Overview Seams Coordination Process

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IntroductionMidwest ISO

• Non-profit organization that manages the reliable flow of electricity across much of the Midwestern United States

• Operational since December 15, 2001

• Generation Capacity

– 127,000 MW (market)

– 156,000 MW (reliability)

• Peak Load (set July 31st, 2006)

– 109,157 MW (market)

– 129,647 MW (reliability )

• Registered PA, TSP, MO, RC, Soon to be BA

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Why Seams Coordination ? • Ensuring reliability

by managing congested path in a coordinated manner

• Ensuring equitable treatment for all customers and Transmission Service Providers

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The Reliability Side

– We look beyond our boundaries at external facilities– We quantify the impact of all of our flows (both tagged

interchange schedules and internal dispatch) on these external facilities

– We leverage our real-time systems – which use fresher and more accurate data

– We redispatch our internal generators to protect these external facilities

Congestion Management has been a paradigm shift:Congestion Management has been a paradigm shift:

Congestion Management Process is a big part of Seams CoordinationCongestion Management Process is a big part of Seams Coordination

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Congestion Management Process Background

• Loop Flows and Resulting Congestion exist today as part of interconnected operations

• Each Control Area’s dispatch has an impact on other neighboring control areas’ facilities

• One of the FERC appointed responsibilities of RTO’s was to improve the management of parallel flows

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• Reduces the overselling of firm transmission service• Provides a mechanism where market and non-market entities

can control parallel flows in an economic manner that consistently ensures system reliability

• Improves response time of markets when a curtailment is called

Respecting Your Neighbors’ SystemsRespecting Your Neighbors’ Systems

Congestion Management Process Benefit

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Participation

Multi-Party CMP Meeting

MISO/PJM JOA

CMP Structure

Agreements

2004 2005 2006Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

2003Q3 Q4

Q3 Q4

2007Q1 Q3

Q1 Q2

MISO/MAPP SOA

MISO/PJM /TVA JRCA

MISO/SPPJOA

MISO/MH SOA

MISO/PJM Mkt – Non-Mkt

Implementations

MISO/PJM Mkt--Mkt

TVASPP

MAPP LGEE

CMPC CMPWG CMPIT CPWG

OCTF

SPPMarket

PJM/CPL JOA

BREC EKPC

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Participation

Note: TVA agreement for CMP has been extended to include Big River Electric Cooperative, East Kentucky Power Cooperative, and Louisville Gas & Electric.

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The Equity Side

– Market Entities (such as PJM, MISO and SWPP)– Non-market Entities (such as MAPP and TVA)

There are multiple transmission providers in the areaThere are multiple transmission providers in the area

Each Entities have historical rights and allocations that need to be respectedEach Entities have historical rights and allocations that need to be respected

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Three Scenarios

– Non-Market to Non-Market• Coordinated AFC and Allocation Calculations

• Congestion Management through NERC TLR process curtailing transactions based on priority

– Market to Non-Market• Coordinated AFC and Allocation Calculations

• Market Entities Redispatch for Congestion on an External Flowgate

• Non Market Entities Congestion Management through NERC TLR process that curtail transactions

– Market to Market• Coordinated External Dispatch to Address Flowgate Responsibilities

• Example: MISO and PJM market-to-market dispatch

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Non-Market to Non-Market – Overview • Addresses a cause of many TLR’s – an oversubscribed

transmission system• RESPECT each other’s flowgate limitations during the

determination of AFC/ATC and the calculation of “firmness”

• Flowgates identified upon which COORDINATION shall occur.

• Reciprocal Entities implement a process for SHARING or transferring unused allocation.

Coordination – Wide Area ViewCoordination – Wide Area View

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Non-Market to Non-Market – Process • Reciprocal Entities conduct tests on flowgates

to determine which flowgates will be coordinated.

• Transmission service request evaluation:– Check for available AFC/ATC– Check for available Allocations– Request allocations from another Reciprocal Entity

• Approve/deny request

Coordination – Bridges the SeamsCoordination – Bridges the Seams

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Non-Market to Non-Market – Benefits • Reciprocal Entities consider available allocation as

well as AFC on a flowgate when selling firm-transmission service.

• Reduces over-selling firm transmission service.• Provides entities requesting firm service higher

level of confidence approved transmission service will not be curtailed.

Reduces the number of TLR eventsReduces the number of TLR events

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Market to Non-Market – Overview• Processes define what portions of a BA’s dispatch should be considered

FIRM or Non-Firm

Total

Market

Flow on

Flowgate

Non-Firm Market Flows

Firm Market Flows

From dispatch

Note: Market flows equal generation to load flows in market areas.

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Market to Non-Market – Process

Redispatch

CurtailSchedules

Non-MarketReciprocal

Entity

MarketBased

ReciprocalEntity

ReliabilityCoordinator

InterchangeDistributionCalculator

TLR

Relief Obigation

Relief Obligations

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Market to Non-Market – Benefits

– Greater granularity in the IDC– More granular calculation based on real-time telemetered

data versus static model– More “surgical” solution– Redispatch is far faster than TLR– Does not require multiple requests for TLR when initial

requests failed to resolve the constraint

A more reliable solution than TLR for addressing congestionA more reliable solution than TLR for addressing congestion

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Market to Market – Purpose• Provides a mechanism whereby Market-Based Operating

Entities can economically dispatch their systems, respecting transmission constraints in each other’s footprints.

• Redispatch by each Market-Based Operating Entity is based on the most economic solution for the combined system.

• Uses market flow calculations to proactively manage congestion.

“M to M” Currently implemented between Midwest ISO and PJM.

Process enables neighbors to help solve the other’s obligationsProcess enables neighbors to help solve the other’s obligations

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Market to Market – Benefits

• Builds on Market-to-Non-market Coordination and retains features for other Non-market Operating Entities.

• More effective and economic interregional control of transmission congestion

• Less reliance on individual transaction curtailments• Provides equity through preservation of entitlements on RCFs.• Maintains process for sharing or transferring of unused

allocations• Provides consistent price signals and incentives for market

behaviors that augments reliable system operations

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Impact of CMP – Market to Market

If we coordinate dispatch on the top 10 congested flowgates we may solve 75% of the problem

If we coordinate dispatch on the top 10 congested flowgates we may solve 75% of the problem

Market to Market Redispatch: Number of Hours By Constraint (2006)

0

200

400

600

800

1000

1200

1400

1600

Constraint by Flowgate

Nu

mb

er o

f H

ou

rs

0

20

40

60

80

100

120

Per

cen

t

Hours Jointly Managed Cumulative Percent Hours

Few Constraints: Big BenefitsFew Constraints: Big Benefits

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Impact of CMP - TLRsTransmission Line Relief Procedures by Reliability Coordinator

(Level 2 or Above)

0

200

400

600

800

1000

1200

1400

1998 1999 2000 2001 2002 2003 2004 2005 2006

Year

Nu

mb

er

of

TL

R P

roc

edu

res

(Lev

el 2

or

Ab

ove

) AEP

APS

EES

FRCC

IMO

MAIN

MAPP

MECS

MISO

ONT

PJM

SOCO

SPP

TVA

VACN

VACS

MISO

PJM

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Impact of CMP – Market to Market As market to market redispatch continues there has been a trend in the reduction of MWH that are being curtailed.

Midwest ISO TLR Information

TLR Level 3 and Higher

0

20

40

60

80

100

120

140

160

180

Jun Jul Aug Sep Oct Nov Dec

Months

Nu

mb

er

of

TL

Rs

2005

2006

MWH Curtailed

0

50000

100000

150000

200000

250000

300000

Jun Jul Aug Sep Oct Nov Dec

Months

MW

H C

urt

ailed

2005

2006

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Impact of CMP – Market to Market TLR Level 5 events have increased in some months, which were in part related to specific outage events.

Midwest ISO TLR Information

TLR Level 5

0

2

4

6

8

10

12

Jun Jul Aug Sep Oct Nov Dec

Months

Nu

mb

er

of

TL

Rs

2005

2006

Firm MW Curtailed

0

5000

10000

15000

20000

25000

30000

35000

40000

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Months

MW

H C

urt

ailed

2005

2006

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Summary

The parties have implemented methodologies that have allowed each party to identify their respective flows on external parties and respond in a proactive and reliable manner to alleviate congestion and enhance reliability.

Questions and Discussion