ferc ' s prospective mitigation and monitoring plan for ca wholesale electric markets
the following report is comprised of what was discussed at the commission meeting held tonight at approximately 7 pm est and additional intelligence gathered from ferc staffers after the meeting by joe hartsoe :
physical withholding - - to prevent physical withholding , the plan will require sellers with pga ' s to offer all their available power in real time . all california generators , even those not subject to ferc price regulation , will be required to sell into the iso ' s real time market as a condition of their use of the iso ' s interstate transmission lines . hydroelectric facilities will be exempted . ( 24 - 7 for lyr )
price mitigation - the plan will establish a single market clearing price auction for the real time market . during stage 1 , 2 and 3 emergencies in the iso ' s real time market , each generator ( other than hydro ) with a participating generator agreement is required to offer all available power and bid its marginal cost based on the generator ' s heat curve , emission rates , gas costs and emission costs , plus $ 2 for o emissions are to be based on cammon fitzgerald ( ? ) . the gas cost and emissions will be published the day after , for use on the following day . a single market clearing price is determined in real time for all generators . highest bid sets the clearing price . each gas fired generator must file with ferc and the iso , on a confidential basis , heat and emission rates for each generating unit . the iso will use these rates to calculate a marginal cost for each generator , including maintenance and operating costs . in the event a generator submits a bid higher than the proxy price , the generator must , within 7 days of the end of each month , file a report with ferc and the iso justifying its price . ferc has 60 days to review / act . no opportunity costs in real time . marketers are in the same boat , as they must be prepared to justify bid at purchased cost based on specific purchases or portfolio with no opportunity cost . however , credit sleeves are permissible .
demand response - beginning june 1 , only public utility load serving entities must submit demand side bids to curtail load and identify the load to be curtailed under those bids . ferc is attempting to break the demand curve . ( 24 - 7 )
outages - - pga generators will coordinate planned outages and report forced outages in accordance with the commission staff proposal adopted by ferc .
term - order expires one year from date of issuance .
rto filing - california iso and two utilities must make rto filing by june 1 or order lapses with no further effect .
iso reporting - on september 14 , 2001 , iso must file a status report on how things are working and how much generation has been built . comments are due in 15 days . quarterly reports thereafter .
revocation of market based rate authority and refunds - the market based rate authority of all public utilities is conditioned on 1 ) no physical withhold of capacity , and 2 ) no inappropriate bidding behavior . inappropriate bidding behavior includes bidding unrelated to known characteristics of the generation unit or without an input cost basis or bidding not based on unit behavior . an increased bid based on increased demand could apparently be inappropriate . in addition , " hockey stick " bids are expressly prohibited ( i . e . bidding 95 % at marginal cost and 5 % at a much higher level ) .
limited 206 filing - applies to sales in the wscc , outside california . refund conditions apply in real time spot markets when contingency within a control area falls below 7 % . control areas are not required to publish when this condition occurs . apparently anything over marginal cost must be justified . all marketers and non - hydroelectric generators must offer to sell contractually and physically available capacity / energy to a location within wscc . ferc is attempting to mirror the rules applied in california . comments are due in 10 days on the 206 investigations . the refund effective date is 60 days from publication of the order .
nox limits in california - - must sell requirements do not apply if a unit is prohibited from running by law . however , it appears that incurring fines does not overcome the must sell requirement - just include the fines as part of the price bid . also if nox is limited , may seek to show that generation would have been sold elsewhere or at different times for determining price .
surcharge to pay past amount due - - comments are due in 30 days on 1 ) whether ferc should require the iso to surcharge parties for payment into an escrow account to pay past costs and 2 ) the effect this surcharge would have on the pg & e bankruptcy filing .
no mention was made at the meeting as to issue of exports of power from california . the order is not finally drafted as of yet , and the status of the foregoing items could change upon issuance of the final order . we will keep you posted .
ra
ferc ' s prospective mitigation and monitoring plan for ca wholesale
electric markets
the following report is comprised of what was discussed at the commission meeting held tonight at approximately 7 pm est and additional intelligence gathered from ferc staffers after the meeting by joe hartsoe :
physical withholding - - to prevent physical withholding , the plan will require sellers with pga ' s to offer all their available power in real time . all california generators , even those not subject to ferc price regulation , will be required to sell into the iso ' s real time market as a condition of their use of the iso ' s interstate transmission lines . hydroelectric facilities will be exempted . ( 24 - 7 for lyr )
price mitigation - the plan will establish a single market clearing price auction for the real time market . during stage 1 , 2 and 3 emergencies in the iso ' s real time market , each generator ( other than hydro ) with a participating generator agreement is required to offer all available power and bid its marginal cost based on the generator ' s heat curve , emission rates , gas costs and emission costs , plus $ 2 for o emissions are to be based on cammon fitzgerald ( ? ) . the gas cost and emissions will be published the day after , for use on the following day . a single market clearing price is determined in real time for all generators . highest bid sets the clearing price . each gas fired generator must file with ferc and the iso , on a confidential basis , heat and emission rates for each generating unit . the iso will use these rates to calculate a marginal cost for each generator , including maintenance and operating costs . in the event a generator submits a bid higher than the proxy price , the generator must , within 7 days of the end of each month , file a report with ferc and the iso justifying its price . ferc has 60 days to review / act . no opportunity costs in real time . marketers are in the same boat , as they must be prepared to justify bid at purchased cost based on specific purchases or portfolio with no opportunity cost . however , credit sleeves are permissible .
demand response - beginning june 1 , only public utility load serving entities must submit demand side bids to curtail load and identify the load to be curtailed under those bids . ferc is attempting to break the demand curve . ( 24 - 7 )
outages - - pga generators will coordinate planned outages and report forced outages in accordance with the commission staff proposal adopted by ferc .
term - order expires one year from date of issuance .
rto filing - california iso and two utilities must make rto filing by june 1 or order lapses with no further effect .
iso reporting - on september 14 , 2001 , iso must file a status report on how things are working and how much generation has been built . comments are due in 15 days . quarterly reports thereafter .
revocation of market based rate authority and refunds - the market based rate authority of all public utilities is conditioned on 1 ) no physical withhold of capacity , and 2 ) no inappropriate bidding behavior . inappropriate bidding behavior includes bidding unrelated to known characteristics of the generation unit or without an input cost basis or bidding not based on unit behavior . an increased bid based on increased demand could apparently be inappropriate . in addition , " hockey stick " bids are expressly prohibited ( i . e . bidding 95 % at marginal cost and 5 % at a much higher level ) .
limited 206 filing - applies to sales in the wscc , outside california . refund conditions apply in real time spot markets when contingency within a control area falls below 7 % . control areas are not required to publish when this condition occurs . apparently anything over marginal cost must be justified . all marketers and non - hydroelectric generators must offer to sell contractually and physically available capacity / energy to a location within wscc . ferc is attempting to mirror the rules applied in california . comments are due in 10 days on the 206 investigations . the refund effective date is 60 days from publication of the order .
nox limits in california - - must sell requirements do not apply if a unit is prohibited from running by law . however , it appears that incurring fines does not overcome the must sell requirement - just include the fines as part of the price bid . also if nox is limited , may seek to show that generation would have been sold elsewhere or at different times for determining price .
surcharge to pay past amount due - - comments are due in 30 days on 1 ) whether ferc should require the iso to surcharge parties for payment into an escrow account to pay past costs and 2 ) the effect this surcharge would have on the pg & e bankruptcy filing .
no mention was made at the meeting as to issue of exports of power from california . the order is not finally drafted as of yet , and the status of the foregoing items could change upon issuance of the final order . we will keep you posted .
ra