If you have difficulty understanding the U.S. electric power industry and how power transactions are done, you are not alone.
This in-depth online training program provides a comprehensive and clear explanation of the structure, function, and current status of today's U. S. electric power industry; the many industry topics listed below; and how PPAs and other power transactions are done.
Each part of this complex industry is explained piece-by-piece, and then the pieces are integrated so that you will finally understand “how it all fits together.”
This proven online training program features the same material used in the popular in-person classroom seminar. Register today and join the over 10,000 industry professionals who trust the organizers for their energy training needs.
Prerequisites and Advance Preparation
This online training program has no prerequisites. No advance preparation is required.
On-Demand Access Time
The on-demand training presentations are available for a total of 30 days from the time any one of the training presentations is first viewed. After 30 days, your access to the on-demand presentations will expire. However, the PDF formatted training program slides and other documents you receive are yours to keep.
Session 1: Introduction to the U.S. Electric Service System
140 minutes - Available Now.
What You Will Learn
- The properties of electricity including voltage, AC power, direct current, reactive power (vars) and other electric power terms and concepts.
- The basic concept of how AC electromagnetic generators and AC motors work, and why reactive power can be an important issue for industrials and solar generation resources.
- The difference between real power (MW) and electrical energy (MWh), and why the power industry can have negative prices during off-peak hours.
- An overview of the North American electric service system (T&D wires and generation), and how it functions.
- How power moves across transmission lines, and what line losses, shrinkage, var support, ancillary services, and parallel flows are.
- The difference between AC and DC high voltage power lines.
- How the North American power industry is set up, the locations of the six North American AC power grids, and how the electric bulk transmission and distribution systems are structured.
- What control areas and balancing authorities are, and how they "keep the lights on.".
- What the definition and role is of the AGC system, spinning reserve, quick start capacity and load shedding.
- How control areas, balancing authorities, and ISOs prepare the pre-hour operating schedule, and why ISOs and RTOs are fundamentally just large control areas.
- How the re-dispatch of generating units can impact the availability of power line transmission capacity.
- What the terms lambda and security constrained-environmental-economic dispatch mean.
Session 2: Introduction To Today's U.S. Electric Power Industry
142 minutes - Available Now.
What You Will Learn
- A brief summary of the structure and function of the six North American AC power grids.
- Who the participants are in today's electric power industry, and what their respective roles and perspectives are.
- The differences between ISO "organized" market structures and the bilateral world of the non-ISO areas in the Southeast and West.
- A summary of utility cost-of-service regulation, rate cases, tariffs, and why regulated utilities are not fans of conservation, demand response, DSM, rooftop solar, and distributed energy resources ("DER").
- Open (direct) access retail and wholesale competitive markets, and how we arrived at today's bifurcated marketplace.
- State versus federal jurisdiction issues, the role of the courts, why Chicago is an island of PJM, and why "No one is in charge."
- What ISOs, RTOs, balancing authorities, and merchant ITCs are, and how these participants function and interact.
- A map of the current U.S. ISOs and RTOs and how we got to where we are today.
- Why the restructuring of the North American electricity markets is such a complicated issue at all four levels- operating, economic, regulatory, and political.
- The difference between ISOs, RTOs, and the California EIM.
- The definition of for-profit merchant HV transmission power lines, OATT tariffs, and market-based transmission rates.
- Why it is so difficult to build HV power lines and restructure the industry.
- A summary of today's key industry issues and where the U. S. electric power industry is headed.
- The major issue of state generation subsidies and Zero Emission Credits ("ZECs").
- The definition of Locational Marginal Pricing ( "LMP" or "LBMP" ) and a brief discussion of its use.
- What the difference is between NERC and FERC.
- A brief summary of what the terms resource adequacy, "capacity", and California's FRACMOO, and why these are important issues.
Session 3: Introduction to ISO Day Ahead Energy Auctions and Locational Marginal Price (LMP)
82 minutes - Available Now.
What You Will Learn
- A clear explanation of how the ISO/RTO day-ahead two-settlement energy auctions work.
- How an ISO functions as a non-profit semi-firm clearinghouse.
- Real-world adjustments and generator restrictions that have turned ISO auctions into a semi-competitive/semi-administrative market.
- What Locational Marginal Pricing ( "LMP" or "LBMP" ) is and how it is used.
- The difference between Day-Ahead LMP, Hour-Ahead LMP, and Real-Time LMP and how these three markets relate to each other.
- What generator offer price caps and the generation "stack" are, and some of the obligations created when generators receive capacity or resource adequacy payments.
- The definition of the terms operating reserve allocation, accounting true-ups, uplift/make whole payments, and Extended LMP.
- Virtual/Convergence Bidding, Incs/Decs, and Dart swaps.
- What the terms LSE, QSE, SC, and FTR/CRR/TCC mean, and why they are important.
- A brief overview of FTRs/CRRs/TCCs/TRs (Hint: They are the same financial product with different names.)
Session 4: Introduction to Heat Rates, Spark Spreads, Tolling Deals, PPAs, and Heat Rate Linked Power Transactions
160 minutes - Available Now.
What You Will Learn
- What operating and market implied heat rates are, and how they are expressed.
- The difference between a generating plant's operating heat rate and its economic or conversion heat rate.
- How to correctly convert coal, oil and natural gas prices to equivalent electric power prices.
- How to correctly calculate fuel quantities. (For example, how many MMBtu per day of natural gas is required to serve a 50 MW on-peak power deal?)
- What spark spreads and dark spreads are.
- The basics of a spark spread trade, and why merchant generating assets are call options on the spot spark spread.
- What the difference is between a tolling arrangement, power purchase agreement, and heat rate deal.
- What forward and reverse "tolling deals" are, and what can go wrong.
- How heat-rate-linked power transactions can hedge a generator's cross-commodity risk.
- How heat rate deals can be combined with natural gas futures, options, and swaps to manage electricity risk and structure profitable transactions.
- How a heat-rate-linked power transaction and Henry Hub natural gas futures contracts can be combined to hedge electricity price risk. (Example #1)
- How a heat-rate-linked power transaction can be used to sell solar electricity tied to natural gas prices under a multi-year power purchase agreement, and how to financially convert this natural gas determined revenue stream to a fixed sales price for project financing purposes. (Example #2)
- How a heat rate transaction and natural gas financial option can be combined to offer a customer a price cap on physical electricity, thereby virtually mimicking one of the benefits of owning a physical electric generation asset. (Example #3).
Session 5: How to Buy and Sell Physical Power with Bilateral Contracts and PPAs
What You Will Learn
- What the difference is between a bilateral power contract and a power purchase agreement ("PPA").
- Why physical energy transactions are mostly a game of virtual contractual promises with no need for warehouses or inventory.
- How simultaneous title transfer works and when payment is due.
- The meaning of financially firm, "LD", interruptible, unit contingent, system firm, full requirements, and where to view the contract language of the various industry-accepted master sales & purchase agreements.
- How to move physical power using OASIS and NERC tags, wheeling, pancaking rates, and why companies often move physical power financially causing it to ‘jump’ between regions.
- The difference between physical, scheduled, and contract path power flows and the commodity ownership chain.
- What "sellers choice" and "buyers choice" are, and how transaction "daisy chains" form at virtual trading hubs.
- How and why the majority of physical bilateral power transactions are “booked-out” and settled in cash.
Session 6: How Bilateral Power Marketing Transactions Are Done within an ISO Footprint Using Financial Power and LMP Auctions
What You Will Learn
- How to transport physical power financially causing it to ‘jump’ between regions which can help renewable energy reach new PPA customers.
- How commodity swaps, CFDs, and financial futures contracts can be combined with ISO energy auctions to give a company "the best of both worlds" when buying, selling, and moving power.
- A detailed listing of all the costs components contained within a competitive end-user price including supply cost, LMP spreads, HV and LV NITS (HV & LV TAC in California), UCAP, Resource Adequacy, FRACMOO (California), and the five different ancillary service charges.
- What "Basis Risk" is and how a company can hedge this risk financially using an ICE, trading desk, or ISO financial product.
- What FTRs, CRRs, and TCCs are; how they help an ISO reduce transmission congestion; how these products can hedge risk; and how they can cause transaction losses for a power marketer.
- Why most bilateral power transactions with an ISO/RTO footprint are purely financial, and why generators, LSEs, QSEs, and SCs, often self-schedule.
- What Fix-for-Floating swaps, Dart swaps, and financial futures contracts are.
- Why a power marketer often has to underprice risk to get a deal done.
President PGS Energy
John Adamiak is President and Founder of PGS Energy Training and an expert in energy derivatives and electric power markets. Mr. Adamiak is a well-known and highly effective seminar presenter who has over 20 years experience in the natural gas and electric power industries. His background includes 15 years as a seminar instructor, 9 years of energy transaction experience, and 6 years of strategic planning and venture capital activities. John's academic background includes an M.B.A. degree from Carnegie Mellon University.
This training program will benefit a wide variety of organizations in the electric power, financial and energy industries. Among those who will benefit from this seminar include energy and electric power executives; attorneys; consultants, accountants & auditors, asset developers, engineers, economists, corporate planners, entrepreneurs, government regulators; rate engineers, traders & trading support staff; marketing, sales, purchasing & risk management personnel, and plant operators.
Types of companies that typically attend this program include electric utilities; banks & financial houses; asset developers, renewable energy firms, ISO staff, industrial companies; consulting & law firms; accounting firms, municipal utilities; government regulators and electric generators.