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SMD

Welcome to. SMD. OVERVIEW. Energy Market. What is multi-settlement?. Two separate Energy market settlements for each trading interval Day-Ahead settlement Real-Time settlement. Relationship between DAM and RTM. DAM is financially Binding

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SMD

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  1. Welcome to . . . SMD OVERVIEW

  2. Energy Market

  3. What is multi-settlement? • Two separate Energy market settlements for each trading interval • Day-Ahead settlement • Real-Time settlement

  4. Relationship between DAM and RTM • DAM is financially Binding • Quantities bought / sold in DAM and NOT purchased / delivered in Real Time are made up in RTM

  5. Day-Ahead Energy market operations Inputs • Offers • Generator • External Purchase • Increment • Virtual supply (spot market sale)

  6. Day-Ahead Energy market operations Inputs • Bids • Load • External Sales • Decrement • Virtual demand (spot market purchase)

  7. Day-Ahead Energy market operations Outputs • Schedule of commitments for next Operating Day (Generation & External Transactions) • Day-Ahead hourly LMPs • Day-Ahead settlement

  8. SUN MONDAY TUESDAY WEDNESDAY THURSDAY Day-Ahead Timeline INPUTS ExternalTransactions Offers Bids Operating Day Participants Submit - DA IBMs 24:00 12:00 16:00 18:00 24:00 12:00 16:00 18:00 24:00 24:00 12:00 16:00 18:00 24:00 24:00 12:00 16:00 18:00 24:00 24:00 12:00 16:00 18:00 24:00 12:00 16:00 18:00 24:00 ISO-NE begins running DA settlements for energy DAM LMPs DAM Schedule -Interface -Demand -Supply -ETs OUTPUTS SMD Training Team

  9. Day Ahead Uplift Uplift– Startup and No load • Energy offers of generators NOT committed in DAM Allocation • All units in DAM

  10. Reliability scheduling • Reserve Adequacy Assessment • Transmission Security Assessment

  11. Reserve Adequacy Analysis Process starts at 18:00 • RAA Inputs • DAM Hourly Schedule • ISO-NE load forecast • Operating Reserve requirements • External Transactions • Approved transmission outages • Re-Offer Period adjustments • RAA outputs • Current Operating Plan

  12. Real-Time Energy market operations Inputs • Actual system operating conditions • Metered load, generation, tie-line flows, etc. • Actual External Transactions • Operating Reserve Requirements

  13. Real-Time Energy market operations Outputs • Real-Time hourly LMPs based on actual operating conditions • Real-Time settlement • based on deviations between Day-Ahead schedule and actual operations

  14. MONDAY TUESDAY WEDNESDAY THURSDAY Real-Time Market Timeline INPUTS Re-offer Period Self Scheduled Adjustments Reserve Adequacy and Transmission Security Assessments Participants Submit - Meter Reading - RT IBTs Initial RAA Run REGO Dispatchable ETs 24:00 12:00 16:00 18:00 24:00 13:00 16:00 18:00 24:00 24:00 12:00 16:00 18:00 24:00 24:00 12:00 16:00 18:00 24:00 12:00 16:00 18:00 24:00 24:00 12:00 16:00 18:00 24:00 ISO-NE begins running RT settlements for energy Operating Day Actual System Conditions Generators get Dispatch Instructions RCP COP OUTPUTS SMD Training Team

  15. Real Time Uplift Uplift – Startup and No load • Units committed after DAM Allocation • Units not there • Units not following instruction

  16. Understanding Locational Marginal Pricing (LMP)

  17. Assets and pricing Nodes

  18. Nodes and Load Zones

  19. Load Zones and Hub

  20. Losses Energy Congestion What is an LMP? LMP Cost to serve the next MW of load at a specific location, using the lowest production cost of all available generation, while observing all transmission limits

  21. C $20/MW capacity: 200 MW Not dispatched B $15/MW capacity: 200 MW 199 MW @ $15 A $10/MW capacity: 300 MW 300 MW @ $10 Economic dispatch Highest-priced Energy block is not dispatched Load 499 MW Dispatcher $15 price of Energy

  22. C $20/MW capacity: 200 MW Not dispatched B $15/MW capacity: 200 MW 200 MW @ $15 A $10/MW capacity: 300 MW 300 MW @ $10 Economic dispatch Highest-priced Energy block sets price Load 500 MW Dispatcher $20 price of Energy

  23. Binding Transmission Constraints External Sales LoadBids Generation Offers DecrementBids Increment Offers LMPsfor alllocations External Purchases Day Ahead LMP process Day Ahead Bidsand Offers SPD Operating Reserves SMD Training Team

  24. Real-time data Binding Transmission Constraints Generator Offers Metered Generation Metered Loads LMP Calculator State Estimator Energy Demand Dispatch Rates System Conditions LMPsfor alllocations Generator MWs Real Time LMP process SPD SMD Training Team

  25. Determining market position at a location Locational Adjusted Net Interchange Adjusted Load Obligation Generation Obligation +

  26. Inputs to Locational ANI • Locational Adjusted Net Interchange • Supply • Demand • Internal Transactions • External Transactions Nodes Generation Obligation and Dispatchable Load Obligation Zones Load obligation Hub

  27. How are LMPs used? • Positive ANI • Net sellers are paid the LMP • Negative ANI • Net buyers pay the LMP

  28. Financial Transmission Rights (FTRs)

  29. FTR and Auction Updates • Registration • Financial Assurance • Market Trials • MT1 (August): monthly auction • MT2 (September): Long term followed by monthly auction • Initial Auction • Nov 8 opening of initial monthly auction window for Dec 1 start-up

  30. ARR Information • Technical Session - late April • Customer Training - July • eFTR software • ARR details

  31. What are FTRs? • Financial instrument that entitles the holder to receive a credit or be assessed a charge based on differences in Day-Ahead (DA) Congestion Components of Locational Marginal Prices (LMPs)

  32. FTR Characteristics • Financial entitlement, not physical right • Independent of energy delivery • Settled hourly against differences in Congestion Component of Day-Ahead Energy Market LMPs • Begin and end date • On-Peak or Off-Peak

  33. FTR Characteristics • Identified from source to sink in MWs • Unidirectional P T R S Q

  34. Losses Energy Congestion LMP Breakdown LMP P = $10.00 Q = $10.00 R = $10.00 S = $10.00 T = $10.00 Z = $10.00 P = $ .50 Q = $ 5.00 R = $11.15 S = $13.55 T = $20.00 Z = $14.90

  35. LMP Congestion Component in a constrained system Thermal Limit 240 MW P T $0.50 $20.00 R $11.15 S Q $13.55 $5.00 Zone 1 LMP $14.90

  36. Congestion Component of LMP Zone Congestion Component $14.90 Total Load Charges $13410 Total Load 900 MWs Specific Node Congestion Component $$$ Total Generation Payments $3660 Total Generation 900 MWs Total Generation Payments $3660 Congestion Revenue $9750 Total Load Charges $13410

  37. Congestion Revenue Fund

  38. How FTR Holders are compensated T P $20.00 $0.50 R $11.15 S Q $13.55 $5.00 Zone 1 LMP $14.90

  39. Things to consider.... Congestion ? FTR ? Consideration • Cost of FTR purchase price • Cost of FTR purchase price • Possible to receive Congestion Credit • Possible to incur Congestion Charge • Not eligible for Congestion Credits

  40. FTR Auction Secondary Market Acquisition of FTRs OR

  41. How can I acquire an FTR? • FTR Auction • Centralized market • Annual and monthly auctions • Method of distributing existing FTR capability • Participants bid for or offer to sell FTRs • Secondary market • Holders can sell all or part of an FTR via registered bilateral trading

  42. FTR Auction schedule... • For SMD year 1: • 2 long-term FTR Auctions • 6 month term • 12 short-term FTR Auctions • 1 month term • For SMD years 2-5: • 5 long-term FTR Auctions each year • 1 year term • 12 short-term FTR Auctions • 1 month term

  43. Auction Schedule (Implementation) • Initially only monthly auctions through April 2003 to sync with NY TCC schedule • First six month auction in April 2003 for May – October 2003, second six month auction in October for November 2003 - April 2004, then annual auctions • Monthly auctions continued throughout • Auctions open at midnight and close at noon on announced dates

  44. Transactions: Internal and External

  45. Internal Bilateral Transactions • Bilateral for Market • Energy • Regulation • Bilateral for Load

  46. DAM Internal Bilateral Transaction (IBT) • Financial only and used in the settlements process • Increase or decrease the adjusted load obligation • There is only one type of IBT in DAM: • Internal Bilaterals for Market (IBM) • Energy only • Submittal deadline for DAM IBTs is 12:00 the next business day following the operating day

  47. RTM Internal Bilateral Transaction (IBT) • Financial only and used in the settlements process • Increase or decrease your adjusted load obligation • The two types of IBTs are: • Internal Bilaterals for Market (IBM) • (Energy and Regulation) • Internal Bilaterals for Load (IBL) • Submittal deadline for RTM IBTs is 13:00 the second business day following the operating day

  48. Internal Transactions process • Submittal requirements • Transactions schedules • Confirmation

  49. External Transaction options • Energy • Day-Ahead • Imports and Exports transactions • Financial impacts only • Real-Time • Imports, Exports and Through transactions • Both physical and financial impacts • ICAP

  50. External Transactions (Import or Export) • Considerations for DAM ETs: • All DAM ETs are financial • NERC tags and OASIS reservations are not required • DAM ETs do not automatically carry forward into RTM • No Wheel Throughs in DAM • There are three types of ETs: • Fixed (self scheduled) • Price-Sensitive (dispatchable) • Up-to-Congestion

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