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Analysis of Market Timelines Adjustment Proposals

This document discusses proposals to adjust market timelines in the energy sector for better coordination between electricity and natural gas scheduling processes, along with possible alternatives, advantages, and disadvantages. It also explores generator availability assumptions and open issues in reliability services.

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Analysis of Market Timelines Adjustment Proposals

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  1. Cold Snap Task Force Working Groups Update on Straw Proposals NEPOOL Reliability Committee May 4, 2004

  2. Straw Proposal #1Adjust Market Timelines • Current electric market timeline results in generator schedules published at 1600 for the DA Market and 2200 for the RT Market • Natural gas scheduling process requires day ahead (timely) nominations to be finalized by 1230 • Advantages: Gas price known when generator offers are submitted to the market • Disadvantages: On days with tight natural gas supplies, generator schedules are issued too late for natural gas scheduling effectiveness.

  3. Straw Proposal #1Adjust Market Timelines Possible Alternatives • Move up the “Market Process” by 12 hours • Event Driven (parameters to be determined) • DAM Offers in by midnight vs. noon • DAM clears 0400 • Re-offer window 0400-0600 • RAA completed by 1000

  4. Straw Proposal #1Adjust Market Timelines • Advantages: • Generator schedules known in advance of timely natural gas nomination requirements • Stakeholders are fully informed of forecast “abnormal” system conditions • Makes use of existing Market Rules and structure • Minimal disruption to current business practices (ISO and Market Participants)

  5. Straw Proposal #1Adjust Market Timelines • Disadvantages: • Natural gas prices are less evident at the time electric market offers are submitted • Current Market Rules do not result in “financially firm” schedules for RT market commitments, leaving certain market risks with gas-fired generators in a constrained natural gas market • No guarantees that generators will operate as scheduled

  6. Straw Proposal #1Adjust Market Timelines Possible Alternatives • Merge DA market and RT market commitment for a single, financially binding solution, completed by 1000 (event driven) • DA solution would become a physical vs. financial commitment • ISO load forecast replaces Participant load bids • Eliminate virtual transactions

  7. Straw Proposal #1Adjust Market Timelines • Advantages: • Generator schedules known in advance of timely natural gas scheduling requirements • Stakeholders are fully informed of forecast “abnormal” system conditions • Using the DA market platform will yield financially firm commitments for all resources, including natural gas units

  8. Straw Proposal #1Adjust Market Timelines • Disadvantages: • Natural gas prices are less evident at the time electric market offers are submitted • Potential exists for significant market rule changes prior to implementation, including possible cost allocation issues • De-listed units not obligated to offer into DA market • Moves away from multi-settlement design

  9. Straw Proposal #2Generator Availability Assumptions Possible Alternatives • Daily MWH above schedules provided in advance of natural gas scheduling deadlines assumed to be not available (ISO prefers generator to report any restrictions via a timely re-declaration) • Use Limited Energy Generator (LEG) functionality to manage operation above generator schedules provided by the natural gas scheduling deadline

  10. Straw Proposal #2AGenerator Availability Assumptions Possible Alternatives • Should we consider a new reliability service not currently provided in the electric market?

  11. Open Issues • Do we have the proper incentives for: • Load to support reliability requirements during “abnormal” situation on the power grid • Generators satisfying market schedules • Generator platform to arbitrage fuel still exists • Scheduling replacement capacity as real-time approaches still problematic for gas-units • Increasing real-time gas-fired generation for post-contingency recovery still questionable

  12. Upcoming Working Group Activities • Continue to develop details on the market timeline straw proposal • Define how to trigger an abnormal natural gas event • Parameters for defining an event • Process to initiate the event – communication plan • Process to exit back to normal conditions

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