Good News From North American Grid Operators

Good news from the major grid operators is good for everyone but especially promising for electrical contractors. A late September report issued by the grid operators that manage the superhighway that delivers power to two-thirds of U.S. consumers and more than one-half of Canadians revealed that organized, competitive markets are working better than ever before. Vibrant market activity is shattering barriers for renewable and demand-response resources, creating new efficiencies in plant operations, significantly improving grid reliability, sending clear pricing signals and expanding regional planning.

Those are some of the findings of a new 2009 State of the Markets Report issued by the Independent System Operator/Regional Transmission Organization ISO/RTO Council through the Independent Regional Council (IRC), which represents North America’s 10 electric grid operators and works to develop processes, tools and standard methods for improving competitive electricity markets throughout North America.

“Across the board, we are seeing that savings from wholesale energy markets are coming from better generation commitment, lower dispatch costs, improved system reliability and transparent price signals,” said Nick Brown, president and CEO of Southwest Power Pool and 2009 IRC chair.

According to the report, efforts have resulted in a total of 31,695 megawatts of available demand response in North America, up from 17,146 megawatts in 2006, an 85 percent increase in available resources to draw on in times of need. Wholesale electricity markets supporting the development of renewable resources resulted in a four-fold increase of wind capacity being added to the interconnected electric-transmission system since 2004. Wind generation capacity of 21,254 megawatts operated in ISO/RTO regions in 2008. Competitive wholesale power markets have resulted in higher power plant availability, lower outage rates, greater unit commitment efficiencies, and the construction of more efficient generation. Infrastructure investment for large-scale transmission projects across multiple transmission systems have been completed or initiated in the Midwest ISO, Southwest Power Pool, PJM Interconnection, ISO New England and ERCOT over the last several years. Fuel-adjusted spot energy prices are declining in most ISO/RTO regions as a result of regional economic dispatch and wholesale competition. For example, the fuel-adjusted cost of wholesale power in New York fell 18 percent from 2000 to 2008. In California, total wholesale costs fell from 2006 to 2007.

“Organized markets produce competitive prices for wholesale electricity that accurately reflect the market fundamentals of supply and demand as well as lower production costs,” said Rana Mukerji, vice president of market structures at the New York Independent System Operator and chair of the IRC Markets Committee. “ISO/RTO markets allow the most cost-effective and reliable sources of generation to be matched with power needs across a wider footprint, leading to increased efficiency.”

About the Author

Mike Breslin

Freelance Writer
Mike Breslin is a freelance writer based in New Jersey. He has 30-years experience writing for newspapers, magazines, multimedia and video production companies with concentration on business, energy, environmental and technical subjects. Mike is auth...

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