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Enron Mail |
Thanks for the heads up. Mark
Steven J Kean@ENRON 11/01/2000 03:43 PM To: Mark E Haedicke/HOU/ECT@ECT cc: Subject: USA: FACTBOX-FERC details changes for Calif power market. Joe Hartsoe, Rick Shapiro, or Jim Steffes can fill you in on the details of what FERC did today. One question you need to think about is how their decision on price caps affects any contracts which we may have indexed to California's spot market. The way it reports the market clearing price will change fundamentally if prices over 150 will be accepted but not used to clear the market for all bids. So, if we are using this as a reference price in our contracts it may trigger the need to look for alternatives. ----- Forwarded by Steven J Kean/NA/Enron on 11/01/2000 03:39 PM ----- Ann M Schmidt 11/01/2000 10:37 AM To: Mark Palmer/Corp/Enron@ENRON, Karen Denne/Corp/Enron@ENRON, Meredith Philipp/Corp/Enron@ENRON, Steven J Kean/NA/Enron@Enron, Elizabeth Linnell/NA/Enron@Enron, Eric Thode/Corp/Enron@ENRON, Laura Schwartz/Corp/Enron@Enron, Jeannie Mandelker/HOU/ECT@ECT, Mary Clark/Corp/Enron@ENRON, Damon Harvey/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Keith Miceli/Corp/Enron@Enron, James D Steffes/NA/Enron@Enron, Richard Shapiro/NA/Enron@Enron cc: Subject: USA: FACTBOX-FERC details changes for Calif power market. USA: FACTBOX-FERC details changes for Calif power market. 11/01/2000 Reuters English News Service (C) Reuters Limited 2000. WASHINGTON, Nov 1 (Reuters) - The U.S. Federal Energy Regulatory Commission on Wednesday approved several actions to revamp California's power market over the next two years. Immediate changes include the following: * Eliminate requirement that three utilities - Pacific Gas & Electric, San Diego Power and SoCal Edison - must sell all of their power to and buy all their power from the state Power Exchange (PX). * Require market participants to schedule 95 percent of their transactions in the day-ahead markets to reduce chronic underscheduling of load and generation and over-reliance on the ISO's real-time imbalance market to meet supply. FERC also proposed a penalty charge for scheduling deviations in excess of 5 percent of hourly load requirements. * Temporary modification of the single-price auction so bids above $150 MWh cannot set the market clearing price paid to all bidders. * Establish independent, non-stakeholder governing boards for the California Power Exchange (PX) and Independent System Operator (ISO). * Create congestion management design proposal. * Establish generation inter-connection procedures. * Explore alternatives to the single price auction by the ISO and PX. * Develop market rules to ensure sufficient supply is available to meet load and reserve requirements. FERC also approved changes to protect wholesale customers from unreasonable rates during the time it will take to adopt longer-term market remedies. The following price mitigation measures will remain in effect until Dec. 31, 2002: * Single-price auctions for all sales in the ISO and PX markets at or below $150 MWh. The single price would be used for all load which clears below this amount in the auction. * If an auction does not clear below the $150 MWh level, suppliers who choose to bid above $150 would be paid their price bid. In other words, the highest bid of the day, if above $150 per MWh, would no longer be the clearing price paid by all. * Sellers receiving above $150 per MWh would be required to report their bids to FERC on a weekly basis and provide certain cost information to the agency. * The ISO and PX would be required to report monthly information on such bids, allowing FERC to monitor competitive conditions and assure just and reasonable rates. Sellers would be subject to potential refund liability but no lower than their marginal or opportunity cost if FERC finds non-competitive conditions. The potential refund liability would extend the full 24 months it would take to implement the market reforms. Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved.
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