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2009 State of the Market Report

Load and Resources

capacity that is unavailable under peak-demand conditions are removed, the reserve margin projected for 2010 for the Midwest ISO region is 12 percent based upon internal load and 20 percent based upon internal demand. At the regional level, the reserve margin varies from 5.4 percent to more than 26 percent based upon internal load and from 12 percent to 37 percent based upon internal demand. Since 10 percent or more of the capacity can be unavailable due to forced outages or set aside for operating reserves, real-time conditions may be tight on some peak days. Hence, interruptible load may need to be curtailed under extreme conditions or if forced outages are higher than average at under peak demand conditions.11

Although these results indicate that the system’s resources are adequate for the summer of 2010, new resources will be needed over the longer term. The results of the net revenue analysis presented earlier in this report indicate that the long-term economic signals do not currently support new entry. Consistent with these signals, little conventional capacity has been added in the last few years. The introduction of ancillary services and capacity markets promote more efficient pricing. The adoption of several recommended pricing changes should help to further align the economic signals and reliability needs of new investment.

Region

Coal

Gas

Oil

Other

Waste

Water

Wind

Total

Central

0

0

0

0

0

0

50

50

East

18

656

0

0

0

0

120

794

WUMS

640

60

0

0

0

10.4

99

809

West

0

6

37

2

7.5

0

1,340

1,392

Total

658

722

37

2

7.5

10.4

1,609

3,045

Table 2 shows the new capacity additions in the Midwest ISO’s 2010 Summer Assessment that have been added since the 2009 Summer Assessment.12

Table 2: Planned Capacity Additions Quantities in MW, 2009-2010 Planning Year

11

The Midwest ISO’s planning margins are slightly lower than the ones we estimate in Table 1. While it does not remove high-temperature deratings as we do, it removes capacity that is not needed to satisfy Load Serving Entities’ (“LSEs”) capacity obligations. Our estimate includes all physical capacity.

12

Some of these additions occurred in the fall of 2009, after the completion of the 2009 Summer Assessment.

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