February 2006 Market Clearing in the Energy Industry 5-19 © Copyright 2006, CCRO. All rights reserved. ISO / RTO/ POOL Market Topic CAISO ERCOT MISO ISO-NE NYISO PJM SPP Generic Transmiss ion Owner7 WSPP Market Pricing Function Zonal. (Locational Marginal Price in 2007.) Locational Marginal Price (Zonal) Locational Marginal Price (Nodal) Locational Marginal Price Locational Based Marginal Price Locational Marginal Price Zonal Zonal Zonal Capacity Market No Market NERC based operating reserve reliability requireme nts enforced via restrictions on supply No Market NERC based operating reserve reliability requirements enforced via restrictions on supply No Market NERC based operating reserve reliability requirements enforced via restrictions on supply Periodic monthly auction Periodic monthly auction Daily OTC market and periodic auctions No Market NERC based operating reserve reliability requireme nts enforced via restriction s on supply No Market NERC based operating reserve reliability No Market NERC based operatin g reserve reliabilit y Market Liquidity Balancing. (Real time and day- ahead in 2007.) Balancing Balancing Real time & Day ahead Real time & Day ahead Real time & Day ahead Bilateral8 Bilateral Bilateral Congestio n Managem ent LMP and Transmissi on Congestio n Rights No Market No Market LMP and Transmissi on Rights LBMP and Transmissi on Congestion Contracts LMP and Financial Transmissi on Rights No Market Bilateral Bilateral Ancillary Services Multiple different products Multiple different products Multiple different products Multiple different products Multiple different products Multiple different products No Market No Market No Market Virtual Bidding Market 9 No Market No Market Active Market to aid in convergence of real time and day- ahead markets Active Market to aid in convergenc e of real time and day-ahead markets Active Market to aid in convergenc e of real time and day-ahead markets Active Market to aid in convergenc e of real time and day-ahead markets No Market No Market No Market 7 An often referenced Transmission provider credit policy is Carolina Power and Light (www.progress- energy.com/aboutenergy/rates/pe_oatt_feb05.pdf) 8 Some Investor Owned Utilities (IOU’s) manage spot interchange trading pooling mechanisms for their affiliates but do not extend the service to third parities 9 Where permitted, virtual trading occurs in the day ahead energy markets. In some markets, physical suppliers bear physical responsibilities in addition to financial accountability arising from day-ahead sale while virtual supply trades, by definition, limited to financial obligations.