EECS4460.1710.20.19.pptx

Power System Management

EECS 4460/5460-901

Lecture #17

Electricity Public Policy Issues

1

The U.S. Transmission Grid

Regional Transmission Operator (RTO)

A Transmission Operator (TSO) – coordinates, controls and monitors a defined grid

Created by FERC Order 2000 in 1999

Promote economic efficiency, reliability and non-discriminatory practices

Independent System Operator (ISO)

Formed at the recommendation of FERC

Coordinates, controls and monitors a defined grid, usually within a single state

Typically a smaller footprint than an RTO

The Organization of the Transmission Operations and Markets

A variety of definitions from various dictionaries….

Various definitions from web-based glossaries
ISO RTO
"...an organization formed at the direction or recommendation of the [FERC]..." "...designated by the [FERC] to direct operation of the regional electric transmission grid in its area..."
"...a neutral party responsible for the management and control of the electric transmission grid in a state or region..." "...coordinates, controls and monitors an electricity transmission grid that is larger with much higher voltages than the typical power company's distribution grid..."
"...operates an electric-transmission system that it does not own..." "...coordinates power generation and transmission within an integrated regional market..."
"...an independent, Federally regulated entity..." "...an independent governing body..."
"...ensure[s] the safety and reliability of the electric system..." "...[responsible] for electric transmission grid operations, short-term electric reliability and transmission services within a multi-state region..."
"...for the purpose of providing open access to retail and wholesale markets for supply..." "...serve as the independent operator of the regional electric market..."

FERC Order 888 –Promoting Wholesale competition through non-discriminatory open access

FERC Order 889 – Establishing and governing an Open-Access Same-time Information System (OASIS) and standards of conduct

The ISO’s and RTO’s

Within the Regions are Balancing Authorities 135 Total

Reliability Coordinators Cover the Entire Grid

Market Module Regions have been Established

First “Power Pool”, began by three utilities in 1927 to share resources

Others have joined over the years

Serves 65 million people in 13 states

84,236 miles of transmission

Peak load (summer) 152,000MW in 2019

All time peak 165,563MW in 2006

First computer control system for generation (1962)

First Energy Management System (EMS) (1968)

Approved as fully independent ISO by FERC (1997)

Fully functioning RTO (2002)

PJM (Pennsylvania-Jersey-Maryland)

PJM Utilities

PJM Transmission Systems

PJM Transmission Overview

The Wholesale Market connects the Generation to the Load Serving Entities (LSE’s)

Energy Market

Makes up majority of the costs (63%)

Day-Ahead Market

Sets energy prices for the next day (hourly) -$/MWHr

Market is “cleared” from lowest to highest bid

Demand forecast is met plus reserves

Real-Time Market

Spot market for immediate delivery

Electronic signal to supplier every five minutes

Paid day-ahead price or higher if exceeded

Capacity Market

Annual auction for future power supplies

Suppliers are “cleared” at auction price ($/MW-day)

Commitment to be available Three-year rolling

Ancillary Services Market

Reliability product

Pricing for regulation and reserve services

PJM Wholesale Markets

PJM Provides Real-Time Information

Sunday

October 20,2019

6:35pm

PJM Provides Real-Time Information

Sunday

October 20,2019

6:35pm

Locational Marginal Prices (LMP’s) are real time prices at locational nodes

Sunday evening prices during mild weather in October are very low

PJM Provides Real-Time Information

Sunday

October 20,2019

6:35pm

Ancillary Services

Wind and Solar

Prices Vary Among the Regions

As Peak Demand Varies

Peak Prices Experienced in 2018

ReCap: The ISO’s and RTO’s

Public Policy Continued

Merchant Generation

Renewable policies

Business Structures

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