Setting Prices during
Emergency Events
Market Subcommittee
August 6, 2013
Background
MSC is tracking two separate issues related to setting prices
during Emergency Events
•
•
MSC047 – EEA Level 2 Price Floor
MSC055 – Administrative Pricing during MinGen
MISO provided initial responses and status updates at the
MSC
•
•
Reviewed what happened on 7/21/11
Provided several high level approaches to improve price signals during Max
and Min Gen Emergencies
The Independent Market Monitor included two
recommendations in the 2012 State of the Market report
•
Develop provisions that allow non-dispatchable DR to set energy prices in the
real-time market
2
Scope of Effort
Real Time Pricing during Emergency Events
•
•
•
Price setting during max and min gen events
LMR setting price
External generator setting price
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Price Setting during Max and Min Gen Events
MISO is considering whether to create price floors and
ceilings on offer costs for Resources that provide
offers with costs but can only be used during an
Emergencies
•
Should we place a price floor on energy above EconMax up to
Emergency Max
– Would prevent prices from dropping during Stage 1b of an Emergency
Event below the prevailing prices immediately prior to the Event?
•
Should we place a price ceiling on energy under EconMin down
to Emergency Min
– Would prevent prices from increasing during Stage 1 of an Emergency
above the prevailing prices immediately prior to the Event?
•
Similarly, can we place price floors on offer costs for
Resources that are available for Emergency conditions only
such as LMR?
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LMR Setting Price
Currently LMR can only submit an offer price when crossregistered as EDR but does not set price
•
EDR setting price will be implemented in ELMP stage 1 (scheduled to be
in production by 2014)
MISO has developed a proposal to modify market rules so that
LMR could submit offers without cross-registering as EDR
•
•
All LMR could then submit offers and participate in price setting similar to
EDR in the ELMP process.
MISO proposes to disable EDR/LMR cross registration, so LMR must
submit offer price as LMR, but would be unable to do it as EDR.
When LMR does not submit a price offer, MISO would still need
to identify a method for such LMRs to set price
•
•
Pre-define the proxy costs for LMR
Should LMR proxy-cost simply be maximum energy market price?
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LMR setting price
P
Supply
Curve
LMPw LMR Price
Demand
Curve
LMPToday
Q
LMR
Quantity
6
Next step
• Further analysis is planned to evaluate impacts and
benefits
– Nature and extent of impacts on pricing and market efficiency
based on the expected frequency and volume of LMRs and other
emergency capacity called upon during Emergency events
– Do similar situations occur in other ISOs? How do they handle
pricing under emergencies?
• Proof of concept simulations/studies
– If possible, using MISO production case to simulate price
behavior using proposed method under emergency event
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Tentative work plan
2013
2014
2015
Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Price floor/ceiling under max/min gen event
LMR setting price
External generator setting prices
Evaluation
Conceptual Design
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Questions?
• Contacts
Tengshun Peng ([email protected])
Dhiman Chatterjee ([email protected])
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