Abstract
Regional ISO/RTOs monitor Reactive Support and Voltage Control (RS&VC) service, which is part of transmission settlements, not market settlements. Cost-based, a bilateral arrangement between the transmission provider and the qualified generator and increasing need for grid balancing services in the future, are all contributing factors to a new RS&VC compensation methodology. We proposed two options to mitigate these challenges: 1) Local Resource Zone (“LRZ”) and 2) Reserve Zone Pricing (“RZP”). The first option requires moving from Transmission Pricing Zone (“TPZ”) to LRZ pricing. Identical to current resource adequacy construct, MISO will need to release their RS&VC needs for the upcoming planning year. In the second option, the RS&VC price is indexed to a specific Ancillary Service (A/S) product like Regulation (as an example), the practical way of reporting that price would be comparable to regulation price. The RZP option takes more resources to implement but will be technically closer to the market objectives.
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