Transitioning the California market from a zonal to a nodal framework: an operational perspective

The California ISO is in the process of migrating from a decentralized and zonal based market system to a centralized and nodal based market system. This is an effort motivated by the standard market design proposed by the U.S. federal energy regulatory commission and by the operational problems encountered by the California ISO over the past five years using a zonal-based model. This paper explains why the California ISO has decided to move from the zonal market system to a nodal market system from an operational perspective.