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2009 State of the Market Report

Executive Summary

they were flexible and dispatched optimally. The Midwest ISO has made substantial progress in this area.


Develop provisions that allow non-dispatchable demand response (or interruptible load) to set energy prices in the real-time market when they are called upon in a shortage.

Like the first recommendation, this recommendation also would improve price signals in the highest-demand hours, which are important for ensuring that the markets send efficient economic signals to maintain adequate supply resources and to develop additional demand response capability. It may be possible to address this recommendation in conjunction with the prior recommendation associated with the role of gas turbines in setting energy prices.


Improve the integration of wind resources into the Midwest ISO system by allowing them to be curtailable at a specified offer price and be eligible to set prices in the energy market.

The Midwest ISO is presently working to address this recommendation and expects to file Tariff changes in 2010.


Develop improved “look-ahead” capabilities in the real-time that would improve the commitment of quick-starting gas turbines and the management of ramp capability on slow-ramping units.

The Midwest ISO’s commitment of peaking resources can be improved by using an economic model to commit and de-commit peaking units. This look-ahead capability could also include a multi-period dispatch optimization to move slower-ramping units in anticipation of system demands over the ensuing hour. Better management of ramp needs and the commitment of gas turbines would reduce out-of-merit quantities, reduce RSG payments, and improve energy pricing. We have recommended this previously and the Midwest ISO has initiated a project to develop such capabilities.


To address the loop flows around Lake Erie, we recommend the Midwest ISO develop a joint agreement with IESO, NYISO, and PJM to modify scheduling and settlement provisions to better align physical flows with the settlements.

Improved scheduling and settlement rules around Lake Erie would substantially reduce loop flows, increase efficiency, and eliminate equitable cost transfers. The scheduling coordination

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