AEI ISO Alerts 2022 Service Notice

Carlisle, MA -- June 02, 2022 -- AEI will be resuming its free ISO Alert service to help subscribers avoid coincident peaks with the electric power grid during the coming months of warm weather and heavy demand. The service will resume on Monday, June 13th, 2022 and continue through September 30th, 2022.

New Peaks are Happening Daily

As usual for the start of the season, new 2022 peaks are happening on a routine basis on all 7 domestic systems we track, but it's very early in the season and only ERCOT has hit 90% of its recent annual peaks; most have barely passed 50% of their expected annual peak for this year. SMS alerts will only be sent when demands exceed a minimum floor we have set for each system in an effort to minimize annoying false positives. For your planning purposes, we are publishing the minimum floor levels that must be exceeded before we will issue any alerts that have a decent chance of being within striking distance of a recent annual peak. These levels are arbitrarily determined by taking 90% of the lowest peak load in the past 5 years. For 2022, these floor levels are as follows:

System	2022 Floor, MW	2021 Peak, MW	Min 5-Year Peak, MW
ISO New England	21,400	25,279	23,753 (2017)
NY ISO	26,700	30,944	29,704 (2017)
PJM	131,100	148,957	145,638 (2017)
MISO	105,300	116,774	116,975 (2020)
SPP	44,000	50,818	48,882 (2020)
CA ISO	39,200	43,591	43,591 (2021)
ERCOT	62,500	73,627	69,496 (2017)

So, for example, if ISO New England were to project a peak load of 20,900 MW on certain day, that would be about 500 MW lower than our projected minimum level for this season and, therefore, no alerts will be issued on that day if that peak projected load is accurate. On some later day, if system loads exceed 21,700 MW, then our minimum floor level will have been reached and alerting will commence for the season. Alerts are issued in the hours before an anticipated new high for the year. In summary, the first alerts you see in the early part of the season are unlikely to be the final annual peak loads but it cannot hurt to use them to rehearse your DR protocols.

Customize Your Morning Report Delivery

With a new feature introduced in 2020, you are able to change the "Minimum Morning Report Rating" from "1" to "2 or higher" if you prefer not to hear from us on those days when the grid rating is a 1 out of 5. Statistically speaking, there will usually be less than 10 days during the next four months where a given grid will have a rating of 2 or higher. You can eliminate most of the morning reports by changing this setting from a "1" to "2 or higher". While we can never guarantee that a peak hour will not occur on a day rated 1 out of 5, it's never happened in the past 5 years. If you are configured to receive SMS alerts, you will still get those if there is a sudden peak that was not forecast by the ISO. To change this setting, use the link at the bottom of any Morning Report email you receive going forward.

Pandemic Uncertainty

We wrote an article in Energy Central back in 2020 that showed an approximate energy usage drop of 5.8% across the entire power grid during the first two months of the COVID-19 pandemic. We had expected a more dramatic drop in demand because of the major shutdowns across all aspects of the U.S. economy, but that scenario did not materialize. Based on that, and given the upswing in the broader economy today and the increased effects of climate change, we are expecting normal to higher levels of activity on the power grid this summer. One mitigating influence could be a drop in residential demand for this year as people feel more inclined to leave the home and move about in public, exchanging residential energy use for an increased usage in buildings and transportation. Utility outages due to extreme weather events, especially in ERCOT, should normally be accounted for in the daily forecasts that we use in our morning report but we cannot be certain if and when reserve margins may fall below preferred levels in any given region. In other words, we don't warn you about the prospects for brownouts or blackouts on any given day; if a given utility forecasts a certain peak system load, we assume they are expecting to fulfill that capacity requirement.

Capacity Charges

The good news for this year is that capacity charges in New England are lower at $3.80 per kW-month, down from $4.63 last year. This trend should show up as lower costs in your demand charges, and if they don't you really should let us look at your TOU profiles or put you in touch with our partners who can help on the supply side. For those of you in the PJM service area, prices this year have backed off slightly to around $50 per mW-day (RTO) and higher, but just the same we continue to advise that you do whatever it takes to avoid coincident peaks because of variability across the different LDAs.

For more information, or to signup for this free service, please visit the AEI ISO Alerts website at https://www.aeintelligence.com/products-and-services/aei-iso-alerts.

###