CAISO’s Role in California Wholesale Markets

The California Independent System Operator (known as CAISO) operates California’s energy wholesale market. The wholesale market, as any other commodity exchanges do, is composed of many interrelated processes.

The energy markets (day-ahead, hour-ahead and real-time) use a full network model that models transmission losses and reactive power load to produce prices at every point in the California electrical system. The CAISO market allows California to meet reliability needs and serve load by providing energy and sufficient capacity.

The CAISO also offers services including mechanisms for entities to obtain and trade congestion revenue rights and engage in convergence bidding activities. All products and services provided by the CAISO are developed and implemented in full collaboration with stakeholders.

The CAISO is regulated by the Federal Energy Regulatory Commission (or FERC), an independent federal agency that regulates the interstate transmission of electricity, natural gas, and oil. The California Public Utilities Commission regulates investor-owned utilities operating in the CAISO balancing authority area. Publicly owned utilities in California are regulated by their respective city councils or other governance bodies.

As a Participating Transmission Owner to the CAISO, SCE has placed all of its transmission system facilities under the administration and operation of the CAISO. Any issues related to interconnecting generation projects to SCE’s transmission system should be addressed to the CAISO.

Selling to SCE, A 3RD Party or Into the CAISO Market

The CAISO market allows any Independent Power Producer (or IPP) to sale to any “market participant” to the CAISO’s market. The current list of market participants include the Investor Owned Utilities (such as SCE, PG&E and SDGE), IPPs, municipalities, energy commodity brokers, etc. Market participants can also be non-California entities participating in inter-state transactions that can be scheduled, delivered and settled via the CAISO’s market.

Participating in the CAISO market requires you to become a Market Participant, or to establish a relationship with a current market participant under an appropriate operating agreement. Some of the operations performed by the CAISO market require additional functional agreements to be in place. These include roles performed by Scheduling Coordinators, Metering Service providers, settlement functions, etc.

For information about becoming a market participant and for any other information about the CAISO, please visit the CAISO website at

Interconnecting Your Project For Sales Into Wholesale Market

Generation projects connecting to SCE’s electrical system seeking to participate in CAISO’s market require to become a Participating Generator. All interconnections requested for the purpose of selling power to a wholesale market are under the jurisdiction of the FERC, and as such, requires to follow the FERC jurisdictional tariffs.

Depending on whether the generation project connects to SCE’s transmission or distribution system, the applicable interconnection process is handled under the CAISO tariff or SCE’s WDAT, respectively.

The California Independent System Operator (CAISO) administers the annual application window for the distributed generation deliverability (DGD) allocation process pursuant to CAISO Tariff Section The CAISO coordinates with utility distribution companies to assign available deliverability capacity to eligible distributed generation facilities that submit an application to participate in this process within the timelines established by the CAISO. The CAISO announces the opening and closing dates for the DGD window on their website (typically around mid-March of each year).

For additional information and for the prior year’s DGD allocation results, please visit our page regarding Interconnections to the CAISO under the header CAISO's Distributed Generation Deliverability (DGD) Application Window.

Distributed Generation Deliverability (DGD) Overview

The CAISO established DGD annual allocation process to enable distributed generation resources (DG Facilities) that are interconnecting to the utility distribution grid to obtain Partial Capacity Deliverability Status or Full Capacity Deliverability Status by allocating “Potential DGD” (as identified by the CAISO in their annual DGD Assessment Results). For more information about the DGD Allocation process, refer to the CAISO’s Business Practice Manual for Distributed Generation Deliverability.

The ISO posts the distributed generation deliverability assessment results to its website at

Application Instructions for Facilities in SCE's Service Territory

Owners of distributed generation facilities interconnected or seeking interconnection to Southern California Edison's distribution system (under SCE’s Wholesale Distribution Access Tariff or Rule 21) who are interested in participating in CAISO's Distributed Generation Deliverability allocation process can submit an application.

Eligibility Worksheet

Before beginning the application, use the attached Eligibility Worksheet to evaluate the project’s eligibility to apply for the Distributed Generation Deliverability allocation process. However, in the case of discrepancies, CAISO’s tariffs and applicable interconnection process prevail.

DGD Application for SCE’s Service Territory

The deadline for submitting a complete application to SCE for the 2023 DGD application window is 5:00 p.m. (Pacific Time) Friday, April 14, 2023.


Additional Information

Questions regarding this application or the deliverability assignment process can be sent to

Expose as Block

DISCLAIMER: The guidelines in this section are provided with the intent to help SCE’s customers understand SCE’s Interconnection Procedures. However, in the case of discrepancies with SCE’s rules, such tariffs and regulations will prevail.