The Midwest Independent Transmission System Operator, Inc. (Midwest ISO) formally launched its real-time energy markets early this morning when it began centrally dispatching wholesale electricity and transmission service throughout much of the Midwest U.S. region.
The integration of the Midwest Energy Markets into ongoing operations is the result of many months of preparation, including testing of systems and training of personnel, and represents an unprecedented level of coordination among member companies, federal and state regulatory officials, and other stakeholders within the Midwest region.
The Midwest ISO began accepting bids and offers for the sale and purchase of electricity in its day-ahead market on Friday, March 25. Those transactions will settle today, April 1, the first formal day of real-time market operations.
Under a tariff approved by the Federal Energy Regulatory Commission (FERC), the Midwest ISO now operates day-ahead and real-time energy markets that are designed to make the most efficient use of all resources within the region reliably.
The tariff sets out the rates, terms and conditions necessary to implement a platform that features the security constrained economic dispatch of generation resources throughout its region. The tariff is consistent with the mandate of FERC Order No. 2000, which requires regional transmission organizations (RTOs) to provide real-time energy imbalance services and a market-based mechanism for congestion management.
A key feature of the Midwest Energy Markets is that they produce locational marginal prices, which provide price transparency of the transactions involving the sale and purchase of wholesale electricity. Buyers and sellers of power will, for the first time, be able to see Real-Time prices for electricity at five-minute intervals at approximately 1400 points along the power grid.
Local control area operators will continue to be responsible for many of their traditional functions, but will operate their systems in response to signals sent by the Midwest ISO.
As an RTO, the Midwest ISO also is responsible for ensuring the reliability of the transmission grid throughout much of the Midwest in a region that stretches from Pennsylvania to Montana and from Missouri to the Canadian province of Manitoba. In addition to its role as reliability coordinator for the wholesale electricity transmission system in its region, the Midwest ISO is also responsible for ensuring fair access to the grid.