ISO Market Settlements Fundamentals

Live Streaming Online June 20-21, 2023

An EUCI Program

Click Here to register $1195

If you are unable to attend at the scheduled date and time, we make recordings available to all registrants for three business days after the event

Settlements are the accounting methods and processes by which the transfer of power flows between counterparties are documented and value is derived.  Their primary function is to ensure all power purchases and sales are correctly reconciled to the terms, agreements and tariffs, and that any discrepancies are properly investigated and disputed.  A secondary function of settlements is to provide feedback on the financial implication of power transactions to the Front Office, and to report on the financial performance of transactions to various Back Office departments. 

This training will present a high-level workflow of RTO/ISO market operations from the beginning to the end. It will focus on generation and load, which together cover 80 percent of market activities.  Illustrations from various RTOs will be employed.  Course attendees will obtain insights on how to ensure their settlement organizations are wringing out every dollar of compensation to which they are entitled.

Learning Outcomes

  • Examine power markets design and processes
  • Explain LMP methodology, the basis for market pricing values
  • Compare basic charge types across ISOs
  • Assess why there are different terms for similar market/settlement functions
  • Examine market participant actions and strategies
  • Identify shadow settlement purposes and functions
  • Evaluate the value of feedback to front office
  • Discuss settlements challenges, tips and traps


TUESDAY, JUNE 20, 2023

9:00 a.m. – 5:15 p.m. Central Time

9:00 – 9:15 a.m. :: Overview & Introductions

9:15 – 10:45 a.m. :: Power Industry & Relationship to Wholesale Power Markets

  • Regulatory framework
    • Federal
    • Regional
    • State

ISO/RTO Structure & Market Overview

  • Why and How
  • System Models
  • Functions and Benefits
  • Products/Services
    • Co-optimized clearing in Day-Ahead market
    • Dispatching in Real-Time market
  • Settlements

11:00 a.m. 12:45pm :: Market Segments

  • Comparisons across North American system operators
  • Day-Ahead
  • Real-Time
  • Capacity

The Building Block of the Market Settlements – LMP Pricing

  • Marginal energy component
  • Marginal congestion component
  • Marginal loss component

12:45 – 1:30 p.m. :: Break for Lunch

1:30 – 3:15 p.m. :: Market Participant Actions

  • Power trading organization
    • Front office
    • Middle office
    • Back office
  • Asset bid strategy development
  • Bid/offer price formation and submission
  • Parameters
  • Instruments

Understanding Settlement Charges

  • Market inefficiency
  • Reliability
  • Performance issues
  • Cost Causation principle

3:15 – 3:30 p.m. :: Afternoon Break 

3:30 – 5:00 p.m. :: Charge Scenarios

  • Physical
  • Virtual schedules
  • Load
    • Imbalance charges
    • Market uplift charges
    • Admin charges
  • Generation
    • Imbalance charges
    • Bid cost recovery/make-whole payment
    • Ancillary services
  • FTR
    • Day-ahead congestion
    • Daily/monthly charges
    • True-ups

5:00 pm :: Course Adjourns for the Day


9:00 a.m. – 12:45 p.m. Central Time

9:00 a.m. – 10:45 a.m. :: Comparing Settlement Charges across Markets

  • Similarities among ISOs/RTOs
  • Differences among ISOs/RTOs
  • Imbalance markets

10:45 – 11:30 a.m. :: Morning Break 

11:00 a.m. – 1:00 p.m. :: Settlements Strategy

  • After-the-Fact Shadow Settlements
    • Mapping between settlement charge types and market results/transactions
    • Mapping between settlement charge types and market and charge type calculations, dispute
    • Calculation validation vs shadow settlements
    • Variance analysis
    • Performance analysis
  • Feedback to Front Office
    • Setting the table for efficiency and effectiveness information flow
    • Asset P&L analysis and reporting
    • Operation recommendations
    • Financial impact of performance issues
    • Review of strategy changes on settlements
    • Market settlements changes
    • Leakage
  • Settlements Challenges, Tips and Traps
    • ISO operations and settlements deadlines
    • Mastering your internal trade shop flow
    • Staying abreast of market rules changes
    • Training resources
    • Reporting and data extraction tools
    • Understanding charge code strategy
    • ISO and vendor settlement charge code relationship

1:00 pm :: Course Adjourns


Henry Chu, Lead Product Manager, Power Settlements

Henry Chu is a senior analyst at Dairyland Power Cooperative, which he joined in 2022.  Over his 30-plus year career in the utility/energy industry, he has spent a majority of that time in settlements.  Mr. Chu started at BC Hydro and its marketing arm POWEREX.  While there, he recovered several million dollars in disputes with CAISO.  In 2003, he joined the Midcontinent ISO (MISO) where he worked in various positions, formalizing the market settlement training at the system operator and as well as in support for the integration of four Southern States.  Mr. Chu was also Senior RTO/ISO Energy Market Analyst at Entergy, where he spent 6 1/2 years.  Before joining Dairyland, he served as Lead Product Manager at Power Settlements, a software and consulting company.

Khai Le, Senior Vice President, PCI Energy Solutions

Khai Le is Senior Vice President of PCI Energy Solutions, a supplier of power portfolio optimization software for power generation and trading companies.  Over the past 42 years, he has conducted over 700 seminars on market-based operations, bidding strategies, portfolio optimization, and shadow settlement for utilities and ISOs worldwide. He is currently working with market participants in CAISO, MISO, SPP, PJM, ISO-NE, and ERCOT to automate their bid-to-bill, portfolio-optimization, ETRM, and BA-operations workflows.    Mr. Le has authored more than 100 technical papers on unit commitment, hydro-thermal coordination, emission dispatch, optimization of ancillary services, post analysis, and short-term planning.  He received his BS from Harvey Mudd College and his MS from Carnegie Mellon University.  Mr. Le is a Fellow of the IEEE.