challenge: “to obtain market prices, there must be a functioning market with a critical mass of participants and price disclosure for market participants.” Commercial states that one of the primary goals of its “Voluntary Allocation & Auction Clearinghouse” (VAAC) proposal is achieving a market with the characteristics it describes. The VAAC is based on an existing mechanism used on the PG&E natural gas system to allocate stranded core transmission and storage assets to Core Transport Agents: That mechanism was created because the CTAs gained more than 10 percent market share and a cost allocation mechanism had to be implemented to ensure bundled-customer indifference. The PG&E/CTA mechanism involves a voluntary triannual allocation of the assets, and then an auction open to all bidders of assets not accepted in the allocation. Applying this model to the PCIA context, Commercial Energy proposes the following steps: The first step is a voluntary allocation to LSEs of all eligible IOU resources: The resources would be aggregated into pools by technology or attribute type, which means that the actual performance and price data for the pools can be safely shared with the market-participant LSEs so that they have some degree of price discovery regarding the assets they are asked to accept. An LSE that accepts an allocation will pay the full contract cost for the asset, thereby removing those costs from the balance of the LSE’s PCIA cost responsibility. The goal is to encourage LSEs to accept these allocations by allowing them to also have the attributes, such as Resource Adequacy and Renewable Energy Credits for the associated resources, while also spreading the risk associated with hourly generation and dispatch imbalances over multiple assets within a single pool.
challenge: “to obtain market prices, there must be a functioning market with a critical mass of participants and price disclosure for market participants.” Commercial states that one of the primary goals of its “Voluntary Allocation & Auction Clearinghouse” (VAAC) proposal is achieving a market with the characteristics it describes. The VAAC is based on an existing mechanism used on the PG&E natural gas system to allocate stranded core transmission and storage assets to Core Transport Agents: That mechanism was created because the CTAs gained more than 10 percent market share and a cost allocation mechanism had to be implemented to ensure bundled-customer indifference. The PG&E/CTA mechanism involves a voluntary triannual allocation of the assets, and then an auction open to all bidders of assets not accepted in the allocation. Applying this model to the PCIA context, Commercial Energy proposes the following steps: The first step is a voluntary allocation to LSEs of all IOU resources: The resources would be aggregated into pools by technology or attribute type, which means that the actual performance and price data for the pools can be safely shared with the market-participant LSEs so that they have some degree of price discovery regarding the assets they are asked to accept. An LSE that accepts an allocation will pay the full contract cost for the asset, thereby removing those costs from the balance of the LSE’s PCIA cost responsibility. The goal is to encourage LSEs to accept these allocations by allowing them to also have the attributes, such as Resource Adequacy and Renewable Energy Credits for the associated resources, while also spreading the risk associated with hourly generation and dispatch imbalances over multiple assets within a single pool. eligible