2013 – ISO Firsts, Records and Memorable Events

Author: Velocity Suite ISO Data Analyst

Happy New Year. It’s just two weeks into 2014- and it’s probably safe to say that to some extent the start of 2014 looks similar to the start of 2013. Albeit bigger, wilder and even more exciting to watch. Cold weather in the northeast, extreme gas prices, new regions joining the ISOs, records falling… I’ll end this post with some teasers around what else I think we’ll see in 2014, but for now, let’s say goodbye to 2013 by looking back at some of the most interesting stories I saw from my desk on the Velocity Suite ISO data team.

It’s Cool to Be in an ISO

January 2013- Welcome to California ISO: Valley Electric Association! Valley Electric was the first non-California entity to join CAISO. This means more renewable integration into the California market; there are major solar developments planned in this area of Nevada which will be important to California as it strives to achieve its ambitious RPS goals.

2013 Review - 1_2 Chart

So far, VEA prices trend three to five dollars lower than the rest of CAISO so it will be interesting to see how this changes with new generation and transmission developments. There are only 11 nodes that make up the current VEA DLAP definition, so we’ll have more to watch on that front too.

June 2013- East Kentucky Power Coop was the next region to join an ISO; this time the ISO growing was PJM. As expected prices in EKPC trend close to neighboring regions of Duke, AEP and Duquesne. These regions average lower than a lot of the other areas of PJM (aside from COMED).

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December 2013- The biggest ISO integration was saved for last; MISO South is alive. Entergy and a number of other transmission owners joined MISO on December 19th 2013. MISO is now Midcontinent ISO. An additional 18,000 miles of transmission lines, 50,000 MWs of generation and 30,000 MWs of load joined MISO – Wow. New load regions, new ancillary service regions, new capacity market regions and hundreds of new price nodes.

A few interesting items related to the MISO South Integration. Image 1 (above): Fuel mix. It’s really interesting to see how this has shifted so significantly in the MISO area. A good volume of renewable energy in MISO “classic” – mostly wind generation. Little to no renewable energy in MISO South. Coal is much more predominant in MISO classic compared to MISO South. MISO South is dominated by natural gas.

Image 2: RT prices- Texas has been higher than the other southern hubs. As you can see in the graphic below, MISO South is not immune to real time market events as prices have spiked above $100/MWh multiple times.

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Image 3: DA Prices- relatively benign in 2013. Minnesota saw the highest DAH prices in the end of 2013. For a week or so around the holidays we did see higher average prices in the southern part of the footprint.

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Records are Made to be Broken

Repeatedly throughout 2013 ISO renewable generation records were broken. FOUR times in the last week of December alone CAISO broke solar generation records. CAISO also broke numerous wind generation records in 2013 (these were in April, May and then June). ERCOT broke its wind generation record in May 2013. During a number of hours in March and April ERCOT was satisfying over one third of its load with wind generation- another record broken.

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Generation records were not the only ones falling in 2013. NYISO hit a new record peak demand for electricity on July 19th. This was an especially hot time across the northeast as ISONE hit a new weekend demand day record on July 20th.

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Fossil Fuel Generation Trends

Generally low gas prices along with pending emission regulations have meant most new fossil fueled units are powered by natural gas. However, that’s not to say it’s the only or always prevailing fuel type in the ISOs. California, ISONE and ERCOT are getting the majority of their fossil fueled generation from natural gas units. But coal still reigns supreme in MISO, PJM and SPP.

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If you look at the US EPA CEMS data for the ISOs, coal generation MWhs increased in 2013 compared to 2012. Gas prices are higher this year which is likely a reason for the uptick in coal generation.

A semi-related item that I have enjoyed tracking throughout the year includes the implementation of the carbon cap and trade program in California. As expected, we have seen higher prices coming out of the market. The California market is complex so I think it’s important to not assume all price increases have been a result of this single program. I’ll be interested to watch import volumes in the future- we didn’t see those decline in the first half of 2013, but started to see a new trend develop in third quarter. CAISO put together really good explanations of both the ARB program and its analysis around import volumes in the second and third quarter market reviews. I’d recommend skimming both.

CAISO Second Quarter 2013 Report >>

CAISO Third Quarter 2013 Report >>

Grand Finale – My Favorite Event of 2013

There were a lot of really interesting market events this year. I’ve listed a number of my favorites so far including the record breaking demand in NYISO this summer, ERCOT wind generation, MISO South and CAISO carbon markets. A couple honorable mentions that didn’t get a section for themselves include additional implementation of FERC 755 – we saw new regulation data coming out in 2013 as a result of pay for performance standards. The capacity markets were exciting- MISO implemented a new annual construct. PJM saw record imports in the RPM. ISONE added new capacity market regions with the 2013 run of its FCM. The FTR/CRR markets kept us busy- twice a year annual postings from ERCOT, modeling trading hub disaggregation in CAISO and new forward monthly markets in MISO. But my favorite market event has to go back to early 2013. Cold Weather Impacts the ISONE market! Gas prices went through the roof. And wholesale energy prices sky rocketed along with them.

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It’s a really big deal to see prices four to five times higher than the previous year- and this wasn’t just a one hour or one day event. These high prices stuck around for a big part of the winter. New market rules are being implemented. Timelines are changing. Pipelines are being constructed. This was a true game changer for the northeast market. This document summarizes some of what is on the table to manage the dependence of natural gas in the region in the future.

ISO New England 2013 Regional Energy Outlook >>

Somewhat selfishly, I must admit I also enjoyed watching the ISONE market events because it really required analysis from across multiple aspects of Velocity Suite- weather, fuels and ISO market data was critical to analyzing the northeast.

2014 and Beyond

As I stated in my introduction, 2014 is starting much the same as 2013. Gas and power prices are high in the northeast as a result of cold weather. New regions are posting new data. CAISO broke another solar generation record. But 2014 will be even bigger (and I’d like to think better as a result). Put March 1st in your calendar (if it isn’t already). SPP’s Integrated Marketplace goes live. This includes a Day 2 energy market, ancillary service market and TCR markets. CAISO EIM (Energy Imbalance Market) will be going live later in 2014 (estimated this fall). That will include PacifiCorp- more non-California entities! We’ll likely see real time 15 minute energy market data from CAISO this year too. MISO is going to post price data for EPnodes! If you ever wanted to know how the MISO load zones are calculated- the wait is almost over. At the end of 2013 we saw ERCOT start posting lambda and price adder data- which means lots of new ERCOT calculated data points are on the Velocity Suite horizon. ISONE will be the last ISO to post regulation pay for performance market data and that is also coming in 2014.

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The ISO/FTR team is expecting to be busy in 2014, but it’s the type of busy we all appreciate. More data, more analysis, more fun.


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