1. Electricity Markets Overview Lo-Cal seminar, 09/21/2010

2. Stages of Balancing All Rights Reserved to Shmuel Oren

3. Stages of Balancing: Day Ahead Load serving entities and power generators submit hourly bids in the day-ahead market. The day-ahead market closes at 10.00 the day before actual operation. The OPF determines the optimal dispatch and the CAISO publishes instructions by 13.00 the same day. The result is an hourly dispatch schedule for generators with 20-minute ramps between hours. Integrated Forward Market (financial) vs Residual Unit Commitment (based on forecasts) All Rights Reserved to Shmuel Oren

4. Stages of Balancing: Hour Ahead As the actual operating hour approaches, generators and loads adjust their positions to forecast errors or unanticipated events by bidding in the hour-ahead market. These bids are also settled by an OPF and the results are published by the CAISO 75 minutes before the beginning of the operating hour. Hour-ahead schedules are also hourly blocks with intra-hour ramps HASP(TH-45 to TH+60), STUC (TH-30 to TH+240), TH-15 to TH + 60, TH to TH + 60 All Rights Reserved to Shmuel Oren

5. Stages of Balancing: Real Time Within each operating hour CAISO continues to adjust generator operating points every 5 minutes. 7.5 minutes prior to the beginning of a 5-minute operating interval CAISO uses hour- ahead generation bids and load forecasts to readjust the operating point of each generator for that interval. The prices that result from real time dispatch, also called ex-post zonal prices, are reported every 10 minutes and are averaged over two adjacent 5-minute intervals All Rights Reserved to Shmuel Oren

6. Stages of Balancing: Regulation Every one minute the ISO adjusts the output of specific generators and/or loads based on reliability criteria. These generators and loads provide ancillary services to the system. The ancillary services market is cleared hour- ahead. The actual dispatch of regulation resources is empirical rather than economic All Rights Reserved to Shmuel Oren