Briefing on Market Performance Mark Rothleder Director, Market - - PowerPoint PPT Presentation

Briefing on Market Performance

Mark Rothleder Director, Market Analysis and Development Board of Governors Meeting General Session March 25-26, 2010

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• 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

Energy Markets - Overview

0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% Apr 2009 May June July Aug Sept Oct Nov Dec Jan 2010 Feb Percent of real-time Intervals Over $1000 $750 to $1000 $500 to $750 $250 to $500

Frequency and magnitude of price volatility in real-time has generally decreased, particularly for extreme price (>$500/MWh).

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Import constraint

When real-time volatility occurs it is related to system conditions.

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50 100 150 200 250 300 350 400 450

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

Load Aggregation Price ($/Mwh) Hour / Interval

Example (Peak Load Pull)

Day Ahead Hour Ahead Scheduling Process Real Time Dispatch (5 min.)

($10) $0 $10 $20 $30 $40 $50 $60 $70 $80 $90 $100

Apr 2009 May June July Aug Sept Oct Nov Dec Jan 2010 Feb

Average LAP LMP ($/MWh)

Day Ahead Hour Ahead Scheduling Process Real Time Dispatch

Price convergence between markets has improved.

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Average Monthly Prices – PG&E Load Aggregation Point (Peak Hours)

Better convergence

Exceptional dispatch volumes continue to decrease as effort to incorporate constraint into the market continues.

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• 10
• 5

5 10 15 20 25 30 35 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 7-Oct 14-Oct 21-Oct 28-Oct 4-Nov 11-Nov 18-Nov 25-Nov 2-Dec 9-Dec 16-Dec 23-Dec 30-Dec 6-Jan 13-Jan 20-Jan 27-Jan 3-Feb 10-Feb 17-Feb 24-Feb Thousands of Mwh per Day

Day_Ahead Real_Time_Inc Real_Time_Dec

• Approx. 3% of total daily energy
• Approx. 1% of total daily energy

Monthly CRR revenue adequacy continues to be an issue due to unanticipated transmission outages.

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0% 25% 50% 75% 100% 125% 150% 175% 200%

• $4
• $3
• $2
• $1

$0 $1 $2 $3 $4 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Percent of Revenue Adeuqacy Revenue Adequacy (Millions) Net Revenue Adequacy Percent of CRR Revenue Adequacy

Note: Net revenue adequacy includes auction revenue

0.00% 0.50% 1.00% 1.50% 2.00% 2.50% April - June 2009 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Percentage of total number of nodal prices Month

Percentage of Nodal Prices Corrected

Price-corrections have fluctuated due to “open-tie” conditions.

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Increase in corrections due to “open-tie” condition in which no bids on tie should have been accepted

11:50 12:10 12:30 12:50 13:10 13:30 13:50 14:10 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 Feb-10 Mar-10 Time Date

Day Ahead Market Publish Time (February 2010)

11:50 12:10 12:30 12:50 13:10 13:30 13:50 14:10 14:30 14:50 15:10 15:30 15:50 16:10 16:30 16:50 17:10 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Time Date

Day Ahead Market Publish Time (April, 2009 - February 2010)

Day-ahead market timing improved in February

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Real-time market completions have been near 100%, but declined in January and February.

Slide 10 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% April May June July Aug Sept Oct Nov Dec Jan Feb HASP RTPD 95.50% 96.00% 96.50% 97.00% 97.50% 98.00% 98.50% 99.00% 99.50% 100.00% HASP Other RTPD

Hour Ahead Scheduling Process (HASP) Real Time Unit Commitment Process (RTUC) . Percentage of Intervals Completed

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

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