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Watch the video version of this episode on YouTube to follow along with the charts and visualizations discussed in the conversation.
What do the data reveal about the Extended Day-Ahead Market's performance since launch?
In this episode of Frequency Band, hosts Paul Dockery and Becky Robinson are joined by Connor Waldoch, Founder and Chief Strategy Officer of Grid Status, and Mark Rothleder, CAISO's Senior Vice President and Chief Operating Officer. Together, they explore EDAM's early results and the operational trends emerging across the Western Interconnection.
Drawing on market data and performance metrics, Connor and Mark discuss reliability, market efficiency, participant benefits, and the evolving dynamics of regional market collaboration. They break down what the numbers are telling us and what EDAM's early performance may signal for the future.
Creators and Guests
What is Frequency Band?
From Fort Peck, Montana to Tijuana, Mexico, the alternating current transmission network in the West oscillates in the narrow band of narrow band 59.97 and 60.02 cycles per second. On Frequency Band, the California ISO will host industry experts to talk about how the physics, economics, and governance of the grid come together to to keep the system in sync.
Hello, Frequency Band listeners. A note about this month's episode. Due to the graphs and visualizations that we're discussing, you may want to watch on Kaizo's YouTube page to follow along with the charts. They are also available on the Kaizo Frequency Band web page for download. Thanks, and hope you enjoy this month's installment.
Paul Dockery:I'm Paul Dockery.
Becky Robinson:And I'm Becky Robinson.
Paul Dockery:On Frequency Band, Becky and I explore the physics, economics, and governance of the grid from a system operator's perspective.
Becky Robinson:On today's show, we're talking about the best charts from the extended day ahead market's early results. Then Paul has a new chart design that he insists on sharing with us. And then after that, we're gonna close with settlement statements from our guests.
Paul Dockery:Becky, I am obviously a chart and visualization enthusiast. Where do you rate yourself on, like, how much you like a good chart?
Becky Robinson:Well, I remember in my first job, in economic consulting, we you know, I had a a person I was working for, and one of the the first things that they introduced me to was, Tufte. Right? And and I think that is a shared experience among a lot of
Paul Dockery:young economists. Something I know. It's not something I know. What's in Tufte?
Connor Waldoch:Oh, right back here.
Becky Robinson:Tufte. Is it Edward? Good. Edward Tufte? The visual display of quantitative information.
Becky Robinson:It's a seminal work. If you've ever seen, there's this great chart of, like, Napoleon's march to Russia, if I'm getting the
Paul Dockery:facts that chart.
Connor Waldoch:Yes. Yes.
Becky Robinson:Right. So it's a whole book of, like, these kinds of charts of how can you convey information with, with, you know, with with pictures and and using less lines on the page to convey more information. So, yeah. Yeah. I think,
Connor Waldoch:you know, I mean, feel
Paul Dockery:like you avoided the question because I was asking whether you like charts, and then you explained to me your first experience with them. So I feel like maybe we got the answer, but let's keep going. Let's introduce our guests.
Becky Robinson:Yes. Okay. So here to share his enthusiasm for data and visualization, we have Connor Waldoch. Connor is the cofounder and chief strategy officer for Grid Status. Grid Status is a data analytics platform for the energy industry with a wide range of charts, dashboards, and insights available at gridstatus.io.
Becky Robinson:Prior to cofounding Grid Status, Connor spent time as a researcher at Oak Ridge National Lab in Tennessee and as a market monitor at Potomac Economics. Welcome, Connor.
Connor Waldoch:Thanks, Becky. Happy to happy to be here. And I certainly share yours and Paul's enthusiasm for data visualizations, but I think your enthusiasm for Sankey diagrams, particularly. I don't know if you're familiar with the Lawrence Livermore National Lab energy consumption, charts over time. I worked on those thirteen, fourteen, fifteen years ago now, in grad school, I interned there.
Connor Waldoch:And one of my tasks was to take that format and apply it to water use and electricity for urban areas, sort of more specific permutations of those national graphs. So Sankey diagrams have been near and dear to my heart for, I guess, coming up on fifteen years at this point.
Paul Dockery:I love a Sankey. I love a flow diagram, and, it's great to have you and, you know, an enthusiast for visualizations. I feel like I've revealed myself as an amateur enthusiast because I didn't know the seminal work. But but, know, we're gonna have fun with it today. We're gonna have fun with it today.
Becky Robinson:Fair enough.
Paul Dockery:Welcome.
Becky Robinson:Yes. Welcome, Connor. Alright. So also joining us today, is Mark Rothleder. For many of our listeners, Mark may need no introduction.
Becky Robinson:But to introduce him, nevertheless, Mark is the chief operating officer and senior vice president for the California ISO. And Mark was part of the original hires at the start of the California ISO, and he hasn't left yet. And he has held positions across the organization. So welcome, Mark. Great to have you today.
Mark Rothleder:Becky, thank you. And, Paul, thank you for having me on the program. Yeah, it's been twenty nine years with the California ISO, next year will be thirty. And I am an engineer by background, so I am not a I guess I'm a practitioner in terms of data graphics and information, and I'm a recipient. So get these information and it tells me a little bit about what maybe is working well, what's working, maybe needs some additional attention.
Mark Rothleder:So I guess I'm a practitioner and a receiver of data through graphics.
Paul Dockery:Okay. Mark, I'm really curious. There's people think differently and in different ways. Do you think of yourself more as a visual person, like to see a chart is helpful? Are you like a numbers or narrative person?
Paul Dockery:Where do you fall?
Mark Rothleder:I value a very efficient graphic and then I the first thing I do is, well, tell me the data behind it and so I can understand it further. But usually if the graphic is a good graphic, I don't usually need to know the data behind it. What I often find is I look at the graphic and then I want to see the data and then I want to do something different with it and present it differently.
Paul Dockery:Love it. This is a great episode for all of this enthusiasm, because we're we're gonna take an approach today inspired by the catalyst with Shail Khan, who does an annual episode with Nat Bullard based on Nat Bullard's annual presentation on the state of energy. We're using our own crafted artisanal slides on the first couple months of the extended day ahead market. In prep, Connor, it sounded like you're familiar with the catalyst in this that annual episode. Is that right?
Connor Waldoch:Yeah. Absolutely. You know, I think other people are looking forward to maybe GIFs or snow and like, are the slides?
Paul Dockery:Where are the slides?
Connor Waldoch:You know, I always appreciate the, it's the breath. Right? It's not just what was oil production? Was that a result in being Kaiso? All the different interconnected pieces of energy industry that make it make it really interesting.
Connor Waldoch:Right. Now I'd be curious, Mark or Becky, if either of you listen to podcasts at all, are they a part of your life or energy energy podcasts in particular? Are you busy, you know, living your lives?
Mark Rothleder:I I try to live my life, but, I I'm guessing becoming increasingly enamored and engaged in podcasting, if that's a if that's the right word. Sure.
Paul Dockery:Are you just you just saying that because you're on a podcast?
Mark Rothleder:I'm just saying that because I'm
Paul Dockery:a pod podcast. About you, Becky?
Becky Robinson:I like to listen to podcasts especially when I drive somewhere. I feel like it's a good use of the time, so I like to listen to ones that, The Economist does. I'm not familiar with this one, The Catalyst, so I'm looking forward to, I'm gonna look it up. Listen to it. I'm excited.
Becky Robinson:Get that full breadth, like you said, of not just sort of our electricity space, but like what else is going on?
Mark Rothleder:I do. I actually agree. Driving around and listening to a podcast is a is a good, use of the time.
Becky Robinson:Yeah.
Connor Waldoch:It's a very California answer. What can we do in the car?
Paul Dockery:Oh. And very engineering answer, like, what's the efficient use of my time in the car? Well, Nat Bullard's annual presentation is about 200 slides. The ISO has produced a bunch of content on the extended day ahead market. Each of our quarterly market performance and planning forum slide deck is around the same amount.
Paul Dockery:Actually, 80 to plus is where that lands. So we've got plenty of depth. But for today, I asked each of you to think about your four favorite graphics to unpack some of the early results from the extended day ahead market runs. And we're gonna pull from both the ISO's market performance and advanced analytics team as well as some grid status charts and dashboards. Does that sound good to the team?
Mark Rothleder:Sounds good by me.
Paul Dockery:Okay. Well, Becky, bit for this episode is that you and I get to translate the visualizations into this audio format. So we have to make, you know, make beautiful, the words that we can use to describe these these these charts. Are you up for it, Becky? What do you think?
Becky Robinson:I am. I am. When, when we were first talking about this episode, it made me think of, a line in an old country music song, by David Allencoe. But the line goes, can you make folks feel what you feel inside? And in that context, talking about music is art and it's kind of the aspiration of, like, what are you going for?
Becky Robinson:And so here, you know, that I guess a phrase that we often hear is a picture's worth a thousand words. I guess we're gonna flip it today and try and not with a thousand words, but No. It's good. Much awesome. Words, can we make folks see what we see?
Becky Robinson:So it's it's a challenge, but I'm, I'm excited for it.
Paul Dockery:Yeah. And I think the best ones that if we can find one that meet your standard, Mark what was the word you used at the the front? Like, a a simple, a concise graphic? What was that word? Because I feel like I I tend to fail that.
Connor Waldoch:I don't remember now.
Paul Dockery:Okay. Well, Mark and Connor, you were responsible. You'll be responsible for introducing the graphic. And then Becky and I will take on this task of of using words to make it mean something for our audio audience. I'm gonna take the mechanical task of just describing axes and units, and Becky is gonna take the harder task of making the data explaining the data in its visual form.
Paul Dockery:So I get the easy job, the mechanical job, Becky's got the hard job. And with that, I will ask Mark, what's an interesting graphic you want to talk about today?
Mark Rothleder:Well, guess the one interesting graphic and this is since May 1 when we started I got to preface this is on May 1 we started the day ahead market enhancements and the extended day ahead market. And I know sometimes they get interchanged and used interchangeably, but the day ahead market enhancements was really an effort where we introduced a new one of the things we did was introduce a new product, Imbalance Reserve. And it's the first time we purchased procured imbalance reserve to cover the uncertainty as part of the integrated forward market. Along the same times we were procuring energy, solving congestion, and procuring other ancillary services. So one of the graphics that I like to look at is under this new product, where are we procuring it from?
Mark Rothleder:How are we procuring it? And so I have to give credit to Guillermo Bautista Alderette, who really gives me all these graphics. He's the director of our market performance and advanced analytics. So I don't produce any of these myself. They come to me in very colorful form already.
Mark Rothleder:But it's that graphic that kind of was a new product and I wasn't quite sure how it was going to play out. And the graphic that shows where we procured from, how much, and the shape of the procurement over the day, gives me some insight about, the new product.
Paul Dockery:Okay. Love it. I'm gonna do the mechanics of the graphic. And I I do also love this. It's, I call these month hour graphics because it is for a month by hour of the day where you have effectively 12 categories across the x axis, the horizontal axis, one for each hour of the day, but it's summarizing data in that hour for the whole month, which I find to be very good ways to interpret the daily shapes across the hours a day.
Paul Dockery:I really love a month hour graphic. So as I mentioned, the x axis on this chart is an hour of the day for a month. The y axis is the average megawatts of the imbalanced reserve up in the upward direction and the imbalanced reserve down procurement in the down direction. It's a stacked bar chart so that and it's stacked by fuel type. So Mark, you mentioned that it's where you're procuring from, that's not location of procurement on the grid, it is fuel source of procurement.
Paul Dockery:So it's categorized in the stacked bar chart by fuel type, And the the imbalance down obviously is the negative. So the stacked bar, you have something going on the vertical and something going in the downward, for each interval of the day. Becky, I'm gonna hand it over to you. That's just how the chart's laid out, 24 intervals. What do you see when you look at this chart?
Becky Robinson:Yeah. Well, this chart is is a really pretty chart in a way. And in a way, it, as we talked about, what does this look like? We decided that it, you know, it looks like a suspension bridge with two towers. And and the two towers, are around, you know, hours ending seven, eight in the morning and then hours ending eighteen, nineteen in the evening.
Becky Robinson:So that's sunrise and sunset, where we see greater amounts of imbalanced reserves being procured in in those hours. And then in between, during the the middle of the day, it sort of slopes down like, you know, like like the cables of a suspension bridge. And and as well, it's, you think about a bridge. It's a bridge over water. It kind of is.
Becky Robinson:I mean, it because the we've got the, imbalance reserve up procurement it going above zero, and imbalanced reserve down procurement shown, you know, below zero. And so it it kind of from a, you know, how much are we buying perspective, it's not exactly equal, up and down, but it the the general shape kind of looks like a reflection in the water. And so for the types of resources that we're procuring from, what you see is that there is for a bounce reserve up, we see a fair amount of solar providing that during the middle of during the day, when when solar is an active resource. We also see a fair amount of of gas. Gas is in red.
Becky Robinson:So maybe this is the Golden Gate Bridge. But we we see gas providing some of that imbalance reserve up, pretty constant throughout the day or, you know, different quantities and different hours, but, but certainly a a key resource throughout the day. As far as imbalance reserve down, we we again see a fair a lot of solar, providing imbalance reserve down as well as a fair amount of wind, as well as some other resource types, providing small quantities. And and of note, we for energy storage, we really see energy storage providing imbalanced reserves, in in those concentrated hour well, in in the, as the sun's rising and as the sun's setting, but not so much in the hours in between. Maybe a little bit in hours in between.
Becky Robinson:But it's really kind of focused, in just a couple of hours where we see energy storage providing imbalanced reserves up and down. So there's a lot there to dig into, Mark.
Mark Rothleder:Yeah. I like the bridge analogy first off. It does look like a suspension bridge and to me as well, maybe the portion that's underwater is the the imbalance reserve down, whereas the portion the positive portion is the the upward portion is what's above the water. I like the mirror image too, so I can see that.
Paul Dockery:And shout out to Guillermo and whoever designed this chart because the wind on this graph is blue and it's the first one on the imbalance reserve down, so it actually kind of looks like it's water that's getting reflected over. So just shout out to great chart design.
Mark Rothleder:Oh, he he's a master of these. Yeah. A lot a lot of thought went into that color and scheme. So trust me.
Paul Dockery:I believe it. I believe it. What's interesting about this, Mark?
Mark Rothleder:So I guess what's interesting or what maybe what's maybe not surprising to me is kind of the shape. And I kind of expected in terms of the requirements of the system when you remember imbalance reserve is trying to cover that uncertainty. So you have to say, when do you have the most uncertainty over the day? And from an operational perspective, graphic aligns. So in the morning hour when the sun's coming up, your load is picking up, that is a time of uncertainty.
Mark Rothleder:If you have a little bit of cloud cover, it could go a little slower and you could have some imbalance needs. The load won't pick up faster on some days depending on the condition. So the morning uncertainty aligns with my kind of operational expectation. Again, in the evening, the second tower, if you want to say this, also aligns with my expectations. Sun goes down, we've got about 20,000 megawatts of solar ramping out of the system, the load may actually still be staying very high, and there is some uncertainty during that time, depending on again cloud cover, how the ramp out it is, and if you have a little bit higher temperatures you could have some uncertainty that manifests itself.
Mark Rothleder:So again, evening hours, sundown, net peak period aligns with my higher degree of uncertainty, especially on the upward direction. I'm a little bit actually surprised in the downward direction that that same level of uncertainty or that same pattern of uncertainty in those same hours manifests in the downward direction as well. Maybe slightly different magnitude. But I guess it makes sense. You could be either high forecast, low forecast, depending on if the wind is blowing higher or the sun has more cloud cover, things are just more uncertain, upward and downward direction.
Mark Rothleder:So it makes sense. The rest of the time the uncertainty is more kind of similar. So you got just under a thousand megawatts. By the way, this graphic is for the California ISO balancing area, not the entire EDAM footprint. So different balancing areas may have different patterns depending on their load and their resource mix.
Mark Rothleder:But the rest of the time in the middle of the day, solar is generally predictable, not a lot of change in load, so the uncertainty during that time is less. And then in the off peak hours, sundown, you don't have as much uncertainty. I guess the other thing that sticks out to me and probably a question that I've heard most about this graphic is, wait a minute, how is solar providing this imbalanced reserve service? If it's the source of uncertainty, how is it also providing the service? And I think I'll take the downward direction because I think it's more straightforward.
Mark Rothleder:You can always reduce a supply and solar is no different. And so if your forecast is a 100 megawatts, you could always reduce that and it looks like solar in terms of the cost of reducing that to manage uncertainty in the downward direction looks like it's actually winning out fairly well, which is not a surprise to me in the downward direction. You can always I don't want to use the term curtailment because they're actually actually offering economic bids. And so we're exercising those economic bids both from a dispatch of energy, but also now in terms of an award of imbalance reserve capacity. The harder one on the solar is to explain, well, how is solar giving you upward capability?
Mark Rothleder:And there you have to think about what's happening, because you could for energy you could find we've got abundance of supply of the midday hours and from a system perspective we could be on the margin or dispatching energy down clearing the day ahead energy market. And as a result of that, if we're dispatching those resources down from what their forecast capability is, the headroom between the forecast I'm sorry between where we dispatched them and their forecast upper bound is upward movement capability that could be dispatched up if you look at it from the perspective of the day ahead market and the uncertainty that could manifest itself in real time. So that's where that upward rationalization of the solar can come from. I know Becky you asked me a question during a board meeting. Well, wait a minute, what about congestion?
Mark Rothleder:What about if those those solar resources are getting dispatched down for congestion? And you're right, if it's dispatched down for congestion and that's the same set of congestion constraints that we're modeling for imbalance reserve as energy, then theoretically there's probably not a lot of upward movement because that same localized constraint constraining the dispatch of the solar in the upward direction. But we're not always dispatching down for local constraints. It's sometimes for system conditions and so forth. So I think that's where the upward comes about.
Mark Rothleder:There's a mother more nuanced point, and that is not all the same constraints are being modeled for imbalance reserve as is done for energy. So you could theoretically have a constraint bind in energy that is not necessarily binding for imbalance reserve award. Okay. And we are still working that out. So how much how many of these constraints do you try to model to constrain the imbalance reserve?
Mark Rothleder:And there is some computational limitations around that, but that's a nuanced answer about the solar. So that's that's the one that caught my eye. Do you want me to go on? I I don't wanna take up too much time.
Paul Dockery:No. This is great. I do wanna get Connor's perspective on what if he finds anything interesting about this graph and and
Connor Waldoch:I mean, I think in in parallel to the solar, right, we have wind. And you think of wind and solar together, you think in why these products were created to manage, you know, these discontinuities day ahead of real time and, you know, what's what's gonna happen. And what you don't see in the wind is a large amount of amounts reserve up that you do see in the solar. And I was wondering if you had any intuition mark or any fundamental reason for why that might be the case, because it does sort of stand out to me. You know, you get that water under the bridge, you know, as as we discussed.
Connor Waldoch:But, you know, I guess fortunately, it's it's it's not rising above sea level. But I'm curious as to why that might be.
Becky Robinson:Or maybe a tiny bit, but not much.
Connor Waldoch:A little. Yeah.
Mark Rothleder:Small amount of procurement. I think it kind of corresponds when you look at the amount of real time dispatch and curtailment, you'll find a lot more of that happening on the solar than the wind, even at the system level. So I think as a result of that, you've got more opportunity for system imbalance reserve in the upward direction than think wind wind is probably just not getting dispatched down on the energy below its forecast as frequently as often.
Connor Waldoch:Yeah. That makes sense. The other piece that I was sort of wondering about there is the, you know, difficulty in forecasting. Right? If you like solar, CAISO is this nice north south system, and it's it's very, you know, relatively well correlated.
Connor Waldoch:Right? And wind is, you know, a little little more active in, you know, how it how it comes in in real time. So I wasn't sure if that was playing a role.
Becky Robinson:Water. A resource type I didn't mention before is water. Our our hydro that's very important to, the whole West. And so I just wanted to mention that here we see it sort of showing up similar to how energy storage is, and I think that makes sense maybe in the sense of limited energy resource.
Mark Rothleder:Yeah, energy limited resource, the batteries for four hours of energy. For the hydro, you're certainly trying to conserve your energy over the day. So it's not surprising to me on either one that you're seeing the award of those energy limited resource for covering the imbalance reserve concentrated in those hours that have the highest value or therefore the highest imbalance needs. So that seems logical to me for something that is an energy limited resource, whether it be hydro or batteries.
Paul Dockery:Well, excellent discussion. Beautiful graphic. I'm glad we got to talk about the imbalanced reserve product and its procurement in in EDAM and in the day ahead market enhancements because Becky and I've been having think it's been the subject of conversations for every episode so far. So now we get to look at a chart based on it. It's been great.
Paul Dockery:Yeah. So thanks for bringing it.
Mark Rothleder:By the by the way, if if you look at the color scheme and the shape, it actually kind of follows your Frequency Band logo.
Paul Dockery:Sure does.
Mark Rothleder:So I I don't know what you're thinking when you're putting that logo together, but I think you have insights into the imbalance reserve.
Paul Dockery:Maybe it's it's that's really the whole the whole bit about this whole podcast. It's all been about the imbalanced reserve products.
Mark Rothleder:Sorry today. No. Was perfect
Paul Dockery:observation. Connor, so talked about imbalanced reserve product and procurement. What do you wanna talk about?
Connor Waldoch:Start with reliability capacity and the up flavor. So, you know, Paul, I couldn't help but make your yours and, Becky's lives more difficult. And, hey, it's not just a single chart. It's a chart with two panels. Looking at the price across the reliability capacity up product in in Kaizo, again, the Kaizo, BA since the EDAM game launch.
Paul Dockery:Yeah. So I'll do the mechanics of it. You can tell me if I get the mechanics of the the the chart descriptors right. So it is the marginal clearing price of the reliability capacity up product. I love that we did procurement by volumes for imbalanced reserves and now we're talking about prices for the liability capacity product.
Paul Dockery:So the two panels that you're talking about, one of them is a heat map, with the hour of the day on the vertical y axis and day of the month from May 1 to the end of July on the horizontal x axis. And it has a bin at each hour of every day since May 1 that's color coded to a chart so that the brighter color indicates higher prices and the darker color is at lower prices. On the second panel, we have a horizontal bar chart, meaning that the bars extend to the side from the vertical axis. I actually requested a modification to the initial version of this because I wanted that vertical axis to be binned by price, because I was interested in how the marginal clearing price was distributed across this period. So each on the vertical axis is just the price bin from and I think it's $2.5 per bin prices from negative 20 to 60.
Paul Dockery:And then the horizontal x axis of that is the share of hours, that prices fell in that bin. How'd I do, Connor?
Connor Waldoch:I think think you did did a great job.
Paul Dockery:Did adequately. Did adequately. Great.
Connor Waldoch:Did an minimum adequate. You know, the price floor is adequate. The price cap is fantastic, and, you know, you're somewhere in between.
Paul Dockery:Good. Now I think I have to leave it to Becky to then share what the data reveals in this mechanically formed, adequately formed graphic.
Becky Robinson:Alright. Well, the colors are really nice on this. So so nicely done, Connor. Where right. White is our is our highest prices, and so those really pop on this black background of the the graph.
Becky Robinson:And so so so what we see looking at this, you know, the hours over the day is there's a lot of just darkness in the middle of the day, not a 100%, but for the most part, Whereas the shoulders of the day, kind of the the same hours we were talking about in the prior graph being the the poles, the the towers of the Suspension Bridge, that, like, sunrise hour and sunset hours, that's where you're seeing more of those white pops. And and not just not just white, but we get some bright blue as we sort of, you know, as the prices tick up from, you know, into the, you know, $20.30 dollar range. So in between our our right. Prices are shown here between $0 and, we'll say, $55, or thereabouts. So, yeah, a fair amount of price activity, not every day, during those sunrise and sunset hours, but, but on a number of days and and, you know, sometimes seeing those prices extend into the into the evening, for several hours.
Becky Robinson:Also, a little chatter, you know, around startup, on the first few days of May, seeing more prices, you know, in the overnight hours. I I think, you know, and maybe we can get into, you know, why the early days of May might look different than, you know, once, you know, we got into June and July. And then, you know, in late July, maybe a couple days with with a little bit more price activity throughout the day. I know we've had some hot days here recently, so maybe, maybe we'll we'll get into all that. But, how'd I do, Connor?
Connor Waldoch:What do you wanna point great. You know? We're we're asking you two to perform a nigh impossible task. So it's, you know, I appreciate the effort. Yeah.
Connor Waldoch:I mean, I think we we can talk about reliability capacity. And I we sort of have alighted the fact that this is this is neither energy nor ancillary service. Right? These are referred to these are new market products, which I think is is an interesting framing to keep in mind. Right?
Connor Waldoch:With the EDAM and DAM enhancements that, Kaizo Kaizo has implemented. Right? Like, leave some of your preconceptions at the door because we're trying to think about these in a different way. And what I find really interesting about reliability capacity is the the way that it, you know, attempts to bridge one of the major discontinuities in the markets. Right?
Connor Waldoch:So we have the the day ahead markets and the real time markets, and you hear a lot about price convergence and the importance of price price convergence. And in the day ahead, have a week or more to get your bids in, but then the the door slams shut the morning before the operating day. There's a few hours to run everything, and we get the results for the next day. But in between, things change. Right?
Connor Waldoch:So you have this this evolution of the forecast, what resources are expected, you have trips, you can have outages, you have all these things that that drive different commitment needs, than than the market reached with with the day ahead clear. And I know we'll get more into the the ruck side of this with, with Mark in a bit. But this this reliability capacity product helping bridge that gap, I think it makes a lot of sense that one, you know, started a little I wouldn't say shaky, I think it's generally performed pretty well from from what I've looked at. You know, started a little more uncertain with higher prices and sort of leveled out over time. And that we see the the, you know, preponderance of of node hours is a nodally priced product.
Connor Waldoch:76% from May through July come in at $0, which, you know, I I think yeah. Know, I wanted to mention the market product versus actually service piece because, you know, I've worked worked in other markets, you know, they implement a new ancillary service, like, oh, it's it's always clearing very low or are we sending the right price signal? Do we need to rework this? Right? You take it back to the stakeholders.
Connor Waldoch:You know, maybe the last thing you want to hear when you just implemented something. But I think in in this case, makes a lot of sense where you're trying to bridge this this gap, right, between what we expect and those expectations changing over time. Having a lot of zero prices isn't necessarily a bad thing. It just means we haven't had these major deviations that need to drive these would have previously been out of market commitments. Right?
Connor Waldoch:So I, you know, when I look at this, I I think about that. I think about is it doing what it says on the tin? Right? A new product, is it meeting that? And, you know, from from from my review, it it looks right.
Connor Waldoch:Right? And you you see these periods of some higher prices, but it's a relatively small handful of percent of hours. And mostly you see zero and you see the zero in the middle of the day. You mentioned it's the same Everything has the same shape. Right?
Connor Waldoch:Where the uncertainty is concentrated in these net load ramps up and down, as solar and wind are, you know, rising, dipping just with the normal diurnal cycle. And so we see that the influence of solar in particular in in the CAISO BA in the middle of the day. And you see it here. You see it in the imbalance reserves that we were just looking at. And, you know, you see it in prices more generally.
Connor Waldoch:Right? So, yeah, that was sort of my main takeaways. Hey, it looks like looks like this is working. It looks like it's sort of settled. You know, this is still early days.
Connor Waldoch:EDAM is gonna keep changing, in particular with with new entrants every, feels like every few months for the foreseeable future. So a lot still to be discovered.
Paul Dockery:Yeah. What I love about and foreshadowing, you're you're gonna bring another heat map for the next chart. And what I really like about heat heat maps is when you start seeing a picture form out of static and that in some ways what I see in this heat map as well, right? You see the, where there's some pattern forming out of what could otherwise just be static on those shoulder periods. So I love that about it.
Paul Dockery:I also, as I mentioned, asked you to redo that right panel graph, and maybe I'll ask this of ViewMarq. So we see these distributions of prices around zero, but then it looks like we get some activity in the middle, like around the $25 period and then at the top. So you also see some distribution around the $50.55 dollars. Anything in there? To me that seems interesting that you're getting some distributions around these specific price points.
Paul Dockery:Anything to learn there?
Mark Rothleder:So remember the RCU is the kind of the residual unit commitment process of and it's not, I guess one can say it's covering uncertainty, but it's actually covering some known differences between what cleared in the integrated forward market and our forecast. For example, sometimes load doesn't clear at or near forecast in the integrated forward market and some of that gets filled up by conversions or virtual bids bringing on resources through the integrated forward market. But to the extent there are still differences accounting for, or discounting I guess, for the virtual bids that cleared and the differences between forecast, that's what the residual unit commitment process is trying to cover. And it's not too surprising that on periods when you have low unit commitment you may actually have higher prices of RCU because you actually found that you need to commit an additional resource or two. Whereas at higher or mid range loads, you've got commitment of a larger group of resources and you have probably residual capacity that can be dispatched.
Mark Rothleder:And so as you move from May to June and July, not in extreme conditions, not extreme heat yet, you're probably seeing that the commitment, the physical commitment that occurred through the natural energy market, the integrated forward market was sufficient. And I'm not too surprised that zeros reflect the fact that you have a high degree of capability already committed. I think the question you're asking though is, well, okay, so you have the concentration of zero, what's the 55? What's happening there? And I think there is some probably interplay at the $55 range about default bids and maybe interplay between the we don't have a demand curve per se in the residual unit commitment process, but we do have a demand curve for the imbalance reserve and that's set at $55 And it seems like there's some concentration at the upper end of that demand curve that when you do need capacity and the capacity may be a bit scarce, you're hitting that $55 mark in terms of bids that are being offered in clearing.
Mark Rothleder:That's my best guess at this point. I think as with all these graphics, they only represent two, three months of operation. So until you get through a full season, graphics can be a little bit deceiving. You could get to incorrect incorrect conclusions by just taking a slice of time and not seeing the entire annual picture of something.
Connor Waldoch:Yeah. You mentioned the the different products, right, Bell Deserves we were just just discussing. So you can't stack RC up and down in the same hour. What what can you stack in in the market? Like, what are the decisions that, you know, generators have to make now that are that are different, than they were?
Mark Rothleder:So I guess the difference is in order to provide a service in the downward direction you first have to have an energy schedule. Okay, so that's one difference. And so in the upward direction it's a little different. You have to at least be committed at least for a resource at your minimum operating level to be able to provide that upward capability. So you have to overcome the commitment and the burden of doing that at minimum load, which in and of itself bringing on additional resources at minimum load may actually cause you need to need to absorb more downward capability because you have to absorb that upward energy that you committed.
Mark Rothleder:So there's a complicated interplay between the energy that's awarded through a separate market in process, the integrated forward market process, and what is residual needed to be committed in the upward and downward direction. And the downward direction in the residual unit commit process is new to us. So this is the new side of the product. We only did residual unit commitment in the upward direction and then downward is actually the new product here in the residual unit commitment process. We never did downward capability or because we could always curtail, we could always dispatch a resource down.
Mark Rothleder:And some people have questioned that. Well, why do you need residual unit commitment down at all? And I think what we're trying to do is at least position and commit the right sets of resources and maybe even moderate how much upward burden we're committing so we don't have to so it minimizes how much downward capability we need as well. But I think that's a question that we'll probably continue to ask ourselves, is the relevance of the downward residual unit commitment alongside the upward.
Connor Waldoch:I think, you know, anything you can do to reduce out of market actions, right.
Mark Rothleder:And from that perspective I feel very good that the combination of the imbalance reserve and integrated forward market and the residual unit commitment process and the capacity has resulted in a reduction of operator activity trying to increase the amount of residual unit commitment when that was the only thing to cover uncertainty. So I think we have another graphic that we may get to that actually demonstrates the effectiveness of this to reduce the need for the operators to feel like they need to adjust anything.
Paul Dockery:What a great segue. Becky, should we take the segue or do you do wanna do you have anything else to add on, reliability capacity prices?
Becky Robinson:No. That was a beautiful segue. I think let's let's take it.
Paul Dockery:Yeah. Yeah. Mark, you telegraphed this, and Connor has already indicated we're going here. So what's the chart you brought us for this ruck adjustments?
Mark Rothleder:Well, okay. So the measure of ruck adjustments, and that's where the operator makes some adjustments based on known conditions that they know, and they may adjust the demand in the residual unit commitment process. And that's been an area of maybe concern that the more operator adjustment that's occurring in the residual unit commitment process obviously leads to additional commitment of additional capacity. And they're doing it for good reasons. They're trying to ensure that they have enough flexibility going into real time to cover a broader range of uncertainty that may arise.
Mark Rothleder:Well, I mean that was the motivation for introducing the imbalanced reserve into the day ahead market, explicitly procuring that as part of the integrated forward market when we're procuring the energy with the hopes that it would actually reduce the operator need to make any adjustments in the residual unit commitment process. So this graphic I think is still being prepared for public consumption, But I think it's going be coming out soon and I think the graphic well, I'm not supposed to describe the graphic. Going to actually I'm going to play my role and I'm going to actually let Becky describe the graphic and then I'm going to maybe explain a little bit about it.
Paul Dockery:I love it. I'll do the mechanics first. This is easier. This is way easier, right? Y axis is residual unit commitment adjustments in megawatts.
Paul Dockery:And the x axis, the horizontal axis is the demand, on the grid. And this is where maybe I'll I'll play your role, Mark, and ask for the data. Are the dots the the megawatt adjustment or is the dot the, what's the dot for this graph that we're plotting
Mark Rothleder:So on this dot is a scatter plot of, at that load level on the x axis, where it lies on the y axis is the amount of effectively operator adjustment. You can see here a thousand megawatts and the y axis indicates that there is an operator adjustment of a thousand megawatts to what looks like probably about a 38,000 megawatt load at a particular point. The size of the and this is always fun and Guillermo always has fun with this the size of the dot or ring in this particular case is used to illustrate the load level. So to the right, there are larger rings, to the left there are smaller rings just illustrating where it is on the x axis of the load levels.
Paul Dockery:Thank you so much for your help on explaining the graphic because I needed some help.
Mark Rothleder:Let me finish. Let me finish.
Paul Dockery:Yeah, okay. No, absolutely.
Mark Rothleder:So in addition, there's a trend line here. So you take all these scatter plots of these dots and then you consolidate them into a trend line. And it's the trend line that actually is what catches my eye because there's dots that are before EDAM and DAME and then there's dots after EDAM and DAME for I believe the same months of July in this particular case, or maybe this is June. I think this is June. So the point is that the trend lines, there's two trend lines, one representing the amount of adjustment, operator adjustment, that's kind of trending at different load levels before and after EDAM.
Mark Rothleder:And I'm not gonna I'm not gonna go to the punchline, but I'll let others lead me to the punchline.
Becky Robinson:Alright. So I one, you know, just I don't know if this is the punchline of this graph, but I do want to note there is a heck of a lot of these dots at zero at all demand levels, you know, from from as low as demand goes, which I mean, I don't know. Maybe it's is it 10 gigawatts on here? Up to up to even on the 45 let's call it 43, 44 gigawatts. There's a lot of zeros, both before and after.
Becky Robinson:But, really, like Mark was teeing up, the punch line here is the difference in the before and after. And on the chart, we those are two different colors. So before is a teal color before EDAM. Right? So so what did we used to do what did operators used to do for rec adjustments before we had these new products that are, in balance reserve, reliability, capacity up and down that are more integrated into the market and solving for that uncertainty, co optimizing for that through the market.
Becky Robinson:And so so right before before we had those new products, the trend line that Mark was was talking about, in that teal color, you see it's, first of all, it's it's higher than the after. So that but but, but to describe it a little bit more, it's, you know, you see that around 30 gigawatts, which maybe is a, you know, I think off for a lot of the year, you know, 30 gigawatts is is kind of like what the the the CAISO, BA system will hit. And so not in the summertime, obviously. But, but so for around that part, the typical RUC adjustment would be about a thousand megawatts. And, again, this is before EDEM.
Becky Robinson:And and as as the demand on the system increases up to, say, around 40, right, which is, you know, hot day, that trend line is up around 3,500 megawatts. Right? So that's a significant amount of this call Connor, you know, brought used the term before, out of market actions that, that operators would have been doing. And we see that that with the launch of EDAM and the day ahead market enhancements and those new products again, that after trend line is much lower, and it's hovering you know, for a 30 gigawatt day, it's, I mean, is it maybe a 100, a 100 megawatts, if that, but really close to zero. Staying close to zero, but you do see it tick up a little bit as demand, increases.
Becky Robinson:So that at around, you know, 40 gigawatts, it's maybe something, you know, like, 300 megawatts worth of rough adjustments. And and it's interesting too that the after line goes out to say 45 gigawatts because we have had some hot days, since since EDAM launched, here in although so anyway but even even at those, like, 45 gigawatt demand days, you've got the rec adjustment still well under a thousand megawatts, more along the order of, say, seven or 800. So huge improvement.
Mark Rothleder:I think what's throwing you off is what how do you get to 44,000 when we haven't hit a 44,000. So I think this is the low level post adjustment.
Becky Robinson:Ah, okay. It's
Mark Rothleder:not the actual load but the load with the adjustment. So I think you've captured it well and the punchline is, yeah, the frequency and magnitude of the adjustments even at the higher low levels has measurably decreased after EDAM versus before EDAM. Not a surprise, completely intentional and completely consistent with the intent of the imbalance reserve bringing it into the market, providing transparency and providing that co optimization between the energy and the uncertainty needs of the system, providing better transparency overall and ultimately reducing the amount of operator intervention that would be necessary to get to the same level of reliability needs, but with transparency now.
Connor Waldoch:Well, had to restrain myself from trying to recreate this as soon as I saw it. I was like, oh, this is a great analysis. I think it makes a lot of sense. And it's sort of what I was seeing earlier with the, liability capacity. Hey, this is what you would wanna see.
Connor Waldoch:Right? You would wanna see a reduction in out of market actions to reduce, you know, uplift costs for, you know, supplemental resource commitment and such. At least as someone who did work in market monitoring, that's very near and dear to my heart. But the the thing that I'm really curious about here is what what the curves on these lines are? Like, are the equations?
Connor Waldoch:You know, what are the slopes? Right? Because you do see it's not just that they are, sort of offset, but they're not offset in in parallel. Right? Like, are legitimate differences to the slopes at different load levels.
Connor Waldoch:And I think that that is, you know, an area that I'm certainly interested in digging into of, you know, what is the difference at these different load levels to better understand how the, you know, whole product fits fits together. Right? Particularly, you mentioned, Mark, you know, again, that this is still early goings. And to the extent that we're comparing, you know, I think you said it's not clear on the graph, whether this is like twenty twenty five June versus twenty twenty six June. You know, to what extent is that weather controlled and all these factors that particularly influence load and these adjustments.
Connor Waldoch:Right? But just given that the 2026 curve is so much flatter with the additional resource that have come online from both wind and solar, and just the complications with balancing, you know, like a growing and evolving grid, I think that's a that's a really good sign.
Paul Dockery:Yeah. We probably don't get to declare victory yet, but it is at least indicating from early results that this is trending the way you want it to trend.
Mark Rothleder:Yeah, and just to maybe answer some of Connor's questions, I think there is a shape to this because our adjustment window probably is more focused in those evening hours. And depending on whether it's a hot day, you're probably in the 35,000 to 40,000 megawatt range versus a moderate day, and that would be something closer to high 20s, mid 30s. And that seems to coincide with the fact that where your peaks were, your evening peaks were, seemed to be the concentration of the points where there's maybe more adjustment going on.
Paul Dockery:Okay. Awesome. We gotta move on to the next chart. Connor, what what what's the last one you brought? What's the last one of interest?
Connor Waldoch:So once again, making your life difficult with two sort of figures, two panels, and in one chart. Sticking with the heat map and and bar chart combination. In this case, it is the GHG component of LMPs in the well, I don't want to say exactly, CAISO BA because it applies only to the GHG regulated portions of the CAISO BA, which is nearly all of but, you know, there is a little piece in in Nevada. So, you know, make sure not not to forget those folks at the VEA. But with that, I'll I'll turn it over, to you, Paul, and Paul and Becky.
Paul Dockery:Well, I feel like mechanically, this is the you've I've already done the work. Right? Because it's a heat map. It has the same y and x axis as we talked about last time. It is hour on the vertical axis and day of month on the horizontal axis.
Paul Dockery:And there's a little bin for the same sort of color gradients. As I described earlier, the higher prices are brighter colors, lower prices are dark, frankly zero, is is is black. I I I feel like you work in dark mode most of the time, Connor.
Connor Waldoch:I do live in dark mode. Yes.
Paul Dockery:Yeah. Yeah. Elder, us elder millennials are showing our stripes. The second panel is, again, a horizontal bar chart, but this time it is on hour of the day. So there's 12 horizontal bars and it's by mean price for that interval.
Connor Waldoch:It's $20.24, but we're so close. Twelve.
Paul Dockery:We're in. That's great. It's good for good for me. Let's cut half the hours out. Twenty four.
Paul Dockery:Twenty four. Good. So, Becky, what do you see here?
Becky Robinson:Well, in a way, this one looks has some similarities to the reliability capacity up charts we the heat maps that we were looking at before from Connor. So, again, the the middle of the day, there's a lot of darkness indicating zero or very low prices. Whereas in the although not just the shoulder hours now, but the the kind of the the dark hours of the day, if you will. The non solar hours of the day, we see prices coming in. Yeah.
Becky Robinson:And I and I think, you know, Connor can speak more to this. But of you know, when we think about GHG pricing, the Kaiso GHG area is importing in those overnight hours often and often exporting during the middle of the day. Right? So that's one reason why you, see a lot of zero GHG prices in the middle of the day. Although there are a few days, where we we see some GHG pricing throughout the day, even in the solar hours, a little bit more as you get into the the latter half of July.
Becky Robinson:And then as far as the the separate chart on the right, someone pointed out that this looks like an upside down wine glass. It took me a while to see it. What? But but now I do. Okay.
Becky Robinson:Okay. Had it pointed out. It's like, you know, you think of the the bowl, if you will, on the glass. Okay. So it's upside down.
Becky Robinson:The bowl is bigger than the base. And so we see, in terms of what are these, you know, average GHG prices in the the early hours of the day. So from, if if I'm reading this right, from zero sorry. From from midnight up until, you know, six, 7AM, you know, you see on average a little bit higher GHG prices, and then they slope into the stem as we get into the middle of the day. You know, their prices are very low.
Becky Robinson:Average price is very low. And then as you get into the evening hours, getting to the base of the wine glass, if it was a chunky base, where
Paul Dockery:Goblet. Maybe it's a wine goblet. Is a goblet a better word for it?
Becky Robinson:Or a lopsided barbell? I know. Chalice. Okay. Chalice sounds chunkier.
Becky Robinson:I like that. Anyway but yeah. So we see some, you know, some some GHG prices. And when I say, you know, we're seeing prices, the the the, x axis here, it goes up to $6, so a megawatt hour. So not huge numbers we're talking about here, but but just sort of seeing that there is a shape to that.
Becky Robinson:And in the evening hours, a little bit, lower prices coming in, you know, around the 3 or $4 range, whereas in the midnight to 6AM and 7AM, the you know, more like 5 or $6. So interesting interesting data.
Paul Dockery:Yeah. Nice. Well done. Well done. Connor, what's interesting here?
Paul Dockery:Why why'd you bring this? What's why was this interesting?
Connor Waldoch:Yeah. So I, I think it was would have been December 2023, FERC's order on tariff revisions, you know, related to DAEM and EDEM or or one of the orders. I think one of the the more seminal ones. You know, we were talking normally, it's like a 200 so page document. You look through it, you know, like LMP formation, gets three pages.
Connor Waldoch:Virtuals get two pages. Congestion and transfer revenue only got six pages. The GHD component got 13 pages in that filing. And it just, you know, that that stood out to me. Yeah.
Connor Waldoch:And you're reading it and you're trying to understand and what the the way that I took the changes that Kaisa was making. Becky made a country music reference earlier. I'm gonna swap genre to, Missy Elliott's 2002 hit Work It. What they did, what Kaiso did is flip
Becky Robinson:Oh it in my goodness. Thank
Connor Waldoch:you. I'm glad someone got that reference cause that's all I could see in my mind. You're flipping from an external price to an internal price and you're reversing from a negative external price to a positive internal price. And I just thought that that fit perfectly. Right?
Connor Waldoch:So it's kind of been stuck in my head since since then, and seeing it come to fruition and and work has been has been, you know, interesting. The and and this is it's it's incomplete currently too. Right? Like the next net export constraint is is still not in place if I remember. Yeah.
Connor Waldoch:And it's it's one of those things that I think you'll find all over electricity markets, which are often like a pretty can be a sort of pure distillation of these, economics principles, like marginal pricing, all these things, where the inverse of what something was just ends up in the same result. Right? So you go from this negative external price to deal with California having GHD regulations and the, you know, the rest of the Western energy imbalance market not in the same way, especially at the time, to an internal positive price and you're the idea is you end up with the same result. Right? And, you know, as far as I have been able to tell them tracking, sort of, you know, reading reports that, you know, you know, are working on and your teams, that seems to be the the case so far that there hasn't been any, you know, major major issues with what is like mechanically a large change to get to the same results and be extensible.
Connor Waldoch:Right? So as EZ DAM expands, you get more GHG regulated areas, and you have to manage this as as part of the market. Right? And I think this is this really stands out to me because it's one of those fundamental things in nodal power markets. Right?
Connor Waldoch:You have the LMP, and LMP is energy congestion and loss. Unless you're ERCOT or unless you're CAISO now. Right? Where you have you either don't publish certain components, in the case of case of ERCOT, or in CAISO, you know, we have this this extra component. Right?
Connor Waldoch:And it then further ties into, hey, now we have this this marginal energy component that's different in different BAs. And it's you need to be, I think, aware of, like, a little more of the fundamentals that we've all gotten really used to, over the last, you know, twenty, thirty, thirty years, I guess. And the GHG component is like a nice little encapsulation of that. Like how it fits into what an LMP is, how it, sort of handles these these policy decisions. Right?
Connor Waldoch:That end up driving some of the market design and outcomes. In terms of the actual prices, you know, I think you hit on it, Becky. It's all kind of makes sense. Again, it's the the midday, we're not really seeing it. You see it in the off hours from solar, and you see it start to ramp up a bit more as it gets hotter and and load rises.
Connor Waldoch:Right? And, you know, I'd love to do some kind of comparison like the chart that Mark just brought of has this materially changed over, you know, with having it internally in terms of the different load levels. Right? Or is it, you know, sort of fit into the idea of not changing? Yeah.
Connor Waldoch:Even though materially it looks so different from what it was before May 1.
Paul Dockery:Yeah. Mark, anything to add on flipping and reversing the GHG component?
Mark Rothleder:Well, Connor's completely correct, but I don't think he fully described the reason why we had to make this convention a reversal. It made sense to incorporate when you had one system marginal energy cost price across the footprint usually referenced around the California ISO price, okay, and that was one price across the whole market footprint, it made sense there to have the negative price component represent the price or the cost not incurred external to the GHG area. In this case the California ISO footprint was the GHG area. What changed is that we were with EDAM we anticipated that we will potentially have multiple GHG regions. And once you do it didn't make intuitive sense anymore to have multiple negative components for every GHG region that you may be modeling.
Mark Rothleder:So we said let's flip it around and have a system marginal or regional marginal energy cost for every area, balancing area, and then it allows us to actually incorporate the positive cost of GHG for different GHG regions in the region that is
Paul Dockery:of
Mark Rothleder:consequence. Okay? So that's one of the motivations why we flipped it. Now for me, think the positive is actually more intuitive. Absolutely.
Mark Rothleder:Rather than the negative external because I mean you have the positive component in the GHG region. That's where you're incurring the compliance costs. That's where you see the cost and that's where you see the price effect. So this is actually in my mind more intuitive. In terms of the other things that you see in this picture, it totally makes sense for all the reasons we described earlier.
Mark Rothleder:The middle of the day now we are probably net exporting, especially this is the real time GHG component. So this is the EIM probably doing some kind of export in the middle of the day in most days. And then in the shoulder hours oftentimes we see that come back as a net transfer import illustrating the power of the EIM to move energy around where and when it's needed at different times of the day. It's not always the case. June 12 is an example where on that particular day my understanding is that we actually had higher loads in real time than we had initially forecast.
Mark Rothleder:And as a result of that, EIM did its job. It moved energy not out of the area, but it moved energy into the area when the actual load was running a little higher inside than the original forecast. And that's why you see GHG prices on that day in the middle of the day when you typically don't. And then as you go further into July, you're just seeing the pattern of the summer coming up as the loads come up. There's different times of the day that we may be either net importing, net exporting transfers in the EIM and the GHG prices follow along.
Mark Rothleder:Zero when we're probably net transferring out, and then positive indicating that some amount of resources serving California load and accounting for the GHG compliance component of that. Good graphic. The way, see George Washington somewhere in there and I don't see a goblet or
Paul Dockery:George Washington in
Mark Rothleder:the fast lane.
Becky Robinson:Like a Mount Rushmore
Mark Rothleder:kind of Something very it's abstract, but I see.
Connor Waldoch:I'm not terribly far from Mount Vernon, so I can go down and ask some folks.
Mark Rothleder:Okay. Maybe the back of his head.
Paul Dockery:There we go. Okay. That that may make more sense to me. Okay. Well, as Becky four excellent graphics.
Paul Dockery:Really appreciate you bringing them. I love a heat map. I'm glad we got those. And I love a month hour graphic. I think they're excellent ways to view it.
Paul Dockery:So that you all hit on that is great and fascinating to me. I couldn't pass up on this chance with two leading wonks in the energy space to put together my own niche graphic that is incredibly esoteric and not useful in any way, but I find to be fancy and fun. So I sent and I shared with you all in advance of this. Everybody knows and loves the LMP maps that shows up on the ISO's website where you see nodal prices by area, so roughly corresponds to its location, on a map. Less familiar, people may be with, the Department of Market Monitoring, their annual report put out these transfer graphics, which is an underappreciated visualization, which is a chord diagram, which is the Sankey graph of circles.
Paul Dockery:And so I really think underused, underused the chord diagram. So I combined these LMPs and price distributions by BA and a core diagram, which shows the transfers and flows between balancing authority areas into a little LMP sunburst that shows on the x axis or the radial axis, because this is a circular graph. I love a circle. The LMP that's further away from the center is higher priced and as it's closer in, it, is lower priced. The cords are the transfers between these various balancing authorities.
Paul Dockery:And then I did it an illustrative version for the whole West, using a little toy model where I could compute LMPs across in an example where frankly path 15 is binding, and you can see price separation across the whole West. Becky, incredibly esoteric. We only have a minute left. Worthwhile? No?
Paul Dockery:Yes? I don't know. What do you think?
Becky Robinson:I noticed that you pulled this data from Pi Day.
Paul Dockery:Did you do that
Becky Robinson:for extra Pi Day? Effect?
Paul Dockery:It means a circle. It has to be from Pi Day. Okay. A wonky score. Observant.
Connor Waldoch:I actually I took that in an even maybe perhaps wonkier power market direction. I was confused why plant information data, PIE data
Paul Dockery:Yeah. Right.
Connor Waldoch:Would have prices because that's the, you know, like AGC type stuff at the units.
Mark Rothleder:I'm with Connor. Every day is a pie day for us.
Connor Waldoch:Okay. Great.
Paul Dockery:Every day is a pie day.
Connor Waldoch:You know, I think it really benefits from, it would benefit from interactivity, Paul. Think it is my my take my major takeaway here. I assume this is probably a screenshot of, like, a Plotly chart or, or similar.
Paul Dockery:So this one isn't interactive. Just did a Jupyter Notebook. It's four interval. But it is it it reveals itself in its usefulness as you compare it, like, as as prices change over time. Mark, I don't know if you remember this, but like first two weeks I was on the job, you and I were sitting in a restaurant talking about congestion and constraints.
Paul Dockery:And I think I, I was like, I think we should do a map like this. And this is what I was thinking. So this is just a continuation And really the soft power of hosting a podcast, which is I can put you on the spot to rate my my graphic. What do you think, Mark?
Mark Rothleder:First off, it's not post eDam. So it's not an eDam graphic.
Paul Dockery:That's fair.
Mark Rothleder:But no, I like the graphic. I actually do like the graph and we do have something similar that shows the flows. I'm not sure it shows the prices, so the interaction, but the flows of from one area to another area. So I think it's a powerful graphic and it's quite colorful, when you actually fill it in.
Paul Dockery:Love it. Good. That's all I needed. Thank you for that endorsement. I will, I'll feel wonderful the rest of the rest of the day.
Paul Dockery:We used to end Frequency Band with Frequent Awards, but today we we cut that out because frankly, me generating awards was was was too personally costly of time and energy. So you aren't getting awards, but you do get a chance for a settlement statement, which is actually how we end markets, with the settlement statement. And so, Mark, I'm gonna hand it to you first. Any closing thoughts? Anything you wanna share as we close out?
Mark Rothleder:Well, thanks for that opportunity. And I I just wanna say, EDAM has been working very well since the start. It actually went smoother than I had anticipated. Operationally, it quickly settled in to reflect operational conditions and I think it's working incredibly well. The area that is now making its way through is the settlements.
Mark Rothleder:First off, do a nine day settlement. So it's very quickly after the operating day and get money to flow. And it's not surprising there that we had identified some things that we need to address when we get to settlements. Fortunately today, August 11, this is the first day where we're doing the second cycle of settlements starting from May 1, and that happens today August 11 when we recorded. So that actually we're seeing address some of the things that we observed in the first nine day settlements for the first couple of months.
Mark Rothleder:And a lot of those issues are now worked their way through and now percolating back through what is intended to be the second cycle of settlements. And we look forward to having that kind of match up to the really fantastic operations that we had and prices, physics, and then ultimately settlements, I think kind of completes the picture of that. So I think all things are going well and look forward to having those the settlement results match up to the actual experience operational experience.
Paul Dockery:Well taking my request for settlement statements very explicitly, Mark, and giving us your own settlement take. Really appreciate it. Mark, I hope you feel seen, heard, valued and appreciated. Do you?
Mark Rothleder:I feel yes, I do. I feel appreciate the opportunity. I feel heard. And I do value the format. And Paul, you do a great job of making this somewhat entertaining but also informational.
Mark Rothleder:And I do want to give again thanks to Guillermo Batista Aldereta and his team of people who really allowed us to talk about the graphics. He does a great job. His team does a great job and appreciate all the information. And also Department of Market Monitoring, they do it from a different perspective. But all the things put together, it tells a fantastic story and you have to sometimes look for the story.
Mark Rothleder:And it's great great great material to work with.
Paul Dockery:Yeah. Awesome. Thank you, Mark. And Connor, any settlement statements, any closing thoughts, anything you want to share to close us out?
Connor Waldoch:Yeah. So when I was thinking about when you when you brought up this podcast, we were talking about it originally, reflecting back on, so, you know, I don't have the, illustrious career that Mark does. I feel like we're running out of people who were there in the beginning. So, yeah, not yeah. It's about, the last fifteen years or so.
Connor Waldoch:And I can picture the exact moment in grad school. I think it was the first semester where I ran into the limits of Excel, where I was like, I can't make the chart I want. I'm trying to pull millions of rows of data. Like, how can I how can I do this? And so specifically charts, wanting to make better, wanting to make more complicated charts.
Connor Waldoch:I wouldn't call anything than better. That led me to learn MATLAB and then Python. It really changed the trajectory of my career in energy. It's very policy focused and added at least technical data elements. Right?
Connor Waldoch:And, you know, you could say that this episode of Frequency Band is a culmination of that to get on an audio medium and promote charts in in electricity markets. Yeah. You know, thanks for having me. You know, it's fun to dig in on a specific market, specific elements. You know, I sort of have my my hands in a lot of things in the day to day.
Connor Waldoch:So being somewhat forced to carve out some time and and dive into particular elements is something I always always appreciate. And with the continued evolution of markets in the West, you know, it's certainly not a bad time to really bone up on what's going on and, you know, we're what, six six weeks away from from the next, next entrant to EDAM, something like that? Or is it it's in the next October 1. October 1. Yeah.
Connor Waldoch:There we go.
Mark Rothleder:Portland General.
Connor Waldoch:So it's yeah. Portland General. It's not not leaving the news anytime soon well, the the news that we consume. Not leaving that news news anytime soon. So I just, you know, appreciate the opportunity and happy to be here and talk charts and wholesale markets.
Paul Dockery:Well, thank you. Thank you, Connor. I I will say you have GRID status as fans at the ISO. Really appreciate your, like, ability to synthesize this information. This is not an endorsement or a promo for GRID status, but just an appreciation.
Paul Dockery:I hope you feel seen, heard, valued, and appreciated.
Connor Waldoch:I absolutely do. Thanks, Paul.
Paul Dockery:Good. And Becky, you know, we didn't get awards when there were Frequency Awards. You can talk settlements anytime you want, Becky. But I hope you feel seen, heard, Vine. Appreciate it.
Paul Dockery:Any thoughts you wanna share
Becky Robinson:to no. Today was great. Thank you so much for to both of our guests. And and, I second your thanks, Mark, to our our ISO staff who work on putting all this you know, pulling the story out of the data and showing it to us, and Connor to you as well. I think it's it's exciting to to get to see kind of what are, you know, folks outside the ISO.
Becky Robinson:What do you see in the data and what looks interesting to you and how do you look at it maybe differently? So, really great conversation today. Great Missy Elliott reference. Loved that. And, this was a lot of fun, so I appreciate it.
Mark Rothleder:Yeah. Thank you. And, Connor, thank you, and, it was a pleasure sharing the the forum with you.
Connor Waldoch:Same to you. Thanks, Mark.
Paul Dockery:And thank you to our listeners. While you aren't seen or heard, are valued and appreciated. Please like, subscribe, and share the show so that other electricity market enthusiasts like us can find us.
Becky Robinson:Frequency Band is a production of the California ISO. It is produced and directed by Paul Dockery, Paul Koliadich, and Jeremy Lipps with writing by Paul Dockery and Becky Robinson. It is mixed, edited, and published by Paul Kolodich with graphics by Stacy Gibbs and Annabel DeGraff. Jamie Ackman is its editor in chief.
Paul Dockery:Its executive producers include Crystal Ball, Jacob Mays, Nicole Hughes, Erin Bloom, Deborah Smith, Monica Gaddis, and Pam Sparborg.
Becky Robinson:The views expressed during today's recording are our own and not the official views of the California ISO or the organization of the guests also appearing on Frequency Band. Any aggregation, quotation, or references to opinions shared in today's episode should be ascribed to the individual participants and not their respective organizations.
Paul Dockery:You can find additional information in the show notes of today's episode, including where to subscribe. Frequency Band, celebrating the wonky charm of electricity markets.
Becky Robinson:Frequency Band, staying in sync at 60 hertz.