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Background Convergence (or virtual) bidding is a mechanism whereby market participants can make financial sales (or purchases) of energy in the Day Ahead market, with the explicit requirement to buy back (or sell back) that energy in the Real Time market. Virtual bids pressure Day Ahead and Real Time prices to move closer together, thus reducing the incentive for buyers and sellers to forgo bidding physical schedules in the Day Ahead market in expectation of better prices in the Real Time market. Under FERC's September 21, 20006 MRTU Order, the CAISO must implement convergence bidding within twelve months after MRTU startup. FERC's April 20, 2007 Order specifies that the CAISO must file tariff language for the implementation of convergence bidding no later than 60 days prior to the on year anniversary of MRTU startup. Thus the CAISO is seeking focused stakeholder input now to help develop the design for Convergence Bidding so that the necessary software features and business processes can be built to meet a reasonable implementation schedule.

Outcome  Pending closure of initiative

Process

Relevant Market Notices

Convergence Bidding: The ISO New England Perspective Agenda - Convergence Bidding Stakeholder Meeting 02-May-2008 pdf 91K | Abstract | 04/30/2008 16:40 Presentation - Convergence Bidding: The New England Experience 02-May-2008 pdf 526K | Abstract | 04/30/2008 16:43 Presentation - Review of Convergence Bidding Design: Issues Discussed to Date 02-May-2008 pdf 242K | Abstract | 05/02/2008 08:26 Markets and Performance (MAP) Initiative Summary pdf 64K | Abstract | 05/12/2008 14:16

Stakeholder Comments on Cost Allocation for Virtual Bids 29-Feb-2008 CPUC Comments on Cost Allocation for Virtual Bids 29-Feb-2008 pdf 33K | Abstract | 03/03/2008 15:32 Dynegy Comments on Cost Allocation for Virtual Bids 29-Feb-2008 pdf 13K | Abstract | 03/03/2008 15:34 EPIC Comments on Cost Allocation for Virtual Bids 29-Feb-2008 pdf 67K | Abstract | 03/03/2008 15:38 EPIC Attachment 1 - Comments on the Flat Fee Concept pdf 26K | Abstract | 03/03/2008 15:43 EPIC Attachment 2 - Hogan Comments on MISO Uplift Costs pdf 1674K | Abstract | 03/03/2008 15:47 PG&E Comments on Cost Allocation for Virtual Bids 07-Mar-2008 doc 50K | Abstract | 03/10/2008 13:12 SCE Comments on Cost Allocation for Virtual Bids 29-Feb-2008 pdf 68K | Abstract | 03/04/2008 15:19 CDWR SWP Comments on Cost Allocation for Virtual Bids 15-Feb-2008 pdf 15K | Abstract | 03/04/2008 15:21 WPTF Comments on Cost Allocation for Virtual Bids 29-Feb-2008 pdf 126K | Abstract | 03/03/2008 15:49

Market Surveillance Committee/Stakeholder Meeting 08-Feb-2008 Stakeholder Comment Matrix - Convergence Bidding Cost Allocation doc 49K | Abstract | 02/21/2008 15:25 Presentation - Cost Allocation for Convergence Bids 08-Feb-2008 pdf 277K | Abstract | 02/05/2008 14:13 Straw Proposal for Convergence Bidding Cost Allocation pdf 178K | Abstract | 02/06/2008 11:03

Stakeholder Comments 30-Nov-2007 CERS Comments on Convergence Bidding 30-Nov-2007 pdf 112K | Abstract | 12/04/2007 11:31 CPUC Comments on Convergence Bidding 30-Nov-2007 pdf 37K | Abstract | 12/04/2007 14:09 DC Energy Comments on Convergence Bidding 30-Nov-2007 pdf 29K | Abstract | 12/04/2007 12:28 EPIC Merchant Energy Comments on Convergence Bidding 30-Nov-2007 pdf 38K | Abstract | 12/04/2007 12:31 PG&E Comments on Convergence Bidding 30-Nov-2007 pdf 34K | Abstract | 12/04/2007 14:12 Powerex Corp. Comments on Convergence Bidding 30-Nov-2007 pdf 25K | Abstract | 12/04/2007 12:33 SCE Comments on Convergence Bidding 30-Nov-2007 pdf 59K | Abstract | 12/04/2007 12:35 Strategic Energy Comments on Convergence Bidding 30-Nov-2007 pdf 22K | Abstract | 12/04/2007 12:38 WPTF Comments on Convergence Bidding pdf 27K | Abstract | 12/06/2007 09:00

Convergence Bidding Stakeholder Meeting 14-Nov-2007 Template for Stakeholder Comments on Convergence Bidding doc 43K | Abstract | 11/16/2007 15:18 Agenda - Stakeholder Meeting 14-Nov-2007 pdf 26K | Abstract | 11/07/2007 17:15 Presentation - Update on the Design for Convergence Bidding 14-Nov-2007 pdf 236K | Abstract | 11/13/2007 15:14 Presentation - Proposed Credit Policy for Convergence Bidding 14-Nov-2007 pdf 730K | Abstract | 11/13/2007 15:17 Presentation - Proposed Cost Allocation for Virtual Bids 14-Nov-2007 pdf 231K | Abstract | 11/13/2007 15:19 Presentation - Nodal Convergence Bidding and Seller’s Choice 14-Nov-2007 pdf 374K | Abstract | 11/13/2007 16:58 Update on the Design for Convergence Bidding 07-Nov-2007 pdf 453K | Abstract | 11/07/2007 17:19 Convergence Bidding: Department of Market Monitoring Recommendations - Nov. 2007 pdf 133K | Abstract | 11/07/2007 17:29 Attachment A: Examples of Convergence Bidding and Local Market Power Mitigation pdf 196K | Abstract | 11/07/2007 17:21 Attachment B: Example of Congestion Revenue Rights Settlement Rule pdf 127K | Abstract | 11/07/2007 17:23 Attachment C: Seller’s Choice Contracts under Nodal Virtual Bidding pdf 73K | Abstract | 11/07/2007 17:25 Attachment D: Benchmarking Against NYISO, PJM and ISO-NE pdf 86K | Abstract | 11/07/2007 17:26

Comments Following Stakeholder Meeting 12-Sep-2007 WPTF Comments on Credit Requirements for Convergence Bidding pdf 54K | Abstract | 11/08/2007 14:03 EPIC Merchant Energy Comments on Convergence Bidding Credit and Collateral Requirements pdf 34K | Abstract | 10/18/2007 08:26

Scarcity Pricing & Convergence Bidding Stakeholder Meeting 12-Sep-2007 Agenda - Scarcity Pricing & Convergence Bidding Stakeholder Meeting 12-Sep-2007 pdf 66K | Abstract | 09/11/2007 15:40 Straw Proposal for Reserve Scarcity Pricing Design - 05-Sep-2007 pdf 330K | Abstract | 09/11/2007 09:35 Presentation – Scarcity Pricing Straw Proposal - 11-Sep-2007 pdf 354K | Abstract | 09/11/2007 11:32 Presentation – Convergence Bidding Credit Policy 12-Sep-2007 pdf 86K | Abstract | 09/06/2007 12:52 Presentation - DMM Recommendations on Convergence Bidding pdf 628K | Abstract | 09/11/2007 15:45 Presentation – Status of Convergence Bidding Design pdf 343K | Abstract | 09/12/2007 09:42 Template for Stakeholder Comments – Scarcity Pricing Straw Proposal - 11-Sep-2007 doc 47K | Abstract | 09/11/2007 11:34

Stakeholder Comments 24-Aug-2007 AReM Comments on Convergence Bidding pdf 27K | Abstract | 08/29/2007 09:55 California Public Utilities Commission Comments on Convergence Bidding pdf 93K | Abstract | 08/28/2007 10:29 Citigroup Energy, Inc. Comments on Convergence Bidding pdf 9K | Abstract | 08/29/2007 10:01 Coral Power Comments on Convergence Bidding pdf 99K | Abstract | 08/27/2007 11:09 DC Energy Comments on Convergence Bidding pdf 107K | Abstract | 08/27/2007 11:10 EOB Comments on Convergence Bidding pdf 21K | Abstract | 09/17/2007 10:59 FPLE Comments on Convergence Bidding pdf 77K | Abstract | 08/28/2007 10:47 Morgan Stanley Capital Group Inc. Comments on Convergence Bidding pdf 90K | Abstract | 08/27/2007 11:12 PG&E Comments on Convergence Bidding pdf 107K | Abstract | 08/27/2007 11:14 SCE Comments on Convergence Bidding pdf 86K | Abstract | 08/27/2007 11:15 Sempra Global Comments on Convergence Bidding pdf 100K | Abstract | 08/27/2007 11:17 Western Power Trading Forum, the Independent Energy Producers, San Diego Gas and Electric, and EPIC Merchant Energy Comments on Convergence Bidding pdf 133K | Abstract | 08/28/2007 10:45 Williams Power Company Comments on Convergence Bidding 24-Aug-2007 pdf 15K | Abstract | 08/24/2007 14:49

Market Surveillance Committee / Stakeholder Meeting 10-Aug-2007 Template for Stakeholder Comments on Convergence Bidding doc 44K | Abstract | 08/13/2007 16:15 Convergence Bidding Discussion at MSC Meeting 10-Aug-2007 pdf 221K | Abstract | 08/09/2007 15:36 Presentation – Convergence Bidding Issues pdf 242K | Abstract | 08/07/2007 14:28 Presentation - DMM Comments and Recommendations on Convergence Bidding Design Options     Revision: The example on slide 38-39 was modified to correct a mathematical error. Slide 38 – "150 MW out of 200 MW dispatch" was changed to "50 MW out of 200 MW dispatch". Slide 39 calculations were modified to reflect the correction described in slide 38. pdf 340K | Abstract | 08/09/2007 14:49 Presentation by SCE - Virtual Bidding in MRTU 10-Aug-2007 pdf 119K | Abstract | 08/10/2007 08:25 Presentation – The Case for Convergence Bidding at All Pricing Points pdf 4355K | Abstract | 08/13/2007 10:19 Options for the Conceptual Design for Convergence Bidding pdf 257K | Abstract | 08/07/2007 15:35

Stakeholder Conference Call on Granularity of Virtual Bids 17-Jul-2007 Presentation – Convergence Bidding: Granularity of Virtual Bids pdf 115K | Abstract | 07/16/2007 16:45

Issues related to Credit Policy for Virtual Bids Presentation – Convergence Bidding: Credit and Collateral Isues 29-Jun-2007 pdf 46K | Abstract | 06/29/2007 09:44 Addendum to May 31 Paper: Key Issues related to Credit Policy for Virtual Bids pdf 251K | Abstract | 06/22/2007 15:37

Stakeholder Comments --13-Jun-2007 CPUC Comments on Convergence Bidding Issues pdf 135K | Abstract | 06/18/2007 16:41 EPIC Merchant Energy Comments on Convergence Bidding Issues pdf 80K | Abstract | 06/26/2007 16:59 SCE Comments on Convergence Bidding Issues pdf 58K | Abstract | 06/15/2007 12:35 Williams Power Company Comments on Convergence Bidding Issues pdf 12K | Abstract | 06/13/2007 15:39 WPTF Comments on Convergence Bidding Issues pdf 31K | Abstract | 06/22/2007 13:05

Market Surveillance Committee / Stakeholder Meeting – 06-Jun-2007 Key Elements for the Conceptual Proposal for Convergence Bidding in the MRTU Markets pdf 215K | Abstract | 05/31/2007 16:13 Review of Settlements Charges for Possible Convergence Bidding Cost Allocation pdf 64K | Abstract | 05/31/2007 16:16 Comparison of Other ISOs' Credit Requirements for Virtual Bidding pdf 29K | Abstract | 06/04/2007 11:01 Presentation - Conceptual Design for Convergence Bidding pdf 96K | Abstract | 06/05/2007 09:41

Stakeholder Comments -- November 15, 2006 CERS Comments on Convergence Bidding pdf 96K | Abstract | 11/17/2006 15:28 CPUC Comments on Convergence Bidding pdf 37K | Abstract | 11/17/2006 15:31 PG&E Comments on Convergence Bidding pdf 91K | Abstract | 11/16/2006 16:23 SCE Comments on Convergence Bidding pdf 80K | Abstract | 11/16/2006 16:32 Williams Power Company Comments on Convergence Bidding pdf 19K | Abstract | 11/16/2006 16:34 WPTF Comments on Convergence Bidding pdf 46K | Abstract | 11/16/2006 16:36

Stakeholder Conference Call 30-Oct-2006 Agenda - Convergence Bidding Conference Call 30-Oct-2006 pdf 78K | Abstract | 10/26/2006 13:06 Revised Convergence Bidding Design Work Paper - Straw Proposal for Three Core Elements 25-Oct-2006 pdf 172K | Abstract | 10/26/2006 08:32 Convergence Bidding: Market Monitoring and Mitigation Issues - Prepared by DMM 24-Oct-2006 pdf 211K | Abstract | 10/26/2006 08:34 Presentation - Stakeholder Process Update on Convergence Bidding pdf 30K | Abstract | 10/31/2006 12:26 Presentation - DMM Comments and Recommendations on Convergence Bidding pdf 48K | Abstract | 10/31/2006 12:31

Additional Stakeholder Comments on Convergence Bidding DC Energy Comments on Convergence Bidding pdf 189K | Abstract | 10/23/2006 16:15

Convergence Bidding in other ISOs ISO-NE Reports on Virtual Transactions pdf 79K | Abstract | 09/07/2006 09:50 Virtual Bidding in the NYISO - Presentation pdf 277K | Abstract | 09/05/2006 15:35

Convergence Bidding White Papers Convergence Bidding Design Framework pdf 92K | Abstract | 08/18/2006 13:41 Revised Convergence Bidding Design Work Paper - 14-Aug-2006 pdf 208K | Abstract | 08/15/2006 12:48 Blacklined - Convergence Bidding Design Work Paper pdf 328K | Abstract | 08/15/2006 12:54 Convergence Bidding Design Work Paper pdf 214K | Abstract | 07/17/2006 15:06

Stakeholder Comments on Convergence Bidding EPIC Merchant Energy Comments on Convergence Bidding pdf 87K | Abstract | 08/16/2006 15:40 PG&E Comments on Convergence Bidding pdf 86K | Abstract | 08/08/2006 14:14 DC Energy Comments on Market Initiatives and Ranking Criteria htm 7K | Abstract | 08/01/2006 11:15 WPTF Comments on Convergence Bidding htm 9K | Abstract | 08/02/2006 16:25 SCE Comments on Convergence Bidding pdf 272K | Abstract | 08/02/2006 16:33 SCE Comments on Convergence Bidding - Exhibit "A" pdf 98K | Abstract | 08/02/2006 16:34 WPC Comments on Ranking Criteria and Convergence Bidding pdf 29K | Abstract | 08/04/2006 16:25

Convergence Bidding Tutorial & Panel

Convergence Bidding Tutorial & Panel Discussion Agenda - June 13, 2006 pdf 60K | Abstract | 06/01/2006 11:21

CAISO Convergence Bidding White Paper pdf 208K | Abstract | 06/01/2006 11:11

CAISO Convergence Bidding Presentation pdf 452K | Abstract | 06/07/2006 12:19

Jim Bushnell Paper on Convergence Bidding and 95% Scheduling pdf 189K | Abstract | 06/06/2006 16:22

Jim Bushnell 95% Scheduling vs Convergence Bidding - Presentation pdf 99K | Abstract | 06/06/2006 16:38

Gary Stern Virtual Bidding Presentation pdf 233K | Abstract | 06/06/2006 16:59

Brian Theaker Convergence Bidding Presentation pdf 507K | Abstract | 06/07/2006 08:57

Joe Bowring Convergence Bidding Presentation pdf 445K | Abstract | 06/12/2006 10:11