US RTO/ISO‐MANAGED WHOLESALE POWER MARKETS: OVERVIEW

The decision to propose a major reformulation of current US RTO/ISO‐managed wholesale power markets has been prompted by a careful consideration of eight broadly accepted goals for wholesale power market design. This chapter provides a brief overview of daily operations in current US RTO/ISO‐managed wholesale power markets. Bulk power trading in all US electric power regions includes bilateral transactions managed by exchanges (centralized trading platforms), over‐the‐counter trading managed by dealers, and privately negotiated bilateral contracting managed by brokers. Since the official release of the FERC design in 2003, the conditions facing US RTO/ISO‐managed wholesale power markets have dramatically changed. The increased participation of variable energy resources, together with the increased encouragement of active demand‐side participation, have substantially increased the uncertainty and volatility of net load as well as the frequency of strong ramp events.