Transcript ISOs in USA

Bulk Power Transmission System
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U.S. bulk power transmission system is directly
serviced by three of the five electric networks (power
grids) in North America, consisting of extra-highvoltage lines designed to permit the transfer of electric
energy across the network.
Virtually all U.S. utilities are interconnected with at least
one other utility by these major grids.
Within each power grid, utilities that own or control
generation and transmission buy and sell power
among themselves.
Bulk Power Transmission System
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The interconnections are divided into 152 regional
"control areas" that monitor and control a regional
transmission grid.
Control areas are the primary units responsible for the
reliable operation of the transmission system
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designate the generators to operate (unit commitment)
schedule power trades between control areas (transaction
scheduling)
schedule electricity generation from each generator (unit
dispatch)
Independent System Operators
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Separation of ownership from control
Transmission system independently operated
ISO Responsibilities
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Control of the transmission system
Maintain system reliability
Provide ancillary services (system & voltage control,
regulation, spinning reserve, supplemental operating
reserve, and energy imbalance)
Administer transmission tariff
Manage transmission constraints
Provide transmission system information (OASIS)
Operate a power exchange (optional)
ISO Rensponsibilities
Example of the effect of parallel path flows on
the contract path pricing method
Pancake Effect of the Contract Path
Pricing Method
ISO proposed transmission tariffs
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Zone pricing
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Transmission grid divided into zones
Customer pays the rate of the zone where the load is
located
System-wide uniform rate
Megawatt-mile methodology for transmission pricing
Congestion cost charges
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Location-based marginal pricing (LBMP)
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Divide region into two active and two inactive congestion zones.
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Based on the cost of supplying energy to the next increment of load at a
specific location on the transmission grid. It measurers congestion costs by
taking the difference in the LBMP between two locations. Calculation of the
LBMP is based on bids into the power exchange.
Transmission constraints are small within the boundaries of each zone but
severe between zones, limiting energy transfer from one zone to another.
Congestion charges based on the costs of out-of-merit dispatch.
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These costs will then be allocated to each load on the transmission system on
the basis of its load ratio share (i.e., individual load expressed as a percent of
total load).
Transimition capacity reservations
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Financial rights
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A financial right, defined for two points on the transmission
grid, entitles the holder to receive payment when the cost of
energy between the two points varies
ISO will sell financial rights in a centralized auction
Holders of these rights are free to trade their rights.
Power Exchanges and the ISO
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A trading center where utilities, power
marketers, and other electricity suppliers
submit price and quantity bids to sell energy or
services, and potential customers submit offers
to purchase energy or services
Some ISO have the power exchange directly
under ISO control, while other create an
independent power exchange.
Monitoring Wholesale Power
Markets Through an ISO
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The FERC requires an ISO to monitor its
energy market for manipulation or abuses by
the participants. This requirement covers both
the power exchange (auction-based) market
and bilateral transactions in the region.
The ISO's authority to take corrective actions
when market abuses are identified depends on
the nature of the abuse.
Ensuring System Reliability
Through an ISO
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All ISOs will ensure short-term reliability of grid operation using NERC operating policies and
the applicable Regional Reliability Council (RRC) standards.
ISOs and the Open Access SameTime Information System
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OASIS is an interactive Internet-based database which will be used by
transmission providers and transmission customers, contains information
on transmission capacity reservations, ancillary services, and
transmission prices