FERC Accepts Modifications To CAISO's RAAIM Charges And Payment Methodology

On March 29, 2018, FERC issued an order accepting proposed modifications to the methodology used to evaluate the availability of resource adequacy ("RA") resources and resulting charges and payments under the Resource Adequacy Availability Incentive Mechanism ("RAAIM") administered by the California Independent Operator Corporation ("CAISO"). In the order, FERC agreed that CAISO's proposal addressed identified problems such as overweighting certain types of resource adequacy capacity and discouraging parties from providing other types of capacity.

To ensure resource adequacy within the CAISO balancing authority area, CAISO and local regulatory authorities require load serving entities ("LSEs") to acquire certain types and amounts of RA capacity. For example, LSEs must acquire a certain amount of "generic/system RA" for serving forecasted load plus a reserve margin, as well as "flexible RA," that must be capable of quickly ramping up and down to manage