NAEMA is an independent, nonprofit trade association consisting of entities who market energy or provide services to the energy industry.
NAEMA focuses principally on the electric industry and its members are active throughout North America — including MISO, SPP, NYISO, PJM, IESO, ISO New England, ERCOT, Florida, and the WECC.
NAEMA’s roots reach back to the Mid-Continent Area Power Pool (MAPP) Power and Energy Market (PEM) which was established by the Mid-Continent Area Power Pool members in 1996. In 2003, the PEM unbundled from MAPP and changed its name to the Mid-Continent Energy Marketers Association (MEMA). In 2011, recognizing that NAEMA had significantly outgrown the Mid-Continent area, NAEMA changed its name to the North American Energy Markets Association (NAEMA).
Significant Events Leading To NAEMA
The northeast blackout of 1965 was a significant disruption in the supply of electricity on Tuesday, November 9, 1965, affecting parts of Ontario in Canada and Connecticut, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, Pennsylvania, and Vermont in the United States.
New York City Blackout
The North American Electric Reliability Corporation is a nonprofit corporation based in Atlanta, Georgia, and formed on March 28, 2006, as the successor to the North American Electric Reliability Council.
North American Electric Reliability Corporation formed in response to the New York Blackout.
The Mid-Continent Area Power Pool (MAPP) is one of the nine regional reliability councils comprising the North American Electric Reliability Council (NERC). The MAPP region covers all of the states of Iowa, Minnesota, Nebraska, North Dakota, most of South Dakota, and portions of the states of Illinois, Michigan, Missouri, Montana and Wisconsin. The Canadian provinces of Manitoba and Saskatchewan are included in the MAPP region as well.
Mid-Continent Area Power Pool (MAPP) Formed
MAPP Agreement expanded to include Service Schedules (contracts) to facilitate energy transactions between members. The various cost-based Service Schedules were designed for Reliability and Economics. MAPP members did not charge each other losses or transmission costs at this time. MAPP was a free-wheeling power pool. For reliability purposes MAPP members agreed to supply each other with “Emergency Energy” when required by the loss of a members generating unit. The price for Emergency Energy was set by the power pool each year.
MAPP expands its member communications system and implements an electronic bulletin board whereby members transact energy sales and purchases. The bulletin board was named POET (Program to Optimize Energy Transactions). This program matched the lowest cost supplier’s incremental cost with the highest cost buyer’s decremental cost. Both costs were added together and divided by two. The seller would make money and the buyer would save money. The POET program was used until the beginning of the MAPP Restated Agreement in November of 1996.
MAPP Grows Membership Communications
MAPP implements a Loss Repayment Program and begins to charge a fee for losses created by energy transaction flowing through non-participating parties to any and all transactions during a given hour.
The Energy Policy Act, effective October 24, 1992, is a United States government act. It was passed by Congress and set goals, created mandates, and amended utility laws to increase clean energy use and improve overall energy efficiency in the United States. The Act consists of twenty-seven titles detailing various measures designed to lessen the nation’s dependence on imported energy, provide incentives for clean and renewable energy, and promote energy conservation in buildings.
Energy Policy Act of 1992 Enacted
MAPP implements a regional transmission tariff and begins to charge transmission fees to transacting parties. This is in response to the Energy Policy Act of 1992.
MAPP Reacts to Energy Policy Changes
FERC Order 888 played an instrumental role in opening up the U.S. electricity system to generator competition and wider transmission access. By the mid 1990’s it had become well known that vertically-integrated utilities —the owners of most of the transmission lines in the U.S.—were stifling competition and letting excess grid capacity go unused.
FERC Order 888
FERC Order 889 went to great lengths to detail exactly how all participants in the electricity market should interact with transmission providers. It laid out the structure and function of what became known as OASIS “nodes,” which are secure, web-based interfaces to each transmission system’s market offerings and transmission availability announcements. Each OASIS node was to be the single point of information dissemination to the market as well as the customer portal for transmission service requests (TSR), even for affiliated power marketers wanting access to their own parent company’s transmission.
The Open Access Same-Time Information System (OASIS) is an Internet-based system for obtaining services related to electric power transmission in North America. It is the primary means by which high-voltage transmission lines are reserved for moving wholesale quantities of electricity. The OASIS concept was originally conceived with the Energy Policy Act of 1992 and formalized in 1996 through Federal Energy Regulatory Commission (FERC) Orders 888 and 889.
FERC Order 889 – “Standards of Conduct”
MAPP implements the MAPP Restated Agreement which essentially unbundles the power pool into three functional areas: Regional Transmission Organization (RTO), MAPP Reliability Organization (MRO) and Power and Energy Market (PEM). This unbundling was implemented to comply with FERC Orders 888 and 889.
MAPP Restated Agreement
The Midcontinent Independent System Operator, Inc. (MISO), formerly named Midwest Independent Transmission System Operator, Inc. is an Independent System Operator and Regional Transmission Organization providing open-access transmission service and monitoring the high-voltage transmission system in the Midwest United States and Manitoba, Canada and a southern United States region which includes much of Arkansas, Mississippi, and Louisiana. MISO also operates one of the world’s largest real-time energy markets.
Midwest Independent System Operator (MISO) Formed
With de-regulation of the electric energy industry seemingly on the horizon, energy marketing and trading organizations grow from 10 in 1994 to over 450 in 1998.
De-regulation Leads to Growth
MAPP transfers its transmission function (RTO) to MISO. Meanwhile, the ENRON debacle shakes up the electric energy industry. MAPP Power and Energy Market membership drops from over 100 members to less than 60.
MAPP transfers its transmission function (RTO) to MISO & ENRON Debacle Shakes up the Market
MAPP Power and Energy Market (PEM) is further unbundled from MAPP and becomes an independent non-profit organization named the Mid-Continent Energy Marketers Association (MEMA). MAPP continues to provide organizational assistance to MEMA.
MEMA was established for the purpose of maintaining the PEM members long-standing marketing and trading relationships which date back to the early 1970’s. The MEMA Capacity and Energy Tariff (FERC approved standard contract) was also developed at this time which allowed PEM members to contract for power and energy on a bi-lateral basis. This tariff replaced the FERC approved MAPP Service Schedules. The MEMA tariff became the premier standard contract in the Midwest region at this time. In 2019, NAEMA launched a new Power and Gas Master Agreement as a stand-alone alternative to this tariff.
MAPP Power and Energy Market (PEM) is further unbundled from MAPP
Midwest Reliability Organization (MRO) is formed and assumes regional reliability functions.
New Organization Forms
MEMA totally splits its relationship with MAPP and hires its first full-time Executive Director.
MEMA Board of Directors decides to grow the organization. MEMA membership at the time was 56 Market Members and 2 Associated Members.
MEMA Board of Directors decides to hold two conferences each year rather than one.
MEMA Branches Off & Grows
MEMA changes its name to the North American Energy Markets Association (NAEMA) to reflect its significant growth over the last six years.
NAEMA is Formed
108 Market members and 34 Associated members. Market members include public or private utilities, energy marketers, power generators, energy transporters, or end-use customers that engage in wholesale energy product transactions. Associated members include vendors that provide information, software and services to the energy industry.
NAEMA continues to conduct a Spring and Fall Conference each year. NAEMA has conducted 30 conferences over the past 15 years.
NAEMA and the International Energy Credit Association (“IECA”) develop a new state-of-the-art master agreement for power and gas transactions. The 2019 Power and Gas Master Agreement (PGMA). To download the announcement, click HERE
NAEMA Membership Increases and Organization Grows