FTR Fundamentals

Managing Congestion Risk in ISOs/RTOs

April 22-23, 2021 | Online, Central Time

0421-ftr-fundamentals

Financial Transmission Rights (FTRs) are a key market mechanism employed by ISOs, their members and market participants to achieve financial balance in the operation of wholesale electricity markets. 

This course will: 

• Explain the key concepts of financial transmission rights (FTRs) and congestion revenue rights (CRRs)
• Spell out the general principles governing the allocation and auction processes for buying and selling FTRs/CRR
• Illustrate how the North American ISOs implement their FTR/CRR and congestion-based mechanisms, including the different terms assigned to similar functions
• Detail FTR market nuances and trading strategies

This invaluable training is an efficient path to learning one of the most integral components of LMP markets. 

Learning Outcomes

• Analyze the purpose and components of FTRs and the motivation for nodal electricity markets
• Review congestion and LMP concepts – why we need an FTR/CRR product
• Identify where congestion comes from?
• Discuss why there is a price difference between load and generator
• Review the process for FTR auctions and ARR allocations
• Compare and contrast different ISO implementations of FTRs
• Review the decision process for both hedging and speculative market participants
• Review current hot topics with FTRs

Thursday, April 22, 2021

9:00 – 9:15 am :: Overview & Introductions

9:15 – 10:15 am :: Fundamentals of Nodal Pricing

• Basic LMP constructs
• Relationship to congestion

Transmission and Congestion

• Kirchhoff’s Laws
• Shift factors

Why FTRs?

10:15 – 10:30 a.m. :: Morning Break

10:30 am – 12:15 pm :: Elements of FTR Markets

• Auctions
• Periodicity
• Relationship to energy market
• Settlement

12:15 – 1:00 p.m. :: Lunch Break

1:00 – 2:45 pm :: Congestion Funding

• Flow of congestion funding
  • Where does the congestion money come from?
  • – How it gets paid out
• Revenue adequacy concepts

2:45 – 3:00 pm :: Afternoon Break

3:00 – 4:45 pm :: Comparison of FTR/CRR/TCR Processes in Different ISOs

• California ISO (CAISO) – CRRs
• ERCOT – CRRs
• Midcontinent ISO (MISO) – FTRs
• PJM Interconnection (PJM) – FTRs
• Southwest Power Pool (SPP) – TCRs 

4:45 pm :: Course Adjourns for Day

Friday, April 23, 2021

9:00 – 10:30 am :: Assessing the Impact on Congestion Pricing Influenced by Market Changes Such as…

• New generation
• Retirements
• New transmission
• Changes in the fuel prices markets
• Etc.

10:30 – 10:45 a.m. :: Morning Break

10:45 am – 12:15 pm :: Market Participant Objectives & Drivers

• Financial traders
• Generators
• Load serving entities

FTR Transaction Strategy Implementation

• Bid parameters and structure

12:15 – 1:00 pm :: Lunch Break

1:00 – 3:00 pm :: Settlement Elements

• Auction costs and revenues
• Congestion funding
• Allocations of under-funding
• Shadow settlement

3:00 – 3:15 pm :: Afternoon Break

3:15 – 4:45 pm :: Related Topics

• “Up To Congestion” (UTC) bidding
• Market-to-Market process and payments
• Storage as a transmission asset
• Market Oversight

4:45 pm  ::  Course Adjournment

Yohan Sutjandra, Manager – Quantitative Analytics and Research, The Energy Authority

Yohan Sutjandra is Manager of Quantitative Analytics and Research at The Energy Authority (TEA), where he and his team are responsible for modeling the electricity markets that TEA clients participate in, keeping abreast of changes in the market design, and developing analysis to assess the impacts of any proposed market design changes.  He has worked on a variety of projects including applying utility theory to evaluate risk-averse strategies, developing a prototype to the BPA Slice Optimizer, and developing strategies for participation in the congestion rights (CRR/FTR/TCR) allocations and auctions, thereby improving clients’ portfolio values.  Mr. Sutjandra’s team is currently developing strategies to optimally offer into the CAISO market hybrid resources, which pair a storage resource with a different resource type.

We will be using Microsoft Teams to facilitate your participation in the upcoming event. You do not need to have an existing Teams account in order to participate in the broadcast – the course will play in your browser and you will have the option of using a microphone to speak with the room and ask questions, or type any questions in via the chat window and our on-site representative will relay your question to the instructor.

• IMPORTANT NOTE: After November 30 you will not be able to join a Teams meeting using Internet Explorer 11. Microsoft recommends downloading and installing the Teams app if possible. You may also use the Edge browser or Chrome.
• You will receive a meeting invitation will include a link to join the meeting.
• Separate meeting invitations will be sent for the morning and afternoon sessions of the course.
  • You will need to join the appropriate meeting at the appropriate time.
• If you are using a microphone, please ensure that it is muted until such time as you need to ask a question.
• The remote meeting connection will be open approximately 30 minutes before the start of the course. We encourage you to connect as early as possible in case you experience any unforeseen problems.

Please Note: This event is being conducted entirely online. All attendees will connect and attend from their computer, one connection per purchase. For details please see our FAQ

If you are unable to attend at the scheduled date and time, we make recordings available to all registrants for three business days after the event

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Credits

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 1.3 CEUs for this event.

Requirements for Successful Completion of Program

Participants must log in each day and be in attendance for the entirety of the event to be eligible for continuing education credit.

Instructional Methods

Case studies, PowerPoint presentations, and panel discussions will be used in this program.