Bulk Power Wholesale Markets-ISOs 69 kV/132 kV DSO to ISO/RTO * Forecast Net Load and Dispatchable Products * Schedules and Bids * Metering and Telemetry DSO Functions * Distribution Planning * Distribution Reliability * Operations Scheduling - Forecasting (Load, DR/DER) - Scheduling (DR/DER, Market) * Dispatch and RT Control * Retail Metering and Settlements * Retail Market Administration ISO/RTO to DSO * Schedules * Dispatch Instructions * Prices * Settlements Transmission Substation P-Node Economic Optimization * Supply/Demand Optimization * Storage Scheduling * Volt/VAR Optimization * Loss Minimization * Optimization Services 34 kV 4-13 kV Storage Microgrids 600/480/240/120 V Figure 4. The DSO facilitating demand-side participation in wholesale and bulk power operations. ISO: independent system operator; RTO: regional transmission organization; DR: demand response; Volt/VAR: voltage/reactive volt-ampere. TAbLe 1. The value of bulk power ancillary services. ISO/RTO CAISO PJM MISO NYISO (West) Nonspinning Res. (US$/MW/h) US$1.50 US$0.40 US$1.50 US$1.05 Spinning Res. (US$/MW/h) US$5.00 US$10.00 US$4.00 US$4.34 Regulation (US$/MW/h) US$10.00 US$30.00 US$12.00 US$10.00 Capacity Value (US$/kW-yr) US$30.00 US$40.00 US$2.00 US$64.00 Ancillary Services (Average Prices): CAISO: California ISO; PJM: Pennsylvania Jersey Maryland; MISO: Mid-continent ISO; NYISO: New York. Aggregation of demand-side facilities into VPPs may be accomplished by aggregators of retail customers of the distribution utilities to whose service domain the underlying distributed assets are connected. A new distribution system operator (DSO) construct has emerged in recent years as the venue to facilitate the participation of demand-side assets in bulk power system and wholesale markets. The DSO may simply act as a custodian of distribution system reliability while facilitating bilateral transactions between the aggregators and the bulk power system operators or may facilitate a retail market. The DSO construct is shown in Figure 4. 26 I E E E E l e c t r i f i c ati o n M agaz ine / december 2016 Depending on their size and voltage level connectivity, microgrids, and commercial/industrial buildings may use an aggregator, act themselves as an aggregator, or use the DSO services to interact with the bulk power and wholesale markets. The benefits of bulk power services to the grid are established through market prices in bulk power markets. Table 1 shows the range of prices for these products in selected independent system operator/regional transmission organization markets. There are also emerging bulk power services, such as ramping and PFR, that are only offered in some organized markets and for which