Valuing Congestion Revenue Rights in the California MRTU - A Workshop on September 9, 2009 at Stanford University

The Market Redesign and Technology Upgrade (MRTU) launched by the California Independent System Operator (CAISO) on March 31, 2009 brought comprehensive changes in the way in which power markets are operated in California. Wholesale power is now offered at thousands of locations throughout the CAISO network, presenting participants with a new set of opportunities in conjunction with associated risks.

The key financial product with which market participants can arm themselves in this locational marketplace is the Congestion Revenue Rights (CRR). CRRs can be used to protect existing positions and to create new opportunities. Unfortunately, there is very little history behind this product and the level of sophistication needed to effectively manage CRRs in these markets is lacking.

You are invited to come to a workshop to discuss the far-reaching effects of CRRs and explore some sophisticated tools and techniques for determining their values.

Practical Information

Date:       9:00 AM - 4:00 PM, Wednesday, September 9, 2009

Venue:    Cypress Room at Tressider, Stanford University
               459 Lagunita Dr.
               Palo Alto, CA 94305

Participation

Participation is limited and is by invitation only. Each participant is expected to have some basic understanding of how the CAISO Day Ahead Market (DAM) is operated as the workshop will be geared towards fundamental valuation techniques using market simulation.

There is no charge for participation in the workshop. However, each participant is responsible for his/her own travel expenses. Please register here.

Organizer

Founded in 1983 in Palo Alto, California, LCG Consulting has pioneered analysis and modeling of competitive energy systems. LCG offers a full range of software products for energy producers, suppliers and traders seeking to optimize resources in competitive energy, transmission and ancillary services markets, as well as tailored consulting services.

Through intensive R&D, LCG has led innovation in the energy sector and provided insight to clients by transforming market information into intelligence, strategy and action.

Agenda

Workshop Timing      9:00AM – 4:00PM

Lunch                        12:00PM – 1:00PM

9:00AM - Welcome & Introductions

9:30AM - MRTU Overview

• Objectives of the MRTU
• Key differences between MRTU and other market structures
• Day Ahead Market Operation

10:00AM - CRR Allocation/Auction Strategies and Methodologies: A Market Participant's perspective

• CRR Process
• Participation logistics
• Modeling needs

11:00AM - Market Simulation

• Fundamental modeling concepts
• Security Constrained Optimal Power Flow
• LMP Price Formulation and Calculation
• Price forecasting

12:00PM - Lunch

1:00PM - Data Sources and Bottlenecks

• Generator characteristics
• Generator bidding
• Transmission topology
• Outages
• Import/Export – the effects of neighboring regions on CRR value
• The effect of fuel prices on CRRs

2:00PM - Valuation Procedures

• Scenario development to capture uncertainty
• Day Ahead market simulation
• Source/Sink node mapping
• Data processing
• Interpreting results

3:00PM - Perform Valuations

• Live demo of valuation process
• Some limited time for participants to identify and value their own CRRs

4:00PM - Workshop Closing

Presenters

Dr. Rajat K. Deb is the President, and Chief Executive Officer of LCG Consulting, Los Altos, California, a corporation devoted to the development of strategic planning software for the electric and gas utility industry and provision of consulting services to the energy industry. Dr. Deb is well known for his pioneering work in developing nodal spot price models and for his extensive published work in the area of competitive modeling, market design, transmission analysis, and tariff design.  

Dr. Deb is a widely recognized expert in the fields of competitive energy market modeling, utility systems planning, and operations research. He has directed many large projects in valuation of generation and transmission assets, utility analysis, operations research, and analytic software development in industry and in academic settings. His innovative work has contributed significantly to both theoretical advances and state-of-the-art practical applications for electric and gas utility planning.

Dr. Pushkar Waglé has over ten years of experience in the electric utility industry. He is presently a Senior Consultant at Flynn Resource Consultants Inc. He has advised various electricity industry players in the areas of electricity market design, congestion revenue rights, renewable energy planning, electricity transmission projects, electricity generating asset valuations and risk management. He has published widely in the areas of electricity generation and transmission adequacy, transmission investment alternatives, ancillary service markets and market-based valuation of coal technologies. His recent testimony to FERC concerns the CAISO’s Integrated Balance Authority Area (“IBAA”) proposal. Dr. Waglé holds a B.S. in Mathematics and a Masters Degree in Economics from the University of Bombay, India and a Ph.D. in Economics from the Stony Brook University.

Mr. Srinivas Jampani  is a consultant for the California and Midwest electric markets. At LCG, Srinivas has actively performed market analysis and advised clients in the areas of market based asset valuations, congestion revenue rights, renewable resource integration and risk management. He is an expert in the development of regional generation and transmission databases for the Midwest, California and Western regions and conducts energy studies to aid decision making in deregulated energy markets. He has worked with utilities and energy companies in California to understand the impact of MRTU on nodal pricing, portfolio performance and risk. Srinivas holds a Masters degree in Mechanical Engineering from Stanford University.

Mr. Pushkar Chhajed has received a Masters degree in Operations Research from Georgia Institute of Technology.  Pushkar is an expert in market simulations and has worked extensively to model nodal market structures including the upcoming Texas (ERCOT) system, New York (NYISO), New England (NEPOOL) and California (CAISO).

Additional presenters may be added

More Information

For additional information relating to this conference please contact Ms. Madeline Chen at (650) 962-9670 ext. 111, or write to info@energyonline.com.

Campus Maps and Direction

Link to Stanford Campus Map