1. Market Pricing Issues: Update
Document ID #: MAC-05-07
8 Oct 2003
Market Advisory Council of the IMO

2. Market Advisory Council of the IMO
Agenda
Background
Recently Introduced Initiatives
Hour-Ahead Dispatchable Load (HADL)
Spare Generation On-Line (SGOL)
Control Action Operating Reserve
Proposal for Additional Control Action Operating Reserve
Next Steps
8 Oct 2003
Market Advisory Council of the IMO

3. Market Advisory Council of the IMO
Background
Three pricing issues
pre-dispatch vs. real-time prices
counter-intuitive prices in times of shortage
size, content and variability of uplift
Contributing factors not only give rise to pricing issues, but also:
reduce market efficiency
jeopardize reliability of IMO-controlled grid
8 Oct 2003
Market Advisory Council of the IMO

4. Market Advisory Council of the IMO
HADL and SGOL
Hour-Ahead Dispatchable Load
4 participants; ~240 MW registered
activity limited to date; 25 hours; <30 MW/hr
impacts negligible
Spare Generation On-Line
~2600 MW registered
activity started in mid-September
net market impacts not quantifiable yet, but appears to be having intended effect
8 Oct 2003
Market Advisory Council of the IMO

5. Control Action Operating Reserve - 1
MW relief that would be realized if control action taken e.g. voltage reduction
Industry accepted source of Operating Reserve
200 MW introduced early August
30 minute Operating Reserve price: 30 $/MW
10 minute non-synchronized Operating Reserve price: $/MW
Energy price: 2000 $/MWh
8 Oct 2003
Market Advisory Council of the IMO

6. Control Action Operating Reserve - 2
Market Impacts (results to September 22)
Increase Average HOEP: range $/MWh, relative to 49.2 $/MWh actual average HOEP (SGOL offsets)
IOG Savings: 37 k$ (Total IOG Payments 2.5 M$)
Reliability Impacts
No unreliable operation as a result of scheduling CAOR
Increased risk of unreliable operation judged very small
Displaced Market Operating Reserve
~0.2% of total scheduled OR
8 Oct 2003
Market Advisory Council of the IMO

7. Control Action Operating Reserve - 3
Requesting IMO Board approval for introducing additional 200 MW (Oct 3 meeting)
same prices and specifications as first 200 MW
implement mid-October
generally supported by MOSC and Technical Panel
Continue to monitor impacts and report to IMO Board and stakeholders
8 Oct 2003
Market Advisory Council of the IMO

8. Market Advisory Council of the IMO
Next Steps
Additional Control Action Operating Reserve
Remove 200 MW Supplementary Reserve
12x ramp rate
Pre-dispatch price bands
8 Oct 2003
Market Advisory Council of the IMO