Congestion
Hedging Process
Transmission Planning Summit
September 21-22, 2011
Agenda Topics
•
Integrated Marketplace Overview
•
Congestion Hedging Process
•
Impact of TCR/IM on Engineering Processes
•
TCR Time line- Next Steps
Overview of Integrated Marketplace Functions
T- 12 months
ARR/TCR
Auction
T- 1 day
Day Ahead
Market
• Performs unit
commitment
• Sets DA prices
• TCRs cleared
Day Ahead
Reliability Unit
Commitment
Makes sure enough
capacity committed
for next operating
time frame
T
T+ 7 days
Intra-Day RUC
Real-Time
Balancing
Market
Settlement
Real-Time dispatch
much like today’s EIS
Market (5 min)
3
Why hedging is needed in Integrated Marketplace?
•
In the DA Market, price separation of MP’s resource to
load may occur due to congestion leaving the MP exposed
to high prices
•
TCRs allow for an efficient market
–
The TCR can be used as hedge against congestion that allows
MPs to reduce their exposure to high market prices
4
ARR-TCR Process Overview
Auction
Revenue
Rights
ARRs Allocated (MWs)
Participate in TCR Auction
TCR Auction
(MWs w/ Price)
Auction Revenue
SPP Transmission
System Capability
Congestion rights
TCR Holders
ARR Holders
Annual vs. Monthly TCR Auctions
Capability
Auctioned
Annual TCR Auction
Monthly TCR Auction
100% for June
90% for July-September
60% for Fall, Winter, Spring
No June Auction
100% July-May
Auction Format Single Round
July- September (single round )
October- April (two rounds)
TCR Products
Monthly and Seasonally
Monthly
TCR Periods
On Peak
Off Peak
On Peak
Off Peak
Credit Check
Yes
Yes
TCR Terms
4 Months and 3 Seasons
One Month
6
Modeling & Steady State Planning
CBA
Market Implementation
 Under IM, SPP will have centralized generation dispatch for
the entire SPP footprint (vs. individual BA dispatch)
 SPP is using a centralized balancing approach to long term
planning
7
Transmission Service and TCR
 SPP is conducting Transmission Service Studies as described
in SPP OATT
 Studied on aggregate basis
 Relationship between TCR and TSS
 Firm Transmission Service (NITS, PTP) will provide ARR
Entitlement to Eligible Entities
 The value of TCR (Sink LMP- Source LMP) would depend
on the transmission improvements committed through
TSS studies
8
GI and TCR/Integrated Marketplace
 SPP is conducting GI studies according to SPP OATT
 Grant Energy Resource Interconnection Service (ERIS) and
Network Resource Interconnection Service (NRIS)
 Relationship between GI and TCR/ Integrated Marketplace
 No hedging rights (ARR/TCR) associated with ERIS and
NRIS
9
Compliance, Seams and IM/TCR
 Compliance
 Compliance studies need to be performed in support of
NERC/ Regulatory Standards
 Seams and Inter-Regional Coordination
 Various Trading Hubs will be defined as a part of TCR
and Day Ahead market Process
 Loop flows (Parallel flows) and outage coordination
will be critical for revenue adequacy in TCR market
10
TCR Work in Progress!
 System design and customization is underway

Nexant is our vendor

Plan to use offline module (Hedge) to perform test runs,
MP training
 Overall “Congestion Hedging” Implementation
Timeline
Market
Protocols
1Q 2011
Mock TCR Runs
1Q 2012
Design/
FAT/SAT/
Customization
2 Q 2012
3Q 2012
Testing
Market Trial
Runs
4Q 2012- 3Q 2013
Ready to
Go Live
4 Q 2013
Upcoming Key Dates for Mock TCR Auction
•
October 5th 2011: TCR Mock Auction Kickoff meeting
•
November 9, 2011 : Preparing for Mock TCR auction*
•
December 12, 2011: Preparing for Mock TCR auction*
•
January 11, 2012: Preparing for Mock TCR auction*
•
January 16th 2012: TCR Mock Auction Phase I- Start
•
February 22nd , 2012: Preparing for Mock TCR auction*
•
March 12, 2012: Preparing for Mock TCR auction*
•
April 2nd , 2012: TCR Mock Auction Phase I- Start
* Offered through Learning Management Service (LMS)