Briefing on Market Performance Mark Rothleder Director, Market - PowerPoint PPT Presentation

Briefing on Market Performance Mark Rothleder Director, Market Analysis and Development Board of Governors Meeting General Session March 25-26, 2010

Energy Markets - Overview  Market successful since launch  Price volatility is reasonable  Price convergence has improved  Exceptional Dispatches have declined  Several areas still need improvement  Congestion revenue right (CRR) adequacy  Quality of data  Market model  Load forecasting Slide 2

Frequency and magnitude of price volatility in real-time has generally decreased, particularly for extreme price (>$500/MWh). 3.0% 2.5% Import constraint Percent of real-time Intervals 2.0% Over $1000 1.5% $750 to $1000 1.0% $500 to $750 $250 to $500 0.5% 0.0% Apr 2009 July Aug Sept Oct Jan 2010 Feb May June Nov Dec Slide 3

When real-time volatility occurs it is related to system conditions. Example (Peak Load Pull) 450 400 350 Load Aggregation Price ($/Mwh) 300 250 200 150 100 50 0 3 6 9123 6 9123 6 9123 6 9123 6 9123 6 9123 6 9123 6 9123 6 9123 6 9123 6 9123 6 9123 6 9123 6 9123 6 9123 6 9123 6 9123 6 9123 6 9123 6 9123 6 9123 6 9123 6 9123 6 912 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Hour / Interval Day Ahead Hour Ahead Scheduling Process Real Time Dispatch (5 min.) Slide 4

Price convergence between markets has improved. Average Monthly Prices – PG&E Load Aggregation Point (Peak Hours) $100 Better convergence $90 $80 $70 Average LAP LMP ($/MWh) $60 $50 $40 $30 $20 $10 $0 ($10) June July Aug Sept Nov Dec Apr 2009 May Oct Jan 2010 Feb Day Ahead Hour Ahead Scheduling Process Real Time Dispatch Slide 5

Exceptional dispatch volumes continue to decrease as effort to incorporate constraint into the market continues. 35 Approx. 3% of total daily energy 30 25 Thousands of Mwh per Day 20 15 Approx. 1% of total daily energy 10 5 0 -5 -10 1-Jul 8-Jul 15-Jul 22-Jul 29-Jul 5-Aug 12-Aug 19-Aug 26-Aug 2-Sep 9-Sep 16-Sep 23-Sep 30-Sep 14-Oct 21-Oct 28-Oct 4-Nov 11-Nov 18-Nov 25-Nov 2-Dec 9-Dec 16-Dec 23-Dec 30-Dec 3-Feb 10-Feb 17-Feb 24-Feb 7-Oct 6-Jan 13-Jan 20-Jan 27-Jan Day_Ahead Real_Time_Inc Real_Time_Dec Slide 6

Monthly CRR revenue adequacy continues to be an issue due to unanticipated transmission outages. $4 200% Adeuqacy Adequacy (Millions) $3 175% $2 150% Percent of Revenue $1 125% $0 100% Revenue -$1 75% -$2 50% -$3 25% -$4 0% Apr-09 Jun-09 Jul-09 Aug-09 Sep-09 Nov-09 Dec-09 Jan-10 Feb-10 May-09 Oct-09 Net Revenue Adequacy Percent of CRR Revenue Adequacy Note: Net revenue adequacy includes auction revenue Slide 7

Price- corrections have fluctuated due to “open - tie” conditions. Percentage of Nodal Prices Corrected Increase in corrections due to “open - tie” condition in which 2.50% no bids on tie should have Percentage of total number of nodal prices been accepted 2.00% 1.50% 1.00% 0.50% 0.00% April - June Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 2009 Month Slide 8

Day-ahead market timing improved in February Day Ahead Market Publish Time (April, 2009 - February 2010) 17:10 16:50 16:30 16:10 Day Ahead Market Publish Time 15:50 (February 2010) 15:30 15:10 14:10 Time 14:50 14:30 13:50 14:10 13:50 13:30 13:30 Time 13:10 13:10 12:50 12:50 12:30 12:10 12:30 11:50 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 12:10 Date 11:50 Feb-10 Feb-10 Feb-10 Feb-10 Feb-10 Feb-10 Feb-10 Feb-10 Feb-10 Feb-10 Feb-10 Feb-10 Feb-10 Feb-10 Feb-10 Feb-10 Feb-10 Feb-10 Feb-10 Feb-10 Feb-10 Feb-10 Feb-10 Feb-10 Feb-10 Feb-10 Feb-10 Feb-10 Mar-10 Date Slide 9

Real-time market completions have been near 100%, but declined in January and February. 100% 90% 80% Percentage of Intervals Completed 100.00% 70% 99.50% 99.00% 98.50% 60% 98.00% 97.50% HASP . 50% 97.00% Other RTPD 96.50% 40% 96.00% 95.50% 30% 20% Hour Ahead 10% Scheduling Process (HASP) HASP 0% Real Time Unit RTPD Commitment Process (RTUC) April May June July Aug Sept Oct Nov Dec Jan Feb Slide 10

Areas of focus going forward.  April 1 – 1 year changes  Spring release  Scarcity price, forbidden region, ancillary service in hour ahead process  Energy bid-cap increases from $500 to $750  Eliminate $2,500 price cap  Update to competitive path assessment  Mitigated bid adder  Congestion revenue rights adequacy  Reduce need for exceptional dispatch  Increase market transparency  Improve market model process and detail Slide 11