MISO is an acronym for Midcontinent Independent System Operator.

Transcription

1 MISO is an acronym for Midcontinent Independent System Operator. aq-rule2-20u 1

2 MISO providesreliability and market services in 15 states and the Canadian Province of Manitoba. Our headquartersand main control room are located in Carmel, Indiana in MIISO Central (highlighted in green). We also have a control room located in Eagan, Minnesota, in MISO North (highlighted in blue), and a control room located in Little Rock, Arkansas (highlighted in orange). 2

3 Several years ago, MISO sought to quantify the value that it provides across its footprint including the entire set of MISO market participants and their customers. MISO did that by conducting the Value Proposition Study. We worked with regulators and stakeholders to determine a set of variables that we would use on an ongoing basis to calculate MISO s value to consumers. MISO provides quantifiable benefits through improved grid reliability, and through increased efficiencies in how generation resources are uses. MISO also provides benefits that are not readily quantifiable, such as price/information transparency, planning coordination, and seams management. In 2014, the Value Proposition Study revealed that MISO provides between $2.2 and $3.1 billion in annual economic benefits for its region. 3

4 The U.S. has 3 Independent System Operators (ISOs): the New York ISO, the Electric Reliability Council of Texas (ERCOT) and the California ISO. Canadahas 2 ISOs: one in Alberta and one in Ontario. The U.S.also has 4 Regional Transmission Organizations (RTOs): ISO New England, the PJM Interconnection, the Midcontinent Independent System Operator and the Southwest Power Pool (SPP). The only real distinction between the two types of entities is that to be approved by the Federal Energy Regulatory Commission as an RTO, an entity has to encompass a multistate region. 4

5 These are the RTO characteristics established by FERC. MISO has all of these characteristics. 5

6 In this photograph of the MISO Control Room in Carmel, note that there are lots of computer screens on both the large map board and individual desktops. This reflects the large number of software applications used by control room personnel to monitor and manage the bulk electric system. 6

7 One of MISO s key responsibilities in fact, one of the first responsibilities given to MISO when it became operational was to monitor and manage power flows on the highvoltage transmission grid. So MISO can be thought of as an air traffic controller for transmission wires. This photograph of a regional air traffic control center bears a strong resemblance to the MISO control room. 7

8 In additional to managing real-time grid reliability, MISO administers a market for wholesale electricity that is, the sale and purchase of electricity between market participants. Our participants include mostly regulated local utilities, but also we have competitive retail suppliers, power marketing companies and merchant (non-utility) power plants. In this market, MISO is matches up the supply of power from generating resources with the demand for power. 8

9 On a second-by-second basis, MISO has to balance the demand for electricity from customers with the available supply of electricity. If power demand and supply are not continually balanced, serious issues can result such as cascading outages of transmission lines and power plants. MISO accomplishes this balancing act through a centralized, competitive wholesale power market. 9

10 MISO also coordinates long-term transmission planning for its market footprint. 10

11 MISO could also reasonably be described as an IT company. Sophisticated computer hardware and software is critical to all of MISO s operational areas. In addition to employing lots of engineers, MISO also employs lots of IT professionals. 11

12 In MISO s real-time market, wholesale electricity prices vary by location and are recalculated every 5 minutes. This constant re-calculation reflects the dynamic nature of the power grid. The primary factor which drives price differences across the footprint is the need to not exceed limits on transmission lines as the system is being dispatched to match supply with demand. The type of price map shownhere is also called a thermal map. Cool colors (blue) represent relatively low prices. Warm colors (orange and red) represent relatively high prices. Yellow and green represent in-between prices. 12

13 Each day, MISO runs a forward market for electricity for the next operating day (midnight to midnight) to determine which units will be available and how they will be dispatched. Prices are calculated for each of the 24 hours, for energy and supporting products ( ancillary services ). Within the operating day, MISO runs a real-time market for electricity and ancillary services where prices are calculated every 5 minutes. This intra-day market is intended as a balancing market to manage deviations from what was settled in the forward dayahead market. MISO performs an optimal (least-cost) economic dispatch using Linear Programming software. Linear Programming is a technique for making a particular number as large as possibly (maximization) or as small as possible (minimization), subject to specified constraints. What MISO tries to minimize, subject to a very large number of constraints, is production cost the cost of supplying energy and ancillary services. 13

14 Each typeof resource, and in fact each individual resource, has unique operating characteristics that include the cost of providing power to the grid, as well as operating limits and operating parameters. 14

15 Each resourcemust provide MISO with an Energy Offer Curve, which can be thought of as a resource-specific supply curve. This curve indicates how much energy the resource is willing to supply at what price.this curve can be either flat or increasing. The Energy Offer Curves from all of the resources in the footprint are a key input to the optimization software. 15

16 Each resource must provide MISO with Resource Parameters for example, Minimum Runtime and Maximum Runtime. Resource Parameters are an important constraint in the optimization software. 16

17 Transmission Constraints are critical to the optimization software because they drive the price separation that is usually seen across the MISO footprint. The table on this slide is a screenshot from the section of the MISO website that shows the real-time binding transmission constraints (a constraint is binding if it is near, at or over its limit and therefore impacting how the resource fleet is dispatched). 17

18 Here you can see a summary of the inputs and outputs in the real-time market (run on a 5-minute basis). 18

19 In closing, MISO has three core responsibilities Reliability, Market Operations and Transmission Planning. 19