2009 State of the Market Report
Load and Resources
maintenance in 2009. These results show no indication that suppliers were deferring maintenance due to poor economic or credit conditions. Similarly, long-term forced outage rates rose to almost 3 percent in 2009. Although these occur somewhat randomly, lower prevailing energy prices decreased the economic incentive to return a unit from a forced outage quickly. Short-term outages, which are more likely than other outages to constitute physical withholding, fell slightly in 2009.10
Outages and deratings were highest in the fourth quarter of 2009, which may be partly attributable to the new business practices associated with must-offer requirements of Module E capacity. In September of 2009, the Midwest ISO began monitoring the compliance of the must- offer obligations. This increased the incentive to accurately report unit outages and deratings.
Resource Margins and Generation Adequacy
This section assesses capacity levels in the Midwest and their adequacy to cover the forecasted peak loads in the summer of 2010. We evaluate generator availability by analyzing outages in 2009. For purposes of evaluating resource adequacy, estimated reserve margins will be optimistic if all potential deratings are not fully reflected. In particular, many resources during peak-load events must be derated in response to environmental restrictions or due to the effect of high ambient temperatures. Available capacity levels during high temperature conditions can therefore be significantly lower than typically assumed in planning studies, resulting in lower actual reserve margins.
Table 1 shows our analysis of the Midwest ISO’s capacity levels for the summer of 2010, given the forecasted peak load and the announced capacity additions and retirements. The table includes separate reserve margins calculated based upon internal demand and internal load. We define internal demand as internal load less the sum of behind-the-meter generation, interruptible load, and other demand response (“DR”) capability. Hence, the statistics based upon internal demand will include the effects of various demand response capability and those based upon internal load will not.
Outages and deratings are evaluated from a competitive perspective in Section VI.