HomeMy WebLinkAboutResolutions - No. 2008-195RESOLUTION NO. 2008-195
A RESOLUTION OF THE LODI CITY COUNCILADOPTING AN
UPDATED ELECTRIC RESOURCE ADEQUACY PROGRAM
WHEREAS, to insure sufficient resources to reliably serve the load in its control
area, the California Independent System Operator (CAISO) requires the local regulatory
authority for each load -serving entity in its control area to adopt a Resource Adequacy
Program; and
WHEREAS, the Resource Adequacy Program previously adopted by the City of
Lodi will terminate upon the implementation of the CAISO's Market Redesign &
Technology Upgrade (MRTU); and
WHEREAS, Lodi, in cooperation with the Northern California Power Agency
(NCPA) and other NCPA members, has developed an updated Resource Adequacy
Program that meets requirementsof the CAISO Tariff now and under MRTU.
NOW, THEREFORE, BE IT RESOLVED that the Lodi City Council does hereby
adopt the Resource Adequacy Program attached hereto marked as Exhibit A, replacing
the prior Resource Adequacy Program; and
BE IT FURTHER RESOLVED that the City Council hereby authorizes the Electric
Utility Director and/or his/her designee to implementthe Resource Adequacy Program.
Dated: October 1,2008
hereby certify that Resolution No. 2008-195 was passed and adopted by the
City Council of the City of Lodi in a regular meeting held October 1, 2008, by the
following vote:
AYES: COUNCIL MEMBERS— Hansen, Hitchcock, Johnson, and
Katzakian
NOES: COUNCIL MEMBERS — None
ABSENT: COUNCIL MEMBERS — Mayor Mounce
ABSTAIN: COUNCIL MEMBERS— None
aNNIFE . PERRIN
Assistant City Clerk
2008-195
Resource Adequacy Program
City of Lodi
(EXHIBIT Al
October 1,2008
Resource Adequacy Program
Table of Contents
1 Background and Purpose of Program.........................................................................
1
2 Applicability...............................................................................................................
2
3 Compliance Demonstration........................................................................................
2
3.1 Submission of Annual System Resource Adequacy Demonstration ..................
2
3.2 Submission of Monthly System Resource Adequacy Demonstration ................3
3.3 Submission of Annual Local Area Resource Adequacy Demonstration ............3
3.4 Submission of Annual and Monthly Resource Adequacy Supply Plans ............4
4 Demand Forecast........................................................................................................
5
5 Planning Reserve Margin............................................................................................
5
6 CAISO Authority to Dispatch Generation Facilities ..................................................
6
7 Resource Adequacy Qualifying Capacity Rules and Criteria .....................................
6
7.1 Resource Adequacy Qualifying Capacity...........................................................
6
7.2 Qualifying Capacity Rules and Criteria —Eligible Resource Types ................... 6
7.2.1 NCPA System.............................................................................................
7
7.2.2 Jointly -Owned Facilities.............................................................................
7
7.2.3 Thermal Resources......................................................................................
8
7.2.4 Hydro Electric Resources...........................................................................
8
7.2.5 Unit -Specific Contracts...............................................................................
8
7.2.6 Firm Energy Contracts................................................................................
9
7.2.7 Industry Standard Contracts with Damages Provisions ..............................
9
7.2.8 Wind and Solar Resources..........................................................................
9
7.2.9 Geothermal Resources..............................................................................
10
7.2.10 Participating Loads...................................................................................
10
7.2.11 Dispatchable Demand Resources..............................................................
11
7.2.12 Facilities Under Construction...................................................................
11
7.2.13 Non -Dynamically Scheduled System Resources (Imports) ......................
11
7.2.14 Dynamically Scheduled System Resources (Imports) ..............................
12
8 Compliance and Enforcement...................................................................................
12
I Background and Purpose of Program
The City of Lodi ("Lodi") recognizes that to achieve a high degree of reliability in the
electric service supplied to its customers, an amount of resources sufficient to not only
meet the immediate loads of Lodi's customers, but to also permit maintenance, to provide
for planned and forced outages, and to account for load forecast errors is required.
In order to achieve a high degree of reliability in the electric service supplied to its
customers, Lodi has established this Resource Adequacy Program to accomplishthis
goal, which includes the following information and requirements:
Applicability
■ Compliance Demonstration
■ Demand Forecast
■ Planning Reserve Margin
■ CAISO Authority to Dispatch Qualifying Capacity
Qualifying Capacity Rules and Criteria
■ Compliance and Enforcement
This Resource Adequacy Program has been developed to coordinate with the rules and
requirements incorporatedwithin the California Independent System Operator
Corporation("CAISO") Market Redesign and Technology Upgrade FERC Electric Tariff
("MRTU Tariff'), as applicable to Lodi, and shall become effective at the time the
MRTU Tariff is implemented or when approved by the Lodi City Council ("LRA"), and
will remain in effect until terminated by action of the LRA. This Resource Adequacy
Program may be modified by the LRA per its discretion.
Capitalized terms not otherwise defined within this Resource Adequacy Program shall be
defined as set forth in the Master Definitions Supplement of the MRTU Tariff.
Lodi Resource Adequacy Program
2 Applicability
Pursuant to Section 40 of the MRTU Tariff all Load Serving Entities ("LSE") and their
respective Scheduling Coordinators, with limited exemptions, are subject to certain
Resource Adequacy requirements based on its election of LSE status. The City currently
operates within the CAISO Balancing Authority Area as a Load Following Metered
Subsystem, pursuant to the terms of the Amended and RestatedNCPA Metered
Subsystem Aggregator Agreement ("MSSA Agreement"), as amended from time to time,
and therefore is recognized as a Load Following Metered Subsystem entity regarding the
application of Resource Adequacy requirements. Therefore, Lodi is required to comply
with the requirements encompassedwithin this Resource Adequacy Program and the
CAISO Tariff, as applicable.
3 Compliance Demonstration
Pursuant to this Resource Adequacy Program and the MRTU Tariff Section 40, Lodi is
required to provide a system and local area Resource Adequacy demonstration to the
CAISO that sets forth the amount of capacity procured by Lodi to satisfy the obligations
described below. As a result, NCPA will submit, on behalf of Lodi, the following
information to the CAISO:
3.1 Submission of Annual System Resource Adequacy
Demonstration
NCPA, acting as Scheduling Coordinator on behalf of Lodi, will submit an annual system
Resource Adequacy demonstration to the CAISO for the applicable compliance period on
behalf of Lodi, on a schedule and in a format set forth by the MRTU Tariff and the
CAISO Business Practice Manual for Reliability Requirements. The annual system
Resource Adequacy demonstration will include a monthly coincident peak Demand
determination for Lodi for each of the five summer months, May through September, of
Lodi Resource Adequacy Program 2
the applicable compliance period, establishedpursuant to Section 4, and identify the
megawatt (MW) quantity of Resource Adequacy Qualifying Capacity, established
pursuant to Section 7, that Lodi will rely upon to satisfy ninety percent (90%) of its
respective monthly coincident peak Demand determination plus the monthly Planning
Reserve Margin, established in Section 5, for each of the five summer months, May
through September, of the applicable complianceperiod.
3.2 Submission of Monthly System Resource Adequacy
Demonstration
NCPA, acting as Scheduling Coordinator on behalf of Lodi, will submit a monthly
system Resource Adequacy demonstration to the CAISO for the applicable compliance
period, on a schedule and in a format set forthby the MRTU Tariff and the CAISO
Business Practice Manual for Reliability Requirements. The monthly system Resource
Adequacy demonstration will include a monthly coincident peak Demand determination
for Lodi for the relevant reporting month of the applicable compliance period, established
pursuant to Section 4, and identify the megawatt (MV) quantity of Resource Adequacy
Qualifying Capacity, establishedpursuant to Section 7, that Lodi will rely upon to satisfy
one-hundredpercent (100%) of its monthly coincidentpeak Demand determinationplus
the monthly Planning Reserve Margin, established in Section 5, for the relevant reporting
month of the applicable compliance period.
3.3 Submission of Annual Local Area Resource Adequacy
Demonstration
NCPA, acting as Scheduling Coordinator on behalf of Lodi, will submit an annual local
area capacity Resource Adequacy demonstration to the CAISO for the applicable
compliance period, on a schedule and in a format set forth by the MRTU Tariff and the
CAISO Business Practice Manual for Reliability Requirements. The annual local area
Resource Adequacy demonstration will identify the megawatt (MV) quantity of
Lodi Resource Adequacy Program
Resource Adequacy Qualifying Capacity, established pursuant to Section 7, qualified as
Local Capacity Area Resources that Lodi will rely upon to satisfy its allocated
responsibility for procurement of Local Capacity Area Resources determinedpursuant to
the MRTU Tariff. The City's allocated responsibility for procurement of Local Capacity
Area Resources is based on its proportionate share of the Transmission Access Charge
("TAC") Area Load at the time of the CAISO's annual coincident peak Demand set forth
in the annual peak demand forecast for the next applicable compliance period, as
determined by the CaliforniaEnergy Commission ("CEC"). Those Local Capacity Area
Resources identified within the annual local area capacity Resource Adequacy
demonstration will count towards Lodi's overall system capacity requirements in addition
to meeting Lodi's local Resource Adequacy requirements.
3.4 Submission of Annual and Monthly Resource Adequacy
Supply Plans
A Load Following Metered Subsystem LSE such as Lodi is not required, pursuant to the
CAISO Tariff, to provide the CAISO with annual and monthly Resource Adequacy
Supply Plans for Resource Adequacy Qualifying Capacity that is used to meet its own
system and local area Resource Adequacy requirements. To the extent that a Load
Following Metered Subsystem LSE such as Lodi provides Resource Adequacy
Qualifying Capacity to a Reserve Sharing Load Serving Entity or a Modified Reserve
Sharing Load Serving Entity, its Scheduling Coordinator is required to provide the
CAISO with annual and monthly Resource Adequacy Supply Plans for this quantity of
Resource Adequacy Qualifying Capacity. As a result NCPA, acting as a Scheduling
Coordinator on behalf of Lodi, will submit annual and monthly Resource Adequacy
Supply Plans to the CAISO on behalf of Lodi (if required), on a schedule and in a
formant set forth in the MRTU Tariff and the CAISO Business Practice Manual for
Reliability Requirements. Both the annual and monthly Resource Adequacy Supply
Plans shall include a listing of Lodi's commitments to provide Resource Adequacy
Qualifying Capacity to any Reserve Sharing Load Serving Entity or Modified Reserve
Sharing Load Serving Entity for the applicable compliance period.
Lodi Resource Adequacy Program 4
4 Demand Forecast
Pursuant to the CAISO Tariff, Lodi's Resource Adequacy Program shall utilize the
monthly coincident peak Demand determination provided by the California Energy
Commission for the applicable complianceperiod, which is based on demand forecast
data ("Demand Forecast") submittedto the California Energy Commissionby Lodi (or by
NCPA on behalf of Lodi), or, if the California Energy Commission does not produce a
monthly coincidentpeak Demand determination for Lodi, the monthly coincidentpeak
Demand determination produced by the CAISO for the applicable compliance period for
Lodi in accordance with the MRTU Tariff and the applicable Business Practice Manual,
using Demand Forecast data submitted to the CAISO by Lodi (or by NCPA on behalf of
Lodi). The monthly coincident peak Demand determination developed and provided by
either the California Energy Commission or the CAISO are coincident with the CAISO
monthly system peak demand forecast for the applicable compliance period. If the
California Energy Commission or the CAISO fail to produce a monthly coincidentpeak
Demand determination for Lodi, the monthly coincidentpeak Demand determination that
will be used for Resource Adequacy compliance shall be equal to Lodi's contributionto
the NCPA Pool's monthly coincident peak demand forecasts for the applicable
compliance period irrespective of the CAISO system coincident peak.
5 Planning Reserve Margin
The City shall maintain an amount of Resource Adequacy Qualifying Capacity, as
described in Section 7, equal to no less than one -hundred fifteen percent (115%) of
Lodi's peak hourly Demand Forecast for the applicable compliance period. The resulting
fifteen percent (15%) capacity reserve margin which is in excess of Lodi's peak hourly
Demand Forecast, for the applicable month, is referred to as the Planning Reserve
Margin.
Lodi Resource Adequacy Program
6 CAISO Authority to Dispatch Generation Facilities
As a Load Following Metered Subsystem Entity, Lodi is only required to comply with a
limited set of provisions contained within the MRTU Tariff, and is not required to make
available its Resource Adequacy Qualifying Capacity used to meet its capacity reserve
requirements to the CAISO for Dispatch in the Day -Ahead Market or Real -Time Market.
However, the CAISO has authority to dispatch Lodi's Resource Adequacy Qualifying
Capacity used to meet its capacity reserve requirements pursuant to the terms of the
MSSA Agreement, which is incorporated by reference as it now exists or may thereafter
be amended.
7 Resource Adequacy Qualifying Capacity Rules and Criteria
7.1 Resource Adequacy Qualifying Capacity
Resource Adequacy Qualifying Capacity shall be the quantity of capacity from a
resource, stated in megawatts (MVV), which is listed within the Resource Adequacy
system and local area capacity demonstration. Resource Adequacy Qualifying Capacity
is the megawatt (MW) quantity of capacity from resources, as calculated using the
Qualifying Capacity Rules and Criteria, that is used for resource adequacy compliance.
The rules and criteria for determining the type of resources that may be eligible to
provide Resource Adequacy Qualifying Capacity and for calculating the quantity of
Resource Adequacy Qualifying Capacity provided from eligible resource types is
documented within Section 7.2. Once calculated, the Resource Adequacy Qualifying
Capacity will be provided to the CAISO to be used to verify compliance against
submitted Resource Adequacy compliance demonstrations.
7.2 Qualifying Capacity Rules and Criteria —Eligible Resource
Types
Lodi Resource Adequacy Program 6
The types of resources specified in Section 7.2 will be eligible to provide Resource
Adequacy Qualifying Capacity to the extent that they meet the criteria for each type of
resource set forth in this Section 7.2. Net Dependable Capacity ("NDC") defined by
North American Electric Reliability Corporation ("NERC") Generating Availability Data
System ("GADS") information will be used to determine the Resource Adequacy
Qualifying Capacity of some of the resource types identified in this Section 7.2. For the
purpose of this Section 7.2, NDC is equal to Gross Dependable Capacity ("GDC") less
the unit capacity utilized for unit station service or auxiliaries. GDC is equal to Gross
Maximum Capacity ("GMC") modified for seasonal limitations over a specifiedperiod of
time. GMC is the maximum capacity a unit can sustain over a specifiedperiod of time
when not restricted by seasonal or other deratings.
7.2.1 NCPA System
As defined in the MSSA Agreement, the NCPA System means all transmission and
distribution facilities owned or controlledby the NCPA Pool participants, including Lodi,
and all Generating Units within the CAISO Balancing Authority Area owned or
controlledby the NCPA Pool participants or any individual NCPA Pool participant or
combination ofNCPA Pool participants.
7.2.2 Jointly -Owned Facilities
A jointly -owned facility must either be identified in Schedule 14 of the MSSA
Agreement, located within the NCPA System, a Participating Generator, a System
Resource, or a Qualified Facility to be considered Resource Adequacy Qualifying
Capacity. The Resource Adequacy Qualifying Capacity for the entire facility will be
determined based on the type of resource as described within Section 7.2. The City's
entitlement to the Resource Adequacy Qualifying Capacity of a facility may encompass
the entire Resource Adequacy Qualifying Capacity of the facility, or may be limited to a
portion of the Resource Adequacy Qualifying Capacity of the facility. The total amount
of Resource Adequacy Qualifying Capacity that may be identified in the system and/or
Lodi Resource Adequacy Program 7
local area capacity compliance demonstration is limited to the total jointly -owned facility
Resource Adequacy Qualifying Capacity as determined pursuant to Section 7.2.
7.2.3 Thermal Resources
Thermal generating facilities must either be identified in Schedule 14 of the MSSA
Agreement, located within the NCPA System, a Participating Generator, a System
Resource, or a Qualified Facility to be considered Resource Adequacy Qualifying
Capacity. The Resource Adequacy Qualifying Capacity of thermal facilities will be
based on Net Dependable Capacity as defined in Section 7.2.
7.2.4 Hydro Electric Resources
Hydro electric generating facilities must either be identified in Schedule 14 of the MSSA
Agreement, located within the NCPA System, a Participating Generator, a System
Resource, or a Qualified Facility to be considered Resource Adequacy Qualifying
Capacity. The Resource Adequacy Qualifying Capacity of a pond or pumped storage
hydro electric facility will be based on Net Dependable Capacity as defined in Section
7.2, minus variable head de -rate based on current reservoir levels with average year
forecasted inflows. The Resource Adequacy Qualifying Capacity of a run -of -river hydro
electric facility will be based on Net Dependable Capacity as defined in Section 7.2,
minus actual or forecasted conveyance flow, stream flow, or canal head de -rate.
7.2.5 Unit -Specific Contracts
Unit -specific contracts will fully qualify as Resource Adequacy Qualifying Capacity.
The generating facility identified in the contract must either be identified in Schedule 14
of the MSSA Agreement, located within the NCPA System, a Participating Generator, a
System Resource, or a Qualified Facility to be considered Resource Adequacy Qualifying
Capacity.
Lodi Resource Adequacy Program 8
7.2.6 Firm Energy Contracts
Firm energy contracts which containprovisions to ensure reliable physical delivery of
Energy and that contain provisions that identify non-delivery as a default condition
subject to contract suspensionand/or termination, and that does not require the seller to
source the Energy from a particular unit, but specifies a delivery point internal to the
CAISO Balancing Authority Area will fully qualify as Resource Adequacy Qualifying
Capacity.
7.2.7 Industry Standard Contracts with Damages Provisions
Industry standard contracts with damages provisions as generally reflected in Service
Schedule C of the Western Systems Power Pool Agreement or the Firm LD product of
the Edison Electric Institute pro forma Master Agreement, or any other similar firm
energy contract that does not require the seller to source the Energy from a particular
unit, but specifies a delivery point internal to the CAISO Balancing Authority Area will
qualify as Resource Adequacy Qualifying Capacity until a commercially available
industry standardized capacitybased product is readily available, and which is provided
under an agreement similar to the Western Systems Power Pool Agreement or the Edison
Electric Institute pro forma Master Agreement.
7.2.8 Wind and Solar Resources
The Resource Adequacy Qualifying Capacity of wind and solar generating facilities, with
backup sources of generation, will be based on Net Dependable Capacity as defined in
Section 7.2.
The Resource Adequacy Qualifying Capacity of wind and solar facilities, without backup
sources of generation, will be based on their monthly historic noon to 6:00 p.m. capacity
factor, using a three-year rolling average.
Lodi Resource Adequacy Program 9
Wind and solar generating facilities without backup sources of generationwhich do not
have three years of historic performance data will be assigned a default Resource
Adequacy Qualifying Capacity value for each year of missing historical performance as
follows:
• The Resource Adequacy Qualifying Capacity of a solar or wind generator with
historic data located in the same weather regime with similar technology
adjusted for the nameplate capacity ratio of a new generator and the similarly
situatedproxy generator.
• If historical data of a solar or wind generator located in the same weather
regime with similar technology is not available, then historic performance data
from the monthly average production factors of all units (wind or solar) within
the TAC Area in which the generator is located will be utilized.
The default Resource Adequacy Qualifying Capacity values will be replaced on a year by
year basis with actual performance data as the data becomes available to form a three
year rolling average.
7.2.9 Geothermal Resources
Geothermal generating facilities must either be identified in Schedule 14 of the MSSA
Agreement, located within the NCPA System, a Participating Generator, a System
Resource or a Qualified Facility to be considered Resource Adequacy Qualifying
Capacity. The Resource Adequacy Qualifying Capacity of a geothermal facility will be
based on Net Dependable Capacity as defined in Section 7.2, adjusted for steam field
degradation.
7.2.10 Participating Loads
Lodi Resource Adequacy Program 10
Participating Loads must eitherbe identified in Schedule 14 of the MSSA Agreement or
located within the NCPA System to be considered Resource Adequacy Qualifying
Capacity. Participating Loads must be available at least 48 hours during the five summer
months (May — September)to be counted in a system and/or local area Resource
Adequacy compliance demonstration as Resource Adequacy Qualifying Capacity. If
Participating Loads are available for the minimum requirement, the stipulatedmegawatt
(MV) quantity reduction in Demand will be treated as supply and be eligible to be listed
as Resource Adequacy Qualifying Capacity.
7.2.11 Dispatchable Demand Resources
Dispatchable Demand resources must either be identified in Schedule l OB of the MSSA
Agreement or located within the NCPA Systemto be considered Resource Adequacy
Qualifying Capacity. Dispatchable Demand resources must be available at least 48 hours
during the five summer months (May — September) to be counted in a system and/or local
area Resource Adequacy compliance demonstration as Resource Adequacy Qualifying
Capacity. If a Dispatchable Demand resource is available for the minimum requirement,
the megawatt (MV) quantity reduction stipulated in the contract or program will be
treated as supply and be eligible to be listed as Resource Adequacy Qualifying Capacity.
7.2.12 Facilities Under Construction
Resource Adequacy Qualifying Capacity for facilities under construction will be
determinedbased on the type of resource as described elsewhere in this Section 7.2. The
facility will be eligible to be identified as Resource Adequacy Qualifying Capacity in a
system and/or local area capacity compliance demonstration of Lodi pursuant to the
anticipated operational date of the facility.
7.2.13 Non -Dynamically Scheduled System Resources (Imports)
Lodi Resource Adequacy Program I I
The Resource Adequacy Qualifying Capacity of Non -Dynamically Scheduled System
Resources to which Lodi has an entitlement shall be the amount of Lodi's entitlement,
measured in megawatts (MW).
7.2.14 Dynamically Scheduled System Resources (Imports)
The Resource Adequacy Qualifying Capacity of a Dynamically Scheduled System
Resource to which Lodi has an entitlement shall be the amount of Lodi's entitlement.
Eligibility as Resource Adequacy Qualifying Capacity is contingent upon Lodi securing
transmission through any intervening Balancing Authority Areas for the resource
entitlementthat cannot be curtailed for economic reasons or due to higher priority
transmission.
8 Compliance and Enforcement
Once the CAISO has received the system and/or local area capacity compliance
demonstrations submittedby NCPA on behalf of Lodi, acting as Scheduling Coordinator,
the CAISO will verify that Lodi has procured sufficient Resource Adequacy Qualifying
Capacity to comply with the Planning Reserve Margin established in Section 5, and any
requirements establishedby Lodi's LRA. To the extent the system and/or local area
capacity demonstrations do not include sufficient Resource Adequacy Qualifying
Capacity to satisfy the Planning Reserve Margin and/or the Local Capacity Area
Resource Adequacy requirements, or in the case of a mismatch between information
included in the compliance demonstration and the Resource Adequacy Supply Plan
submittedby the Scheduling Coordinator of a resource identified in Lodi's compliance
demonstration, the CAISO will notify NCPA and attempt to resolve the issue. To the
extent that NCPA is unable to resolve the identified issue, the CAISO will notify Lodi's
LRA of the potential deficiency.
Once Lodi's LRA is informed of the identified deficiency and confirms that Lodi's
system and/or local area capacity compliance demonstration is deficient, Lodi's LRA
Lodi Resource Adequacy Program 12
may determine if and how the deficiency will be resolved. If the CAISO identifies a
mismatch between the information included in Lodi's system and/or local area capacity
compliance demonstration and a Resource Adequacy Supply Plan submitted by the
Scheduling Coordinator of a resource identified in the Resource Adequacy compliance
demonstration, and the identified mismatch is not resolved prior to the 10th day before
the effective month during the applicable compliance period, the CAISO will accept the
value contained in the Supply Plan to set the Resource Adequacy Qualifying Capacity
value for the applicable compliance period.
If Lodi's LRA requires Lodi to resolve an identified deficiency in the system and/or local
area capacity compliance demonstration, and Lodi has not resolved the identified
deficiency, Lodi must provide an explanation as to why the identified deficiency has not
be resolved to its LRA. The City may incur penalties or other sanctions adopted by
Lodi's LRA for failure to cure the deficiency. NCPA, acting as Scheduling Coordinator,
is required to report to the CAISO within thirty (30) days of any action taken by Lodi's
LRA in response to the deficiency notification if Lodi's LRA does not provide public
access to records or information regarding action taken for violations of Lodi's Resource
Adequacy Program policies or rules.
Lodi Resource Adequacy Program 13