BPA completes EIM Phase III policy process

As October drew to an end, BPA closed out a year-long exploration with customers and constituents of policy changes needed if Bonneville joins the Western Energy Imbalance Market operated by the California Independent System Operator.

This work is the third of five phases that BPA must progress through in its consideration to join the EIM in March 2022. BPA issued the EIM Phase III Decision Document on Oct. 30, capturing four distinct policy decisions.

“I am grateful that customers engaged throughout this effort and were active participants forging a path forward,” said Tom McDonald, acting chief operating officer for BPA. “We are committed to meeting our customers’ needs through this process and to preserving the great value that BPA brings to the Pacific Northwest.”

BPA issued a draft of its decision for customer comments on Aug. 14. Of the four policy decisions, only one significantly changed from its initial proposal. 

On the issue of nonfederal resources within BPA’s balancing authority participating in the EIM, Bonneville originally sought to delay nonfederal participation by six months. This would have enabled BPA to work through any complexities or issues that arose as it went live in the EIM and could allow for a smoother, subsequent entry by nonfederal parties. Several comments argued that nonfederal resources should not be kept out of the EIM for six months and that such a decision economically disadvantaged them. After consideration, BPA agreed to not delay nonfederal participation. Nonfederal parties will be allowed to apply to participate seven days before BPA starts parallel operations testing, which is estimated to be Nov. 24, 2021. If they have completed their registration process with the CAISO and the BPA application process, they will be able to participate at the go-live date. 

“We listened to customers. While six months would give us a time to resolve any last-minute issues that might arise with real-time operations in the EIM, this decision is a great example of BPA’s responsiveness to the needs of our ratepayers,” said McDonald. “Ultimately, if we join the EIM, we want that market to be successful for both BPA and our customers.”

Another policy discussed during the process was whether or not BPA should sub-allocate its resource sufficiency requirements to the different load-serving entities within its balancing authority area. BPA decided to not sub-allocate during the BP-22 rate period due to the lack of available data until BPA participates in the market. BPA may reevaluate this position in future rate periods based on data and practical experiences. 

BPA determined its current metering technical standards were sufficient for EIM use on the question of whether additional changes in metering requirements for generators or loads in its balancing authority area are needed to meet CAISO requirements. 

The fourth policy issue addressed in the Phase III document is moving EIM losses to an implementation issue. BPA will determine the loss factor or percentage to be used in EIM participation as an internal implementation matter. In addition, a new CAISO initiative, Real-Time Settlement Review, may make this a moot point. BPA will track and participate in the stakeholder process. 

“Both BPA staff and our customers rolled up their sleeves in these workshops and navigated through some pretty thorny issues,” said Rachel Dibble, director of market initiatives for BPA. “That work puts BPA in a good position for Phase IV and Phase V of our EIM decision plan. The collaboration with customers is a key to success and we plan to continue that engagement.”

The process explored five other policy considerations, but BPA determined the final decision on those policies would need to take place in either the upcoming tariff or rates proceedings or in future business practice changes.

“The work we accomplished with our customers across 27 workshops helps us to narrow our focus in our TC-22 and BP-22 cases and already begin to capture and reflect the concerns and needs of impacted parties,” Dibble said.

BPA began exploring the opportunity to join the EIM in July 2018. Bonneville issued the EIM Policy Record of Decision on whether to sign an implementation agreement with CAISO in September 2019. These two periods broadly capture Phase 1 and Phase 2 of BPA’s EIM decision. 

The TC-22 Terms and Conditions Tariff Proceeding and BP-22 Rate Case, anticipated to be complete in July 2021, form the fourth phase of BPA’s EIM decision process. In August 2021, BPA will begin the fifth and final phase that will review policy decisions and measure them against the participation principles previously agreed upon with customers in the EIM Policy ROD. At the end of Phase V, anticipated in September 2021, BPA will issue a final decision on whether it officially plans to enter the EIM as a full participant in March 2022.