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4.6 Other markets
Publication date: 20 Jul 2016
us Utilities guide
As depicted in Figure 4-1, in addition to PJM, there are a number of other RTOs in the United States, most of which also have transmission capacity, congestion, and ancillary services instruments. Although there may be differences in the names of these instruments and some of the specifics of their features, in general, the key considerations and evaluation of the accounting for the instruments will be similar. Therefore, reporting entities may consider the information included in the rest of UP 4 when evaluating contracts executed in other markets. To assist in this analysis, Figure 4-11 highlights the primary RTOs in the United States and related products, along with mapping to the equivalent PJM product.
Figure 4-11
Summary of regional transmission organizations and related instruments
Summary of regional transmission organizations and related instruments
Market | Capacity | Transmission congestion | Ancillary services |
California Independent System Operator Corporation | Not applicable | Congestion Revenue Rights: function similar to FTRs in PJM | Ancillary services: considerations are generally consistent with those in PJM |
Electric Reliability Council of Texas (ERCOT) | Not applicable | Congestion Revenue Rights: function similar to FTRs in PJM | Ancillary services: considerations are generally consistent with those in PJM |
ISO New England Inc. | Capacity Market: functions similar to RPM in PJM | ARRs and FTRs: function similar to ARRs and FTRs in PJM | Ancillary services: considerations are generally consistent with those in PJM |
Midcontinent Independent System Transmission Operator, Inc. (MISO) | Voluntary capacity market: market participants obtain “planning resource credit” that allows them to demonstrate they have adequate resources; functions similar to RPM in PJM | ARRs and FTRs: function similar to ARRs and FTRs in PJM | Not applicable |
New York Independent System Operator, Inc. | Capacity market | Transmission Congestion Contracts: consider guidance on ARRs in PJM for contributed transmission congestion contracts | Ancillary Services: considerations are generally consistent with those in PJM |
Southwest Power Pool | Not applicable | ARRs and Transmission Congestion Rights (TCRs): function similar to ARRs and FTRs in PJM | Ancillary Services: considerations are generally consistent with those in PJM |
Note that Figure 4-11 focuses on non-energy related products. Each RTO also facilitates transactions involving energy.
In late 2014, a regional Energy Imbalance Market (EIM) operated by the California ISO was created. The EIM is developing a governance process that, although closely coordinated, is separate and distinct from the California ISO. The EIM anticipates continuing to add new members and increasing its regional footprint, which could ultimately lead to changes in the scope and configuration of the California ISO.
The primary differences in the RTOs are in terminology. However, there are certain variations in the functions of the RTOs that should be noted. The ISO-NE does not allow conversion of its ARRs into FTRs. Although these instruments would be accounted for individually, it does expose the holder to greater price discrepancies as they cannot match the congestion variances without bidding on the FTRs. Only the PJM offers FTR option instruments as discussed in 4.4.1. The frequency and duration of the FTR auctions vary by RTO.
PwC. All rights reserved. PwC refers to the US member firm or one of its subsidiaries or affiliates, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details. This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.
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