March 14, 2008

The Midwest ISO plans to launch its ancillary services market Sept 9, over three months after the original target, it said yesterday after its board of directors made the decision.

          "While we were hoping to meet the target launch date of June 1, there were a number of factors that we took into consideration when establishing the new target launch date," said MISO CEO T Graham Edwards.

          "I have said many times we would not launch until all of the key parties are ready."

          FERC recently gave approval to the ISO's market design (RT, Feb-27).

          The ASM will integrate the buying and selling of "regulation and contingency reserves" within the existing energy markets.  Regulation, in this case, means the moment-to-moment changes in generation needed to meet varying demand.  Contingency reserves are extra capacity that can be brought online within 10 minutes in response to an event such as a major outage.

          The ISO is still crunching numbers on how much the ASM will cost to get done -- with more parallel operations tests and systems operations tests needed to ensure it's ready.

          The ISO plans to discuss revised project milestones on a conference call Monday.

          MISO wants to get the project out as quickly as possible for the wholesale market to begin to reap its benefits, said COO John Bear.

          "The ancillary services market will increase the efficiency of the existing Midwest ISO day-ahead and real-time energy markets," said Bear.

          "This is in addition to minimizing total costs and providing estimated net annual benefits between $115 million and $205 million."