Transcript Day Ahead Market Highlights - National Energy Marketers

Building the Energy Markets of Tomorrow . . . Today
New York State
Electricity Markets
Federal Energy Regulatory Commission
Market Design Technical Conference
January 22, 2002
Charles A. King - Vice President, Market Services
Building the Energy Markets of Tomorrow . . . Today
Outline of Today’s Presentation
I.
Overview of New York’s Market Structure
II.
Day-Ahead Market
III.
Real-Time Market
IV.
Transmission Service Markets
V.
Financial Transmission Rights
VI.
Ancillary Services Markets
VII. Long-Term Capacity Markets
VIII. Market Monitoring and Mitigation
Appendix – Statistics and Examples
2
Building the Energy Markets of Tomorrow . . . Today
I. NYISO Overview
New York ISO
"Hub of the Northeast"
Hydro
Quebec
19,410 MW*
ISO New England
25,158 MW*
IMO
23,857 MW*
New York ISO
30,983 MW*
PJM
54,176 MW*
* = Peak Load in Megawatts
3
Building the Energy Markets of Tomorrow . . . Today
I. NYISO Overview
New York Electric Industry
Restructuring
 New York Transmission Owners entered into
settlement agreements with New York Public
Service Commission in mid 1990s which
required divesture of generating units
 Established phased schedule for retail access
 Wholesale markets launched and NYISO
began operation on December 1, 1999
4
Building the Energy Markets of Tomorrow . . . Today
I. NYISO Overview
NYISO Governance
BOARD OF DIRECTORS
10 Member Unaffiliated
6 Votes to Pass
MANAGEMENT COMMITTEE
5 Sectors
58% Vote to Pass
OPERATING COMMITTEE
5 Sectors
58% Vote to Pass
BUSINESS ISSUES COMMITTEE
5 Sectors
58% Vote to Pass
5
Building the Energy Markets of Tomorrow . . . Today
I. NYISO Overview
Unique System Characteristics
 Transmission prone to thermal, voltage
and stability limitations which can
bifurcate NYISO system (east vs. west)
 Much higher degree of transmission
congestion
 FERC 12/19/01 Electric Transmission
Constraint Study
 High degree of generation divestiture
 Investor-owned utility divesture
currently at 91 percent
6
Building the Energy Markets of Tomorrow . . . Today
I. NYISO Overview
Chateauguay
Moses
New York Independent System Operator
High Voltage Transmission System
Massena
Plattsburgh
- 230 kV and above Transmission
Niagara
Oswego
Complex
Kintigh
Sta.80
Pannell
Stolle Rd.
Dunkirk
Rotterdam
New
Scotland
Porter
Clay Marcy
Edic
Lafayette
Watercure
Oakdale
Fraser
Gilboa
Leeds
Coopers
Corners
Pleasant
Valley
Roseton
Rock
Tavern Bowline
Legend:
765 kV
345 kV
230 kV
Homer City
Ramapo
Sprainbrook
Dunwoodie
Shore Rd.
Farragut
E.Garden City
Goethals
7
Building the Energy Markets of Tomorrow . . . Today
I. NYISO Overview
Markets
 Bid-Based Markets





Energy
Regulation
Spinning and Non-Spinning Reserves
Three-part bids
Self-scheduling
 Other Markets
 Installed Capacity
 Transmission Congestion Contracts
 Two Settlement System
 Day-Ahead Market
 Real-Time Market
8
Building the Energy Markets of Tomorrow . . . Today
I. NYISO Overview
Markets (continued)
 Locational Based Marginal Pricing
 Nodal congestion management pricing system
 Marginal losses
 Financial Hedging Instruments
 Transmission Congestion Contracts
 Contract For Differences
 Virtual Trading
 Demand Response Program
 Day-Ahead
 Emergency
9
Building the Energy Markets of Tomorrow . . . Today
I. NYISO Overview
Markets (continued)
 Flexible market structure
accommodates:
 Bilateral Transactions
 Existing Transmission Agreements
 Scheduling of Energy Limited Resources
 Municipal Customers
 Power Marketers
 Price responsive load customers
10
Building the Energy Markets of Tomorrow . . . Today
I. NYISO Overview
New York's Two-Settlement Process
Bids by 5 a.m.
Day before
DAM = Day-Ahead Market
SCUC = Security Constrained Unit Commitment
BME = Balancing Market Evaluation
RT = Real-Time Market
SCD = Security Constrained Dispatch
Day-Ahead
Market
SCUC
Bids by 90 min
before hour
(Hourly
Process)
BME
Supplemental
Resource
Evaluation
Real-Time
Market
Real
Conditions
Gen
SCD
11
Building the Energy Markets of Tomorrow . . . Today
II. Day-Ahead Market
Highlights
 Bids submitted by 5:00 am
previous day
 Suppliers submit MW quantity and price bids for each
hour including any ancillary services bids
 Loads submit MW requirement bids for each hour
including any price cap load bids
 Includes bids for virtual supply and virtual load
 Security Constrained Unit Commitment
(SCUC) scheduling software simultaneously
cooptimizes energy and ancillary services for
least cost solution
12
Building the Energy Markets of Tomorrow . . . Today
II. Day-Ahead Market
Highlights (continued)
 Locational Based Marginal Prices
(LBMP) posted by 11:00 am previous day
 Accommodates bilateral transaction
scheduling concurrently with supply and load
bids
 Any deviations in supply or demand settled in
Real-Time Market
13
Building the Energy Markets of Tomorrow . . . Today
II. Day-Ahead Market
Benefits
 Provides price certainty while
avoiding volatility of Real-Time Market
 Simultaneous co-optimization process
maximizes the use of the existing
transmission system and provides for
appropriate cost allocation
 Highly automated system manages complex
operating processes
14
Building the Energy Markets of Tomorrow . . . Today
II. Day-Ahead Market
Benefits
(continued)
 Multi-pass Security Constrained Unit
Commitment (SCUC) process accommodates
 Reliability requirements
 Market mitigation
 Cost assignment of uplift
15
Building the Energy Markets of Tomorrow . . . Today
II. Day-Ahead Market
Unique Characteristics
 Day-Ahead prices include effect of reliability
commitments and all scheduled external transactions
 Incorporates automated mitigation (in-city and
automated mitigation procedures (AMP))
 Ancillary Services secured and priced
 Fully unbundled
 Simultaneous co-optimization of individual availability bids
16
Building the Energy Markets of Tomorrow . . . Today
III. Real-Time Market
Highlights
 Balances system supply and demand every
five minutes
 Bids may be adjusted to address in-day operating
conditions
 Accommodates additional bilateral transactions and
changes to fixed output generator schedules
 Security Constrained Dispatch (SCD) software
re-optimizes energy and ancillary service markets on
system-wide basis
 Provides for commitment of “quick start” resources
 Locational Based Marginal Prices (LBMP) posted
every five minutes
17
Building the Energy Markets of Tomorrow . . . Today
III. Real-Time Market
Benefits
 Simultaneous co-optimization process
maximizes the use of the existing
transmission system while maintaining
reliability
 Provides for least cost dispatch of Real-Time
resources
 Provides Real-Time price transparency
18
Building the Energy Markets of Tomorrow . . . Today
III. Real-Time Market
Unique Characteristics
 Ex-ante pricing based upon “scheduled”
generator basepoint vs. ex-post pricing based
upon generator actual output
 NYISO uses unit-specific MW signal instead
of dollar zonal price signal
 Minimum energy bid is -$1000 vs. $0 in PJM.
NYISO practice allows market to resolve
min-gen scenarios instead of dumping energy
19
Building the Energy Markets of Tomorrow . . . Today
III. Real-Time Market
Unique Characteristics (continued)
 Variations on criteria used to determine which units
are eligible to set Locational Marginal Pricing (LMP)
 PJM only allows units that respond to $ zonal price signal to
set LMP
 NYISO used hybrid pricing method to allow inflexible units to
set LMP. PJM does not allow inflexible units to set price
20
Building the Energy Markets of Tomorrow . . . Today
IV. Transmission Service Markets
Highlights
 Firm transmission service available to users willing to
pay congestion costs
 Continuous redispatch to support firm transactions
 Transmission Congestion Contracts (TCCs) provide financial
hedge against congestion costs
 Non-firm transmission service curtailed when
congestion exists
 Cost of transmission marginal losses included in
clearing price
21
Building the Energy Markets of Tomorrow . . . Today
IV. Transmission Service Markets
Highlights
 Long-term prescheduling and ramp management will
enhance ability to acquire explicit long-term
transmission service across control area boundaries
 Facilitation of “counter-flow” transactions in hourly
scheduling process avoids need to curtail day-ahead
transactions for transmission system security
 Implementation of Open Scheduling System (OSS) for
“One Stop Shopping”
22
Building the Energy Markets of Tomorrow . . . Today
IV. Transmission Service Markets
Benefits
 Loads pay non-pancaked license plate
Transmission Service Charge
 All parties pay the same rate at the same
location
 All parties have equal access to the
transmission system, no physical reservations /
rights to hoard
 Day-Ahead transaction certainty enhanced
through presence and utilization of
counter-flow transactions
23
Building the Energy Markets of Tomorrow . . . Today
IV. Transmission Service Markets
Unique Characteristics
 NYISO utilizes an implicit bid-based transmission
reservation scheduling process
 NYISO planned implementation of explicit
transmission pre-scheduling process provides
physical long-term reservation and schedule at NYISO
boundaries
 Utilization of “counter-flow” transaction avoids
curtailment of Day-ahead schedules
 Open Scheduling System (OSS) facilitates transaction
scheduling
24
Building the Energy Markets of Tomorrow . . . Today
IV. Transmission Service Markets
Unique Characteristics
 Blended (flow-based) export transmission
service charge rate
 Generation minimum interconnection criteria
is “access-based” with no deliverability
requirement
 Special protection schemes fully addressed
25
Building the Energy Markets of Tomorrow . . . Today
V. Financial Transmission Rights
Highlights
 Transmission Congestion Contracts (TCCs) sold
through auction - serves as a congestion hedge, or as
financial instrument available to the market
 Auctions held on a semi-annual basis for TCCs for
variable time periods (half-year to 5 years)
 Monthly “Re-configuration Auctions” conducted
 Auction results posted
 TCCs settled in Day-Ahead market
 May be specified between generators, zones, external proxy
buses, NYISO reference bus
26
Building the Energy Markets of Tomorrow . . . Today
V. Financial Transmission Rights
Benefits
 All Transmission Congestion Contracts (TCCs)
auctioned except those associated with
Grandfathered Transmission Wheeling
Agreements
 Fully funded TCCs provide hedging certainty
 Multiple round auction enhances price
discovery
27
Building the Energy Markets of Tomorrow . . . Today
V. Financial Transmission Rights
Benefits (continued)
 “Alternating Current (AC) Power flow” solution
provides for improved accuracy
 Simultaneous feasibility is assured to avoid
“over selling” of Transmission Congestion
Contracts (TCCs)
 TCCs are “unbundled” - for more liquid market
 Moving towards a simultaneous, multi-period
TCC auction process by Summer 2003
28
Building the Energy Markets of Tomorrow . . . Today
V. Financial Transmission Rights
Unique Characteristics
 NYISO fully funds TCCs and balances
over/under collection with Transmission
Owners
 PJM passes revenue shortfalls to FTR holder and
over-collection is refunded to loads
 High degree of capability offered for sale in
the auction
 TCCs may be purchased up to 5 years vs.
monthly in PJM
29
Building the Energy Markets of Tomorrow . . . Today
VI. Ancillary Services Market
Highlights
 Market-Based Services
 Regulation
 Spinning Reserve
 10-Minute Non-Spinning Reserve
 30-Minute Non-Spinning Reserve
 Simultaneously co-optimized with energy markets both
Day-Ahead and Real-Time
 Incorporates locational reserve requirements
 Cost-Based Services
 Scheduling, Control and Dispatch
 Voltage Support
 Black Start
30
Building the Energy Markets of Tomorrow . . . Today
VI. Ancillary Services Market
Benefits
 Separate but simultaneously co-optimized
markets provide an efficient mechanism for
obtaining the least-cost solution
 Lost opportunity cost payments ensure
availability of sufficient resources
 Markets can satisfy locational needs
 Allows for a more precise ability to control
and dispatch resources to maximize use of
the transmission system
31
Building the Energy Markets of Tomorrow . . . Today
VI. Ancillary Services Market
Unique Characteristics
 Fully unbundled regulation and reserve services
 Four markets vs. single regulation market in PJM
 Explicit availability bids for each Ancillary Service
Market
 Specific locational requirements met
 Ancillary services are fully scheduled in the
Day-Ahead Market, with in-day adjustments made
through hourly and supplemental processes
 Energy and ancillary services simultaneously
co-optimized
32
Building the Energy Markets of Tomorrow . . . Today
VII. Long Term Capacity Markets
Highlights
 Installed Capacity (ICAP) requirements for
Load Serving Entities (LSE’s) based on
annual peak load
 Long-term ICAP requirement
 Monthly ICAP auctions accommodate loadshifting and latest generator performance
 Supply can be via Bilateral Transaction, self
supply, or auction
33
Building the Energy Markets of Tomorrow . . . Today
VII. Long Term Capacity Markets
Highlights (continued)
 Locational requirements apply (in-city and
Long Island)
 Deficiency charges applied to Load Serving
Entities (LSEs), if requirements are not met
 Market power mitigation measures apply in
New York City
34
Building the Energy Markets of Tomorrow . . . Today
VII. Long Term Capacity Markets
Benefits
 NYISO market similar to neighbors for
product consistency
 Ensures resource adequacy to meet reliability
requirements
 Installed Capacity (ICAP) reflects experienced
availability: Unforced Capacity (UCAP)
 Intermittent resources (windmills, etc…)
eligible
 Demand-side resources allowed to participate
35
Building the Energy Markets of Tomorrow . . . Today
VII. Long Term Capacity Markets
Unique Characteristics
 4 hour qualification test vs. 2 hour test in PJM
 Full credit for ICAP / UCAP for interruptible
loads and intermittent generators
 Monthly certification
 Deficiency penalty applied monthly
36
Building the Energy Markets of Tomorrow . . . Today
VIII. Market Monitoring & Mitigation
Highlights
 NYISO market monitoring procedures …
 foster transition to a fully competitive market
 seek to maintain a competitive supply demand relationship
under all conditions
 minimize unnecessary market intervention
 insure delivery of market based products from suppliers
 Mitigation based upon Conduct and Impact standard
 Multiple mitigation needs addressed through variable
thresholds, margins, and reference offers/bids
37
Building the Energy Markets of Tomorrow . . . Today
VIII. Market Monitoring & Mitigation
Highlights
 Market Monitoring accountable to NYISO Board of
Directors
 Independent Market Advisor provides oversight
 NYISO applying comprehensive mitigation approach
to address all mitigation needs based upon conduct /
impact standard
 Day-Ahead Market (DAM) In-City with structural component
 Real-Time (RT) In-City with structural component
 Statewide Automated DAM
38
Building the Energy Markets of Tomorrow . . . Today
VIII. Market Monitoring & Mitigation
Highlights
 Market monitoring of:










Physical Withholding / physical audits
Economic Withholding
Uneconomic production
Submission of false information
Failure to follow dispatch instruction
Under-scheduling load
Transmission congestion contracts
Transmission service / transactions
Installed Capacity Markets
Market participant financial positions against collateral
39
Building the Energy Markets of Tomorrow . . . Today
VIII. Market Monitoring & Mitigation
Benefits
 Mitigation parameters (triggers, thresholds, reference
prices, etc) may be tailored to address specific needs
 Reference prices reflect historical accepted
competitive offers whenever possible
 Process provides for consultation with market
participants prior to mitigation
 Procedures automated to prevent “lost day”
 Mitigation parameters can be reviewed and adjusted
over time, allows Market Participants to “build out “ of
a congested pocket
40
Building the Energy Markets of Tomorrow . . . Today
VIII. Market Monitoring & Mitigation
Unique Characteristics
 NYISO relies on a conduct / impact standard to
determine exercise of market power (except for New
York City pocket mitigation; plan under development
to add conduct / impact plus structural component)
 PJM assumes market is un-competitive when
transmission congestion exists (except for
East/Central/West voltage constraints)
 NYISO mitigates to a competitively set reference bid
 PJM mitigates via cost-capping (cost + 10 percent)
41
Building the Energy Markets of Tomorrow . . . Today
VIII. Market Monitoring & Mitigation
Universal Market Mitigation Framework
CONDUCT TEST
T
R
I
G
G
E
R
S
T
H
R
E
S
H
O
L
D
M
A
R
G
I
N
S
C
O
N
S
U
L
T
A
T
I
O
N
MARKET IMPACT TEST
Generator
Reference
Prices
Historical 90 day Competitive
Negotiated
Default
Mitigation Occurs Only
During Non-competitive Times
42
Building the Energy Markets of Tomorrow . . . Today
APPENDIX
Statistics
and Examples
43
Building the Energy Markets of Tomorrow . . . Today
II. Day-Ahead Market
Performance Statistics
 High degree of price certainty
 Load zones A, G, and J used as trading
indices by power marketers
 95% of New York’s energy transactions
settled Day-Ahead
 Includes both Day-Ahead Market and Bilateral
Transactions
 All Transmission Congestion Contracts
(TCCs) settled Day-Ahead
44
Building the Energy Markets of Tomorrow . . . Today
II. Day-Ahead Market
New York Market Share
Bilaterals
50%
NYISO
Day-Ahead
Market
45 – 50%
Real
Time
<5%
Bilateral Contracts outside the NYISO
NYISO Day-Ahead Market
NYISO Real-Time Market
50%
45 - 50%
<5%
100%
45
Building the Energy Markets of Tomorrow . . . Today
III. Real-Time Market
Performance Statistics
 Represents less than 5 percent of New York
energy market transactions
 Less than .05 percent of price intervals
corrected in 2001
 Improved NERC control performance
46
Building the Energy Markets of Tomorrow . . . Today
III. Real-Time Market
Performance Statistics
CPS%
NYCA Daily Control Performance
December 2001
210
200
190
180
170
160
150
140
130
120
110
100
90
80
70
CPS1
CPS1 Target
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31
Day
CPS1 for Dec.=179.67 % Compliance Threshold=100%
CPS1 measures how well a Control Area meets its demand requirement
47
Building the Energy Markets of Tomorrow . . . Today
IV. Transmission Service Markets
Open Scheduling System (OSS)
What is OSS?
 OSS is comprised of an industry leading set of tools
for Market Participants and Scheduling Coordinators
to interact, trade and communicate within and across
control areas
 Initially, OSS will provide the ability to:
 Enter bilateral transaction bids across Scheduling
Coordinator borders with a single data entry interface
 View status from each Scheduling Coordinator
 View schedules from each Scheduling Coordinator
 Request transmission and ramp reservations
48
Building the Energy Markets of Tomorrow . . . Today
IV. Transmission Service Markets
Open Scheduling System (OSS)
What is OSS?
 OSS is comprised of an industry leading set of tools
for Market Participants and Scheduling Coordinators
to interact, trade and communicate within and across
control areas
 Initially, OSS will provide the ability to:
 Enter bilateral transaction bids across Scheduling
Coordinator borders with a single data entry interface
 View status from each Scheduling Coordinator
 View schedules from each Scheduling Coordinator
 Request transmission and ramp reservations
49
Building the Energy Markets of Tomorrow . . . Today
IV. Transmission Service Markets
Open Scheduling System (OSS)
50
Building the Energy Markets of Tomorrow . . . Today
IV. Transmission Service Markets
Open Scheduling System (OSS)
51
Building the Energy Markets of Tomorrow . . . Today
IV. Transmission Service Markets
Open Scheduling System (OSS)
OSS Project Timeline
6/05/01
8/27/01
2/11/02
3/11/02
Design/Development
Kickoff
Phase 1
Phase 1
Test Start
Live
 Agreement on OSS endvision
 Internal and external bilateral
transactions (hourly)
 Validation of pilot
concepts
 Pre-scheduling
 Open nodal architecture
 Integration with PJM
 Ability to review and manage
schedule status
Phase 2 and beyond
 Integration with e-Tag agents
 Integration w/ WebCoordinate
 Consistent with ESC and
OASIS II
 Automated Checkout
 Ability to edit NERC tags
 Inter-regional congestion
commitments
 Bid entry up to 18 months in
future
 Integration with more
scheduling coordinators
 Support EST only
Support of sub-hourly
transactions
User defined time zone
52
Building the Energy Markets of Tomorrow . . . Today
IV. Transmission Service Markets
Open Scheduling System (OSS)
OSS Summary
 Open, platform independent design that is
consistent with Order 2000
 OSS is an application that can be easily
adopted by other Scheduling Coordinators
with minimal change to existing systems
 Addresses critical Inter-Control Area
transaction seams issues with minimal
impact on current MP processes
53
Building the Energy Markets of Tomorrow . . . Today
IV. Transmission Service Markets
Open Scheduling System (OSS)
OSS Summary
 Based on requirements gathered from MPs
with input from Scheduling Coordinators
 Defines a communication protocol between
Scheduling Coordinators
 The OSS application will be deployed in
phases with the first scheduled for Q1 2002
54
Building the Energy Markets of Tomorrow . . . Today
V. Financial Transmission Rights
Performance Statistics
 Net Revenues to Transmission Owners
- Year 2000:
- Year 2001:
~ $260 million
~ $65 million
 Outstanding Transmission Congestion Contracts
(TCCs)
- Grandfathered: ~ 40 percent (~ 11,800 MW)
- NYISO Auction: ~ 60 percent (~ 18,800 MW)
55
Building the Energy Markets of Tomorrow . . . Today
V. Financial Transmission Rights
Performance Statistics
Alleviating Contract Path Confusion
 Parties do not need to optimally pair their
supply and load up as bilateral transactions
to minimize transmission charges
 TUC paid by aggregator does
Source
Sink
not depend on how it bids
its supply and load
 TUC is point-to-point
 Does not depend on contract path
 An Example
56
Building the Energy Markets of Tomorrow . . . Today
V. Financial Transmission Rights
Example – Configuration A
Source
Sink
Chat East
Fraser
Niagara 345
Leeds
Ramapo
Sprainbrook
Goethals
57
Building the Energy Markets of Tomorrow . . . Today
V. Financial Transmission Rights
Example – Configuration A
Configuration A - Billing
Example 6.1.1: Billing for Aggregation
Aggregator TUC for Bilateral Set 1
Point of
Point of
Injection Bus Withdrawal Bus
RAMAPO
GOETHALS
CHATEAST
NIAG 345
Total TUC Charge
SPRBROOK
SPRBROOK
LEEDS 3
FRASER
Delivered Energy
(MWh)
200
200
200
200
Point of
Injection LBMP
($/MWh)
34.88
35.59
22.44
15.70
Point of
Withdrawal
LBMP for Load
Zone
($/MWh)
37.00
37.00
38.19
29.88
Total TUC*
($)
424.00
282.47
3,150.49
2,835.01
58
6,691.97
Building the Energy Markets of Tomorrow . . . Today
V.
Financial Transmission Rights
Example – Configuration B
Source
Sink
Chat East
Fraser
Niagara 345
Leeds
Ramapo
Sprainbrook
Goethals
Config A
Config B
59
Building the Energy Markets of Tomorrow . . . Today
V.
Financial Transmission Rights
Example – Configuration B
Configuration B - Billing
Aggregator TUC for Bilateral Set 2
Point of
Point of
Injection Bus Withdrawal Bus
Delivered Energy
(MWh)
200
200
200
200
Point of
Injection LBMP
($/MWh)
34.88
35.59
22.44
15.70
RAMAPO
LEEDS 3
GOETHALS
FRASER
CHATEAST
SPRBROOK
NIAG 345
SPRBROOK
Total TUC Charge
* Total TUC = (POW LBMP- POI LBMP) * Delivered Energy
Point of
Withdrawal
LBMP for Load
Zone
($/MWh)
38.19
29.88
37.00
37.00
Total TUC*
($)
662.00
(1,141.53)
2,911.91
4,259.01
6,691.39
60
Building the Energy Markets of Tomorrow . . . Today
V. Financial Transmission Rights
Example
The Aggregator Net Charge
Aggregator Net Charge (TUC) for Spot Transactions
Withdrawals from Spot Market
Amount (MWh)
LBMP ($/MWh)
Cost ($)
LEEDS 3
200
38.19
7,638.00
FRASER
200
29.88
5,976.00
SPRBROOK
200
37.00
7,400.00
SPRBROOK
200
37.00
7,400.00
Total
28,414.00
Injections into Spot Market
Amount (MWh)
RAMAPO
200
GOETHALS
200
CHATEAST
200
NIAG 345
200
Total
Net Transmission Charge (TUC)
LBMP ($/MWh)
34.88
35.59
22.44
15.70
Revenue ($)
6,976.00
7,117.53
4,488.09
3,140.99
21,722.61
6,691.39
61
Building the Energy Markets of Tomorrow . . . Today
VI. Ancillary Services Market
Example: Summer 2001
NYISO Loads Peak Week August 6 - 10, 2001
Daily Peak Loads (MW)
30983
31000
30665
30509
30500
30000
29568
MW
29435
29500
29000
28500
Mon
Tues
Wed
Thurs
Fri
62
Building the Energy Markets of Tomorrow . . . Today
VI. Ancillary Services Market
Example: Summer 2001
Overview of Northeast Peak
Load Situation on Aug. 9  New NYISO Peak Load - 30,983 MW
(Hour Beginning:14:00, August 9)
 New Peaks in Neighboring Control Areas
 IMO
 ISO-NE
 PJM
- 25,269 MW
- 25,158 MW
- 54,176 MW
63
Building the Energy Markets of Tomorrow . . . Today
VI. Ancillary Services Market
Example: Summer 2001
Situations Observed –
 NYISO Operating at Reserve Requirements
 Neighboring Control Areas Operating at
Margins
 NYISO Able to Maintain Energy Exports
 Depressed Voltage Levels Observed in PJM
and New York
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Building the Energy Markets of Tomorrow . . . Today
VI. Ancillary Services Market
Example: Summer 2001
Load Relief Measures
Total
-
 EDRP & SCR
 Voltage Reduction
 Public Appeals
 NYS Government
 TO Programs
1,580 MW
-
580 MW
350 MW
270 MW
220 MW
130 MW
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Building the Energy Markets of Tomorrow . . . Today
VI. Ancillary Services Market
Example: Summer 2001
System Performance
 Equipment Performance
 Market Information System was reliable
 The Transmission System was secure and reliable
 Generation performed consistently
 Load was served throughout the period
66
Building the Energy Markets of Tomorrow . . . Today
VI. Ancillary Services Market
Example: Summer 2001
System Performance
 Impact of Transactions on Voltages
 NYISO exports and wheels to PJM
 PJM experienced severe voltage problems in the East
 NYISO experienced depressed SENY voltages
 Some transactions cut by NYISO to increase voltages
 PJM requested NYISO voltage reduction to avoid
system voltage collapse
 NYISO implemented 5 percent voltage reduction to
assist PJM
67
Building the Energy Markets of Tomorrow . . . Today
VI. Ancillary Services Market
Example: Summer 2001
NYISO Reserve Requirement
NYISO
Reserve Requirement
Operating
Reserve
Operating Reserve
August
9, 2001
August 9, 2001
4500
4000
3500
Counting
ICAP Sales
Level
of Exports
Maintained
towards reserve
during Peak Day
MWs
3000
2500
2000
1500
1000
500
0
11:00
12:00
13:00
14:00
15:00
16:00
17:00
18:00
Time
30 Min Act
30 Min Req
Reserve + ICAP Sales
68
Building the Energy Markets of Tomorrow . . . Today
VI. Ancillary Services Market
Example: Summer 2001
 Benefits of NYISO “Best Practices”
August 9, 2001
 Best Practice: Simultaneous co-optimization of energy
and ancillary service markets;
 Best Practice: Hourly evaluation (Balancing Market
Evaluation – BME) which optimizes in-day resource
adjustments;
 Best Practice: Emergency Demand Response Program
69
Building the Energy Markets of Tomorrow . . . Today
VI. Ancillary Services Market
Example: Summer 2001
 Benefits of NYISO “Best Practices” August 9, 2001
(continued)
 NYISO Best Practices provided the ability to track and
augment system energy and reserves in real time despite
adverse conditions.
 NYISO Best Practices provided the ability to make full
utilization of limited transmission capability in real-time to
maintain reliability in NY and support neighboring control
areas.
 NYISO able to maintain exports critical to neighboring areas
during peak load periods due to flexibility afforded by NYISO
Best Practices.
70
Building the Energy Markets of Tomorrow . . . Today
VI. Ancillary Services Market
Performance Statistics
NYISO Monthly Average Ancillary Service Prices
Day Ahead Market 2001
$25
$20
$15
$10
East West
East West
East
East
West
$5
$0
Jan
Feb
10 Min Spin Res
10 Min Spin Res
10 Min Spin Res
10 Min Spin Res
Mar
Avg - 2001
Avg East - 2001
Avg West - 2001
Avg - 2000
Apr
May
Jun
10 Min Non-Synch Avg - 2001
10 Min Non-Synch Avg East - 2001
10 Min Non-Synch Avg West - 2001
10 Min Non-Synch Avg - 2000
Jul
30 Min Op Res
30 Min Op Res
30 Min Op Res
30 Min Op Res
Aug
Avg - 2001
Avg East - 2001
Avg West - 2001
Avg - 2000
Sep
Oct
Nov
Regulation Average - 2001
Regulation Average East - 2001
Regulation Average West - 2001
Regulation Average - 2000
Dec
71
Building the Energy Markets of Tomorrow . . . Today
VI. Ancillary Services Market
Performance Statistics
Ancillary Services Capability and Offers
15000
Average
Capability
12000
1500
9000
1000
Average
Offer
6000
500
Approximate
Demand
3000
All
Units
Excl.
PURPA
All
Units
Excl.
PURPA
All
Units
Excl.
PURPA
0
All
Units
0
30 Minute Reserves (MW)
2000
Excl.
PURPA
Regulation and 10 Minute Reserves (MW)
2500
*10 minute reserves includes only capability in Eastern New York due to locational reserve requirements.
10 Min Spin*
10 Min Nspin*
Regulation
30 Min Reserves
72
Building the Energy Markets of Tomorrow . . . Today
VII. Long Term Capacity Markets
Performance Statistics
 Installed Capacity (ICAP) Requirements
 Statewide:
 Locational:
 New York City:
 Long Island:
36,132 MW
8,428 MW
4,639 MW
 Procurement
 75 percent Bilateral Transactions
 25 percent NYISO Auctions
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Building the Energy Markets of Tomorrow . . . Today
VII. Long Term Capacity Markets
Performance Statistics
 Statistics on ICAP prices
 Winter - UCAP
 Strip Auction
– $9.40/kW/month NYC (3970 MW)
– $2.00/kW/month Rest of State (ROS) (2290 MW)
 Monthly – thorough 1/2002
– $7.30/kW/month NYC (550 MW)
– $0.20/kW/month ROS (550 MW)
74
Building the Energy Markets of Tomorrow . . . Today
VIII. Market Monitoring & Mitigation
Fundamentals of Operation
 Market Power Mitigation: Two Criteria
 Conduct inconsistent with workable competition
 Actions have a substantial impact on LBMPs or other
revenues
75
Building the Energy Markets of Tomorrow . . . Today
VIII. Market Monitoring & Mitigation
Fundamentals of Operation
 Conduct inconsistent with workable
competition
 Economic Withholding of an Electric Facility
 Physical Withholding by an Electric Facility
 Uneconomic Over-production from an Electric Facility
76
Building the Energy Markets of Tomorrow . . . Today
VIII. Market Monitoring & Mitigation
Fundamentals of Operation
Actions have a substantial impact on LBMPs or
other Revenues
 Criterion
 The lower of a tripling of prices or $100 in an energy or
ancillary services market
 A tripling of guarantee payments to a market
participant
77
Building the Energy Markets of Tomorrow . . . Today
VIII. Market Monitoring & Mitigation
Fundamentals of Operation
Does Conduct Exceed Thresholds?
 Thresholds for Economic Withholding
 The lower of a quadrupling of prices or $100 / MW in the
energy markets and for most reserves.
 The lower of a quadrupling of prices or $50 / MW for realtime 10-minute spinning reserves.
 A tripling of startup cost offer prices
 Reference concept
 Accepted, unmitigated offers during periods of workable
competition
78
Building the Energy Markets of Tomorrow . . . Today
VIII. Market Monitoring & Mitigation
Fundamentals of Operation
Does Conduct Exceed Thresholds?
 Thresholds for Physical Withholding: DayAhead
 The lower of 10% or 100 MW of a unit’s capability.
 The lower of 5% or 200 MW of an organization’s capability
 Thresholds for Physical Withholding: RealTime
 Operation of a unit at less than 90% of the NYISO’s dispatch
rate
79
Building the Energy Markets of Tomorrow . . . Today
VIII. Market Monitoring & Mitigation
Fundamentals of Operation
Does Conduct Exceed Thresholds?
 Thresholds for Uneconomic Over-production
 Schedule and production of energy at an LBMP less than 20% of a
unit’s reference price.
 Real-time output exceeding 110% of the NYISO’s dispatch level.
 The conduct must cause or contribute to
congestion
80
Building the Energy Markets of Tomorrow . . . Today
VIII. Market Monitoring & Mitigation
Fundamentals of Operation
 Screening Reports
 “5 AM” Generator, Startup, and Zone Reports
 “11AM” Generator and Energy Exception Reports
 Identify DAM conduct through reports and
data screens
 Identify impact through SCUC and offer-curve
analysis
 Conduct and impact together trigger
prospective mitigation
81