DAYZER Software Identifies Profitable Opportunities in Financial Transmission Rights Market

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Researched by Industrial Info Resources (Sugar Land, Texas)--Energy traders across the U.S. have saved tens of millions of dollars using an information service that identifies transmission constraints in regional transmission groups based on outages at power plants and transmission lines. The software, the Day-Ahead Locational Market Clearing Prices Analyzer (DAYZER), was developed by Cambridge Energy Solutions LLC (CES) (Cambridge, Massachusetts).

DAYZER combines an analysis of the supply and demand for wholesale power in regional transmission markets with plant outage information from Industrial Info Resources, Assef Zobian, founder and president of CES, said in an interview. "To operate effectively in the financial transmission rights (FTR) market, you need an analysis of the market fundamentals, plus temporal and locational intelligence. DAYZER provides all of that."

"We have several clients who each saved tens of millions of dollars using DAYZER," Zobian continued. The software, originally introduced in 2003, has just been updated to cover the Southwest Power Pool (SPP) (Little Rock, Arkansas), a nine-state regional transmission organizations that has members in Arkansas, Kansas, Louisiana, Mississippi, Nebraska, New Mexico, Oklahoma, and portions of Missouri and Texas.

Buying and selling FTRs is a relatively new market that helps allocate scarce capacity in day-ahead transmission markets. "At a given hour on a given day, an FTR can be worth anywhere from zero to hundreds of dollars per megawatt-hour (MWh), and in a few hours during a year, FTRs are worth $1000 or more per MWh," Zobian told Industrial Info.

"The value of an FTR depends on temperature, the regional supply and demand for generation and transmission, and which plants or transmission lines are experiencing outages--both planned and unplanned," continued the CES president."By identifying potential transmission bottlenecks and available capacity, DAYZER helps financial participants and asset owners make more-informed trading and plant startup decisions."

Paul Copello, president of IIR Energy, made this comment: "DAYZER helps our shared customers better monetize their investments and make better-quality trading decisions. It combines proprietary information gathered by both companies and presents it in an easy-to-use, actionable dashboard. Our clients have told us that DAYZER lets them more rapidly identify profitable transactions while steering clear of unprofitable ones. The FTR market is dynamic, and when a power plant or transmission unexpectedly goes down, FTRs can really shoot up in value."

DAYZER can be licensed from CES with an option to subscribe to Industrial Info's outage service. To subscribe to IIR, clients must be members of Industrial Info and CES. The companies have been co-licensing DAYZER for more than five years.

Zobian said the most-congested regional transmission markets, in order of congestion, are:

• Midwest Independent System Operator (MISO) (Carmel, Indiana), which includes utilities operating in Illinois, Indiana, Iowa, Michigan, Minnesota, Wisconsin, and parts of Missouri, Kentucky, North Dakota, South Dakota and Montana


• PJM Interconnection (PJM) (Valley Forge, Pennsylvania), which includes utilities operating in Delaware,Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia and the District of Columbia


• Electric Reliability Council of Texas (ERCOT) (Austin, Texas), which includes utilities operating in Texas


• New York Independent System Operator (NYISO) (Albany, New York), which includes utilities operating in New York state


• Independent System Operator New England (ISO New England) (Holyoke, Massachusetts), which includes utilities operating in Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island and Vermont

"Markets need transparency to operate efficiently," Zobian said. "DAYZER gives market participants unparalleled insight into the day-ahead and hour-ahead markets in the nation's major regional transmission organizations, allowing them to hedge or arbitrage as they see fit."

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.