MISO Energy Storage Study Phase 1 Report - Utility Wind ...

STORED ENERGY RESOURCE TREATMENT IN THE MISO TARIFF
schedule pumping and generation. Similarly, the participant may adjust its bids, offers and/or
schedules in the Real-Time market. From January 6, 2009, through December 31, 2009, pumped
storage facilities used 2,353,300 MWh of energy to pump, produced 1,647,124 MWh of energy,
and provided 94,836 MWh of regulating reserves, 309,390 MWh of spinning reserves and 7,942
MWh of supplemental reserves in real-time.”
The MISO Business Process Model (BPM) describes the current operating procedure for pumped
storage as follows: 12
“Load at a pumped storage facility when operating in pumping mode should be included in the
load forecast supplied by the load balancing authority for the reliability assessment commitment
(RAC) processes. Inter-control center communications protocol (ICCP) values for the load and
generator should be sent to MISO. The load measurement would be a positive value and the
generator measurement would be “zero” when pumping and vice versa when generating. During
real-time, load served by the pumped storage facility can be handled by either the load balancing
authority and or MISO continuously updating the load forecast to include load from pumping.”
Pumped Hydro Storage Tariff
There are two challenges in operating storage under the existing MISO tariff. The first is that
charging and discharging are treated separately by MISO. This means that when the plant offers
generation and load into the day ahead energy market, the Locational Marginal Price (LMP) for
electricity purchases to charge the storage is not linked to the generation price (LMP for
electricity sales). This allows for the possibility that when generation clears in the day ahead
market and load does not, the storage owner is left committed to provide power at an unknown
cost. It is possible to hedge both load and generation positions using financial virtual bids 13 but
the virtual bids are also not guaranteed to clear in the day ahead market. The second challenge is
that plant turbines are treated as separate units in the market, increasing energy arbitrage
calculation complexity for the plant operator.
If the storage plant could be treated as one unit with both generation and load, then stored energy
could be linked to the generation to optimize revenue. In addition, the unit dispatch model could
incorporate a look-ahead horizon to forecast when stored energy arbitrage is optimal. This is
particularly useful in periods when peak prices are low, since cycling the storage every day may
not be the optimal asset utilization throughout the year.
These operational shortcomings are not, however reflected in the modeling for the Energy
Storage Study. Both the EGEAS and PLEXOS models used in this study optimize over longer
time periods, allowing for the energy arbitrage to be maximized.
12 MISO BPM-002 June 2011
13 Virtual bids allow market participants to hedge day ahead market positions (load or generation) by entering an
opposite financial position to their physical bids to eliminate price risk
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