Assessment of Moving MISO
Market Clearing
June 13, 2013
Kevin Vannoy
Director Market Administration
1
Day-Ahead Market Timing and Forward Reliability
Assessment Commitment
MISO’s Forward Reliability Assessment
Commitment (FRAC) runs following
the re-bid period and typically posts
well ahead of the 20:00 EST target
deadline
Electric
Day‐Ahead Market Closes (11:00)
Timely Cycle Nominations Due Day‐Ahead Market Clearing (15:00 Posting)
Evening Cycle Nominations Due Scheduled Gas Flows (10:00)
Intraday Cycle 1 Nominations Due Electric Day‐Ahead
Gas Trading
Rebid Period (16:00)
FRAC Clearing
(16:00 ‐ 20:00+‐)
FRAC Notifications
Electric Day
MISO posts Day-Ahead Market awards
at 15:00 EST and provides a one
hour re-bid period from 15:00 –
16:00 EST
Gas Day
MISO’S Day-Ahead Marker Closes at
11:00 EST and has a 4 hour clearing
Window
Gas Day‐Ahead
Gas
8:00
9:00
10:00
11:00
12:00
13:00
14:00
15:00
16:00
17:00
18:00
19:00
20:00
21:00
22:00
23:00
0:00
1:00
2:00
3:00
4:00
5:00
6:00
7:00
8:00
9:00
10:00
11:00
12:00
13:00
14:00
15:00
16:00
17:00
18:00
19:00
20:00
21:00
22:00
23:00
Day‐Ahead Market Closes (11:00)
Day‐Ahead Market Clearing (15:00 Posting)
Rebid Period (16:00)
Intraday Cycle 2 Nominations Due FRAC Clearing
(16:00 ‐ 20:00+‐)
FRAC Notifications
June 13, 2013
2
Other Factors Impacting Scheduling
• MISO maintains its Operating Days and Market
Schedules on Eastern Standard Time (EST), so
adjustments are not made to timing and duration during
the Spring or Fall changeovers
– During the Summer Day Savings Time, MISO Operating Days and
Market Schedules are one hour later in relation to the Gas Day
– During the Winter, or Standard Time, results in one hour misalignment
with PJM Operating Day and Market Timing which maintains Eastern
Prevailing Time (EPT) from early November through the middle of
March, about 18 weeks
June 13, 2013
3
Issues and Benefits of Moving the Market Day
•
•
•
In April 2013, FERC approved a proposal from ISO-New England to
advance the close of its Day-Ahead Energy Market one hour from 11:00 to
10:00 Eastern (EPT). Additionally, the completion of the Reserve Adequacy
Analysis (RAA) was advanced by 5 hours from 22:00 to 17:00 EPT.
Changes were driven by need to align gas and electric scheduling to
address the following issues:
– Increasing reliance on natural gas fueled generators at times when
there is an increasingly tight availability of pipeline capacity
– The inability of gas fueled generators to perform to the full extent of their
operating parameters when called on due to fuel issues
– Ensuring enough generation in operation during the early morning hours
as load is increasing
– Reduced response rates to contingency events
Reliability Benefits included:
– More time for gas-fired resources to make fuel arrangements
– Provides ISO with additional time to commit longer lead, non-gas-fired
resources when gas unavailability exists
June 13, 2013
4
Growing dependence upon natural gas-fired generation
resources in the MISO footprint
Energy Contribution by Fuel Source
Contribution to Total Energy Served
90%
80%
78%
76%
75%
68%
70%
60%
50%
40%
30%
20%
10%
14%
14%
13%
13%
9% 7%
5% 5%
4% 4%
3% 3%
0%
2009
2010
2011
2012
Year
Coal
Nuclear
Gas
Wind
To date, 2013 shows a trend closer to that of 2011, given an increase in gas price
from 2012 levels.
June 13, 2013
5
Sustained growth of natural gas-fired generation is
forecasted
Source: U.S. Energy Information Administration | Annual Energy Outlook 2013
June 13, 2013
6
Business Impacts - Reliability
• Fuel Procurement and Scheduling
– Provides market participant more time for make fuel
arrangements
– Additional time, and potentially more units to address instances
of fuel unavailability
– Evaluate Start notifications procedures for fast start resources to
allow more time for Gas Fired units identified in the FRAC as
needed for the Morning Ramp
• Longer lead units available to the Day-Ahead Market and
FRAC.
• Capacity Benefit – access to an additional quantity of
cheaper, longer lead start time units by moving the DayAhead and FRAC commitment notification timing
June 13, 2013
7
Business Impacts - Economic
•
•
•
Price risk – In the ISO-NE timing order, FERC identified the impact
of moving up the market close and clearing window would incent
generation owners to include a risk premium in their offers. MISO
shares the same concern, however, this issue is mitigated in MISO’s
market by the ability of Market Participants to update offers in real
time. Additionally, moving the clearing up one or two hours would
expect to have only a minimal effect.
Price Certainty. Given the experience in the New York ISO,
specifically that gas trading has not shifted to account for the earlier
trading, MISO sees little benefit in moving the closing and clearing of
the day ahead market to occur ahead of the first nomination cycle
for the next day.
Capacity Benefit – Potential Production Cost saving due to access
to an additional quantity of cheaper, longer lead start time units by
moving the DA close and clearing and FRAC up.
June 13, 2013
8
Business Impacts – Market Administration
• Forecast Accuracy – With impacts to forecast accuracy,
greater uncertainties would need to be built into the
assumptions utilized in the clearing of the DAM and FRAC
processes. Would expect to see an incremental increase in
differences between planned versus actual unit plans and
resource capabilities.
– Load Forecast. Moving the Market timing ahead may have an
impact on the accuracy of MISO’s and Market Participants
Medium Term or Day-Ahead Load Forecasts, impacting
scheduling of load in the day ahead market. Increased day
ahead to real time deviations could lead to even greater reliance
on fast-start, gas fueled generation resources.
– Wind Forecast. Moving the Market timing ahead may have an
impact on the accuracy of MISO’s and Market Participants
Medium Term or Day-Ahead Wind Forecasts, impacting
scheduling of wind fueled resources in the day ahead market.
Increased day ahead to real time deviations could lead to even
greater reliance on fast-start, gas fueled generation resources.
June 13, 2013
9
Business Impacts – Market Administration
Day-Ahead Market Coordination with adjacent markets
• MISO has a Joint Operating Agreement with adjacent
markets in PJM. MISO currently coordinates information
with PJM under its JOA. Additionally, MISO and PJM are
investigating expanded levels of coordination in the DayAhead horizon.
• MISO also coordinates with other seams entities,
including the Southwest Power Pool.
• Electric Markets are not sequenced today, in either the
Day-Ahead or Real-Time horizons. In some cases,
RTO’s differ in Day-Ahead Market closing time, clearing
window, and results publication. Similarly, RTO’s differ
on Real-time dispatch intervals, and the ability to update
and reflect offer and Resource capability in the real time
horizon.
June 13, 2013
10
Business Impacts – Market Administration
• Daylight Savings Time
– Gas Day / Electric Operating Day Misalignment due
to DST. MISO views the variation by one hour of
misalignment between Gas and Electric Day as
having minimal Reliability and Financial impact, and
in and of itself would not warrant the expense needed
to implement DST in MISO’s Market and Settlement
Systems as well as for all Market Participant’s
corresponding systems.
– Market Timing Misalignment due to DST. The one
hour impact in the alignment in Electric Market Timing
and Gas Nomination and Scheduling deadlines may
have an impact to both markets and warrants
investigation to attain better alignment.
June 13, 2013
11