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COLD SNAP Overview of Proposed Procedure for Winter 2004/2005

COLD SNAP Overview of Proposed Procedure for Winter 2004/2005. NEPOOL Markets Committee August 26, 2004 Charles Ide. Presentation Overview. ISO Objectives Gas/Electric Coordination Market/System Operation Daily Process Settlement. ISO’s Objectives. Evaluate proposals from Working Group

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COLD SNAP Overview of Proposed Procedure for Winter 2004/2005

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  1. COLD SNAPOverview of Proposed Procedure for Winter 2004/2005 NEPOOL Markets Committee August 26, 2004 Charles Ide

  2. Presentation Overview • ISO Objectives • Gas/Electric Coordination • Market/System Operation • Daily Process • Settlement

  3. ISO’s Objectives • Evaluate proposals from Working Group • Determine which of the recommendations can be implemented for this winter – 2004- 2005 • -What can be done within context of current Market Rule 1? • -What can ISO and Market Participants implement?

  4. Cold Snap Coordination • ISO holds weekly discussions with individual pipeline operators (more often, as required) • Key Inputs – Electric • -Peak Load Forecasts • -Known External Conditions: NPCC, PJM • Import/Export limits • Capacity position • -Known and anticipated generator outages & reductions, including economic outages • -Overall reliance on natural gas resources

  5. Cold Snap Coordination • Key inputs – Weather • -Probability & timing of extreme winter weather conditions • Temperature • Wind • Duration • Geographic impact

  6. Cold Snap Coordination • Key inputs – Natural Gas • -Anticipated Critical Notices or Operational Flow Orders (OFO’s) • Timing & Duration • Severity of limitations • -Pipeline or other equipment outages • -Regional LNG limitations • -Estimation of impact on natural gas generation • Curtailment of non-firm transportation

  7. Cold Snap Operations • Based on operational analysis, Cold Snap Procedure initiated by ISO • -Specific triggering criteria being developed • Cold Snap Procedure Actions • -Cancel all Economic Outages • -Deny any further Economic Outage requests • -Post “Cold Snap” forecast condition to the ISO website and communicate with State Regulators and Electric/Gas Operations Committee • -Communicate potential capacity shortages with NPCC, PJM – seek assistance, as required

  8. Cold Snap Operations • Cold Snap Procedure Actions cont’d • -Shift market timeline (DA Market to close at 0900) to accommodate early commitment schedules • -Request all permitted & equipped dual fuel units to switch to secondary fuel for specified day(s) • -Notify market of upcoming need for activation of Demand Response Resources • -ISO and NE Air Regulators issue a “gas unavailable” declaration for specified day(s)

  9. Cold Snap Daily Process • Day Ahead Market offers submitted by 0900 Note: Delisted units have option to offer into DAM • Estimate of operation for gas units that have submitted DA offers using those offers and ISO forecasted RT loads • Gas units advised of scheduled hours of RT operation for following day

  10. Cold Snap Daily Process • Gas unit schedules (hours of operation at eco-min) included in DAM assumptions • DAM clears in “normal” fashion – Gas units have DA commitment at eco-min or higher • All gas units contacted to confirm gas nominations (availability) • RAA process proceeds as normal

  11. Cold Snap Settlement • Gas units have Day-Ahead Generation Obligations equal to their DAM cleared MW schedules • DA Commitments are considered to be necessary for 1st contingency coverage (Not RMR)

  12. Cold Snap Settlement • Gas units paid DA LMP for DA Cleared quantities and may be eligible for DA Operating Reserve • DA Operating Reserve charges are allocated to Day Ahead Load Obligation

  13. Cold Snap Coordination • ISO will coordinate with pipeline operators and will update conditions at least daily (more often, as required) • Market participants will be kept informed via website, e-mail, and phone call updates, as required • ISO will hold daily briefings with regional regulators during the abnormal operations period • ISO will implement all necessary actions of OP#4, Actions During a Capacity Deficiency • Market conditions set back to normal after end of “Cold Snap” event

  14. Questions/Issues

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