APX CAISO Market Update - December 2011

Summary of APX MarketSuite^® Enhancements from 2011

Throughout 2011, APX clients have received regular enhancements to the APX MarketSuite^® application.  Below is a summary of the major enhancements made throughout 2011 for the CAISO region.  Look for continued enhancements to come in 2012.

APX MarketSuite^® Checkout Application:  The Checkout Application was enhanced to include RUC Capacity and RUC awards for registered Resource Adequacy (RA) imports; one of the new products released by the CAISO this year. The Checkout Application was also updated to offer read-only permission.  This will allows clients to provide their users read only access to just the Checkout Application, while blocking access to the Bid/Offer, Trade, and Resource Parameter input screens.

New Status Color (Blue):  New blue status color was added to the APX MarketSuite^®.  A blue status color means "advisory" and allows clients to more easily identify bids and/or offers that were modified by the ISO or trades where counter parties have not yet submitted their side of the transactions to the ISO.  

Convergence Bidding:  The APX MarketSuite^® scheduling and settlement platforms were upgraded to incorporate CAISO Convergence Bidding (Virtual Bids and Offers), which went live on February 1, 2011. 

ISO Allocation Reports (Allocation Detail, Allocation Summary, and Allocation Detail by Watermark):  These reports have been enhanced to include the following:

• (6) Resource Adequacy charge codes: 7872, 7874, 7876, 7880, 7882, and 7884 as of April 1, 2011.
• Updated allocation of charge codes 382 and 383 to account for both exports and Non-PTO load takeout points for the same interval.
• 6 Convergence Bidding charge codes 6013, 6053, 6473, 6703, 4520, and 4533 

APX Allocation Detail by Watermark Report:  This report was enhanced to include new columns for Billable Quantity (BQ) and Price.  The BQ and price have been added for all non-allocated/copied charge codes as well as BQ and price for CAISO MRTU charge code 6011 (which is not provided by the CAISO).

ISO Prices Report:  The ISO Prices Report was enhanced to include all Convergence Bidding takeout point locations.

ISO Statement Reports (Monthly by Day and Daily Interval by Day):  These reports were enhanced with the addition of a Source Group parameter.  This allows users to view their ISO Statements, Estimates, and/or Shadow data in the same report.  This is a great new feature that allows clients who subscribe to the APX Estimate and Shadow Settlement Service* to access all their data.

Meter Data Report:  This new report allows users to view and download meter data from OMAR and BAPI at its lowest granularity by location and channel.  This report is especially valuable for clients that want to programmatically pull resource level meter data and load it into their system.

Settlement by Trade or Publish Date Report:  This new report allows users to select and compare multiple statement versions (Initial, Recalcs) by Trade date as well as the ability to view data by Publish Date (i.e. what APX has harvested from the ISO or calculated (in the case of estimates or shadow in the last 1,2,3,4 or 5 business days).  By selecting multiple versions, users can view/download both daily and monthly amounts and compare versions of statements over time.

CAISO MRTU Settlement Timeline:  Changes were made to the APX MarketSuite^® to support the CAISO's MRTU Settlement Timeline project, which went live on October 1, 2011.

*If you would like information on how to subscribe to the APX Estimate and Shadow Settlement Service, please contact your Account Manager.

Update on NERC Security Initiatives

Listed below are the latest updates/changes on NERC Critical Cyber Asset Reliability and Compliance issues.

CIP V4 Security Standards: FERC issued a Notice of Proposed Ruling (NOPR) for the proposed CIP V4 security standards, which were submitted to FERC in February 2011.  All comments for the NOPR were due to FERC by November 15, 2011.  The main change in CIP V4 standards is the creation of the Bright-Line criteria for determining what would be considered a Critical Cyber Asset and removing the current subjective Risk Assessment method.   CIP V4 is considered a stop gap between the current CIP V3 and the new CIP V5 standards which has been released for industry review.  There is lobbying occurring to have FERC reject CIP V4 and remain on the CIP V3 standards until the CIP V5 standards is approved.  The main argument for not approving the CIP V4 standards is to avoid the multiple compliance changes between CIP V3, V4, and V5 along with the required tracking within a period of 3 years.   If CIP V4 is approved by FERC the possible implementation date would be either October 2012 or January 2013 which is dependent upon when FERC issues the ruling.

A link to the CIP V4 standards on the NERC website is noted below. This is the section for all approved Reliability Standards.  Expand the "Critical Infrastructure Protection (CIP)" section of the web page.  The V4 standards are listed with the other active CIP standards and will have a "-4" in the standard number.

http://www.nerc.com/page.php?cid=2|20

CIP V5 Security Standards:  CIP V5 was posted for industry review on November 7, 2011 and is expected to satisfy all of the FERC directives in Order 706 which was issued in 2008.  It continues the work started in CIP V4 with the Bright-Line criteria for Critical Cyber Asset identification, which will now be referenced as "BES Cyber Assets / System", consolidates common control requirements that are currently scattered in separate standard documents, creates two (2) new standard documents which expand on current standard requirements, and clarifies where the standards should be applied and the measurements to determine if they are being applied correctly.  Besides satisfying FERC Order 706 requirements one of the other major objectives of the CIP V5 standards is to reduce the number of Technical Feasibility Exception (TFE) filings that need to be created under the current CIP standards.  The current CIP V5 implementation schedule indicates it would take effect no earlier than January 2015. 

The current URL on the NERC website to CIP V5 is:

http://www.nerc.com/filez/standards/Project_2008-06_Cyber_Security_Version_5_CIP_Standards_.html 

FERC Culture of Compliance:   This is a concept outlined in multiple FERC orders between 2008 and 2010 which indicates that Registered Entities who have Internal Compliance Programs who continually review their processes, find deficiencies with their processes and data as it relates to the reliability of the Bulk Electric System (BES), and corrects those deficiencies will be in consideration for a reduction in any penalties.   FERC's goal is to get Registered Entities to develop robust compliance programs and continually review and improve the program elements without the fear of significant penalties.  This concept is now showing up in NERC presentations related to Reliability and CIP audits and it can be found in recently released Notice of Penalty (NOP) rulings and in an updated Compliance Enforcement Initiative outlined below.

NERC Compliance Enforcement Initiative:   NERC submitted to FERC at the end of September 2011 an initiative to change the current Compliance Enforcement and Monitoring Program (CEMP), which is titled Compliance Enforcement Initiative.  The main goal of the initiative is for Registered Entities to continually review their internal processes for deficiencies, record those deficiencies, and track the correction of the deficiencies.  NERC uses the term "Find, Fix, and Track" (FFT) within the submission and in documents released explaining the new program.  The main goal of the initiative is for Registered Entities (RE) to expand their Culture of Compliance.  As part of the program NERC is requiring Registered Entities to self-report their discovered deficiencies.  Based on the severity of the reported items to the stability of the BES (Bulk Electric System) and a Registered Entities compliance history, the self-report could be placed on a separate report to FERC and avoid penalties.  FERC has not issued a ruling on the NERC submission at the time this newsletter went to press.

EOP-004 and CIP-001 Merge:  NERC has released for industry comment EOP-004-2 (Event Reporting), which will replace EOP-004-1, CIP-001-1, and Compliance Application Notice (CAN) 0016.    EOP-004-2 outlines when and how disturbances that effect or could affect the reliability of the Bulk Electric System (BES) should be reported to NERC and the Regional Entities.  The concept of Sabotage has been removed with a more practical approach as it relates to the impact of the disturbance to the BES.  Balloting on the standard will happen between Dec 2nd and 12th 2011. 

The current URL on the NERC website to EOP-004-2 is:

http://www.nerc.com/filez/standards/Project2009-01_Disturbance_Sabotage_Reporting.html

If you have any questions on the above topics please contact your APX Account Manager.

CAISO Settlement Market Initiatives

APX Power Markets provides secure, web-based application functionality for settlement business processes related to ISO Market participation through its state-of-the-art platform, the APX MarketSuite.  With the APX MarketSuite^® and Software-as-a-Service (SaaS) model, market participants benefit from minimal initial investment and reduced total cost of ownership.

APX settlement services can be provided on a standalone basis or bundled with the APX scheduling service.

Intuitive, Cross Market Settlement Applications and Reports:  The APX MarketSuite includes a data warehouse and a powerful reporting server for fast and flexible interactive reporting. It provides web-viewable and downloadable reports to quickly understand and navigate through volumes of data. All APX standard reports are cross market and ahve a consistent look and feel.

APX Standard Reports                                                                                                
ISO Market Volumes                                    Statement Summary (Monthly by Day)*
ISO Meter Vs Schedule                                Statement Detail (Daily by Interval)*
ISO Dispatched Energy                                APX Allocation Summary (Monthly by Day)*
ISO Prices                                                   APX Allocation Detail (Daily by Interval)*
Meter Data                                                  Settlement Verification Control

*Includes ISO statements and APX estimates

Settlement Estimation:  APX calculates estimated settlement amounts on the trade date or the day after the trade date for the ISO charge types that can be estimated using alternative data.  This provides users next day insight into their settlement exposure.

Settlement Verification:  Use APX to verify your ISO settlement statements and identify disputes.  Simply run the report to see what APX calculations ran each day and to check for differences between the APX and ISO amounts, then use the APX Settlement Comparison application to drill down to see the cause of the discrepancy.

Settlement Allocation:  The APX MarketSuite^® provides allocations of charge types across locations.  The ISO has some charge types such as uplifts and administration fees that are not provided by the ISO at a location level.  APX utilizes the ISO charge methodology for allocating these charge types to specific locations.  The APX Allocation Summary and Detail reports can be used as a feedback tool to refine trading, scheduling, and forecasting processes.  The reports can also be used to support P&L reporting and as an input to bill downstream customers.

Custom Calculations:  Since our calculations are performed using a configurable calculations engine this allows APX the ability to quickly implement custom calculations for clients.

Integrated Solutions:  APX provides clients looking to implement scheduling and settlement data integration by providing machine-to-machine interfaces for uploading and downloading files and data via web services.

If you are interested in learning more please contact Cris Gallegos at cgallegos@apx.com or (408) 517-2154.

CAISO Market Initiatives - December Release

CAISO Flexible Ramping Constraint

The CAISO is implementing a new flexible ramping constraint in the market optimization for the real-time unit commitment or pre-dispatch process (RTPD), and the real time dispatch (RTD) process.  This new constraint is necessary to address certain reliability and operational issues observed in the ISO's operation of the grid.  The ISO has observed that in certain situations reserves and regulation service procured in the real-time and units committed for energy in the fifteen minute commitment process (RTPD) lack sufficient capability and flexibility to meet conditions in the five minute market interval during which conditions may have changed from the assumptions made during the prior procurement process.   The ISO proposes to compensate all resources that resolve the flexible ramping constraint at the shadow price of the constraint.  The flexible ramping constraint shadow price is the marginal unit's resource specific opportunity cost.  The cost for this flexible ramping constraint will be allocated to measured demand, which consists of metered load and exports.  The ISO's implementation date for this initiative is December 13, 2011. 

APX will be updating the APX MarketSuite^® in December (Release 25) to show which client SCIDs resolved the flexible ramping constraint during a given hour.  These "awards" will be viewable in the Post-Market view of the Checkout Application and the ISO Market Volumes report.

CAISO 2012 Grid Management Charge

Effective January 1, 2012, the CAISO will be making revisions to the GMC rate design in an effort to more closely align the cost allocation categories with the ISO's nodal market.  The ISO will be reducing the number of formula-rate charges from seven to three; the categories are: Market Services, System Operations, and Congestion Revenue Rights ("CRR") services.  The proposed GMC rate structure also includes five administrative fees; Bid Segment Fee, Inter SC Trade Fee, CRR Bid Fee, TOR Fee, and a SCID Fee.  The ISO is also allowing a limited time exemption from the system operations charge for certain SCs who are locked in to their power supply contracts for the next three years. 

The new charge codes are:

Charge Code      Charge/Fee Name                                           Rate                      

4560                       Market Services Charge                                 $0.0836                
4561                       Systems Operations Charge                          $0.2899                
4562                       CRR Services Charge                                    $0.0117                
4512                       Inter SC Trade Fee                                        $1.00                    
4515                       Bid Segment Fee                                          $0.005                  
4516                       CRR Bid Fee                                                $1.00                    
4563                       TOR Fee                                                      $0.27                    
4575                       SCID Monthly Fee                                         $1,000                  

APX will be revising the Shadow and Estimated Settlements service to calculate the GMC charge codes based on the new CAISO configuration by January 1, 2012.  APX will also be implementing new allocation algorithms for these charge codes to allocate the charge codes to the correct locations based on causality.

Link to the CAISO Grid Management Charge Stakeholder Process web page:

http://www.caiso.com/281a/281ac7f165ad0.html

For More Information on any of the items above;

Contact your Account Manager Cris Gallegos (408.517.2154) or Moises Melgoza (408.517.2129) for more information.  For APX Marketsuite support please contact our APX Operations Group at helpdesk@apx.com or (888.896.8629).