Transcript Midwest Market Initiative Presentation

Energy Markets at the Crossroads
Managing Multiple RTOs within State Boundaries
The Midwest RTO’s Perspective
December 12, 2002
Crowne Plaza Hotel
Springfield, Illinois
MISO Service Territory With SPP
Scope (with SPP)
150 GW peak load
144,000+ miles of transmission lines
20.9 million customers
2
Who We Are…
• Midwest ISO is an independent, non-profit grid
operator for the transmission of high voltage
electricity across much of the Midwest
• Member based
-
TOs* and TDUs** and Coordination Agreements
End Users and State Regulatory Authorities
Consumers and Environmental Groups
Power Marketers and IPPs
• Nation’s first FERC approved Regional Transmission
Organization (RTO)
*TO - Transmission Owner
**TDU – Transmission Dependent Utility
3
Midwest ISO
Regional Transmission Organization
AGREEMENTS
Transmission
Owners
Agreement
(Delegates
Responsibility)
Open
Access
Transmission
Tariff
(Establishes
Rules)
GOVERNANCE
Independent Board of Directors
(Ensure that the business performs in accordance to the TOA)
Transmission Owners
Committee
(Exercise authority
granted under the TOA)
Advisory Committee
(Stakeholder group that is advisor
to Board regarding Policy Issues)
MISO Officers
(Administer the TOA and perform functions directed by Board)
MAJOR FUNCTIONS
MISO RTO
By-Laws
(Defines
Corporation)
• Tariff Administration
• Congestion Management
• Parallel Path Flow
• Ancillary Services
• OASIS and ATC
• Market Monitoring
• Planning and Expansion
• Interregional Coordination
4
The Energy Marketplace
Markets
The
Dynamic
Energy
Grid
Participants
Oversight 5
The Participant View of the Energy Marketplace
Market Participants
Should I
invest in
new
generation
or
transmission
facilities
?
Should I
reserve
transmission
for my
intended
energy
dealings
?
Transmission Transmission
RTO Expansion
Service
Reservation
Information
sharing
requirement
without
a Market
structure
Should I
hedge
against
congestion
on my
energy
deals
?
FTR
Market
Operations
What bid
strategy
should
I use
?
Day Ahead
Energy
Market
Should I
change my bid
strategy to take
advantage
of any
opportunities
?
Did I make
the right
decisions
$$$
Real-Time
Energy
Market
Billing
and
Settlement
Additional information sharing requirement with
participants when a Market structure is in place
( also allows for more incentives and opportunities)
In order
to answer
this very
important
question
?
6
What We Do as an RTO
• Coordinate long-term transmission planning
• Administer generation interconnections
• Evaluate transmission service requests through one OASIS* site
• Approve and Provide transmission reservations
• Schedule transmission service over multiple control areas
• Provide billing/settlements for transmission service
• Manage congestion over a wide area in real time (reliability coordination)
• Analyze system conditions in real time
*OASIS – Open Access Same-time Information System
7
High Level RTO Functions
Interregional
Coordination
Transmission
Transmission
Expansion
Planning
Load
FTR Market
Market
Settlements
Congestion
Management
Tariff Administration
Transmission and Generation
Outage Scheduling
Market
Monitoring
Real Time
Operations
EMS
OASIS
Generation
Price
Transparency
Energy
Market
Ancillary
Services
Markets
Generation Dispatch
Transmission
Security
Unit
Commitment
Connection of New
Generation
8
Energy Market Objectives
RTO Functions
Transmission
Expansion
Planning /
Generation
Interconnection
• Holistic broad view point
• Independence and
Neutrality
• Equitable Process
• Optimal use of
Resources
When Combined with
An Efficient
Energy Market
• Financial Incentive to Support
Reliability :
• Congestion Cost Causality
• Supply/Demand
• Price Transparency
Establishes
Regional
Reliability
at a Low Price
• Adequate Supply
• Competitive
Prices
• Efficient Growth
Which Meets
the Consumer
Retail
Energy Needs
• Reliable Supply of
Power
• Low Price for
And Provides for
a Brighter Energy
Future
• More Consumer
Choices
• Competitive Price for
Electricity
• Continued Reliable
Supply of Power
• Incentives for
Investment
• Industry
Standardization
• Recognized Best
Practices
Electricity
9
Benefits of the Midwest Market
• Transparency of energy imbalance pricing data
• Market Based Congestion Management including visibility of the
financial impact of Congestion Management
• Higher utilization of transmission assets
• Optimal use of energy resources across a wider region
• Deferral of generation construction through utilization of a wider set
of assets
• Facilitates the ability of demand response to market incentives
• Visibility of data for use in siting generation
• Visibility of price data for use in Futures contracts
• Higher utilization of transmission assets
• Meeting requirements of FERC Order 2000
o
Congestion Management
o
Energy Imbalance
10
MISO & PJM Footprints
Manitoba
Washington
New Hampshire
Montana
North Dakota
Michigan
Minnesota
Oregon
Idaho
New York
Wyoming
Michigan
Iowa
Utah
Ohio
Kansas
Missouri
Maryland
Virginia
Virginia
Kentucky
New Mexico
Oklahoma
District of Columbia
North Carolina
Tennessee
Arizona
New Jersey
Delaware
Indiana
Colorado
Rhode Island
Connecticut
Pennsylvania
Illinois
Nebraska
California
Massachusetts
Wisconsin
South Dakota
Nevada
Maine
Vermont
South
Carolina
Arkansas
Alabama
Georgia
Texas
Louisiana
Florida
11
What’s Happened So Far…
July 2002 FERC conditional approval of former Alliance companies’ RTO elections
Midwest ISO
PJM
• Ameren
• American Electric Power
• First Energy
• Commonwealth Edison
• Northern Indiana Public Service
• Dayton Power & Light
• Illinois Power
12
What’s Happened So Far…
FERC APPROVAL CONDITIONAL BASED ON
Elimination of rate pancaking between PJM & MISO
Complete sign off by NERC of the Reliability Proposals at each stage of
the process
Requirement to hold Michigan and Wisconsin harmless
13
Addressing The Seam Issues
Challenges
RTO choices of utilities leaves “marbled” configuration
Single common market will resolve many of the issues, but not all
Transition to single common market will require perfect coordination with PJM
14
Addressing The Seam Issues
By Establishment of a Joint and Common Market
Common Markets
Common Market Rules
Common Billing & Settlement
Value
Proposition
Simplified & Enhanced Participant Interaction
Multi-Regional Reliability Improvement
Multi-Regional Resource Optimization
Reduced Implementation Costs
15
Addressing The Seam Issues With Technology
Common Market Portal
Market Participant or Regulator
The CMP functionality
will exist, in total, at all the
participating RTOs.
It will be developed as a
set of encapsulated
services that will interface
Energy Market
with an RTOs existing
Analysis/
application systems
Data Visualization
through customized APIs.
Tools
Existing
Market
Systems
MISO
Market
API
Information
Systems
Automatic
Bulk
Data
Transport
Bulk Data
Transport
Graphical User
Interface
Required
Standards Development
• Security
• Graphical User
Interface
• Bulk Data Transport
• Data Model
• Application Program
Interfaces
Portal Request Services
CPP
Portal
Services
Request
Broker
CPA
PSR
PCR
Portal Functions
Portal UI Widgets
Common Process Functions
Portal Data Repository
Portal
Services
Request
Broker
Existing
Market
Systems
Any RTO’s
Market
API
Information
Systems
Composite
RTO Data
RTO
Data Exchange
16
Addressing The Seam Issues With Technology
Common Market Portal - FTR Request Example
1) Participant
Requests FTR from
NewCo to
New England
Request
Encryption
Internet
Transport of
Encrypted
Information
Electronic
Signature
Request
Decryption
Authenticate
User
2) Splits the FTR into
its individual RTO
components.
3) Transmits requests
for FTR’s to each
of the RTO’s.
Common 4) Waits for response
Market
from the RTOs.
Portal
7) Combines RTOs
FTR responses and
notifies the participant
of the approval or
denial of the desired
FTR.
Participant
8) Reviews FTR’s cost (accepts or rejects)
9) If the FTR is
accepted, notifies the
individual RTO’s of
the FTR acceptance.
Enterprise Application Integration Message Bus
New
England
New
York
PJM
MISO
5) Each RTO performs its own simultaneous feasibility study for the requested FTR.
6) Each RTO transmits results of study (approval/denial of FTR) back to the CMP.
10) Each RTO commits the requested FTR.
17
Addressing The Seam Issues Through
Coordinated Planning Activities
•
* Active requests within one county of seam
Access and Expansion Planning
MISO & PJM to reach joint resolution for
coordination of impact studies.
18
Addressing The Seam Issues
With Coordinated Activities
Transfer Capability Between Markets
MISO
WEST
PJM
MISO
AMRN
MISO
ECAR
19
Addressing The Seam Issues
With Coordinated Activities
Outage Maintenance Coordination
MISO & PJM will define list of key facilities in each RTO that impact operations
in the other RTO when outaged.
MISO and PJM will cooperate in coordinating transmission maintenance outages
on those facilities included in key facilities list through data-sharing, NERC
System Data Exchange (SDX) data, and verbal communication.
20
Addressing The Seam Issues
Through Collaborative Actions
NERC Regional Criteria & Reserve Sharing
Members of MISO and PJM may continue to participate in common reserve sharing
programs during and following the transition period.
This will require generators in one RTO to respond to reserve sharing
events in the other RTO.
MISO & PJM will agree to either assign a transmission margin to their flowgates to
allow capacity in both RTOs to respond to reserve sharing events in either RTO,
or
will redispatch generators to provide the transmission capacity when needed.
21
Addressing The Seam Issues
With Joint Agreements
Contract Tie Capacity – Peninsulas / Islands
Being addressed as part of response to FERC order holding Wisconsin &
Michigan harmless.
MISO and PJM will agree on how full network capabilities can be used to serve
transmission customers.
In those instances where contract path limits are reached before flow-based
limits by either RTO, the other RTO will make its contract path capacity
available.
Resolution of “Thru” & “Out” rates could eliminate this problem.
22
IP
ComEd
Critical* MISO Flowgates impacted by Illinois and AEP operation(s)
A.
Rush Island-St. Francois 345kV
B.
Rush Island-St. Francois 345kV for Bland-Franks 345kV
C.
Bland-Franks 345kV
D.
Eau Clair-Arpin 345kV
E.
Blue Lick 345/161kV Xfmr for Baker-Broadford 765kV
F.
Lore-Turkey River 161kV for Wempletown-Paddock 345kV
D
AEP
F
B
C A
5
E
4 3
1
2
DPL
Critical* AEP Flowgates impacted by MISO operation(s)
1.
Kanawha-Matt Funk 345kV for Baker-Broadford 765kV
2.
Cloverdale-Lexington 500kV for Pruntytown-Mt. Storm 500kV
3.
Kanawah-Matt Funk 345kV for Broadford-Jacksons Ferry 765kV
4.
Kyger-Sporn 345kV for Amos 765/345kV Transformer
5.
Cook-Benton Harbor 345kV Circuit
* 10 or more days in TLR Level 3 or above since January 1, 2001
23
Addressing The Seam Issues
With Joint Agreements
Parallel Flows (Congestion Management)
 PJM utilizes Locational Marginal Pricing (LMP) to manage congestion.
o Transactions internal to PJM are not tagged.
o Economic Dispatch of generation resources within PJM is utilized to manage.
congestion and the cost is passed on to the marketer.
 MISO utilizes Transmission Loading Relief (TLR) Procedures to manage
congestion (MISO is migrating to LMP congestion Management)
o Any transaction between two or more Control Areas is tagged.
o Tagged transactions which impact a constrained facility by 5% or more are curtailed in
a pro rata manner to manage energy flow.
o Un-tagged transactions are not identified by the TLR Process.
24
Addressing The Seam Issues
With Joint Agreements
Parallel Flows (ATC* / AFC** Calculation)
• MISO and PJM will execute an ATC/AFC coordination agreement prior to
Nov. 1, 2002.
• Agreement will be based upon the ATC/AFC Coordination Agreement
reached between MISO, Southwest Power Pool (SPP), and the former
Alliance companies.
*ATC – Available Transfer Capability
**AFC – Available Flowgate Capability
25
Addressing The Seam Issues
Through the Establishment of Joint Procedures
Different Definitions / Procedures Between RTOs
During actual power system restoration, MISO & PJM will coordinate their
actions with each other – as well as with other RTOs.
In the event of an emergency in an area that is in close electrical proximity to
both MISO and PJM areas, BOTH RTOs will issue TLR Level 6 or take
other actions in kind to address the situation.
Both RTOs agree that either RTO has the authority to direct operating entites
in both RTOs during an emergency – this will always be done with both
RTOs conferenced in.
26
Addressing The Seam Issues
Through the Collaborative Stakeholder Process
The Midwest Independent Transmission System Operator, Inc. (MISO), PJM
Interconnection and Southwest Power Pool, Inc. (SPP) announce a workshop
to discuss proposed solutions that will ensure the safe and reliable operation of
the transmission grid across their 27-state service territories, the District of
Columbia and Canadian province of Manitoba.
The workshop will be held Dec. 18, 2002, from 10 a.m. to 3 p.m. (EST) at the
Radisson Airport Hotel & Conference Center in Columbus, Ohio. MISO, PJM
and SPP staff will facilitate discussion on proposals to mitigate parallel path
flow issues between their service territories. Discussion of the proposals will
center on the coordination of information related to the safe and reliable
operation of the grid, including coordination of available transfer capability
(ATC) and available flowgate capability (AFC) in the two regions.
All interested parties are invited to attend by registering at the MISO, PJM,
SPP joint and common website,
www.miso-pjm-spp.com
27
Appendix A
The Midwest
Energy Market Initiative
28
Energy Market Functionality
FUNCTIONAL AREAS
FTRs
(A financial contract that entitles holder to a stream of revenues –
or charges - based on the hourly energy price differences across
the path)
• Request processing
• Simultaneous deliverability feasibility testing
• Approval processing
Day Ahead Market
(Based on scheduled hourly quantities and day-ahead hourly
prices)
• Security Constrained Unit Commitment
• LMP calculation using generation offers, demand bids, and bilateral
transaction schedules.
Real-Time Energy Market
(Based on actual hourly quantity deviations from day-ahead
schedule hourly quantities and real-time prices)
SUPPORTING
PROCESSES
S
t
a
k
e
h
o
l
d
e
r
P
r
o
c
e
s
s
P
u
b
l
i
s
h
M
a
r
k
e
t
• LMP calculation using real-time SE values
D
a
t
a
S
e
t
t
l
e
m
e
n
t
s
&
B
i
l
l
i
n
g
Participant Readiness
• Communications Plan
• Define Membership
Requirements
• Manage Customer Registration
• Manage Customer Relations
• Manage Training
• Perform Market Trials
29
Fixed Transmission Rights
Example
Market Timeline
Annually (Seasonally On/Off Peak):
-MISO processes and distributes Initial / ReAllocated FTR/ARRs
-Updated ownership information is tracked
internally by MISO
Monthly:
-MRE submits bid to Buy FTR
-MISO processes Auction and publishes
Auction Results
-Updated ownership information is tracked
internally by MISO
-Auction Results are sent for Invoicing
At Least Daily:
-MRE submits FTR Request
-MISO determines result and publishes
information for MRE
-MRE accepts/rejects FTR Request and
ownership is updated internally
-MRE submits an FTR Trade Request on
behalf of a participant
-Trade is processed and ownership is
tracked internally by MISO (for trade
processed through the RTO)
Daily:
-MISO sends ownership information to
Market Settlements
Financial
GenCo 1:
- Generation Resource 1
GenCo 2:
- Generation Resource 4
External
Control
Area
NewCo Footprint
Market Area
Control Area 1
GenCo 3:
- Generation Resource 2
- Generation Resource 3
- Generation Resource 5
External GenCo 1:
- External Generation
Resource 4
LSE 1
- Load 1
- Load 2
LSE 2
- Load 4
- Load 6
- DRR 1
MRE 1
- GenCo 1
- LSE 1
MRE 3
- External
GenCo 1
b
LSE 3
- Load 3
LSE 4
- Load 7
- Load 8
- Load 9
LSE 5
- Load 5
MRE 2
- GenCo 2
- GenCo 3
- LSE 2
- LSE 3
- LSE 4
Control Area 2
Generation
Resource 4
Load 8
Load 1
Zone
Load 7
External
Generation
Resource 6
Load 2
Generation
Resource 1
Generation
Resource 5
Control
Area 5
Load 9
Hub
Load 3
Load 6
Physical
Zone
Load 5
Flowgate
Generation
Resource 3
Pnode
External
Pnode
APNode
Load 4
Zone
Load
Demand
Response
Resource
Generation
Resource
Demand
Response
Resource 1
Generation
Resource 2
Control Area 3
Control Area 4
Transmission
Line
30
Day-Ahead
Energy Market Example
Market Timeline
7 Days Prior - 1000 DA:
- MISO generates load forecast
- GenCo submits outages
1000 DA:
- MISO performs preliminary transmission
assessment
1100 DA:
- Begin creating DA Market Case
Ending 1200 DA:
- MRE submits demand bids on behalf of
Load.
- MRE submits generation offers on
behalf of Gen. Res.
- MRE submits DA bilateral schedules
with another MRE
1200 DA - 1600 DA:
- MISO clears the DA Market
1600 DA:
- MISO publishes the public and private
DA results
1600 – 1800 DA:
- MRE submits three-part bids on behalf of
Gen. Res.
Financial
GenCo 1:
- Generation Resource 1
GenCo 2:
- Generation Resource 4
External
Control
Area
NewCo Footprint
Market Area
Control Area 1
GenCo 3:
- Generation Resource 2
- Generation Resource 3
- Generation Resource 5
External GenCo 1:
- External Generation
Resource 4
LSE 1
- Load 1
- Load 2
LSE 2
- Load 4
- Load 6
- DRR 1
MRE 1
- GenCo 1
- LSE 1
MRE 3
- External
GenCo 1
b
LSE 3
- Load 3
LSE 4
- Load 7
- Load 8
- Load 9
LSE 5
- Load 5
MRE 2
- GenCo 2
- GenCo 3
- LSE 2
- LSE 3
- LSE 4
Control Area 2
Generation
Resource 4
Load 8
Load 1
Zone
Load 7
External
Generation
Resource 6
Load 2
Generation
Resource 1
Generation
Resource 5
Control
Area 5
Load 9
Hub
Load 3
Load 6
Physical
Zone
Load 5
Flowgate
Generation
Resource 3
Pnode
External
Pnode
APNode
Load 4
Zone
Load
1800 – 2000 DA:
- MISO performs DA Resource Adequacy
Assessment and Feasibility Study and
commits resources, if necessary
- MISO informs MRE of any revisions to
Schedule of Operation.
Demand
Response
Resource
Generation
Resource
Demand
Response
Resource 1
Generation
Resource 2
Control Area 3
Control Area 4
Transmission
Line
31
Real-Time
Energy Market Example
Market Timeline
DA Market Close to OH - 90 minutes
- MRE Submits Self-Schedule on behalf of
Gen. Res
- MRE Submits changes to Offer Curves
- MRE Submits Demand Response Offer
on behalf of Dem. Resp. Res
DA Market Close to OH - 20 minutes
- MRE Submits a new Bilateral Schedule
with another MRE
- MRE updates existing Bilateral Schedule
from the DA Market
T - 5 minutes to T - 0 minutes:
- MISO determines 5 Min. Load Forecast
- MISO performs SCED
- MISO sends NSI to Control Areas
- MISO sends Dispatch Instructions (in
both price and MW form)
Financial
GenCo 1:
- Generation Resource 1
GenCo 2:
- Generation Resource 4
External
Control
Area
NewCo Footprint
Market Area
Control Area 1
GenCo 3:
- Generation Resource 2
- Generation Resource 3
- Generation Resource 5
External GenCo 1:
- External Generation
Resource 4
LSE 1
- Load 1
- Load 2
LSE 2
- Load 4
- Load 6
- DRR 1
MRE 1
- GenCo 1
- LSE 1
MRE 3
- External
GenCo 1
b
LSE 3
- Load 3
LSE 4
- Load 7
- Load 8
- Load 9
LSE 5
- Load 5
MRE 2
- GenCo 2
- GenCo 3
- LSE 2
- LSE 3
- LSE 4
Control Area 2
Generation
Resource 4
Load 8
Load 1
Zone
Load 7
External
Generation
Resource 6
Load 2
Generation
Resource 1
Generation
Resource 5
Control
Area 5
Load 9
Hub
Load 3
Load 6
Physical
T – 0 minutes to T + 5 minutes:
- Market Operates
T + 5 minutes:
- MISO calculates and determines Ex-Post
LMP
Zone
Load 5
Flowgate
Generation
Resource 3
Pnode
External
Pnode
APNode
Load 4
Zone
Load
T - 0 minutes to 1200 of OD + 1 Day:
- MRE updates financial bilateral
schedules, after-the-fact, for Imbalance
Exchange
- MISO calculates and determines
Settlement LMP
Demand
Response
Resource
Generation
Resource
Demand
Response
Resource 1
Generation
Resource 2
Control Area 3
Control Area 4
Transmission
Line
32
Energy Market
Settlements Example
Market Timeline
5 Days After the Operating Day:
- MISO performs initial settlements for OD1
6 Days After the Operating Day:
- MRE downloads statement from portal
13 Days After the Operating Day:
-MISO produces Invoices for the last
seven operating days, including OD1
14 Days After the Operating Day:
- MRE downloads invoice from portal
18 Days After the Operating Day:
- MISO collects money from MREs
20 Days After the Operating Day:
- MISO pays out MREs
45 Days After the Operating Day:
- Metering Agent submits meter data
45 Days After the Operating Day:
- MISO performs final settlements for OD1
46 Days After the Operating Day:
- MRE downloads statement from portal
Financial
GenCo 1:
- Generation Resource 1
GenCo 2:
- Generation Resource 4
External
Control
Area
NewCo Footprint
Market Area
Control Area 1
GenCo 3:
- Generation Resource 2
- Generation Resource 3
- Generation Resource 5
External GenCo 1:
- External Generation
Resource 4
LSE 1
- Load 1
- Load 2
LSE 2
- Load 4
- Load 6
- DRR 1
MRE 1
- GenCo 1
- LSE 1
MRE 3
- External
GenCo 1
b
LSE 3
- Load 3
LSE 4
- Load 7
- Load 8
- Load 9
LSE 5
- Load 5
MRE 2
- GenCo 2
- GenCo 3
- LSE 2
- LSE 3
- LSE 4
Control Area 2
Generation
Resource 4
Load 8
Load 1
Zone
Load 7
External
Generation
Resource 6
Load 2
Generation
Resource 1
Generation
Resource 5
Control
Area 5
Load 9
Hub
Load 3
Load 6
Physical
Zone
Load 5
Flowgate
Generation
Resource 3
Pnode
External
Pnode
APNode
Load 4
Zone
Load
75 Days After the Operating Day:
- MISO resettles OD1 (#1)
405 Days After the Operating Day:
- MISO resettles for OD1 (#12)
Demand
Response
Resource
Generation
Resource
Demand
Response
Resource 1
Generation
Resource 2
Control Area 3
Control Area 4
Transmission
Line
33
Energy Market
Application Architecture
Financial
Statements
MRE
T hird Party
Rating
Agencies
Credit
Policy
Changes
FERC
MRE
Transmission Reservations
Transmission Service Reservation Validation
New Co Enhanced System s
External Ratings
Energy Management
Sy stem
Load Forecast
State Estimator
Outage Scheduler
SCADA/ICCP
DA Scheduling
Data
RT Scheduling
Data
NSI
NSI
NewCo
Control
Area
Forecasts
Reserves
Dispatch Inst.
NSI
Infeasibilities
Schedule
Verification
NSI
Enhanced Energy
Scheduling Sy stem
Phy sical Scheduling
Physical
Schedules
Operating
Conditions
Actual
Load
Control
Area
RT/DA Market Operation Sy stem
Operate Day Ahead Energy
Market
Operate Real Time Energy Market
Calculate LMP
Generation
Company
Financial
Reports
Commercial
Model
Relationships
Credit
Events
Accounting Sy stem
Inv oicing
Process Pay ments
General Ledger
Credit/Collections
Financial Reporting
Budgeting
Customer
Outstanding
Balance
Commercial
Model
Relationships
Settlements Data
Market Operations Settlements
Payment
Tariff
Based
Charges
Commercial
Model
Relationships
Market Settlement Sy stem
Settle Spot Energy Market
Settle Loss Charges
Settle Congestion Charges
Settle FTRs
DA Operating Data
RT Operating Data
Commercial
Model
Relationships
Settlement
Statement
Financial
Schedule
s
DA & RT
Market
Operatio
n
FTR
Request
FTR
Request
Results
FTR Sy stem
Calculation, Allocation,
& Auction
Trading & Tracking
Network
Model
Market Operations Market Operations
FTR Bids
FTR Market
Information
Service Requests
Disputes
Portal Users
Invoices
NewCo
Settlement
Analyst
MRE
Service Requests
Disputes
Portal Users
Commercial Model
Auction
Results
Financial Schedule
Sy stem
Financial Scheduling
MRE
NewCo
Market
Operator
OASIS
Network Serv ice
PtP Serv ice
Manage FTR
Requests
Meter
Data
Commercial Model
Relationships
Customer Serv ice Sy stem
Register Participants
Track Customer Requests
Manage Settlement Disputes
Dispatch
Instructions
Billing
Determinants
Engineering
Commercial
Model
Relationships
FTR
Data
Corporate Affairs - Customer Service
Schedule
of
Operation
Tarif f Billing
Sy stem
Settle Non-Market
Charges
Operations Tariff Admin
Peak Data
Commercial
Model
Relationships
Market Operations - Settlements
Validate
Settlement
Results
Default
Distributions
Credit Management
Sy stem
Credit Score/Limits
Monitor Customer
Positions
Credit Risk Ev ent
Management
Commercial
Model
Relationships
Market Operations - Market
Operations
External
Control
Area
LSE
Corporate Services Accounting
Operations Scheduling
Operations - Reliability
Coordination
Confirmed OASIS Reservations
DA Data
RT Data, FTR Data
Customer Inquiries/
Information
Commercial Model
DA Data
RT Data
DA/RT
Transactions
Portal
Prov ide Common Interactiv e
Interf ace f or Market Inf ormation
Metering Agent
Meter Actuals
Inquiries
Allocated ARRs
Inquiries
Market Information
Invoice
Payment
Inquiries
Distribution
Company
Inquiries
Distribution
Company
Inquiries
NewCo
Control Areas
Inquiries
Inquiries
FERC
PUC
T ransmission
Owner
NewCo New Systems
34
Energy Market
Hardware Architecture
MISO
Technology
Model
(Logical)
DNS Server Cluster
Web Server Cluster
microsystems
micros ystems
Authentication Server Cluster
microsystems
micros ystems
INTERNET
SAN
Switch
II
IO
O
Database Server
Cluster
Weblogic App
Server Cluster
Information Storage Solution
(EMC SAN & NAS)
m ic r o s y s t em s
SunFire15K
0
1
LDAP Server Cluster
m ic r os y s t em s
2
ENTERPRISE 2 8 0 R
m ic r os y s t em s
microsystems
3
m ic r os y s t em s
ENTERPRISE 2 8 0 R
4
microsystems
5
6
Dispersed Participant
Workstations
7
8
PS1
PS2
PS3
9
10
PS1
PS2
PS3
11
12
I
P
13
14
IOS Firewall
15
Backup LAN
* Out-of-Band
* syslog Rollups
* Backups
ENTERPRISE 2 8 0 R
m ic r os y s t em s
m ic r os y s t e m s
SERVER LINK 5
Designed for

microsystems


Microsoft

W ind ows95
Deskpro EN
PS1
L11000
microsystems
Management Console
* Monitoring Rollups
* RSA Admin
* Axent ESM
* Located on Business
LAN
PS2
PS3
PS1
PS2
PS3
*
*
*
*
*
*
Application Server
Clusters for
SPD Engine
FTR Engine
Siebel CRM
Lodestar
Market Monitoring
Security Authorization
POWER
SUPPLY 2
POWER
SUPPLY 2
POWER
SUPPLY 2
POWER
SUPPLY 1
POWER
SUPPLY 1
POWER
SUPPLY 1
35
Midwest Market
Initiative Schedule
Program Schedule
Projects
3Q’02
4Q’02
1Q’03
2Q’03
3Q’03
4Q’03
Stakeholder Communications
Market Rule Definition
Market Rule Maintenance
Business Practice Develop. & Implement.
Internal Process Develop. & Implement.
Regulatory Affairs
Seams Coordination
Market Participant Readiness
Market Participant Registration
Training Development & Delivery
Market Network Model Development
Transmission Rights Conversion
Technology Deployment
System Definition
System Design
Configuration
System Test
Integration Test (Prep. & Execution)
Market Trials (Prep. & Execution)
Market Implementation
Major Milestones
Market Rules for
System Development
(9/30/02)
System Design
Sign-Off
(11/8/02)
System Test Plan
Approved
(3/21/03)
System Test
Complete
(4/18/03)
Market Trials
Complete
(11/7/03)
Integration Test
Complete
(8/1/03)
Go-Live
(12/1/03)
36
Energy Market Implementations Cost Comparison
Metric
IMO
CA ISO
PJM
NY ISO
ISO-NE
ERCOT
SPP
MISO
Capital Cost to Implement Mkt ($
Million)
$172.0
$100.0
$140.0
$82.0
$87.0
$137.0
$24.0
$59.2
Real Time Energy
Y
Y
Y
Y
Y
Y
Y
Y
Day Ahead Energy
N
Y
Y
Y
Y
N
N
Y
Operating Reserves
Y
Y
Y
Y
Y
Y
Y
N
FTR
Y
Y
Y
Y
N
Y
N
Y
MCP
ZONAL
LMP
LMP
MCP
ZONAL
LMP
LMP
MARKET CHARACTERISTICS:
Pricing
Sources:
- IMO, CA ISO, PJM, NY ISO,
ERCOT values from RTO West
Report
- ISO-NE value provided by ISONE CFO
- SPP market was not implemented
37
MISO / PJM Market Contrast
Item
Generator Bids
Price
Transparency
Unit Bids
Obligations
Handling of
Unit Deviation
From
Requested
Output
MISO Proposed
PJM Current
Similarities
Hourly Bidding
Day Ahead Bidding
Day Ahead & Real-Time Markets
Five minute posting of
three price components:
• Energy component
• Marginal losses
• Marginal congestion
Five minute posting of Settlement debit/credits made on hourly
integration of five minute values.
one price component:
• Combination of
energy and congestion
Mandatory offering of
resources with
notification, start-up,
and minimum run
times greater than 24
hours.
Mandatory offering of
resources designated
in installed capacity
portfolio of Load
Serving Entities.
Uninstructed deviation
penalty for each hour
when difference
between actual energy
and dispatch is greater
than the higher of 3
MW or 3% of the units
high emergency limit.
No implicit penalty;
Units outside of +/-10%
current dispatch rate do
not set market clearing
price, but are paid at
clearing price.
Three part bids accepted:
• Start-up
• No-load
• Price or monotonically increasing price
curve
38
MISO / PJM Market Contrast
Item
Fixed
Transmission
Rights
Resource
Adequacy
Measures
MISO Proposed
PJM Current
Seasonal allocation;
Options and obligations
to delineate between
expected to be funded
and non-funded.
Annual allocation;
If congestion charges
collected are less than
the target value of FTRs,
then the FTR credits are
reduced proportionately.
Resource adequacy
monitored days in
advance. Day-ahead
reliability assessment
performed and
additional units
committed so as to
ensure coverage of
demand and reserves.
LSE’s that are short of
capacity are charged
accordingly.
Reliability Assurance
Agreement requires
LSEs to contract with
resources to cover 119%
of their forecasted
annual peak load
(implemented a number
of capacity credit
markets to facilitate the
trading of energy for the
LSE capacity obligation
which is not met by
bilateral arrangements
and/or self-supplied).
Similarities
39
MISO / PJM Market Contrast
Item
Market Based
Ancillary
Services
Losses
Ancillary
Service
MISO Proposed
Regulation Market
currently under
development.
Cost of losses
calculated as the
difference between the
marginal cost of losses
at injection point and
marginal cost of losses
at delivery point.
PJM Current
Similarities
Current Services:
• Regulation
• Day-ahead operating
reserve
• Balancing operating
reserve
•Spinning reserve
Losses flat (2.5% offpeak 3% on-peak)
multiplied times hourly
energy transactions
multiplied by the realtime load weighted
average LMP for the
entire system; hourly
transactions over 200
MWHR may return MW
in-kind rather than pay
for losses.
40
Appendix B
Industry
Terminology
41
Glossary of Terms
Term
Definition
Financial Transmission Right (FTR)
Financial instrument whose value is determined when the transmission grid
is congested in the Day-Ahead Market, leading to different LMPs at
different locations.
Market Responsible Entity
An entity that is qualified to represent a Market Participant for purposes of
market interactions and financial settlements with MISO.
Midwest Independent System
Operator (MISO)
Independent Transmission System Operator that serves the electrical
transmission needs of much of the Midwest.
Midwest Market Initiative (MMI)
A NewCo initiative to implement market functionality.
NewCo
A combined entity that includes MISO and SPP footprints
Single Market Design Forum (SMDF)
A forum to develop a single market that meets the needs of all customers
and stakeholders using the electric power grid in the regions served by
MISO, PJM Interconnection, and Southwest Power Pool.
Southwest Power Pool
NERC Reliability Council that provides independent security coordination
functions and tariff administration in the Midwest.
42
Glossary of Acronyms
Term
Definition
Term
Definition
ATC
Available Transmission Capacity
MRE
Market Responsible Entity
ARR
Auction Revenue Right
NERC
North American Electric Reliability Council
CAISO
California Independent System Operator
NYISO
New York Independent System Operator
CRM
Customer Relationship Management
OATT
Open Access Transmission Tariff
DA
Day-Ahead
OASIS
Open Access Same Time Information System
DAM
Day-Ahead Market
PJM
PJM Interconnection
ERCOT
Electric Reliability Council of Texas
PSC
Policy Subcommittee
FERC
Federal Energy Regulatory Commission
RT
Real-Time
FTR
Financial Transmission Rights
RTO
Regional Transmission Operator
IMO
Independent Market Operator
SCUC
Security Constrained Unit Commitment
ISO-NE
Independent System Operator New England
SE
State Estimator
LAN
Local Area Network
SMD NOPR
LDAP
Lightweight Directory Access Protocol
Standard Market Design Notice of Proposed
Ruling
LMP
Locational Marginal Pricing
SPD
Scheduling, Pricing, Dispatch
LOI
Letter of Intent
SPP
Southwest Power Pool
LSE
Load Serving Entity
TO
Transmission Owner
MISO
Midwest Independent System Operator
TOA
Transmission Operator Agreement
MMI
Midwest Market Initiative
43