Organized Markets and the Northwest Power Pool MC Initiative. January 19, 2015

Transcription

1 Organized Markets and the Northwest Power Pool MC Initiative January 19, 2015

2 This presentation is for informational purposes only No board action is being requested 2

3 Market Evolution U.S. energy markets are becoming more organized and automated Currently in the Northwest, transactions are done bilaterally (trades between two parties without a market operator) Organized markets for trades within the hour are new in the Northwest (Energy Imbalance Markets) and are being evaluated 3

4 Organized Markets EIM/SCED Energy Imbalance Market (EIM) or Security Constrained Economic Dispatch (SCED) Match the least-cost generation resources to satisfy the current loads within the hour NWPP MC is proposing five minute intervals (same as CAISO) 4

5 Organized Markets - ISO and RTO Independent System Operator (ISO) Operates a region's electricity grid Administers the region's wholesale electricity markets Current day and next day Provides reliability planning for the region's electricity system (transmission and generation resources) Regional Transmission Organization (RTO) Primarily focused on transmission reliability and planning 5

6 38 Balancing Authorities 6

7 ISO/RTO Map 7

8 NWPP MC NW leadership met in March 2012 NWPP Market Assessment and Coordination Committee (MC) Initiative started NWPP MC is proposing automated within-hour market Better manage ramps associated with variable energy resources Share load and resource diversity Better manage the regional transmission system 8

9 MC Participant Organizations (19) Avista Corporation Balancing Authority of Northern California (BANC) Bonneville Power Administration B.C. Hydro/Powerex Eugene Water & Electric Board Idaho Power Company NaturEner NorthWestern Energy Puget Sound Energy Chelan County PUD PacifiCorp Clark County PUD Portland General Electric Grant County PUD Snohomish County PUD Seattle City Light Tacoma Power Turlock Irrigation District WAPA, Upper Great Plains 9

10 SCED/EIM Basics Market participants voluntarily submit availability of resources (hourly) Market operator then optimizes best combination of resources (generation, load and transmission) at the least possible cost Recalculated every 5 minutes 10

11 Participation Voluntary to join SCED Voluntary for participants to offer dispatchable generation (MW and price) into the market Mandatory for participants to pay for load and generation imbalances (usually outside their control) 11

12 Timeline Q Phase 3 Regional visibility tools Policy issues defined RFP for Market Operator FERC Petition for Declaratory Order Q Decision to fund Phase 4 Phase 4: Preparation for contract with Market Operator, review of FERC Declaratory Order Q3/Q Decision to fund Phase 5 Phase 5: Contract for Market Operator, Preparation for SCED Market Q Anticipated start of Northwest SCED market 12

13 District s Primary Concerns Market is voluntary Voluntary to participate Voluntary resource offers Willing buyer and seller (not cost based) Does not make the District FERC jurisdictional Acceptable governance terms Robust Resource Sufficiency provision Must have enough capacity prior to the dispatch window to meet all obligations Reasonable market oversight Does not jeopardize hydro s role in the NW 13

14 District s Effort Actively participated in work groups in the NWPP MC effort Emphasize key issues for the District Monitor status Influence key aspects Leading effort with five other Publics (EWEB, Seattle, Tacoma, SMUD/BANC, Snohomish PUD) to analyze the cost and benefits Target for draft analysis in late February,

15 Next Steps Review of key issues at the conclusion of Phase 3 and decide if we want to continue with Phase 4 (Q1) Approximate cost to the District to participate in Phase 4 is $100,000 to $150,000 (in 2015 budget) Review of the Public Power cost/benefit analysis (Q1) Willingness to participate in Phase 5: the preparation for the hiring of a market operator and participation in SCED (Q4) 15

16 Appendix 16

17 NWPP FERC Petition for Declaratory Order Petition for Declaratory Orders (DO) seeks an interpretation of a party's rights or obligations; does not bind FERC but provides and indication of FERC direction The Voluntary Market FERC will not mandate participation in the market or the determination to bid resources into the market Market Oversight FERC will not reprice bids and offers but there may be a price cap Withholding of hydro does not constitute market manipulation Clearly define and limit the role of oversight Transmission FERC will not deem the Market Operator (MO) to be a jurisdictional transmission service provider The MO will not undertake other transmission management functions assumed by RTOs The Market Operator will collect transmission charges only as an agent for market participants Withdrawal No regulatory approval will be required for market participants freely to withdraw from participation in the SCED 17

18 NWPP FERC Petition for DO (cont.) Non-Public Utility Participation Participation in the SCED by non-public utilities (FPA section 201(f) entities) does not alter the jurisdictional nature of these entities. The MO s activity as agent for market participants in arranging transmission offered by non-public utility systems will not trigger oversight of non-public utility transmission rates Governance Jurisdictional status of the administrative entity that hires the MO Independence of MO Stability of Market Operator Function - Mobile-Sierra Protection MO will not undertake transmission operations MO will not offer transmission service MO will not create or administer a generation capacity market MO will not propose or compel participation in market place by market participants MO will administer a within-hour market only: no expansion contemplated to day-ahead, weekly or monthly market. 18

19 What is the NWPP MC SCED Proposal NWPP SCED is a: Within-hour energy-only market Security-constrained via a state estimator model Market to optimize energy dispatch Centralized unit dispatch for offered resources Uses as-available transmission capability NWPP SCED is not: Independent System Operator (ISO) Regional Transmission Organization (RTO) Day-ahead market Capacity market Provider of transmission service 19

20 Phase 4 Scope Policy Summary Resource Sufficiency Transmission Issues Balancing Reserve Voluntary Roles & Responsibilities SCED Design Market Operator Candidate Market Oversight Structure Organization & Governance Funding Cost/Benefit Summary FERC Petition for Declaratory Order (see appendix) Timeline Phase 4 Work Order 20