BPM - CG CC 6637 IFM Bid Cost Recovery Tier2 Allocation

Settlements & Billing

BPM Configuration Guide: BPM - CG CC 6637 IFM Bid Cost Recovery Tier2 Allocation

CC 6637

Version 5.0b1 Settlements & Billing Version: 5.0b1 Configuration Guide for: BPM - CG CC 6637 IFM Bid Cost Recovery Tier2 Allocation Date: 06/01/1001/31/11

Table of Contents

1. Purpose of Document 3

2. Introduction 3 2.1 Background 3 2.2 Description 4

3. Charge Code Requirements 5 3.1 Business Rules 5 3.2 Predecessor Charge Codes 5 3.3 Successor Charge Codes 5 3.4 Inputs – External Systems 6 3.5 Inputs - Predecessor Charge Codes or Pre-calculations 6 3.6 CAISO Formula 7 3.7 Outputs 7

4. Charge Code Effective Date 8

ÓCAISO, 2018 Page 2 of 9 Settlements & Billing Version: 5.0b1 Configuration Guide for: BPM - CG CC 6637 IFM Bid Cost Recovery Tier2 Allocation Date: 06/01/1001/31/11

1. Purpose of Document

The purpose of this document is to capture the requirements and design specification for a SaMC Charge Code in one document.

2. Introduction

2.1 Background

Bid Cost Recovery (BCR) is the process by which the CAISO ensures Scheduling Coordinators (SCs) are able to recover Start Up Costs (SUC), Minimum Load Costs (MLC), Transition Costs (TC), and Energy Bid Costs. In order to recover SUC and MLC, a Generating Unit, Pumped-Storage Unit, or resource-specific System Resource must be committed by the CAISO. Likewise, the CAISO must commit a Multi-Stage Generating Resource in order for it to receive TC compensation. Bid Cost recovery for Energy and Ancillary Services (A/S) Bids applies to Bid Cost Recovery Eligible Resources in general (for example, Generating Units, Pumped-Storage Units, Proxy Demand Resources, and System Resources) scheduled or dispatched by CAISO independent of whether they are CAISO-committed or instead are self-committed.

For purposes of determining BCR eligibility, CAISO uses a concept called Commitment Period. A Commitment Period consists of the consecutive time periods within a Trading Day when a resource is on-line, synchronized to the grid, and available for dispatch. A Commitment Period is comprised of two distinct sub-types --- Self-Commitment Period and CAISO Commitment Period. The portion of a Commitment Period where a resource submits an Energy Self-Schedule or A/S self provision is called a Self-Commitment Period. A Self-Commitment Period may include time periods when a resource is not operating pursuant of an Energy Self-Schedule or A/S self-provision, but must be on due to Ramping Constraints, minimum up time, or minimum down time. Resources are not eligible for BCR of SUC, MLC or TC during Self-Commitment Periods, but are eligible for BCR of awarded Energy and A/S. The portion of a Commitment Period that is not a Self-Commitment Period is called CAISO Commitment Period. Resources are eligible to receive BCR for SUC, MLC, TC, awarded Energy and A/S during a CAISO Commitment Period. For each resource, the total SUC, MLC, TC, Bid Costs, and market revenues from IFM, RUC, and RTM are netted together for each Settlement Interval. If the difference between the total costs and the market revenues is positive in the relevant market, then the net amount represents a Shortfall. If the difference is negative in the relevant market, the net amount represents a Surplus. For each resource or MSS entity that has elected net settlement, the IFM, RUC, and RTM Shortfalls and Surpluses are then netted over all hours of a Trading Day. As a result, surpluses from any of the CAISO markets offset any shortfalls from the other markets over the entire Trading Day. If the net Trading Day amount is positive (a Shortfall), the Scheduling CoordinatorSC receives a BCR Uplift Payment equal to the net Trading Day amount.

While there is one Bid Cost Recovery payment per resource per day across all CAISO Markets, the methodology for allocation of IFM Bid Cost Uplift per Trading Hour occurs in two tiers. IFM Costs are first allocated in CC 6636 IFM Bid Cost Recovery Tier 1 Allocation based upon IFM Load Uplift Obligation, and any remaining costs are allocated pro rata to Measured Demand under CC 6637 IFM Bid Cost Recovery Tier 2 Allocation.

2.2 Description

For the first tier: (i) The Tier 1 rate is calculated. To determine the rate for a particular Trading Hour, the CAISO Hourly IFM Bid Cost Uplift amount (in $) is divided by the sum of: (a) IFM Load Uplift Obligation (over the CAISO Control Area). IFM Load Uplift Obligation is calculated as the IFM Scheduled Demand (Load plus Exports) in excess of the IFM Self-Scheduled Generation and IFM Imports, adjusted by any applicable Inter-SC Trades of IFM Load Uplift Obligations, where the excess Demand quantity is calculated over all Business Associates from CAISO-Committed BCR Eligible Resources in that Trading Hour; and IFM Virtual Demand Award uplift obligation (over the CAISO Control Area). The IFM Virtual Demand Award uplift obligation equates to the net Virtual Demand from which is subtracted the difference by which Measured Demand exceeds Physical Demand, if stated condition is true, where all Demand terms are calculated over all BA’s of the CAISO Control Area, with provision that the rate shall not exceed the ratio of the hourly Net IFM Bid Cost Uplift for the Trading Hour divided by the maximum of the sum of the hourly IFM Load Uplift Obligation for all Scheduling Coordinators in that Trading Hour, as specified in (i) a. above, or (b) the sum of all hourly Generation scheduled in the Day-Ahead Schedule and IFM upward AS Awards for all Scheduling Coordinators from CAISO- committed Bid Cost Recovery Eligible Resources in that Trading Hour; (ii) Each SC’s IFM Uplift allocation amount is calculated. To determine the SC’s IFM Uplift allocation amount, the Tier 1 rate is multiplied by the sum of: a. IFM Load Uplift Obligation for the SC, calculated as the Virtual Demand in excess of Virtual Supply for the SC; and b. the product of: i. IFM Virtual Demand Award uplift obligation (over the CAISO Control Area), as specified in (1) b. above; and ii. the ratio of the BA’s net Virtual Demand to the total of net Virtual Demand for all BAs where the Virtual Demand Award exceeds the Virtual Supply Award. In the second tier, Business Associates will be charged for an amount equal to any remaining CAISO Hourly Net IFM Bid Cost Uplift amount for the Trading Hour in proportion to the Business Associate’s Measured Demand.

For Tier-1, MSS SCs will be treated the same as non-MSS entities. For Tier-2, MSS entities that have elected to both not follow their Load and gross settlement, the allocation to the MSS entity will be in proportion to their Measured Demand. For MSS entities that have elected to either follow their Load or net Settlement, or both, the allocation will be in proportion to their MSS Aggregation Net Measured Demand. The CAISO Hourly IFM Bid Cost Uplift is allocated in two tiers as follows: (iii) In the first tier, the CAISO Hourly IFM Bid Cost Uplift amount is allocated to the Business Associates in proportion to their IFM Scheduled Demand (Load plus Exports) in excess of their IFM Self-Scheduled Generation and IFM Imports, adjusted by any applicable Inter-SC Trades of IFM Load Uplift Obligations, but with an IFM Bid Cost Uplift rate not exceeding the ratio of the CAISO Hourly Net IFM Bid Cost Uplift amount divided by the sum of all hourly Generation scheduled in the Day-Ahead Schedules and IFM Upward AS Awards for all Business Associates from CAISO-Committed BCR Eligible Resources in that Trading Hour. (iv) In the second tier, Business Associates will be charged for an amount equal to any remaining CAISO Hourly Net IFM Bid Cost Uplift amount for the Trading Hour in proportion to the Business Associate’s Measured Demand.

For Tier-1, MSS SCs will be treated the same as non-MSS entities. For Tier-2, MSS entities that have elected to both not follow their Load and gross settlement, the allocation to the MSS entity will be in proportion to their Measured Demand. For MSS entities that have elected to either follow their Load or net Settlement, or both, the allocation will be in proportion to their MSS Aggregation Net Measured Demand.

3. Charge Code Requirements

3.1 Business Rules

Bus Business Rule Req ID 1.0 The CAISO Total IFM BCR allocation amount is done in two tiers. The remaining CAISO IFM BCR allocation amount after the Tier 1 1.1 allocation is allocated in the Tier 2 if any. Tier 2 is allocated to every Business Associate proportional to its 1.2 Measured Demand for each Trading Hour. The Measured Demand is the sum of the metered CAISO Demand and 1.3 the Real-Time Interchange export schedules. If a MSS has elected Net Settlement or Load Following, the CC 6637 allocation shall be based on its Net MSS Measured Demand. Otherwise 1.3.1 (in the case of a gross-settled MSS), it shall be the same as for other Business Associates that are allocated based on Measured Demand. 1.3.2 The Measured Demand quantity excludes Energy provided by Business Associates and resources that comprise the Exceptions #6 exception set

Bus Business Rule Req ID as it is defined in the Measured Demand Over Control Area Configuration Guide. PTB Adjustment logic, of any kind, does not apply to this Charge Code. However, any PTB adjustments made to predecessor charge codes 1.4 must be included in the Tier 2 allocation to ensure neutrality is maintained.

3.2 Predecessor Charge Codes

Charge Code/ Pre-calc Name CC 6636 – IFM Bid Cost Recovery Tier 1 Allocation Pre-calc – Measured Demand Over Control Area

3.3 Successor Charge Codes

Charge Code/ Pre-calc Name None

3.4 Inputs – External Systems

Row # Variable Name Description

3.5 Inputs - Predecessor Charge Codes or Pre-calculations

Predecessor Charge Code/ Pre-calc Row # Variable Name Configuration CC6636 – IFM Bid Cost Recovery Tier 1 1 IFMBCRTier1Charge Bh Allocation CAISOHrlyTotalIFMUplift CC6636 – IFM Bid Cost Recovery Tier 1 2 Amount h Allocation CAISOTotalIFMLoadUplif CC6636 – IFM Bid Cost Recovery Tier 1 3 tObligation h Allocation

Predecessor Charge Code/ Pre-calc Row # Variable Name Configuration

CC6636 – IFM Bid Cost Recovery Tier 1 4 TotalIFMCapacity h Allocation

Pre-calc – Measured Demand Over Control Area. Hourly Measured Demand represented as negative value less applicable TOR quantities and Exemption BAHourlyMeasuredDem #6 (as defined in MD Over Control Area 5 andMinusRightsControlA Pre-calc) in which the Measured Demand reaQty_LFEx6 Bh quantity for Load Following MSS entities is the MSS Aggregation Net Measured Demand for Business Associate B and Trading Hour h. Pre-calc – Measured Demand Over Control Area. Total Hourly Measured Demand represented as negative value less applicable TOR quantities and Exemption CAISOTotalHourlyMeasu #6 (as defined in MD Over Control Area 6 redDemandMinusRights Pre-calc) in which the Measured Demand ControlAreaQty_LFEx6 h quantity for Load Following MSS entities is the MSS Aggregation Net Measured Demand for Business Associate B and Trading Hour h.

3.6 CAISO Formula The Tier 2 IFM BCR Charge is a follows:

IFMBCRTier2Charge Bh =

(-1) * BAHourlyMeasuredDemandMinusRightsControlAreaQty_LFEx6 Bh *

IFMBCRTier2UpliftRate h

3.6.1 Where IFMBCRTiew2UpliftRate h =

IFMBCRTier2AllocationAmount h / ((-1) * CAISOTotalHourlyMeasuredDemandMinusRightsControlAreaQty_LFEx6 h )

3.6.2 And IFMBCRTier2AllocationAmount h =

If TotalIFMCapacity h > CAISOTotalIFMLoadUpliftObligation h Then

IFMBCRTier2AllocationAmount h = CAISOHrlyTotalIFMUpliftAmount h -  B

IFMBCRTier1Charge Bh Else

IFMBCRTier2AllocationAmount h = 0

3.7 Outputs

Row Name Description # In addition to any outputs listed below, all inputs shall be included as outputs. The Tier 2 IFM Bid Cost Recovery Charge for 1 IFMBCRTier2Charge Bh Business Associate B and hour h. The Tier 2 IFM BCR 2 IFMBCRTier2UpliftRate h allocation rate for Trading Hour h. The Tier 2 amount 3 IFMBCRTier2AllocationAmount h allocated in Trading Hour h.

4. Charge Code Effective Date

Charge Code/ Document Effective Effective Version Version Start Date End Date Update Type Pre-calc Name CC 6637 – IFM Bid Cost Documentation 5.0 04/01/09 07/31/10 Recovery Tier 2 Edits Only Allocation CC 6637 – IFM Bid Cost Documentation 5.0a 08/01/10 11/14/10 Recovery Tier 2 Edits Only Allocation

Charge Code/ Document Effective Effective Version Version Start Date End Date Update Type Pre-calc Name CC 6637 – IFM Bid Cost Open01/31 Documentation 5.0b 11/15/10 Recovery Tier 2 /11 Edits Only Allocation CC 6637 – IFM Bid Cost Documentation 5.1 02/01/11 4/30/2014 Recovery Tier 2 Edits Only Allocation

ÓCAISO, 2018 Page 9 of 9