-----Original Message-----
From: 	Fromer, Howard  
Sent:	Friday, June 08, 2001 1:45 PM
To:	Jeffery.Ader@enron.com; Brown, Michael - COO London; Davis, Mark Dana; Dutta, Tom; Suarez, John; Sewell, Doug; Ring, Richard; Decker, Charles; Llodra, John; May, Tom; Hammond, Pearce; Nicolay, Christi; Novosel, Sarah; Staines, Dan; Duran, W. David; Lydecker Jr., Richard; Montovano, Steve; Steffes, James; Sullivan, Kathleen; Brown, Jeff; Scheuer, Janelle; Bachmeier, Rick; Hinrichs, Lance; Meyn, Jim; Aucoin, Berney C.; Thompkins, Jason; Wheeler, Rob; Hamlin, Mason; Ferris, Frank; Gupta, Gautam; Philip, Willis; Misra, Narsimha; Thomas, Paul D.
Subject:	NYISO - Weekly Update 6/8/01

Attached FYI is the weekly update prepared by the NYISO. In addition, several noteworthy actions were taken at Wednesday's Management Committee meeting:
ICAP: Culminating an 18-month effort that I have been chairing, the MC gave final approval to two fundamental changes to NY's ICAP market, that, if approved by FERC, would go into effect on Nov.1, 2001, with the start of the winter capability period. The first changes the nature of determining the product to be bought and sold from one based on tests results (ICAP) to one that includes, as an element, a unit's forced outage rate (referred to as unforced capacity or UCAP). The design adopted by NY is very similar to the accreditation system that has been used in PJM for many years.  It will reward units that are more available than the average unit in the state, and incent the below average units to improve their availability. The second major change adopted moves NY to a monthly procurement requirement for loads. The current requirement is six months at a time. The change should facilitate customer switching under retail access programs and avoid the experience just witnessed in upstate NY for this summer capability period, where 1400 MW of load were deficient and got stuck paying a huge deficiency price for the entire six month period. Under the revised program, load could cover their positions month by month. This latter change was approved by the MC over the objections of the PSC and certain utilities, who continued to argue that any change to the current ICAP rules may damage NY's reliability. 
Penalty and Public Disclosure Provisions: In a surprise vote, the PSC-led effort to get the MC to approve additions to the ISO's Market Mitigation Plan that would add penalty and public disclosure provisions for parties whose bids are mitigated by the ISO was defeated when only 55% voted for the measure. (A 58% vote is required for passage.) An earlier version of the proposal had been passed by the MC but had been rejected by the ISO Board because it applied only to suppliers and not to all market participants found to engage in behavior detrimental to the market. The PSC-led effort to respond to the Board's concerns apparently caused enough supporters of the original version to change their vote this time around. Whether this effort is resurrected again (by the PSC/utilities or the Board itself) may hinge on what FERC decides with respect to the circuit breaker proposal pending before FERC. The ISO Board has made clear it wants something in effect this summer to help it  manage price spikes.
Unbundling of Schedule 1 Charges: Efforts to finalize the unbundling of the ISO's fixed schedule 1 charges (nearly $100 million a year) were sent back to a working group for further work. However, the direction to be taken for some issues appears clear. 
TCCs: We succeeded in convincing the group that no costs should be assigned to existing TCCs, and that if costs are to be assigned to this market, they should be allocated on the basis of the relative price paid for the TCCs compared to the annual auction revenues, rather than on the basis of number of TCCs purchased.
Exports and Wheelthroughs: We succeeded in getting a separate category created for these transactions that will result in $/MWH costs that are much less than what is currently charged. Conversely, there is now likely to be a small charge on imports into NY; however, since all generation will be hit with this charge, it should be reflected in everyone's bids equally and simply passed on to the loads through the market clearing price.
The exact amount of these various charges will depend on resolution of a number of issues including whether the TOs should be assessed a portion of the ISO's overhead right off the top.

----- Forwarded by Howard Fromer/NA/Enron on 06/08/2001 02:00 PM -----


	kkranz@nyiso.com Sent by: owner-nyiso_bic@lists.nyiso.com 06/08/2001 12:46 PM 	   To: market_relations@nyiso.com  cc:   Subject: NYISO - Weekly Update 6/8/01	



Dear Members of the MC, BIC, OC, and TIE List,

Attached, please find the NYISO Weekly Update.  This Update
is written jointly by Mollie Lampi and other NYISO staff.

The NYISO Weekly Update provides a brief status report of, or
progress on, a range of issues that are under discussion at NYISO
Committee meetings or are being undertaken by NYISO Staff.

Many, but not all, of these issues are being addressed through the
NYISO Committee structure.  Market participants may raise any
comments or questions on items covered in the update through
the Committee structure, or directly to Mollie Lampi (mlampi@nyiso.com.).

Prior editions of the Weekly Update on the "NYISO Committees"
page of the NYISO web site:
http://www.nyiso.com ---> Services ---> Committees ---> Weekly Update

or by clicking on the following link:
http://www.nyiso.com/services/documents/groups/weekly_updates/wkly_updates.html

(See attached file: weekly060801.PDF)


 - weekly060801.PDF
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