FERC Filings
MOTION FOR LEAVE TO INTERVENE AND COMMENTS OF THE ELECTRIC POWER SUPPLY ASSOCIATION-New York Independent System Operator, Inc.-Docket No. ER01-2076-000
II. THE NYISO HAS NOT MET THE COMMISSION’S REQUIREMENTS IN THE MAY 9TH ORDER
The NYISO failed to provide adequate opportunity for market participants to review the proposal and its subsequent effects on the regional market. The May 9th Order required the NYISO to fully address the concerns of market participants, including whether the NYISO provided ample time to market participants to evaluate and provide input on the AMP proposal. The NYISO has not upheld the integrity of that Order. Claiming “exigent circumstances” to justify a shortened comment period and filing the AMP before the NYISO’s Management Committee could consult and comment on the procedure does not fulfill such a requirement.
The NYISO claims that the AMP “does not make any substantive changes in the two-part test for market mitigation accepted by the Commission when it approved the NYISO’s Market Mitigation Measures,” and that “market participants have had an opportunity to express their views on the AMP in Docket No. EL01-55-000.” EPSA disagrees. Parties, including EPSA, have commented on the NYISO’s introduction of a “circuit breaker” mechanism in Docket No. ER01-181-000, and the Mirant Complaint asking that the NYISO be required to officially make a §205 or §206 filing before implementation of the AMP.
. Indeed, even the Commission, in its May 9th Order, required the NYISO to officially make a §205 filing because “the [NYISO] has proposed modified market mitigation procedures that are substantive changes to its MMP.” This AMP Proposal, in addition to the NYISO Technical Bulletins that were issued on May 21, 2001, do not provide enough of the necessary and substantive details of the AMP, and must not be substituted for tariffs reviewed and approved by the Commission. Substantive changes to the MMP will absolutely have considerable effects on market participants and their business decisions in the New York markets. The Commission must therefore require the NYISO to gather the proper input and allow participants ample time to evaluate and comment on the proposal.
The May 9th Order also requires the NYISO to explain how the AMP, if implemented, could result in accurate market clearing prices even if the party whose bid was improperly mitigated remains whole and would establish a new $150 threshold that does not appear in the MMP. The NYISO has failed to do this. In fact, the NYISO states that it is indeed possible for a bid to be improperly mitigated, although it claims that the likelihood of this occurring, and therefore any significant adverse affects, are quite small. EPSA disagrees – any mechanism that will result in flawed market clearing prices sends incorrect signals to market participants and distorts the fundamental and necessary forces of supply and demand from governing the market. This result is not insignificant.
Further, because there is no consultation process though which to investigate the legitimacy of a bid, those that are justifiable, albeit, above the threshold (although not necessarily exhibiting market power abuse), would be automatically mitigated and the result is again flawed clearing prices, as well as exposing suppliers to increased risk and uncertainty. Such action is gratuitous and unwarranted and would keep suppliers in a constant mode of justifying their bids, rather than making correct and necessary business decisions that would facilitate a robust and well-functioning NYISO market.
Given the complexities of the implementation process, the near certainty that implementation will be problematic at best; the NYISO, at a minimum, should be required to adopt a phase-in or pilot testing procedure for the AMP protocol before it is institutionalized into the tariff.