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MISO Report Finds Market Performed Competitively In 2007

The Midwest Independent System Operator (MISO) submitted its 2007 State of the Market Report to the Federal Energy Regulatory Commission on July 25, 2008. The annual report analyzes the competitive performance, design, and operation of MISO's wholesale energy markets, and provides recommendations for future improvements. MISO covers all or part of 15 states and serves 40 million people.

MISO ENERGY MARKETS FOUND TO BE EFFICIENT, ECONOMICAL, AND RELIABLE

  • "The day-ahead market provides an efficient daily commitment of generating resources in the region. Efficiency is achieved by reducing the quantity of generation that is committed and by ensuring that the most economic generation is committed."(p. i)


  • "The energy markets cause energy to be produced from the most economic resources given the limits of the transmission system. This includes employing the lowest-cost redispatch options to manage congestion and allowing the transmission system to be fully utilized." (p. i)


  • "Midwest ISO energy markets improve reliability through the five-minute dispatch. This allows far more responsive and accurate control of power flows on the transmission system than the Transmission Loading Relief procedures used in other regions." (p. i)


  • "The Locational Marginal Price (LMP) markets provide transparent economic signals to guide short and long-run decisions by participants and regulators. Although these benefits are the most difficult to quantify, they may be the largest because they accumulate over time as better investment and retirement decisions are made by participants." (p. i-ii)


MISO PURSUING VARIOUS AVENUES TO PROVIDE BENEFITS TO CONSUMERS
  • "The Midwest ISO markets have substantially improved the commitment and dispatch of generating resources in the Midwest. The improved commitment is largely due to the day-ahead market, which provides a market-based process to commit generating resources and supply load. Ninety-seven percent of the generation dispatched in 2007 was scheduled through the day-ahead market." (p. vi)


  • "One of the most significant benefits of the Midwest ISO energy markets is that they provide accurate and transparent price signals that reflect congestion on the network." (p. viii)


  • "Demand participation in the market is beneficial in many ways. It improves reliability in the short-term, contributes to resource adequacy in the long-term, reduces price volatility and other market costs, and mitigates supplier market power… When all forms of demand response (both passive and active) are included, the Midwest ISO has more than 8,600 MW, or more than 40 percent of the total demand response capability in all of the U.S. RTOs." (p. xiii)


  • "The Midwest ISO is implementing a number of changes that will substantially improve the performance of the energy markets and the economic signals they provide. These changes include the introduction of ancillary services markets in September 2008 that will improve both the allocation of resources between energy and ancillary services and improve their pricing." (p. xiv)


The full report can be found at MISO's website, www.midwestiso.org

MISO Report Finds Market Performed Competitively In 2007

CONTACT: JOHN SHELK
(202) 349-0154or 703-472-8660

EPSA is the national trade association representing competitive power suppliers, including generators and marketers. These suppliers, who account for nearly 40 percent of the installed generating capacity in the United States, provide reliable and competitively priced electricity from environmentally responsible facilities serving global power markets. EPSA seeks to bring the benefits of competition to all power customers.