Market Performance Report for May 2007 Alan Isemonger Manager, - PowerPoint PPT Presentation

Market Performance Report for May 2007 Alan Isemonger Manager, Market Information Board of Governors General Session July 18 th - 19 th , 2007

Market Highlights The full May Market Performance Report is available at http://www.caiso.com/1be8/1be8723649d20.pdf Hydroelectric generation has peaked With the exception of May 8 th the Balancing Energy Market was subdued Average Ancillary Services prices rose Total inter-zonal congestion costs increased substantially 2

Hydroelectric Generation Capacity 7000 Average hydroelectric 2007 Hydro Generation generation peaked at 6000 Average Hydro Generation (MW) 2006 Hydro Generation 3,000 MW in May, 2005 Hydro Generation while remaining well 2004 Hydro Generation 5000 below production 4000 levels in previous years. 3000 2000 1000 1-Jan 15-Jan 29-Jan 12-Feb 26-Feb 12-Mar 26-Mar 9-Apr 23-Apr 7-May 21-May Week Beginning 3

Balancing Energy Perspective Red bars are balancing 600,000 energy vs. total market Bilaterally Scheduled Energy CAISO Balancing Market Energy 500,000 volume. Balancing energy 400,000 made up 2.8% of total MWh energy consumed in 300,000 April. 200,000 100,000 0 1-May 3-May 5-May 7-May 9-May 11-May 13-May 15-May 17-May 19-May 21-May 23-May 25-May 27-May 29-May 31-May Date 4

Real Time Balancing Energy Prices There were only 101 550 500 instances of five-minute NP15 Settlement Price 450 prices exceeding $250 in Market-Clearing Price ($/MWh) NP15 IHR Price 400 May as compared to 203 350 in April and 131 in March. 300 Representing 1.13% of the 250 total number of pricing 200 intervals in the month. 150 Further, 41 of these high 100 price intervals, over 40% 50 of the total, occurred on 0 May 8. -50 1-May 2-May 3-May 4-May 5-May 6-May 7-May 8-May 9-May 10-May 11-May 12-May 13-May 14-May 15-May 16-May 17-May 18-May 19-May 20-May 21-May 22-May 23-May 24-May 25-May 26-May 27-May 28-May 29-May 30-May 31-May Date 5

Cost of Balancing Energy May 7 th and 8 th had a $3,000 20,000 large proportion of the Above $250 $2,700 18,000 high priced intervals this Inc Below $250 Balancing Market Volume, MWh $2,400 16,000 month. Over 50% of Total Inc Volume $2,100 14,000 costs on these days Cost, Thousands $1,800 12,000 were incurred at prices in $1,500 10,000 excess of $250 MWh $1,200 8,000 For the month 21.8% of $900 6,000 costs for balancing $600 4,000 energy were transacted $300 2,000 $0 0 during intervals with 1-May 3-May 5-May 7-May 9-May 11-May 13-May 15-May 17-May 19-May 21-May 23-May 25-May 27-May 29-May 31-May prices greater than $250, with the balance below. Date 6

Ancillary Services Markets Prices for Regulation Up and Spinning 45 40 Reserve increased 35 RU RD SP NS sharply by 139% and 30 25 $/MW 201% respectively in 20 May 15 10 Due to inter-zonal 5 0 congestion on the 2 9 16 23 30 6 13 20 27 3 10 17 24 3 10 17 24 31 7 14 21 28 5 12 19 26 MEAD and PACI Dec Jan Feb Mar Apr May 2007 branch groups which Week Beginning caused lower priced bids to be skipped Average Required (MW) Weighted Average Price ($/MW) RU RD SP NS RU RD SP NS Apr 07 377 355 721 701 $ 11.48 $ 8.26 $ 2.48 $ 1.10 May 07 367 356 740 739 $ 27.49 $ 9.65 $ 7.45 $ 1.36 -2.7% 0.2% 2.5% 5.5% 139.4% 16.9% 200.8% 23.3% 7

RA Unit Commitment Costs Total unit commitment costs (RA and FERC MOO) declined sharply in May to $1.2 million from 2.2 million in April. $250,000 RA commitment costs in May were driven by a large unit $200,000 outage around the 13th of the month, and by the loss of the $150,000 McCullough-Victorville transmission line which $100,000 increased the SCIT nomogram requirements. $50,000 Victorville-Lugo congestion $0 and SCE Area requirements 1-Apr 8-Apr 15-Apr 22-Apr 29-Apr 6-May 13-May 20-May 27-May also contributed about 20 percent each to the total. System SP26 Cacacity Victorville-Lugo SCE Area SCIT South-of-Lugo Outage Other 8

FERC MOO Commitment Costs FERC MOO commitments $250,000 totaled a mere $14,000 for $200,000 some System energy on $150,000 May 1. $100,000 $50,000 $0 1-Apr 8-Apr 15-Apr 22-Apr 29-Apr 6-May 13-May 20-May 27-May System SP26 Cacacity Victorville-Lugo SCE Area SCIT South-of-Lugo Outage Other 9

I nter-zonal Congestion Costs Total inter-zonal congestion costs increased to $12.5 million in May from $5 million in April. Congestion was driven largely by Schedule Coordinators attempting to move cheap hydroelectric power from the Pacific Northwest into the CAISO control area. Outages, scheduled maintenance on transmission lines and related transmission de-rates also contributed to the high level of congestion this month. 10