New EnglandStandard Market Design

Experience

September 2003

2

• SMD experience from Operations perspective

• Describe how we prepared for and implemented the Standard Market Design (SMD)

• Summary on general performance since implementation

• Describe the dispatch philosophy change that occurred in moving to the Standard Market Design from the interim market design

• Key initiatives that have helped make the SMD implementation successful.

• Questions

New England SMD Experience

3

• Prior to actual cutover:– Major training effort on Market Operations included:

• Operators– Simulator– System Operations Procedures– Market Rules

• Operations support staff• Participants

– Marketers– Generator Owners/Operators

Cutover

4

• Prior to actual cutover continued:– Market Trials

• Internal at first (2)– Allowed ISO to test and refine our software and

processes prior to external involvement• External (3)

– Participants involved.– Bid to bill approach.

– Sandbox Environment • Allowed external participant interface with new

SMD systems:– Supplemented training ISO provided to Participants– Allowed participants to prove out internal systems with

programmatic actions (i.e. batched bidding processes)

Cutover (continued)

5

• Actual cutover:– Set up each Control Room console to support dual market operation.– Brought on additional team of Operators two days prior to cutover to

support SMD software • One team performed normal operations functions on interim market

design until cutover• Additional team updated SMD software to mirror real-time conditions

up until cutover, and then took over operational control during cutover. – Bids were accepted as early as February 19th.– First Day Ahead commitment and clearing occurred on Friday,

February 28, for the first day of market operation on March 1.– Contract scheduling and unit commitment (Reserve Adequacy

Assessment or RAA) processes were the first official tasks performed under the SMD rules in System Operations

– Held support staff through cutover process to ensure immediate response to issues

Cutover (continued)

6

• Overall operational experience since going live has been very good.

• Participants and ISO-NE have moved quickly along the learning curve with limited errors on both sides.

• Operational experience with the software has been positive

• We have been improving procedures and business processes and providing additional training and support as required.

• ISO New England website has volumes of information on market performance.

SMD Performance

7

• Interim Market (Note that Electronic Dispatch was in place for the interim market design):

– Dispatch software under interim market failed to recognize transmission constraints, requiring manual dispatch to address transmission problems.

– Automation in the software provided less than ideal control for Operators.

• The dispatch solution (five minute horizon) was automatically executed at least once every five minutes with the results sent on a five minute resolution to the generators via ED infrastructure. (Lack of Operator approval of dispatch solutions required Operator to react to bad solutions in future cases.)

• Limited capability to adjust inputs by the Operator in dispatch software.

– One price for all of New England failed to send the right signal to generators when congestion occurred.

Dispatch Philosophy Change

8

• SMD– Dispatch software recognizes transmission constraints, requiring

almost no manual dispatch action.– Dispatch solution is executed by the Operator on demand at least

once every fifteen minutes. • Operator approves solution prior to results being sent to generators via

the Electronic Dispatch infrastructure.• Operator has ability to control time horizon (typically 15 minutes) and

load inputs along with other critical inputs.– LMP based approach creates prices signals that generators can

understand.

Dispatch Philosophy Change

9

• Training:– Sandbox– Ensured ISO staff was ready– Training Simulator proved valuable in supporting the training of

Operators while providing a test bed for identifying software and business process issues

– Generator forums/spider phone approach

• Solution Center

• FAQ’s/Special Notices

Key Initiatives

10

• Questions?