Market Monitoring Update Eric Hildebrandt, Ph.D. Executive - PowerPoint PPT Presentation

Market Monitoring Update Eric Hildebrandt, Ph.D. Executive Director, Department of Market Monitoring EIM Governing Body Meeting General Session January 24, 2019

EIM prices in 2018 reflect regional supply conditions, transmission limits, and net loads. Average hourly 15-minute prices (April – December 2018) Slide 2

Upward flexible ramping requirement test failures low in most areas, but 4 to 5% in some EIM areas during 2018. Source: EIM power balance constraint relaxation and imbalance conformance limiter, DMM, January 18, 2019. http://www.caiso.com/Documents/EIMpowerbalanceconstraintrelaxationandimbalanceconformancelimiter.pdf Slide 3

Flexible ramping requirement test failures lead to transfer limits – which contribute to power balance constraint infeasibilities in EIM areas. 1.0% Failed sufficiency test & infeasibility Passed sufficiency test & infeasibility 0.9% 0.8% Percent of intervals 0.7% 0.6% 0.5% 0.4% 0.3% 0.2% 0.1% 0.0% Excess Short Excess Short Excess Short Excess Short Excess Short Excess Short Excess Short Excess Short PacifiCorp PacifiCorp NV Energy Puget Sound Arizona Public Portland Idaho Power* Powerex* East West Energy Service General Electric Slide 4

Changes to ramping sufficient test in EIM being implemented in spring 2019 include: • Application of Bid Range Capacity and Flexible Ramp Sufficiency Tests at a 15-minute (vs. hourly) basis. • Tolerance bandwidth threshold for small deviations from test requirements – Greater of 1% of BAAs uncertainty requirement or 1 MW. • Provide EIM areas increased information and details of sufficiency evaluations. Changes should provide more transparency and reduce test failures. Slide 5

Changes in load conformance limiter planned for 2019 will significantly reduce when the limiter is triggered. 1.0% Load conformance limiter not triggered 0.9% Current load conformance limiter tiggered 0.8% Proposed load conformance limiter triggered Percent of intervals 0.7% 0.6% 0.5% 0.4% 0.3% 0.2% 0.1% 0.0% Curr. Prop. Curr. Prop. Curr. Prop. Curr. Prop. Curr. Prop. Curr. Prop. Curr. Prop. Curr. Prop. California ISO PacifiCorp PacifiCorp NV Energy Puget Sound Arizona Public Portland Idaho Power* East West Energy Service General Electric Slide 6

With current limiter, prices set by last dispatched bid in EIM areas are often much lower than $1,000/MW penalty price otherwise used for infeasibilities. 1.0% Less than $50 $50 to $200 $200 to $300 $300 to $400 $400 to $900 > $900 0.9% 0.8% Percent of intervals 0.7% 0.6% 0.5% 0.4% 0.3% 0.2% 0.1% 0.0% Curr. Prop. Curr. Prop. Curr. Prop. Curr. Prop. Curr. Prop. Curr. Prop. Curr. Prop. Curr. Prop. California ISO PacifiCorp PacifiCorp NV Energy Puget Sound Arizona Public Portland Idaho Power* East West Energy Service General Electric Slide 7

New load conformance limiter will have much lower impact on prices in two EIM areas. Average price Average price with current with proposed conformance conformance limiter limiter Increase NV Energy 15-minute market (FMM) $35.75 $37.60 5% 5-minute market (RTD) $35.30 $37.91 7% Arizona Public Service 15-minute market (FMM) $34.96 $38.52 10% 5-minute market (RTD) $34.66 $39.33 13% Impact of current and proposed load conformance limiter found to be minimal in CAISO and other EIM areas. Slide 8

Impact of current and proposed load conformance limiter in APS (15-minute prices, 2018). $100 Average price using current load conformance limiter logic (actual) Average estimated price without the load conformance limiter $90 Average estimated price using proposed load conformance limiter logic $80 $70 Price ($/MWh) $60 $50 $40 $30 Actual average price: $34.96 $20 With proposed limiter: $38.52 (+ 10%) $10 With no limiter: $39.22 (+ 12%) $0 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 ending Slide 9

Impact of current and proposed load conformance limiter in NV Energy (15-minute prices, 2018). $100 Average price using current load conformance limiter logic (actual) Average estimated price without the load conformance limiter $90 Average estimated price using proposed load conformance limiter logic $80 $70 Price ($/MWh) $60 $50 $40 $30 Actual average price: $35.75 $20 With proposed limiter: $37.60 (+ 5%) $10 With no limiter: $37.93 (+ 6%) $0 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 ending Slide 10

Conclusions and recommendations • DMM supports new load conformance limiter being proposed, but recommends EIM areas take action to mitigate potential priced impacts of new approach. – Review and monitor use and impact of load conformance. – Seek to reduce ramping sufficiency test failures. • Changes to sufficiency tests should provide more transparency and help reduce failures. Slide 11