IESO Technical Panel Meeting 293 IESOTP 294-1

Transcription

1 Meeting 293 IESOTP Minutes of Meeting Date held: September 22, 2015 Time held: 9:00 am Location held: Teleconference Invited/Attended Company Name Attendance Status (A)ttended; (R)egrets Panel Members Shelley Cunningham Distributor Representative A (via teleconference) David Dent Natural Gas Representative A (via teleconference) Barbara Ellard IESO Representative A (via teleconference) Paul Huebener Financial Services Representative A (via teleconference) Brian Kelly Generator Representative A (via teleconference) Robert Lake Residential Consumer Rep. A (via teleconference) Martin Longlade Industrial Consumer Rep. A (via teleconference) Luis Marti Transmitter Representative A (via teleconference) Peter Rowles Commercial Consumer Rep. A (via teleconference) Yannick Vennes Retailers and Wholesalers Rep. A (via teleconference) Bill Wilbur Generator Representative A (via teleconference) Mark Wilson Chair A (via teleconference) Stakeholder Observers Tom Chapman IESO A (via teleconference) Jo Chung IESO A (via teleconference) Gordon Drake IESO A (via teleconference) Reena Goyal IESO A (via teleconference) Chaim Koff City of Toronto A (via teleconference) Jason Kwok IESO A (via teleconference) Herman Mo OPG A (via teleconference) Rebecca Short IESO A (via teleconference) Mark Tinkler Customized Energy Solutions A (via teleconference) Lynn Wizniak OPG A (via teleconference) Julien Wu Brookfield Power A (via teleconference) Nicholas Zsofcsin A (via teleconference) Secretariat Susan Harrison IESO A (via teleconference) John Rattray IESO R Scribe: Jo Chung. Please report any corrections, additions or deletions by to stakeholder.engagement@ieso.ca. October 15,

2 All meeting material is available on the IESO web site at: Panel.aspx Agenda Item 1: Administration Agenda: The agenda was approved. Minutes and Action Items: The Panel unanimously approved the draft TP 292 minutes. Agenda Item 2: Stakeholder Engagement Update The purpose of this discussion was to inform the Panel of updates on IESO stakeholder engagement initiatives and Stakeholder Advisory Committee (SAC) meetings: Stakeholder Advisory Committee: The agenda has been posted for the October 1st SAC meeting and meeting materials will follow this week on the SAC webpage. There are a number of memos that will be provided as update items including the NUG Framework Assessment Report that was recently filed with the Minister, details on the Market Manual development for the Ontario/Quebec capacity swap and a brief introduction on the stakeholder engagement initiative on the Real-time Generation Cost Guarantee Review that will commence soon. Other items on the agenda include input from the SAC members on (i) the IESO Corporate Performance Measures for the 2016 to 2018 Business Plan; (ii) the proposed principles for stakeholder engagement which have been revised to encompass the new IESO's merged mandate; and (iii) proposed recommendations on the Foundation Working Group that has been working on options to enhance the value of the data in the MDM/R. As an informational note, there will be an IESO operations update to include some of the details in the recent 18 month outlook and a speaker, John Godfrey, who is the chair of the Climate Action Group and will speak over the lunch hour on this initiative and what it means for the electricity sector in Ontario. Gas Electric Coordination Enhancements: The IESO is continuing discussions with stakeholders to clarify some of the logistics with a process to support this effort. A generator representative asked about the October 6 th session to talk about the DSO (dispatch scheduling optimizer) replacement, and whether there would be any discussions on potential market changes, or whether the design would be consistent with the current market design, noting the aggressive timelines for the DSO replacement. The IESO representative responded that the IESO will need to have discussions with stakeholders on market design separately from the DSO stakeholdering, and that the market initiatives stakeholdering will have a longer timeline. October 15,

3 The other generator representative asked whether the DSO replacement will have the flexibility to handle changes to the market design such as locational marginal pricing (LMP). The Chair responded that the DSO replacement is more of a refresh of the MIS software, and that early intentions are to not include any market design changes into this refresh of the market systems. This could change as the IESO begins discussions with stakeholders. The generator representative asked if the tools refresh could be delayed if it appears that design changes are the way to go. The Chair responded that the IESO could take a look at a change in the scope of the initiative, and whether it would be practical to implement any design changes within a reasonable timeframe. However, given the experience with the length of time it takes for design changes, the incorporation of any significant market changes in the refresh is unlikely. Agenda Item 3: Demand Response Auctions MR-00416: Demand Response Auction Non-Performance Charges & Settlement and Prudential Support IESO Support Staff Jo Chung & Jason Kwok Stakeholder Plan Stakeholder Engagement - Demand Response Auction The purpose of this discussion was to request that the Panel vote to recommend amendment proposals MR R03 & R04 to the IESO Board for approval (refer to IESOTP 293-3a, 3b, 3c and 3d). The industrial consumer representative expanded on the written comments from AMPCO related to the proposed non-performance section in section 4.7J of Chapter 9, noting two main issues: 1. The proposed rules give the IESO considerable latitude by subjecting demand response (DR) market participants to non-performance charges in accordance with the applicable market manual, which has yet to be finalized. Settlement equations with respect to energy and operating reserve are typically included in the market rules, not market manuals. 2. The proposed treatment of SEAL events (i.e. events related to the safety of any person, damage to equipment, or violation of applicable law) is restrictive or discriminatory compared to other market participants for like services. For example, there are no nonperformance charges assessed against a generator for SEAL events, and DR market participants are not being treated with the same parity as other participants in the realtime energy market. For the above reasons, the industrial consumer representative indicated he will not be supporting the proposed settlement amendments. IESO staff recapped the scenario of what non-performance charges would be levied in the case of a SEAL event (as indicated in the IESO response in the cover memo), noting that DR auctions have been structured to buy peak capacity in times of system need, for limited hours and locational conditions. The IESO is of the view that during times of system need, if a DR resource is unable to perform, it is appropriate to penalize them for their unavailability, which is comparable treatment to other jurisdictions with October 15,

4 respect to the failure to provide capacity. Regarding parity with other participants, generators for example may see reduced payments through their contracts when they are on outage during times they are expected to be producing energy. The industrial consumer representative asked whether a generator that has bid into the market and is dispatched-on according to their bid and subsequently cannot deliver due to a SEAL event, is subject to a penalty. IESO staff noted the importance of distinguishing between capacity and energy. The DR auctions will procure capacity, and it is expected that these capacity resources will be utilized in times of system stress for a very limited number of hours. If the IESO experiences these conditions and the resource is unable to perform then it is appropriate that the resource is penalized for their unavailability. The industrial consumer representative asked for a comparison with operating reserve (OR) for generators. IESO staff responded that OR provides contingency reserve, and if a generator is on forced outage, that it cannot offer OR because it is unavailable. The key difference is that generators have not been procured to provide OR and therefore have no obligation to do so, whereas DR market participants in DR auctions have been procured to provide capacity and therefore have an obligation to bid. The industrial consumer representative asked about the applicability of non-performance charges for events out of the control of a DR market participant. IESO staff responded that availability payments will be clawed back for a given hour, as indicated in the IESO s response in the cover memo. The industrial consumer representative was of the view that the definition of force majeure in Chapter 11 of the market rules could be qualified by another document referred to in section 7.7 of Chapter 1, and depending on what is in that document, that the definition of force majeure could be treated by the IESO such that an otherwise force majeure event would not apply. IESO legal commented that the definition of force majeure in the market rules is fulsome. Where there is an inconsistency between the market rules and market manuals, the market rules will prevail. The industrial consumer representative commented that there was also a concern about the overlap of a force majeure event and a SEAL event. IESO staff responded that if a SEAL event qualifies as a force majeure event, force majeure would apply. The industrial consumer representative asked whether safety issues would not constitute a reason for validating force majeure due to the content of the market manual. The industrial consumer representative had concerns that if the market manual is written so as to qualify or limit force majeure events, and if the market rule definition of force majeure allows market manual content to carve-out force majeure events, a NOD (notice of disagreement) would be unsuccessful. The industrial consumer representative noted what he saw as an increasing use by the IESO of amending market rules where the treatment of a particular situation is addressed in market October 15,

5 manuals, noting that the market manuals detailing non-performance charges has yet to be finalized. He was of the view that there was nothing to stop future market manual changes that are inconsistent with the intent of the market rules voted on by the Technical Panel, and that Panel members are being asked to vote on market rule amendments without having full information. The Chair responded that the concern that finalization of market manual content, the timing of which normally follows the market rule amendment process and is not reviewed by the Technical Panel has been raised in the past. The Chair noted however that the market manual content that was requested by APPRO was provided in the IESO s response in the cover memo. The Chair asked whether there would still be a concern if the IESO wrote the manual based on the written response. The industrial consumer representative confirmed there would still be a concern, and that what would eliminate the concern is the IESO ensuring the force majeure position on non-performance charges is in line with similar treatment for generator forced outages. IESO staff responded that, from an energy perspective, the treatment of SEAL events is the same no market participant is expected to follow dispatch under SEAL, and there are no energy penalties. The capacity charge that is levied when a DR market participant is unable to follow dispatch does not apply because, under the existing SEAL process, the resource s bids are removed by the participant from the system and the resource does not receive an energy schedule. The availability charge applies only for the hour in question. The industrial consumer representative asked why a market participant responding to a SEAL event, which is a legitimate response, should suffer a financial penalty. IESO staff responded that where force majeure criteria are met, there will be a one-for-one claw-back of the availability payment without a penalty. For a SEAL event that is not a force majeure event, the resource is treated as if it provided no availability for those impacted hours for settlement purposes. The industrial consumer representative asked if the market manual would contain a statement that a force majeure event would over-ride a SEAL event. IESO staff responded that the IESO is not trying to supersede or carve-out specific events from the definition of force majeure via market manual content. For a force majeure event, the availability charge s nonperformance factor will be set to 1.0, which results in a one-for-one claw-back of the availability payment. For a SEAL event that is not force majeure, the availability charge will be calculated using the applicable monthly non-performance factor, which ranges from 1.0 during the shoulder months to 2.0 during peak months. The Chair asked the other Panel members for their thoughts on the concerns raised by the industrial consumer representative. A distributor representative commented that she was fine with and supports the proposed market rules. For the concerns noted by the industrial consumer representative regarding market rules versus market manual content, she indicated she was not overly concerned as there are avenues for anybody who has issues with market manual content to pursue. October 15,

6 The natural gas representative indicated that he supports the recommendation for Board approval. As long as the final settlements equations are in the market manuals as discussed, he does not see any issues. The IESO representative indicated support for the recommendation for Board approval. The financial services representative indicated support for the recommendation for Board approval. He noted he did not like the fact that the market manual content has yet to be finalized, but assuming that the content comes out correctly and that stakeholders have the ability to review them, he was supportive. A generator representative indicated support for the package as currently structured, and suggested that stakeholders should closely watch the evolution of the market manuals to ensure it is consistent. If there is a problem with any market manual content, any issues should be brought back to the Technical Panel for discussion. The residential consumer representative indicated he had sympathy for the industrial consumer representative s positions, but was of the view that demand response was insurance for the grid and should be treated differently from other market participants such as generators. The representative supported the proposed market rules, but contingent on the IESO Board knowing that there may be a problem with the timing of when market manual content is drafted, which occurs after the rule amendment process. The industrial consumer representative indicated his views have been expressed, and in response to the other Panel members views, added that there is no formal mechanism for changes in market manuals to come back to the Technical Panel. The transmitter representative indicated he had sympathy for the industrial consumer representative s arguments, and added that being asked to make a decision on the market rules when market manual information is not ready based on a promise of intent of market manual content is not an ideal process. Aggressive market rule timelines have to be synchronized with other processes. However, the representative indicated support for the amendment packages as a whole. The commercial consumer representative indicated support for the recommendation for Board approval, noting his agreement with a lot of the comments made by Panel members. The retailers and wholesalers representative indicated support for the recommendation for Board approval, for similar reasons voiced by the other Panel members. October 15,

7 The other generator representative indicated he agreed with the industrial consumer representative s comments and issues with the existing process. Noting this, he indicated support for the recommendation for Board approval of the proposed market rules. The Chair indicated support for the recommendation for Board approval, and summarized that eleven Panel members were in favour of recommending the proposed market rule amendments (i.e. the settlements and non-performance package MR R03) for Board approval. The Chair indicated that the Board will be made well versed of the Panel s comments, drafts of which will be circulated to Panel members prior to submission to the Board. The Chair thanked the Panel for all their comments, effort and time spent on reviewing the demand response auction amendments. IESO Note: Subsequent to the Panel meeting, the IESO requested confirmation on the vote to recommend both rule packages - MR R03 & R04: Demand Response Auction Non- Performance Charges & Settlement and Prudential Support for IESO Board approval. The Panel confirmed that: MR R03 Non-Performance Charges and Settlement Vote: 11 in favour; 1 opposed (industrial consumer representative) MR R04 Demand Response Prudential Support - Vote: Unanimously in favour Agenda Item 6: Other Business None. Next Panel Meeting: Tuesday, December 1, 2015 Action Item Summary # Date Action Status Comments October 15,