Executive Summary:

• CAISO’s stakeholder process is bringing substantial policy and market design changes to fruition in 2025.
• Many of the most significant changes involve battery energy storage system operations - including state-of-charge management and changes to the bid cost recovery mechanism.
• Other wider-reaching changes involve reform of the interconnection process and changes to how Resource Adequacy procurement targets are determined - each of which will likely benefit batteries.

Subscribers to Modo Energy’s Research will also learn:

• How policy changes and initiatives are introduced and actually progress through the stakeholder process in CAISO.
• About the motivations behind ongoing initiatives, and what their likely outcomes will be.
• How the timeline differs for different types of initiatives - and what the timeline looks like for issues currently moving through the stakeholder process.

How CAISO’s stakeholder process works

California Independent System Operator (CAISO) operates the state’s wholesale electricity market and transmission system - relying on a structured stakeholder process to refine policies, develop market designs, and align grid operations with regulatory mandates.

The process allows for stakeholders to engage and contribute to key decisions that shape California’s energy market operations.

CAISO first identifies market inefficiencies, reliability concerns, and policy gaps that require action.