ENERGY TRANSFER SCHEDULING IN ENERGY IMBALANCE MARKET

1/23/2015 ENERGY TRANSFER SCHEDULING IN ENERGY IMBALANCE MARKET 1. Introduction This technica paper describes the cacuation of Energy Transfer schedues between Baancing Authority Areas (BAAs) in the Energy Imbaance Market (EIM) Area from the optima EIM Transfer cacuated for each BAA in the EIM Area by the Rea-Time Unit Commitment (RTUC) and the Rea-Time Dispatch (RTD) appications. The methodoogy in this document is genera to account an arbitrary network configuration of EIM and non-s in the Fu Network Mode (FNM), such as the exampe shown beow: Non-EIM BAA CISO Non-EIM BAA Non-EIM BAA s may be interconnected with the CISO directy, through another, through a Non-, or a combination thereof. The EIM Entity for an may have made avaiabe transmission rights on a direct interconnection with the CISO, on a direct interconnection with another, or on an indirect interconnection with the CISO or another through one or more non-s. The red arrows in the exampe above iustrate such transmission rights. These transmission rights are essentia to the EIM Transfers for each BAA in the EIM Area as they both aow and constrain the optima exchange of imbaance energy among the BAAs in the EIM Area. PSTD/GAA Page 1 of 9

Energy Transfer Scheduing in EIM 1/23/2015 The EIM Transfer is an agebraic quantity (positive for export and negative for import) for the net energy exchange between a given BAA and the remaining BAAs in the EIM Area. The probem at hand is to determine the Energy Transfer schedues among the s and the CISO from the optima EIM Transfers of the BAAs in the EIM Area using the avaiabe transmission rights without vioating them. These Energy Transfer schedues can then be tagged to the reevant interties among the BAAs. 2. Energy Transfer System Resources Athough not necessary for impementation, it is convenient to define dedicated System Resources in each to anchor the Energy Transfer schedues from that BAA to other BAAs in the EIM Area for tracking, tagging, and settement. These Energy Transfer System Resources (ETSRs) are defined as aggregate resources at the Defaut Generation Aggregation Point (DGAP), which is an aggregation of a suppy resources in the BAA. Each ETSR is defined as either an import or an export resource, and it is associated with an EIM intertie with another, or a CISO intertie with the CISO. The associated intertie is one where the EIM Entity for the reevant has made transmission rights avaiabe for scheduing Energy Transfers from/to the other or the CISO. At east two ETSRs must be defined in a BAA for each Energy Transfer schedue with another BAA in the EIM Area: one for import, and the other for export. An aggregate intertie may be used if there are mutipe interties under the transmission rights that are made avaiabe. It may be necessary to define ETSRs for each intertie separatey if the transmission rights are different for each one of them. It may aso be necessary to define mutipe ETSRs for each Transmission Service Provider (TSP) whose transmission rights are made avaiabe. Finay, it may be necessary to define different ETSRs for static 15min Energy Transfer schedues and dynamic 5min Energy Transfer schedues. The appicabe transmission right imits can then be modeed as upper operating imits on the corresponding ETSRs. For Energy Transfer schedues between BAAs in the EIM Area, the reevant ETSRs in these BAAs must be associated in import-export pairs since an Energy Transfer schedue between the BAAs is an import to one and an export to the other. 3. Notation The foowing mathematica notation is used in this paper: i Node index. j, k BAA indexes; zero (0) is used for the CISO. Intertie or Energy Transfer schedue index; in the atter case, it is the corresponding ETSR index (ETSR pair for Energy Transfers between BAAs in the EIM Area). Accent denoting base schedue (RUC schedue for the ISO BAA). Accent denoting gross tagged or forecasted interchange schedue between non-eim BAAs. Accent denoting initia vaues from the ast AC Power Fow (ACPF) soution. PSTD/GAA CAISO Interna Use Ony Page 2 of 9

Energy Transfer Scheduing in EIM 1/23/2015 EIM Denotes incrementa vaues from the ast ACPF soution. For a Member of and The set of CISO and a s. BAA j The set of nodes in BAA j. G i The generation at node i. L i The oad at node i. I j,k, The import schedue into j from BAA k. E j,k, The export schedue from j to BAA k. D j The demand (oad pus osses) forecast in BAA j. Loss j The transmission oss in BAA j. LPF i The oss penaty factor at node i. LPF j,k, NSI j T j IT j,k, ET j,k, IT MAXj,k, ET MAXj,k, IT TRj,k, ET TRj,k, IT MAX15j,k, The oss penaty factor at the Scheduing Point for intertie schedue between BAA j in the EIM Area and non- k. The Net Schedued Interchange of BAA j; positive for export and negative for import. The EIM Transfer of j; positive for export and negative for import. The import Energy Transfer schedue of j from BAA k in the EIM Area. The export Energy Transfer schedue of j to BAA k in the EIM Area. The appicabe imit of the import Energy Transfer schedue of j from BAA k in the EIM Area. The appicabe imit of the export Energy Transfer schedue of j to BAA k in the EIM Area. The transmission right for the import Energy Transfer schedue of j from BAA k in the EIM Area. The transmission right of the export Energy Transfer schedue of j to BAA k in the EIM Area. The static imit for the import Energy Transfer schedue of j from BAA k in the EIM Area. ET MAX15j,k, The static imit of the export Energy Transfer schedue of j to BAA k in the EIM Area. IT MAX5j,k, The dynamic incrementa imit for the import Energy Transfer schedue of EIM BAA j from BAA k in the EIM Area. PSTD/GAA CAISO Interna Use Ony Page 3 of 9

Energy Transfer Scheduing in EIM 1/23/2015 ET MAX5j,k, C j,k The dynamic incrementa imit of the export Energy Transfer schedue of EIM BAA j to BAA k in the EIM Area. The transmission cost of the Energy Transfer scheduess of j from/to BAA k in the EIM Area. 4. Mathematica Formuation This section describes the reevant cacuations and mathematica formuae. 4.1. Base Schedues The base Energy Transfer schedues between s are submitted aong with the generation and intertie base schedues ahead of the market run. The base Energy Transfer schedues between s and the CISO are the corresponding intertie schedues from the Residua Unit Commitment (RUC) 1 and need not be submitted since they are known: IT j,0, = E 0,j, j EIM j > 0 ET j,0, = I 0,j, For accounting and vaidation purposes, base Energy Transfer schedues between s must be submitted for both BAAs and must be matching: IT j,k, = ET k,j, j, k EIM j k j, k > 0 It is assumed that the base Energy Transfer schedues are feasibe: 0 IT j,k, IT MAXj,k, j, k EIM j k j > 0 0 ET j,k, ET MAXj,k, For efficiency, there shoud not be both an import and an export base Energy Transfer schedue on a given intertie; at east one of them ought to be zero. The base EIM Transfer for each is the net of a base Energy Transfer schedues: T j = ET j,k, IT j,k, k EIM k j j EIM j > 0 The base EIM Transfer for the CISO is simpy the negative sum of the base EIM Transfers of a s: 1 T 0 = T j j EIM j>0 1 Currenty, RUC intertie schedues are not part of the base EIM Transfer because no scheduing is aowed from Scheduing Hubs in the Day-Ahead Market, and intertie schedues from existing CISO Scheduing Points in s are not considered EIM transactions; hence the base Energy Transfer schedues with the CISO and the base EIM Transfer for the CISO are a zero. PSTD/GAA CAISO Interna Use Ony Page 4 of 9

Energy Transfer Scheduing in EIM 1/23/2015 The base NSI for each is the net of the EIM Transfer and the submitted base intertie schedues with non-s: NSI j = T j + E j,k, I j,k, k EIM j EIM j > 0 The base demand in each is derived to achieve power baance with the submitted base generation schedues and the base NSI: D j = G i NSI j j EIM j > 0 The base oad in each is obtained initiay by reducing the base demand with an assumed initia transmission oss and then distributing it to the oad nodes in the BAA using Load Distribution Factors (LDFs); the base oad is then adjusted to absorb the oss error by an ACPF using distributed oad sack and Area Interchange Contro (AIC) to maintain the base NSI: D j = L i + Loss j j EIM j > 0 The base generation and oad for the CISO are initiaized at the RUC schedues; the CISO base oad is aso adjusted in the ACPF to account for generation and transmission outages occurred after RUC, and to absorb oss error as the CISO base NSI is maintained. The base oad for s is significant because it is used as a reference for imbaance energy settement; however, the base oad for the CISO is not important since for the CISO the reference for imbaance energy settement is the day-ahead schedues from the Integrated Forward Market (IFM); nevertheess, it is used in the ACPF to baance the CISO, and the FNM overa, for cacuating the power fows on transmission branches to identify any transmission imit vioations for the feasibiity test. For the same reason, base schedues are aso cacuated for non-s to mode unschedued oop fow through the EIM Area. The approach for the non- base schedues is somewhat different because they are not submitted; instead, the demand forecast and the tagged or forecasted interchange schedues with other non-s are used to suppement the information avaiabe for the s and the CISO. Specificay, the base NSI for non-s is derived as foows: NSI j = E j,k, I j,k, E k,j, I k,j, k EIM k j k EIM j EIM The base generation in each non- is derived as the sum of the demand forecast and the base NSI, and it is distributed to the generating resources in the BAA using Generation Distribution Factors (GDFs), renormaized for generation outages: G i = D j + NSI j j EIM The base oad in each non- is cacuated simiary to the base oad in s. The base NSI for the CISO is simpy the negative sum of the base NSIs of a BAAs in the FNM: PSTD/GAA CAISO Interna Use Ony Page 5 of 9

Energy Transfer Scheduing in EIM 1/23/2015 4.2. Optima NSI and EIM Transfers NSI 0 = NSI j The optima NSI for each BAA in the EIM Area, as cacuated by RTUC and RTD, is the resut of the optima dispatch of resources within the BAA: j>0 NSI j = (G i L i ) Loss j j EIM j > 0 Linearizing from the previous ACPF soution: NSI j = NSI j + NSI j NSI j = G i L i Loss j j EIM NSI j = ( G i L i ) LPF i Where the optima changes in generation and oad are adjusted for margina osses. Note that the oad is not dispatched uness there is an outage or it is a dispatchabe oad, e.g., a hydro pump. The optima EIM Transfer for each is derived from the optima NSI by subtracting the next export interchange with non-s: T j = NSI j E j,k, I j,k, k EIM Linearizing from the previous ACPF soution: j EIM j > 0 T j = T j + T j T j = NSI j E j,k, I j,k, k EIM T j = ( G i L i ) LPF i j EIM j > 0 E j,k, I j,k, LPF j,k, k EIM Note that margina oss contributions from network branches externa to the EIM Area are ignored in the Loss Penaty Factors; consequenty, the effect of intertie schedues between non- s and BAAs in the EIM Area on the EIM Area osses is the same as if the energy was generated or consumed at the EIM Area boundary. The optima EIM Transfer for the CISO is simpy the negative sum of the optima EIM Transfers of a s: T 0 = T j j EIM j>0 PSTD/GAA CAISO Interna Use Ony Page 6 of 9

Energy Transfer Scheduing in EIM 1/23/2015 The aggregate interchange dispatch at non- Scheduing Points/Hubs determines the NSI deviation (from the base NSI) of non-s and it is distributed to the generating resources of the reevant Generation Aggregation Point (GAP) using the appicabe GDFs: NSI j NSI j = E k,j, I k,j, k EIM = (G i G i) j EIM The NSI is maintained for each BAA in the ACPF by adjusting the oad using distributed oad sack and AIC. Therefore, the NSI, EIM Transfer, and generation for s in the ACPF soution are aways equa to the optima soution in the ast iteration. 4.3. Energy Transfer Schedues The EIM Transfer for each is distributed optimay to the appicabe Energy Transfer Schedues: Where: ET j,k, IT j,k, = T j j EIM j > 0 k EIM k j IT j,k, = ET k,j, j, k EIM j k j, k > 0 Without vioating the appicabe transmission right imits: 0 IT j,k, IT MAXj,k, j, k EIM j k j > 0 0 ET j,k, ET MAXj,k, For efficiency, there shoud not be both an import and an export Energy Transfer schedue on a given intertie; at east one of them shoud be zero. It is assumed that the transmission imits are symmetric: IT MAXj,k, = ET MAXk,j, j, k EIM j k j, k > 0 To carify, Energy Transfer schedues are variabes in the market optimization cacuated optimay subject to the above constraints. The base Energy Transfer schedue is incuded in the optima Energy Transfer schedue; in other words, the optima Energy Transfer schedue on any given intertie may competey back down a base Energy Transfer schedue and the energy transfer may reverse, resuting in efficient use of interconnecting transmission capacity. The CISO is used as a reference, hence no constraints are formuated for the CISO Energy Transfer or Energy Transfer schedues from CISO ETSRs. Furthermore, to reduce the probem dimensionaity, ony the export ETSRs are incuded in the probem formuation; their import ETSR counterparts can be eiminated; the exception is the CISO export ETSRs, for which their import ETSR counterparts in s are used instead, for reasons expained in 4.5. 4.4. Energy Transfer Schedue Limits Normay, Energy Transfer schedues are dynamic and the same ETSRs and transmission imits are used in both RTUC and RTD. However, if some Energy Transfer schedues must be differentiated between RTUC and RTD, static ETSRs wi be used for the 15min Energy PSTD/GAA CAISO Interna Use Ony Page 7 of 9

Energy Transfer Scheduing in EIM 1/23/2015 Transfer schedues in RTUC and dynamic ETSRs wi be used for the incrementa 5min Energy Transfer schedues in RTD. In this case, the base Energy Transfer schedue is incuded in the 15min Energy Transfer schedue, and the transmission imit for the 5min Energy Transfer schedue is zero in RTUC and incrementa (from the optima 15min Energy Transfer schedue) in RTD. For a uniform treatment of a ETSRs to simpify impementation, the appicabe Energy Transfer schedue imits in RTUC and RTD can be derived from the transmission right, static imit, and incrementa dynamic imit, as foows: RTUC: IT MAXj,k, = min IT TRj,k,, IT MAX15j,k, j, k EIM j k j > 0 ET MAXj,k, = min ET TRj,k,, ET MAX15j,k, RTD: IT MAXj,k, = min IT TRj,k,, IT j,k, + IT MAX5j,k, j, k EIM j k j > 0 ET MAXj,k, = min ET TRj,k,, ET j,k, + ET MAX5j,k, Where the Energy Transfer schedues used in the cacuation of the appicabe Energy Transfer schedue imit in RTD are the optima 15min Energy Transfer schedues from RTUC. With these generic formuae, the static imit is what is made avaiabe from the transmission right in RTUC, and the dynamic imit is additiona transmission capacity that can be used in RTD. If there is no distinction between static and dynamic Energy Transfer schedues, both static and dynamic imits shoud be equa to the transmission right to maximize transmission capacity use across RTUC and RTD. 4.5. Energy Transfer Tags The optima Energy Transfer schedues are assigned to the corresponding ETSRs and are tagged to the associated intertie using the corresponding ETSR identification. For static ETSRs, the tag is a static 15min tag that incudes the base Energy Transfer. For dynamic ETSRs, the tag is a dynamic 5min tag; if there is no distinction between static and dynamic Energy Transfers on a given intertie, there is no static tag and the base Energy Transfer schedue is incuded in the dynamic 5min tag. Because the Energy transfer schedues between two BAAs are dupicated as import and export counterparts seen from each BAA, by convention ony the export ETSRs wi be tagged between the two BAAs. As an exception, because the CAISO as a Market Operator is not authorized to submit tags, both import and export ETSRs at s with CISO interties wi be tagged. 4.6. Intertie Transmission Cost The distribution of the Energy Transfer for a BAA over the various interties to adjacent BAAs in the EIM Area is not infuenced by network impedance or transmission osses, and as such it does not represent actua power fows on these interties; it resembes the cassica probem of transferring goods from suppy centers to demand centers over a road network. The Energy Transfer schedue imits are scheduing imits and they resembe road throughput capacity. Physica intertie imits need to be enforced separatey to constrain actua power fows on the interties, incuding oop fow contributions from base schedues in non-s. In a probem ike that, there is often not a unique soution, particuary if many intertie scheduing imits are not binding, i.e., there may be mutipe ways to transfer the goods from the suppy centers to the demand centers without vioating any road constraints. To obtain a robust PSTD/GAA CAISO Interna Use Ony Page 8 of 9

Energy Transfer Scheduing in EIM 1/23/2015 and efficient soution without circuating Energy Transfer schedues, a sma nomina cost shoud be incuded in the objective function for each ETSR, as foows: min + C j,k ET j,k, + IT j,k, j,k EIM k j j>0 This cost resembes tos paid on the roads connecting the suppy and demand centers. Introducing this cost wi aso guarantee that Energy Transfer schedues between two BAAs in the EIM Area wi aways be unidirectiona, i.e., either the export or the import wi take vaue, but never both. This cost may utimatey refect appicabe wheeing or transmission access fees depending on agreed transmission pricing methods among the BAAs in the EIM Area. 4.7. Energy Transfer Economic Vaue In cacuating rea-time neutraity by BAA, an economic vaue is required for the Energy Transfer, which must be considered to baance the BAA. Currenty, the economic vaue is determined by pricing the EIM Transfer at the LMP of the metered end of the intertie used for tagging the reevant EIM Transfer schedue. With the introduction of mutipe interties (mutipe ETSRs) for a given BAA where the Energy Transfer can be optimay distributed based on the presented methodoogy, a more robust price woud be the LMP of the DGAP of the BAA where the ETSR resides. This is a more appropriate price since the ocation of the ETSR is the DGAP of its BAA, which is deemed to be the source of the Energy Transfer anyway. PSTD/GAA CAISO Interna Use Ony Page 9 of 9