Technical Conference Regarding Energy and Ancillary Services Markets

Welcome and Opening Remarks

Panel 1: Incenting resources to reflect their full operational flexibility in energy and ancillary services offers

This panel will discuss whether energy and ancillary service market participation rules need to be reformed to ensure that resources have incentives to offer their full operational flexibility to RTO/ISO markets.  This panel will focus on RTO/ISO rules governing market offers, uplift eligibility, market power mitigation, resource eligibility rules to offer ancillary services, and other market rules that affect resource participation in RTO/ISO energy and ancillary services markets.

1. Do any existing RTO/ISO energy and ancillary service market participation rules, supply offer rules, eligibility requirements, and relevant procedures encourage certain resources to offer into the market inflexibly (i.e., without reflecting the full range of their physical operating capabilities)? 
   1. For example, are any changes to resource supply offer rules or uplift eligibility requirements needed to ensure resources submit physical offer parameters (e.g., notification time, minimum run time, ramp rates) that reflect their flexible capabilities?
   2. To what extent do the RTOs/ISOs account for existing fuel limitations like natural gas supplies that have the potential to impact flexibility?
2. Do any existing RTO/ISO energy and ancillary service market rules exhibit an undue preference for certain resource types over other resource types?  If so, please explain how and provide examples.
3. To what extent do existing self-scheduling or self-commitment rules in RTO/ISO markets reduce the amount of operational flexibility available to the RTO/ISO in real-time and the system’s need for operational flexibility?  Are options for self-scheduling and self-commitment needed to allow resource owners to make the best use of their assets over time?  Do existing self-scheduling or self-commitment rules in RTO/ISO markets exhibit an undue preference for certain types of resources over other resource types?
4. Do current RTO/ISO offer rules, market power mitigation practices, and reference levels prevent or discourage resources from including in their offers the additional costs, if any, that resources incur from being more flexible (e.g., longer-term wear and tear on natural gas resources due to increased cycling, battery warranty considerations, etc.)?  Are such costs difficult to quantify?  If so, please explain why.  How should RTOs/ISOs review such costs to ensure that resources’ energy and ancillary services supply offers are competitive? 

Panelists:

• Dr. Nicole Bouchez, Principal Economist, Market Design, New York Independent System Operator, Inc.  
• Joseph Daniel, Manager, Electricity Markets, Climate and Energy Program, Union of Concerned Scientists | Presentation
• Keith Collins, SPP MMU | Presentation
• Tom Kaslow, Vice President, Market Policy, FirstLight Power Inc.
• Sherman Knight, President, Competitive Power Ventures
• Karen Onaran, Vice President, Electricity Consumers Resource Council
• Greg Sorenson, Manager, Market Surveillance and Mitigation, Southwest Power Pool, Inc.
• Dr. Catherine Tyler, Deputy Market Monitor, Monitoring Analytics

Panel 2: Maximizing the Operational Flexibility Available from New and Emerging Resource Types

Permitting all resources, including new resource types, to offer in a manner that maximizes the operational flexibility available to RTO/ISO operators will better enable system operators to manage changing system needs.  This panel will discuss whether current RTO/ISO energy and ancillary services market rules present barriers to relatively new and emerging resource types, such as storage resources, hybrid and co-located resources, aggregated distributed energy resources, and standalone variable energy resources, offering their full operational capability to the market. 

1. Do existing RTO/ISO energy and ancillary services market rules, practices, or procedures prevent or otherwise obstruct relatively new and emerging resource types from fully participating in RTO/ISO markets and offering the operational flexibility they are technically capable of providing?
2. To what extent do existing RTO/ISO energy and ancillary services market rules require standalone variable energy resources to respond to dispatch instructions (e.g., curtailment)?
   1. To what extent are standalone variable energy resources technically capable of being “dispatchable?”  Is there a distinction between being dispatched down and being curtailed?
   2. Under what circumstances can a standalone variable energy resource be dispatched up versus down?  
3. To what extent do resource capabilities vary amongst different classes and vintages of variable energy resources (e.g., newer vs. older wind turbine models, onshore vs. offshore wind, fixed-tilt vs. tracking solar, etc.) and do offer rules currently reflect such differences, if any?
4. To what extent are emerging resource types, such as hybrids, storage resources, and distributed energy resource aggregations technically capable of providing existing ancillary service products or other reliability services?  Acknowledging that some market rules are evolving due to Order Nos. 841[1] and 2222,[2] do current RTO/ISO market rules for ancillary services and other reliability services, such as eligibility requirements, align with these emerging resource types’ capabilities?
5. What RTO/ISO energy and ancillary services market reforms could be adopted, if any, to ensure that new and emerging resource types are able to offer their full operational capabilities into RTO/ISO energy and ancillary services markets to help operators manage changing system needs?
   1. Would shortening the day-ahead market interval length increase the operational flexibility available from resources?  What considerations (e.g., computing time) are important to consider when establishing the length of energy and ancillary services market intervals?
   2. RTOs/ISOs often require resources that provide ancillary services to be capable of doing so for a duration of 60 minutes.  Does this eligibility requirement limit the pool of resources available to offer ancillary services into RTO/ISO markets?  Would reexamining the need for this particular eligibility requirement present reliability concerns or raise other issues for operators?  If so, please explain.

Panelists:

• Betsy Beck, Director, Regulatory Affairs - Central and Western U.S., Enel North America, Inc.
• Jason Burwen, Interim Chief Executive Officer, Energy Storage Association
• Mike DeSocio, Director, Market Design, New York Independent System Operator, Inc.  
• Brian George, Director of Strategic Policy & Government Affairs, Electric Power Supply Association
• Dr. Walter Graf, Senior Director of Economics, PJM Interconnection, L.L.C.  | Presentation
• Dr. Nikita Singhal, Technical Leader, Grid Operations and Planning, Electric Power Research Institute, Inc.

Panel 3: Revising RTO/ISO market models, optimization, and other software elements to address operational flexibility needs

This panel will focus on potential changes to RTO/ISO energy and ancillary service market models, software, and operational practices to optimize the changing resource fleet.  Discussions in this panel will refer to RTO/ISO software used for market clearing and pricing energy and ancillary services and any software supporting that function, including software for advisory commitments, look-ahead commitments, and resource modeling, among others.

1. What are the challenges to incorporating uncertainty within the current RTO/ISO market software?  For example, how can improvements in forecasting, the use of intra-day commitment processes that include a range of forecasts, or longer look-ahead commitment and dispatch horizons result in more efficient unit commitment and dispatch in real-time?
2. Can changes to RTO/ISO unit commitment and dispatch software address the need to posture system resources optimally to meet expected and unexpected ramp and operational flexibility needs?
   1. How are these enhancements tailored to the expected magnitude of forecast errors in different time periods?
   2. How would multi-period dispatch modeling in the real-time market help address operational flexibility needs?  What are the advantages and disadvantages of a binding as opposed to an advisory multi-period dispatch model?
   3. What are the computational burdens associated with such modeling enhancements?
3. To what extent can software enhancements for modeling specific technology types (e.g., multi-configuration modeling of combined cycle units, storage, etc.) help address the system’s changing operational needs?
4. Can multi-day-ahead markets or hour-ahead markets help address operational flexibility needs in RTOs/ISOs?  What is the objective of such approaches, and are there potential drawbacks?  

Panelists:

• Dr. George Angelidis, Principal, Power Systems and Market Technology, California Independent System Operator Corp. 
• Dr. Erik Ela, Program Manager, Electric Power Research Institute, Inc.
• Dr. Bethany Frew, Senior Engineer, National Renewable Energy Laboratory
• Arne Olson, Senior Partner, Energy and Environmental Economics, Inc.
• Dr. Congcong Wang, Lead, Day Ahead and Reliability Commitment, Midcontinent Independent System Operator, Inc.
• Dr. Jinye Zhao, Principal Analyst, Advanced Technology Solutions, ISO New England, Inc. 

Panel 4: Out-of-market operator actions used to manage net load variability and uncertainty

This panel will discuss the out-of-market actions RTO/ISO operators currently take to address net load variability and uncertainty, and the impact these actions have on prices and incentives for resources to submit offers that increase the operational flexibility available to RTO/ISO operators.  These out-of-market operator actions include unit commitments, relaxations of modeled constraints, load forecast adjustments, avoiding in-merit commitments and dispatches, and other actions that alter operations away from calculations made by market software.

1. RTO/ISO reports and filings to the Commission indicate that at times operators take out-of-market actions to address net load variability and uncertainty.  What are the most common out-of-market actions taken to address net load variability and uncertainty?  Is there sufficient data and transparency into what out-of-market actions may be taken as they relate to addressing net load variability and uncertainty? What impacts do such actions have on price formation in RTO/ISO energy and ancillary service markets?  Are those impacts material, both in terms of individual instances of operator actions and in terms of more general effects on market efficiency?
2. Do RTOs/ISOs anticipate that, without RTO/ISO energy and ancillary services market reforms, out-of-market operator actions will increase over time in response to changing system needs?
3. To what degree, if any, do out-of-market actions by operators undermine RTO/ISO energy and ancillary services market reforms, such as operating reserve demand curve reforms or ramp products, designed to incent resources to provide RTO/ISO operators with the operational flexibility needed to manage the system?
4. How can RTOs/ISOs best mitigate the risks of out-of-market operator actions undermining incentives for resource operational flexibility, to the extent such risks exist?

Panelists:

• Yasser Bahbaz, Manager, Reliability Coordination, Southwest Power Pool, Inc.
• Liam Baker, Vice President Regulatory Affairs, Eastern Generation
• Chris Bossard, Shift Manager, Real-Time Operations, California Independent System Operator Corp.
• Laura Rauch, Director, Settlements, Midcontinent Independent System Operator, Inc.
• Noha Sidhom, Chief Investment Officer, Viribus Fund, on behalf of the Energy Trading Institute
• William Fields, Deputy People's Counsel, Maryland Office of People's Counsel

Closing Remarks