2014 Ancillary Service Scarcity Event Report
May 13, 2015
www.caiso.com │ 250 Outcropping Way, Folsom, CA 95630
Author: Jennie Sage/Market Quality and Renewable Integration
│
916.351.4400
2014 Ancillary Service
Scarcity Event Report
I.
Introduction
The California Independent System Operator Corporation (ISO) needs to procure sufficient
regulation services (regulation-up and regulation-down) and operating reserves (spinning and
non-spinning reserves) through its markets to meet the requirements for these ancillary
services. In addition to the system-wide requirements, the ISO must meet the minimum
ancillary service procurement requirements in some of its ancillary service sub-regions, such as
the CAISO system (the entire CAISO excluding the interties), SP26 and SP26_EXP sub-regions.
On December 1, 2010, the ISO implemented an ancillary service scarcity pricing mechanism in its
markets. The scarcity pricing mechanism is triggered when there is insufficient ancillary service
supply. Under this mechanism, the price of the scarce ancillary service will automatically rise to
a pre-determined scarcity price, as described in the ISO tariff.1
In 2014, there were five trade dates with scarcity events.2 This report presents the details of the
scarcity events that occurred in 2014, including the causes and financial impact of the scarcity
event.
II.
Ancillary Service Scarcity Events in 2014
From January 1, 2014 to December 31, 2014, there were five trade dates where ancillary service
scarcity events occurred. Table 1 below shows the frequency of the 2014 scarcity events by
date, market and sub-region. Table 2 lists the MW shortages of the ancillary services for the
scarcity event. The estimated financial impact of the scarcity events is shown in Table 3.
Table 1: Frequency of 2014 Scarcity Events by Market and Sub-region
Date
Market
February 6
April 8
April 12
December 23
December 24
Total Hours
HASP/RTUC
RTUC
RTUC
RTUC
RTUC
III.
CAISO
0
1
1
0
1
3
Sub-region
SP26
SP26_EXP
0
0
0
1
0
0
1
0
3
0
4
1
NP26_EXP
3
0
0
0
0
3
Total
Hours
3
2
1
1
4
11
Causes of the Scarcity Event
From 2011 to 2014, there have been no ancillary service scarcity events in the Integrated
Forward Market (IFM). Generally, the real time markets experience constraints, which are not
1
See the ISO tariff section 27.1.2.3.
Prior year’s reports are located at:
http://www.caiso.com/Documents/Reports%20and%20bulletins/Market%20reports/Market%20perform
ance%20reports/Ancillary%20services%20scarcity
2
CAISO/MQ&RI/JS
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2014 Ancillary Service
Scarcity Event Report
in the IFM market such as an unexpected resource outage or de-rate or transmission
congestion. Therefore, the IFM ancillary service awards of some resources may be disqualified
wholly or partially in real time markets due to these constraints, which can make ancillary
service scarcity more likely in the real time markets than in the IFM market.
The following factors caused the 2014 scarcity events:
 On February 6, 2014 from HE 17-19, there were non-spin and regulation down scarcity
events in the Hour Ahead Scheduling Process and Real-Time Unit Commitment markets
when the ISO activated the NP26 expanded sub-region for procurement of ancillary
services. The natural gas pipeline that serves southern California was limited on this day
so the ISO needed to procure ancillary services from northern California generators and
imports instead of southern California resources that are procured to meet SP26
requirements. There were insufficient northern California resources and imports to
meet the NP26 procurement targets.
 On April 8, 2014 from HE 19-20, in-state generation was needed for energy
requirements instead of ancillary service requirements in the real-time market when net
imports did not materialize due to transmission line outages.
 On April 12, 2014 in HE 13, there were over-generation conditions due to excessive wind
and solar generation. The ISO issued an Over-generation Notice at 12:00. Regulation
down could not be procured in one fifteen-minute interval because it would require
generators to move up to provide the regulation down and this additional generation
would exacerbate over-generation conditions.
 On December 23, 2014 in HE 22, the resource supplying regulation down to meet the
SP26 region requirement was forced out.
 On December 24, 2014 in HE 4 and HE 12, the resource supplying regulation down to
meet the SP26 region requirement reported an outage on its communication, or
telemetry, equipment and could not provide regulation.
In 2014, there were five trade dates with scarcity events. There was one event in 2012, one
event in 2013 and 24 events in 2011. The frequency of scarcity events has been relatively low
and given the nature of the events, the ISO does not see a need to re-evaluate the scarcity price
curves.
Table 2: Summary of 2014 Scarcity Events and Causes
Trade
Date
2/6/14
Trade
Hour
Trade
Intervals
Sub
Region
Market
Ancillary
Service
Shortage
MW
17
1-3
NP26_EXP
RTUC
Non-Spin
60.5
17
1-4
NP26_EXP
RTUC
Regulation
Down
61
18
-
NP26_EXP
HASP
18
-
NP26_EXP
HASP
19
-
NP26_EXP
HASP
CAISO/MQ&RI/JS
Non-Spin
Regulation
Down
208
Non-Spin
95
17
Causes
ISO activated
the NP26
region because
there were
limitations in
procuring A/S
capacity in
southern
California due
to low gas
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2014 Ancillary Service
Scarcity Event Report
Trade
Date
Trade
Hour
Trade
Intervals
Sub
Region
Market
Ancillary
Service
Shortage
MW
19
3
SP26_EXP
RTUC
Non-Spin
15
20
3-4
CAISO_EXP
RTUC
Non-Spin
128/106
4/12/14
13
3
CAISO_EXP
RTUC
Regulation
Down
5
12/23/14
22
4
SP26
RTUC
Regulation
Down
5.93
12/24/14
4
3
CAISO_EXP
RTUC
Regulation
Down
3.36
12/24/14
12
2
SP26
RTUC
Regulation
Down
5.93
4/8/14
Causes
supply.
Loss of net
import required
additional instate energy
procurement
Overgeneration
conditions and
resources could
not move up to
provide
regulation
down.
Generator
outage
Generator
telemetry
outage
Generator
telemetry
outage
Table 3: Financial Impact of 2014 Scarcity Events
Trade
Date
Trade
Hour
Trade
Intervals
Sub
Region
Market
2/6/14
17
1-3
NP26_EXP
RTUC
2/6/14
17
1-4
NP26_EXP
RTUC
2/6/14
18
-
NP26_EXP
HASP
2/6/14
18
-
NP26_EXP
HASP
2/6/14
4/8/14
4/8/14
4/12/14
18
19
20
13
3
3-4
3
NP26_EXP
SP26_EXP
CAISO_EXP
CAISO_EXP
HASP
RTUC
RTUC
RTUC
Ancillary
Service
Procurement
(MW)
Cost ($)3
Non-Spin
Regulation
Down
Non-Spin
Regulation
Down
Non-Spin
Non-Spin
Non-Spin
Regulation
332.92
41,614.984
0
0
25
14,999.75
0
0
25
1.75
28.3
0
16,186.25
214.42
2,792.51
0
3
Cost is calculated as procurement in MWs at the scarcity prices multiplied by the difference between the ancillary
service marginal price (ASMP) of current interval and the last interval that did not have ancillary service scarcity. The
ASMP of the last interval without scarcity is used as a proxy of the ASMP of the current interval in which the scarcity
condition occurred.
4
NP26 region was not active in intervals prior to HE 17 so the CAISO region price is used as a proxy.
CAISO/MQ&RI/JS
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2014 Ancillary Service
Scarcity Event Report
Trade
Date
Trade
Hour
Trade
Intervals
Sub
Region
Market
12/23/14
22
4
SP26
RTUC
12/24/14
4
3
CAISO_EXP
RTUC
12/24/14
12
2
SP26
RTUC
CAISO/MQ&RI/JS
Ancillary
Service
Down
Regulation
Down
Regulation
Down
Regulation
Down
Procurement
(MW)
Cost ($)3
4.07
505.69
136.64
16,812.83
4.07
487.26
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