Midwest ISO earns Edelman honors

Moments after Midwest ISO, which manages one of the world’s largest energy markets, won the 2011 Franz Edelman Award for Achievement in Operations Research and the Management Sciences, company CEO and President John Bear was asked how many people comprise his high-end analytics (operations research, i.e. “O.R.”) group.

“That’s a trick question,” Bear said. “In theory, there are 850 of us involved with O.R. All of us — everyone who works for the company — try to focus every day on how can we continuously improve, how can we do things better, how can we move ourselves forward, whether it’s incrementally or fundamentally.”

The Edelman competition, sponsored by the Institute for Operations Research and the Management Sciences (INFORMS) and considered the “Super Bowl of O.R.,” is an annual event that recognizes outstanding examples of operations research-based projects that have transformed companies, entire industries and people’s lives. The 2011 winner was announced at an awards gala April 11 in conjunction with the INFORMS Conference on Business Analytics & Operations Research in Chicago.

For many years, the U.S. power industry consisted of utilities that focused locally and ignored the possibility that there might be better, regional solutions. Midwest ISO was the nation’s first regional transmission organization (RTO) to emerge following the Federal Energy Regulation Commission’s push in the 1990s to restructure and boost efficiency throughout the power industry. Headquartered in Carmel, Ind., Midwest ISO has operational control over more than 1,500 power plants and 55,000 miles of transmission lines throughout a dozen Midwest states, as well as Manitoba, Canada.

Driven by the goal of minimizing delivered wholesale energy costs reliably, Midwest ISO, with the support of Alstom Grid, The Glarus Group, Paragon Decision Technology and Utilicast, used operations research and analytics to design and launch its energy-only market on April 1, 2005, and introduced its energy and ancillary services markets on Jan. 6, 2009.

Midwest ISO improved reliability and increased efficiencies of the region’s power plants and transmission assets. Based on its annual value proposition study, the Midwest ISO region realized between $2.1 and $3.0 billion in cumulative savings from 2007 through 2010. Midwest ISO estimated an additional $6.1 to $8.1 billion of value will be achieved through 2020. The savings translate into lower energy bills for millions of customers throughout the region.

Along with Midwest ISO, the other 2011 Edelman finalists included CSAV (Chilean shipping company), Fluor Corporation, Industrial and Commercial Bank of China (ICBC), InterContinental Hotels Group (IHG) and the New York State Department of Taxation and Finance.