DOE Releases Policies for the Market Operator Performance Standards

On 20 June 2022, the Department of Energy (“DOE”) issued Department Circular No. DC2022-06-0029 or “Providing Policies for the Market Operator Performance Standards,” (“DC2022-06-0029”) which published the Market Operator Performance Standards.

The Market Operator Performance Standards provide the targets and criteria pertaining to the identified performance categories, as well as performance metrics that will serve as a monitoring guide for the DOE and Energy Regulation Commission in the assessment of the Market Operator’s performance. It shall also serve as a guide for the Market Operator to be able to identify the areas in relation to its services to stakeholders which need improvements or enhancements. As provided for in the Wholesale Electricity Spot Market (“WESM”) Rules, the Market Operator shall refer to the Independent Market Operator, which is a private, non-stock, non-profit organization which is responsible for administering the operations of the WESM in accordance with the law.

Under DC2022-06-0029, the Market Operator Performance Standards is categorized as follows:

1. IT Systems – covers the systems used in WESM operations, as well as the main system used in the registration of wholesale and retail participants, and settlement.

2. Market Reports and Data Publication – contains the various publications required to collect various market information such as market results, reports, and registry lists.

3. Forecast Accuracy – the category describes the required forecasts, specifically the following: (i) real-time forecasts used in the determination of ex-ante schedules and prices, (ii) day-ahead projection consisting of day-ahead schedules and prices, and (iii) hour-ahead-projection consisting of hour-ahead schedules and prices.

4. Dispatch Scheduling and Pricing – the category covers the activities in relation to market scheduling and pricing, real-time ex-ante workflows, issuance of pricing errors and conduct of market re-runs, as well as the occurrence of market intervention attributable to the Market Operator.

5. Billings, Settlements and Accounts Management – this covers the financial aspect of the WESM operations such as metering trouble reports, calculation of market transactions, settlement statements, actual monetary transactions, default notices and margin call.

6. Registration and Customer Relations – pertains to tasks associated with the market participant registration, trainings, and helpdesk support. 

The circular also includes performance standards scoring system for Market Operators with a general rating system of 1-5, with 1 being poor and 5 being excellent. The scores shall be computed based on either of the following: (i) quantitative, based on specific scores and weights for all performance categories; (ii) qualitative, based on targets not met and tasks not accomplished; and (iii) calculating the ratings, which is weighted ratings computed from the equivalent score corresponding to the Market Operator’s actual performance multiplied by the assigned weights of the performance categories.

Finally, the circular also provides the monitoring timeline, responsibilities and reports that must be submitted on the performance of the Market Operator. 

For more information, the full circular can be accessed here.