TODAY’S STUDY: STATE OF THE GRID, 2010

(Note Transmission could be called the glass ceiling of renewable energy, Beth Soholt, Executive Director of the Midwest activist group Wind on the Wires, said in a recent interview with NewEnergyNews. So, yeah, the report below is to some extent the turf of the geek (aka the Peabody, in the most current lingo). But anybody who cares about New Energy really needs to know about transmission, perhaps not in the full detail offered by the highlighted report but at least in enough detail to understand how important the system is and how urgently the antiquated, fragmented and fragile U.S. grid needs upgrading.)

2010 ISO/RTO Metrics Report
December 2010 (California Independent System Operator Corporation (California ISO), ISO New England, Inc. (ISO-NE), Midwest Independent Transmission System Operator, Inc. (Midwest ISO), New York Independent System Operator (NYISO), PJM Interconnection, L.L.C. (PJM), and Southwest Power Pool, Inc. (SPP))

Executive Summary

The following report has been prepared by the independent system operators (ISOs) and regional transmission organizations (RTOs) that are regulated by the Federal Energy Regulatory Commission (FERC). The report provides information on various data points that are common to each of the system operators, and has been prepared at FERC’s direction following the process described below.

The information included, similar to FERC Form 1 information, may be useful to the FERC, stakeholders and the public at large in compiling information and tracking certain data points that are relevant to ISO and RTO performance in the areas of reliability, wholesale electricity market performance and organizational effectiveness. That said, this report does not definitively measure ISO and RTO performance or supplant the various mechanisms already in place to measure performance. Those include FERC’s triennial market-based rate analysis under Order No. 697, the respective State of the Market Reports for each ISO/RTO, FERC’s State of the Market Report, or regional initiatives such as the ―value proposition‖ and other measures developed by ISOs and RTOs.

Moreover, the information provided herein must be assessed in the proper context. For example, the report includes tables comparing forecast accuracy at each of the ISOs and RTOs. However, there are a number of factors that influence the data and could result in variations among the ISOs/RTOs, including the time of day at which the forecast is made, the region’s weather variability, data points selected (i.e., hour to hour) and the geographic diversity of the control area. Where possible, and to the extent practicable, this context has been provided along with the data. Absent this context, the data tell an incomplete story.

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History of the Initiative

This report originated with a review undertaken by the United States Government Accountability Office in 2008 at the request of the U.S. Senate Committee on Homeland Security and Governmental Affairs.1 To more effectively analyze ISO/RTO benefits and performance, the Government Accountability Office recommended that the FERC work with ISOs/RTOs, stakeholders and other interested parties to standardize measures that track the performance of ISO/RTO operations and markets, and to report the performance results to Congress and the public.

Accordingly, FERC staff worked with a team composed of personnel from FERC-jurisdictional ISOs and RTOs to develop the performance metrics that form the basis for this report. As part of this process, FERC held meetings with industry stakeholders for their input and established an open comment period on the proposed metrics which will track the performance of ISO/RTO operations, markets and organizational effectiveness…

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Emerging Themes

The information provided in this report reinforces the value of ISOs and RTOs. The report illustrates the transparency of ISO/RTO operations and reinforces the value of ISO/RTO operation of the grid and administration of wholesale electricity markets. Specifically, this report shows that:

 Balancing authority areas operated by ISO/RTOs function reliably;
 ISO/RTO organized markets are efficient;
 ISO/RTOs are advancing public policy energy objectives; and
 ISO/RTOs enable demand response and energy efficiency.

ISO/RTO Geography and Operations Statistics

The map and data below show to the location and breadth of operations for the ISOs/RTOs contributing to this report. These reference points will facilitate understanding some of the similarities and differences amongst the information of ISOs/RTOs in this report.

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Descriptions of Performance Metrics and Other Information

ISO/RTO Bulk Power System Reliability

All ISOs and RTOs are responsible for compliance with North American Electricity Council (NERC) mandatory standards and any mandatory standards for the Regional Entities (RE) that apply in the region where the ISO/RTO is located and are subsequently adopted by NERC. The mandatory reliability standards only apply to ISO/RTOs based on the NERC functional model categories for which each ISO/RTO has registered.

Therefore, different reliability standards apply to different ISOs and RTOs. For example, each region may have reliability standards that apply only within that region, given the particular infrastructure, resource mix, topographical and other differences that exist within the region. The main differences between the ISO/RTO applicable standards are the Regional Entity standards. Each region develops standards applicable for their infrastructure, environment and any other regional differences. Each ISO/RTO may also be registered for different functions, causing them to comply with different reliability standards.

Violations of such standards may be identified by an ISO/RTO and self-reported or may be identified by a NERC and/or Regional Entity audit of the ISO’s/RTO’s standards compliance. Such violations can then be classified as low, medium or high severity. This metric is a quantification of all NERC and RRO Reliability Standards violations that have been identified during an audit or as a result of an ISO/RTO self-report and have been published as part of that process…

Dispatch Operations…Transmission Load Relief or Unscheduled Flow Relief Events…Energy Management System Availability…

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Load Forecast Accuracy

A load forecast is an informed estimate of the future electrical demand on the ISO/RTO’s system. Accurately forecasting load is critical because the forecast drives the commitment of generation and/or demand response for future periods. Inaccurate forecasting can manifest itself in either reliability problems (due to under-commitment of resources) or in additional costs (due to either over-commitment of resources or inefficient commitment of short lead-time resources).

Each of the ISOs/RTOs generates load forecasts in a number of different time periods ranging from years ahead to minutes ahead of the actual load period. This report focuses on the day-ahead load forecast for each ISO/RTO, as defined by that ISO/RTO. While there is some variation in the time of day in which each company’s day-ahead load forecast is created, the use of the forecasts is similar – this is the forecast used to make day-ahead unit commitments of resources. Since SPP does not have a day-ahead market, the prior day’s medium-term load forecast (MTLF) is used as the load forecast accuracy reference point.

Generally speaking, higher forecasting accuracy is good as it means that the actual load was closer to the forecast load. The ISOs/RTOs are striving to improve load forecast accuracy. Mean Absolute Percentage Error (MAPE) is commonly used in quantitative forecasting methods because it produces a measure of relative overall precision; the lower the MAPE, the more precise the forecast. However, comparisons between regions can be difficult because the load drivers vary significantly between regions. Also, results can change from one year to the next based on weather conditions and variations in patterns of customer usage across all sectors of the economy...

 Weather Patterns – Certain regions experience more extreme weather variations (e.g., storms patterns, temperature swings). Generally, regions with more extreme weather variations would be expected to have less accuracy in their load forecasts.
 Industrial Loads – Certain regions have higher concentrations of variable industrial loads which can impact the load forecasts. Generally, regions with variable industrial loads would be expected to have less accuracy in their load forecasts.
 Geography Diversity – Broader ISO/RTO geographies can lead to netting of potential forecast inaccuracies in the ISO/RTO region for a more accurate total ISO/RTO region load forecast…

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Wind Forecasting Accuracy…Unscheduled Flows…

Unscheduled flows are energy flows on each ISO’s/RTO’s transmission interface (interties), defined as the difference between net actual interchange (actual measured power flow in real time), and the net scheduled interchange (planned or pre-scheduled use of transmission). Unscheduled flow may be comprised of both inadvertent interchange and/or parallel flows.

Inadvertent interchange is relevant from an ISO/RTO perspective, not at the individual tie level. Inadvertent interchange is the difference between net actual interchange (actual power flow measured in real time), for all interties connecting the ISO/RTO with other Balancing Authority Areas within the interconnection.

Parallel flow (occasionally referred to as loop flow) is actual power flow within an interconnection that is generated within one Balancing Authority Area for delivery directly to load within a second Balancing Authority Area along a specified contract transmission path. In real time, ―parallel‖ transmission lines through a third party Balancing Authority Area may partially be used because of the interconnection’s operating configuration, line resistance and physics. Parallel flow typically results in an un-scheduled flow of power, in on one intertie and out on another intertie through the third party Balancing Authority Area. Thus, parallel flow is a subset of unscheduled flow as it uses unscheduled transmission capacity on the respective interties…

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Transmission Outage Coordination

Centralized transmission outage coordination is an important function of ISOs/RTOs. Each ISO/RTO has procedures by which planned transmission outages should be noticed to the ISO/RTO by the transmission owner. Then, the ISO/RTO studies the planned transmission outage to determine whether such an outage request would create any reliability concerns. Even after approving a transmission outage request, an ISO/RTO can cancel a planned transmission outage if system conditions have changed such that an outage may create a reliability issue.

The four metrics in this section measure how promptly ISOs/RTOs are receiving planned transmission outage requests, how effective each ISO/RTO is at processing transmission outage requests, how often each ISO/RTO cancels previously-approved transmission outages, and the level of unplanned transmission outages in each ISO/RTO region. Each of these measures addresses transmission lines greater than or equal to 200kV.

Transmission Planning

ISO/RTO’s take a long-term (generally 10 years or more) analytical approach to bulk power system planning with broad stakeholder participation to address reliability and economic benefit at intra- and inter-regional levels. By identifying system reliability and economic needs in advance, the planning process gives market participants time to propose either a market-based solution (e.g., a merchant transmission line, power plant or demand response) or regulated solution (e.g., a rate-based transmission line). Essential, large-scale transmission projects spanning the service territories of multiple transmission system owners have been completed or initiated in every ISO/RTO in the last 10 years.

Supply-side resources and demand response, which are effectively integrated into the system, can sometimes assist in the resolution of transmission reliability issues, thereby potentially allowing the deferral of transmission solutions. However, creating new transmission solutions may be necessary to prevent supply-side resources or demand resources from compromising the deliverability of other existing resources.

The identified transmission planning metric provides an indication of the progress made to address reliability needs or economic opportunities early enough, to engage a broad set of stakeholders, and to successfully carry the projects to completion.

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Generation Interconnection

One important role ISO/RTO’s have is to facilitate unbiased and open access to all potential electric grid users. This function closely aligns with the transmission planning process, as ISO/RTO’s manage the analytical and administrative processes of generation and transmission facility interconnections. This entails receiving interconnection requests, conducting impartial, diligent technical analyses of the system reliability impact, individually and collectively, of their usage and interconnection to the grid, and determining and allocating the costs of transmission upgrades to connect these facilities to the power system.

Average Generation Interconnection Request Processing Time

Generation interconnection is the process of connecting a generator to the electrical grid. When an entity is proposing to build a new generation unit or upgrade an existing unit, they apply to the ISO/RTO that manages the transmission access in that area to assess the availability of transmission capacity to export the energy from that new or upgraded generation facility. This performance metric measures the processing time for generation interconnection requests from time of access application through the study period to the delivery of final answer on the requirements for connection of the proposed units – including any proposed transmission upgrade requirements and associated costs. This metric is calculated as the simple average of the number of days between when a generation interconnection application is received and when the final application response is provided to the requestor - for all responses provided during the calendar year.

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Generally speaking, a shorter average study period is preferred. However, wide variation is expected between ISOs/RTOs on this metric. There are several drivers to this variation including:

 Number of Applications – There is very wide variation in the number of generation interconnection applications in the regions. In the past few years, wind-rich regions have received large numbers of applications from wind generation developers. The number of applications has far outpaced any prior period and as a result has driven the redesign of the application and study processes in wind-rich regions.

 Complexity of Applications – Applications requesting system upgrades to support the integration of renewable resources increase the complexity of the application and thus increase the time required to complete the study. Also, some wind generator manufacturers have been reluctant to provide detailed models of their equipment, thus delaying studies and making it more difficult to complete accurate analyses.

 Tariff Requirements – There is no consistent study period requirement in the various ISO/RTO tariffs and the requirements continue to evolve to meet regional needs.

Planned and Actual Reserve Margins 2005 – 2009…Percentage of Generation Outages Cancelled by ISO/RTO…Generation Reliability Must Run Contracts…Interconnection / Transmission Service Requests…

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Special Protection Schemes

The North American Electric Reliability Corporation defines a Special Protection System (SPS) as an automatic protection system designed to detect abnormal or predetermined system conditions, and take corrective actions other than and/or in addition to the isolation of faulted components to maintain system reliability. Such action may include changes in demand, generation output, or system configuration to maintain system stability, acceptable voltage, or power flows. An SPS does not include (a) underfrequency or undervoltage load shedding or (b) fault conditions that must be isolated or (c) out-of-step relaying (not designed as an integral part of an SPS). A Special Protection System may also be referenced as a Remedial Action Scheme.

In comparison with planning and constructing new transmission facilities, SPSs can be placed in service relatively quickly and inexpensively to increase power transfer capability. The identified SPS metric provides an indication as the extent to which SPSs are relied upon in RTO regions, either on a permanent or interim basis until a transmission planning solution can be implemented. This metric also indicates the effectiveness of SPS operations by indicating the number of SPS activations in which the SPS operated as expected as well as number of SPS activations that were not intended. Though SPS data has been presented for 2009 solely, there have been no material changes in the SPS levels of the ISOs/RTOs in this report during the period 2005 through 2009.