Vista Energy (REV) Assessed a Disgorgement of $1,670,000 and a Civil Penalty of $1,000,000

Summary:

During 33 days within the Relevant Period, Vista told CAISO (in a bid submitted by 10 a.m.) that it forecasted its Initial State of Charge the next day (i.e., 14 hours after submitting the bid) to be at or below 4 MWh, even though the Battery had a 36 MW or larger Regulation Up award for the final hour of that day. Vista knew, or should have known, that because of that Regulation Up award, the Ancillary Services State of Charge constraint would ensure that Vista’s actual State of Charge would be around 20 MWh during the final hour that day. On these 33 days, Vista received 40 MW Regulation Down awards for the first hour of the next day due to its 4 MWh or lower Initial States of Charge. As Vista knew, or should have known, it would not have received these awards in the first hour of the day if it had submitted an Initial State of Charge value of 20 MWh. On each of these 33 days, Vista’s low Initial State of Charge values also enabled it to obtain 40 MW Regulation Down awards for several hours after the first hour. Because the Battery was actually at a State of Charge around 20 MWh at the beginning of each of the 33 days within the Relevant Period, there was a conflict between operation of the Regulation Down product (which seeks to charge the Battery to adjust voltage on the grid) and the Ancillary Service State of Charge constraint (which seeks to discharge the Battery when necessary to keep its State of Charge below a certain level). To resolve this conflict, the Ancillary Service State of Charge Constraint frequently discharged the Battery to make Vista’s Regulation Down Awards feasible. Under its Tariff at the time, CAISO was required to pay Vista for these discharges at Vista’s bid prices, which were often above CAISO LMPs. CAISO might have given the Battery 40 MW Regulation Down awards if the Battery had Day Ahead Energy awards for the relevant hours, but that was not the case here. CAISO Tariff § 37.3.1.1 states: Expected Conduct Market Participants must submit Bids for Energy, RUC Capacity and Ancillary Services and Submissions to Self-Provide an Ancillary Service from resources that are reasonably expected to be available and capable of performing at the levels specified in the Bid, and to remain available and capable of so performing based on all information that is known to the Market Participant or should have been known to the Market Participant at the time of submission. On 33 days within the Relevant Period, Vista submitted inaccurate Initial State of Charge values as part of its Regulation Down bids from a resource that was not “reasonably expected to be available and capable of performing at the levels specified in the Bid,” based on its actual expected Initial State of Charge. Enforcement concludes that this conduct violated § 37.3.1.1 of the CAISO Tariff.

Additional Discussion:

REV is a renewable power company with approximately 2.8 GW in generation assets, including the Vista Battery in CAISO. REV was formed in 2021 by LS Power, whose affiliates own approximately 87 percent of REV. Vista Energy Storage, LLC, in turn, is a subsidiary of REV that owns and operates the Vista Battery. The Vista Battery’s maximum storage capacity is 40 Megawatt Hours (MWh), meaning it can store up to 40 MWh of energy. The Battery can charge or discharge at a rate of 40 MW for a duration of 1 hour, and thus can fully charge or discharge within one hour.

Resolution

Vista agreed to disgorge $1,670,000 it received as a result of bids to CAISO for the Vista Battery during the Relevant Period. Vista also agreed to pay a civil penalty of $1,000,000. Additionally, Vista agreed to conduct compliance training and to submit one annual compliance monitoring report and a second annual compliance monitoring report at FERC Enforcement’s discretion.

Associated Files: