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FERC Filings

RE: Docket No. PL01-5—Technical Conference on RTO Interregional Coordination Under Order No. 2000 (Function 8)

JEFF PERRY-MIRANT CORP.

Mirant’s discussion points will focus on the Northeast market (New York, New England and PJM). We would like to begin by briefly describing how the lack of seamless interregional coordination in the Northeast affects our commercial operations. These occur in the areas of trading liquidity, coordination of transportation rights across RTO interfaces, transmission scheduling, and arrangement of scheduling deadlines in adjacent RTOs so that all transactions can occur.

We would also like to offer the Commission specific recommendations on how to resolve interregional coordination issues in the Northeast. Proposed remedies are:

  • Installed Capacity: among the existing models in the Northeast, our preferred market structure is the NY ISO – Stage 2 model. Important features of this model include an annual obligation requirement, a monthly obligation procurement period, a deficiency rate equal to three times the levelized embedded cost of a combustion turbine, and multiple round auctions (for price discovery) for multiple forward months with deficiency auctions. Additional issues that should be addressed in ICAP implementation include the long-term nature of ICAP (a two-year forward market is needed), the definition of ICAP zones and the calculation of zonal capacity import limits throughout the Northeast (i.e. locational ICAP requirements), and a region-wide certification process of generation assets since ICAP resources cross individual ISO boundaries


  • Transaction Scheduling: We support a physical transmission reservation system for inter-control area transactions, and a financial transmission system for internal transactions. Additionally, the lack of long-term reservations in the NY ISO market must be addressed.


  • Transaction Curtailment: We support the following notification hierarchy across the Northeast: (1) phone; (2) e-mail; (3) web-site general notice. We also suggest that all transmission service willing to pay congestion costs should be considered under the category “Firm NERC Bucket 7” across the region.


  • Ramping: We support more frequent ramping throughout the region (with PJM’s standard of 4 times per hour as a best practice)


  • Transaction Check-out: We support a market close time of 7:00AM and a market post time of 11:00AM to facilitate fuel procurement and option exercise, and allow last minute adjustments to bids and offers. The end-state should be a shortened unit commitment run time of two to three hours. Additionally, an extended unit look-ahead is needed for the entire Northeast (1 week)


  • Energy Pricing at the Boundaries: An inter-regional congestion management coordination system should be implemented across the region. We support the approach that PJM has outlined for its pilot program


  • Trading Hubs: We support trading hubs that help to increase liquidity in the market. Possible hubs include New York zones A, G and J, New England 36 bus central Mass hub, and the existing PJM trading hubs.


  • ATC: We propose that the industry adopt a standard of ATC being equal to TTC minus all firm and non-firm reservations.


    • Mirant proposes to close our comments with a financial analysis of tangible and quantifiable efficiency losses that occur in the areas of central scheduling, market monitoring, planning and reliability, due to the lack of interregional coordination, and the need for one Northeast market.