IEEE Power & Energy Magazine - March/April 2021 - 33

CAISO worked closely with other agencies and SoCalGas to
implement market enhancements and tools to efficiently operate
the electric system while helping manage limited gas supply.
will require the corresponding incremental gas procurement. If resources cannot follow instructions
because they are unable to procure gas while managing gas deviations within the daily gas balancing
limits, there can be a disconnect between electric
market dispatches and what is available to meet actual demand. This disconnect may cause a balancing
problem and turn into a reliability condition.
3) There could be less-efficient commitments and dispatches of gas resources. The CAISO markets commit
and dispatch resources based on minimum load costs,
start-up costs, transition costs, and variable operation
costs. The markets use a daily gas price index to account for the fuel cost of gas resources. Depending
on how accurately an index price reflects the realtime gas conditions, the electric market may produce
less-efficient commitments. In turn, these suboptimal
instructions may exacerbate the limited supply condition. For instance, using low fuel prices when there are
gas limitations can result in gas resources artificially
appearing cheaper, and, thus, they can be committed
or dispatched more frequently or to a higher level.
This leads to more gas usage, further stressing the gas
supply limitation.
4) There could be an inability of resources to recover
costs. Deviations from not following CAISO instructions are settled on real-time prices and expose resources to additional costs. Resources also settle based on
commitment costs, and if they are based on fuel prices
not reflecting the actual procurement costs, resources
may not sufficiently recover their costs associated with
meeting CAISO's commitments and dispatches.
As a result of these assessments, CAISO worked closely
with other agencies and SoCalGas to implement market
enhancements and tools to efficiently operate the electric
system while helping manage limited gas supply. Originally, these changes were implemented temporarily, and,
since then, they have been extended annually or, in some
cases, b e c o m e p e r m a n e n t f e a t u r e s . These changes
have been gradually reassessed and enhanced over the last
years through five different phases.
The most recent SoCalGas winter assessment concluded that, in the best-case scenario, there will be insufficient supplies to meet a one-in-10-year cold day demand
forecast. The SoCalGas assessment goes on to state that
" in a one-in-10-year cold day scenario, some level of noncore curtailment may be required, either voluntary or
march/april 2021

involuntary, beginning with (electric generation) demand
following the commission-approved procedure. "
The SoCalGas assessment is consistent with CAISO's
experience with the natural gas system in Southern California since the initial Aliso Canyon restrictions. It shows
that the Southern California gas system, given the current
limitations on the gas transmission and storage system, is
insufficient to maintain natural gas reliability to electricgeneration customers during high-demand periods. These
system-level challenges are exacerbated by the requirement that gas companies must maintain reliable service to
core customers before serving noncore customers. CAISO
requires close coordination with SoCalGas to ensure that
electric-generation resources are dispatched appropriately to maintain both gas and electric system reliability.
Different winter assessments by the CPUC and SoCalGas
have indicated that, even though critical pipelines have
come back to service, the ability to provide reliable service to gas customers depends on the ability to withdraw
gas from Aliso Canyon and on no additional outages on
main pipelines.
In April 2020, the CPUC released the 2020 summer reliability assessment for Southern California. Based on the
most recent assessment of the operation of the Aliso Canyon
facility and projected conditions, gas supply conditions have
improved following previous years. This is a result of more
gas in storage, not only in Aliso Canyon but also in the other
three storage facilities, and of the return to service of a key
pipeline after an outage in 2017. The CPUC revised its Aliso
Canyon protocol, which provides more flexibility for using
this storage facility to balance the gas system. Although
expected conditions show that the gas balance can be maintained by using other storage facilities, there is still a risk of
limited supply.
Given these potential risks, CAISO expects these limitations to remain a constant fixture over the long term rather
than merely being short-term challenges. Accordingly, in
October 2019 CAISO sought and received the authority to
permanently implement a market enhancement related to
Aliso Canyon. These market features and tools are described
in the subsequent sections.

Gas Constraints in the Electric Market
The CAISO market enforces all required system constraints related to the transmission system, including operational limits for thermal and security conditions. As part
of the congestion management embedded in the market
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IEEE Power & Energy Magazine - March/April 2021

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