Peak Reliability/PJM Connext West-Wide RC and Market Services. Webinar January 16, 2018

Transcription

1 Peak Reliability/PJM Connext West-Wide RC and Market Services Webinar January 16, 2018

2 Welcome and Introductions Peak Reliability (Peak) Dick Garlish Pete Hoelscher Brett Wangen PJM Connext Scott Baker Fran Barrett Todd Bessemer 2

3 Agenda Introduction and Overview The Peak/PJM Connext Partnership Market Opportunities for the West Open Forum Conclusion and Next Steps 3

4 The Case for Markets Drive reliable operations Unlock value of diversity geography, weather, fleet attributes, timing More efficient use of transmission system Market signals offer basis for investment, trade and new construction/upgrades Provide new economic opportunities for participants 4

5 The Peak/PJM Connext Value Proposition For Peak Reliability Funders A market for the West by the West Direct say in market design and governance Reduce operating costs For Peak Reliability / PJM Connext Advance reliability in the West through markets Expand services and lower Reliability Coordinator (RC) function costs Maintain and enhance West-wide view and services 5

6 High-Level Functions and Service Flexibility 1. Peak RC services + 2. Participants have three organized markets options: Use Peak/PJM Connext Market services, including interregional coordination, or; Use other markets (SPP, CAISO), or; None continue with self-scheduling/bilaterals + 3. Balancing Authority (BA) services: Use Peak/PJM Connext BA services, or; Continue with separate BAs 6

7 Initial Conceptual Market Offering Nodal, Locational Marginal Pricing (LMP)-based market Real-time and day-ahead energy markets Financial Transmission Rights (FTR) Consolidated credit and market settlement Optional services, as desired by stakeholders: Co-optimized ancillary services (Regulation, Reserves) Demand response construct Capacity construct and market Other alternatives 7

8 Control center (Vancouver, WA) Leveraging Peak and PJM Existing Tools and Services PEAK Operations PJM Market Management GE Energy Mgmt. System West-Wide Model Outage Coordination Control Center (Loveland, CO) GE Market Management System Day-Ahead Market Optional Services Capacity SCADA/SE Real-Time Market Reserves ECC Transmission Rights Regulation Settlements & Credit 8

9 Agenda Introduction and Overview The Peak/PJM Connext Partnership Market Opportunities for the West Open Forum Conclusion and Next Steps 9

10 PJM s Grid & Market Experience Operations, Markets and System Planning spanning 13 States & DC Interfaces with single and multistate markets (NYISO, MISO), and non-markets (TVA, Duke) Electrically contiguous members of all types 90+ years of grid & reliability operations and 20+ years market operations 10

11 Focus on operational excellence e.g. Perfect dispatch production cost savings, , of $1.4b Proven implementation track record On-schedule implementation of new market features, and integrating new territory Customer service focus Consistently high customer satisfaction rating (87% in 2016) Strong financial and fiscal track record: Lowest effective $/MWh rate of any US market Only ISO/RTO to operate on a firm-payment basis, rather than cost pass-through Aa2 credit rating from Moody s PJM s Record and Culture 11

12 $300 $250 Finance Committee Recommended Budget Approved by PJM Board Actual Net Expenses PJM Net Expense Budget Performance Dollars in millions $200 $150 $100 $50 $

13 Wholly-owned, unregulated subsidiary of PJM Interconnection Connext is the commercial vehicle through which PJM pursues all ventures outside its core FERCregulated functions within the PJM footprint Has access to the full capabilities of PJM: innovation, intellectual property, leadership Thus, PJM s experience is PJM Connext s distinctive capability Global experience 13

14 Value of Peak/PJM Connext Partnership Proposition brings together the knowledge and relationships of Peak Reliability, and the operational capabilities, and delivery credibility, of PJM. existing West-Wide model existing relationships with participants strong operational track record and reputation for keeping delivery commitments cost effective and cost conscious member-governed market pre-existing capabilities means quick time-to-market multi-state/province market offers public policy balance 14

15 Agenda Introduction and Overview The Peak/PJM Connext Partnership Market Opportunities for the West Open Forum Conclusion and Next Steps 15

16 Market Design Philosophy Market prices should reflect actual operating conditions and encourage the right behaviors. Participants are partners with the grid operator in maintaining reliability through price signals. The bulk of trading activity will rightly take place in the forward markets, but this requires reliable underlying reference pricing. The use of FTRs for hedging congestion allows the transfer capability of the transmission system to be maximized. Market Operations Energy Ancillary Services Capacity Reliability Grid Operations Supply/Demand Balance Transmission Monitoring

17 Initial Recommended Operating Approach Day-Ahead Market Day-Ahead Participants purchase and sell energy at binding dayahead LMPs: Optimized security-constrained schedule minimizes total production cost subject to transmission constraints Based on bid-in demand (rather than forecast) Includes unit commitments, with guaranteed recovery of startup and no-load costs Option: financial/virtual bidding, or not Supplemental reliability commitment process based on the operator s load forecast. 17

18 Initial Recommended Operating Approach Real-Time Market Resource dispatch based on Security Constrained Economic Dispatch (SCED) executed every 5 minutes. Generates LMPs and resource basepoints. Options: Look-ahead commitment for fast-start plant, over various time intervals Co-optimization of ancillary services schedules, prices and commitments Processes are tightly integrated with the Energy Management System (EMS) for inputs (SCADA/State Estimator) and outputs (Automatic Generation Control (AGC)). 18

19 Operating Approach Financial Transmission Rights FTRs complement the LMP market by providing a congestion cost hedging mechanism Can be to/from a node, or aggregate location (hub/zone) Implement based on PJM standard model with available flexibility. Can facilitate both: Direct Allocation of Transmission Rights Auctions for all/some Transmission Rights PJM has experience managing grandfathered transmission agreements as part of the FTR regime. 19

20 Inter-Regional Coordination PJM Joint Congestion Management between Market Entities Traditional (Non-Market) Congestion Relief MISO NYISO Market-to-Market JOAs PJM TLR JOAs/RCAs TVA Duke Joint Operating Agreements Joint Operating Agreements Or Reliability Coordination Agreements Supports efficient inter-regional congestion management Supports interchange transactions 20

21 Inter-Regional Coordination West Joint Congestion Management between Market Entities Traditional (Non-Market) Congestion Relief CAISO SPP AESO Market-to-Market JOAs Peak/PJM Connext Market ECC JOAs/RCAs Non-Market Regions Joint Operating Agreements Joint Operating Agreements Or Reliability Coordination Agreements Supports efficient inter-regional congestion management Supports interchange transactions 21

22 Operating Approach Settlement & Credit Leverage existing PJM settlement processes, with calculations configured and interfaces customized for the Western market. Uses central counter-party structure. Comprehensive Market Settlement Reporting System. Weekly billing Cash settlement utilizing a two-day process. Credit process includes minimum credit requirements, screening requirements, and short-term and long-term requirements. 22

23 Market Readiness Extensive participant communications and readiness coordination Environments for testing of participant connectivity and interfaces. Extensive array of training, how-to guides and checklists Comprehensive Market Trial leading up to go live, to familiarize participants with market in an as-real, commercially-safe setting. 23

24 Agenda Introduction and Overview The Peak/PJM Connext Partnership Market Opportunities for the West Open Forum Conclusion and Next Steps 24

25 Agenda Introduction and Overview The Peak/PJM Connext Partnership Market Opportunities for the West Open Forum Conclusion and Next Steps 25

26 Closing - Peak/PJM Connext Value Proposition Responsive and flexible governance by and for the West Brings together the combined knowledge, relationships and capabilities of PJM and Peak Ability to promptly deliver the market you want Track record of timely and effective delivery Cost effective and value conscious Multi-state, public policy balance 26

27 Continue soliciting participant interest and receptivity February: o 6-7: Update at Peak Member Advisory Committee and Board meetings o 27: Webinar March: o Complete data gathering and analysis o Services roadmap o Finalize business case Late March/Early April: Publish findings, final proposal and cost estimates o Stakeholder communication o MOU (non-binding) with initial participants April June: Participant commitment phase Next Steps 27

28 Meeting recording and material related to the Peak/PJM Connext partnership will be posted: To stay informed subscribe to the Peak/PJM Connext webpage at: Additional questions should be sent to: An array of free PJM training material can be found at: Peak/PJM Connext Webpage Access requires signing up for a free PJM account at: 28