By - Jon Brown

LMP Analytics and Predictive Modeling
July 23-24, 2018 | Chicago, IL

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Anyone who deals with current and future electricity prices will benefit from a deeper understanding of what drives them.  The volatility of prices reflects the complexity of supplying power around the clock, across an imperfect transmission grid, from a variety of suppliers and without benefit of large-scale storage or rationing.

Attendees will receive guidance about forecasting prices — with or without sophisticated modeling tools — in the face of new policies, evolving resource mix and changing market rules. Emphasis will be placed on describing U.S. locational marginal pricing (LMP) style markets.  Going beyond the traditional three-bus LMP example, attendees will learn how the markets form prices in the real world. 

The first part of this course offering examines the value of understanding and forecasting electricity prices in the wholesale markets.  Attendees will become familiar with how this knowledge supports decision-making, trading and negotiation.  Following a review of LMP formation, real-world situations will be dissected using publicly-available data.  Finally, some solved “what-if” examples will illustrate the impact on LMPs of various new market rules, policies and shifting resource developments using a simplified market model.

The related, optional workshop is dedicated to exposing the mathematics of solving of the “what-if” examples, for those attendees who want to understand in more granular detail how to derive LMP values.

Learning Outcomes

Using real-world situations and illustrative examples, this instructional course will:

  • Examine the fundamental drivers of electricity prices (supply, demand, transmission network, and market rules)
  • Review the value and use of price forecasts for multiple market participants
  • Explain the LMP distinctions between “day ahead” (DA) and “real time” (RT) markets
  • Assess the LMP dynamics driven by unit commitment – how the market chooses which suppliers to buy from
  • Explain how LMP is one outcome of economic dispatch – how the market decides how much to buy from each supplier
  • Identify how different resources are offered into the markets
  • Illustrate locational marginal price (LMP) formation with examples
  • Review input data for fundamentals-based forecasting (market mimicking)



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 1.0 CEUs for this course and 0.3 CEUs for the workshop.

Upon successful completion of this event, program participants interested in receiving CPE credits will receive a certificate of completion.

Course CPE Credits: 11.0 for the course 4.0 for the workshop.
There is no prerequisite for this Course.
Program Level: Beginner/Intermediate
Delivery Methood: Group-Live
Advanced Preperation: None

CpeEUCI is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit.

Instructional Methods

PowerPoint presentations and case studies will be used in program.

Requirements For Successful Completion Of Program

Participants must sign in/out each day and be in attendance for a minimum of four hours to be eligible for any continuing education credit.


Monday, July 23, 2018

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

8:30 – 9:00 a.m. :: Overview and Introductions  

9:00 – 10:15 a.m. :: Value and Uses of Price Forecasts

  • Impact of market rule changes
    • Loss pricing
    • Extended LMP
    • Subsidies
  • Evolving resource mix
    • Renewables
    • Storage
    • Coal retirement
    • Etc
  • Generation bidding
    • Gas nomination
    • Water release
  • ISO transmission plans (adjusted production cost)
  • Elective transmission upgrades
  • Generation investment and retirement decisions
  • PPA negotiation
    • Contract for difference (CfD)
    • Basis
    • Curtailment
    • Negative LMP risks
  • Trading
    • Physical
    • Virtual
    • Speculative
  • Financial transmission rights (FTR/TCR/TCC/CRR)
  • Regulatory and legislative (market reform debate)
  • Mark-to-Model

10:15 – 10:30 a.m. :: Morning Break

10:30 – 11:15 a.m. :: Defining the Price of Electricity

  • Demand forecasting
  • Unit commitment
  • Economic dispatch
  • Operating reserves
  • Power flow

11:15 a.m. – 12:00 p.m. :: Locational Marginal Prices

  • Marginal energy
  • Marginal loss
  • Marginal congestion
  • Shadow prices
  • Shift factors

12:00 – 1:00 p.m. :: Group Luncheon

1:00 – 2:30 p.m. :: Real World Examples

  • Understanding LMPs through published data
    • California ISO (CAISO)
    • ERCOT
    • ISO New England (ISO-NE)
    • Midcontinent ISO (MISO)
    • New York ISO (NYISO)
    • PJM Interconnection (PJM)
    • Southwest Power Pool (SPP)

2:30 – 3:00 p.m. :: Networking Break

3:00 – 4:45 p.m. :: Developing a Realistic Dispatch on a Simple Network

  • Energy and reserves, perfect grid
  • Transmission congestion
  • Dispatch accounting for losses
  • Security constraints (“N-1” on top of “N-0”, “flowgates”)

4:45 – 5:00 p.m. :: Review and Recap

5:00 p.m. :: Course Adjourns for Day

Tuesday, July 24, 2018

7:45 – 8:15 a.m. :: Continental Breakfast

8:15 – 10:00 a.m. :: Worked Examples using the simple Network (solutions only)

  • Impact of higher fuel price (e.g., natural gas)
  • Impact of new transmission build (example: public policy transmission)
  • Virtual bids and offers
  • Impact of carbon tax
  • Impact of high renewable energy penetration
  • Price spikes and negative prices

10:00 – 10:15 a.m. :: Morning Break

10:15 – 11:00 a.m. :: Input Data for Fundamental Modeling

  • Resource cost curves (heat rate, etc.)
  • Fuel and emissions allowance prices
  • Demand
  • Transmission network model
  • Transmission constraints
  • Benchmarking hints
  • Questions to ask consultants!

11:00 – 11:45 a.m. :: Real-world Case Studies

  • Applications of fundamental modeling

11:45 a.m. :: Course Adjourns


The Mechanics of Calculating LMPs

Tuesday, July 24, 2018


Bulk power markets like MISO, PJM and NYISO are modifying their price formation to reduce uplift costs and make LMP better reflect the true cost of energy.  The resulting LMPs (known as “extended LMP”) exhibit some significant differences from traditional LMPs.

This workshop is dedicated to exposing the mathematics for solving the examples presented in the course.  An example of unit commitment will be presented, and “extended LMP” price formation will be described and examined through variations on the worked examples. 

Learning Outcomes

Expanding on the course material, this workshop will:

  • Illustrate the solution of the worked LMP examples
  • Apply an example of security constrained unit commitment (SCUC)
  • Discuss start-up costs, no-load costs, ramp rates, minimum run-time and down-time
  • Examine the motivation behind introducing “Extended LMP”
  • Assess the anticipated differences in pricing between LMP and “Extended LMP” and their impact on different resource types (renewable, fast-start, demand response)
  • Demonstrate worked examples of “Extended LMP” and contrast them with the LMP examples

Workshop Agenda

12:30 – 1:00 p.m. :: Registration

1:00 – 2:30 p.m. :: Mathematical Solution of LMP Formation Worked Examples

  • Setting up the n-1 dispatch
  • Impact of higher fuel price (e.g., natural gas)
  • Impact of new transmission build (example: public policy)
  • Virtual bids and offers
  • Impact of carbon tax
  • Impact of high renewable energy penetration
  • Price spikes and negative prices

2:30 – 2:45 p.m.  :: Afternoon Break

2:45 – 3:30 p.m. :: Introduction to SCUC (Security Constrained Unit Commitment)

3:30 – 3:45 p.m. :: Rationale for “Extended LMP”

3:45 – 4:45 p.m. :: Examples of Extended LMP vs LMP

4:45 p.m. :: Workshop Adjourns


Nicholas Pratley has 30 years of experience in power systems engineering and analysis, including 12 years simulating wholesale power markets in the U.S., Canada and Europe. His clients have included transmission owners, municipal utilities, electric co-ops, generation developers and power traders.  He holds bachelor’s and master’s degrees in Electrical Engineering from McGill University and the University of Montreal.


Millennium Knickerbocker Hotel
163 E Walton Pl
Chicago, IL 60611

To reserve your room, please call 1-312-751-8100
Please indicate that you are with the EUCI group to receive the group rate.

Click here to book online

Room Rate:

The room rate is $189.00 single or double plus applicable taxes.

Room Block Dates:

A room block has been reserved for the nights of July 22 – 23, 2018.

Rate Available Until:

Make your reservations prior to July 6, 2018. There are a limited number of rooms available at the conference rate. Please make your reservations early.


Event Standard RateAttendees

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