME products, before moving forward with proposed reforms.

It is also important to consider that, generally, participation in the RA program is voluntary, and, at present, the economics of RA contracts in California are challenging for wind and solar resources with heavily discounted counting values and relatively low RA prices. For resources that are considering entering into an RA contract in California, the decision to sell RA depends on whether expected RA revenue outweighs the associated risk. If potential penalties approach or exceed RA revenue, some owners may reasonably choose not to sell RA at all. That outcome would reduce the RA supply available to LSEs, put upward pressure on RA prices, and reduce the capacity visible to CAISO through RA obligations. It would also run counter to the RAMPD problem statement’s objective that RAAIM changes “encourage all RA-eligible resources to be shown.”

As a directional illustration, a 100 MW Southern California sited solar unit would earn roughly $1.6 million in RA revenue over the June-October period if valued at the CPM soft offer cap ($7.34/kW-month), using the CAISO’s 2027 exceedance-based Technology Factors.  Actual bilateral RA prices and LRA counting rules differ, so this is not a precise estimate of market revenue. It does, however, illustrate the scale of the risk. Under the proposed caps, the same unit could face up to roughly $1 million in RAAIM charges in a single summer month (twice the CPM soft offer cap applied to about 67 MW of July shown RA). For some owners, that exposure may make participation in the program not worthwhile relative to selling energy and RECs alone.

Under the proposed event-based design for RAAIM, a resource’s exposure depends largely on whether a forced outage happens to coincide with a Tier 1 or Tier 2 event. Forced outages are, to a significant extent, stochastic; as WPTF’s analysis earlier in this initiative indicated, fleet forced outages show little correlation with system stress. ACP-CA’s analysis submitted as an attachment to its August 5 comments also supports this thesis. While forced outages are generally stochastic, the occurrence of Tier 1 and Tier 2 events depends primarily on system-wide factors such as LSE procurement levels, the planning reserve margin, load forecasts, imports and hydro conditions – in other words, both the forced outages and the conditions for which they are penalized are largely outside the control of suppliers. Because Tier 1 hours are confirmed only three days in advance and Tier 2 hours only when the day-ahead RSE is run, operators also have limited ability to plan maintenance around them. ACP-CA is concerned that, as a result, the revised mechanism may function less as an incentive for individual resources to be available and more as an allocation of system-level reliability risk to generators, which ultimately does not offer meaningful benefits and is only likely to result in upward cost pressure to electric rates.

With these considerations in mind, ACP-CA recommends that CAISO:

1. Focus the current initiative on UCAP implementation issues.
2. Pause further development of the RAAIM redesign until at least one year after the CPUC’s UCAP framework becomes binding, consistent with the timeframe recommended by PG&E and NextEra. Consider any proposed RAAIM redesign in light of CAISO’s changes to RA processes and dynamics under UCAP.
3. As part of a future RAAIM redesign evaluation, include retirement of RAAIM and extension of current RAAIM rules as explicit options for consideration.
4. If CAISO concludes that an interim change to RAAIM is needed before 2028, limit it to the conforming changes needed to implement UCAP while retaining existing exemptions, namely for VERs.
5. Continue to advance elements of the proposal that do not depend on the RAAIM redesign, including the suspension of Flexible RA RAAIM penalties and the outage substitution enhancements.

3. Please provide your organization's overall feedback on the discussion regarding the revised RAAIM and resource type application.

ACP-CA appreciates CAISO’s efforts to refine its proposed treatment of VERs but continues to believe that applying RAAIM to VERs would impose meaningful costs without a demonstrated reliability benefit. We respectfully request that CAISO remove this element from the scope of the initiative and retain the categorical VER exemption. If CAISO later identifies a VER-specific reliability concern that existing tools do not address, ACP-CA would welcome the opportunity to work with CAISO on a targeted solution at that time.

The October 23 presentation describes the objective of this change as promoting “more consistent accountability across the RA fleet.” ACP-CA believes that this ideal of consistency must be weighed against how well an assessment fits a resource type and costs of application, as well as the fundamental differences between resource types for revenue generation (VERs produce RECs while thermal and storage resources do not). CAISO must also consider the administrative lift it is creating for itself and for generators and LSEs that would need to account for the new construct in RA contracting.

On the benefit side of applying RAAIM to VERs, the materials provided by CAISO do not yet include analysis of VER forced outage rates, VER availability during stressed hours, or the expected reliability improvement RAAIM penalty exposure could achieve. The available evidence suggests VER availability is not a significant driver of reliability risk. ACP-CA’s analysis of CAISO outage data (Attachment A to our August comments) found September solar forced outage rates of roughly 1.6–1.9%, below thermal and storage resources, and found that forced outage rates for all resource classes, including wind and solar, decline during stressed grid conditions. ACP-CA also understood CAISO staff to acknowledge in the July RAMPD workshop that wind and solar forced outages are not material drivers of system reliability gaps.

Moreover, it is important for CAISO to understand and appropriately consider that VER owners already have strong incentives to maintain availability (even without being subject to RAAIM), since they lose their primary source of revenue (energy and REC sales) whenever equipment is down. CAISO staff should recognize this is a major factor separating VERs from other units subject to RAAIM penalties that justifies different treatment.  Many VER failures are fundamentally stochastic and can occur despite diligent maintenance. With solar forced outage rates already below 2% during summer peak hours, ACP-CA believes the reliability benefits of applying RAAIM to VERs would be negligible at best, while the change would provide a major disincentive to participate in the RA program.

On the cost side, applying RAAIM to VERs would carry implementation and administrative costs regardless of actual outcomes. And the newly introduced risks would need to be considered in RA contracting and could put upward pressure on prices and/or disincentivize existing resources from entering into RA contracts. Existing wind and solar contracts were negotiated with the categorical VER exemption in place. For these contracted resources, removing the exemption would introduce a new liability that sellers would largely absorb, and in some cases, it may even disrupt existing contracts that have to be re-opened to price in additional risk. Uncontracted VERs and those selling RA on a short-term basis, including projects operating on a merchant basis after their original contracts expire, may instead be forced to reevaluate the decision to participate in RA entirely. For these resources, RA is a modest and optional revenue stream. A few hours of outage coinciding with a Tier 2 event could potentially offset several months of RA revenue. As AES has also noted, some of these owners may reduce the amount of RA they show or stop selling RA entirely.

Application of the proposed RAAIM reforms would also impose administrative costs: linking penalties to outage reporting could create tracking, validation and settlement burdens for CAISO and scheduling coordinators, and could have unintended effects on the granularity of outage reporting that CAISO relies on for operational awareness.

ACP-CA’s two central concerns, that VER outages are not a meaningful reliability problem and that applying RAAIM to VERs would nonetheless increase costs, are consistent with one another. Because VER forced outages are infrequent and largely random, a penalty would do little to improve VER availability or system reliability. At the same time, because sellers cannot predict or control whether an outage will coincide with a Tier event, and monthly exposure could reach twice the CPM soft offer cap, sellers must price that risk into RA contracts regardless of how often penalties are actually assessed, at a cost to ratepayers without a corresponding reliability benefit.

If CAISO is to continue to propose removing the RAAIM exemption for VERs, it must put forward analysis to demonstrate the potential benefits of this proposal so that CAISO and stakeholders can weigh those against the likely costs.  If CAISO nonetheless continues to consider applying RAAIM to VERs, ACP-CA requests that CAISO provide a clearer explanation, with worked examples, of how the VER calculation would work in practice. In particular, the VER example presented by CAISO (slide 24 of the October 23 presentation), which assumes a resource with 500 MW Pmax, 100 MW NQC and 80 MW of shown RA, does not reflect how wind and solar resources are shown, since shown RA for these resources equals NQC. ACP-CA appreciates CAISO staff’s acknowledgment of this issue at the October 9 workshop and their commitment to revise the example.

ACP-CA also recommends that, where a VER shows only a portion of its NQC as RA, outages affecting the portion that is not shown should not count toward the RAAIM calculation. This would be consistent with CAISO’s proposed treatment of thermal resources, where an equipment derate creates exposure only to the extent it reduces available capability below shown RA. Using the values from CAISO’s example (slide 24 of the October 23 presentation), the table below compares CAISO’s proposed calculation with ACP-CA’s recommendation. Under CAISO’s approach, the full outage is counted against shown RA; under ACP-CA’s recommendation, the outage is first attributed to the capability that is not shown as RA.

ACP-CA also agrees with NextEra that a VER producing at or above its shown RA during a Tier 1 or Tier 2 interval should not be assessed a RAAIM charge, regardless of whether it has a partial outage on file. Under the proposed proportional method, a VER with a partial outage would be charged the same whether it generates 80 MW or 300 MW, making VERs the only resource type that could be penalized while delivering more than the RA CAISO relied upon. This would also weaken the incentive for VERs to over-deliver, for example by returning equipment to service early during a Tier event. Because CAISO already has metered output for each VER, a test of whether output met or exceeded shown RA would be straightforward to apply and would be consistent with CAISO’s treatment of thermal resources.

Similarly, as ACP-CA discussed in its August comments and Attachment A, the proposed method could penalize a solar resource for an equipment outage during evening or nighttime Tier hours, when it would not otherwise be producing and could not help resolve the event. Solar operators often schedule repair work after sunset specifically to avoid lost production, and the proposal could discourage that prudent practice.

ACP-CA further requests that the revised examples demonstrate the calculation across a range of realistic cases, including partial outages, partial RA showings, and outages during hours when the resource would not otherwise be producing (such as solar resources during evening Tier 1 hours), as well as examples of application of the bounded exposure framework. This would help stakeholders understand the potential exposure if VER application is retained.

4. Please provide your organization's overall feedback on the discussion regarding the tier assessment.

ACP-CA appreciates that CAISO is no longer proposing a minimum number of Tier 1 assessment hours, and that Tier 1 would apply only to stressed hours identified through the trigger calculation. While we continue to oppose the reforms to RAAIM and the use of system conditions to determine penalty conditions, we offer additional comments on the value of predictable and limited application of Tier assessments, should CAISO nevertheless proceed with the currently proposed construct.

The proposed T-3 binding date for Tier 1 events may be insufficient warning for resource operators to source parts, mobilize crews, or complete repairs for a forced outage. Instead, operators will likely rely primarily on diligent maintenance and prompt restoration to minimize outage risk during periods of high system stress. These incentives already exist for most resources, and ACP-CA encourages CAISO to consider this in assessing how much incremental availability the event-based design is likely to produce.

ACP-CA also requests a clearer definition of the Tier 1 uncertainty adder. The proposal states that the adder would reflect historical seasonal uncertainty in demand, wind and solar generation, and RA resource availability, and would mirror approaches used in CAISO’s forecasting and reliability assessment tools, but it does not specify how the adder would be calculated. ACP-CA requests that CAISO define the methodology, including the data inputs, the statistical basis (for example, the percentile of historical forecast error used), and how it relates to existing uncertainty methods such as the 90th-percentile approach used for Imbalance Reserves, as ACP-CA noted in its August comments. ACP-CA also requests a back-cast showing how often, and in which hours, Tier 1 would have been triggered in recent years using the proposed adder.  Stakeholders cannot assess the implications of the uncertainty adder and be able to fully comment until it is clearly defined.  With only a few months between this comment period and when staff is proposing to take the proposal to a Board vote, that is insufficient time to review and comment on the calculation of the uncertainty adder.

ACP-CA remains concerned that the trigger for Tier 2 events is a BAA-level RSE failure, which can result from load forecast changes, import availability or procurement levels outside an individual resource’s control, and that the fixed $2,000/MWh price may not reflect actual system conditions. ACP-CA continues to recommend indexing the Tier 2 price to the applicable hub price, capped at $2,000/MWh, and not triggering Tier 2 where the EDAM market cures the RSE failure.

ACP-CA is also concerned that CAISO’s justification for the $2,000/MWh price continues to rely on comparisons to EDAM RSE costs calculated over a 16-hour on-peak block. The illustrative example in Figure 18 of the proposal, for instance, compares the Tier 2 charge to an RSE surcharge assessed across a 16-hour on-peak strip. While that block structure is appropriate for the EDAM RSE surcharge, it is not an appropriate basis for setting a RAAIM penalty. As ACP-CA noted in its August comments, the Tier 2 penalty should reflect only the hours in which Tier 2 is actually triggered, and ACP-CA requests that CAISO confirm that Tier 2 charges would apply only in those hours.  These comments were not acknowledged or addressed in the revised straw proposal, making it unclear if staff took them into account.  It is unclear why staff is using a 16 hour block EDAM RSE failure surcharge as a comparison in Figure 18, when nowhere does staff suggest in the proposal that a generator would face a RAAIM penalty for a full 16-hour block if there is only one Tier 2 failure hour.  Figure 18 only multiplies the $2000 Tier 2 RAAIM charge for a 20 MW unit by one hour, while using 16 hours to calculate the RSE surcharge which, per the proposal, is not what the generator would be charged for if there was only a one-hour shortfall.  Cost causation principles would have the generator face the replacement price, based on actual conditions (import hub or LMP) instead of an administratively designed penalty.     

5. Please provide your organization's overall feedback on the discussion regarding charges, payments, and bounded penalty exposure.

While ACP-CA generally opposes moving forward with RAAIM reforms at this time, we appreciate CAISO’s adoption of a bounded exposure framework. We believe the proposed bounds should be refined to better achieve the goal of financial predictability and to further limit risk. The proposed full-rate threshold ($7.34/kW-month) is about 1.8 times the current RAAIM penalty cap amount, and the hard cap ($14.68/kW-month) is about 3.5 times. Staff has provided no justification for why the cap should be increased above the current RAAIM penalty cap nor how this higher price will impact generator behavior relative to solely increasing generator risk and raising RA prices.  The potential revenue impacts from the revised RAAIM framework for even short-duration outages during Tier 2 events are unaccounted for in existing contracts and will result in higher prices in future contracts or potentially parties seeking to renegotiate existing contracts. CAISO should better balance the negative revenue impact by reducing the proposed penalty caps.  ACP-CA recommends that CAISO set the monthly hard cap at no more than 100% of the CPM soft offer cap, with the full-rate threshold set correspondingly lower. ACP-CA also agrees with stakeholders who have suggested lower percentages, such as 60% of the CPM soft offer cap, consistent with the price reference used in today’s RAAIM.

If CAISO continues to move forward with the RAAIM reform, ACP-CA also urges further review and consideration of the revenue allocation methodology so that penalties are properly balanced with incentives for generators to over-perform. Today’s RAAIM pairs non-availability charges with incentive payments to resources whose availability exceeds the standard, and any redesign should preserve that balance. In particular, ACP-CA does not support directing Tier 2 revenues to load; distributing penalty revenues to resources that are available during Tier events would more directly reinforce the availability incentive the proposal is intended to create.

6. Please provide your organization's overall feedback on the discussion regarding the bidding requirements.

ACP-CA has no comments at this time.

7. Please provide your organization's overall feedback on the discussion regarding substitution and outage definitions.

ACP-CA questions if the shopping cart is an incremental improvement, as it may not fully address the scarcity of substitute capacity during tight periods. If CAISO moves forward, ACP-CA recommends a formal re-evaluation 1–2 years after implementation, based on participation and transaction data. We also ask CAISO to commit that, if the tool is underutilized, CAISO will reconsider the approach and replace it with ACP-CA’s previously proposed alternative of conditional outages. Under ACP-California’s previous proposal, planned and opportunity outages would be allowed to proceed without substitute capacity under defined conditions, such as periods CAISO identifies as low-risk. Requiring substitution when it provides no reliability benefit may discourage timely maintenance and ultimately contribute to higher forced outage rates during critical periods.

ACP-CA supports retention of Short-Notice Opportunity Outages, which have served as a useful tool for performing maintenance when system conditions allow.

8. Please submit your organization's overall feedback on the Calpine Stakeholder Presentation on 10/9.

ACP-CA agrees that UCAP implementation requires CAISO to reconsider how capacity values are used across its RA systems, rather than substituting a single UCAP-based NQC value. As the presentation illustrated, a single value cannot readily serve as the basis for RA showings, the must-offer obligation, RAAIM and substitution, Local RA, firm exports and backstop procurement without risking stranded or double-counted capability. ACP-CA supports the presentation’s recommendation that CAISO publish a complete mapping of NQC-linked functions, including RAAIM and substitution, and resolve those questions before implementation.

ACP-CA believes this presentation also supports sequencing the consideration of RAAIM reform after the UCAP review. Many elements of the revised RAAIM proposal depend on capacity values whose treatment under UCAP is still being worked out, including shown RA, the deliverable portion and NQC in the MOO formula, and Pmax and shown RA in the proposed VER calculation.

9. Please submit your organization's overall feedback on the CESA Stakeholder Presentation on 10/23.

ACP-CA supports the core policy argument of CESA’s presentation. Nonlinearity is a known storage characteristic that is accounted for in accreditation. CAISO’s market model cannot yet represent it, which requires operators to use outages to communicate their resources’ actual capability, and operating in the nonlinearity region does not prevent a storage resource from meeting its fundamental RA obligation. As CESA’s examples show, the current approach can result in penalties on the days when CAISO most needs stored energy, which may in turn affect bidding behavior that provides CAISO with flexible access to that energy. ACP-CA supports CESA’s proposed interim solution: until the proposed model enhancements are implemented, nonlinearity outages may use the existing RAAIM-exempt “Technical Limitations Not In Market Model” nature of work. Because the second revised straw proposal does not include an interim measure or an implementation date for the modeled solution, ACP-CA encourages CAISO to reconsider an interim approach and to

11. Please submit any additional feedback not already captured.

Flexible RA: ACP-CA continues to support suspending Flexible RA RAAIM penalties and would appreciate an implementation timeline. As noted in our August comments, ACP-CA also recommends that CAISO reassess whether the Flexible RA product remains needed given the Imbalance Reserve and Reliability Capacity products now in place under DAME.

Process & Timing: ACP-CA appreciates CAISO’s decision to move the Track 2 Board decision to Q1 2027. Consistent with WPTF’s comments, ACP-CA suggests that the next iteration be a further revised straw proposal rather than a draft final proposal. ACP-CA would find it helpful for that proposal to address the VER exemption as discussed above, present the alternative of not proceeding with RAAIM reform alongside any redesign, and include back-testing with estimated effects on annual RA economics with supporting data and formulas.

Gauging Stakeholder Preferences: Given the range of stakeholder views on the threshold questions in this initiative and preferences on where efforts in this initiative should be focused, ACP-CA suggests that CAISO include direct questions, including consideration of indicative voting, in the next comment template to accurately gauge stakeholder positions on the following issues:

• Preference for focusing on UCAP implementation and when to sequence RAAIM redesign within the effort.
• Key topics to address related to UCAP implementation.
• Interest in considering RAAIM retirement in light of the UCAP transition.
• Support for applying RAAIM to VERs

1. Please submit your organization's overall feedback on the Resource Adequacy Modeling and Program Design (RAMPD) Track 2 meetings held on 10/9 and 10/23.

As it did in previous rounds of comments, the Alliance for Retail Energy Markets (AReM) [1] neither endorses nor opposes CAISO’s straw proposal. It offers further feedback in these comments. AReM also continues to recommend CAISO begin Track 3B as soon as possible to facilitate coordination with Track 2. 

[1] AReM represents three of the largest electric service providers (ESP) in California. ESPs are LSEs under the jurisdiction of the CPUC and serve customers through California’s Direct Access program.

2. Please submit your organization's overall feedback on the second revised straw proposal that was posted on 10/2.

As stated above, AReM does not either endorse or oppose CAISO’s straw proposal. 

3. Please provide your organization's overall feedback on the discussion regarding the revised RAAIM and resource type application.

AReM only requests that CAISO consider the following recommendations that AReM has submitted in prior comments to ensure that this issue has visibility and facilitate coordination with the California Public Utilities Commission (CPUC):

• CAISO should add a plan for tracking relevant metrics to assess Resource Adequacy Availability Incentive Mechanism (RAAIM) performance and provide the results of this tracking to stakeholders for potential follow-up. Metrics to assess RAAIM performance should include forced outage rates and use of substitution for forced outages.
• CAISO should include relevant reporting within the proposal sufficient for LSEs to understand the performance of contracted resource adequacy (RA) resources, including availability, outages, and any penalties assessed. Such information should be provided in a timeframe that allows load-serving entities (LSE) to effectively manage compliance and contractual obligations.

4. Please provide your organization's overall feedback on the discussion regarding the tier assessment.

In previous comments, AReM sought clarity regarding how storage resources would be assessed under new RAAIM rules. AReM appreciates the second revised straw proposal’s clarifying statement that “CAISO is not proposing adding a separate state-of-charge, charging-sufficiency, duration, or energy performance assessment. Evaluating those factors would require additional design beyond the proposed assessment of availability through bids and reported outages. Any additional energy-sufficiency or performance checks would be considered through future policy development addressing real-time energy availability and performance.”[1] However, if CAISO has any plans for this “future policy development,” AReM recommends CAISO inform parties to this initiative.

[1] P. 23

5. Please provide your organization's overall feedback on the discussion regarding charges, payments, and bounded penalty exposure.

AReM reiterates its prior recommendation that these penalties be assessed on generators and not load scheduling coordinators. CAISO should maintain full clarity on this point as it moves forward through its proposals and tariff changes. 

6. Please provide your organization's overall feedback on the discussion regarding the bidding requirements.

AReM thanks the CAISO for providing greater clarity on how must-offer obligations (MOO) are determined using a process to accommodate different resource counting conventions from different local regulatory authorities. This helps stakeholders understand how this process will accommodate the CPUC’s implementation of a UCAP standard in 2028. To the extent further questions were raised at the workshop, AReM welcomes additional examples and clarifications. 

7. Please provide your organization's overall feedback on the discussion regarding substitution and outage definitions.

AReM has no comments on outage substitution or outage definition at this time. 

8. Please submit your organization's overall feedback on the Calpine Stakeholder Presentation on 10/9.

AReM takes no position on the specific recommendations in Calpine’s presentation. However, AReM reiterates its position that it supports CAISO and CPUC cooperation in ensuring a smooth transition to the CPUC’s UCAP RA program. Ultimately, LSEs and generators will need to understand how the UCAP implementation will impact the market. AReM generally supports CAISO taking steps to facilitate data accessibility and transparency regarding UCAP-related changes. 

9. Please submit your organization's overall feedback on the CESA Stakeholder Presentation on 10/23.

AReM has no comments on CESA’s presentation at this time.

11. Please submit any additional feedback not already captured.

 AReM has no further comment.

1. Please submit your organization's overall feedback on the Resource Adequacy Modeling and Program Design (RAMPD) Track 2 meetings held on 10/9 and 10/23.

The California Community Choice Association (CalCCA) appreciates the opportunity to comment on the California Independent System Operator’s (CAISO) Resource Adequacy (RA) Modeling and Program Design (RAMPD) Track 2 Second Revised Straw Proposal (Second Revised Straw Proposal). In summary, the CAISO should:

• Revise the Resource Adequacy Availability Incentive Mechanism (RAAIM) to focus on the periods of time when the grid is most stressed, elevating incentives to be available during especially constrained system conditions when RA capacity is critical for reliability;
• Translate the generic inputs proposed for the uncertainty band into a specific calculation methodology and conduct an analysis of how often a Tier 1 RAAIM assessment would have been triggered in recent years;
• Monitor the changes and bounded penalty exposure upon implementation to ensure the levels are set in a way that incentivizes availability without being overly punitive;
• Preserve the relationship between the must-offer obligation (MOO) and operating capability under statistical RA valuation methodologies;
• Base RAAIM exposure on the MOO, not shown RA, so that resources are fully incentivized to completely satisfy their MOO;
• Develop a voluntary, decentralized outage substitution procurement pool;
• Conduct the mapping exercise proposed by Constellation to ensure the CAISO and stakeholders have a clear understanding of the terms and capacity functions before contracting and operating under unforced capacity (UCAP) and /or other new RA rules; and
  • Allow storage resources to manage nonlinearity with a RAAIM exempt outage card and coordinate with the California Public Utilities Commission (CPUC) to ensure nonlinearity is not accounted for in UCAP values.

2. Please submit your organization's overall feedback on the second revised straw proposal that was posted on 10/2.

See response in Section 1 above.   

3. Please provide your organization's overall feedback on the discussion regarding the revised RAAIM and resource type application.

CalCCA supports the CAISO’s efforts to revise RAAIM, as the current mechanism has proven insufficient to incent RA resource availability. The CAISO’s proposal would focus RAAIM application on the periods of time when the grid is most stressed, elevating incentives to be available during especially constrained system conditions when RA capacity is critical for reliability.

4. Please provide your organization's overall feedback on the discussion regarding the tier assessment.

As described in Section 3, above, CalCCA supports the CAISO’s proposed tier assessment, which focuses on hours of elevated reliability risk. CalCCA appreciates the additional details provided for how the CAISO proposes to define the “uncertainty band” included in the Tier 1 RAAIM assessment, but more information is needed for stakeholders to fully assess the proposal. The CAISO states that the uncertainty band would, “reflect historical seasonal uncertainty in demand, wind and solar generation, and RA resource availability, including the possibility of additional outages or derates.”[1]

The CAISO should translate these generic inputs into a specific calculation methodology and conduct an analysis of how often a Tier 1 RAAIM assessment would have been triggered in recent years using the uncertainty band as defined.

[1]            Second Revised Straw Proposal, at 32.

5. Please provide your organization's overall feedback on the discussion regarding charges, payments, and bounded penalty exposure.

CalCCA supports the CAISO’s proposal regarding charges, payments, and bounded penalty exposure. The CAISO’s proposed bounds on penalty exposure through a maximum cumulative penalty dollar amount seems likely to help ensure penalties are not overly punitive or have a negative impact on the financial health of RA suppliers. The CAISO should monitor the changes and bounded penalty exposure upon implementation to ensure the levels are set in a way that incentivizes availability without being overly punitive.

6. Please provide your organization's overall feedback on the discussion regarding the bidding requirements.

CalCCA supports the CAISO’s proposed MOO clarifications that will preserve the relationship between the MOO and operating capability under statistical RA valuation methodologies such as UCAP, exceedance, or effective load carrying capability (ELCC). However, the CAISO should modify the proposal to base RAAIM exposure on the MOO, rather than on shown RA. While basing the MOO on shown RA may work when many resources’ QC value is based on its Pmax, once UCAP is implemented, many more RAAIM eligible resources will have their QC based upon a statistical measurement of their expected output. Therefore, the CAISO should base RAAIM exposure on the MOO, not shown RA, so that resources are fully incentivized to completely satisfy their MOO.   

Missing from the Second Revised Straw Proposal is a discussion of bid insertion. Today, the CAISO tariff allows the CAISO to insert bids for RA resources that do not bid their shown RA into the CAISO market to fulfill their must-offer obligation. The CAISO should ensure that, once the CPUC and CAISO transition to an RA program where shown RA does not always equal the must offer obligation, its bid insertion rules allow the CAISO to insert bids up to the resource’s full must-offer obligation, not just the shown RA. Otherwise, the CAISO may not receive the reliability that load-serving entities (LSE) have paid for to achieve the RA program’s reliability standard.

7. Please provide your organization's overall feedback on the discussion regarding substitution and outage definitions.

CalCCA directionally supports the CAISO’s Straw Proposal to develop a decentralized outage substitution procurement pool. A well-utilized pool will: (1) remove friction for a scheduling coordinator (SC) seeking substitute capacity; (2) minimize the need to hold back RA capacity for substitution; and (3) retain the responsibility of providing substitution on the entity in control of the outage. 

In the next iteration of the proposal, the CAISO should affirmatively state that use of the pool is strictly voluntary and clarify that parties can continue to pursue bi-lateral arrangements for substitute capacity outside of the pool. While the proposal states that contracting and financial settlement would remain bilateral,[1] additional clarity is needed to specify that parties can continue to search for and connect with counterparties outside of the pool if they choose.  

[1]            Second Revised Straw Proposal, at 53.

8. Please submit your organization's overall feedback on the Calpine Stakeholder Presentation on 10/9.

CalCCA agrees with many of the recommendations made by Constellation. Constellation’s primary recommendation, to clearly define terms and map them to each capacity function, is a good starting point for the CAISO and stakeholders to develop policy proposals from a common understanding. Constellation is likely correct that the CAISO will need to track both a resource’s installed capacity (ICAP) and UCAP to administer each capacity function and accommodate different local regulatory authority (LRA) programs. Conducting the mapping exercise proposed by Constellation will help ensure the CAISO and stakeholders have a clear understanding of the terms and capacity functions before contracting and operating under UCAP and /or other new RA rules.

CalCCA also agrees with Constellation that deliverable physical capability should continue to be the basis for many operational functions, such as establishing must offer obligations and substitution requirements. As described in Section 6 above, the CAISO should also use the deliverable physical capability as the basis for RAAIM application and bid insertion to ensure the right incentives are in place for CAISO to receive offers for the full amount of contracted RA capacity in its markets.

CalCCA does not take a position on the topic of firm exports from RA capacity at this time. The CAISO should hold additional discussion on this topic.

Constellation provides two ways the CAISO can address local RA as system RA transitions to UCAP: (1) continue to establish and validate Local RA on a consistent physical-capability basis; or (2) translate both the LCR requirement and resource accreditation to UCAP. The CAISO should adopt the first approach. Local RA requirements are established on a different basis than system RA requirements, using the Local Capacity Technical Study to evaluate local resources needed to meet local area contingencies. This differs from system RA requirements, which are based on a 1-in-2 load forecast plus a planning reserve margin (PRM). The level of the PRM is dependent upon how resources are counted. Because local RA requirements are not likewise based upon a PRM, that can be adjusted to align with the counting methodology applied, local RA requirements and counting should continue to be based on physical capability.

9. Please submit your organization's overall feedback on the CESA Stakeholder Presentation on 10/23.

CalCCA agrees with CESA that non-linearity does not impact the ability of storage resources to meet their fundamental RA obligations and should not expose storage resources to RAAIM. As stated previously, CalCCA supports the development of a modeled solution to reflect nonlinearity for storage resources and agrees that the modeled solution should not carry RAAIM implications.[1] To maintain a consistent policy going forward and in the interim, the CAISO should allow storage resources to manage nonlinearity with a RAAIM exempt outage card and coordinate with the CPUC to ensure nonlinearity is not accounted for in unforced capacity values. 

[1]            https://stakeholdercenter.caiso.com/Comments/AllComments/19a74e74-8f0d-4268-813b-2f4d3284e368#org-a12cc6f2-5db2-433d-9600-d55241e952fc.

11. Please submit any additional feedback not already captured.

10. Please submit your organization's overall feedback on the group Stakeholder Presentations given on 10/23. *

See responses in Section 8 and 9 above.   

11. Please submit any additional feedback not already captured.

The CAISO and the LRAs should coordinate efforts to evaluate how the changes to both the PRM and resource accreditation, including for those LRAs using UCAP and those that are not, impact the need and resource portfolio.  In theory, the change to UCAP simply moves the uncertainty of outages from the PRM to the resource accreditation. This should result in a zero-sum game in which the percentage of excess RA capacity is equal under UCAP and ICAP accounting, with the PRM adjusted. The market will need to understand whether the new process has made the RA market more or less constrained due to UCAP-related changes to resource accreditation and the PRM. 

In addition, LSEs and generators will need to understand the impacts on the resources they are using for RA.  Two LSEs using ICAP today may be compliant, but one or both could become non-compliant under UCAP if the resources they have under contract experience high outage rates that affect their UCAP.  It is critical for buyers and sellers to understand this impact well in advance of implementation so that portfolio adjustments can be made if necessary. 

The CAISO will need to coordinate with LRAs to determine their final rules on which outages count toward a resource's UCAP value, which continue to be reflected in the PRM calculation, and when changes to resource-specific values and the PRM will occur. Without this coordination, the market will be unable to transact effectively, potentially preventing LSEs from meeting their compliance obligations.  With an anticipated implementation in 2028, LSEs will need certainty about portfolio positions as early in 2027 as possible, but no later than Q2, to allow time to conduct transactions necessary to achieve compliance resulting from changes in implementing UCAP.   

1. Please submit your organization's overall feedback on the Resource Adequacy Modeling and Program Design (RAMPD) Track 2 meetings held on 10/9 and 10/23.

CDWR appreciates CAISO’s detailed presentations and engagement during the Track 2 stakeholder meetings on October 9 and October 23, 2026. While we support CAISO’s objective to optimize physical reliability during stressed grid conditions, CDWR maintains its concerns with the MOO being greater than shown RA for a resource (please see section 6 for detail). CDWR has the following general comments:

• At the October 9^th meeting CAISO asked stakeholders to provide feedback on how assessments should recognize water and operating constraints while maintaining accountability for unavailability. CDWR recommends that the use limit nature of hydro resources should be considered both for the MOO and the RAAIM, and that these  should be based on the shown RA. Shown RA is considered for actual availability based on the current forecast of hydrology among other factors. The existing use limit outage cards should be maintained.

• CDWR strongly supports participating load (PL) being exempt from RAAIM .

• CDWR also supports the proposal that Flexible (Flex) RA showings and bidding requirements remain, while separate Flex RAAIM penalties would be suspended during a transition while the CAISO continues to assess the future of Flex RA through  a track of the ongoing RAMPD initiative.

• CAISO’s proposal to align the timeline for Advisory notices with day ahead schedules is appropriate for enhanced reliability assessment. As proposed, it would run from T-7 (aligned with 7 days ahead schedules) through T-4, with binding confirmations at T-3, T-2, and T-1.
• ISO Seeks feedback on the proposal that Tier 1 revenues would go to eligible available generation, while Tier 2 revenues would go to load, recognizing the different functions of the two tiers. Without supporting data, CDWR does not have any insight into this method’s effectiveness in allocating revenues without systemwide data analysis for cost causation. CDWR would appreciate CAISO sharing any data analysis it has performed, but CDWR does not oppose the proposed allocation.

• CAISO seeks feedback on specific attributes for offered substitute capacity in illustrative tool design mockup.  CDWR believes that the addition of flex RA category attributes would be advantageous given Track 2 will be developed and potentially implemented before the future track on Flexible RA assessment and retention.

2. Please submit your organization's overall feedback on the second revised straw proposal that was posted on 10/2.

CDWR appreciates the CAISO effort in addressing issues related to RAAIM, MOO, penalty and allocations. CDWR also supports CAISO’s proposal to retain the exemption applied to a PL resource due to its modeling complexities and operating characteristics. CDWR’s concern on setting RA MOO higher than the shown RA, however, is still not addressed, although the MOO formula has been revised to reduce the Pmax so that it reflects the deliverable capacity. Please see section 6 for further description and impacts it may have.

3. Please provide your organization's overall feedback on the discussion regarding the revised RAAIM and resource type application.

CDWR supports retaining the RAAIM exemption for participating load.

4. Please provide your organization's overall feedback on the discussion regarding the tier assessment.

The proposed two-tier assessment approach aligns with incentivizing resource availability during stressed grid conditions.

5. Please provide your organization's overall feedback on the discussion regarding charges, payments, and bounded penalty exposure.

CDWR supports bounded penalty structure.

6. Please provide your organization's overall feedback on the discussion regarding the bidding requirements.

The proposal indicates the revised MOO framework originated around dispatchable resources but does not explicitly exclude other resources. Similarly, page 48 of the proposal states (emphasis added) that “[t]he ISO proposes to determine the MOO for dispatchable system RA resources using the relationship among shown RA, NQC and the resource’s deliverable portion,” but it does not explicitly address non-dispatchable resources.  Assuming MOO framework is applied to all RA resources, our overall feedback focuses on following critical areas where the current design creates unintended operational concerns and confusion:

1. Unclear deliverable capacity calculation and applicability: The revised proposal modifies the MOO MW calculation formula as follows:

Must-offer obligation (MW) = shown RA (MW) x Deliverable Portion [Pmax (MW) ∗ Deliverable (%)] / NQC (MW)

where Pmax is replaced by Pmax prorated to deliverable % and reduced. The proposal specifies that the deliverable portion refers to the portion of a resource’s output that can be delivered to the aggregate load on the CAISO controlled grid, consistent with the CAISO’s Reliability Criteria and Procedures and the CAISO On-Peak Deliverability Assessment. Basing the deliverable MW on the on-peak deliverability study produces significantly higher MWs resulting in a higher deliverable % for certain types of resources that are subject to fuel variability not under their control, which can be significantly higher during certain months. If the same deliverable factor is applied for all 12 months to the static Pmax, it may create an infeasible MOO.

Recommendation: Provide clarification on:

1. What resources (category / type) are subject to the MOO framework which applies MOO > Shown RA? Is it just for the Unforced Capacity (UCAP) applicable resources or for all resources?
2. How is deliverable MW calculated for a resource? Is it derived from the LRA’s provided QC value as an outcome of deliverability study (QC values are provided by the LRA for each month, which can differ month by month)? Should the deliverable MW be tied to the LRA’s provided QC values by the month? Varying monthly QC values provided to the CAISO by LRAs already reflect the monthly capability and seasonality of their resources. Should the monthly QC value be used for the monthly deliverable % (if those QC values are less than highest NQC value even though there is no monthly deliverability assessment), instead of a fixed deliverable % for a year?
3. CAISO’s “MOO >Shown RA” proposal is apparently driven by assumption that generators have meaningful amounts of capacity that they are not showing as RA, thus jeopardizing reliability. CAISO has not presented evidence that this is occurring or that the market price signal (energy, ancillary services, non-RA for firm export, substitution RA) is not sufficient to incentivize resources to offer capacity to the CAISO beyond their shown RA, when that capacity is allowed by operational limits. CAISO should not adopt “MOO>Shown RA” because it is not solving a demonstrated problem but instead creates problems like the added costs and complexity described in CDWR’s August 5 comments.

2. Severe Seasonal Mismatches (Hydro): Relying on a peak late-summer deliverability snapshot to set year-round multipliers (deliverable %) ignores seasonal fuel and environmental realities. Mandating a high summer-scale MOO during the low-flow winter months forces a paper bidding requirement for water that does not physically exist. Whether a resource is UCAP applicable or not, this can cause adverse impacts. For a complex water delivery system, mathematically creating a single MOO for the entire season or year may create an unwarranted operational infeasibility due to the limitations and environmental constraints.

NQC values once finalized in the annual process cannot be reduced during the compliance year but can be increased in the monthly process. In reality the real availability varies significantly during the monthly operations as it is based on the varying hydrology. MOO calculations, based on the original NQC and Deliverable %, can produce an outcome that would be infeasible to operate.

Recommendation: Set the MOO at the shown RA MW. Shown RA reflects the extent to which RA can be provided safely without impacting operational limits. If there is any leftover non-RA capacity and if operation allows in the relevant timeframe, it can be used as substitution RA capacity, non-RA capacity supporting firm export, or scheduled to CAISO for energy and ancillary service.

3. Incompatibility with Participating Load: The scaling math creates an operational fiction for behavioral, block-loaded resources like a PL. For a resource that is structurally limited to discrete 60 MW blocks with an NQC capped at its CAISO-certified Non-Spinning Reserve capability, the formula forces an untested, uncertified, and un-biddable   partial pump obligation much higher than it is certified for. This forces providers to artificially over-bid.

Example:

PL Pmax in the Masterfile= 420 MW (7 units each 60 MW),

Certified to provide non-spin = 120 MW.

Scenarios 1 and 2 are based on if deliverability % is defined as 100% deliverable and 3 and 4 are based on deliverability % as ratio of certified non-spin and the Masterfile Pmax. Scenario 2 creates situation for two units shown RA, MOO has to be 3 and a half units (infeasible).

Recommendation: Set the MOO for PL at Shown RA, which would eliminate this issue.

4. Redundant Capacity Mandates Given Existing CAISO Visibility: The proposal states that the purpose of the MOO calculation is to preserve the CAISO’s visibility into operational capability where a resource’s accreditation value is below its physical operating capability. CAISO already has full operational visibility over any uncontracted capacity that is not on an approved outage card. Natural market price signals and existing Market Power Mitigation (MPM) protocols are fully sufficient to pull available capacity into the market stack dynamically. An administrative mandate is unjustified absent any studies proving strategic physical withholding for economic reasons.
5. Impact on contracting: The contract for the “Shown RA” and compensation for that received by the resource’s owner may have to offer higher MOO than Shown RA. Is the LSE under this proposal required to contract for a MOO capacity that is more than shown RA? The MOO RA creates an obligation for the resource owners to make it available, and this has a cost impact on the resource’s owner to meet that obligation. The existing contracts may also have to adjust this new MOO requirement if the MOO > Shown RA thereby increasing the complexity.
6. Clarity on MOO obligation: If MOO does not meet the above shown RA, will CAISO insert bids? Currently CAISO does not insert bids for certain types of resources for valid reasons, how will that change if bid insertion is applied?

7. Please provide your organization's overall feedback on the discussion regarding substitution and outage definitions.

Substitution limited to shown RA is appropriate. 

8. Please submit your organization's overall feedback on the Calpine Stakeholder Presentation on 10/9.

CDWR appreciates Calpine’s presentation and has following comments:

• Not clear if the presentation is only for resources applicable to UCAP.
• Conceptually supports the definition that the Deliverable Pmax be adjusted for the deliverability and persistent physical limits. CDWR believes that this can be achieved by updating the NQC values to a value higher than originally established during a compliance year, as an option.
• Supports if MOO= Shown RA capacity offer requirements

9. Please submit your organization's overall feedback on the CESA Stakeholder Presentation on 10/23.

No comment at this time as this is primarily for storage resources.

11. Please submit any additional feedback not already captured.

The proposal at section 3 states: “The existing system RA bidding framework may not preserve the intended MOO when a dispatchable resource’s accreditation value is lower than its operating capability. If the MOO is set directly equal to shown RA, an accreditation derate may reduce the capacity visible to the ISO market even where the resource remains capable of offering additional capacity”

Is the modification to the MOO limited to a dispatchable resource only? Is this adjustment targeted only for resources that are subject UCAP derates? These questions relate to comments on 6(a) (i) above.

The CAISO statement under “Bidding Requirements” section states, “NQC establishes the maximum capacity that may be shown as RA. The deliverable portion and NQC may have the same MW value, but NQC may be lower where an accreditation derate reduces the RA counting value without a corresponding reduction in deliverable portion of the resource”. Is the accreditation derate applied after the deliverable capacity is determined by a deliverability study? Sequential steps in deriving reduced NQC compared to deliverable capacity would be helpful to understand the situation where NQC can be less than deliverable capacity.

1. Please submit your organization's overall feedback on the Resource Adequacy Modeling and Program Design (RAMPD) Track 2 meetings held on 10/9 and 10/23.

California Energy Storage Alliance (CESA) appreciates CAISO’s second revised straw proposal for RAAIM reform and thanks CAISO for the opportunity to comment. CESA particularly commends CAISO for scheduling a second workshop to further discuss issues raised by stakeholders.

CESA's principal recommendations are summarized below:

• Storage foldback: Authorize interim use of the RAAIM-exempt Technical Limitations Not in Market Model NOW code for storage foldback until CAISO's market model accounts for foldback. Per CPUC rules, foldback is already reflected in storage QC, so RAAIM penalties are duplicative, unavoidable for compliant resources, and provide no visibility into potentially overstated QC values.
• Penalty prices: Retain a capacity-based RAAIM penalty price rather than energy market LMPs, which do not reflect the value of RA capacity and would yield lower penalties than today. CESA supports the proposed limits on penalty exposure.
• Tier assessment: Align tier triggers with Energy Emergency Alert events rather than RSE failures, and, if the forward-looking Tier 1 assessment is retained, rescind penalties when anticipated tight conditions do not materialize.
• Substitution and outages: Develop a market-based RA substitution mechanism to facilitate planned maintenance, and address the broader outage-definition changes in a separate stakeholder initiative.
• UCAP transition: Prioritize coordinating tariff, BPM, and CIRA changes now to align with the CPUC's forthcoming UCAP framework, including treatment of mixed ICAP and UCAP showings.
• Process: Engage more fully with stakeholder feedback, ground design decisions in clearly stated policy principles, and ensure that proposed reforms actually solve the problems CAISO itself has defined.

2. Please submit your organization's overall feedback on the second revised straw proposal that was posted on 10/2.

The straw proposal did not address many of the issues identified by stakeholders in response to the May 12 straw proposal and the July 17 revised straw proposal. CESA encourages CAISO to engage more fully with stakeholder feedback and consider whether more fundamental revisions to the proposed framework are warranted, rather than focusing primarily on incremental modifications to the existing proposal. CESA also recommends CAISO ensure its proposals have clearly stated policy principles and rationales backing their design decisions.

Among the stakeholder issues left unaddressed, the second revised straw proposal:

• Retains day-ahead LMPs as the Tier 1 penalty price, despite stakeholder support for capacity-based price references, including Reliability Capacity Up and the Capacity Procurement Mechanism (CPM) price;
• Retains EDAM RSE failure as the Tier 2 trigger, despite proposals from CESA, AES, and Vistra to tie assessments to declared emergency conditions;
• Holds confirmed Tier 1 assessment hours fixed for settlement even when forecast tight conditions do not materialize, rather than rescinding them as CESA has recommended in both prior rounds of comments;
• Continues to allocate a share of collected penalties to load rather than to resources that meet or exceed their obligations;
• Declines to provide interim RAAIM relief for storage nonlinearity, despite requests from AES, CalCCA, CESA, and SDG&E;
• Continues to develop the decentralized shopping cart, even though Vistra, CESA, and Middle River Power indicated it would not meaningfully address CAISO's outage substitution problem statement and DMM asked CAISO to explain how it would address the reasons entities do not procure replacement capacity today; and
• Proceeds with broad RAAIM reform rather than first coordinating CAISO's RA framework with the CPUC's UCAP decision, as CESA and WPTF recommended.

Several of these design choices also leave unsolved the problem statements CAISO itself identified at the outset of this initiative. As discussed in our responses below on tier assessment, penalty prices, outage substitution, and storage foldback, the proposal frequently does not solve for the very problems it was intended to address.

3. Please provide your organization's overall feedback on the discussion regarding the revised RAAIM and resource type application.

No comment at this time.

4. Please provide your organization's overall feedback on the discussion regarding the tier assessment.

CESA continues to believe that aligning RAAIM tier triggers with Energy Emergency Alert (EEA) events would provide the most appropriate measure of actual system scarcity. In particular, we remain concerned about relying on RSE failures as a Tier 2 trigger given the uncertainty surrounding how RSE outcomes and their reliability implications may evolve with EDAM implementation. Finally, if CAISO retains its proposed forward-looking Tier 1 assessment, CESA strongly encourages the inclusion of a mechanism to rescind penalties when the anticipated tight system conditions do not materialize.

These recommendations go directly to a problem CAISO itself identified. CAISO's problem statement criticizes today's RAAIM because “Resources that are unavailable during grid emergencies or high stressed intervals face the same RAAIM settlement as those unavailable during lower risk hours,” and because its incentive level is “tied neither to system conditions nor the implicit reliability consequence costs of grid emergency conditions.”[1] The proposed triggers do not fully solve this problem. An RSE failure is a resource sufficiency screen, not a grid emergency, and as AES, WPTF, MRP, and Six Cities noted, an RSE failure may be driven by “procurement deficiencies, forecast changes, or import availability” rather than unavailable RA.[2] Likewise, CAISO proposes that once Tier 1 hours are confirmed, “[s]ubsequent changes in forecast conditions would continue to inform ISO operations but would not reduce the confirmed assessment hours.”[3] Under that design, resources will be penalized in hours that turn out not to be stressed, recreating the very mismatch between penalty exposure and actual reliability risk that CAISO identified as a flaw in today's RAAIM.

[1] CAISO Track 2 Second Revised Straw Proposal, pg. 5

[2] Id. at p. 15

[3]  Id. at p. 33

5. Please provide your organization's overall feedback on the discussion regarding charges, payments, and bounded penalty exposure.

CESA supports CAISO's proposed limits on RAAIM penalty exposure, which provide an appropriate balance between maintaining meaningful availability incentives and limiting excessive financial risk for resource owners.

However, CESA does not support using energy market locational marginal prices (LMPs) as RAAIM penalty prices. CAISO's problem statement is explicit: “In the recent past, the ISO's RAAIM penalty price has been far below the cost of finding substitute capacity. This means there has been little incentive to replace capacity that is subject to a forced outage.”[1] CAISO's data analysis likewise concludes that “[t]he current RAAIM penalty ($4.40/kW-month) is far below bilateral trading prices.”[2] CESA understands the appeal of tying penalties to a transparent, market-determined price, but an LMP-based Tier 1 penalty does not solve this problem.

CAISO’s analysis shows median CAISO day-ahead prices of roughly $50–$60/MWh even on the 100 highest-load days since 2022.[3] As an initial matter, this price level does not seem to support the notion that the Tier 1 assessment hours are targeted to times of need.  Furthermore, the proposed Tier 1 penalty would also be far weaker than today’s RAAIM for extended outages.  Under current RAAIM rules, each MW out for a month would incur a penalty of $4,400. Under the proposed Tier 1 rules, assuming an average penalty of $60/MWh, Tier 1 would have to be triggered in more than 73 hours in that month to produce a comparable penalty.[4] If Tier 1 were triggered in only four hours, the resource would pay just $240 per MW, despite being unavailable for the entire month.

More fundamentally, energy market LMPs are separate and distinct from the value of RA capacity. LMPs reflect the short-run marginal operating cost of the resources dispatched in a given interval, while RA capacity is a forward commitment to be available, and its value reflects the cost of building and retaining resources. An older, high-cost resource that would not have been dispatched during assessment hours has no effect on LMPs, yet its unavailability still reduces the capacity available to the system, and the cost of replacing that capacity is set in capacity markets whose values and costs differ from operating marginal cost-based LMPs.

CAISO has argued in the past that LMPs reasonably represent the harm an unavailable resource causes the system: when RA capacity is unavailable, other resources must be dispatched in its place, and the LMP reflects the marginal cost of that replacement energy. CESA understands the logic, but it conflates the cost of replacement energy with the harm of unavailable capacity. In many hours, the system holds enough surplus capacity that an outage has little or no effect on LMPs, yet the outage still erodes the planning reserve margin that RA exists to secure. The reliability harm of unavailable capacity is an increased risk of shortfall, and that risk is priced through capacity procurement and backstop mechanisms, not interval energy prices. Moreover, the energy market already imposes its own LMP-based consequence: an unavailable resource forgoes the energy revenue it would have earned at the LMP. An LMP-based RAAIM penalty would largely duplicate that signal rather than enforce the capacity obligation RAAIM is meant to protect. An LMP-based penalty therefore cannot measure the harm caused by unavailable RA capacity. CESA encourages CAISO to retain a capacity-based penalty price that reflects the value of the RA service the resource failed to provide.

[1] Id. at pg. 7

[2] Id. at pg. 8

[3] Id., Figure 16

[4] Current RAAIM: $4.40/kW-month × 1,000 kW/MW = $4,400 per MW-month. Proposed Tier 1: $4,400 ÷ $60/MWh ≈ 73.3 hours. For comparison, four Tier 1 hours × $60/MWh = $240 per MW.

6. Please provide your organization's overall feedback on the discussion regarding the bidding requirements.

No comment at this time

7. Please provide your organization's overall feedback on the discussion regarding substitution and outage definitions.

CESA continues to encourage CAISO to consider a more comprehensive, market-based approach to RA substitution rather than the proposed framework for procuring replacement capacity from a limited pool of available resources. A market-based mechanism could provide greater flexibility, improve price discovery, and better reflect the economic value of replacement capacity. Facilitating planned maintenance outages is an important means of reducing the risk of forced outages during periods of high system need, and existing substitution requirements can create significant barriers to scheduling such maintenance. Short of eliminating the substitution requirement altogether, establishing an efficient, market-based mechanism for obtaining substitute capacity may be the most effective reform CAISO could undertake to address these barriers.

CAISO's problem statement identifies four outcomes of the current substitution process: “[i]nefficiencies as multiple SCs hold back RA capacity for outage substitution for a partial-month outage,” “[a]rtificial tightness in the RA bilateral market due to holding back capacity for outage substitution,” “[p]otential maintenance delays if substitute capacity is not available,” and “[h]igher forced outage rates because planned outages cannot be scheduled and the resource ultimately experiences a forced outage.”[1] CAISO adds that its process “should not incentivize individual scheduling coordinators to hold back substitute capacity for their own needs.”[2]

The shopping cart does not solve these problems. Participation is voluntary, and nothing in the proposal changes the incentive for an SC to hold back capacity as a hedge against its own outages. CAISO asserts that the tool “offers incentives for SCs to offer their capacity through the tool instead of withholding it”,[3] but does not identify what those incentives are. Because “[c]ontracting and financial settlement would remain bilateral and outside the ISO's purview,”[4] the credit reviews, contracting requirements, eligibility checks, and short transaction timelines that stakeholders identified as the real barriers to substitution remain in place.[5] CAISO also has not determined what information the tool would display, while acknowledging that “[t]he fewer fields shown, however, the less the shopping cart tool will provide value relative to the ISO's existing power contracts bulletin board.”[6] With forced outage substitution averaging between zero and one percent in summer 2022, CAISO has not shown that a search tool layered on the existing bilateral process will create the liquidity needed to resolve the problems it has defined.[7]

To resolve the concerns CAISO has identified, CESA believes CAISO must establish a substantially more liquid market for substitute capacity. That requires two things the shopping cart lacks. First, the market must remove transactional friction through standardized substitute capacity products with defined MW quantities and durations, CAISO-administered settlement and credit in place of bilateral credit reviews and individual contracts, and automatic RASC qualification on timelines that work for both planned and short-notice outages. Second, the market must be priced to attract participation. SCs now withhold capacity because keeping it as a hedge against their own outages is worth more than offering it, net of transaction costs. A transparent clearing price would give sellers a reason to offer capacity and give buyers confidence it will be available when needed. Without both, CESA expects substitution to remain illiquid and CAISO’s goals will remain unmet.

CESA shares other stakeholders' concerns regarding the proposed revisions to outage definitions. What began as a relatively limited effort to clarify outage classifications for purposes of RAAIM and substitution has expanded into a broader effort to align CAISO's outage management framework with RC West procedures. Given the potential implications for outage coordination and operational practices beyond the RA program, we encourage CAISO to consider addressing these changes through a separate stakeholder initiative with broader participation from affected parties.

[1] CAISO Track 2 Second Revised Straw Proposal, p. 51

[2] Id.

[3] Id. at p. 56

[4] Id. at p. 54

[5] Id. at p. 16

[6] Id. at p. 56

[7] Id. at p. 12

8. Please submit your organization's overall feedback on the Calpine Stakeholder Presentation on 10/9.

CESA agrees with Calpine that CAISO should prioritize coordinating the necessary changes to its tariff provisions, business practice manuals, and CIRA systems to align with the CPUC's forthcoming UCAP framework. Given the potential complexity of these changes and the need for consistency between CPUC accreditation requirements and CAISO's resource adequacy administration, we encourage CAISO to initiate this work promptly rather than waiting until the CPUC's UCAP framework is fully implemented.

We encourage CAISO to establish a coordinated implementation schedule, including the necessary tariff and BPM revisions, CIRA modifications, and stakeholder review of how each capacity value will be calculated, reported, and applied. In particular, CAISO should address the treatment of mixed ICAP and UCAP showings, including the determination of must-offer obligations and residual capacity available for substitution, firm exports, and backstop procurement. These issues will require resolution well in advance of implementation to provide LSEs and resource owners sufficient certainty for contracting and RA compliance.

We particularly support Calpine's recommendation that CAISO undertake a comprehensive review of NQC-dependent functions and establish function-specific treatment of accredited capacity, physical capability, and committed RA capacity before implementing UCAP.

CAISO's own Bidding Requirements problem statement recognizes this need: “[a]s LRA accreditation methodologies evolve, the relationship among a resource's NQC, shown RA, operating capability, and MOO requires greater clarity.”[1] The second revised straw proposal addresses that relationship only for the MOO and RAAIM exposure, continuing to rely on a single NQC value set by “the LRA with the highest QC.”[2] It does not address how mixed ICAP and UCAP showings will be reconciled in determining residual capacity available for substitution, firm exports, or backstop procurement.

[1] Id. at p. 47

[2] Id. at p. 49

9. Please submit your organization's overall feedback on the CESA Stakeholder Presentation on 10/23.

CESA appreciated the opportunity to discuss the interaction between RAAIM and energy storage foldback during the October 9 and October 23 workshops. Foldback is an unavoidable operating characteristic of battery energy storage resources, and its impact on resource availability is already reflected in their RA accreditation. Accordingly, assessing RAAIM penalties when storage resources enter foldback is inappropriate and penalizes resources for limitations already accounted for in their RA value. To ensure that these operating limitations are accurately reflected in market dispatch without subjecting resources to inappropriate RAAIM penalties, CESA recommends that storage resources be permitted to report foldback limitations using the RAAIM-exempt Technical Limitations Not in Market Model nature-of-work (NOW) code until CAISO completes updates to its market model to directly account for foldback limitations, just as the market model already accounts for the known operating characteristics of other resource types. Subjecting storage resources to RAAIM penalties while they remain fully capable of meeting their RA service obligations is unreasonable and unduly discriminatory relative to the treatment of other resource types whose known limitations are reflected in the market model.

CESA provided several examples showing that when foldback is appropriately accounted for in QC and RA Supply Plan values, there are no instances in which foldback hinders an energy storage resource’s core ability to provide its shown RA value for four consecutive hours. RAAIM penalizes fully compliant resources while doing nothing to identify or correct overstated QC values.

CESA appreciates CAISO's clarification of its concerns during the discussion at the October 23 workshop and offers the following responses.

Treatment of foldback in QC and on RA Supply Plans. CAISO's concern rests on a sound premise: capacity shown on annual and monthly RA and Supply Plans should be capacity the resource can actually provide. CAISO has explained that it lacks visibility into whether foldback limitations are already reflected in individual resources' Qualifying Capacity (QC) values or shown RA values. If a shown RA value exceeds the amount a resource can continuously discharge for four consecutive hours, the resource could enter foldback before completing its four-hour obligation and fall short of the fundamental RA service obligation. In that scenario, CAISO reasons, the Plant Trouble nature-of-work (NOW) code and its associated RAAIM exposure appropriately flag a resource that has overstated its capability.

CESA agrees that shown RA capability must be provided, but RAAIM does not address this concern. RAAIM does not distinguish between a resource whose QC overstates its four-hour capability and one whose QC accurately excludes foldback energy. As CESA's examples demonstrate, even an appropriately sized, or oversized, resource that can deliver its full shown RA value for four consecutive hours will incur RAAIM penalties, because whether and when a resource reaches its foldback range depends on the state-of-charge trajectory produced by CAISO's dispatch over the course of the day. RAAIM therefore penalizes compliant resources while giving CAISO no additional visibility into non-compliant ones. If CAISO needs that visibility, more direct tools are available: CAISO can ask each resource to report the MWh of discharge energy not affected by nonlinearity, or it can conduct appropriately structured NQC tests. Either approach would address CAISO's concern directly, without RAAIM's collateral penalties.

CAISO has also articulated an incentive rationale. In the Storage Design and Modeling (SDM) initiative, CAISO explained that a RAAIM-exempt NOW code “would effectively eliminate the incentives for storage resources to develop, augment, contract, and make themselves available in ways that minimize foldback and ensure the provision of the capacity contracted,” noting that resources could, for example, oversize their facilities to minimize the range in which foldback affects their ability to respond to grid needs.[1] CESA shares the underlying goal of ensuring that resources are capable of providing the capacity they sell.

However, a RAAIM exemption would not weaken that incentive, because the incentive to minimize foldback already resides in accreditation. Under the QC methodology the CPUC clarified in D.26-07-008, storage QC excludes discharge capability affected by foldback, so every MWh lost to foldback reduces a resource's QC and the RA value it can sell, and a resource that augments or oversizes to reduce foldback is rewarded with higher QC. Layering RAAIM penalties on top does not sharpen that incentive; it imposes an indiscriminate duplicative charge for the same limitation.

Moreover, CESA's examples show that RAAIM penalties are unavoidable for resources sized to meet their four-hour obligation, because foldback is a known resource characteristic whose effect varies with how CAISO dispatches the resource, not with the resource's sizing decisions. Avoiding penalties entirely would require oversizing well-beyond accredited capability to cover a five-hour window, effectively requiring storage to supply uncompensated capacity beyond what its RA value reflects. A penalty that cannot be avoided through any reasonable sizing, augmentation, or operating decision does not function as an incentive.

Finally, CAISO has grounded its position in the CPUC's QC definition. In its August 8, 2025 SDM revised straw proposal, CAISO maintained its preference for the Plant Trouble NOW code based on “the policy principle that using a RAAIM-exempt nature of work is undue for a known technological limitation that can be minimized,” and on D.14-06-050, which bases storage QC on the output level at which a resource can discharge for four or more uninterrupted hours.[2] On this view, a resource that cannot sustain its shown output for the required duration falls short of the very standard on which its QC rests.

CESA agrees that the four-hour standard is the correct benchmark, and that benchmark supports CESA's proposal. The resources in CESA's examples meet the D.14-06-050 standard: each can discharge at its shown RA value for four uninterrupted hours. Foldback in these cases limits only energy beyond that four-hour capability, which the QC definition never counted. Penalizing a resource for failing to deliver energy excluded from its QC is inconsistent with the standard CAISO invokes. Any remaining doubt about whether QC values reflect foldback has been addressed by the CPUC: in D.26-07-008, adopted July 2, 2026, the CPUC clarified that storage QC must reflect only discharge capability not affected by foldback, beginning with the 2027 RA compliance year. To the extent full implementation of that methodology awaits database or data-collection changes, that administrative lag is not a reason to subject storage resources to penalties that are plainly undue. And even if CAISO retains residual concerns about individual resources, RAAIM is an ill-fitted tool: it penalizes compliant resources while doing nothing to identify or correct an overstated QC.

Availability of an alternative interim approach. CAISO has suggested that an exemption is unnecessary because resources already have tools to manage their exposure. In CAISO's view, a resource that can meet its core RA service obligation controls its own offers and can avoid RAAIM penalties by withholding energy offers for capacity affected by foldback rather than submitting outage cards, or by structuring its bids to limit dispatch into the foldback range. If those tools worked, an outage-code exemption would add little. They do not. CESA's examples show that RAAIM penalties remain unavoidable even when a resource is fully capable of providing its qualified capacity for four consecutive hours. The flaw is structural: RAAIM assesses availability over a five-hour window, while the CPUC accredits storage based on four-hour capability. No offer strategy can close the gap between those two measures.

CAISO's suggested workarounds would also harm reliability, market efficiency, or both.

• First, CAISO suggests resources could simply not offer energy subject to foldback limitations. Across the storage fleet, this is gigawatt-hour-scale energy that resources are physically capable of delivering. Withholding it would leave that energy idle precisely when system conditions are tightest and CAISO needs every available MWh. The suggestion also conflicts with the RA must-offer obligation, which requires resources to offer all physically available capacity to CAISO. Storage resources would be left with an untenable choice: withhold available energy and risk violating the must-offer obligation, or offer it and incur RAAIM penalties.
• Second, CAISO suggests resources could employ creative bidding strategies to avoid their resources being driven by CAISO’s optimization in a way that would subject them to RAAIM penalties. As CESA’s examples showed, RAAIM penalties are unavoidable no matter the bidding strategy. Moreover, the only bid-based way to manage this risk is to embed expected RAAIM penalties in energy offers. Doing so would push storage offers above true marginal cost, distorting the merit order and raising energy costs whenever those resources are dispatched. Also, when storage resources are subject to market power mitigation, their offers are replaced by default energy bids that do not include RAAIM penalty costs.

Reliability of operation in the foldback range. At the October 23 workshop, CAISO staff indicated a concern with dispatching storage resources while they operate in their foldback range, presumably because it perceives that a resource's ability to follow dispatch instructions may be reduced as its discharge rate declines near its state-of-charge limits.[3] CESA takes this concern seriously, but it does not depend on which NOW code is used. Under current practice, storage resources offer foldback-limited energy while entering and managing an outage card that communicates the reduced capability to CAISO. CESA's proposal preserves that practice: the outage card would continue to give CAISO the same operational information, and only the RAAIM settlement treatment would change. CESA continues to support the development of non-linearity enhancements for the Non-Generator Resource model as the appropriate way to mitigate these concerns.

Implementation burden and limited duration. CAISO has noted that foldback treatment was previously considered through the SDM initiative and has expressed reluctance to devote additional resources to a temporary solution with potentially limited impacts. CESA understands the desire to conserve staff resources and avoid building solutions that will soon be superseded. But the proposed interim accommodation requires no market model changes, no new functionality, and no modification of existing outage codes; it requires only CAISO's authorization to use an existing NOW code for this purpose, subject to appropriate safeguards. CAISO's expectation of limited impacts also weighs in favor of the accommodation: if foldback-related outages are limited in scale, the reliability risk of exempting them is equally limited, while the penalties assessed on individual compliant resources may be significant. Until the modeling enhancements are in place, those penalties will continue to accrue.

Potential misuse of the Technical Limitations Not in the Market Model NOW code. CAISO has expressed concern that resources could misclassify actual outages as foldback limitations to avoid RAAIM penalties. This is a legitimate concern: an exemption is only as sound as the reporting behind it. But the concern can be addressed through design and enforcement rather than by denying the exemption to all resources. CAISO can define precisely when the NOW code may be used for bona fide foldback limitations. Misreporting an outage under that definition would violate CAISO's tariff requirement to submit accurate information and expose the resource to potential enforcement actions. CAISO already relies on accurate self-reporting for every other NOW code, and foldback reporting need not be treated differently. Market rules should be designed for compliant participants and enforced against violators, not built on speculation that participants will knowingly violate clearly defined rules. Finally, the interim nature of the accommodation limits the duration of any potential exposure.

An additional consideration supports an interim accommodation: reporting foldback through Plant Trouble outage cards would expose storage resources to a third consequence for the same limitation. Beyond the foldback-adjusted QC and RAAIM penalties, Plant Trouble outages may also reduce UCAP accreditation through the CPUC's backward-looking EFORd calculation once UCAP applies to storage beginning in 2028.

For these reasons, CESA encourages CAISO to authorize interim use of the Technical Limitations Not in Market Model NOW code for storage foldback until the planned modeling enhancements are implemented.

[1]  CAISO, Issue Paper & Straw Proposal on Outage Management, Nonlinearity, and SOC Clarification, March 27, 2025, p. 12

[2]  CAISO, Revised Straw Proposal on Outage Management Topic Group, p. 14

[3] CAISO mentioned briefly mentioned this concern in its November 12, 2025 Storage Design & Modeling slide deck. Its concern is described as “reliability and operational concerns.”

11. Please submit any additional feedback not already captured.

No comments at this time. 

1. Please submit your organization's overall feedback on the Resource Adequacy Modeling and Program Design (RAMPD) Track 2 meetings held on 10/9 and 10/23.

Comments on Resource Adequacy Modeling and Program Design

Track 2 – Second Revised Straw Proposal

Department of Market Monitoring

November 6, 2026

Overview

The Department of Market Monitoring (DMM) appreciates the opportunity to comment on the Resource Adequacy Modeling and Program Design Track 2 Second Revised Straw Proposal published on October 2, 2026.[1] These comments add to our previous comments dated June 4, 2026, and include additional detail on the resource adequacy availability incentive mechanism (RAAIM) penalty incentive event frequency and price.[2]

DMM recommends the ISO demonstrate that the proposed two-tier assessment framework would provide sufficient incentive to limit the amount of resource adequacy (RA) capacity sold to the expected availability of the resource. RAAIM penalties should be calibrated so that expected non-availability costs are commensurate with bilateral RA prices and discourage the sale of RA capacity that is unlikely to be available. The ISO should clearly articulate and empirically assess how well the proposed two-tier assessment incentive meets this design objective.  

Finally, DMM reiterates that the implementation of an unforced capacity (UCAP) framework should not be viewed as a replacement for a RAAIM penalty structure that adequately disincentives the sale of capacity that may be unavailable to the CAISO market.

Comments

The ISO has not yet demonstrated that the two-tier assessment framework would provide sufficient incentive to limit the sale of RA capacity to the expected availability of the resource

DMM continues to recommend RAAIM incentive event frequency and prices be designed to ensure that resources do not have an incentive to sell RA capacity in excess of what they can reasonably expect to make available to the market.[3] To align RA supply with expected market availability and operational capabilities, RAAIM penalty pricing should be aligned with market conditions such that expected penalties for non-availability meet or exceed any potential gains from selling RA capacity that cannot reliably perform.

As discussed in previous comments, under the proposed two-tiered RAAIM assessment framework, the ISO would need to trigger RAAIM penalties on a regular basis to have RAAIM penalties commensurate with RA prices. Furthermore, DMM has noted the likelihood of a tier 2 penalty is relatively low since the CAISO balancing authority area (BAA) rarely fails the Western Energy Imbalance Market resource sufficiency evaluation (RSE). As a result, there is low expectation of the CAISO BAA failing the extended day-ahead market RSE and triggering the tier 2 penalties.[4]

In the second revised straw proposal, the ISO provided a historical lookback analysis of the frequency in which the tier 1 RAAIM penalty would be triggered. The ISO calculated that from 2023-2025 there would have been 47 operating days that RAAIM penalties would have been triggered. This includes 2025, which only had two days and two hours where tier 1 RAAIM penalties would have been triggered.[5] These findings—along with previous analysis by DMM—suggest that the frequency of such events appears insufficient to create a penalty structure commensurate with bilateral RA capacity prices, and would not discourage the sale of RA capacity that is unlikely to be available.[6]

Table 1 presents an analysis of the impact of the RAAIM penalties (in $/kW-month) given different levels of event hours per month and day-ahead prices. For example, this analysis shows that for the proposed RAAIM penalty to be approximately similar to the current RAAIM penalty price, which is 60 percent of the capacity procurement mechanism soft-cap price, there would need to be 40 event-hours at a day-ahead price of $100/MWh, or 10 event-hours and day-ahead prices of $400/MWh. Moreover, DMM has previously recommended that the current RAAIM penalty price would need to be increased to discourage the sale of RA capacity that is unlikely to be available.

In previous comments, DMM presented an empirical analysis estimating hypothetical tier 1 RAAIM trigger events using different levels of the uncertainty adder. This analysis found that in 2025, the hypothetical tier 1 RAAIM events had prices varying from $31/MWh to $80/MWh, with a mean and median of approximately $51/MWh.[7] Extending the analysis from Table 1, for a tier 1 RAAIM trigger to equal the current RAAIM penalty at the observed 2025 prices, approximately 80 event-hours would need to occur per month for parity.

Table 1. RAAIM prices, event frequency, and resulting penalties as a capacity price

To increase penalties beyond the current RAAIM penalties, as would be required to align with the value of RA capacity, would require many more event hours per month at 2025 prices. However, the ISO found that under the assumptions used in the second revised straw proposal analysis, there were only two event-hours in all of 2025.[8]^,[9] DMM recommends the ISO further extend their tier 1 historical lookback analysis, and incorporate prices to allow stakeholders to compare the proposed RAAIM structure with current and historical RA capacity prices.

In the most recent California Public Utilities Commission (CPUC) RA report, the CPUC reported that for 2023-2025, the average price for RA ranged from $11.78/kW-month to $17.31/kW-month.[10] Comparing these bilateral RA prices to hypothetical penalties shown in Table 1, this would require approximately 30 to 40 event-hours per month at day-ahead prices of $400/MWh, assuming no tier 2 event is triggered. Based on the 2025 prices from DMM’s historical lookback analysis under different levels of uncertainty, this would require approximately 300 event-hours per month, assuming no tier 2 event is triggered.

DMM recommends the ISO demonstrate how the proposed framework under a reasonable set of assumptions can result in expected penalties for non-availability that are sufficient to discourage the sale of RA capacity that is not reasonably expected to be available. If the proposed framework is unable to accomplish this objective, DMM recommends the ISO consider a different approach that could more effectively do so.

Lastly, DMM reiterates that there is still a role for an availability mechanism like RAAIM, even in the context of an unforced capacity (UCAP) accreditation framework. In 2025, the California Public Utilities Commission (CPUC) issued a decision to implement a UCAP framework that will incorporate historical availability when determining the amount of RA a resource will be able to supply to the market. The role of UCAP is to ensure accurate and consistent reporting of a resource’s expected operational capability to the market.

The UCAP framework also provides incentives to minimize outages that will impact future capacity accreditation. While UCAP overlaps with RAAIM in providing additional incentives to minimize certain outage types, RAAIM functions as the primary incentive for resources to meet must-offer obligations and to be available in the day-ahead and real-time markets.[11] The two policies serve different functions. While they should be incentive-aligned in their development, DMM does not view the implementation of a UCAP framework as a replacement for a RAAIM penalty structure that adequately disincentives the sale of capacity that may be unavailable to the CAISO market.

[1]   Resource Adequacy Modeling and Program Design – RAAIM and Outage Substitution (Track 2) – Second Revised Straw Proposal, California ISO, October 2, 2026: https://stakeholdercenter.caiso.com/InitiativeDocuments/Second-Revised-Straw-Proposal-Resource-Adequacy-Modeling-and-Program-Design-Track-2-Oct-02-2026.pdf

[2]   Comments on Resource Adequacy Modeling and Program Design Track 2 – Revised Straw Proposal, Department of Market Monitoring, August 6, 2026: https://www.caiso.com/documents/dmm-comments-on-resource-adequacy-modeling-and-program-design-track-2-revised-straw-proposal-aug-06-2026.pdf

[3]   Ibid.

[4]   Comments on Resource Adequacy Modeling and Program Design Track 2 – RAAIM Reform Presentation, Department of Market Monitoring, March 23, 2026: https://www.caiso.com/documents/dmm-comments-on-rampd-track-2-raaim-reform-mar-02-2026-input-session-ahead-of-straw-proposal-mar-23-2026.pdf

[5]   Resource Adequacy Modeling and Program Design – RAAIM and Outage Substitution (Track 2) – Second Revised Straw Proposal, Figure 15, California ISO, October 2, 2026: https://stakeholdercenter.caiso.com/InitiativeDocuments/Second-Revised-Straw-Proposal-Resource-Adequacy-Modeling-and-Program-Design-Track-2-Oct-02-2026.pdf

[6]   Comments on Resource Adequacy Modeling and Program Design Track 2 – RAAIM Reform Presentation, Department of Market Monitoring, March 23, 2026: https://www.caiso.com/documents/dmm-comments-on-rampd-track-2-raaim-reform-mar-02-2026-input-session-ahead-of-straw-proposal-mar-23-2026.pdf

[7]   Comments on Resource Adequacy Modeling and Program Design Track 2 – Straw Proposal, Department of Market Monitoring, June 4, 2026: https://www.caiso.com/documents/dmm-comments-on-resource-adequacy-modeling-and-program-design-track-2-straw-proposal-jun-04-2026.pdf

[8]   Resource Adequacy Modeling and Program Design – RAAIM and Outage Substitution (Track 2) – Second Revised Straw Proposal, California ISO, October 2, 2026: https://stakeholdercenter.caiso.com/InitiativeDocuments/Second-Revised-Straw-Proposal-Resource-Adequacy-Modeling-and-Program-Design-Track-2-Oct-02-2026.pdf

[9]   In previous comments, DMM highlighted the importance of the magnitude of the uncertainty adder to have sufficient tier 1 RAAIM penalties triggered. In the empirical exercise presented in previous comments, DMM selected five representative uncertainty values and estimated the number of days that would result in a potential tier 1 RAAIM trigger. Conversely, in the historical analysis shown in the second revised straw proposal, the ISO selected the uncertainty adder from historical uncertainty in demand, wind and solar generation, and RA availability, including potential additional outages or derates. The ISO then calculated the number of hours and days the tier 1 RAAIM trigger would be activated with their selected uncertainty adder.

[10] 2023 Resource Adequacy Report, California Public Utilities Commission Energy Division, August 2025, p 25: https://www.cpuc.ca.gov/-/media/cpuc-website/divisions/energy-division/documents/resource-adequacy-homepage/2023-resource-adequacy-reportv2.pdf

[11] Comments on Track 1 Proposals, Department of Market Monitoring, October 9, 2025: https://docs.cpuc.ca.gov/PublishedDocs/Efile/G000/M604/K003/604003026.PDF

2. Please submit your organization's overall feedback on the second revised straw proposal that was posted on 10/2.

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 organization's overall feedback on the discussion regarding the revised RAAIM and resource type application.

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. Please provide your organization's overall feedback on the discussion regarding the tier assessment.

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. Please provide your organization's overall feedback on the discussion regarding charges, payments, and bounded penalty exposure.

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.

6. Please provide your organization's overall feedback on the discussion regarding the bidding requirements.

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.

7. Please provide your organization's overall feedback on the discussion regarding substitution and outage definitions.

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.

8. Please submit your organization's overall feedback on the Calpine Stakeholder Presentation on 10/9.

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.

9. Please submit your organization's overall feedback on the CESA Stakeholder Presentation on 10/23.

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.

11. Please submit any additional feedback not already captured.

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 submit your organization's overall feedback on the Resource Adequacy Modeling and Program Design (RAMPD) Track 2 meetings held on 10/9 and 10/23.

Energy Division Staff (ED Staff) of the California Public Utilities Commission (CPUC) develops and administers energy policies and programs that serve the public interest, advises the CPUC, and supports compliance with CPUC decisions and statutory mandates. ED Staff provides objective, expert analysis that promotes reliable, safe, and environmentally sound energy services at just and reasonable rates for Californians.

ED Staff appreciate the refinements to the Track 2 proposal, including historical data on the frequency with which the proposed Tier 1 criteria would have been triggered and a numerical example illustrating the proposed penalties.

ED Staff also appreciate the opportunity for stakeholders to present their concerns regarding implementation of the CPUC’s transition to unforced capacity (UCAP) in its Resource Adequacy (RA) program.

2. Please submit your organization's overall feedback on the second revised straw proposal that was posted on 10/2.

CAISO’s second revised straw proposal retains the event-based Resource Adequacy Availability Incentive Mechanism (RAAIM) framework introduced in the prior proposal. It also adds implementation details and responds to stakeholder concerns regarding financial exposure, treatment of different resource types, deliverability, and outage coordination.

Key elements of the RAMPD proposal

1. RAAIM event triggers and penalties

• CAISO would issue nonbinding advisories from T-7 through T-4 days and binding designations from T-3 through T-1 days. Tier 1 would apply only during identified stress hours when forecast demand, reserves, and an uncertainty adder exceed available RA. Once CAISO issues a binding Tier 1 designation, the identified assessment hours would remain fixed for settlement purposes even if subsequent forecasts improve.
• Tier 2 is unchanged. It remains triggered by a CAISO balancing-area failure of the EDAM upward Resource Sufficiency Evaluation and carries a fixed $2,000/MWh charge. Overlapping Tier 1 and Tier 2 charges would not stack; Tier 2 would supersede Tier 1.

• Penalty exposure and revenue allocation
  • A new monthly exposure limit is proposed. The combined Tier 1 and Tier 2 charges would be assessed at the full applicable rate until cumulative monthly charges reach 100 percent of the resource’s monthly Capacity Procurement Mechanism (CPM) amount.[1] Charges above that threshold would be assessed at 20 percent of the otherwise applicable rate until cumulative charges reach a hard cap equal to 200 percent of the resource’s CPM-based monthly amount. The calculation would reset each month, with no carryover.
  • The proposal retains the per-event allocation under which 50 percent of collected penalty revenues would be allocated to load and 50 percent would be allocated to eligible resources on a per-MW basis.
    • CAISO is seeking feedback on an alternative allocation under which Tier 1 revenues would go to available generation and Tier 2 revenues would go to load.
  • As in the prior proposal, RAAIM would assess a resource’s failure to submit bids consistent with its Shown RA obligation.

• Resource-specific RAAIM treatment
  • Variable energy resources (VERs) would no longer have a blanket RAAIM exemption for qualifying equipment outages. Reported equipment outages could create RAAIM exposure. Reductions in output caused by weather variability, ambient conditions, or forecast error would not create RAAIM exposure.

2. Must-offer obligation and UCAP coordination

• The must-offer obligation formula is changed to use deliverable capacity rather than Pmax because a resource’s RA quantity may be less than its Pmax, including where interconnection limitations restrict the capacity that can be delivered. The proposal would require the market participant to provide the resource’s deliverable capacity value.
• CAISO reiterates that UCAP serves as a forward accreditation mechanism, while RAAIM addresses operational availability. Broader questions involving UCAP’s interaction with RA showings, local requirements, exports, bidding obligations, and deliverability remain under review.

ED Staff appreciate CAISO staff’s efforts to summarize stakeholder concerns and further refine the proposal. The statistical information regarding the frequency of potential Tier 1 events, together with the numerical penalty examples, helps stakeholders understand the potential financial effects of CAISO’s proposed RAAIM framework.

ED Staff responds to specific issues in the following sections.

[1] The CPM is currently $7.34/kW-month.

3. Please provide your organization's overall feedback on the discussion regarding the revised RAAIM and resource type application.

In prior comments, ED Staff supported consideration of applying RAAIM to variable energy resources (VERs), which are currently exempt, because VERs represent a growing share of the resource fleet as the electric grid transitions toward renewable generation. The proposal states that weather-related variations in output would not create RAAIM exposure, while reported equipment outages could create such exposure. ED Staff consider this distinction a reasonable principle.

CAISO provided the following example on page 25 of the proposal:

Figure 13 from CAISO’s proposal

The CPUC uses an exceedance methodology to establish the maximum Shown RA quantity that a VER may report.  The exceedance value is derived from historical performance that reflects both equipment outages and weather-related variation. Therefore, on a given operating day, the VER may be capable of producing more or less than its Shown RA quantity.

Figure 13 appears to calculate unavailable RA by applying the equipment outage percentage to the resource’s Shown RA. Under that approach, a 150 MW outage affecting a 500 MW resource produces a 30 percent outage factor, which is then applied to the resource’s 80 MW Shown RA to calculate 24 MW of unavailable RA which would be the basis for a RAAIM penalty. However, depending on weather conditions, the resource might still be capable of providing its full 80 MW Shown RA despite the equipment outage. For example, wind resources under ideal conditions may still be able to provide its 80 MWs of Shown RA despite an equipment outage.  The proposal states that RAAIM exposure is failure to be able to deliver its Shown RA, but in the case of VERs it is possible to deliver Shown RA despite equipment outages.  ED Staff recommends that CAISO continue refining the RAAIM methodology for VERs so that equipment-outage calculations appropriately account for the relationship among equipment availability, weather-dependent output, and the resource’s Shown RA obligation.

4. Please provide your organization's overall feedback on the discussion regarding the tier assessment.

The current proposal does not fundamentally change the Tier 1 assessment triggers.  The proposal states that a Tier 1 event would occur when:

CAISO forecast demand + reserves + uncertainty adder > available RA

CAISO states that the uncertainty adder “would reflect historical seasonal uncertainty in demand, wind and solar generation, and RA resource availability, including the possibility of additional outages or derates.”

The proposal does not clearly explain whether the reserve requirement and the uncertainty adder account for overlapping components of resource availability or weather-related uncertainty. ED Staff recommends that CAISO identify the components included in each term and explain how the methodology avoids double counting.

5. Please provide your organization's overall feedback on the discussion regarding charges, payments, and bounded penalty exposure.

ED Staff does not support the 50/50 sharing of the allocation of the collected RAAIM penalty revenue to between load and resources because load is impacted when RA resources fail to provide capacity to the CAISO markets which results in high energy prices or RSE failure penalties. ED Staff continues to strongly recommend that all collected RAAIM penalties be allocated to load because load has already paid for RA capacity to be available and it is harmed through high prices or RSE failure penalties when those resources are unavailable.  ED Staff does not support the alternative proposal to allocate collected penalty revenues for Tier 1 to resources and Tier 2 to load because regardless of the trigger load pays the high energy prices or resource sufficiency evaluation failure penalties.  

ED Staff appreciates CAISO’s publication of the frequency with which the proposed Tier 1 criteria would have been triggered under historical conditions during 2023 through 2025. Applying the proposed criteria would have produced 18 potential Tier 1 events in 2023, 20 in 2024, and 2 in 2025. Given the number of potential events identified by the historical analysis, ED Staff agrees that the proposal should include a limit on cumulative monthly penalty exposure.

The proposed bounded-penalty framework from the CAISO proposal is shown below:

The proposal provides an example in which a 50 MW resource is unavailable for 10 Tier 1 hours and 24 Tier 2 hours. Before application of the bounded-exposure provisions, the calculated penalty is $2.45 million. After application of the proposed hard cap at 200% of the CPM, the penalty is limited to $0.734 million.[1]

The current market price benchmark for capacity is approximately $10 to $11/kW-month.[2]  Based upon the current $7.34/kW-month for the CPM, the hard cap is about 70% of the current market value of capacity.  The proposal does not explain why a hard cap equal to 200 percent of the CPM-based monthly amount appropriately balances the incentive for resources to perform against the objective of limiting financial exposure. ED Staff requests additional explanation supporting the proposed 200 percent cap but does not take a position at this time on whether that level is appropriate. ED Staff may provide further comments after reviewing other stakeholder feedback and any subsequent revision of the proposal.

[1] The current CPM is $7.34/kW-month.

[2] 2026-market-price-benchmarks.pdf

6. Please provide your organization's overall feedback on the discussion regarding the bidding requirements.

ED Staff appreciate CAISO’s recognition that, after UCAP is adopted as the basis for determining the qualifying capacity used in RA showings, a separate capacity value may be needed to establish a resource’s must-offer obligation in CAISO markets. As with the prior version, ED Staff continue to recommend that the must-offer value should be provided by the local regulatory authority (LRA) given its linkage to qualifying capacity.

The proposal specifies the following formula for the must-offer obligation:

Must-offer obligation (MW) = Shown RA (MW) × [Deliverable Capacity (MW) ÷ NQC (MW)]

Deliverable Capacity (MW) = Pmax (MW) × Deliverable Capacity Percentage

The change from the prior proposal is the use of Deliverable Capacity rather than Pmax in the numerator. This is a reasonable modification because some resources have an NQC below Pmax. Using Pmax directly could therefore overstate the resource’s must-offer obligation.

The CPUC is evaluating UCAP implementation issues which includes the “appropriate basis for the must-offer obligation once UCAP replaces the current ICAP-based methodology as qualifying capacity, including any necessary California Independent System Operator tariff or Business Practice Manual modifications”.[1]  ED staff is reviewing the capacity definitions and fields to include in the master resource database.  Should the CPUC retain the existing installed-capacity-based NQC value under a new field name then that could be the basis for the must offer.    

[1] CPUC D.26-07-008 ordering paragraph 14 at 199.  See also Assigned Commissioner’s Amended Scoping Memo and Ruling, issued August 25, 2026, at 3.

7. Please provide your organization's overall feedback on the discussion regarding substitution and outage definitions.

CAISO proposes to align its tariff outage definitions with the Reliability Coordinator West outage-coordination framework by adding Urgent and Opportunity outages to the existing Planned and Forced outage categories. Urgent and Forced outages would be subject to RAAIM when substitute capacity is not provided, and both would count toward CAISO’s default UCAP methodology. Planned and Opportunity outage requests would require CAISO approval and require substitute capacity. CAISO also proposes to eliminate the existing Short Notice outage category. The proposed Opportunity outage category would be similar to the current Short Notice category and would be exempt from RAAIM when CAISO approves the outage and substitute capacity is provided.

The proposed outage categories appear reasonable because they would provide resources with additional options for managing outages.

The CPUC’s UCAP framework [1]relies on the daily Curtailed and Non-Operations Generator Prior Trade Data Report, which currently identifies outages as planned or forced. If CAISO implements the proposed Urgent and Opportunity outage categories, ED Staff recommends that the report include each new category. This information would improve transparency and allow the Commission to evaluate whether Urgent outages should be included in the CPUC’s UCAP calculation.

[1] CPUC D.26-07-008 adopted the UCAP framework.

8. Please submit your organization's overall feedback on the Calpine Stakeholder Presentation on 10/9.

Calpine’s (aka Constellation) presentation raised concerns regarding implementation of UCAP and its potential effects on CAISO processes. The presentation identified concerns about using NQC values based on UCAP in operational functions such as must-offer obligations, RA substitution, Local RA, firm-export calculations, and backstop capacity procurement.

ED Staff understands the concern to be that existing RA planning and CAISO operational processes were designed around an installed-capacity-based NQC value. After UCAP is implemented, the UCAP-based Shown RA quantity may not be an appropriate input for every process that currently relies on Shown RA. The must-offer obligation is one example for which CAISO has recognized that a UCAP-based Shown RA value may not be appropriate and has proposed a separate calculation.

ED Staff recommends that CAISO review each operational and planning process that currently relies on Shown RA. CAISO should identify whether each process requires an installed-capacity-based value or can appropriately use a UCAP-based value and should recommend any necessary business-process changes.

9. Please submit your organization's overall feedback on the CESA Stakeholder Presentation on 10/23.

No comments.

11. Please submit any additional feedback not already captured.

The Western Power Trading Forum (WPTF) and Calpine have expressed concerns regarding implementation of UCAP and its effects on CAISO operations and processes. They state that installed capacity-based values remain necessary for certain CAISO operations.

ED Staff is still evaluating implementation issues which include the resource capacity definitions and fields to include in the Master Resource Database.

1. Please submit your organization's overall feedback on the Resource Adequacy Modeling and Program Design (RAMPD) Track 2 meetings held on 10/9 and 10/23.

The Public Advocates Office at the California Public Utilities Commission (Cal Advocates) is the independent ratepayer advocate at the California Public Utilities Commission (CPUC).  Our goal is to ensure that California ratepayers have affordable, safe, and reliable utility services while advancing the state’s environmental goals.

Cal Advocates appreciates the opportunity to comment on the Resource Adequacy (RA) Modeling and Program Design (RAMPD) initiative’s October 9 and October 23 workshops and associated proposal.[1]  Cal Advocates’ comments address the following:

• CAISO’s Second Revised Straw Proposal would have CAISO assess RAAIM rarely, on only part of the must-offer obligated capacity, and at capped levels.  These RAAIM assessment criteria risk not fixing the underlying incentive issues that this RAAIM reform proposal aims to address.
• CAISO should allocate RAAIM penalties to load. If this is not adopted then, at a minimum, CAISO should not allocate RAAIM penalties to capacity that is at or below its must-offer obligation (MOO).

[1] California Independent System Operator Corporation (CAISO), Resource Adequacy Modeling & Program Design RAAIM and Outage Substitution (Track 2) Second Revised Straw Proposal, October 2, 2026 (Second Revised Straw Proposal).  Available as “Second Revised Straw Proposal – Resource Adequacy Modeling and Program Design – Track 2 – Oct 02, 2026” at: https://stakeholdercenter.caiso.com/StakeholderInitiatives/Resource-adequacy-modeling-and-program-design.

2. Please submit your organization's overall feedback on the second revised straw proposal that was posted on 10/2.

Overall, Cal Advocates supports the CAISO’s goal of reforming RAAIM, but disagrees with the direction of this RAAIM reform proposal.  Specifically, under the Second Revised Straw Proposal, CAISO would assess RAAIM penalties very rarely and would not assess those penalties against a resource’s full MOO.[1]  Since CAISO’s proposed assessment design may trigger penalties rarely, it is unlikely that RAAIM penalties would be sufficient to improve resource availability incentives compared to the current RAAIM design.  CAISO has not demonstrated how its proposed structure addresses the concern about resource operators failing to offer their RA capacity.  Instead, CAISO and stakeholders have spent a great deal of time on technical details such as technology-specific exemption criteria.  Development of such details will likely eventually be necessary, but for now CAISO should focus on the more basic incentive issues first, namely assessment periods and penalty design. 

Cal Advocates continues to recommend[2] that the CAISO apply a tier of RAAIM penalties in a predictable manner to many hours a year, rather than the current Tier 1 and Tier 2 penalties that trigger only a handful of hours per year.[3]  Penalties that trigger rarely are unlikely to provide the incentive necessary to ensure resource availability. Cal Advocates previously submitted its RAAIM assessment arguments to the CAISO and the remainder of our comments here address other issues in the Second Revised Straw Proposal.

[1] CAISO’s Department of Market Monitoring (DMM) has highlighted that CAISO would need to assess the proposed Tier 1 penalty design for more than 300 hours per month to be commensurate with RA prices.  DMM has noted that Tier 2 penalties have a low probability of triggering at all.

DMM, Comments of the Department of Market Monitoring, August 6, 2026 at Section 1.  Available at:  https://stakeholdercenter.caiso.com/Comments/AllComments/19a74e74-8f0d-4268-813b-2f4d3284e368#org-bdad4678-b987-4759-8d67-da9a8f05a8a1.

[2] Cal Advocates, Comments of the Public Advocates Office on 7/22 Hybrid RAMPD Track 2 Stakeholder Meeting, August 5, 2026 (Cal Advocates Track 2 August Comments) at Section 3.  Available at: https://stakeholdercenter.caiso.com/Comments/AllComments/19a74e74-8f0d-4268-813b-2f4d3284e368#org-9423be50-5ea4-412c-a40d-0aef4678d107.

[3] CAISO reported historical data that demonstrates that CAISO would have triggered Tier 1, as currently designed, for 2-20 days per year over the past three years (Second Revised Proposal at 34).  CAISO proposes to trigger Tier 2 during extended day-ahead market (EDAM) resource sufficiency evaluation (RSE) upward capacity failures.  Broadly, RSE failures occur when a balancing authority area (BAA) do not have sufficient supply to meet its needs in the day-ahead or real-time markets.  The CAISO BAA has not yet had an EDAM RSE failure.  The CAISO BAA has had just one 15-minute interval with a real-time RSE failure in the Western Energy Imbalance Market between 2024 and 2025 (CAISO Department of Market Monitoring, 2024 Annual Report on Market Issues & Performance, August 7, 2025 at 197.  Available at: https://www.caiso.com/documents/2024-annual-report-on-market-issues-and-performance-aug-07-2025.pdf.).

3. Please provide your organization's overall feedback on the discussion regarding the revised RAAIM and resource type application.

Cal Advocates provides no comments on this topic at this time, aside from our comment above that these discussions may be premature when CAISO has not yet solved the underlying incentive issues of this policy.

4. Please provide your organization's overall feedback on the discussion regarding the tier assessment.

Please see Cal Advocates’ prior comments on the Revised Straw Proposal concerning RAAIM assessment structures.[1]

CAISO should also clarify the table in Figure 15.[2]  That table describes the number of (possibly duplicated) hours that would have had alerts under Tier 1, and the de-duplicated number of days with any alerted hours.  However, the table does not describe the number of de-duplicated hours that would be affected, nor what the average Tier 1 price would have been during those hours.

[1] Cal Advocates Track 2 August Comments at Section 3.  See also Comments of the Public Advocates Office on May 15 Stakeholder Discussion and Straw Proposal for Track 2, June 4, 2026 at Section 2.  Available at: https://stakeholdercenter.caiso.com/Comments/AllComments/0e34e687-e290-4afa-92a2-7dd9ebbeeb52#org-0b1b3f5e-fd41-456f-abbc-114f94f2a056.

[2] Second Revised Straw Proposal at 34.

5. Please provide your organization's overall feedback on the discussion regarding charges, payments, and bounded penalty exposure.

RAAIM penalty revenue should be allocated to load for both tiers

CAISO proposes to remove the monthly availability standard and related deadband in its reform of RAAIM and to divide Tier 1 penalties between load and RA capacity that was available during the Tier 1 event.[1]  CAISO presents options where Tier 2 is either allocated the same as Tier 1 or allocated only to load.[2]  CAISO argues that this different treatment correlates with the different functions of the two tiers.[3]  When a BAA fails the EDAM RSE test, load in that BAA faces additional costs.[4]  CAISO notes that returning Tier 2 RAAIM payments to load in such instances “would recognize the RSE-related costs borne by load.”[5]  Rather than just returning Tier 2 RAAIM payments, CAISO should allocate all RAAIM penalty revenues to load for both tiers. 

The costs of RA are ultimately borne by ratepayers who fund the contracts or ownership of RA resources that are obligated to be offered to CAISO markets.  If an RA resource fails to make itself available, it is in violation of the MOO, an obligation that is funded by ratepayers to obligate that resource to be available to CAISO.  Ratepayers are also harmed by the market costs and reliability impacts of unavailable resources.  For example, if CAISO has to use a resource that has higher costs than an unavailable RA resource, those additional costs are borne by ratepayers.  In an extreme case where CAISO has to shed load because of unavailable resources, those outage harms are borne by ratepayers.  The RAAIM penalties that CAISO assesses should flow back to ratepayers as a partial mitigation to these harms.

If CAISO allocates any RAAIM penalty revenue to generators, it should be for capacity above a made available resource’s MOO

CAISO states that allocation of Tier 1 RAAIM revenues to all megawatts (MW) of generation capacity “provides an additional incentive for each MW of shown RA to be available during stressed hours, beyond simply avoiding the non-availability charge.”[6]  RAAIM assessments and penalty prices should provide sufficient incentive to ensure availability.  CAISO should not allocate RAAIM revenues to generation for simply meeting the obligations the resource has agreed to through contractual arrangements and payments.[7]  If CAISO believes an “additional incentive” is necessary, then it has not appropriately designed RAAIM assessments and penalty prices.  CAISO should not require duplicative incentive payments.  CAISO should reform RAAIM in a manner that simply and directly applies penalties to incent the availability ratepayers have already paid for.

Figure 19A-alternative: Illustrative example of system-wide penalty revenue allocation

If CAISO allocates any revenue to generators, it should be to additional capacity that made itself available, above any MOO.  Any RA-eligible resource, including those not on a supply plan, should be eligible for this availability payment.  Paying resources for capacity above their MOO would provide a stronger incentive than the incentive CAISO’s proposal provides.  The table above provides a comparison, using Figure 19A from the Second Revised Straw Proposal.  Note that in this hypothetical example, the incentive for resources to perform above any MOO is 58% stronger than the incentive CAISO proposes for meeting the shown RA, per megawatt-hour (MWh).[9]

The CAISO should not bind RAAIM penalties at the proposed levels

CAISO proposes a means to bound monthly RAAIM penalty exposure.  The proposal would reduce penalty rates after a certain level of penalty assessment and would set a hard cap on total monthly penalties.[10]  Under the current price of the Capacity Procurement Mechanism (CPM) soft offer cap, CAISO would assess the full Tier 1 and Tier 2 penalties (per penalized kW) up to a combined total of $7.34/kW-month, 20% of the Tiers penalties from there to $14.68/kW-month, and no penalty after that.[11]  The CAISO’s proposed bounds do not exceed the market value of RA in some historical years.2  The CAISO’s proposed values for the penalty limits would thus enable a resource to collect revenue beyond RAAIM penalties applied to the resource even if its unavailable for an entire year.

For example, the CPUC’s market price benchmark (MBP) data, which covers the past eight years of RA, is recorded in the table below.[12]  This data represents the CPUC’s aggregation and analysis of the overall market cost of RA and the CPUC uses this data in various CPUC ratemaking processes.  Looking at the MPB averages provides a summary, but there is significant variation between contracts and between months of the year.  The 2× CAISO CPM columns represent the RAAIM penalty limits if CAISO’s proposed policy had been in place in previous years.  In these years, the MPB is occasionally higher than 2× the CAISO CPM and often higher than 1× the CAISO CPM.  The expected value of these penalties is far lower than the penalty cap, and would depend on the frequency of Tier 1 events as well as energy market prices.  When the value of RA is higher than the possible penalties, CAISO risks extending the status quo of an ineffective RAAIM.

Rather than bound penalties in this way, CAISO should instead ensure that its RAAIM assessment, trigger, and penalty price designs are sufficient to incentivize availability without being unreasonably punitive.  The approach Cal Advocates suggested previously[15] – a tier with lower but more certain penalties and no bounding – would address some of these concerns.

If CAISO moves forward with its proposal to bound RAAIM penalties, the design should consider the risk of reduced RAAIM incentive at the end of stressed months, since penalties would be far weaker as more RAAIM violations may have occurred.  This may be a particular concern for August, where heat waves at the end of the month are fairly common.

[1] Second Revised Straw Proposal at 39-41.

[2] Second Revised Straw Proposal at 39 and 41-42.

[3] CAISO, Resource Adequacy Modeling & Program Design (RAMPD) Track 2: RAAIM & Outage Substitution Second Revised Straw Proposal, October 23, 2026 (October 23 Workshop Slides) at 12.  Available as “Presentation – Resource Adequacy Modeling and Program Design – Oct 23, 2026” at: https://stakeholdercenter.caiso.com/StakeholderInitiatives/Resource-adequacy-modeling-and-program-design.

[4] CAISO, Settlements Refresher Training: DAME, EDAM, and EDAM CAISO Balancing Authority Participation Rules, April 21, 2026 at 47-52.  Available at: https://www.caiso.com/documents/presentation-dame-edam-and-edam-caiso-balancing-authority-participation-rules-settlements-refresher-training.pdf.  See also CAISO Tariff section 33.31.1.5.

[5] Second Revised Straw Proposal at 42:

This approach would use Tier 1 payments to reinforce resource availability during forecasted stressed conditions, while Tier 2 payments would recognize the RSE-related costs borne by load.

[6] Second Revised Straw Proposal at 39.

[7] Utility-owned resources do not receive contract payments when the utility that owns the resource uses it for RA compliance, though the utility itself is financing that resource through its rate base.

[8] In order to mirror the CAISO’s table, this table uses the day-ahead LMP as the Tier 1 penalty.  Cal Advocates has no comment on the merits of this tier design at this time.

[9] 58% more = $0.01667 / $0.0105 = 95,000 / 60,000 MW.

[10] Second Revised Straw Proposal at 42-43.

[11] Second Revised Straw Proposal at 43.

[12] These values are nominal, with no adjustment for inflation.  The CPUC’s True Up and Forecast Market Price Benchmark for 2019-2016 is available at: https://www.cpuc.ca.gov/industries-and-topics/electrical-energy/electric-power-procurement/power-charge-indifference-adjustment.

[13] Federal Energy Regulatory Commission, Order Accepting Tariff Revisions, May 29, 2020, at 2.  Available as “May 29, 2020 Letter Order Accepting Tariff Revisions to Capacity Procurement Mechanism - Soft Offer Cap (ER20-1075)”at: https://stakeholdercenter.caiso.com/RecurringStakeholderProcesses/Capacity-procurement-mechanism-soft-offer-cap.

[14] CAISO, Capacity Procurement Mechanism Enhancements Track 2: CPM Soft Offer Cap effective date 6/1/24, May 17, 2024.  Available at https://www.caiso.com/notices/capacity-procurement-mechanism-enhancements-track-2-cpm-soft-offer-cap-effective-date-6-1-24.

[15] Cal Advocates Track 2 August Comments at Section 3.

6. Please provide your organization's overall feedback on the discussion regarding the bidding requirements.

CAISO proposes to calculate RAAIM penalties based on a resource’s failure to meet the shown RA quantity, rather than the resource’s full MOO.  As Cal Advocates previously noted, failing to tie the incentive to the obligation makes the obligation much less meaningful.[1]  Furthermore, the modeling and accreditation procedures that calculate the quantities of RA that a resource can show are built on a foundation that assumes the resources will offer their full capacity, not just the accredited value, when feasible.[2]  The arguments CAISO provides for setting the MOO above the shown RA capacity also imply that any RAAIM penalty should be based on the MOO, not the shown RA capacity.[3]  Therefore, CAISO should calculate RAAIM penalties starting from the MOO value, not the shown RA value.

Furthermore, energy-only or non-deliverable capacity that contributes to load-serving entities’ (LSEs’) supply plans should have the same MOO and RAAIM exposure as other resources that contribute to LSEs’ supply plans.  For example, collocated energy-only solar, which the CPUC RA program allows LSEs to demonstrate charging sufficiency, does not have RA capacity itself, but does contribute to RA program reliability.  Co-located energy-only solar should face the same RAAIM exposure as other solar resources that LSEs use for RA compliance.

[1] Cal Advocates, Comments on 3/2/2026 RAMPD Track 2 RAAIM Reform Options - Stakeholder Meeting, March 23, 2026 at Response 3.  Available at: https://stakeholdercenter.caiso.com/Comments/AllComments/4aeac74b-0625-44c2-aeb9-163d024e9176#org-0555a053-da73-4849-87eb-6d0470426001.

[2] See, e.g., CPUC, Revised Inputs & Assumptions: SERVM 2026 Data Updates in Support of Resource Adequacy (RA) and Integrated Resource Planning (IRP), June 5, 2026 at 44.  Available at: https://docs.cpuc.ca.gov/PublishedDocs/Efile/G000/M608/K310/608310037.PDF.  The CPUC models that resources provide their full capacity, not their supply-plan RA volume, except for outages and weather-driven variability.  If resources limited their availability to their supply-plan volume, the model would find a significant shortage of resources.

[3] Second Revised Straw Proposal at 47-50.

7. Please provide your organization's overall feedback on the discussion regarding substitution and outage definitions.

Cal Advocates provides no comments on this topic at this time.

8. Please submit your organization's overall feedback on the Calpine Stakeholder Presentation on 10/9.

Cal Advocates provides no comments on this topic at this time.

9. Please submit your organization's overall feedback on the CESA Stakeholder Presentation on 10/23.

Cal Advocates provides no comments on this topic at this time.

11. Please submit any additional feedback not already captured.

CAISO makes explicit that the Second Revised Straw Proposal addresses availability (making sure resources offer their capacity to the market) rather than performance (making sure resources deliver on their awarded schedules).[1]  Strengthening the incentives for availability without addressing performance creates the risk of more resources becoming “available” in name only, and that those resources will fail to deliver when called on.  CAISO should move swiftly to address performance concerns.

[1] Second Revised Straw Proposal at 46.

1. Please submit your organization's overall feedback on the Resource Adequacy Modeling and Program Design (RAMPD) Track 2 meetings held on 10/9 and 10/23.

None.

2. Please submit your organization's overall feedback on the second revised straw proposal that was posted on 10/2.

Overall, Clearway remains concerned that the proposed changes do not resolve concerns raised in previous rounds of comments. Most notably, CAISO has not demonstrated that the proposed changes would improve resources’ availability. CAISO’s proposed revisions would penalize resources due to factors outside of their control, and the changes to outage definitions would require substitute RA during all outages to avoid RAAIM charges, even though there is currently not a liquid market for substitute RA capacity. 

Clearway recommends delaying action on RAAIM changes until after Unforced Capacity (“UCAP”) is implemented at the CPUC. Clearway also supports the proposals from Western Power Trading Forum related to pursuing a capacity-based RAAIM that is adapted to UCAP quantity shown for RA. The implementation of UCAP will fundamentally change the treatment of forced outages and the amount of RA a resource can show. The CAISO should delay making changes to RAAIM to ensure that the revisions account for CPUC’s UCAP implementation and do not penalize resources multiple times for the same outage. 

3. Please provide your organization's overall feedback on the discussion regarding the revised RAAIM and resource type application.

Clearway remains concerned with the proposed removal of the exemption for VERs from RAAIM. As discussed in prior comments from Clearway and other stakeholders, VER contracts are typically tied to availability – resources under power purchase agreements are only paid when they are delivering energy. Applying RAAIM to VERs will not create a new incentive to ensure the resources are available. Clearway is also concerned about the added complexity that would be required to ensure that VERs are not assessed RAAIM penalties when weather is the cause of a resource’s unavailability. CAISO has not demonstrated that there is a benefit to imposing RAAIM on VERs above and beyond the strong incentive present in VERs' contracts to ensure those resources are available.  

4. Please provide your organization's overall feedback on the discussion regarding the tier assessment.

None.

5. Please provide your organization's overall feedback on the discussion regarding charges, payments, and bounded penalty exposure.

The inclusion of the proposed monthly exposure limit is a constructive addition, but it does not alleviate concerns about the underlying penalty rate or the maximum potential penalty. The newly proposed penalty cap is $14.68/kW-month, which is a 234% increase over the current $4.40/kW-month. This dramatic increase in penalty exposure creates significant new risks for resource owners and operators. In combination with the inability to procure substitute RA to cover short-duration outages, this proposal will create an untenable level of risk for RA resources.  

Additionally, it is essential that stakeholders have access to the alert dates and data underlying Figure 15. Without this data, we cannot fully assess the effect of the proposed changes on our fleet. Clearway supports WPTF’s request that stakeholders be granted access to a full data set that reflects RA showings, bids and schedules, outages and derates, substitution, resource-specific availability obligations, applicable prices, and Tier 2 deficiency hours in order to evaluate penalty exposure more fully.  

6. Please provide your organization's overall feedback on the discussion regarding the bidding requirements.

None.

7. Please provide your organization's overall feedback on the discussion regarding substitution and outage definitions.

The proposed changes to outage definitions will have wider ranging consequences outside of CAISO. Clearway requests that the CAISO move these proposed changes to a broader stakeholder initiative that can fully assess the broader impacts of the proposed changes in the newly expanded day-ahead market footprint. 

Among the proposed outage categories, Clearway is concerned that the elimination of the short-notice opportunity outage will remove operator flexibility without creating an adequate outage option in its place. In previous comments, Clearway noted several specific instances when the short-notice opportunity outage is used in practice. The outage is primarily used to ensure resources are ready to be available for summer months by installing replacement parts that were not delivered during annual spring maintenance or performing minor maintenance. Without the short-notice opportunity outage as an option, there would be no financial incentive for operators to consider the impact to RA availability when scheduling this type of time-sensitive maintenance. 

The proposed “opportunity outage” category does not provide the same window of opportunity for timely maintenance. The short notice opportunity outage enabled projects to go on outage for 5 days without providing substitute RA; the proposed opportunity outage only allows for projects to be on outage for under 8 hours and requires substitute RA to be procured, except in the case of an off-peak opportunity outage. Neither of these new options accommodate the type of preventative maintenance that the short-notice opportunity outage is currently used for.  

If CAISO chooses to move forward with these changes, opportunity outages should instead extend to the same 5-day duration as the current short-notice opportunity outage. If substitute RA can be provided for 5 days, the outage should be allowed to be 5 days. Additionally, if CAISO moves forward with eliminating the short-notice opportunity outage, Clearway requests that the submission timeline for off-peak opportunity outages be reduced from the current 8-day requirement. There are several situations where an issue is identified and can be resolved quickly with a software update within a few days. For example, an issue identified on Tuesday may be ready for resolution by Thursday during overnight or off-peak hours. In these cases, taking a forced outage or waiting more than a week to implement the update may create unnecessary operational impacts when the work could otherwise be completed during off-peak hours. Additionally, CAISO should clarify that BESS capacity testing is exempt from RA substitution requirements for associated outages. During regularly scheduled capacity tests, the BESS remains online and operational and can respond to grid needs. Treating capacity tests as a planned outage does not fully reflect the resource’s actual availability. 

Clearway is generally supportive of the CAISO’s efforts to improve the availability of substitute RA capacity, but the changes to outage types necessitate improvements to the proposed “shopping cart” approach before this proposal moves forward. As currently proposed, the shopping cart tool offers visibility into available offers, but it does not provide enough detail to support acquiring qualifying capacity in the applicable timeframe. For the shopping cart approach to be more useful, the platform should show all capacity available, the hourly timeframe that each resource could provide substitute RA, the name of the offeror, and the credit level of the counterparty. We recommend that the platform continue including the SCID, Resource ID, Resource Name, contact information, offered quantity of MW, price, and area. Once all that information is available, the tool could be more effective for procuring substitute RA.  

If an entity is unable to procure substitute RA, then they will always be exposed to the Tier 1 or Tier 2 RAAIM penalties when applicable.  Before any changes are made to outage categories that change requirements around substitute RA, there must be a liquid market with usable substitute RA, otherwise all outages will be forced outages. If the result of the proposal is that all outages will require substitute RA, then the proposal should not move forward until it is certain that market participants will be able to access substitute RA.  

8. Please submit your organization's overall feedback on the Calpine Stakeholder Presentation on 10/9.

None.

9. Please submit your organization's overall feedback on the CESA Stakeholder Presentation on 10/23.

None.

11. Please submit any additional feedback not already captured.

1. Please submit your organization's overall feedback on the Resource Adequacy Modeling and Program Design (RAMPD) Track 2 meetings held on 10/9 and 10/23.

Constellation appreciates the opportunity to submit the following comments on CAISO’s Resource Adequacy Modeling and Program Design Track 2 initiative. Constellation has the following key recommendations: (1) UCAP implementation should remain the immediate priority; (2) CAISO should establish a complete, internally consistent implementation design before finalizing material changes to RAAIM, outage classifications, substitution rules, or bidding obligations; and (3) A single UCAP-based NQC value cannot reliably perform every planning, commercial, and operational function currently linked to NQC. 

UCAP is a forward System RA accreditation value that reflects expected forced-outage risk, butt should not be treated as a physical operating limit. Consequently, CAISO should not use one UCAP-based NQC value as the universal ceiling for System RA showings, must-offer obligations, RAAIM exposure, substitution, Local RA, Flexible RA, firm exports, and backstop procurement. These functions use different measures of capacity and require explicit conversion rules. 

Constellation requests a CAISO-led UCAP implementation workshop involving the relevant CAISO teams. The workshop should use practical examples to resolve how UCAP accreditation translates into RA showings, must-offer obligations, RAAIM, substitution, Local RA, firm exports, and backstop procurement before the implementation rules are finalized.

2. Please submit your organization's overall feedback on the second revised straw proposal that was posted on 10/2.

The Second Revised Straw Proposal adds detail and constrains monthly penalty exposure, but it does not establish the complete UCAP implementation architecture needed to support revised availability incentives. CAISO should not finalize RAAIM changes based on an undefined relationship among UCAP accreditation, mixed UCAP and ICAP showings, must-offer obligations, outage treatment, substitution, Local RA, firm exports, and residual capacity. 

Before advancing the proposal, CAISO should identify how each NQC-linked function will operate under UCAP. The same UCAP value should not be applied across multiple distinct functions.

3. Please provide your organization's overall feedback on the discussion regarding the revised RAAIM and resource type application.

Constellation supports a clear separation between the capacity committed for RA and the resource’s physical operating capability. RAAIM charges and substitution obligations should apply to the RA quantity actually shown after that quantity is translated to a common physical-capability basis. The fact that a UCAP showing may produce an equivalent MOO above the shown UCAP MW should not expand the MW subject to RAAIM or substitution beyond the committed share of the resource. 

For example, if a resource has 100 MW of deliverable physical capability and 90 MW of UCAP, a 45 MW UCAP showing represents a 50 percent commitment and should translate to a 50 MW MOO. The remaining 50 MW of deliverable capability should remain identifiable and available for another permissible commitment, subject to actual outages and operating limits. CAISO should prevent both stranding and double counting by tracking the committed share rather than treating 90 MW as a universal ceiling. 

Before extending RAAIM to additional resource types, CAISO should identify the applicable availability obligation and demonstrate the reliability benefit. For storage and hybrids, CAISO should distinguish equipment failure from expected energy, state-of-charge, shared-interconnection, dispatch, and nonlinear operating limitations. Limitations already reflected in accreditation should not produce a second capacity reduction or penalty without a distinct reliability basis. 

4. Please provide your organization's overall feedback on the discussion regarding the tier assessment.

Constellation does not support the proposed two-tier assessment in its current form. The Tier 1 design risks misalignment with UCAP. UCAP measures expected forced-outage performance during defined at-risk periods, while Tier 1 applies a separate forecast-based assessment framework. CAISO should explain why an additional performance window is necessary and how the proposed assessment avoids duplicating forced-outage risk already reflected in UCAP accreditation.

Tier 2 raises an additional concern. An EDAM RSE failure can result from procurement, forecasting, imports, transfer constraints, or unavailable supply. CAISO should not impose an RA availability charge unless the resource failed to meet its applicable shown-RA obligation and that failure is relevant to the deficiency. At minimum, CAISO should prevent overlapping Tier 1 and Tier 2 charges and should test operating reserve shortages, EEA conditions, or another direct capacity-scarcity measure as the trigger.

5. Please provide your organization's overall feedback on the discussion regarding charges, payments, and bounded penalty exposure.

Constellation continues to oppose using day-ahead LMPs for Tier 1 penalties and a fixed $2,000/MWh rate for Tier 2 penalties without a demonstrated relationship to the value or replacement cost of RA capacity. Energy prices measure the marginal value of energy, not the value of a forward capacity availability obligation. CAISO should compare these rates against a capacity-based alternative. 

Bounded exposure is necessary but does not validate the proposed penalty rates. Both monthly and annual limits should be defined in advance and applied to the committed RA share. CAISO should also clarify how the limits apply to mixed UCAP and ICAP showings, partial-month commitments, overlapping tiers, settlement corrections, and resources with multiple RA commitments.

The mechanism should remain self-funded unless CAISO clearly articulates a reasonable justification for an alternative allocation. CAISO should also adopt transition protection for contracts executed before the final rules and implementation specifications are known.

6. Please provide your organization's overall feedback on the discussion regarding the bidding requirements.

This is the most important unresolved implementation issue. CAISO should preserve the denomination of each LRA showing, convert each shown quantity into an equivalent MOO share of deliverable physical capability, aggregate those shares at the resource level, and prevent total commitments from exceeding the resource’s deliverable capability. 

Constellation recommends the following framework. First, publish Deliverable Pmax, or PmaxRA, as the resource’s physical capability adjusted for deliverability and persistent physical limitations. Second, publish each applicable ICAP and UCAP accreditation value. Third, track whether each showing is denominated in UCAP or ICAP. Fourth, translate each showing to equivalent MOO MW.

For a UCAP showing, equivalent MOO MW should equal shown UCAP MW multiplied by PmaxRA and divided by the resource UCAP value. An ICAP showing should be translated using the corresponding resource ICAP (physical capability) denominator. Fifth, aggregate the translated MOO commitments and cap the total at PmaxRA, subject to actual outages and operating limitations. 

CAISO should not add UCAP and ICAP showings together and divide by a single NQC value selected from one LRA methodology. That approach can misstate the committed share, strand residual capability, or allow the same capability to support inconsistent commitments. CIRA, SIBR, the NQC list, RA validation, and settlement systems should preserve the original showing denomination and ensure the translated MOO and residual capability are consistently recognized across CAISO's RA and market rules. 

Local RA requires separate treatment. CAISO should either continue to establish the LCR requirement and resource credit on a consistent deliverable physical capability basis or translate both the requirement and the resource accreditation to UCAP. CAISO should not retain an ICAP-based (i.e., physical capability-based) local requirement while limiting local showings to a UCAP-discounted value without an explicit conversion. 

Firm exports, substitution, and backstop use should reflect the resource’s residual deliverable capability after accounting for all committed resource shares and actual outages. A forward UCAP discount should not strand physically deliverable, uncommitted capacity or become a universal cap on high-priority export support. 

7. Please provide your organization's overall feedback on the discussion regarding substitution and outage definitions.

Constellation supports improved substitution visibility, but substitution cannot work until CAISO defines what was committed. If CAISO assesses mixed UCAP and ICAP showings against a single NQC value, neither CAISO nor the resource can identify the committed MOO share, and therefore neither can determine how much physical capability must be replaced when the resource is on outage. CAISO should first translate each showing into an equivalent MOO share of PmaxRA, as described in response to Question 6. Substitution should then replace the deficient committed MOO share, not an undefined NQC quantity. The replacement resource should be validated on a comparable physical-capability and deliverability basis. 

Constellation opposes eliminating the functionality currently provided by Short-Notice Opportunity Outages without a comparable maintenance option. CAISO has historically approved these outages when system conditions permit. Treating an accommodated preventative maintenance outage as forced for both RAAIM and UCAP can create cumulative consequences and may discourage prudent maintenance. CAISO has not articulated a reasonable justification for removal of the SNOO category and has not responded to significant stakeholder feedback that opposed its proposal to remove this option.  CAISO should reconsider this aspect of the proposal and reverse course to maintain the SNOO category and associated RAAIM exemption.

At minimum, CAISO should permit conditional short-notice maintenance without substitution when reliability conditions allow, with authority to revoke the approval if conditions change.

8. Please submit your organization's overall feedback on the Calpine Stakeholder Presentation on 10/9.

Calpine’s (Constellation) October 9 presentation demonstrated that UCAP implementation requires more than replacing the existing NQC value with a UCAP-discounted number in a set of RA-related processes. UCAP is a forward System RA accreditation value reflecting expected availability. It should not become a universal limit on a resource’s physical capability or its ability to support other CAISO reliability functions.

Constellation requests that CAISO incorporate the implementation framework presented on October 9 and discussed further in response to Question 6. CAISO should establish Deliverable Pmax, or PmaxRA, as the resource’s deliverable physical capability, retain both applicable ICAP and UCAP accreditation values, and track whether each RA showing is denominated in ICAP or UCAP.

CAISO should translate each showing into an equivalent share of the resource’s physical must-offer obligation. UCAP showings should be converted to equivalent MOO MW based on the relationship between the shown UCAP quantity, the resource’s UCAP value, and PmaxRA. ICAP showings should receive corresponding treatment using the applicable ICAP value. CAISO should then aggregate those commitments at the resource level and ensure that total commitments do not exceed the resource’s deliverable physical capability, subject to actual outages and operating limitations.

This approach is particularly important where a resource has mixed UCAP and ICAP commitments. CAISO should not simply aggregate differently denominated showings against a single NQC value. Doing so could strand otherwise available capacity or create inconsistent commitments. Any remaining physical capability should continue to be available for substitution, firm exports, and backstop procurement, subject to the applicable requirements for those functions.

The same principle should govern Local RA. A forward forced-outage adjustment does not change a resource’s physical ability to respond to the local contingencies that are the basis for LCRs. CAISO should therefore either retain a consistent deliverable physical-capability basis for both the Local Capacity Requirement and Local RA resource credit, or convert both sides of the Local RA framework to a consistent UCAP basis. CAISO should not retain an ICAP-based local requirement while limiting resource counting to a UCAP-discounted quantity.

More broadly, UCAP implementation should distinguish forward System RA accreditation from operational capability. The final design should preserve the resource’s actual deliverable capability for MOO, firm exports, substitution, backstop procurement, and other operational functions after accounting for the portion already committed to RA and any actual outages or operating limitations.

9. Please submit your organization's overall feedback on the CESA Stakeholder Presentation on 10/23.

Constellation supports further consideration of an interim exemption for nonlinear storage and hybrid operating limitations, including use of the Technical Limitations Not In Market Model outage category where appropriate. CAISO should define objective eligibility criteria, prevent duplicate reductions where a limitation is already reflected in accreditation, and coordinate the interim treatment with the Storage Design and Modeling initiative. 

Any interim exemption should preserve CAISO’s ability to identify genuine equipment failures and should not substitute for development of durable market-model parameters. The implementation should also specify how the limitation affects the resource’s shown RA quantity, equivalent MOO, RAAIM exposure, substitution obligation, and residual capability.

11. Please submit any additional feedback not already captured.

Before finalizing Track 2 proposals and seeking Board approval, CAISO should resolve the principal UCAP implementation questions addressed above, including the treatment of mixed UCAP and ICAP showings, MOO conversion, Local RA, substitution, firm exports, backstop procurement, and residual deliverable capability. These applications determine the obligations associated with RA capacity and are integral to UCAP implementation.

1. Please submit your organization's overall feedback on the Resource Adequacy Modeling and Program Design (RAMPD) Track 2 meetings held on 10/9 and 10/23.

GreenGenStorage, LLC (GreenGen) appreciates the ISO's efforts at the October 9 and October 23 meetings to walk stakeholders through the second revised straw proposal and to respond to questions.

The October 23 discussion of outage definitions showed that the proposed alignment with RC West outage classifications and submission timelines raises questions that likely reach beyond resource adequacy, including how the timelines for each outage type would interact with RC West study windows for all ISO market participants. GreenGen supports the suggestion made by WPTF and Constellation at the October 23 meeting that the ISO consider the outage-definition and RC West alignment elements in a separate or dedicated process so that the other elements in Track 2 can continue to move forward. A clearer mapping of outage reasons, types, timelines, and examples would be beneficial, along the lines of Figure 25 in the Second Revised Straw Proposal at 58.

2. Please submit your organization's overall feedback on the second revised straw proposal that was posted on 10/2.

GreenGen is developing the Mokelumne Pumped Storage Project, a proposed 400 MW open-loop pumped storage hydroelectric (PSH) project that would use two existing reservoirs and is pending licensing before the Federal Energy Regulatory Commission (Project No. P-14796). Because GreenGen is not yet a resource adequacy (RA) supplier, its comments are limited to issues that will shape how a new long-duration, long-lead-time resource would be assessed once it is operating.

GreenGen generally supports the direction of the proposal. Limiting the revised RAAIM assessment to identified stressed hours (Second Revised Straw Proposal at 31), capping RAAIM exposure at shown RA and separating the must-offer bidding quantity from RAAIM exposure (id. at 18-19, 50) are reasonable refinements. Predictable and bounded exposure is particularly important for capital-intensive resources with long development timelines, whose financing depends on the ability to quantify RA revenue and risk well before commercial operation.

GreenGen also encourages the ISO to keep Track 2 closely coordinated with Track 2 of the CPUC's RA proceeding (R.25-10-003). In D.26-07-008, the CPUC identified the basis for the MOO once UCAP replaces the current ICAP-based qualifying capacity as an outstanding implementation issue and encouraged the ISO to submit a proposal in that track (D.26-07-008 at 90; Ordering Paragraph 14(b)). Aligning the two efforts will reduce the risk that a resource's MOO and RAAIM exposure change materially between policy adoption and implementation.

3. Please provide your organization's overall feedback on the discussion regarding the revised RAAIM and resource type application.

The proposal describes how revised RAAIM would apply by resource type (Figure 9, Second Revised Straw Proposal at 19-20). It addresses dispatchable hydro with reservoir storage (id. at 27) and Participating Load and Pumping Load (id. at 28) as separate categories. Pumped storage is mentioned only in explaining the existing exemption for pumping load (id. at 27). The proposal does not say how the revised framework would apply to a PSH unit that both generates and pumps.

As background, existing rules already recognize PSH as distinct from other hydroelectric resources. The ISO calculates default qualifying capacity for Pumped-Storage Hydro Units using the UCAP methodology, while other hydroelectric units use the ELCC methodology (ISO Tariff Section 40.8.3.4). The CPUC’s 2026 Qualifying Capacity Methodology Manual gives PSH a dispatchable hydro calculation while recognizing that it operates like a storage resource (at 25), and D.26-07-008 distinguishes open-loop and closed-loop PSH for charging sufficiency purposes (D.26-07-008 at 55; Ordering Paragraph 11). The ISO’s market model represents a PSH unit as a single resource with generating and pumping modes (Business Practice Manual for Market Operations, Version 107, Section 2.1.6.1).

GreenGen asks the ISO to state in the next iteration how the revised framework applies to PSH and suggests adding PSH to Figure 9 in the proposal. ISO Tariff Section 40.9.3.4(d)(iv) already links a hydroelectric resource’s RAAIM treatment to how its qualifying capacity is set. For instance, outages taken to manage water-related limitations are excluded only where qualifying capacity reflects historical hydrological conditions. GreenGen suggests applying the same principle to PSH, so that a PSH unit’s availability assessment matches the basis on which its RA counting value is set, whether a hydrological methodology, full deliverable capacity, or a UCAP methodology. GreenGen is not seeking more favorable treatment for PSH. It is simply seeking clarity, which developers and offtakers will need when negotiating RA contracts for new PSH capacity.

Relatedly, the straw proposal references the ISO Tariff Section 40.9.3.4(d)(iv) exclusion and seeks feedback on how water, environmental, licensing, and use-limited constraints should be reflected (Second Revised Straw Proposal at 27), but it does not say whether the exclusion would continue. GreenGen asks the ISO to confirm whether the exclusion continues under revised RAAIM, and how the water-related operational and regulatory limitations of a new open-loop PSH unit, such as license conditions on reservoir levels and water releases, would be recognized where the unit does not yet have a historical hydrological record for setting its initial qualifying capacity value.  Further detail about this in the proposal would be helpful and appreciated.

4. Please provide your organization's overall feedback on the discussion regarding the tier assessment.

No comment at this time.

5. Please provide your organization's overall feedback on the discussion regarding charges, payments, and bounded penalty exposure.

GreenGen supports bounding each resource's monthly exposure (Second Revised Straw Proposal at 42-43). A defined maximum allows new resources and their offtakers to quantify RAAIM risk when contracting. GreenGen also supports the provision that Tier 1 and Tier 2 penalties do not stack in overlapping hours (id. at 31).

6. Please provide your organization's overall feedback on the discussion regarding the bidding requirements.

GreenGen supports the ISO's proposal to calculate the MOO using the resource's deliverable portion rather than its unrestricted Pmax (Second Revised Straw Proposal at 48-49), and to keep RAAIM charges and substitution obligations based on shortfalls below shown RA rather than the MOO (id. at 50).

The proposed formula in the proposal scales the resource’s bidding obligation in proportion to its shown RA (id. at 49). For instance, where a resource’s NQC is reduced by an accreditation method such as UCAP, the ISO’s proposed scaling formula restores visibility into the resource’s capability, which the accreditation method discounted (id. at 50). For hydroelectric resources whose qualifying capacity reflects historical water availability, a gap between NQC and the deliverable portion may reflect expected water limitations rather than forced-outage risk, and the same scaling could set a MOO above what available water supports. SCE raised a similar concern in its comments on the July revised straw proposal, stating:

[T]he proposed MOO framework could result in bidding obligations that exceed the capabilities of hydro resources constrained by hydrology, environmental requirements, or reservoir management. The proposed UCAP framework does not necessarily directly align hydro accreditation values with operational constraints. (SCE Comments on the RAMPD Track 2 Revised Straw Proposal, response to Question 2.)

GreenGen asks the ISO to confirm how the formula applies to hydroelectric resources, including PSH. One option is to keep the MOO for resources whose qualifying capacity reflects water availability at their expected available energy up to shown RA, consistent with the existing bidding requirement for Hydro Units (BPM for Reliability Requirements, Version 86, Section 7.1). Whatever approach the ISO selects, the scaling should restore only capability that an accreditation derate has discounted, not capability that is unavailable because of water limitations.

Finally, because "must-offer obligation" is not currently a defined term in Appendix A, and the proposed MOO could differ from a resource's shown RA, GreenGen suggests that the tariff language implementing Track 2 define the must-offer obligation quantity in one place, whether in Appendix A or in a single provision of Section 40, and use that term consistently. Section 40 currently refers both to a "must-offer obligation" (e.g., Section 40.6.4.1) and to a "must-offer requirement" (e.g., Section 40.9.3.4). A single defined term would reduce ambiguity between the bidding obligation and the RAAIM and substitution quantities, and would give the CPUC and other Local Regulatory Authorities a clear reference as they address the basis for the MOO under UCAP.

7. Please provide your organization's overall feedback on the discussion regarding substitution and outage definitions.

GreenGen supports the ISO's effort to clarify the distinction between urgent and forced outages. As noted in response to Question 1, GreenGen supports considering RC West alignment in a separate or dedicated process.

The RC West outage types the ISO proposes to adopt are defined by the condition of facilities and equipment (RC West Procedure RC0630, Section 9.1), so they do not by themselves provide a category for water-related operational or regulatory limitations on a resource whose equipment remains fully available. Whatever outage taxonomy results, GreenGen asks the ISO to preserve a defined nature-of-work treatment for the water-related operational and regulatory limitations of hydroelectric resources so that those limitations are not classified as forced or urgent outages. This matters for accreditation as well as RAAIM. Under the ISO's default qualifying capacity methodology, urgent outages would count toward a unit's UCAP-based QC value just as forced outages do (Second Revised Straw Proposal at 60), and the ISO's default counting methodology for PSH Units is UCAP (ISO Tariff Section 40.8.3.4). How a water-related limitation is classified could therefore affect both a resource's RAAIM exposure and its future capacity counting value.

8. Please submit your organization's overall feedback on the Calpine Stakeholder Presentation on 10/9.

No comment at this time.

9. Please submit your organization's overall feedback on the CESA Stakeholder Presentation on 10/23.

No comment at this time.

11. Please submit any additional feedback not already captured.

No comment at this time.

1. Please submit your organization's overall feedback on the Resource Adequacy Modeling and Program Design (RAMPD) Track 2 meetings held on 10/9 and 10/23.

LSA and CalWEA’s main impression about the meetings are as follows:

• The Proposal fails to justify the need for a reformed RAAIM generally, and in particular, for continued RAAIM after Unforced Capacity (UCAP) is implemented.  As explained further below, imposition of both mechanisms will penalize resources twice for the same Forced Outages (or, given common PPA penalties for Forced Outages and related unavailability measures, these will actually be triple penalties).

• The Proposal still fails to justify RAAIM exemption revocation for Variable Energy Resources (VERs).   No evidence has yet been presented showing that current market and PPA incentives are insufficient to incent high VER availability, that the original reasons forn the exemption no longer apply, or that that this additional penalty will increase VER availability.  LSA’s questions at the meeting on these topics were “answered” only with vague generalities, citing the mechanics (see below) and not substantive responses.

• The Proposal does not address the numerous open substantive questions about how CAISO proposes to apply RAAIM even to resources that are currently subject to it, as shown by: (1) the CESA presentation; (2) concerns expressed by many that the outage-reporting changes are beyond initiative scope, and that UCAP form and implementation should be more settled before RAAIM is modified.  (LSA and CalWEA demonstrate below that the proposed methodology, as applied to VERs, is unjust and unreasonable.)

• The Proposal still does not explain the need for revoking the RAAIM exemption for resources less than 1MW, given the complexity and relative huge burden the proposal would impose on those resources.  (See response to Q#11 below for further discussion.)

2. Please submit your organization's overall feedback on the second revised straw proposal that was posted on 10/2.

The Second Revised Straw Proposal is not responsive to any of the major concerns raised in earlier comment submittals.  LSA and CalWEA strongly recommend:

• Removal of the proposals revoking the VER RAAIM exemption, because:

• The CAISO “background data” do not actually present any VER data, or any evidence that VER availability is any concern at all.  In other words, this proposal appears to be a solution in search of a problem, and the CAISO should not be proposing a “solution” to a problem it has not demonstrated.

• The Proposal materially mischaracterizes the rationale for the VER exemption, and does not address the main reasons for the exemption or present any evidence that those reasons have changed.

• The proposed methodology for applying RAAIM to VERs is fundamentally flawed (see response to Q#3 below).

• The CAISO has not yet addressed important issues related to resources already subject to RAAIM; it should do so before expanding RAAIM applicability.

• Return to the CAISO’s original position that RAAIM will be eliminated once UCAP is implemented.  The CAISO’s earlier statements regarding duplication of penalties, where penalties are imposed for Forced Outages and then RA value is reduced for the same Forced Outages, are duplicative, creating higher cumulative penalties for the same outage.  Thus, RA Resources should not be subject to both UCAP and RAAIM.

The reasons for these recommendations are further explained below.

VER exemption issues

The Proposal states (at p.25) that “VERs are currently categorically exempt from generic RAAIM, recognizing their limited ability to change output when wind or solar conditions constrain output.”  The Proposal goes on to propose a mechanical formula that supposedly addresses this lack of control (see response to Q#3 below).

However, this is a materially incomplete mischaracterization of the reasons for the current VER exemption.  Because the Proposal misstates the reasons for the current exemption, it fails to examine whether they continue to apply (which they do). 

CAISO’s own earlier words state the rationale for the VER exemption from RAAIM much more accurately.  For example, the October 14^th, 2014 Reliability Services Initiative Second Revised Straw Proposal stated as follows:

6.13.2. Wind and solar resources

If wind or solar resource is shown as system or local RA, the ISO proposes to exempt the resource from the availability incentive mechanism for two reasons. First, wind and solar resources typically are procured under contracts that either provide payments for energy produced or have severe penalties for under-performance. In their September 5, 2014 comments LSA stated, “…virtually all PPAs for wind/solar resources provide payments only for energy produced, i.e., there is no capacity payment and all PPA revenues are completely dependent on maximum equipment availability and production. Moreover, these PPA contain multipliers that provide for higher payments (and thus even greater availability/production incentives) during hours that are designed to be highly correlated with system needs.”

Additionally, the ISO has reviewed the recent drafts of the Investor Owned Utilities’ 2014 pro forma contracts for renewables awaiting approval by the CPUC. The ISO’s understanding of at least some of these contracts is that they have provisions for non-performance. Given that these contracts are specific to wind and solar and are extremely standardized (unlike contracts for other resource types) the ISO potentially would be penalizing renewables for non-performance without this exemption.

Second, the only way to assess wind and solar under the proposed methodology is to use the resource’s forecast as a baseline for comparison….

The CAISO’s May 29^th, 2015 Reliability Services Initiative tariff filing at FERC (https://www.caiso.com/documents/may29_2015_tariffamendment_implement_phase1a_reliabilityservicesinitiative_er15-1825.pdf), which resulted from this initiative, echoed and expanded on these VER policies (at pp.75-77 of the cover note) (highlights added).

b. Exemptions from RAAIM Provisions Applicable to only Local and System Resource Adequacy Capacity

Four categories of resources will be exempt from the RAAIM provisions applicable to only local and system resource adequacy capacity. These exemptions ensure that resources are not double-penalized for poor performance….

(i) Variable energy resources

Variable energy (primarily wind and solar) resources will be exempt from the local and system RAAIM provisions. There are several reasons for this exemption. The amount of resource adequacy capacity variable energy resources may provide is dependent on historical performance. The expectation is not that the resource will be able to meet this performance level in every hour, but that on average the resource will be able to provide this much capacity.

Unlike an energy bid for thermal generation, the forecast may exceed the variable energy resource’s resource adequacy capacity value. It also is expected that it would be less than this value because the forecast is merely an average over a long period of time and not an hourly expected minimum value.  Therefore, it would be overly punitive to assess variable energy resources similar to thermal generation and hold them responsible in every hour up to their local or system resource adequacy capacity values.

One alternative would be to assess a variable energy resource under the RAAIM using the resource’s forecast as a baseline for comparison. However, such an alternative approach would be problematic for several reasons.

First, the forecast to some extent captures outages. This is because it is unlikely the entire variable energy resource will go on outage and instead a single turbine or panel may not be working. This will simply lower the forecast for the resource or potentially not impact the forecast at all… In practice, variable energy resources very rarely entirely go on outage, and their outages are typically outages that would exempt them from the RAAIM anyway (e.g., due to testing, CAISO equipment malfunction, etc.)

Creating this functionality for variable energy resources would be overly burdensome for the CAISO settlements process and would not provide any useful incentives to variable energy resources...

…Finally, the variable energy resource community pointed out that variable energy resources typically are procured under contracts that either provide payments for energy produced or have severe penalties for under-performance. This is consistent with the investor-owned utilities’ pro forma contracts that the CAISO reviewed, as approved by the CPUC, which include provisions for nonperformance. Inasmuch as these contracts are specific to wind and solar and are extremely standardized (unlike contracts for other resource types) the CAISO potentially would be double-penalizing renewables for non-performance without this exemption.

The CAISO’s language throughout this (and later) initiatives cites, as reasons for the VER exemption: (1) a lack of benefit from imposing RAAIM on VERs; (2) the complexity and burden of doing so fairly and accurately; and (3) the strong incentives already provided contractually for high availability. 

None of the reasons in the earlier CAISO documents for the current VER exemption related to VER “limited ability to change output when wind or solar conditions constrain output,” as stated in the Proposal.  The CAISO’s own words argue that there would be little benefit, and much cost and complexity, to imposing RAAIM on VERs, and the Proposal presents no evidence that any of these factors are any different than they were in 2014-2015.

Finally, none of CAISO’s cited outage analysis demonstrates a VER availability problem. The resource-type forced-outage table addresses batteries, thermal units, and hybrids—not standalone wind or solar—and the September 2022 analysis identifies thermal and storage concerns. Whatever that evidence may demonstrate for other resource classes (see below), it does not support revoking the VER exemption.

Need for this RAAIM reform proposal generally

The Proposal continues to be based on the assumption, without valid supporting evidence, that RA Resources will not be available when needed unless the CAISO provides some incentive for doing so (or, more applicable to the proposed mechanism, a penalty for not doing so).  The Proposal ignores strong incentives already applied through market contract mechanisms included in Power Purchase Agreements (PPAs), as well as tools the CAISO already uses to protect reliability during vulnerable periods. 

The data on which the need for the proposal is based is highly flawed.  It is largely based on 2022 data – four years old – when little storage was even on the system, and it ignores likely better results based on newer projects and technology.  It mixes planned and forced outages, and thus does not demonstrate whether or by how much Forced Outages have increased.  The Proposal admits that there are other valid reasons why Forced Outages might have increased but does not investigate or quantify those other impacts, jumping to the unsupported conclusion that lack of financial incentives must be the problem.

Double penalties with UCAP and RAAIM

Aside from these unsupported conclusions, LSA and CalWEA object strongly to continued imposition of RAAIM after UCAP implementation.  (Many LSA and CalWEA members have Mixed Fuel Resources (MFRs) with both solar/wind and storage resources, so this matter is of high interest to LSA and CalWEA as well.)  All CAISO UCAP proposals (in the earlier RA Enhancements Initiative) stated that UCAP would replace RAAIM, to avoid double-penalization for the same Forced Outages. 

CAISO’s own words, in the 2015 filing referenced above (where a resource-specific Exceedance method was used to determine VER QC), said as much in 2015, citing a CPUC ruling that it clearly supported:

Applying an availability incentive penalty to these resources, in addition to their facing a reduction in the amount of capacity they can offer as a result of prior outages, would essentially result in a double penalty for these resources…the Commission recognized that “it would be a harsh result to apply the same availability standards, which are designed to penalize poor performance, to resources already subject to qualifying capacity adjustments...”

(In 2021, FERC accepted a RAAIM exemption because capacity-value discounting plus RAAIM created a risk of double penalization, and FERC declined to revisit the VER exemption even after adoption of a class-based ELCC methodology for determining Qualifying Capacity.) 

The inherent unfairness of penalizing any resource twice for the same Forced Outage (a triple penalty if Power Purchase Agreements (PPAs) also contains such penalties, which most do), renders retention of RAAIM after UCAP implementation both unjust and unreasonable.  CAISO itself initially recognized this unfairness in its own UCAP proposals but appears to have lost its way, instead immersing its recent efforts in this complex and unnecessary proposal.

3. Please provide your organization's overall feedback on the discussion regarding the revised RAAIM and resource type application.

As noted above, LSA and CalWEA strongly objects to RAAIM imposition on VERs. 

Aside from that fundamental disagreement, the simplistic formula in the Proposal to apply RAAIM to VERs violates the principles in the CAISO’s language in its 2015 filing, excerpted above, in several ways and is highly flawed.   Among other things, the penalty design will penalize VERs for known availability features inherent in their technologies.

Even when triggered by a documented forced or urgent equipment outage, the proposed proportional formula can assign an unavailable-RA quantity that bears little relationship to the outage impact on output during the assessed hour.  CAISO says it will not directly penalize weather-driven variability, but it would effectively do much the same thing by applying a Pmax-based outage percentage to static shown RA, without measuring the outage’s hour-specific effect on expected production.  This is because:

• It is based on “shown RA,” and not forecasted or actual output capability.  The Proposal (at p.26) admits that any unavailability measure would ideally be geared to VER forecasts but then resorts to a sub-optimal application because of complications in doing it more accurately, stating:

The ISO’s current forecasting system does not provide the separate estimate needed for a forecast based assessment. Developing that capability or establishing a consistent method for using proxy resource would introduce additional implementation complexity which is currently not feasible.

However:

• “Shown RA” for solar projects is 0.1MW for six months of the year (and below 2% for another month), and for wind projects is below 10% for five months of the year, meaning that this “incentive” would essentially be meaningless in all those those months.

• Even if the formula was forecast-based, forecasts may be inaccurate, especially for individual resources and especially on an hour-by-hour basis.  CAISO used to regularly release granular forecast-accuracy data for its Participating Intermittent Resource Program (PIRP), but it has not done so for many years, so we have no way of knowing the current CAISO forecast accuracy statistics even overall, much less for specific projects in high-output hours and months.

• The calculation is not hour-specific: Although revised RAAIM would apply only during identified Tier-event hours, the quantity assessed is not hour-specific and does not reflect the output the unavailable equipment would reasonably have produced during that interval.  Thus, for example, it does not recognize that high-solar-output hours (typically in the afternoon) typically do not occur during the early-evening hours when grid reliability concerns are typically greatest (the reason the CAISO uses much lower values in its On-Peak Deliverability Assessments than the CPUC solar QC values). 

For example, the hypothetical 500MW VER in the example on p.26 of the Proposal may have a July NQC of around 365MW (73% - NorCal, Solar Tracking technology) but forecasted output in HE 18 of around 50MW (10%, similar to CAISO assumptions in its deliverability assessments).  If that resource had outages that actually reflected 150MW of the 500MW in POI output, and assuming “shown” RA equals NQC, the CAISO’s proposal would impose penalties for (30% x 365MW =) 109.5MW.

In other words, this resource would be penalized for 109.5MW of unavailability in an hour when its entire forecasted output was only 50MW, and when a proportional 30% availability reduction might reduce output by only (30% x 50MW =) about 15MW.    This penalty far exceeds the impact of the outage on the system and, therefore, cannot be either just or reasonable. 

Before changing the existing VER exemption, CAISO should conduct and publish a retrospective, resource-specific analysis using historical wind and solar outage data. The analysis should identify qualifying equipment outages that intersect hypothetical Tier 1 or Tier 2 hours, estimate the output that would have occurred but for each outage, calculate the resulting charges, and demonstrate what avoidable reliability harm the proposed incentive would have prevented.

This analysis is particularly important for wind and solar facilities, where individual turbine or inverter outages are reported in nameplate MW even though the energy and reliability capability actually lost depends on contemporaneous wind conditions.   If CAISO cannot establish a reliable but-for capability, the existing exemption should remain in place, or CAISO should first conduct nonbinding shadow settlements.

Again, the CAISO has simply not put in the work or consideration to determine whether this VER proposal is just and reasonable, aside from the lack of need for it in the first place.

4. Please provide your organization's overall feedback on the discussion regarding the tier assessment.

LSA and CalWEA have no comments at this time. 

5. Please provide your organization's overall feedback on the discussion regarding charges, payments, and bounded penalty exposure.

LSA and CalWEA have no comments at this time. 

6. Please provide your organization's overall feedback on the discussion regarding the bidding requirements.

LSA and CalWEA have no comments at this time. 

7. Please provide your organization's overall feedback on the discussion regarding substitution and outage definitions.

LSA and CalWEA  request clarification on how the Proposal would treat high-wind cutout (for wind), icing, wildfire restrictions, environmental curtailments, transmission outages, telemetry failures, collector-system outages, and manufacturer-directed safety derates.

8. Please submit your organization's overall feedback on the Calpine Stakeholder Presentation on 10/9.

LSA and CalWEA have no comments at this time. 

9. Please submit your organization's overall feedback on the CESA Stakeholder Presentation on 10/23.

CESA’s presentation made many valid points, including unfair penalization for inherent operating characteristics of the storage resource type.  LSA’s criticisms of the Proposal in response to question #3 above are based on the same flaw, but for VERs. 

11. Please submit any additional feedback not already captured.

The Proposal continues to provide no rationale for elimination of exemptions for resources smaller than 1MW.  The CAISO’s 2015 filing, referenced above, at least included data about the number and capacity of such resources, but as with VERs, the “data” provided to support this proposal does not even bother to do that.  The Proposal provides no information demonstrating any benefit to the system, or any data at all for these resources, nor examined the cost of imposing these new requirements on these small projects. 

These resources were exempted originally because the administrative complexity would be unduly onerous and likely yield little benefit.  The Proposal presents no evidence to the contrary.

Moreover, it is highly unlikely that these extremely small resources, which do not usually have the capability to track CAISO stakeholder processes, are even aware of this considerable additional burden that could apply to them.  At a minimum, the CAISO should at least reach out to these resources, and any relevant trade associations representing them, to inform them of this initiative and allow them a voice here.

1. Please submit your organization's overall feedback on the Resource Adequacy Modeling and Program Design (RAMPD) Track 2 meetings held on 10/9 and 10/23.

Middle River Power (MRP) appreciates the ISO's time on the October 9 and October 23 Track 2 meetings and allowing stakeholders to present their thoughts on RAMPD Track 2. MRP agrees with other stakeholders such as WPTF, Constellation, and Vistra that Unforced Capacity (UCAP) accreditation will create downstream impacts for both ISO systems as well as market participants. MRP believes the ISO should continue to work out the necessary implementation details.

MRP recommends that the ISO reevaluate its revised RAAIM proposal. The ISO has not demonstrated that a two-tiered design tied to day-ahead energy prices would improve resource availability compared to the current RAAIM mechanism, and it has not responded to the empirical analyses MRP and WPTF provided. MRP continues to prefer targeted improvements to the existing mechanism: a single tier for now, availability metrics updated to account for UCAP and forced outage rates, and a penalty price that remains tied to the CPM soft offer cap. At the same time, the changes proposed for outage timelines and definitions would cause outages that are planned today, with substitute capacity, to be treated as urgent or forced.

MRP recommends that the ISO provide, before the next paper, illustrative examples and side-by-side timelines comparing current and proposed treatment for each outage type (planned, opportunity, urgent, and forced). For each type, the examples should show the ISO submission deadline, the RC West study window deadline, the substitution deadline, the substitution review period, holiday adjustments, and RAAIM and UCAP treatment. MRP believes that without this information, stakeholders cannot evaluate the proposal on a common factual basis.

2. Please submit your organization's overall feedback on the second revised straw proposal that was posted on 10/2.

MRP supports several elements of the second revised straw proposal. On UCAP, MRP agrees with setting the must-offer obligation (MOO) based on a resource's deliverable operating capability rather than its UCAP value, and recommends that the ISO provide concrete examples showing how mixed and partial UCAP and ICAP showings would translate into a resource's MOO, and explain what changes market participants should expect to ISO systems such as CIRA and supply plans.

On RAAIM, MRP supports retaining shown RA as the assessment basis and, in concept, bounding monthly exposure. Where a resource's capacity is shown to LRAs that use different accreditation methods, MRP recommends that the ISO assess RAAIM against the total RA actually shown, with each showing counted under its LRA's methodology, and explain how the availability band would apply. However, MRP has two fundamental concerns with the revised design. First, MRP believes the RAAIM charge should be capacity-based. RA is a capacity product, contracted and priced on a $/kW-month basis, and a resource's RA obligation is to be available, not to produce energy at a given price. A non-availability charge should therefore reflect the value of the capacity that was not provided, as today's CPM-based charge does. Day-ahead LMPs reflect the hourly marginal cost of energy, driven by fuel prices, congestion, and system conditions that have no relationship to what an LSE paid for the capacity. A resource on outage already forgoes energy market revenue at those prices, so an LMP-based charge layers a second energy-based penalty onto a capacity obligation.

Second, MRP believes the ISO has not justified the two-tiered structure itself. The ISO has not shown that differentiating charges by forecasted stress conditions would improve availability over the current mechanism, and it has not responded to the empirical analyses MRP and WPTF provided showing that resources are available during peak and critical hours today. A tiered design adds complexity and exposure that depend on forecasts that may not materialize, and suppliers will price that risk into RA contracts. These concerns are compounded by the proposed changes to outage definitions and timelines. By lengthening the lead time for planned outages and narrowing the opportunity outage category, the proposal would reclassify outages that qualify as planned today, because the scheduling coordinator has arranged substitute capacity, as urgent outages. As a result, those outages would become subject to both RAAIM and UCAP, even though the resource's RA capacity is replaced through substitution just as it is today. MRP continues to prefer targeted improvements to the existing RAAIM mechanism, updated to account for UCAP accreditation and forced outage rates, with a penalty price that remains tied to the CPM soft offer cap. MRP recommends that the ISO provide concrete examples showing how a resource's charges and payments would differ under the current and proposed designs. MRP describes these recommendations further in its responses to Questions 3 and 4.

MRP has significant concerns with the outage definition and substitution elements. By moving the effective planned outage deadline from T-8 to roughly T-14 to T-18 days, and limiting opportunity outages to those with an eight-hour return time, the proposal would turn outages that are planned today, because the scheduling coordinator has arranged substitute capacity, into urgent outages subject to both RAAIM and UCAP, while the substitute capacity market remains illiquid. MRP cannot support the outage definition changes as currently proposed. MRP also questions the purpose of the change. RC West's outage definitions were designed for reliability coordination and outage studies, not for RA availability or substitution. Aligning the ISO's RA outage definitions to a framework built for a different purpose, solely for the sake of alignment, creates more problems than it solves and offers little to no benefit to the system. MRP recommends that the ISO explain what problem the definition change is intended to solve, and why the current definitions are inadequate, before advancing it.

3. Please provide your organization's overall feedback on the discussion regarding the revised RAAIM and resource type application.

MRP continues to prefer targeted improvements to the existing RAAIM mechanism over a broader redesign. MRP and WPTF have each given the ISO empirical analyses that do not support the premise that the current mechanism fails to keep resources available during peak and critical hours. The ISO has not responded to or replicated that analysis. MRP asks the ISO to respond to the MRP and WPTF analyses, refresh its own analysis with current data given how quickly the fleet is changing, and state the specific availability problem the revised RAAIM is meant to solve before advancing the redesign.

MRP supports retaining shown RA as the RAAIM assessment basis. As Constellation noted on 10/9, assessing RAAIM against the full MOO while a resource's shown RA already reflects a UCAP derate could be viewed as a double penalty. However, this becomes more complicated when a resource sells its capacity to both CPUC-jurisdictional and non-CPUC-jurisdictional LSEs. In that case, the resource's shown RA would combine UCAP-based and ICAP-based showings, as illustrated in MRP's response to Question 6. MRP recommends that the ISO assess RAAIM against the total RA actually shown for the resource, with each showing counted under its LRA's accreditation methodology, and specify how CIRA will calculate that amount.

MRP agrees with WPTF that the existing availability band (charges below 94.5% availability, incentive payments above 98.5%) was not simply an accommodation to suppliers. The forced outages it allows for are already reflected in the planning reserve margin and paid for by LSEs. Assessing resources against 100% of shown RA with no band adds risk that suppliers will price into RA contracts, raising costs to LSEs beyond the reliability level the CPUC has set. If the ISO removes the band, it should explain why and show how the change interacts with the planning reserve margin. This is especially important for capacity shown to LRAs that continue to use ICAP-based counting. Those programs rely on a planning reserve margin that assumes a certain level of forced outages, rather than accounting for them through UCAP accreditation. MRP recommends that the ISO explain how RAAIM and the availability band would apply to a resource whose showings are counted under different LRA methodologies, so that resources are not penalized for forced outages that the buyer's RA program already accounts for.

4. Please provide your organization's overall feedback on the discussion regarding the tier assessment.

MRP recommends that the ISO focus on a single tier at this time. The proposed second tier is tied to EDAM resource sufficiency evaluation (RSE) failures. An RSE failure can result from many factors unrelated to an individual resource's availability, including an LRA's RA program that does not meet a 0.1 LOLE standard, load forecast error, or transmission limitations. An availability penalty should be tied to a resource's own performance. A tier that charges resources for an RSE failure would penalize them for program-level or system-level shortfalls they do not control and cannot cure by being more available. If the ISO later identifies a specific link between RSE failures and resource availability, it can consider a second tier at that time.

For tier 1, MRP prefers targeted changes to today's RAAIM over a new design. Specifically, MRP recommends that the ISO (a) update today's availability metrics to account for UCAP accreditation and forced outage rates, so that resources are not penalized again for outages already reflected in their UCAP values, and (b) consider a new penalty price, provided it remains tied to the CPM soft offer cap, for example by revisiting the percentage of the CPM soft offer cap used today. A CPM-based price keeps the charge tied to the value of capacity and lets suppliers know their exposure in advance. An LMP-based charge makes exposure unpredictable, and suppliers will price that uncertainty into RA contracts without a clear improvement in availability.

MRP agrees with WPTF that the penalty price should be set from stated market design principles, not by choosing among the alternatives the ISO has identified so far. Before the next paper, the ISO should explain what value the charge is meant to represent and how its level relates to the existing RAAIM charge, the planning reserve margin, and the bounded exposure limits. If the ISO retains event-based assessment for tier 1, MRP reiterates the concerns it raised in its June 4 comments on the straw proposal. Locking in the tier 1 result at T-2 for T-1 and the operating day is not supported by a clear rationale, and if a day initially fails the rolling assessment and later passes, RAAIM should not be assessed for that day. Penalties should not apply when there is no real reliability issue. The rolling assessment also creates uncertainty for multi-day outages.

MRP requests that the ISO explain the following example. Consider a three-day outage where today is T-1 and tomorrow is the first outage day. Day 1 has passed the assessment and was locked in at T-1. Day 2 of the outage is applicable to the rolling T-2 assessment and has failed and is locked in as a tier 1 day. Day 3, now at T-3, has passed but remains subject to the rolling assessment. Assuming nothing changes, it appears that only day 2 would be assessed RAAIM, even if conditions on day 2 improve before the operating day. MRP recommends that the ISO confirm whether this understanding is correct and explain how a scheduling coordinator should evaluate RAAIM exposure for a multi-day outage when each day's tier 1 status is set on a different date and may change after the outage has started. If the outage were seven days rather than three, how might the rolling assessment impact the resource’s RAAIM exposure?

5. Please provide your organization's overall feedback on the discussion regarding charges, payments, and bounded penalty exposure.

MRP is concerned that the outage definition changes would increase how often resources incur RAAIM charges and how quickly they reach the monthly cap. Outages that are planned today, because the scheduling coordinator has arranged substitute capacity, would be reclassified as urgent simply because they miss an earlier submission deadline or cannot fit within an eight-hour opportunity outage return time. Those outages would count toward the RAAIM cap and would also count against the resource's UCAP. The UCAP impact is not limited by the RAAIM cap and would reduce the resource's accredited capacity in future years. The ISO should assess the expected change in total RAAIM and UCAP exposure from the outage definition changes, and present that analysis alongside the charge and payment design.

MRP supports bounding monthly penalty exposure, but the proposed 200% hard cap is too high. Under the proposal, a resource's tier 1 and tier 2 charges would accrue at full rates up to 100% of its CPM-based monthly amount, then at 20% of the applicable rate until reaching a hard cap of 200% of that amount. In the ISO's own example, a 50 MW resource could be charged up to $734,000 in a single month, twice the CPM soft offer cap value of its capacity. Today's RAAIM charge is set at 60% of the CPM soft offer cap, a level that WPTF noted was negotiated to keep supplier and buyer interests in balance. A penalty cap should be in line with the market value of the RA capacity that was not provided. A cap well above that value adds risk that suppliers will price into RA contracts, raising costs to LSEs without a corresponding reliability benefit.

MRP recommends that the penalty remain based on the CPM soft offer cap, with a monthly cap that follows the shape of monthly load profiles. Under this approach, a resource's maximum exposure in any month would track the reliability value of its capacity in that month. In peak summer months, when system needs and RA prices are highest, the monthly cap could exceed the CPM soft offer cap, while non-summer months would have lower caps. Across the year, the monthly caps would average to a set percentage of the CPM soft offer cap, such as the 60% used today. If the ISO retains a cap above today's level, it should explain why a cap aligned with the value of RA is insufficient and estimate the effect of a higher cap on RA prices.

On revenue allocation, MRP supports allocating penalty revenues to resources that are available during assessment periods. An availability incentive should reward performance as well as penalize non-performance. If the ISO does not adopt that approach, MRP prefers the alternative presented on 10/9, under which tier 1 revenues go to eligible available generation, over a common per-MW allocation shared with load.

6. Please provide your organization's overall feedback on the discussion regarding the bidding requirements.

MRP agrees with Constellation that the proposal sets the MOO on the right basis: the resource's deliverable operating capability, not its UCAP value. In Constellation's example, a 45 MW UCAP showing on a 100 MW resource with a 90 MW UCAP carries a 50 MW MOO. However, the proposal leaves suppliers and buyers to work out that MOO themselves. MRP asks the ISO to have CIRA calculate and report the MOO that results from each resource's showings, including mixed and partial UCAP and ICAP showings. Suppliers should not carry compliance risk for an obligation the ISO's systems never state.

For example, a 100 MW resource with a 90 MW UCAP that sells 100% of its capacity to a CPUC-jurisdictional LSE would show 90 MW of RA on the supply plan, which validates against the LSE’s RA plan. At the same time, the resource’s MOO should be 100 MW, because the loss of load expectation (LOLE) studies underlying the RA framework assume the resource’s deliverable Pmax to attain a 0.1 LOLE standard. Without the additional 10 MW, the LOLE study would require capacity from other resources. Accreditation determines how capacity counts toward an LRA’s RA obligations; it does not change the energy a resource must make available for reliability. Alternatively, if the resource sells its capacity to two LSEs, only one of which is CPUC-jurisdictional, the non-CPUC-jurisdictional LSE’s share may continue to count at full value if its LRA follows the current accreditation methodology. Suppose the non-CPUC-jurisdictional LSE buys 60% (60 MW) of the capacity and the CPUC-jurisdictional LSE buys the remaining 40% (40 MW), which it can count only as 36 MW toward its RA obligations. The resource would show 60 MW on the supply plan for the non-CPUC-jurisdictional LSE and 36 MW for the CPUC-jurisdictional LSE. Together, the shown RA would total 96 MW, even though the MOO would be 100 MW. If the resource instead showed 40 MW while the LSE showed 36 MW, the mismatch would produce validation errors and, in turn, contractual disputes. MRP believes the ISO must provide a solution to this issue and enforce consistency of the MOO for all resources regardless of the buyer of the capacity.

Table 1. Illustrative showings and MOO for a 100 MW resource with a 90 MW UCAP

Another issue which has not yet been discussed is how overlapping capacity is calculated under UCAP for purposes of DAME Transitional Measures. Given the possibility of resources selling to LSEs that are not CPUC jurisdictional, DAME Transitional Measures should appropriately calculate the reliability capacity and imbalance reserves associated with the capacity sold.

7. Please provide your organization's overall feedback on the discussion regarding substitution and outage definitions.

MRP's most significant concerns with the second revised straw proposal are in this section.

Alignment with RC West solves no identified problem and creates new ones. Misalignment between the ISO's outage definitions and RC West's was not among the problems identified in this initiative. The stated goal was to improve the planned outage process. The RC West definitions were designed for reliability coordination and outage studies, not for RA availability or substitution, and adopting them does not improve outage coordination, substitution, or resource availability. Instead, as described above, it would turn outages that are planned today, with substitute capacity, into urgent outages subject to RAAIM and UCAP. The alignment is also selective. The proposal adopts some RC West definitions, including the eight-hour return time, but adds a 48-hour minimum submission time for opportunity outages that RC West does not require, and it keeps a substitution requirement that RC West does not have. MRP recommends that the ISO not change its outage definitions solely for the sake of alignment. If the ISO believes alignment is necessary, it should identify the specific problem alignment would solve and show that the benefit outweighs the costs described here. At a minimum, it should consider aligning with RC West's lack of a substitution requirement, or allowing a limited number of outages without substitution and without UCAP impact.

The proposed outage definitions are a major change, not the status quo. Under today's rules, a planned outage can be submitted with substitute capacity up to T-8. Under the proposal, a planned outage must meet the RC West short-notice study window, which closes on the Monday of the week before the outage week (or the prior Friday if Monday is a holiday). The ISO also expects submission five business days before that deadline (Operating Procedure 3220, as cited in the proposal). Combined, the effective lead time for a planned outage becomes roughly T-14 to T-18 days, depending on the day of the week the outage starts. Generators do not submit outages to RC West directly and have not historically planned around these windows. This is a substantial change for every resource, and it should be presented and evaluated as one.

The opportunity outage category does not fill the gap. Per RC West procedures, an opportunity outage must have an emergency return time of no more than eight hours. Most multi-day planned maintenance cannot meet that requirement. An outage that misses the planned outage deadline and cannot qualify as an opportunity outage therefore becomes an urgent or forced outage. MRP is concerned that, as a result, a large volume of outages planned today will be treated as urgent or forced, triggering RAAIM and UCAP impacts.

Consider a centralized, ISO-administered substitution process. Once RA showings are made, LSEs are generally not involved unless there is a CPM or deficiency. The rest of the process resides within the ISO. MRP believes substitute capacity could be procured through a centralized, ISO-run process, potentially on a daily basis similar to the energy markets, rather than relying on bilateral markets, where negotiating confirmation language and setting up payments creates significant administrative burden. An ISO-run process can be designed around the RC West outage definitions so as to improve liquidity and lower administrative burden. For example, RA resources could submit planned outages within the RC West short-notice study window for the following operating week. The ISO would then procure surplus capacity for that week and assign the procurement costs to the resources requesting the outages. The price of the substitute capacity could equal the RAAIM penalty price. Surplus capacity would be capacity that is not shown on a supply plan, not designated under CPM, and not supporting a PT export.

Shopping cart tool attributes. In the bilateral market, the attributes that matter most are quantity (MW), price, and duration or dates of availability, together with like-for-like attributes such as local area and sub-area. SC ID, resource ID, and resource name matter less. Brokers that facilitate bilateral transactions typically keep counterparties anonymous until a match is made. A shopping cart built around these attributes could function much like a broker market and improve visibility into available capacity. However, it would not address execution, which is where most of the friction in the bilateral market lies. If counterparties must still negotiate confirmation language and arrange payments after a match, the tool's usefulness will be limited. MRP recommends that the ISO design the shopping cart to reduce post-match administrative work, for example through standardized confirmation terms, or pursue the centralized substitution process described above.

MRP also recommends that the ISO allow LSEs that have purchased capacity but do not show it on a supply plan to offer that capacity for substitution. Where a resource has sold its capacity to multiple LSEs that elect not to show it on a supply plan, the resource's SC should not be required to submit offers on behalf of LSEs that may want to offer different prices. If the ISO cannot allow LSEs to submit their own offers, the SC should be able to confidentially identify the LSE on whose behalf each offer is submitted, so that it is clear which LSE's capacity was matched to a buyer.

8. Please submit your organization's overall feedback on the Calpine Stakeholder Presentation on 10/9.

MRP agrees with Constellation and WPTF that implementing UCAP requires more than replacing the ICAP-based NQC with a UCAP value. UCAP is a planning value. It does not change a resource's installed capability, deliverability, or physical output. If the ISO uses a single UCAP-based NQC as the ceiling for operational functions such as firm exports, substitution, and backstop, it will strand deliverable capacity. If it does not track mixed UCAP and ICAP showings, it risks misstating the MOO it actually receives. As WPTF emphasized, this is not an edge case. It affects every resource that is not shown in full.

MRP supports Constellation's recommendations that the ISO: (a) map each capacity function (showings, MOO, RAAIM, substitution, local RA, flexible RA, firm exports, and backstop) to the value it will use under UCAP, through an issue paper if needed; (b) publish both a deliverable installed capacity value (the "deliverable portion" referenced in the proposal) and a UCAP value in the NQC list, and track UCAP and ICAP showings separately in CIRA; and (c) preserve residual deliverable capability for exports and substitution, subject to outages reported in the outage management system.

On local RA, MRP asks the ISO to respond directly to Constellation's example. Part of the 10/9 discussion of that example used a loss-of-load-expectation framing, but the ISO's local capacity requirements are set through a deterministic N-1-1 contingency study, not a 1-in-10 LOLE standard. The ISO should explain whether Constellation's example reflects how local requirements are set and counted today, and how they would be set and counted under UCAP. MRP supports Constellation's request for an issue paper on the LCR process. It should cover sequencing, since LCR requirements and allocations are determined before NQC values are known.

Given the scope of the tariff, BPM, and system changes involved, MRP shares Constellation's concern about completing this work before UCAP takes effect in 2028, and asks the ISO to publish a schedule for it.

9. Please submit your organization's overall feedback on the CESA Stakeholder Presentation on 10/23.

MRP supports the principle underlying CESA's presentation: a resource should not be penalized under RAAIM for a known operating characteristic that is already reflected in its accreditation. This is the same principle behind MRP's recommendation in Question 4 that RAAIM not penalize resources again for forced outages already reflected in their UCAP values. If a storage resource's QC already accounts for nonlinearity, and the resource remains capable of performing to the design specifications used to establish its QC, a nonlinearity (foldback) outage does not reduce the RA capacity the buyer contracted for.

MRP agrees with CESA that the long-term solution is to update the NGR model so that nonlinearity can be represented directly in the market without an outage. In the interim, MRP recommends that the ISO allow storage resources to use the RAAIM-exempt "Technical Limitations Not In Market Model" nature of work for foldback outages. In doing so, the ISO should (a) limit that treatment to bona fide nonlinearity outages consistent with the characteristics used to establish the resource's QC, (b) monitor its use after the fact, and (c) apply the same principle to other resource types whose known operating limitations are accounted for in accreditation, so that RA availability rules remain technology-neutral.

Separately, the ISO already provides similar relief to demand response resources, which may submit a RAAIM-exempt use-limit reached outage once they have reached their dispatch limits. Because nonlinearity affects storage resources of all durations, including eight-hour storage, MRP recommends that the ISO extend the same treatment to all storage resources. Once a storage resource has been dispatched to the limits of its design specifications in a day, it should be allowed to submit a use-limit reached outage for the remainder of that day. The ISO's market model is intended to optimize the dispatch of storage resources across the day. A resource that has delivered what it was designed to provide under that optimization should not be penalized for being unable to provide more.

11. Please submit any additional feedback not already captured.

10. Please submit your organization's overall feedback on the group Stakeholder Presentations given on 10/23. *

MRP appreciates the stakeholders who presented on 10/23 and thanks the ISO for making time for these presentations. They offered practical, implementation-level perspectives from the market participants who will operate under the new rules, and they raised issues that may not be apparent from the proposal alone. MRP believes this kind of collaborative exchange is the most effective way to develop a workable Track 2 design. MRP recommends that the ISO hold additional meetings, including working sessions focused on specific design elements, and continue to work through policy development together with stakeholders. Stakeholder presentations should remain a regular part of the process, and the ISO should address the proposals and analyses presented as it develops its next paper.

11. Please submit any additional feedback not already captured.

MRP reiterates its recommendation from prior comments that outages due to fuel insufficiency be exempt from RAAIM. When a resource is physically available and has purchased fuel but cannot obtain fuel because of conditions outside its control, such as gas supply curtailments or pipeline constraints, an availability penalty does not create an incentive the resource can act on. This is consistent with the principle MRP supports in Question 9: RA availability rules should not penalize resources for limitations they cannot cure by being more available, and that principle should apply regardless of technology.

In the ISO’s on-peak deliverability assessment methodology, the methodology states that “Pmax for the non-intermittent resources are set to the highest summer month Qualifying Capacity in the last three years.”[1] MRP requests that the ISO clarify how UCAP accreditation would impact the on-peak deliverability assessment if the Pmax is set to the Qualifying Capacity value.

MRP also believes the ISO needs to hold more meetings, and hold them more often, to reach its target of a Board decision in Q1 2027. That schedule matters because the CPUC has adopted UCAP accreditation beginning in 2028, and the ISO must, at a minimum, implement the UCAP-related changes by the start of 2028.

[1] On Peak Deliverability methodology, pg 3

1. Please submit your organization's overall feedback on the Resource Adequacy Modeling and Program Design (RAMPD) Track 2 meetings held on 10/9 and 10/23.

NextEra Energy Resources, LLC (“NextEra Energy Resources”) appreciates the opportunity to provide comments on CAISO’s Resource Adequacy Modeling and Program Design Track 2 Second Revised Straw Proposal (“Second Revised Straw Proposal”), posted on October 2, 2026, and subsequent stakeholder meetings held on October 9 and October 23, 2026.

NextEra Energy Resources appreciates CAISO's consideration of presentations from Constellation Energy and the California Energy Storage Alliance (“CESA”) regarding Unforced Capacity ("UCAP”) implementation and its interaction with the proposed Resource Adequacy Availability Incentive Mechanism (“RAAIM”) redesign.

NextEra Energy Resources understands from the October 23 stakeholder discussion that CAISO intends to defer further consideration of the RAAIM redesign until 2027. NextEra Energy Resources strongly supports this deferral, as the proposed redesign continues to raise significant concerns that warrant further stakeholder discussion. Consistent with Pacific Gas and Electric Company's (“PG&E”) prior comments, NextEra Energy Resources supports pausing the proposed scarcity-based RAAIM redesign for at least two years or until one year after the California Public Utilities Commission's (“CPUC”) UCAP program becomes binding, whichever is later.[1] This would allow stakeholders to evaluate the impacts of UCAP implementation and determine whether additional availability incentives are necessary.

In the near term, NextEra Energy Resources strongly encourages CAISO to prioritize resolving outstanding UCAP implementation issues, including the interaction between UCAP accreditation, Resource Adequacy (“RA”) showings, must-offer obligations, outage classifications, and substitution requirements.

[1] PG&E Comments on RAMPD Track 2 Revised Straw Proposal, August 6, 2026.  

2. Please submit your organization's overall feedback on the second revised straw proposal that was posted on 10/2.

 NextEra Energy Resources appreciates CAISO's continued efforts to improve resource availability and reliability. However, NextEra Energy Resources remains concerned that the Second Revised Straw Proposal continues to focus on increasing financial penalties without adequately demonstrating how the proposed reforms would provide meaningful incremental incentives for generators to improve availability.

As noted in its previous comments, NextEra Energy Resources believes CAISO has not sufficiently demonstrated that the existing RAAIM penalty structure is inadequate to incentivize resource availability. While CAISO's analysis indicates that the existing monthly averaging and deadband may dilute availability incentives during certain stressed conditions, this does not establish that increasing penalty levels or implementing a new scarcity-based framework is necessary.

NextEra Energy Resources believes CAISO should first identify the specific generator behaviors it seeks to change, demonstrate how the proposed penalties would incentivize those behaviors, and evaluate whether targeted modifications to the existing RAAIM framework could achieve the same reliability objectives. For example, would a scarcity-based RAAIM program incentivize resources to perform well over time? At this time, NextEra Energy Resources remains concerned that the proposed RAAIM redesign could create significant financial uncertainty for generators, potentially requiring revisions to existing RA contracts and increasing risk premiums in future RA procurement.

NextEra Energy Resource urges CAISO to defer the broader RAAIM redesign and consider more targeted modifications to the existing framework, such as eliminating the current availability deadband and assessing performance at a 96.5% threshold. Such changes could strengthen availability incentives without introducing the significant complexity and financial uncertainty associated with the proposed two-tier framework.

Further, with the CPUC's adoption of UCAP accreditation beginning with the 2028 RA compliance year, NextEra Energy Resources believes CAISO should prioritize resolving UCAP implementation issues before introducing a new availability incentive mechanism. UCAP will incorporate historical outage performance into forward RA accreditation for applicable resources, and CAISO should evaluate whether additional penalties would provide incremental reliability benefits or just provide financial consequences. As stated above, CAISO should defer the RAAIM program reform discussions until UCAP is implemented.

3. Please provide your organization's overall feedback on the discussion regarding the revised RAAIM and resource type application.

NextEra Energy Resources continues to oppose extending RAAIM applicability to Variable Energy Resources (“VERs”). In particular, NextEra Energy Resources opposes CAISO's proposed proportional derate methodology, under which the percentage of a VER's Pmax affected by an equipment outage would result in a corresponding percentage reduction in its shown RA availability.[1] For partially deliverable VERs, resource owners can be penalized for outages above the deliverable MWs. Notably, VERs are the only resource type that will receive a RAAIM penalty even if they are available above their shown RA.

NextEra Energy Resources remains concerned that this approach does not adequately account for the unique operating characteristics of wind and solar resources, whose RA accreditation values already reflect expected generation contributions through the exceedance methodology established under CPUC’s Slice of Day framework. VER exceedance values are based on historical operations, which incorporate operations during partial outages by default. Further, VERs already have strong economic incentives to maximize production, as equipment outages result in lost energy revenues.

Applying additional RAAIM penalties to VERs could impose overlapping financial consequences without demonstrating meaningful incremental reliability benefits.  For example, CAISO’s proposal illustrates that a 500 MW nameplate VER with a 150 MW outage would be penalized even when shown for only 80 MW of RA. NextEra Energy Resources is concerned that the VER in this example would be penalized the same regardless of its actual generation (e.g., regardless of whether it generates 80 MW or 300 MW). Not only does this outcome penalize the VER for delivering the expected amount of RA that CAISO relied on for planning purposes, it dilutes the very incentive for VERs to over-deliver by returning from outage and taking other proactive actions during the Tier 1/Tier 2 advisory horizon that the proposal purports to strengthen.  If CAISO is counting on VERs to be available above their shown RA for planning purposes, it must support why it is not unduly discriminatory that under its proposal a VER would not get credit for over-delivering as expected and would in fact receive a penalty for over-delivering in spite of a partial outage.

NextEra Energy Resources notes that ACP-California's previous comments identified relatively low VER forced outage rates during summer peak hours, raising further questions regarding the reliability benefits of expanding RAAIM applicability to these resources.[2]  NextEra Energy Resources is particularly concerned that the proposed proportional derate methodology would assess unavailable RA based on the percentage of installed capacity affected by an equipment outage, rather than the actual generation lost during the assessment interval. Further, as historical operational data is used to determine the RA value of VERs via exceedance, which includes operations during equipment outages, applying a proportional percentage decrease on shown RA will likely double-count the impacts of equipment outage on VER operations. NextEra Energy Resources is also concerned that the proposal could penalize, for example, a solar resource that experiences a forced outage during a nighttime Tier 1 or Tier 2 event that the solar resource would otherwise be unable to help alleviate due to normal lack of irradiance.[3]  As a result, the proposed methodology could impose penalties that are disproportionate to the resource's actual contribution to system reliability during the event.

NextEra Energy Resources requests that CAISO conduct a quantitative cost-benefit analysis comparing the incremental reliability benefits of improved VER availability against the potential financial, administrative, and commercial impacts of the proposed framework. This analysis should evaluate historical VER equipment outages during stressed system conditions, the actual generation lost relative to the proposed proportional derate assessment, and the extent to which additional financial penalties could reasonably be expected to reduce outage frequency or duration. NextEra Energy Resources further requests that CAISO evaluate whether the proposed RAAIM framework would provide incremental reliability benefits beyond those already reflected through exceedance accreditation, existing energy market incentives, and contractual availability obligations.

Absent evidence demonstrating that the incremental reliability benefits justify the associated costs, NextEra Energy Resources believes CAISO should retain the existing VER exemption.

Regarding the application of the proposed RAAIM framework on storage resources, CAISO should clarify that storage would only be assessed for penalties based on its duration. For example, if there is a six-hour Tier 1 event, a four-hour battery would not be penalized for two hours of non-availability.

[1] Second Revised Straw Proposal, p. 26.

[2] ACP-CA Comments on RAMPD Track 2 Revised Straw Proposal, August 6, 2026.  

[3] This concern may be attenuated once CAISO transitions to an hourly RA framework consistent with Slice of Day, such that solar resources would presumably not be shown for RA during nighttime hours.

4. Please provide your organization's overall feedback on the discussion regarding the tier assessment.

NextEra Energy Resources continues to oppose the proposed two-tier RAAIM assessment framework. CAISO has not sufficiently demonstrated how the proposed Tier 1 and Tier 2 triggers would incentivize generator behavior or improve reliability, rather than simply impose additional financial penalties during stressed system conditions. The proposal contends that it will encourage RA resources to “take operationally meaningful actions, including returning from outage, updating outage status, or securing substitute capacity before the applicable trade date.”[1] However, these same goals could be realized through more targeted revisions to the existing RAAIM construct (e.g., removing the deadband and assessing resources at a 96.5% threshold).

Tier 1 Assessment

NextEra Energy Resources remains concerned that CAISO proposes to establish binding Tier 1 assessment hours based on forecasted elevated reliability risk, even if those conditions improve before the operating day. Under the proposed framework, a resource could incur RAAIM penalties despite the forecasted reliability concern no longer existing.

NextEra Energy Resources believes Tier 1 assessments should be reversible when updated forecasts indicate that the reliability risk has subsided. Maintaining penalties based on forecasted conditions that do not materialize is inconsistent with the objective of targeting availability incentives to periods of elevated reliability risk.

Further, CAISO has not sufficiently explained the methodology used to calculate the proposed “uncertainty adder” or demonstrated how it would affect the frequency of Tier 1 events.

Tier 2 Assessment

NextEra Energy Resources continues to oppose using a CAISO Resource Sufficiency Evaluation (“RSE”) failure as the Tier 2 trigger. RSE failures can result from various factors, including load forecast uncertainty, import availability, and procurement deficiencies, which are not necessarily attributable to individual generator unavailability.

CAISO has not demonstrated that individual generators would have a meaningful ability to prevent or resolve these events through improved availability or substitute capacity procurement. Accordingly, NextEra Energy Resources does not believe an RSE failure alone provides an appropriate basis for imposing additional generator penalties.

NextEra Energy Resources also remains concerned with the proposed fixed $2,000/MWh Tier 2 penalty, which has not been adequately justified based on actual reliability costs or the severity of individual events. Additionally, a low-probability, high impact penalty may not provide significant incentives for appropriate maintenance and other best practices, while also raising financing costs due to increased project risks. Thus, it could be an ineffective mechanism and raise costs for ratepayers.

Historical Analysis

NextEra Energy Resources appreciates CAISO providing historical forecast-alert information in the Second Revised Straw Proposal. However, NextEra Energy Resources requests that CAISO conduct a historical backcast of both proposed tiers over at least the past three years, including the number and duration of events, underlying system conditions, resource availability, and estimated RAAIM charges. This analysis should also identify the extent to which individual generator unavailability contributed to the triggering conditions. NextEra Energy Resources believes this analysis is necessary before stakeholders can meaningfully evaluate whether the proposed framework would provide incremental reliability benefits.

[1] Second Revised Straw Proposal, p. 32.

5. Please provide your organization's overall feedback on the discussion regarding charges, payments, and bounded penalty exposure.

Bounded Penalty Exposure

NextEra Energy Resources appreciates CAISO's recognition of the need to establish limits on cumulative RAAIM penalty exposure. However, NextEra Energy Resources opposes the proposed maximum monthly penalty cap of 200% of the Capacity Procurement Mechanism (“CPM”) soft offer cap. Consistent with its previous comments, NextEra Energy Resources recommends establishing a maximum monthly RAAIM penalty cap of 60% of the CPM soft offer cap, consistent with the existing RAAIM penalty price reference. NextEra Energy Resources notes that other stakeholders, including Calpine and Middle River Power (“MRP”), have also expressed support for limiting RAAIM penalty exposure to 60% of CPM.

NextEra Energy Resources believes CAISO has not adequately demonstrated why increasing maximum monthly penalty exposure to 200% of CPM is necessary to improve resource availability or system reliability. Generators already face meaningful financial consequences for unavailability through existing RA contractual obligations, lost energy revenues, and potential future reductions in RA accreditation under UCAP. The CPM represents CAISO’s maximum monthly willingness to pay to resolve capacity shortages using its backstop procurement authority. Therefore, increasing RAAIM penalty exposure to 200% of CPM essentially signals that a generator could be penalized in a single day at an amount equal to CAISO’s maximum allowed backstop procurement cost over two months. This could impose disproportionate financial risks on generators, potentially requiring renegotiation of existing RA contracts or potentially face default as an operational asset and, thereby, increasing RA prices in the future. Further, CAISO has not provided sufficient analysis demonstrating that higher penalty levels would incentivize additional generator availability beyond existing market and contractual incentives.

If CAISO continues with the Tiered approach, NextEra Energy Resources urges CAISO to establish a maximum monthly RAAIM penalty cap of 60% of CPM and provide additional analysis demonstrating whether higher penalty levels would produce measurable incremental reliability benefits than just penalizing.

Availability Incentive Payments

NextEra Energy Resources remains concerned that the proposed penalty revenue allocation framework does not provide sufficiently meaningful positive incentives for generators to improve availability beyond those that exist currently. Although CAISO proposes allocating a portion of collected charges to available RA resources, the proposed methodology does not distinguish resources that exceed an established availability benchmark from resources that merely satisfy their obligations.  For example, a generator with a 90% availability would receive a very similar incentive payment to a 100% available generator, so the proposed incentive payment would not incentivize overperformance. NextEra Energy Resources believes an availability incentive mechanism should reward resources that demonstrate superior availability, rather than relying predominantly on penalties for non-availability.

NextEra Energy Resources recommends that CAISO retain a meaningful incentive payment mechanism for resources that exceed applicable availability benchmarks. Providing a portion of penalty revenues to load does not directly incentivize generator availability, as load cannot take operational actions to improve generator performance during stressed system conditions. Specifically, CAISO should retain a structure similar to the existing RAAIM incentive structure that allocates collected non-availability charges to resources that exceed the applicable availability standard.

6. Please provide your organization's overall feedback on the discussion regarding the bidding requirements.

NextEra Energy Resources continues to support CAISO's proposal to assess RAAIM availability based on shown RA capacity, even when a resource's must-offer obligation (“MOO”) exceeds its shown RA value.

NextEra Energy Resources appreciates CAISO's recognition that UCAP accreditation may reduce a resource's RA counting value without necessarily reducing its physical operating capability. However, the proposed changes to bidding requirements raise additional questions regarding the interaction between UCAP accreditation, Net Qualifying Capacity (“NQC”), deliverable capacity, shown RA, and applicable must-offer obligations.

Specifically, NextEra Energy Resources believes CAISO should prioritize resolving these implementation questions before adopting changes to the existing bidding framework. In particular, CAISO should clarify how the proposed MOO methodology would apply to partially shown resources, resources with partial deliverability, and resources subject to different Local Regulatory Authority accreditation methodologies.

As noted in NextEra Energy Resources' previous comments, UCAP implementation requires a comprehensive review of CAISO's Tariff and Business Practice Manuals, including the treatment of separate capacity values such as Pmax, LRA-specific Qualifying Capacity, Maximum Qualifying Capacity, NQC, and shown RA. CAISO should also evaluate the implications of UCAP for local and flexible capacity studies rather than limiting its implementation efforts to bidding requirements.

NextEra Energy Resources recommends that CAISO prioritize UCAP implementation and preserve the distinction between bidding obligations and RAAIM penalty exposure, with the latter remaining limited to shown RA capacity.

7. Please provide your organization's overall feedback on the discussion regarding substitution and outage definitions.

NextEra Energy Resources opposes CAISO's proposal to eliminate the Short-Notice Opportunity Outage (“SNOO”) category. SNOOs provide an important mechanism for generators to perform necessary short-notice maintenance when CAISO determines that system conditions can accommodate the outage, without requiring substitute RA capacity or imposing additional RAAIM penalties.

NextEra Energy Resources appreciates CAISO's introduction of a new Opportunity Outage classification intended to align with RC West outage coordination procedures. However, the proposed Opportunity Outage does not provide an equivalent replacement for the existing SNOO framework. Specifically, CAISO proposes requiring substitute RA capacity through the Resource Adequacy Substitute Capacity (“RASC”) process and submission at least two days before the outage start date. In contrast, the existing SNOO framework allows CAISO-approved short-notice maintenance without requiring substitute capacity.

NextEra Energy Resources is concerned that these additional requirements could discourage proactive maintenance, particularly when substitute capacity is unavailable or prohibitively expensive, even if CAISO determines that system conditions can accommodate the outage. The proposed urgent outage classification does not address this concern, as urgent outages would remain subject to RAAIM penalties.

NextEra Energy Resources therefore recommends that CAISO retain the existing SNOO framework or modify the proposed Opportunity Outage classification to preserve the ability to conduct short-notice maintenance without substitution when CAISO determines that system reliability would not be adversely affected.

NextEra Energy Resources also requests that CAISO clarify the applicable RC West study-window deadlines and how they interact with CAISO's proposed two-day substitution requirement. Clear submission deadlines and outage classification criteria are necessary to provide generators with certainty regarding their operational and compliance obligations.

8. Please submit your organization's overall feedback on the Calpine Stakeholder Presentation on 10/9.

 NextEra Energy Resources supports Calpine’s overall objective for CAISO to consider overall UCAP implementation. As discussed above, NextEra Energy Resources urges CAISO to consider UCAP implementation and defer the RAAIM reform discussions until UCAP is implemented.

9. Please submit your organization's overall feedback on the CESA Stakeholder Presentation on 10/23.

 NextEra Energy Resources supports the overall objective of CESA’s presentation to properly consider nonlinearity when addressing RAAIM reforms.

11. Please submit any additional feedback not already captured.

 NextEra Energy Resources supports the overall objective of CESA’s presentation to properly consider nonlinearity when addressing RAAIM reforms.

1. Please submit your organization's overall feedback on the Resource Adequacy Modeling and Program Design (RAMPD) Track 2 meetings held on 10/9 and 10/23.

Please see NCPA’s comments below.

2. Please submit your organization's overall feedback on the second revised straw proposal that was posted on 10/2.

NCPA supports the proposal's continued respect for and recognition of Local Regulatory Agencies’ jurisdictional rights to set their own resource adequacy (RA) counting methodologies and planning reserve margins (PRMs), as well as the CAISO's decision to retain the Load Following MSS exemption. NCPA also appreciates the additional explanation of the Tier 1 framework and the proposed CPM-based limit on monthly penalty exposure.

Although the second revised straw proposal addresses NCPA's principal concern regarding retention of the load-following MSS exemption, NCPA continues to have significant concerns with the proposed pricing and bidding frameworks. NCPA recommends retaining a capacity-based RAAIM price tied to the CPM soft offer cap, with a higher multiplier or set of multipliers if the CAISO demonstrates that the current 60 percent level is insufficient. NCPA also recommends limiting the must-offer obligation to shown RA.

3. Please provide your organization's overall feedback on the discussion regarding the revised RAAIM and resource type application.

NCPA supports the CAISO's decision to retain the Load Following MSS exemption. This directly addresses NCPA's prior comments and appropriately recognizes the unique operating characteristics of load-following MSS resources. This exemption should be preserved as the proposal advances.

4. Please provide your organization's overall feedback on the discussion regarding the tier assessment.

NCPA appreciates the additional explanation of the Tier 1 trigger and the role of the uncertainty buffer. This is responsive to NCPA's prior request for greater clarification regarding how Tier 1 conditions would be determined.

Further clarification, however, is still needed. As part of any further revised proposal, the CAISO should propose a sufficiently specific and reproducible methodology for calculating the uncertainty buffer, including the applicable data inputs and lookback period. The CAISO should also commit to timely publishing sufficient information to allow Scheduling Coordinators to independently understand and validate a Tier 1 designation.

5. Please provide your organization's overall feedback on the discussion regarding charges, payments, and bounded penalty exposure.

NCPA appreciates the proposal to bound monthly penalty exposure using the CPM soft offer cap. A defined limit provides greater predictability and partially addresses NCPA's concern that the proposed $/MWh frameworks could create unreasonable and punitive exposure.

The proposed limit, however, does not cure the underlying pricing problem. Indeed, the need to bound penalty exposure under the proposed penalties underscores the fundamental flaws with the proposed approach. Day-ahead LMP is an energy price and is not an appropriate measure of RA capacity value. Likewise, the proposed administrative Tier 2 price is not tied to the going-forward cost of capacity and could produce unreasonable penalties (even with bounded monthly penalty exposure).

NCPA does not support decoupling the RAAIM price from the CPM soft offer cap. Because the CPM soft offer cap is based on the going forward price of the reference resource, it is a logical and appropriate measure for incenting good performance and encouraging investment. If the CAISO believes the current RAAIM price is insufficient, it should still tie that price to the CPM soft offer cap but consider evaluating a higher multiplier or set of multipliers. The CPM framework provides a more appropriate capacity-based benchmark for incenting availability than day-ahead LMPs or administratively selected $/MWh pricing.

6. Please provide your organization's overall feedback on the discussion regarding the bidding requirements.

NCPA appreciates that the CAISO replaced unrestricted PMax with the resource’s deliverable capacity in the proposed must-offer calculation. This change narrows the potential obligation but does not resolve NCPA’s concern.

NCPA continues to oppose imposing a must-offer obligation above shown RA. The RA showing identifies the capacity that an LSE has procured and designated to satisfy its RA obligation, as well as the capacity for which the resource has undertaken the corresponding RA obligations. Requiring the resource to offer additional capacity merely because it is deliverable would impose an obligation on capacity that has not been sold, designated, or compensated as RA.

This concern is particularly significant for jointly owned and partially contracted resources. A Scheduling Coordinator may schedule the entire resource but may not possess the contractual right to commit every owner’s or purchaser’s share of the resource to CAISO as RA capacity. Capacity above the shown RA amount may belong to another project participant, be reserved under another contractual arrangement, or remain available for a use other than satisfying the showing LSE’s RA obligation. A tariff requirement to offer that capacity could therefore conflict with existing ownership, scheduling, and contractual arrangements and effectively expand the parties’ negotiated RA commitments without corresponding compensation.

Separating the expanded MOO from RAAIM exposure does not resolve this concern. Even if RAAIM and substitution obligations remain limited to shown RA, the resource would still be subject to a tariff-based bidding obligation for capacity outside the underlying RA commitment. The must-offer obligation should therefore remain limited to shown RA.

7. Please provide your organization's overall feedback on the discussion regarding substitution and outage definitions.

NCPA does not support eliminating the existing short-notice opportunity RA outage category. NCPA is also concerned with the proposed revisions to outage definitions more broadly. Redefining outage categories extends beyond the appropriate scope of the RAMPD initiative because those definitions may affect market participants beyond entities subject to the CAISO RA framework, including EDAM participants. NCPA recommends retaining the short-notice opportunity RA outage category and addressing broader revisions to outage definitions through a separate stakeholder initiative that provides all affected stakeholders an appropriate opportunity to evaluate the operational and market implications.

8. Please submit your organization's overall feedback on the Calpine Stakeholder Presentation on 10/9.

No comments at this time.  

9. Please submit your organization's overall feedback on the CESA Stakeholder Presentation on 10/23.

No comments at this time.  

11. Please submit any additional feedback not already captured.

No comments at this time.  

1. Please submit your organization's overall feedback on the Resource Adequacy Modeling and Program Design (RAMPD) Track 2 meetings held on 10/9 and 10/23.

Ormat appreciates the opportunity to provide comments on CAISO’s Resource Adequacy Modeling and Program Design (RAMPD) Track 2 initiative and the discussions held during the October 9 and October 23 stakeholder meetings. Ormat encourages CAISO to ensure that any proposed changes to the RAAIM framework are appropriately justified, proportionate to reliability needs, and coordinated with ongoing efforts to implement Unforced Capacity (UCAP) accreditation.

2. Please submit your organization's overall feedback on the second revised straw proposal that was posted on 10/2.

Ormat is concerned that CAISO is proposing substantial revisions to the RAAIM framework while the transition to UCAP accreditation is approaching in 2028. The interaction between UCAP accreditation and RAAIM requirements remains uncertain, creating significant challenges for developers and load-serving entities that are currently negotiating power purchase agreements and making long-term procurement commitments. These parties need clarity regarding the capacity value, availability obligations, and potential penalty exposure associated with RA resources in order to appropriately allocate risks and establish commercially reasonable contract terms.

Ormat encourages CAISO to prioritize coordination with the CPUC on UCAP implementation and to consider how the proposed RAAIM revisions will interact with the new accreditation framework before adopting substantial changes to availability incentives and penalties.

3. Please provide your organization's overall feedback on the discussion regarding the revised RAAIM and resource type application.

Ormat encourages CAISO to ensure that the revised RAAIM framework appropriately accounts for the operating characteristics of geothermal resources and is coordinated with the implementation of UCAP accreditation. In particular, CAISO should ensure that geothermal resources are not subject to duplicative penalties for forced outages or other availability limitations already reflected in their accredited capacity values.

4. Please provide your organization's overall feedback on the discussion regarding the tier assessment.

Ormat is concerned that CAISO's proposed tier assessment framework does not adequately distinguish between routine system conditions and periods of genuine reliability emergencies. While Ormat recognizes that heightened availability incentives may be appropriate during periods of system stress, the escalation of RAAIM penalties should be tied to clear, objective indicators of reliability need.

Ormat encourages CAISO to align the proposed penalty tiers with established Energy Emergency Alert (EEA) levels rather than introducing a separate set of triggers. EEA declarations provide a transparent, established framework for identifying increasingly severe reliability conditions and would create a clearer relationship between the severity of RAAIM penalties and the reliability consequences of resource unavailability. If CAISO believes that additional triggers are necessary outside declared EEA conditions, it should provide a clear justification for those triggers and demonstrate why the existing EEA framework is insufficient.

5. Please provide your organization's overall feedback on the discussion regarding charges, payments, and bounded penalty exposure.

Ormat supports the establishment of limits on RAAIM penalty exposure. Bounded penalties are important to ensuring that RA obligations remain commercially reasonable and that developers and load-serving entities can appropriately evaluate and allocate financial risks when negotiating long-term contracts. However, while Ormat supports the principle of bounded penalty exposure, it does not necessarily endorse the specific limits proposed by CAISO. Additional analysis and stakeholder discussion are needed to determine whether the proposed limits appropriately balance reliability incentives with reasonable financial exposure.

CAISO should provide its rationale on why some RA capacity resources should be exposed to higher or lower penalties than other RA capacity resources based on localized energy market congestion issues. Ormat requests clarification regarding the treatment of negative locational marginal prices (LMPs) under the proposed Tier 1 penalty calculation. Geothermal resources frequently experience negative LMPs, and it is unclear whether the proposed calculation would result in a negative penalty during such intervals, effectively creating a payment to an unavailable resource. Ormat requests that CAISO clarify whether the Tier 1 penalty price is subject to a zero floor, explain how negative LMPs would be treated under the proposed framework, and demonstrate how that treatment is consistent with the fundamental purpose of RAAIM as an incentive for resource availability.

6. Please provide your organization's overall feedback on the discussion regarding the bidding requirements.

Ormat believes that RAAIM bidding requirements and associated penalties should be limited to the capacity a resource has committed to provide as RA, and should not exceed its shown RA capacity or applicable UCAP accreditation. Resources should not be subject to RAAIM penalties for failing to offer capacity beyond their RA obligations. Ormat encourages CAISO to ensure that the revised bidding requirements are consistent with this principle, particularly as the RA program transitions to UCAP accreditation.

7. Please provide your organization's overall feedback on the discussion regarding substitution and outage definitions.

Ormat encourages CAISO to develop more flexible and effective substitution options for RA resources. The proposed “shopping cart” mechanism is insufficient to address the practical challenges resources face in securing replacement capacity, particularly for planned maintenance outages. A meaningful substitution framework should facilitate market-based procurement of replacement capacity and provide resource owners with a workable means of meeting their RA obligations without incurring unnecessary penalties. Ormat encourages CAISO to work with stakeholders to develop additional substitution mechanisms that support planned maintenance and preserve system reliability.

8. Please submit your organization's overall feedback on the Calpine Stakeholder Presentation on 10/9.

Ormat appreciates Calpine's stakeholder presentation and believes it raises important concerns regarding the interaction between the proposed RAAIM revisions and the forthcoming implementation of UCAP accreditation. Ormat agrees that coordination between these frameworks warrants greater attention and encourages CAISO to prioritize resolving these issues in collaboration with the CPUC and stakeholders before finalizing substantial changes to RAAIM. Given the approaching 2028 implementation of UCAP and the long-term procurement decisions already underway, timely clarification is essential.

9. Please submit your organization's overall feedback on the CESA Stakeholder Presentation on 10/23.

No comment at this time.

11. Please submit any additional feedback not already captured.

No comment at this time.

1. Please submit your organization's overall feedback on the Resource Adequacy Modeling and Program Design (RAMPD) Track 2 meetings held on 10/9 and 10/23.

PG&E appreciates CAISO's continued efforts to improve the Resource Adequacy framework and appreciates the additional detail provided in the Second Revised Straw Proposal. However decision (D.) 26-07-008 at the CPUC adopted a UCAP framework beginning with the 2028 Resource Adequacy compliance year. As PG&E stated in our last round of comments, implementation of UCAP should become the primary near-term focus of Track 2. 

Given the substantial implementation effort required to transition California's RA framework to UCAP, PG&E urges CAISO to reprioritize UCAP-readiness and modify the Tariff accordingly to support the changes in alignment with timing for the CPUCs RA process in 2028: 

• Clarification of the Must Offer Obligation (MOO) under UCAP should be equal to the ICAP equivalent amount for any shown UCAP megawatts; 

• Ensure CAISO’s ability to translate shown UCAP values into ICAP equivalent values for any processes that implicitly use an ICAP value. 

These foundational issues should be resolved before CAISO implements a major redesign of RAAIM.?? 

2. Please submit your organization's overall feedback on the second revised straw proposal that was posted on 10/2.

Please see comments to question 1. 

3. Please provide your organization's overall feedback on the discussion regarding the revised RAAIM and resource type application.

Please see comments to question 1. Please see comments to question 1. 

4. Please provide your organization's overall feedback on the discussion regarding the tier assessment.

Please see comments to question 1. 

5. Please provide your organization's overall feedback on the discussion regarding charges, payments, and bounded penalty exposure.

Please see comments to question 1. 

6. Please provide your organization's overall feedback on the discussion regarding the bidding requirements.

Please see comments to question 1. 

7. Please provide your organization's overall feedback on the discussion regarding substitution and outage definitions.

Please see comments to question 1.

8. Please submit your organization's overall feedback on the Calpine Stakeholder Presentation on 10/9.

No comments

9. Please submit your organization's overall feedback on the CESA Stakeholder Presentation on 10/23.

No comments

11. Please submit any additional feedback not already captured.

No additional comments

1. Please submit your organization's overall feedback on the Resource Adequacy Modeling and Program Design (RAMPD) Track 2 meetings held on 10/9 and 10/23.

No comment

2. Please submit your organization's overall feedback on the second revised straw proposal that was posted on 10/2.

No comment

3. Please provide your organization's overall feedback on the discussion regarding the revised RAAIM and resource type application.

No comment

4. Please provide your organization's overall feedback on the discussion regarding the tier assessment.

Shell Energy appreciates CAISO's effort to align RAAIM with periods of reliability need and believes an event-based approach is directionally stronger than assessing availability only during predefined weekday hours. The CAISO should justify the approach by showing that the assessed hours identify meaningful reliability risk and that the resulting incentives can improve availability, rather than resting the case on the new mechanism producing larger charges.

The rationale for a tiered structure is appreciated, but multiple tiers may be unnecessary, and the added complexity may outweigh the benefit. A single Tier 1 assessment, scaled to the severity of the forecast shortfall or the extent to which the calculated threshold is breached, would be preferable, and the CAISO should evaluate that alternative against the proposed two-tier design. Advance notice is valuable, but Shell Energy questions whether the assessment hours confirmed at T-3 through T-1 should remain binding if the forecast stress later resolves. Advisory runs through the day before the trade date, with the T-1 run determining the binding assessment hours, would preserve early notice while tying financial exposure to the most current forecast.

5. Please provide your organization's overall feedback on the discussion regarding charges, payments, and bounded penalty exposure.

Shell Energy appreciates CAISO's work to add predictability through monthly exposure limits and to give suppliers a stronger reason to restore or replace unavailable capacity. The overall structure, however, is not well calibrated. Tier 1 is priced at day-ahead LMP and Tier 2 at a fixed $2,000/MWh. The penalty exposure is then moderated with full-rate charges up to 100% of the CPM soft offer cap, a 20% reduced rate beyond that, and a hard cap at 200%. In effect, the design sets very large initial penalties and then tempers them with percentage reductions and caps. Those limits are useful for managing risk, but they do not appear to be derived from the reliability value of RA capacity or the realistic cost of substitution. We struggle to support using day-ahead LMP as the Tier 1 benchmark as the LMP includes location-specific components, congestion and losses, and reflects the marginal cost of energy rather than the cost of replacement capacity. The CAISO's own analysis notes that the full LMP is often higher than its estimate of potential capacity value, and the difference between an external hub price and a CAISO energy price is not an observed price for replacement RA. LMP is also hard to forecast, which makes it difficult for suppliers to manage their exposure when deciding whether to restore a unit or procure a substitute.

As an alternative, the CAISO may consider leveraging monthly capacity prices in the CPUC's resource adequacy reporting framework which could be updated annually or quarterly. The 2024 prices are $16.82/kW-month for summer, $14.38 for fall, $6.22 for winter and $6.09 for spring. The CAISO could normalize the applicable seasonal price across the current availability assessment hours to produce an hourly Tier 1 charge, then scale it to the severity of the shortfall identified in the Tier 1 trigger calculation. While the reported capacity prices would be a lagging, backward-looking indicator, they would provide suppliers a clearer basis for choosing between restoring a unit and procuring a substitute and be grounded in actual capacity costs.

https://www.cpuc.ca.gov/-/media/cpuc-website/divisions/energy-division/documents/resource-adequacy-homepage/2023-resource-adequacy-reportv2.pdf

6. Please provide your organization's overall feedback on the discussion regarding the bidding requirements.

No comment

7. Please provide your organization's overall feedback on the discussion regarding substitution and outage definitions.

Shell Energy is supportive of furthering the shopping cart concept and encourages CAISO to treat the shopping cart as a stepping stone toward a more centralized, ISO-administered clearing process built around a standardized substitute capacity product. A shopping cart or centralized capacity platform could create greater visibility into available substitute capacity, a structured transaction workflow and an incentive to offer capacity rather than withhold it.

8. Please submit your organization's overall feedback on the Calpine Stakeholder Presentation on 10/9.

No comment

9. Please submit your organization's overall feedback on the CESA Stakeholder Presentation on 10/23.

No comment

11. Please submit any additional feedback not already captured.

No comment

1. Please submit your organization's overall feedback on the Resource Adequacy Modeling and Program Design (RAMPD) Track 2 meetings held on 10/9 and 10/23.

Please see the Six Cities’ response to question no. 2 below.

2. Please submit your organization's overall feedback on the second revised straw proposal that was posted on 10/2.

As discussed in response to the individual questions included below, there are elements of the Second Revised Straw Proposal that the Six Cities either support or do not oppose, and there are elements of the Second Revised Straw Proposal to which the Six Cities remain opposed.

Specifically, the Six Cities support or do not oppose most of the proposed modifications to the Resource Adequacy Availability Incentive Mechanism (“RAAIM”) and encourage the CAISO to move forward with modifications to the RAAIM construct.  Although the Six Cities support the CAISO’s recommendation that RAAIM penalties be limited to shown resource adequacy (“RA”) capacity values, the CAISO’s recommended bidding requirements remain confusing and inconsistent with RA commitments.  The Six Cities are opposed to most of the recommendations in the Second Revised Straw Proposal regarding outage definitions and substitution obligations, because these proposals are unreasonably burdensome and inconsistent with the overall objective of expanding both visibility and availability of RA resources.

3. Please provide your organization's overall feedback on the discussion regarding the revised RAAIM and resource type application.

The Six Cities continue to support modification of the RAAIM construct to focus on availability of RA resources during hours when stressed system conditions are occurring or imminent.  With the exception of the proposed treatment of battery storage resources discussed in response to question no. 9 below, the Six Cities do not oppose application of the revised RAAIM approach to different types of resources as described in the Second Revised Straw Proposal, including the application of RAAIM penalties to Variable Energy Resources (“VERs”) based on documented equipment outages as a percentage of shown RA.  Consistent with the Six Cities’ understanding of the CAISO’s proposal, RAAIM charges should apply only to shown RA capacity (i.e., the capacity included in a load-serving entity’s monthly RA showing or designated to provide substitute capacity). 

4. Please provide your organization's overall feedback on the discussion regarding the tier assessment.

The Six Cities support the concept of a tiered approach to defining critical hours when RAAIM penalties will apply and graduated penalties reflecting the severity of capacity shortfalls.  However, the Six Cities continue to oppose the CAISO’s proposal to lock in a declaration of a Tier 1 event at T-3 days before the relevant trading day. 

Although the Six Cities continue to support the proposed process for establishing advisory notifications of potential Tier 1 events beginning at T-8, they remain strongly opposed to making an anticipated Tier 1 event binding as of T-3.  A binding Tier 1 confirmation at T-3 (or T-2 or T-1) could result in application of Tier 1 RAAIM penalties to resources that were not available by the trading day identified in the earlier confirmation even if system conditions change, and there is more than enough capacity available on the trading day to meet system needs.  The imposition of RAAIM penalties in hours when there is no system capacity shortfall is unduly rigid and inconsistent with the objective of aligning the application of penalties with critical system conditions.  Moreover, the CAISO has not explained why declaring a Tier 1 event on a binding basis three days before a trading day would significantly improve the incentive for resources to maximize the probability that they would be available as compared with simply continuing to notify the market of a potential capacity shortfall on an advisory basis.  Persistent advisory notifications of potential capacity deficiencies will warn RA resources that they will be subject to RAAIM penalties if conditions develop as anticipated and they are not available.  That identified risk of penalty exposure plus the expectation of higher prices and increased profits for inframarginal resources in scarcity conditions should be sufficient to encourage resources to take all possible steps to be available on days forecast to experience critical conditions.  Imposing non-availability penalties on resources when there is no shortfall of capacity on the system is unlikely to enhance reliability, particularly in light of the challenges to procuring substitute capacity and appears unreasonably punitive.

5. Please provide your organization's overall feedback on the discussion regarding charges, payments, and bounded penalty exposure.

At this time, the Six Cities do not oppose establishing the Tier 1 penalty price as recommended in the Second Revised Straw Proposal.  Basing the Tier 1 penalty on Day-Ahead locational marginal prices (“LMPs”) allows gradation of Tier 1 penalties reflecting market conditions.  Based on discussion in the Second Revised Straw Proposal and coupled with the proposed adoption of a capacity-based monthly cap on penalty exposure, the Six Cities also do not oppose setting the Tier 2 penalty price at the $2,000/MWh maximum bid level for energy.  Because a Tier 2 event can be expected to coincide with highly stressed system conditions, the $2,000/MWh maximum bid for energy effectively represents a proxy for high-end LMP impacts during the most severe conditions.

The Six Cities appreciate the CAISO’s development of the proposal for a monthly cap on penalty exposure as described in the Second Revised Straw Proposal.  The proposed cap mechanism appropriately limits penalty exposure in proportion to the magnitude of capacity shortfalls subject to the penalty.  Subject to consideration of further comments, the Six Cities do not oppose basing the cap mechanism on levels of the Capacity Procurement Mechanism soft-offer cap.

Regarding the distribution of revenues collected through application of RAAIM penalties, the Six Cities remain convinced that it would be reasonable to allocate to load all funds payable by resources that incur non-availability penalties.  RA resources are paid to be available, and it is not clear why resources should receive additional compensation for meeting the basic contractual obligations they have assumed.  At a minimum, revenues resulting from collection of Tier 2 penalties should be used first to offset Assistance Energy Transfer payments and/or Resource Sufficiency Evaluation failure penalties incurred by the CAISO balancing authority area.

6. Please provide your organization's overall feedback on the discussion regarding the bidding requirements.

The Six Cities continue to oppose the CAISO’s proposal to base bidding requirements on capacity that is operationally available rather than on shown RA capacity.  The Six Cities appreciate and support the CAISO’s current proposals (i) that exposure to RAAIM penalties and substitution obligations will be limited to shown RA value (see Second Revised Straw Proposal at pages 51-52), and (ii) that a resource’s Must Offer Obligation (“MOO”) will not exceed its deliverable NQC (Id.).  In addition, the Six Cities appreciate the CAISO’s clarification at the October 23 meeting that bid insertion applies only to shown RA capacity.  Notwithstanding these clarifications, the Six Cities strongly oppose the CAISO’s continuing proposal that a resource’s MOO may exceed its shown RA capacity value. 

As noted in the Six Cities’ 6/4/26 and 8/5/26 comments, if the payment for taking on RA obligations is premised on a stated capacity value, it is not appropriate to apply the MOO to capacity beyond the level for which the resource is being paid and the purchasing entity is receiving credit against RA requirements.  Load-serving entities (“LSEs”) that are resource owners are entitled to choose whether to show their capacity for RA purposes and how much capacity to include in their showings.  Merchant resource owners are entitled to decide how much capacity to sell as RA.  Imposing a MOO set at a higher level than shown RA imposes obligations beyond the level for which a resource seller is being paid (absent a different agreement between the parties to the RA contract) and for which the purchasing LSE or LSE resource owner is receiving credit for RA requirements.  Such treatment is inconsistent with the ability of merchant generators that have not sold RA capacity to decide whether or not to bid into the markets.  In addition, it would result in unwarranted and uncompensated interference with the ability of resource owners (whether LSEs or merchant generators that have sold a portion of their capacity as RA) to manage operation of their resources as they determine best meets their needs.  Forced bidding beyond shown RA capacity levels may interfere with resource owners’ desired management of maintenance schedules, restrictions on unit run times or emissions, or fuel supply limitations. 

Finally, a MOO requirement exceeding shown RA capacity would complicate implementation of the capacity substitution pool discussed in question no. 7 below.  If substitute capacity is transferred through the pool, is the magnitude of the MOO assumed by the buyer set at the capacity amount transferred, or is it something greater?  How could the seller or the buyer of substitute capacity (either through the substitution pool or another bilateral arrangement) comply with a MOO associated with capacity beyond the amount to which it holds rights?

7. Please provide your organization's overall feedback on the discussion regarding substitution and outage definitions.

The Six Cities continue to support development of a substitute capacity pool and support the decentralized “shopping cart” approach.  The Six Cities recommend that information available through the pool include the amount of capacity offered, duration of capacity availability (i.e., daily, weekly, monthly), offer price, type of resource, and identification of the offering entity.  The Six Cities strongly support allowing flexibility in the duration of substitute capacity offered into the pool and believe such flexibility will enhance the value of the pool and maximize utilization of available capacity. 

The remaining proposed changes to substitution requirements, outage definitions, and outage timelines are unclear and undermine the objectives of incentivizing availability and encouraging substitution for RA capacity that is not available.  For example, the discussion at the October 23 stakeholder meeting confirmed that the proposed change to the timeline for submitting requests for planned outages (to five business days before the RC West short-range study submission deadline) would require a request for an outage beginning on a Friday to be submitted fourteen business days or nearly three calendar weeks in advance.  As noted by several commenters at the meeting, this is a significant expansion of the eight day advance deadline for submission of a planned outage request, and the CAISO has not explained why such a substantial change to the notice period is necessary. 

The Six Cities continue to strongly oppose elimination of Short Notice Opportunity Outages.  As expressed in the Six Cities 6/4/26 and 8/5/26 comments, elimination of Short Notice Opportunity Outages will result in removal of a critical operational tool that some resources rely on to address near-term maintenance needs.  For example, the short notice outage card may be used to perform important weekend maintenance activities that are necessary to maintain turbine efficiency, emissions compliance, and safe operations.  These outages cannot always be forecasted far—or even eight days—in advance, because they depend on ambient conditions and real time operational loading.  Nonetheless, the maintenance activities may be required under prudent utility practice and to ensure optimal equipment operation.  It is in the interests of all parties for the CAISO to enable this type of maintenance to be performed at times when doing so will pose little to no risk to grid reliability.  If the CAISO removes the Short Notice Opportunity Outage option, then resources may be forced to either (1) delay necessary maintenance or (2) take outages without an approved coordination mechanism.  It also will continue to encourage LSEs to exclude from RA showings and the substitution pool capacity contracted for RA that exceeds showing requirements.  All of these potential consequences increase reliability risk.

8. Please submit your organization's overall feedback on the Calpine Stakeholder Presentation on 10/9.

The Six Cities have no comments at this time on the presentation by Constellation at the October 9 meeting.

9. Please submit your organization's overall feedback on the CESA Stakeholder Presentation on 10/23.

The presentation by CESA at the October 23 meeting described circumstances in which battery storage resources are exposed to unavoidable RAAIM penalties following four continuous hours of discharge in compliance with the resource’s RA obligations.  The CAISO did not appear to disagree with CESA’s description of the circumstances giving rise to the RAAIM exposure.  To the contrary, the Second Revised Straw Proposal indicates at page 24 that the CAISO is working on a “modeled solution,” but declines to apply “an interim exemption while the modeled solution is pending.”  The Six Cities request that the CAISO explain why an interim exemption from RAAIM penalties under the specific circumstances described by CESA would not be appropriate.

11. Please submit any additional feedback not already captured.

In multiple set of previous comments in this initiative (see, e.g., comments submitted on 5/17/24, 12/6/24/ 9/19/25/ 6/4/26, and 8/5/26), the Six Cities have recommended that the CAISO allow LSEs to reflect on their RA showings varying levels of resource availability throughout the month.  The Six Cities are disappointed that the CAISO has not responded to that recommendation, which the Cities consider to represent “low hanging fruit” in terms of expanding capacity available to meet reliability requirements.  Permitting daily granularity for RA commitments by resources would increase the capacity available through the substitution pool and reduce incentives to hold back contracted RA capacity not needed to satisfy RA requirements in a given month.  The CAISO continues to assert (Second Revised Straw Proposal at page 54) that the substitution process should not encourage scheduling coordinators to hold back capacity to substitute for their own needs nor create risks or uncompensated burdens for LSEs showing resources beyond those needed to meet their own requirements.  Modification of the RA showing framework as recommended by the Six Cities could complement the proposed substitution pool and do more to address those objectives.  Allowing daily variations in showings for resources as well as daily substitution opportunities would enhance the ability of both LSEs and resources to satisfy RA requirements and expand availability of RA eligible capacity.

1. Please submit your organization's overall feedback on the Resource Adequacy Modeling and Program Design (RAMPD) Track 2 meetings held on 10/9 and 10/23.

SCE believes that the RAMPD meetings, especially the Constellation presentation and the discussion it engendered, demonstrate that more discussion and analysis are required to determine the necessary relationships and requirements for resource data to be provided to the CAISO. Given that some LRAs will be using a UCAP system (potentially different systems) and others will not and will continue to use the existing ICAP methodology, in order to ensure that the resources and the LSEs procuring the RA are treated equally and fairly care will need to be taken in designing the rules and counting techniques. These rules may extend into other RA areas, such as the Planning Reserve Margin. LRAs should demonstrate that their PRM is appropriate for whether they are using a UCAP concept or not. Further, care must be taken to ensure that unavailability penalties, both the CAISO’s RAAIM and any LRA specific impacts such as to UCAP, are treating resources similarly whether they are supporting a UCAP LSE or a non-UCAP LSE.  

SCE supports appropriately designed incentives for RA resources to be available when needed. However, implementation of UCAP fundamentally changes the RA framework because historical resource unavailability will already have a direct economic consequence through reduced future RA accreditation. CAISO should therefore demonstrate that its proposed RAAIM framework provides an incremental reliability incentive that is not already adequately reflected through UCAP.

Where the same outage both results in a contemporaneous RAAIM charge and subsequently reduces the resource's UCAP accreditation, CAISO should evaluate the combined economic consequences and demonstrate that they are neither duplicative nor disproportionate.

SCE recommends that CAISO coordinate with the CPUC to evaluate UCAP and RAAIM as an integrated availability framework rather than independently calibrating each mechanism. As part of this coordination CAISO should analyze how the financial impacts of the RAAIM penalties and any UCAP financial consequences compare to the RAAIM only penalties for resources under an ICAP RA. This may be influenced by the amount of RA subject to RAAIM penalties; if the penalties are assessed on the amount of shown RA, the penalties would potentially be higher for ICAP RA which has a higher shown RA amount. This might offset the additional financial impact of the UCAP impact of the outage. As the discussion around the Constellation presentation demonstrated, there are still issues that need to be resolved concerning how the various RA quantities (MOO, RAAIM amount, NQC, PRM) can be determined for the resources under the various potential LRA requirements, which may include various potential UCAP mechanisms, ICAP mechanisms, and potential different counting and PRM amounts.

2. Please submit your organization's overall feedback on the second revised straw proposal that was posted on 10/2.

SCE is encouraged with the progress being made, but believes more work is required to ensure that all LSEs and resources are treated fairly under the CAISO’s RA and the various LRA RA mechanisms.

3. Please provide your organization's overall feedback on the discussion regarding the revised RAAIM and resource type application.

SCE generally agrees with the CASIO that RAAIM penalties should apply to most resources, but not for things that are beyond the resources’ control, such as outages due to renewable resources being unable to generate because of lack of sun or wind. SCE urges care be taken in drafting the specifics for each type of resource to assure that penalties apply only for outages that are under the control of the resource.

With respect to use limited resources, SCE requests CAISO clarify use-limited bidding requirements or circumstances in which an exemption may be granted under the revised RAAIM assessment criteria. SCE expects the ULPDT process and associated RAAIM exempt outages to continue under the new framework.

SCE also requests that CAISO clarify how legitimate operating constraints for hydro resources, including run-of-river hydro and open-loop pumped-storage resources, will be reflected under the revised RAAIM framework, particularly where shown RA exceeds the resource's physically and operationally available capability during a Tier event. These constraints may include available water and hydrologic conditions, licensing and environmental requirements, water-management obligations, pond or cascade limitations, and pumping availability. For open-loop pumped storage in particular, the ability to generate during a Tier event may depend on sufficient prior opportunities to pump and on CAISO dispatch in preceding hours. SCE does not believe a resource should incur RAAIM exposure where its inability to provide shown RA results from prior CAISO awards or dispatch, insufficient pumping opportunities, or other legitimate operating constraints outside the resource operator's control. CAISO should clarify how the quantity of hydro capacity subject to RAAIM will be determined under these circumstances, how these constraints will be reflected in applicable availability and MOO requirements, and confirm that appropriate use-limited and RAAIM-exempt outage treatment will remain available.

4. Please provide your organization's overall feedback on the discussion regarding the tier assessment.

SCE requests that CAISO establish appropriate upper and lower bounds for the Tier 1 non-availability rate. Because the proposed Tier 1 rate is based on the applicable day-ahead LMP, locational congestion could result in zero or negative prices at certain resource locations even during broader system stress conditions. For hydro resources in particular, sustained negative prices may result in water being spilled or bypassed rather than economically generating. SCE therefore requests that CAISO clarify how zero or negative day-ahead LMPs would be treated in determining the Tier 1 non-availability rate and consider establishing an appropriate floor and cap that preserve the intended availability incentive and relationship between Tier 1 and Tier 2. More specifically, SCE requests CAISO institute a cap and a floor for Tier 1. Even on grid emergency days, DA LMPs sometimes clear negative due to congestion at certain nodes. Without revisions, the current proposal implies certain SCs could receive payments for not being available during Tier 1 assessment hours. Additionally, DA LMPs may clear well above the $2,000 Tier 2 penalty price, sometimes even as high as $9,000 in some resource locations. SCE questions if it makes sense that a Tier 1 DA LMP penalty could be higher than the Tier 2 cap of $2,000.

5. Please provide your organization's overall feedback on the discussion regarding charges, payments, and bounded penalty exposure.

SCE supports the bounded penalty exposure, but wonders about the potential reduced incentives for availability, especially when the cap is effective. SCE asks the CAISO to provide information on the likelihood of there being enough Tier 1 and Tier 2 events within a month to allow the cap to become effective. The information provided shows 40 Tier 1 events over the last three years, with significant variation in the frequency per year. It further seems like each day of a Tier 1 had an average 5-6 hours alerting. Can the CAISO please provide additional information about how those days break down by month, information on potential Tier 2 events by month as well, and the day ahead prices during the hours of alerts? This information would allow stakeholders to determine the likelihood of the penalties hitting the reduced rate and cap.

SCE also encourages CAISO to consider the incentives for a resource to return to service after reaching the monthly penalty cap. While bounded penalty exposure provides greater certainty regarding potential financial exposure, once the cap is reached there may be a reduced incremental incentive under the penalty framework to restore availability. SCE requests that CAISO consider how the proposed design will continue to encourage timely return to service following a resource reaching its maximum penalty exposure.

6. Please provide your organization's overall feedback on the discussion regarding the bidding requirements.

SCE does not oppose proposed bidding requirements for Must Offer Obligation based on the revised straw proposal, however, as explained above in the answer to question 1, SCE believes that further discussion is necessary in the determination of the MOO, RAAIM amount, and RA counting under the various UCAP and ICAP mechanisms that different LRAs may adopt and use. This is necessary to ensure that the various LSEs and resources are treated fairly and equally regardless of which LRA’s rules the RA capacity is being considered under. The Constellation presentation and the discussion it engendered made clear that there are still issues about how shown RA, MOO amount, RAAIM amount and local RA amounts should be determined under UCAP and ICAP LRA mechanisms to ensure that the resources and the LSEs are treated fairly and the CAISO can count on the RA it is shown.

7. Please provide your organization's overall feedback on the discussion regarding substitution and outage definitions.

SCE appreciates CAISO’s efforts to clarify and improve the substitution and outage framework. However, SCE is concerned that eliminating the Short-Notice Opportunity Outage (SNOO) option and its associated RA availability, substitution, and RAAIM treatment represents a fundamental change to the existing framework. While CAISO has expressed concern that the current SNOO treatment may weaken incentives for resource owners to appropriately plan maintenance, SCE believes additional supporting information is needed to demonstrate that approved SNOOs have materially contributed to RA availability or system reliability concerns before eliminating the existing exemption.

SCE requests that CAISO provide historical data regarding the number of SNOOs requested and approved, the frequency with which an approved SNOO was subsequently needed for system reliability, and the circumstances under which those outages were allowed to proceed. The existing SNOO process provides CAISO with an opportunity to evaluate system conditions and approve, disapprove, defer, or cancel a request when reliability concerns exist. CAISO Procedure 3220, Section 3.4.2, also provides direction to Operations Planning for evaluating SNOO requests. If CAISO has identified deficiencies with the existing approval process, SCE believes CAISO should first consider whether clearer approval criteria or revisions to its Operations Planning procedures could address those concerns rather than eliminating the exemption altogether.

SCE also believes there is value in preserving a narrowly defined short-notice or Urgent SNOO option for situations in which maintenance is necessary to maintain resource reliability or requires timely attention to prevent equipment damage or failure, but the resource does not need to immediately take a forced outage. This flexibility allows resource owners to coordinate emerging maintenance needs with CAISO in advance, providing CAISO an opportunity to identify an appropriate outage window based on system conditions. Without that flexibility, resources facing deteriorating equipment conditions may have fewer incentives to coordinate maintenance in advance and could ultimately experience a forced outage with significantly less notice to CAISO.

Accordingly, SCE recommends that CAISO consider aligning the existing SNOO process with the proposed Opportunity/Urgent/Forced outage framework rather than eliminating the SNOO exemption entirely. Where CAISO determines that short-notice maintenance is justified and system conditions allow the outage to proceed without adversely affecting reliability, maintaining appropriate RA substitution and RAAIM relief provides a reasonable balance between reliability, maintenance needs, and RA performance incentives. Eliminating that relief regardless of system conditions could increase substitution and RAAIM costs without providing a corresponding reliability benefit and may reduce the incentive for resources to coordinate emerging maintenance issues with CAISO before they develop into forced outages.

As mentioned previously, SCE would also like clarification that certain forced outages utilized by Use Limited Resources (e.g. Monthly Use Limit Reached NOW, Ambient Not Due to Temp NOW) will continue to be RAAIM exempt without the need to provide substitution.

8. Please submit your organization's overall feedback on the Calpine Stakeholder Presentation on 10/9.

SCE believes that the Constellation presentation, and the discussion it engendered, raised significant issues about the various RA counting methodologies, such as NQC, MOO, RAAIM, etc., and how they relate. SCE agrees with Constellation’s recommendations that before implementation CAISO needs to provide a mapping between the various capacity countings for both UCAP and ICAP commitments, including how local RA is treated. This mapping must also recognize that there may be several potential UCAP methodologies.

9. Please submit your organization's overall feedback on the CESA Stakeholder Presentation on 10/23.

SCE agrees with CESA that storage resources in non-linearity regions which have been excluded from RA should not be subject to RAAIM penalties, but SCE doesn’t believe that the complete details about the amounts of RA that storage resources can provide, how their non-linearity is modeled and/or treated through outages or modeling have been fully developed. The work on this continues both in this RA stakeholder process and in the Storage stakeholder process. Questions still remain that must be addressed. In the examples presented the storage resource is capable of a Pmax of 100 MW, with a capacity of 400MW and an RA value of 90 MW. This makes sense, but the example shows the resource is bidding 100 MW but only being dispatched for 90 MW. If the resource is actually dispatched for the 100 MW it bid, in the fourth hour it would not be able to be dispatched to 90 MW for the entire hour since its state of charge would only be 100 and foldback starts at 40MW. Is this an outage that should be subject to RAAIM? The answer seems to be possibly because it is an outage that could have been prevented by the resource only bidding in 90 MW in each hour. A discussion of the relative benefits of bidding in the full 100MWs of the resource and providing that option to the CAISO as compared to ensuring that the resource can provide its full 90MW RA commitment for four hours needs to be conducted.

11. Please submit any additional feedback not already captured.

SCE requests additional clarity regarding tiered events and how resource availability would be recognized for longer-start resources or resources with longer minimum up times. For example, a resource that is only available during binding Tier 1 AAH hours may have limited ability to support the system, particularly where its start-up or minimum on time extends beyond the tiered assessment hours. In such cases, the resource would effectively be unavailable to the optimization model.

SCE recommends that CAISO clarify the operational and accounting treatment for resources that are physically available during tiered event hours, but unable to be dispatched by the market model. Conversely, the CAISO should clarify how penalties are applied if a resource is bid into the day ahead market but goes on forced outage after the market close (i.e. the resource was deemed available in the day ahead timeframe but is not physically available in real-time), as well as the opposite situation, a resource that was unavailable during the day-ahead market, but is able to complete repairs and is back online and available by the real time market.  How will the tiered assessments apply in these two situations?

1. Please submit your organization's overall feedback on the Resource Adequacy Modeling and Program Design (RAMPD) Track 2 meetings held on 10/9 and 10/23.

Terra-Gen does not have any immediate feedback on the Track 2 meetings held in October.

2. Please submit your organization's overall feedback on the second revised straw proposal that was posted on 10/2.

Terra-Gen appreciates CAISO’s continued work on the second revised straw proposal, including the added resource-type examples, the Tier 1 historical lookback, and the bounded penalty exposure. Terra-Gen's primary concern remains sequencing. The CPUC adopted UCAP for the 2028 RA year but is still working out how it applies to hybrids in Track 2, which we expect to wrap up in Q2 of 2027. The second revised straw proposal’s treatment of shown RA, must-offer obligations, and RAAIM exposure depends on how a resource’s capacity is counted under UCAP. Terra-Gen recommends that CAISO prioritize UCAP implementation, align with the CPUC’s definitions wherever possible, and defer the parts of the proposal that depend on unresolved UCAP questions, including hybrid assessment. 

Terra-Gen supports LSA’s recommendation to keep the VER RAAIM exemption, as the revised straw proposal doesn’t show a VER availability problem. Additionally, Terra-Gen is concerned about how a hybrid would be assessed in non-solar hours, how Tier 1 and Tier 2 revenue could be split once the bounded exposure limits apply, and how the new outage definitions would work alongside UCAP, including a planned-outage lead time that could approach three weeks. Terra-Gen supports the bounded exposure framework, WPTF’s request for a UCAP workshop with worked examples, and CESA’s recommendation that storage not be penalized for operating within a nonlinear SOC range. Our detailed comments are in the responses to the questions below. 

3. Please provide your organization's overall feedback on the discussion regarding the revised RAAIM and resource type application.

Terra-Gen supports the Large Solar Association's (LSA) comments on the Second Revised Straw Proposal and asks CAISO to give them full weight. Terra-Gen agrees that the proposal hasn’t shown a problem with VER availability. The data it relies on covers non-VERs and a 2022 heat wave. CAISO’s own reasons for the exemption in 2014 and 2015, that VER contracts already pay only for energy produced, and that a fair assessment is hard to build, aren’t addressed. The proposal describes the exemption as being about VERs’ limited ability to change output instead. Consistent with LSA's comments, Terra-Gen recommends CAISO remove its proposal to revoke the VER RAAIM exemption. 

Regarding the applicability of revised RAAIM to hybrids, Terra-Gen appreciates the CAISO's attempt to provide a dedicated section to fully discuss how hybrids are impacted. However, we maintain our prior comments that the CAISO should defer subjecting hybrids to RAAIM until the CPUC determines how UCAP will apply to this resource class. CAISO's revised straw proposal relies on assessing hybrids' day-ahead bids against its shown RA, but it's impossible for stakeholders to understand how this will practically work given the lack of clarity on how a UCAP counting framework will apply to hybrids which inevitably flows into its final shown RA for RAAIM assessments. The CPUC scoped UCAP-applicability into its current RA docket (Track 2) which we expect to be completed in Q2 of 2027. 

Even without the clarity desired, Terra-Gen is concerned with how the proposed assessment would function during non-solar hours (either overnight or in intervals when a VER produces below its forecast). Based on CAISO's straw proposal, hybrids are assessed using their day-ahead bids and outage status compared to its shown RA. During overnight hours, a hybrid's day-ahead bid is necessarily lower than its shown RA because a portion of its RA is attributable to a variable technology not expected to produce during those hours. But it is unclear if CAISO's straw proposal takes that into account. Stated differently, a scheduling coordinator would not be expected to submit an outage in the overnight hours to account for VER fuel insufficiency, but otherwise it remains unclear how to ensure that a hybrid is not inappropriately assessed RAAIM for a portion of its shown RA that is not able to generate for RAAIM-exempt reasons (i.e., lack of fuel sufficiency). This is similar to the concerns raised by LSA regarding a VER with a forecasted output lower than its derated capacity after accounting for any outages.

4. Please provide your organization's overall feedback on the discussion regarding the tier assessment.

Terra-Gen supports the Western Power Trading Forum's (WPTF) feedback on the tiered assessment. Terra-Gen finds that assessment hours must correspond to a demonstrated need for capacity, and that RAAIM penalties should ultimately not apply if forecasted system conditions fail to materialize.  

5. Please provide your organization's overall feedback on the discussion regarding charges, payments, and bounded penalty exposure.

Notwithstanding our other concerns, Terra-Gen supports bounded penalty exposure. EDAM is in its first year, and stakeholders have little insight into how often a Tier 2 event could trigger, meaning how often the CAISO balancing area will fail the RSE. A monthly cap on exposure is a needed financial backstop. 

Terra-Gen recommends that CAISO revisit how Tier 1 and Tier 2 revenue is allocated. Under the proposal, Tier 1 charges would be split between load and eligible available RA resources on a per-MW basis. For Tier 2, CAISO proposed the same structure but asked whether Tier 1 revenue should instead go to generators and Tier 2 revenue to load. We recommend that all Tier 1 and Tier 2 charges go to eligible RA generators, as existing RAAIM charges do. 

Our reason is that the proposal does not explain how allocation would work once a resource reaches the bounded exposure limit. Figure 19A illustrates the allocation but not that case. In Figure 21, a resource’s charges before the limits total about $2.5 million ($50,000 for Tier 1 and $2.4 million for Tier 2). After the reduced rate they total $783,600, and the hard cap brings the final charge to $734,000. There is no clear way to say how much of the $367,000 charged at the full rate, or of the final $734,000, came from each tier. The $367,000 could be $50,000 from Tier 1 and $317,000 from Tier 2, or it could be entirely Tier 2, with Tier 1 charges accruing at the reduced rate. Either way, the cutoff at the hard cap makes the final amount impossible to split. Sending all charges to eligible RA generators avoids the need for rules to divide full-rate, reduced-rate, and capped amounts between supply and load.

6. Please provide your organization's overall feedback on the discussion regarding the bidding requirements.

Terra-Gen supports WPTF’s feedback and recommendations for the CAISO to host a UCAP workshop to address issues like partial showings, accreditation methods, and high-priority exports. CAISO should provide several worked examples for a variety of resource types such that stakeholders understand how these issues may apply to resources with different bidding obligations.

7. Please provide your organization's overall feedback on the discussion regarding substitution and outage definitions.

The October 23 stakeholder meeting highlighted several challenges with the proposed outage definitions. Aligning with RC West would lengthen the lead time for submitting planned outages, which could approach three weeks, far longer than today. CAISO proposes a new opportunity outage type to replace short-notice opportunity outages, but the requirement to return to service within eight hours makes it hard to use. 

With 2028 as the first binding year of UCAP under the CPUC’s RA program, changing outage definitions now is likely to add confusion and implementation challenges. For example, the proposal treats urgent outages as equivalent to forced outages for availability purposes (revised straw proposal, p. 65), which could create a new misalignment with the CPUC’s UCAP definitions. CAISO has its own default QC methodology, but it should align with widely applicable LRA methods for determining a resource’s QC wherever possible. Further differences between CAISO’s and the CPUC’s UCAP methodologies would fragment the market.

8. Please submit your organization's overall feedback on the Calpine Stakeholder Presentation on 10/9.

Calpine's presentation provided stakeholders another key component of CAISO's UCAP implementation that must be prioritized for resolution. Following our feedback above, Terra-Gen believes that these UCAP implementation questions are threshold issues that must be prioritized in the near-term to ensure that CAISO's systems are ready in 2028 to work constructively with a UCAP system. Calpine's presentation makes a compelling case that there exists the potential for implementation misalignments, particularly when one resource is shown under different counting methodologies, and that CAISO will need to rethink how best to work with a new way of counting forward system RA values. Accordingly, CAISO should include the issues raised by Calpine in a follow up workshop to further discuss UCAP implementation.

9. Please submit your organization's overall feedback on the CESA Stakeholder Presentation on 10/23.

Terra-Gen appreciates CESA's attempt to describe the various challenges with operating storage plants given known characteristics (i.e., non-linearity) and the implications for resource adequacy contracting, penalties, and performance obligations.  

Terra-Gen is aligned with the general policy principles as described by CESA, and CESA's proffered policy recommendations in the interim while a modeled market solution is implemented to manage the operational constraints from non-linearity. Terra-Gen agrees with CESA that storage should not be penalized for operations that occur within the SOC where a facility experiences non-linearity. As documented in the storage design and modeling working group, nonlinearity will be managed once the needed market model updates have occurred. In the meantime, this appears to be a clear-cut example where SCs should be able to use the "Technical limitations not in market model" NOW code to appropriately reflect the operational realities without encumbering various RAAIM or potential UCAP penalties.

11. Please submit any additional feedback not already captured.

1. Please submit your organization's overall feedback on the Resource Adequacy Modeling and Program Design (RAMPD) Track 2 meetings held on 10/9 and 10/23.

Western Area Power Administration (WAPA) is a federal agency responsible for marketing hydropower generated by the federal Central Valley Project (CVP) to meet its statutory responsibilities to serve project-use energy pumping requirements and market available hydropower generation under its Power Marketing Plan to preference power allottees.  In Northern California, WAPA serves load in both the Balancing Authority of Northern California and the CAISO.  WAPA delivers its generation from many large and small hydro facilities of the CVP to its loads.  WAPA owns, operates and maintains an extensive high voltage transmission network extending to the load center of Northern California.

WAPA appreciates the opportunity to provide comments on the CAISO’s second revised straw proposal on Resource Adequacy Modeling & Program Design Track 2 –RAAIM Reform. CVP generators plan to participate in the Extended Day-Ahead Market (EDAM) after Balancing Authority of Northern California (BANC) joins EDAM in October 2027. For CVP generators in BANC to support generic Resource Adequacy (RA) imports to its power customers in the CAISO Balancing Authority Area (BAA), RA obligations of Import Resources must be reassigned to individual CVP generators according to the current EDAM GAP-tie design. WAPA has been engaged in this stakeholder process to ensure that CAISO’s proposal enables CVP generators to efficiently and effectively provide Resource Adequacy to its power customers through EDAM participation.

WAPA provided comments on the Straw Proposal and the Revised Straw Proposal. WAPA appreciated CAISO staff’s willingness and efforts in working with stakeholders to understand the challenges that stakeholders face in Resource Adequacy. Many issues raised by WAPA remain unresolved. WAPA respectfully requests CAISO again to address WAPA’s concerns and suggestions.

2. Please submit your organization's overall feedback on the second revised straw proposal that was posted on 10/2.

The second revised straw proposal introduced a new MOO requirement that deviated from the simple RA showing. WAPA is concerned that this new formula may force hydro generation resources to violate its water operation constraints. How is “Deliverable portion” determined for a hydro generation resource?

If a resource provides more capacity than its RA showing, the additional capacity above RA showing should be recognized as RA capacity. To require resources bid more than RA showing and at the same time not to recognize the additional RA in RAAIM assessment can lead to phantom RA deficiency and unnecessary RA cost to the market participants.

3. Please provide your organization's overall feedback on the discussion regarding the revised RAAIM and resource type application.

WAPA continues to support RAAIM based on RA showing for dispatchable hydro generation resources.

4. Please provide your organization's overall feedback on the discussion regarding the tier assessment.

No comments

5. Please provide your organization's overall feedback on the discussion regarding charges, payments, and bounded penalty exposure.

Federal entities are exempt from penalties under the CAISO tariff due to principles of Federalism, Sovereign Immunity, and the Supremacy Clause of the Constitution.  Additionally, the Anti-Deficiency Act prohibits the government from entering agreements where the government’s liability is indefinite or undetermined. This reflected in the CAISO tariff, Section 22.9(a), which states that "No person or federal entity shall incur any liability by failing to comply with a CAISO Tariff provision that is inapplicable to it by reason of being inconsistent with any federal statutes, regulations, or orders lawfully promulgated thereunder..." WAPA as a federal entity, is exempt from penalties under the CAISO tariff, including those related to RAAIM. Accordingly, without a sufficient interest in the matter, WAPA respectfully declines to comment on the nature and character of CAISO’s penalty structure. 

6. Please provide your organization's overall feedback on the discussion regarding the bidding requirements.

WAPA believes the RA MOO quantity should be based on contracted capacity. The contracted capacity is limited by UCAP/NQC according to the LRA’s determination. CAISO should not demand MOO capacity to be greater than the RA showing. CVP generators cannot offer the full capacity to CAISO because of water limitations. See comments on Item 2.

7. Please provide your organization's overall feedback on the discussion regarding substitution and outage definitions.

WAPA has significant amount of transmission ownership rights (TOR) that enable WAPA to import and wheel power from the Pacific Northwest to CAISO BAA. WAPA requests that CAISO enable RA imports supported by a chain of ETC/TOR schedules to provide RA to CAISO BAA by system resource reassignment and substitution.

8. Please submit your organization's overall feedback on the Calpine Stakeholder Presentation on 10/9.

No comments.

9. Please submit your organization's overall feedback on the CESA Stakeholder Presentation on 10/23.

No comments.

11. Please submit any additional feedback not already captured.

WAPA requests that CAISO allow a portfolio of CVP generators to support the RA imports to CAISO BAA. CVP has a system of reservoirs and generators that change their output frequently to maintain space in the regulating reservoirs while the total volume of water that needs to be moved may not change over the day. In other words, the total amount of energy (MWh) generated by all generators may not change even though the individual generator schedules may change hour by hour. Although the currently proposed EDAM Gap-tie RA reassignment approach requires each intertie resource showing RA to be reassigned to individual generators, CVP generators as Use-Limited and Conditionally Available hydro generation resources are not subject to automatic energy bid generation. To allow a portfolio of CVP generators to support RA imports, CAISO only needs to add one rule to check the sum of RA provisions by the portfolio of CVP generators against the sum of MOO of the CVP generators. This simple addition can prevent unnecessary outage submission and substitution busy work that creates no reliability benefit to CAISO. WAPA’s proposal will allow CAISO system to recognize all CVP capacity and mitigate potential phantom RA shortage.

1. Please submit your organization's overall feedback on the Resource Adequacy Modeling and Program Design (RAMPD) Track 2 meetings held on 10/9 and 10/23.

The Western Power Trading Forum (WPTF) supports efforts to strengthen resource adequacy (RA) incentives and establish workable maintenance outage rules. However, CAISO has not yet provided the information stakeholders need to assess the combined financial and operational consequences of its proposals. WPTF is concerned that the initiative is moving toward policy decisions before fundamental questions have been resolved.

A particular priority is the implementation of unforced capacity (UCAP). Commercial activity is already underway and is expected to accelerate in early 2027, making continued uncertainty increasingly difficult to manage. WPTF requests a CAISO-led workshop, with participation from the relevant CAISO teams and local regulatory authorities (LRAs), to work through accreditation, RA showings, bidding obligations, availability assessments, and treatment of residual capacity using practical examples. Stakeholders should then have an opportunity to provide written comments. Questions raised in July and October need to be resolved before the rules are finalized and market participants enter into binding commercial commitments.

2. Please submit your organization's overall feedback on the second revised straw proposal that was posted on 10/2.

Although the October 2 Second Revised Straw Proposal provides additional detail and introduces welcome monthly limits on penalty exposure, it does not address WPTF’s principal concern: CAISO has not demonstrated that the proposed changes would produce a meaningful improvement in resource availability commensurate with their costs and commercial risks. Stakeholders need supporting analysis, not simply an assertion that higher penalties will improve performance.

WPTF continues to support a capacity-based Resource Adequacy Availability Incentive Mechanism (RAAIM) adapted to the UCAP quantity actually shown for RA, without penalizing resources a second time for forced-outage risk already reflected in accreditation. CAISO should evaluate that approach alongside the existing mechanism and its proposed event-based assessment, using historical availability data to compare incentives, opportunities for substitution, and net financial exposure. A reduction in aggregate collections, by itself, does not establish that the revised mechanism is better designed.

The analysis should also recognize that bidding failures, physical outages, barriers to substitution, and procurement deficiencies are different problems that call for different solutions. Increasing penalties cannot create replacement supply or remove eligibility, contracting, and transaction barriers.

3. Please provide your organization's overall feedback on the discussion regarding the revised RAAIM and resource type application.

WPTF supports a clear distinction between a resource’s operational must-offer obligation (MOO) and the quantity of RA capacity actually shown and subject to availability assessment. UCAP may result in a MOO that exceeds the shown RA quantity, but that should not expand the MW exposed to RAAIM charges or substitution requirements beyond the RA commitment. This limit on assessed MW is separate from any dollar cap on penalties, and resources would remain responsible for complying with their full operational MOO.

Before applying RAAIM to additional resource types, CAISO should identify the specific availability obligation and demonstrate the associated reliability benefit. The assessment must distinguish equipment failures from limitations associated with weather, hydrology, dispatch, and operating characteristics that may already be reflected in accreditation. For storage and hybrid resources in particular, CAISO needs to reconcile bidding rules, outage-card treatment, shared interconnection limits, and market instructions with its Storage Design and Modeling initiative. Any separate assessment of state of charge or energy performance should be developed through its own stakeholder review.

4. Please provide your organization's overall feedback on the discussion regarding the tier assessment.

WPTF does not support the proposed two-tier assessment in its current form. Assessment hours should correspond to a demonstrated need for capacity, and penalties should be tied to a resource’s failure to meet the availability obligation applicable to its RA showing. Neither connection has been adequately established.

A threshold problem is that stakeholders cannot reproduce CAISO’s historical alerts or reliably backcast the proposed Tier 1 hours using the published formula and available data. In October 21 correspondence, CAISO acknowledged that certain inputs were not public and that using a zero uncertainty adder would not reproduce its results. Introducing an assumed adder does not resolve this discrepancy. Implementation training and future alert notices are useful, but they are no substitute for an independently verifiable analysis of the proposal now under consideration.

CAISO should therefore provide machine-readable hourly data underlying Figure 15 and the proposed assessment, including forecast issuance times, demand, reserves, available RA, and the uncertainty adder at each forecast horizon. It should also document how the calculations treat RA credits, outages, derates, and substitution, explain the calibration of the adder, and identify differences between the historical analysis and the proposed methodology.

Figure 15 compounds the difficulty by presenting alert instances and unique dates rather than unique assessment hours. Because an hour confirmed at T−3, T−2, or T−1 would remain subject to assessment even if the forecast later improves, reconstructing the results using only T−1 data can understate exposure. CAISO should identify the status of each hour at every forecast issuance, the rules for retaining confirmed hours, and the final set of assessed hours. A worked example should address revisions, missing data, time zones, and daylight-saving transitions.

WPTF supports advance notice of potential assessment hours and does not believe a minimum number of hours is necessary. However, an advance alert should not automatically trigger an assessment if the stressed system condition never materializes. CAISO should also explain the interaction between the uncertainty adder and Imbalance Reserves Up to avoid counting the same need twice. Reliability Capacity Up (RCU) warrants consideration as a capacity-based trigger and price reference. If low RCU prices indicate limited incremental capacity need, CAISO should not substitute a higher energy-price benchmark without an independent justification.

The proposed Tier 2 assessment raises a related cost-causation concern. An Extended Day-Ahead Market (EDAM) Resource Sufficiency Evaluation (RSE) failure can result from procurement, forecasting, imports, or transfer constraints, not necessarily from unavailable shown RA. Before imposing a RAAIM charge, CAISO should establish whether the resource’s failure to meet its availability obligation contributed to the RSE deficiency. Restricting Tier 2 to deficient hours and preventing overlapping Tier 1 charges are appropriate safeguards, but neither demonstrates causation or justifies recovering RSE-related costs through RAAIM.

5. Please provide your organization's overall feedback on the discussion regarding charges, payments, and bounded penalty exposure.

WPTF continues to oppose using day-ahead locational marginal prices (LMPs) for Tier 1 assessments and a fixed $2,000/MWh rate for Tier 2. The difference between an external energy hub price and a CAISO energy price is not an observed price for replacement RA capacity, a limitation CAISO recognizes in the October 2 proposal (pp. 35–36). CAISO needs to explain why either benchmark is appropriate for an RA availability obligation and compare these rates with a capacity-based alternative.

The proposed monthly exposure limits are a constructive addition, but caps do not validate the underlying penalty rates or the maximum potential charge. CAISO has not adequately justified monthly cap levels that reach 100% of Capacity Procurement Mechanism (CPM) compensation before reduced penalty rates apply and ultimately reach 200% of CPM compensation. Without supporting analysis, these levels appear potentially punitive relative to the underlying RA availability obligation and the supplier's practical ability to mitigate exposure. CAISO should evaluate lower limits and explain why its selected levels are proportionate. A useful availability incentive should also give suppliers a reasonable understanding of the consequences of their operational decisions. CAISO should identify the actions a supplier could realistically take to avoid an assessment, particularly following an immediate forced outage when substitution cannot be arranged in advance. The analysis should examine event-level and annual limits, as well as transitional treatment for contracts executed under the existing rules.

To evaluate actual exposure, stakeholders need a backcast that reflects RA showings, bids and schedules, outages and derates, substitution, exemptions, resource-specific availability obligations, applicable prices, and Tier 2 deficiency hours. Public outage reports are not sufficient to determine whether shown RA was unavailable or what settlement liability would result. CAISO should also specify how it would handle overlapping tiers, changes in monthly showings, partial-month commitments, the MW basis for monthly limits, and subsequent settlement corrections.

The results should combine both tiers and report gross charges, the effect of reduced-rate stages and hard caps, incentive payments, and net exposure. They should show how results vary with the length of an event and recurring events across multiple months. Because the tiers share monthly limits, a Tier 1-only analysis cannot establish total exposure. CAISO can protect confidentiality through anonymized results while allowing individual participants to validate the inputs associated with their own resources.

Finally, WPTF supports retaining a self-funded availability incentive. Any proposal to allocate collections to load should be supported by a cost-causation rationale and assessed for its effect on the intended incentive, particularly where an RSE deficiency may have resulted from inadequate procurement rather than a supplier’s failure to provide shown RA.

6. Please provide your organization's overall feedback on the discussion regarding the bidding requirements.

WPTF supports using deliverable capability rather than unconstrained Pmax in the proportional MOO calculation (pp. 48–49). However, the proposed treatment of resources shown under different LRA accreditation methodologies could distort the resulting commitment. Adding those showings together and dividing by one net qualifying capacity (NQC) value, selected as the highest LRA value, does not necessarily produce a consistent measure of the resource’s physical obligation. CAISO should preserve the accreditation basis of each showing and convert the commitments to comparable resource shares before aggregating them. CAISO should also assess whether supply-plan changes are needed to communicate the accreditation basis of each showing.

These conversion rules should be a central topic of the requested UCAP workshop. The discussion needs to address partial showings, mixed accreditation methodologies, partial deliverability, outages and substitution, local and flexible RA, Capacity Procurement Mechanism (CPM) obligations, high-priority exports, external RSE support, and transitional-measures settlements. For each situation, CAISO should explain the capacity counted and shown, the resulting bidding and availability obligations, and the capacity remaining available for other commitments. Participants also need access to the relevant capability data and a means to validate their results.

The same principles apply to local requirements and exports: UCAP-based showings must be expressed in compatible units when determining the associated RA obligations. Local reliability studies should reflect a resource’s expected output up to its maximum deliverable physical capability, rather than treating NQC as a limit on physical capability. Export capability should reflect the share of physical capability committed to CAISO RA, actual outages, and applicable export conditions. The tariff, Business Practice Manuals (BPMs), and Scheduling Infrastructure and Business Rules (SIBR) must implement these distinctions consistently. These are policy choices with commercial consequences and should be settled before implementation.

7. Please provide your organization's overall feedback on the discussion regarding substitution and outage definitions.

WPTF believes changes to general outage definitions, reporting deadlines, and coordination requirements should be addressed in a separate, broader stakeholder initiative. These provisions are not limited to CAISO RA resources. Tariff Section 9.3.2 imposes maintenance-approval requirements on Participating Generators and CAISO Controlled Grid facilities regardless of RA status. Sections 33.9.2 and 29.9(e) also apply selected Section 9 reporting provisions to EDAM and Western Energy Imbalance Market (WEIM) participants, including the treatment of short-notice maintenance requests as forced outages. Regional maintenance-approval responsibilities remain assigned under Sections 33.9.1 and 29.9(b)–(c).

It would therefore be inappropriate to redesign generally applicable outage rules through an RA-focused initiative without directly engaging non-RA operators, EDAM and WEIM entities, Scheduling Coordinators, transmission owners and operators, and affected reliability coordinators. RAMPD can continue to address RA-specific substitution, accreditation, and financial incentives, with appropriate coordination between the two processes. Consistent with the governance discussion on page 63, CAISO should identify each affected tariff and BPM provision, the participants to whom it applies, any incorporation through Sections 29 or 33, and the applicable governance process. Alignment with RC West procedures does not, on its own, justify the proposed RA consequences.

WPTF supports improved visibility through the proposed substitution platform, but visibility into available offers is only one part of the problem. Suppliers must still be able to secure qualifying replacement capacity within the applicable timeframes, subject to credit, contracting, eligibility, and available-supply constraints. CAISO should evaluate the feasibility of completing the transaction, rather than treating the platform itself as a sufficient solution.

WPTF is particularly concerned by the proposed elimination of Short-Notice Opportunity Outages without comparable maintenance flexibility. The new opportunity-outage category would require substitution, a request submitted by the morning two days in advance, and an ability to return within eight hours in an emergency. The retained off-peak exemption requires eight days’ notice and limits the outage to specified hours (pp. 60–61). Neither alternative accommodates the same range of short-notice preventive maintenance. Moreover, an urgent outage would be treated as forced under both the revised RAAIM and CAISO’s default UCAP methodology, potentially creating consequences beyond the immediate availability assessment. CAISO should evaluate these effects with the CPUC and other LRAs before adopting the changes.

That review should compare the current and proposed deadlines, including how weekends and holidays affect compliance, and separate changes required for operational coordination from discretionary policy decisions. CAISO should also reclassify representative historical outages under the proposed rules to estimate the UCAP and RAAIM consequences and assess whether the changes could encourage operators to defer prudent preventive maintenance. Any historical reclassification would require appropriate transition provisions and an opportunity to correct the underlying records.

WPTF recommends retaining conditional maintenance without substitution when CAISO determines that system conditions permit the outage, with authority to cancel the approval if circumstances change. When the applicable reliability review determines that an opportunity outage can be accommodated, substitution should not be required merely because the planned-outage submission deadline has moved earlier. The proposed eight-hour emergency return requirement also deserves direct review with plant operators. Maintenance that can be safely scheduled may not be safely reversed within eight hours. CAISO should clarify when that condition would apply, including to off-peak outages, and consider workable alternatives or safeguards.

8. Please submit your organization's overall feedback on the Calpine Stakeholder Presentation on 10/9.

The October 9 Calpine examples, together with WPTF’s July presentation, illustrate why the UCAP conversion rules need to be resolved through the proposed implementation workshop. CAISO should clarify how contracts are denominated, how quantities are converted, and which system fields govern each obligation before participants make binding commitments. Capacity that remains physically deliverable and has not been committed should remain available for other permissible uses, with safeguards against double counting. A forward-looking forced-outage discount should not automatically be treated as a reduction in the resource’s physical operating capability.

9. Please submit your organization's overall feedback on the CESA Stakeholder Presentation on 10/23.

WPTF supports further consideration of CESA’s proposed interim exemption for nonlinear operating limitations, including use of the Technical Limitations Not In Market Model outage category. CAISO should define the eligibility criteria and ensure that limitations already captured in accreditation do not produce duplicative capacity reductions or availability penalties. The approach should distinguish expected nonlinear behavior from equipment failures and be coordinated with the Storage Design and Modeling initiative. An interim solution should not displace development of appropriate long-term market-model parameters.

11. Please submit any additional feedback not already captured.

Before requesting approval, CAISO should publish the data and analysis necessary to evaluate the proposed changes, resolve the outstanding policy issues, and circulate a revised proposal with meaningful time for stakeholder review. Promises to address details during implementation cannot replace a complete policy record. Once rules and technical specifications are final, participants will also need adequate time to update contracts, validate obligations, and make operational changes.

CAISO should also clarify the proposed suspension of Flexible RA-specific RAAIM while retaining Flexible RA showings and MOO requirements (p. 45). Stakeholders need to understand how long this transitional approach would remain in effect, the criteria for revisiting it, how UCAP would affect counting and compliance obligations, and the schedule for reviewing whether the separate Flexible RA product remains necessary. Any future performance mechanism should receive its own policy review.