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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