Monday, April 23, 2018

CAISO Proposes TO-focused Black Start Procurement

By Robert Mullin

CAISO’s straw proposal for procuring black start resources would entail significant collaboration with affected transmission owners.

The draft plan also calls for costs to be allocated to the transmission owner area in which the black start resource is located, rather than across the entire CAISO footprint, as the ISO initially considered.

The ISO developed the proposal after identifying a need for additional black start resources in the transmission-constrained San Francisco Bay Area, which is served by Pacific Gas and Electric. (See CAISO Kicks off Initiative to Procure Black Start Resources.)

black start caiso

CAISO’s developed the black start procurement proposal to address a need to better prepare the transmission-constrained San Francisco area for system restoration. | Visit California

Black start resources serving the Bay Area are relatively far from population centers, unlike in Southern California, where capability is more evenly distributed near major load centers and can provide a more rapid restoration.

The ISO’s initiative represents the second phase of a 2013 undertaking to address NERC reliability standard EOP-005-2, which requires transmission operators to develop plans for system restoration following blackouts.

Under the proposal, CAISO and the TO would jointly develop specifications describing the requirements and selection criteria for the black start resource. Criteria could include generator minimum load, the unit’s proximity to critical loads, interconnection voltage, megawatt output and reactive power capabilities and type of unit.

Responses to the subsequent procurement would be turned over to the TO, which would evaluate them against the selection criteria and then submit a written recommendation to CAISO.

The ISO would then evaluate the TO’s recommendation and approve or reject the choice. Once a resource is approved, CAISO would begin the contracting process with both the black start resource owner and TO.

“The length of any contractual commitment by the ISO and the black start service provider carry different risks and benefits to each party,” CAISO said in its proposal. “A longer commitment term to the ISO will provide greater certainty of sufficient black start capability, but the ISO may also want reasonable exit provisions to address changes in circumstances.”

CAISO is considering basing compensation on a cost-of-service approach rather than providing a capacity-type payment sufficient to support an otherwise unprofitable generator in operation.

“These arrangements should be expected to provide some reasonable expectation of cost recovery and margin to the black start service provider, but predicated on the basis that the resource is providing an incremental service — as opposed to an RMR [reliability-must-run] arrangement,” the ISO said.

CAISO is also considering a standard five- or 10-year contract with a clause requiring one year’s notice for termination in order to provide sufficient time to obtain a replacement resource or reach an RMR agreement to keep the contracted resource in place until a replacement is in service.

Under the proposal, the ISO would allocate the black start contract costs to the host TO, which could then recover the expense from its customers through its reliability services rate schedule. The ISO will likely need to revise its own Tariff to include black start services in the schedule.

“CAISO recognizes this approach would allocate incremental black start costs to all transmission customers within a PTO [participating transmission owner] transmission access charge area. However, to the extent this capability assists in restoring the PTO’s system, all transmission customers will benefit from this restoration,” the ISO said.

CAISO has scheduled a Feb. 21 call to discuss the proposal and is asking stakeholders to submit comments by Feb. 28. ISO staff are specifically seeking input on the proposed contract terms.


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