FERC Filings
MOTION FOR LEAVE TO INTERVENE AND PROTEST Re: NYISO
II. THE NYISO HAS FAILED TO DEMONSTRATE THE NEED FOR ITS PENALTY PROVISIONS
The NYISO has not shown that the NYISO-administered market is unworkably competitive or that market power has been abused under the current market monitoring procedures. The Commission should not approve the Penalty Provision filing until such a finding is proven. In fact, the NYISO’s Independent Market Advisor, Dr. David Patton, concluded that the performance of the markets has generally been consistent with workable competition.
The NYISO claims that the Penalty Provisions will complement the NYISO’s existing market power mitigation authority currently provided by the MMM, in addition to the Commission-approved Automated Mitigation Procedures (AMP), and will “deter market power abuses from occurring in the first place.” At the outset, the NYISO incorrectly assumes that market power will be exercised in an abusive manner during periods of increased load. Indeed, the Penalty Provisions filing fails to identify even one instance, much less a multitude of occurrences, when these alleged abuses of market power have taken place. The Penalty Provision filing was made merely four days after the Commission granted the NYISO’s request to implement the AMP through this summer. The NYISO alleges that the mitigation measures now in place are insufficient to protect New York’s electric markets, yet the NYISO did not provide any new information to indicate that this perceived “threat” to the electric markets has not been abated.
Indeed, in its Order approving the AMP for the 2001 summer capability period only, the Commission recognized that quick fixes should not be applied without determining “whether there is an underlying structural market power problem.” The NYISO should take heed to these words. Instead of taxing its resources trying to “fix” unproven and erroneous allegations of market abuse, the NYISO might be better served to focus its efforts on the real problems facing New York electricity markets – problems that can be solved with regional standardization, the addition of new generation and transmission, and of course resolution of seams issues with neighboring markets. To allow such Penalty Provisions in New York markets promises to further exaggerate the regional differences in the markets.