A review of frequency regulation markets in three U.S. ISO/RTOs

A review of the frequency regulation market practices of the ISO New England, PJM Interconnection, and Midcontinent ISO is presented here. Particular attention is given to market structure, resource eligibility, selection, market clearing and settlements. An overview of frequency regulating reserves and the capacity and performance components is provided. We find that the observed spread in historic market clearing prices can be explained by how each operator incorporates lost opportunity cost into their clearing formulation.