By - Jon Brown

Financial Transmission, Congestion and Auction Revenue Rights (FTRs/CRRs/TCRs/ARRs)
January 29-30, 2019 | Baltimore, MD

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Overview

Financial transmission (FTR)/congestion revenue rights (CRRs and TCRs) and auction revenue rights (ARRs) facilitate mandatory, competitive, open transmission access. While the use of these measures is a customary practice among physical market participants, it’s their use as financial instruments that seems to draw the most attention with regard to the efficient operation of the wholesale power marketplace.

Several market conditions are pushing FTR and ARR practices into more than just hedging tools. ISOs and RTOs, along with market participants, are constantly adjusting to ever-changing regulatory and oversight requirements associated with trading practices, credit and risk.  In addition, competing perspectives are advocating adjustments to the ARR and FTR/CRR/TCR markets process, as weather, environmental regulations, accelerating renewable energy penetration and shifts in national energy policy influence how system operators deal with monetizing transmission congestion impacts. 

This conference will discuss how these trends are affecting transmission congestion instruments operating in the wholesale electricity markets in 2018 and going forward.   It will also consider what system operators, market economists and design consultants — as well as market participants — are doing to adjust their practices accordingly. And it will examine what’s under development now that could influence future market conditions and measures.

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Learning Outcomes

  • Review updates to processes and auctions in North American FTR/CRR/TCR markets
  • Discuss FERC, CFTC and private compliance, surveillance agencies’ enforcement of their market manipulation and disruptive trading practice rules over the past year
  • Examine the impact of ISO model building and outage selection practices on market participant FTR bidding strategies and revenue
  • Compare FTRs with non-FTR congestion management measures
  • Assess whether FTR markets would significantly benefit from re-design and, if so, in what form(s)
  • Identify credit policies that could reduce vulnerabilities and undue risk exposure as lessons learned from the “GreenHat” case
  • Evaluate the accuracy of auction right allocations and market administration
  • Examine if technical or system limitations are reducing the efficiency or performance of the FTR auction(s)
  • Assess if the day ahead market (DAM) products are functioning in a way so as to converge the DAM and RT markets

Credits

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EUCI has been accredited as an Authorized Provider by the International Association for Continuing Education and Training (IACET).  In obtaining this accreditation, EUCI has demonstrated that it  complies with the ANSI/IACET Standard which is recognized internationally as a standard of good practice. As a result of their Authorized Provider status, EUCI is authorized to offer IACET CEUs for its programs that qualify under the ANSI/IACET Standard.

EUCI is authorized by IACET to offer 1.4 CEUs for this conference and 0.6 CEUs for the workshop.

 

Requirements for Successful Completion of Program 

Participants must sign in/out each day and be in attendance for the entirety of the course to be eligible for continuing education credit. 

Instructional Methods 

PowerPoint presentations and case studies will be used for this course. 

Agenda

Tuesday, January 29, 2019

8:00 – 8:30 am :: Registration and Continental Breakfast

8:30 – 8:45 am :: Welcome and Overview


8:45 am – 12:00 pm :: Updates and Upcoming Plans/Proposals from North

(includes 15 min break) American ISOs re: Their Transmission Congestion Auctions, Markets and Processes

North American transmission system operators will provide a synopsis of how its transmission congestion market adjusted its operations and what impacts this produced.

  • California ISO (CAISO)

Guillermo Alderete Bautista, Director – Market Analysis & Forecasting

  • ERCOT

Donald House, Supervisor – Congestion Revenue Rights

  • ISO New England (ISO-NE)

Kevin Seliga, Manager – Market Administration invited

  • Midcontinent ISO (MISO)

Yok Potts, Manager – FTR Market & Pricing

  • New York ISO (NYISO)

Robert Pike, Director – Market Structure and Product Management invited

  • PJM Interconnection (PJM)

Brian Chmielewski, Manager – Market Simulation, PJM Interconnection

12:00 – 1:00 pm :: Group Luncheon


1:00 – 3:00 pm :: FERC, CFTC and Private Compliance, Surveillance Enforcement Update

This panel will discuss the agencies’ enforcement of their market manipulation and disruptive trading practice rules over the past year.  Further, it will discuss the potential for additional liability through private enforcement actions brought under the antitrust laws.  Topics will include:

  • Summary of FERC and CFTC enforcement actions and open public investigations
  • Discussion of potential future liability under the antitrust laws
  • Possible changes to the agencies’ enforcement postures due to the new administration
  • The increased need for proactive compliance programs and internal trade surveillance

Shaun Ledgerwood, Principal, The Brattle Group

Sean Collins, Director – Division of Analytics and Surveillance, Federal Energy Regulatory Commission (FERC)

Noha Sidhom, CEO, TPC Energy

3:00 – 3:20 pm :: Afternoon Break


3:20 – 5:15 pm :: Is There a Need for FTR Re-design? If So, What Type(s) of Overhaul and Why?  How About:

  • Implementing long-term auctions that satisfy the 10-year requirement stipulated in FERC Order No. 681?
  • Trading outside the electricity market construct on a separate exchange and/or clearinghouse?
  • Following NYISO’s practice of allocating congestion costs incurred due to unplanned transmission outages back to the transmission owner?
  • Following ERCOT’s practice that allows for the purchase of an FTR options contract at every path that is available for a traditional FTR contract?
  • Considering the applicability of CAISO auction reforms to other congestion markets?
  • With the Adoption of Order 844, did FERC get it right with regard to…
    • Uplift cost allocation practices?
    • Transmission constraint penalty factors?

Scott Harvey, Consultant, FTI Consulting

Howard Haas, Chief Economist, Monitoring Analytics

Guillermo Alderete Bautista, Director – Market Analysis & Forecasting, California Independent System Operator (CAISO)

Abram Klein, Managing Partner, Appian Way Energy Partners

5:15 – 6:15 pm :: Networking Reception


Wednesday, January 30, 2019

7:45 – 8:15 am :: Continental Breakfast


8:15 – 10:00 am :: Credit Policies that May Reduce Vulnerabilities and Undue Risk Exposure

  • Lessons learned from “GreenHat” default and other zero-cost position policies
  • Applicability of general commodity market credit rules
  • Adjustments to ISO/RTO governance and credit policies
  • Weighing internal clearing practices vs third-party clearinghouse

Demetri Karousos, Managing Director – Market Administration & Surveillance and Chief Risk Officer, Nodal Exchange

Andrew Stevens, Managing Director, DC Energy

Brian Chmielewski, Manager – Market Simulation, PJM Interconnection

Sharon Midgley, Senior Manager – Wholesale Market Development, Exelon (invited)

10:00 – 10:20 am :: Morning Break


10:20 am – 12:00 pm :: Ensuring the Accuracy of Auction Right Allocations and Market Administration

  •  How frequently should (historical) resources be re-mapped to ensure appropriate auction revenue rights allocations?
  • How significant a role in congestion pricing is the lack of transparency regarding the scheduling of outages?
  • Should a consistent schedule be instituted for all of the RTOs/ISOs to release network model updates prior to FTR auctions?
  • Transmission modeling as it relates to FTR model
  • New equipment into service
  • Project slippage and scheduling uncertainty
  • Over-estimating congestion when it does come online
  • Criteria for outage selection in building the monthly model file (e.g., picking one set of outages to apply to whole)

Steve Lieberman, Director – PJM Regulatory Affairs, American Municipal Power

Scott Harvey, Consultant, FTI Consulting

Robert Pike, Director – Market Structure and Product Management, New York ISO (NYISO) invited

12:00 – 1:00 pm :: Group Luncheon


1:00 – 2:45 pm :: Are Technical or System Limitations Reducing the Efficiency or Performance of the FTR auction(s)?  If so, What Are Those Problems and How Can They Be Addressed?

  • Software limitations?
  • Hardware limitations?
  • Dated algorithms?
  • New clusters?
  • DAM/RT model consistency
  • Accounting for loop-flows across systems
  • Impact on system performance and reliability
  • Initial and operating expenses
  • Perceived benefits

Assef Zobian, Founder & President, Cambridge Energy Solutions

Noha Sidhom, CEO, TPC Energy

Paul Sotkiewicz, President and Founder, E-Cubed Policy Associates

Donald House, Supervisor – Congestion Revenue Rights, ERCOT

2:45 – 3:00 pm :: Afternoon Break


3:00 – 4:45 pm :: Are the Day Ahead market (DAM) products – such as Point-to-Point and/or Up-To Congestion – functioning in a way so as to converge the DAM and RT markets?

  • Is DAM providing appropriate price signals?
  • Why is there divergence between day-ahead and real-time scheduling?
  • Do the markets need an hourly FTR product?
  • Converting monthly FTRs to daily FTRs

Howard Haas, Chief Economist, Monitoring Analytics

Sergio Brignone, FTR Senior Trader, Vitol

Ron Coutu, Founder and Strategic Market Advisor, Strategic Market Design

4:45 pm :: Conference Adjourns

Workshop

FTR Trading Fundamentals & Tools

Monday, January 28, 2019

Overview

This workshop will explain the key concepts of nodal markets as they relate to FTRs, as well as provide a base of knowledge to make the ensuing FTR conference more understandable. The topic of FTRs will be introduced with a brief discussion of the motivation for nodal electricity markets and centralized dispatch. The purpose of FTRs within nodal markets and their financial form will be examined.

The auction process for buying and selling FTRs will be presented with an overview of how each of the different ISOs has a slightly different implementation (and a slightly different name) for FTRs and auctions. These fundamental FTR concepts will be reinforced by the presentation of historical scenarios from the perspective of both hedging and speculative market participants.   Useful tools and techniques for building FTR valuations will be examined, as well as numerical illustrations of an FTR in the money and out of the money, an explanation of drivers behind each, and considering the objectives of these market participants: trading/financial cos, generators and load.

Learning Outcomes

  • Identify and review the price formation mechanisms in nodal markets
  • Review the purpose of financial transmission rights (FTRs) within nodal markets and their financial form
  • Examine the causes of transmission congestion and the relationship to FTRs
  • Sources of info and software to forecast LMP and congestion
  • Discuss the modelling approaches and the tools available for FTR valuation
  • Assess FTRs in the money and out of the money, and an explanation of drivers behind each

Agenda

8:00 – 8:30 a.m. :: Registration and Continental Breakfast

8:30 – 8:45 a.m. :: Overview and Introductions


8:45 – 11:45 a.m. :: Program Content

(includes 15 min morning break)

  • Discuss the Fundamentals of Nodal Pricing
  • Review the Elements of FTR Markets
    • Types
    • Period
    • Settlement
    • Etc.
  • Brief Review of North American ISO/RTO Congestion Management Structures

11:45 a.m. – 1:00 p.m. :: Group Luncheon


1:00 – 4:45 p.m. :: Program Content

(includes 15 min afternoon break)

  • Transmission and Generation Modeling as it Relates to FTR model
    • Shift factors
    • Line outage distribution factors
    • Etc.
  • Useful Tools and Techniques for Building FTR Valuation
  • Sources of Information and Software to Forecast LMP and Congestion
  • Impact on Congestion Pricing of Expected Market Changes
    • New generation
    • Retirements
    • New transmission
    • Changes in the fuel prices markets
    • Etc.
  • Numerical Illustrations of an FTR in the Money and Out of the Money, and Explanation of Drivers Behind Each, and Considering These Market Participant Objectives
    • Trading/Financial cos
    • Generators
    • Load

4:45 p.m. :: Workshop Adjournment

Instructors

Assef Zobian, Founder & President, Cambridge Energy Solutions, LLC

Dr. Assef Zobian is Founder and President of Cambridge Energy Solutions, LLC, which provides information and software tools to assist market participants in analyzing the electricity markets on a locational basis, forecast and value transmission congestion, and to understand the fundamental drivers of short- and long-term prices. He is an electrical engineer with more than a dozen years’ experience in power systems technology, economics, and planning.  Prior to founding CES-US, Dr. Zobian was Vice President of Tabors Caramanis & Associates (TCA), where he worked on some 30 different generation and transmission asset and rights valuations with a total value of more than $20 billion. He led the team to define the structure and tariff for the first for-profit Transmission System Operator (TransCo) in the US.  Before joining TCA, Dr. Zobian was a consultant at Putnam, Hayes & Bartlett, where he worked on developing models for least-cost economic dispatch for secure and economic operation of electric power systems and methods to compute the associated marginal costs of real power.  He earned his MS and Ph.D. from the Massachusetts Institute of Technology. He also has BS and ME degrees from the American University of Beirut.


Ron Coutu, Founder and Strategic Market Advisor, Strategic Market Design

Ron Coutu is the founder and strategic market advisor of Strategic Market Design, a company he formed in 2018 upon retiring from ISO New England (ISO-NE).  At the ISO, he was lead of the Business Architecture and Technology group.  Mr. Coutu has more than 30 years’ experience in markets and software design and development, having been involved in Electricity Markets design and development since 1996.  Over the years his responsibilities included development of market solutions, providing guidance in implementing those solutions and deciphering market designs to various stakeholders and outside entities.  Just a few of his several landmark efforts are the creation of a ‘Standard Market Design’ in New England, patterned after the PJM market design of the time; implementation of ancillary services markets, which included a design for a forward reserve market; and development of a forward capacity market, featuring an aptly named pay-for-performance set of market rules.  He also designed and conducted many of the training modules administered by ISO New England.  Mr. Coutu’s degree is in Computer Science.

Speakers

Guillermo Alderete Bautista, Director – Market Analysis & Forecasting, California Independent System Operator (CAISO)

Sergio Brignone, FTR Senior Trader, Vitol

Brian Chmielewski, Manager – Market Simulation, PJM Interconnection

Sean Collins – Division of Analytics and Surveillance, Federal Regulatory Commission (FERC)

Ron Coutu, Founder and Strategic Market Advisor, Strategic Market Design

Howard Haas, Chief Economist, Monitoring Analytics

Scott Harvey, Consultant, FTI Consulting

Donald House, Supervisor – Congestion Revenue Rights, ERCOT

Demetri Karousos, Managing Director – Market Administration & Surveillance and Chief Risk Officer, Nodal Exchange

Abram Klein, Managing Partner, Appian Way Energy Partners

Shaun Ledgerwood, Principal, The Brattle Group

Steve Lieberman, Director – PJM Regulatory Affairs, American Municipal Power

Sharon Midgley, Senior Manager – Wholesale Market Development, Exelon (invited)

Robert Pike, Director – Market Structure and Product Management, New York ISO (NYISO) invited

Yok Potts, Manager – FTR Market & Pricing, Midcontinent ISO (MISO)

Kevin Seliga, Manager – Market Administration, ISO New England invited

Noha Sidhom, CEO, TPC Energy

Paul Sotkiewicz, President and Founder, E-Cubed Policy Associates

Andrew Stevens, Managing Director, DC Energy

Dr. Assef Zobian, Founder & President, Cambridge Energy Solutions

Location

Royal Sonesta Harbor Court Baltimore

550 Light St

Baltimore, MD 21202

Reserve your room:

please call 1-410-234-0550

Room Block Reserved For:

Nights of January 27 – 29, 2019

Room rate through EUCI:

$ single or double plus applicable taxes
Make your reservations prior to December 28, 2019.

Register

Please Note: Confirmed speakers do not need to register and are encouraged to participate in all sessions of the event. If you are a speaker and have any questions please contact our offices at 1.303.770.8800

EventEarly Bird Before
Friday, January 11, 2019
Standard RateAttendees
Financial Transmission, Congestion and Auction Revenue Rights (FTRs/CRRs/TCRs/ARRs)US $ 1295.00US $ 1495.00

This event has the following workshops:

FTR Trading Fundamentals & ToolsUS $ 895.00
US $ 995.00

Take advantage of these discounts!

  • Attend the Conference and workshop and pay US $ 2,095.00 per attendee (save US $ 95.00 each)

Register 3 Send 4th Free!

Any organization wishing to send multiple attendees to these conferences may send 1 FREE for every 3 delegates registered. Please note that all registrations must be made at the same time to qualify.

Cancellation Policy

Your registration may be transferred to a member of your organization up to 24 hours in advance of the event. Cancellations must be received on or before December 28, 2019 in order to be refunded and will be subject to a US $195.00 processing fee per registrant. No refunds will be made after this date. Cancellations received after this date will create a credit of the tuition (less processing fee) good toward any other EUCI event. This credit will be good for six months from the cancellation date. In the event of non-attendance, all registration fees will be forfeited. In case of conference cancellation, EUCIs liability is limited to refund of the event registration fee only. For more information regarding administrative policies, such as complaints and refunds, please contact our offices at 303-770-8800

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