Dive Brief:

• Caliornia's grid operator wants broader authority to utilize reliability-must-run (RMR) agreements, and has asked the Federal Energy Regulatory Commission to approve tariff revisions that would give it the right to issue any dispatch notice for any product and service.
• The California ISO (CAISO), in a July 26 filing with FERC, said maintaining reliability on its "rapidly transforming system" could involve meeting flexible and system capacity needs with the RMR program, along with the local capacity needs the procurement more traditionally serves.
• The ISO filed its proposed tariff changes in April and federal regulators subsequently requested additional information, including an explanation of how the grid operator plans to determine whether a specific resource should be retained to meet system or flexible reliability needs under an RMR contract.

Dive Insight:

The growth of intermittent renewable generation has CAISO looking for new solutions to balance the grid, and when making RMR decisions, it proposes to consider "relative operating characteristics of the resource including dispatch ability, ramp rate, and load following capability."

The ISO told FERC in its initial filing that modernizing its retirement and backstop procurement provisions can help ensure that the necessary resources to maintain system reliability and integrate renewable resources "remain operational and that retirement requests are processed in a timely, orderly, and efficient manner that recognizes the significant business and financial decisions resource owners must make in deciding whether to retire or continue operating.

In its follow-up with federal regulators, the grid operator said it anticipates that local reliability needs in Local Capacity Areas "will generally drive any RMR designations, but the CAISO must be able to utilize its RMR authority to designate a retiring resource that the CAISO needs to comply with all Reliability Criteria."

System capacity needs refer to grid-wide requirements, while local capacity areas are subsets of regions defined by generation and transmission configurations.

The proposed changes will "significantly enhance the generating unit retirement process and overall RMR construct," CAISO said.

CAISO officials are now waiting on FERC to signal the next steps. They have asked the commission to issue an order by Sept. 23 to provide "certainty to market participants" before the annual resource adequacy showings in October and the 2020 Resource Adequacy Compliance Year.