Briefing on Market Performance Mark Rothleder Director, Market Analysis and Development Board of Governors Meeting General Session March 25-26, 2010
Energy Markets - Overview Market successful since launch Price volatility is reasonable Price convergence has improved Exceptional Dispatches have declined Several areas still need improvement Congestion revenue right (CRR) adequacy Quality of data Market model Load forecasting Slide 2
Frequency and magnitude of price volatility in real-time has generally decreased, particularly for extreme price (>$500/MWh). 3.0% 2.5% Import constraint Percent of real-time Intervals 2.0% Over $1000 1.5% $750 to $1000 1.0% $500 to $750 $250 to $500 0.5% 0.0% Apr 2009 July Aug Sept Oct Jan 2010 Feb May June Nov Dec Slide 3
When real-time volatility occurs it is related to system conditions. Example (Peak Load Pull) 450 400 350 Load Aggregation Price ($/Mwh) 300 250 200 150 100 50 0 3 6 9123 6 9123 6 9123 6 9123 6 9123 6 9123 6 9123 6 9123 6 9123 6 9123 6 9123 6 9123 6 9123 6 9123 6 9123 6 9123 6 9123 6 9123 6 9123 6 9123 6 9123 6 9123 6 9123 6 912 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Hour / Interval Day Ahead Hour Ahead Scheduling Process Real Time Dispatch (5 min.) Slide 4
Price convergence between markets has improved. Average Monthly Prices – PG&E Load Aggregation Point (Peak Hours) $100 Better convergence $90 $80 $70 Average LAP LMP ($/MWh) $60 $50 $40 $30 $20 $10 $0 ($10) June July Aug Sept Nov Dec Apr 2009 May Oct Jan 2010 Feb Day Ahead Hour Ahead Scheduling Process Real Time Dispatch Slide 5
Exceptional dispatch volumes continue to decrease as effort to incorporate constraint into the market continues. 35 Approx. 3% of total daily energy 30 25 Thousands of Mwh per Day 20 15 Approx. 1% of total daily energy 10 5 0 -5 -10 1-Jul 8-Jul 15-Jul 22-Jul 29-Jul 5-Aug 12-Aug 19-Aug 26-Aug 2-Sep 9-Sep 16-Sep 23-Sep 30-Sep 14-Oct 21-Oct 28-Oct 4-Nov 11-Nov 18-Nov 25-Nov 2-Dec 9-Dec 16-Dec 23-Dec 30-Dec 3-Feb 10-Feb 17-Feb 24-Feb 7-Oct 6-Jan 13-Jan 20-Jan 27-Jan Day_Ahead Real_Time_Inc Real_Time_Dec Slide 6
Monthly CRR revenue adequacy continues to be an issue due to unanticipated transmission outages. $4 200% Adeuqacy Adequacy (Millions) $3 175% $2 150% Percent of Revenue $1 125% $0 100% Revenue -$1 75% -$2 50% -$3 25% -$4 0% Apr-09 Jun-09 Jul-09 Aug-09 Sep-09 Nov-09 Dec-09 Jan-10 Feb-10 May-09 Oct-09 Net Revenue Adequacy Percent of CRR Revenue Adequacy Note: Net revenue adequacy includes auction revenue Slide 7
Price- corrections have fluctuated due to “open - tie” conditions. Percentage of Nodal Prices Corrected Increase in corrections due to “open - tie” condition in which 2.50% no bids on tie should have Percentage of total number of nodal prices been accepted 2.00% 1.50% 1.00% 0.50% 0.00% April - June Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 2009 Month Slide 8
Day-ahead market timing improved in February Day Ahead Market Publish Time (April, 2009 - February 2010) 17:10 16:50 16:30 16:10 Day Ahead Market Publish Time 15:50 (February 2010) 15:30 15:10 14:10 Time 14:50 14:30 13:50 14:10 13:50 13:30 13:30 Time 13:10 13:10 12:50 12:50 12:30 12:10 12:30 11:50 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 12:10 Date 11:50 Feb-10 Feb-10 Feb-10 Feb-10 Feb-10 Feb-10 Feb-10 Feb-10 Feb-10 Feb-10 Feb-10 Feb-10 Feb-10 Feb-10 Feb-10 Feb-10 Feb-10 Feb-10 Feb-10 Feb-10 Feb-10 Feb-10 Feb-10 Feb-10 Feb-10 Feb-10 Feb-10 Feb-10 Mar-10 Date Slide 9
Real-time market completions have been near 100%, but declined in January and February. 100% 90% 80% Percentage of Intervals Completed 100.00% 70% 99.50% 99.00% 98.50% 60% 98.00% 97.50% HASP . 50% 97.00% Other RTPD 96.50% 40% 96.00% 95.50% 30% 20% Hour Ahead 10% Scheduling Process (HASP) HASP 0% Real Time Unit RTPD Commitment Process (RTUC) April May June July Aug Sept Oct Nov Dec Jan Feb Slide 10
Areas of focus going forward. April 1 – 1 year changes Spring release Scarcity price, forbidden region, ancillary service in hour ahead process Energy bid-cap increases from $500 to $750 Eliminate $2,500 price cap Update to competitive path assessment Mitigated bid adder Congestion revenue rights adequacy Reduce need for exceptional dispatch Increase market transparency Improve market model process and detail Slide 11
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