FERC Filings

EPSA Comments On The Establishment and Use of Reference Prices

Introduction

As the notice and attendant FERC staff paper highlight, several RTOs and ISOs use “conduct and impact” tests (CITs), or an automated version of the CIT known as Automated Mitigation Procedure (AMP), in their wholesale day-ahead and real-time electric markets both to determine whether certain bids (or offers) should be mitigated and to set the default bid (or price) when mitigation is triggered and applied. A reference price is set for a particular unit by the RTO or ISO (or its market monitor) and is intended to approximate the unit’s marginal costs. The CIT is included in the RTO or ISO’s Commission-approved tariff, and the methods for determining the reference price and related formulas are set forth in the tariff. One method for setting the reference price is negotiation between the individual ISO/RTO and market participant. Various RTO/ISOs utilize different agents to negotiate or determine reference prices (e.g., independent consultants, internal or external market monitor).

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