Objectives and Concerns for Market-Based Operations

Success in RTO/ISO markets is critically dependent on optimization of the entire value chain. Each group must understand their roles and responsibilities as well as the interplay with other groups. Developing and maintaining this environment is an organizational and technical challenge, especially considering the infancy and fluidity of RTO/ISO markets. This presentation will address specific issues of this optimization challenge using three generic groups as a basis for discussion. Generation operation and maintenance: 1) Responding to and respecting market forces (unit design, age, workforce); 2) Communication with fleet management (accurate, timely, tools); 3) Operating envelope (unit design and age, workforce, budgets). Generation fleet management: 1) Generation costs (combined cycle LTSA, unit cycling, heat rates); 2) Generation constraints (OSHA, EPA, physical operating envelope); 3) Fuel procurement, transportation, and storage; 4) Power contract obligations (sales and purchases); 5) Tools, training, and technical support (complex rules, complex tools). Generation financial accounting: 1) Settlements; 2) Feedback to operations and maintenance, fleet management; 3) Federal and state regulatory reporting; 4) Credit, SOX, cash flow