Midwest ISO sees savings, proposes new markets

NEW YORK, Feb 15 (Reuters) - Midwest ISO, the regional power grid operator for 15 states and one Canadian province, said its energy market has brought about $70 million in financial benefits to market participants annually, according to a study.

The study by Virginia-based ICF International also determined the benefits would grow as the ISO adds services, including a proposed ancillary services market.

That market, which is similar to ancillary markets in other power grids, including the neighboring PJM grid, would have boosted benefits by $189 million over the 10-month study period, the study found.

Midwest ISO said it would file with the Federal Energy Regulatory Commission to establish the ancillary services market on Thursday, with hopes to have the new market up and running by the spring of 2008.

The grid operator expects the new market to increase the efficiency of the existing day-ahead and real-time markets while minimizing costs, among other things.

In addition, the ISO's board of directors also approved of a transmission expansion plan on Thursday that recommends $3.6 billion in additional infrastructure and improvements, expected to reduce congestion costs by $2 billion annually.

The transmission plan would allow for the interconnection of 14,400 megawatts of new generation by 2011, including 2,810 MW of renewable resources, while eliminating 22 of the top 30 constraints to market operations.

The Midwest ISO operates the power grid used by more than 36 million people in all or parts of 15 states and one Canadian province -- Illinois, Indiana, Iowa, Kentucky, Michigan, Minnesota, Missouri, Montana, Nebraska, North Dakota, Ohio, Pennsylvania, South Dakota, Virginia, Wisconsin and Manitoba, and administers the wholesale electric market with a generating capacity of more than 132,000 megawatts.