LMP Modeling, Analysis and Forecasting

LMP Modeling, Analysis and Forecasting

December 6-7, 2022 | Online :: Central Time

“This course is exactly what I was looking for to better understand price formation and dispatch in the electricity market.  The speaker is the only industry expert who addresses this topic in such complete detail.”  Associate, EDF Renewables

“Great way to learn how LMPs are calculated.” Rates and Policy Director, Northwest Requirements Utilities

“This course provided the insights into price formations that has taken my understanding to the next level.”  Market Operations Engineer, ERCOT

This course examines the value of understanding and forecasting electricity prices in the wholesale markets.  The information will benefit anyone who deals with current and future locational marginal prices (LMPs) in wholesale electric markets by providing a deeper understanding of what drives them: 1) the complexity of supplying electrical energy around the clock 2) across an imperfect transmission grid, 3) from a variety of suppliers 4) without benefit of large-scale storage or rationing.  It addresses itself to wholesale power market participants who confront these questions:

  1. How should I price “market risk” in my proposed project?
  2. Why is my existing project suffering and what can I do about it?
  3. What makes a credible LMP forecast?

The content will cover guidance about forecasting prices – with or without sophisticated modeling tools – in the face of new policies, an 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 market forms prices in the real world.  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 emerging bulk power developments using a simplified market model.  For those attendees who want to understand what some people call “magic”, an optional related workshop is dedicated to exposing the mathematics that solve for “what-if” examples.

Learning Outcomes

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

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


    Tuesday, December 6, 2022 : Central Time

    8:45 – 9:00 a.m.
    Log In and Welcome

    12:45 – 1:30 p.m.
    Lunch Break

    9:00 a.m. – 5:00 p.m.
    Course Timing

    9:00 – 9:15 a.m. :: Overview and Introductions

    9:15 – 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, etc.)
    • ISO transmission plans (Adjusted Production Cost)
    • Elective Transmission Upgrades
    • Generation investment and retirement decisions
    • PPA negotiation (CfD, basis, curtailment, negative LMP risks)
    • Trading (physical, virtual, speculative)
    • Financial Transmission Rights (FTR /TCR / TCC/ CRR)
    • Regulatory & Legislative (Market reform debate)
    • Mark-to-Model

    10:15 – 10:30 a.m. :: Electricity Supply, Demand and Transmission Market Basics

    • Day-ahead (DA) markets
    • Real-time (RT) markets
    • Congestion hedging and virtual trading

    10:30 – 10:45 a.m. :: Morning Break

    10:45 – 11:20 a.m. :: Solving Five Problems Leads to Prices

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

    11:20 a.m. – 12:45 p.m. :: Locational Marginal Prices

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

    12:45 – 1:30 p.m. :: Break for Lunch

    1:30 – 3:00 p.m. :: Developing a Realistic Dispatch on a Simple Network

    • Energy and reserves, perfect grid
      • Energy-price hedges
    • Transmission congestion
      • FTRs/CRRs
    • Security constraints (“N-1” on top of “N-0”, “flowgates”)

    3:00 – 3:15 p.m. :: Afternoon Break

    3:15 – 4:30 p.m. :: Real World Examples

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

    4:30 – 5:00 p.m. :: Distribution of Homework Assignments

    • Introduction and discussion

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


    Wednesday, December 7, 2022 : Central Time

    8:45 – 9:00 a.m.
    Log In

    9:00 a.m. – 12:15 p.m.
    Course Timing

    9:00 – 10:00 a.m. :: Dispatch Accounting for Losses

    • Loss factors and the marginal loss component

    10:00 – 10:30 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

     10:30 – 10:45 a.m. :: Morning Break

    10:45 – 11:15 a.m. :: Worked Examples (cont’d)

    • Impact of carbon tax
    • Impact of high renewable energy penetration
    • Price spikes and negative prices
    • Extended LMP
      • Block-loaded resources
      • Fast start resources

    11:15 – 11:45 a.m. :: Real-World Case Studies

    • Applications of forecasting LMPs

    11:45 a.m. – 12:15 p.m. :: Challenges of Forecasting

    • Statistical versus fundamental models
    • What to expect from various assumptions
      • Generation expansion and retirement
      • Fuel prices
      • Transmission constraints
      • Declining demand
      • Incentives
    • Long-term LMP forecasting — fact or fiction?
    • Benchmarking hints
    • Questions to ask consultants!

    12:15 p.m. :: Course Adjourns


    The Mechanics of Calculating LMPs

    Wednesday, December 7, 2022 : Central Time


    This workshop is dedicated to exposing the mathematics for solving “what-if” examples, for those attendees who want to understand what some people call “magic”.  It is complementary to the primary course, converting the principles and practices into specific scenarios.

    Workshop attendees are encouraged to have a laptop equipped with the Excel Solver add-in.

    Learning Outcomes

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

    • Examine the fundamental drivers of electricity prices (supply, demand, transmission network)
    • Review LMP calculation methods
    • Reinforce understanding through experiments using an optimization model


    12:45 – 1:00 p.m.
    Log In

    1:00 – 4:45 p.m.
    Workshop Timing

    1:00 – 4:45 p.m. :: Workshop Timing

    • Unit commitment
    • Co-optimization of energy and reserves
    • Approximate solution by Lagrangian Relaxation
    • Solution by linear programming
    • Interactive model in MS Excel

    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.

    Online Delivery

    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 attendees for 7 days after the event


    LMP Modeling, Analysis and Forecasting

    December 6-7, 2022 | Online
    Individual attendee(s) - $ 1295.00 each

    Volume pricing also available

    Individual attendee tickets can be mixed with ticket packs for complete flexibility

    Pack of 5 attendees - $ 5,180.00 (20% discount)
    Pack of 10 attendees - $ 9,065.00 (30% discount)
    Pack of 20 attendees - $ 15,540.00 (40% discount)


    The Mechanics of Calculating LMPs

    December 7
    Individual attendee(s) - $ 495.00 each
    - OR - I choose to attend remotely
    Individual remote connections(s) - $ 495.00 each

    Volume pricing available for remote connections

    Individual attendee tickets can be mixed with ticket packs for complete flexibility

    Pack of 5 attendees - $ 1980.00
    Pack of 10 attendees - $ 3465.00
    Pack of 20 attendees - $ 5940.00

    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 November 04, 2022 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




    EUCI is accredited by the International Accreditors for Continuing Education and Training (IACET) and offers IACET CEUs for its learning events that comply with the ANSI/IACET Continuing Education and Training Standard. IACET is recognized internationally as a standard development organization and accrediting body that promotes quality of continuing education and training.

    EUCI is authorized by IACET to offer 1.0 CEUs for this course and 0.4 CEUs for the workshop.

    Instructional Methods 

    This program will use PowerPoint Presentations and group discussions. 

    Requirements For A 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

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

    Course CPE Credits: 11.5
    Workshop CPE Credits: 4.5
    There is no prerequisite for this Course.
    Program field of study: Specialized Knowledge
    Program Level: Basic
    Delivery Method: Group Internet Based
    Advanced Preparation: 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. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its web site: www.nasbaregistry.org



    Who Should Attend

    Representative Organizations

    • Independent power producers (IPPs)
    • Load-serving entities (LSEs) and utilities
    • Local distribution companies (LDCs)
    • Merchant power ventures
    • Merchant transmission providers
    • Wholesale trading companies
    • Power marketers
    • Energy service providers/companies (ESPs/ESCOs)
    • Smart grid resource providers
    • Demand response providers/aggregators
    • Large energy customers
    • Consumer advocates
    • Regulatory counsel
    • State regulatory staff


    • Generation bidding
    • Scheduling
    • Asset management
    • Marketing and business development
    • Financial marketers
    • Power trading
    • Power supply analyst
    • Contract administrators and analysts
    • Energy management
    • Revenue assurance
    • Energy operations and supply
    • Retail load supply
    • Structured power
    • Bulk power
    • Energy finance and analysis
    • Confirmation administration
    • Procurement management

    By clicking Accept or closing this message, you consent to our cookies on this device in accordance with our cookie policy unless you have disabled them. more information

    By clicking Accept or closing this message, you consent to our cookies on this device in accordance with our cookie policy unless you have disabled them. You can change your cookie settings at any time but parts of our site will not function correctly without them. We use cookies during the registration process and to remember member settings.