3. Discussion

On the first issue, specifically that the first strategy should allow for the submission of convergence bids related to certain long-start generation units, PG&E notes that limitations in the CAISO's market software, coupled with the CAISO's rules regarding minimum down times for thermal units in the Integrated Forward Market (IFM), may result in market inefficiencies and added costs. As PG&E describes it:

Thus, a thermal unit that has a long-start time may be instructed to shutdown at the end of the day and because of the CAISO's rules regarding minimum downtimes, may not be able to bid into the next day's IFM, even when the resource may have elected to remain online and is available in Real-Time. When long-start thermal resources are not represented in the optimization because of the required minimum downtime, they are generally replaced by higher priced resources, thus increasing costs for customers. (PG&E Petition for Modification at 3.)

PG&E argues that its proposed modification will help resolve this issue:

Through virtual supply bids in the convergence bidding markets, the IOUs [investor-owned utilities] can sell energy virtually in the IFM to more accurately represent the availability of long-start resources that remains online, and as such, improve market efficiencies. (Id.)

PG&E notes that it raised this issue in the course of the proceeding, and no party opposed its proposal. (Id. at 4.) SCE supports PG&E's request on this issue, and DRA does not oppose it. (SCE Response at 2; DRA Response at 2.)

PG&E's request makes sense, is supported by the record in this proceeding, and is unopposed. Accordingly, we will grant the clarification requested by PG&E on this issue.

On the second issue, that all three strategies should allow for bids to be submitted at interties as well as at nodes or locations where utility resources or loads are located, PG&E argues:

In the Decision, the Commission included restrictions in Section 6 on the locations where the IOUs are authorized to submit convergence bids, specifically at the nodes or locations where the IOU-owned or IOU-contracted resources or load are physically located. However, IOU portfolio positions may include resources (or obligations) external to the CAISO Balancing Area ("BA") that could create market risks similar to those faced by in-area resources (or obligations). The Decision authorized specific convergence bidding strategies to help manage these risks for in-area resources and loads. There would be added hedging benefits if the authority for approved bidding locations were extended to include Interties for applicable IOU import and export locations. (PG&E Petition for Modification, pp. 4-5.)

In response, SCE states: "SCE understands that the Decision already authorizes convergence bids at interties under all three strategies as SCE's imports are physically delivered to CAISO interties." (SCE Response at 2-3.) SCE also supports PG&E's request to make this authority clearer. (Id. at 3.)

Similarly, DRA states: "DRA agrees in principle with the request for such authority but believes that it is probably already within the scope of the authority granted by the Decision ..." (DRA Response at 2.)

Again, PG&E's request makes sense. There is no practical reason nor anything in the record of this proceeding which would support treating interties differently than nodes at which utility load or resources are located. While DRA agrees with the substance of PG&E's request, DRA proposed different language than did PG&E. (DRA Response at 3.) We prefer DRA's characterization, that interties where utility load or resources are located are a subset of the nodes and locations at which we have already authorized the utilities to participate in convergence bidding. We will grant the clarification requested by PG&E, as described by DRA.

Because this decision serves to clarify D.10-12-034 rather than change its substance, we will not change the language of that decision.