Briefing on 2009-2011 Market Initiatives Release Plan Margaret Miller Senior Market Design and Policy Specialist Janet Morris Director, Program Office ISO Board of Governors Meeting General Session September 10-11, 2009
The ISO existing market design should be enhanced with new elements: ! Short timeline from bid to bill ! Standardized and tradable resource adequacy capacity product ! More demand response participation ! Reserve shortage scarcity pricing mechanism ! Efficient dispatch of generators with forbidden operating regions ! Explicit financial arbitrage and hedging mechanism Slide 2
Planned market enhancements deliver new functionality and provide key market and operational benefits. ! Payment Acceleration ! Reduces credit risk ! Shortens payment timeline ! Standard Capacity Product/ancillary services must offer obligation ! Facilitates contracting and trading of capacity ! Prevents AS withholding from resource adequacy resources ! Proxy Demand Resource ! Increases demand response participation ! Meets FERC regulatory requirements ! Scarcity Pricing ! Provides enhanced price signals triggered during reserve shortages ! Stimulate participation in demand response Slide 3
Planned market enhancements deliver new functionality and provide key market and operational benefits. ! Multi-Stage Generator Modeling ! Addresses deferred implementation of real-time enforcement of forbidden operating regions ! Ensures more accurate price signals ! Participating Load ! Provides ability for demand response to schedule demand and bid load curtailments as an integrated bid ! Provide comparable treatment to a generator in the ISO markets ! Convergence Bidding ! Allows all market participants to take a position in real-time to hedge or arbitrage price differences ! Converges prices between day-ahead and real-time Slide 4
The market initiatives roadmap process to prioritize future market initiatives is currently underway. ! Ranking process will be completed in September ! Results will feed into corporate strategic planning process resulting in release planning and implementation post 2011 Slide 5
Slide 6 Release Plan
Our release plan derives from the strategic plan, FERC orders, stakeholder input and lessons learned. Multi-Stage Credit Convergence Participating 1-2 years System Generating Bidding Load Refinements Unit Modeling Enhancements Proxy Standard Post Summer Payment Scarcity Up to 1 Demand Market Capacity Acceleration Pricing year Resources Product Enhancements The ISO Markets are based on the redesigned platform Current Slide 7
Based on lessons learned, our release plan reduces risk in implementing major ISO projects. • Conduct full business impact Under- estimation of assessment full effort • Review requirements with key vendors • Trace business requirements with Incomplete and changing tariff requirements • Enforce tight governance process • Ensure rigorous change management Resource • Build committed resource plan constraints • Plan longer term with key vendors Slide 8
Delivery and deployment phases benefit from the planning investments and other process improvements. Vendor • Contract fixed terms delivery • Involve vendor in requirements Adherence • Complete testing prior to market to schedule simulation • Ensure that scope, schedule, budget and quality measures are met Market • Allow market participants time to design participant and test their systems readiness Slide 9
The market initiatives release plan results from detailed implementation planning with stakeholders. 09 Apr 09 May 09 Jun 09 Jul 09 Aug 09 Sep 09 Oct 09 Nov 09 Dec 10 Jan 10 Feb 10 Mar 10 Apr 10 May 10 Jun 10 Jul 10 Aug 10 Sep 10 Oct 10 Nov 10 Dec 11 Jan 11 Feb Post-Summer Wind Tech Specs Mkt Sim Go-Live - 9/10 6/ 26 Forecasting 8/ 17 – 8/28 SIBR UI Go-Live - 9/1 2009 Enhancements SIBR LITE 8/ 13 Simplified Go Live – 10/ 1 Mkt Sim Ramping Tech Specs BPM Draft – 8/ 19 9/ 1 – 9/ 30 Market Simulation Go-Live - 9/ 21 Master File II BPM Draft 7/ 8 PA Go-Live 11/1 BPM 8/10 – 8/25 Tariff Filing Tech Specs Schedule may Dry Run Period 7/1 – 10/3 BPM Draft 6/1 Mkt Sim extend based on SIBR Rules 3.10 SIBR API Go-Live 11/9 – 12/ 11 SIBR LITE Winter Tech Specs 9/14 12/31 Open 10/ 26 2009 feedback received Standard Mkt Sim Capacity Product 11/9 – 12/ 11 Go-Live External BRS Tech Specs & Tariff Filing / AS MOO 12/31 8/ 12 BPM Drafts 9/28 8/ 10 Mkt Sim SIBR Reports / API Assessing Go-Live 11/9 – 12/ 11 12/31 Multi-Stage Generating BPM Q1 2010 ability to Unit Modeling SIBR Mkt Sim External BRS Tariff Filing Tech Specs Lite Feb-March 2010 Spring 8/ 12 November 12/15 Go-Live 4/ 1/ 2010 – 10/ 1/ 2010 2010 bring in Mkt Sim Scarcity Pricing FERC Filing & schedule Final Proposal 9/30 BOG Approval 12/ 17 March Go-Live 4/1/ 2010 BPM Drafts Proxy Demand Final Proposal BOG Approval Go Live 4/1/ 2010 Resources 8/ 5 9/ 11 2011 Early Convergence BPM Market Simulation Bidding Final Proposal BOG Approval External BRS Tech Specs 9/ 30 10/30 November 2009 Q2 2010 Q3 2010 10/1/ 2010 – 1/31/ 2011 Go Live2/ 1/ 2011 Participating Load BPM Market Simulation Refinements Slide 10 External BRS Q1 2010
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