Regional power market efficiencies may save $368M

The Independent Market Monitor of the New York Independent System Operator (NYISO) has announced that a preliminary analysis of the benefits of the “Broader Regional Markets” initiative estimates regional annual savings of at least $368 million. Estimated savings associated with New York are $212 million a year.

The analysis, conducted by the Independent Market Monitor Dr. David Patton of Potomac Economics, examined several of the “Broader Regional Markets” proposals to improve coordination of power transactions between regional grid operators.

The NYISO, in conjunction with grid operators serving the Mid-Atlantic, Midwest and New England regions of the United States and the Canadian province of Ontario, proposed a series of “Broader Regional Markets” initiatives to the Federal Energy Regulatory Commission (FERC) in January 2010.

“This analysis offers further evidence that improving the flow of power among the grid operators will enhance the benefits of markets throughout the region,” said Stephen Whitley, NYISO president & CEO.

The analysis of benefits focused on coordinated congestion management, “buy through” of congestion and the improved utilization of external interfaces.

* Market-to-market coordination would increase the level of collaboration in congestion management between system operators in the region.
* Buy-through of congestion would require that the congestion cost of a transaction be charged based on the physical flow of power, unlike the current settlement determination that is based only on the contract path.
* Inter-regional transaction coordination would lower total system operating costs as transaction schedules more quickly adjust to market-to-market pricing patterns.

“Progressive collaboration among power systems, such as the “ËœBroader Regional Markets’ initiative, will offer additional benefits. It can help us take full advantage of wind power and other variable renewable resources.  Enhanced coordination will strengthen the ability of grid operators to adjust to the dynamic changes in system conditions, such as the ebb and flow of wind power,” Whitley said.

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The Clarion Energy Content Team is made up of editors from various publications, including POWERGRID International, Power Engineering, Renewable Energy World, Hydro Review, Smart Energy International, and Power Engineering International. Contact the content lead for this publication at

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