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Enron Mail |
If you read Ray Alvarez's summary from yesterday evening, open the attached=
=20 Word document and read only the changes that we made to the summary since= =20 receiving the final order, which was issued this afternoon. Alan Comnes The full order is available at: http://www.ferc.fed.us/electric/bulkpower.h= tm SUMMARY OF FERC=01,S ORDER ESTABLISHING PROSPECTIVE MITIGATION AND MONITORING PLAN FOR THE=20 CALIFORNIA WHOLESALE ELECTRIC MARKETS AND ESTABLISHING AN INVESTIGATION OF= =20 PUBLIC UTILITY RATES IN WHOLESALE WESTERN ENERGY MARKETS (Issued April 26, 2001) Effective Date -- Price mitigation is effective May 29, 2001. (ISO needs t= o=20 have its day-ahead proxy price ready on 5/28) Physical Withholding -- To prevent physical withholding, the plan will=20 require sellers with PGA's to offer all their available power in real time = to=20 the extent not scheduled in bilateral trade. All California generators, ev= en=20 those not subject to FERC price regulation, will be required to sell into t= he=20 ISO's real time market as a condition of their use of the ISO's interstate= =20 transmission lines. Hydroelectric facilities will be exempted. (This=20 requirement to provide power is for all hours (24/7) for 1yr)=20 Price Mitigation - The plan will establish a single market clearing price= =20 auction for the real time market. During Stage 1, 2 and 3 emergencies in t= he=20 ISO's real time market, each generator (other than hydro) with a=20 participating generator agreement is required to offer all available power= =20 and bid its marginal cost based on the generator's heat curve, emission=20 rates, gas costs and emission costs, plus $2/MWh for O&M. The gas cost wil= l=20 be the average daily cost of gas for all delivery points in California;=20 emissions are to be based on Cantor Fitzgerald Environmental Brokerage=20 Services. The ISO will publish by 8:00 am, the gas and emission figures to= =20 be used for the next day in any hour where an emergency is declared. These= =20 figures (for the next day) will be based on the prior day's Gas Daily and= =20 Cantor Fitzgerald data. A single market clearing price is determined in rea= l=20 time for all generators. Highest bid sets the clearing price. Each=20 gas-fired generator must file with FERC and the ISO within 5 days, on a=20 confidential basis, heat and emission rates for each generating unit. The= =20 ISO will use these rates to calculate a marginal cost for each generator,= =20 including maintenance and operating costs. Generators that submit bids at = or=20 below the market clearing price will not be subject to refund liability. = =20 (Although the following qualification is made: =01&However, all public util= ity=20 rates will be subject to refund for violations of the conditions imposed on= =20 market-based rates, discussed infra.=018 Presumably this has to do with=20 anomalous bidding behavior.) In the event a generator submits a bid higher= =20 than the proxy price, the generator must, within 7 days of the end of each= =20 month, file a report with FERC and the ISO justifying its price. FERC=20 explicitly acknowledges that some units may have gas costs that exceed the= =20 =01&all delivery point=018 index it has adopted. FERC has 60 days to review= /act. =20 No opportunity costs in real time. Marketers are not held to any generator= =20 cost standard but must be prepared to justify bid at purchased cost based o= n=20 specific purchases or portfolio with no opportunity cost. =20 Underscheduling Penalites -- FERC acknowledges that the there is a pending= =20 request to revoke the current underscheduling penalty but indicates that it= =20 is still in place. Thus, although it may be advantageous to wait to buy=20 power in R/T at capped prices, doing so may make the scheduling coordinator= =20 subject to the currently effective $100/MWh penalty. See p. 20 of the FERC= =20 order. New Generation -- New generation is NOT exempted from the Commission=01,s = price=20 mitigation measures. Demand Response -- Beginning June 1, only public utility load serving=20 entities must submit demand side bids to curtail load and identify the load= =20 to be curtailed under those bids. FERC is attempting to make the demand=20 curve more price responsive. (This requirement is in effect for all hours= =20 (24/7)) =20 Outages -- PGA generators will coordinate planned outages and report forced= =20 outages The ISO is required to make a tariff filing within 15 days of the= =20 order proposing a mechanism for coordination and control of outages,=20 including periodic reports to the Commission. Term - Order expires one year from date of issuance. RTO Filing - California ISO and two Utilities must make RTO filing by June = 1=20 or Order lapses with no further effect. The RTO filing is to be consistent= =20 with the characteristics and functions in Order No. 2000. ISO Reporting - On September 14, 2001, ISO must file a status report on how= =20 things are working and how much generation has been built. Comments are du= e=20 in 15 days. Quarterly reports thereafter. Revocation of Market Based Rate Authority and Refunds - The market based ra= te=20 authority of all public utilities is conditioned on (1) no physical withhol= d=20 of capacity, and (2) no inappropriate bidding behavior. Inappropriate=20 bidding behavior includes bidding unrelated to known characteristics of the= =20 generation unit or without an input cost basis or bidding not based on unit= =20 behavior. An increased bid based on increased demand could apparently be= =20 inappropriate. In addition, "hockey stick" bids are expressly prohibited= =20 (i.e. bidding 95% at marginal cost and 5% at a much higher level). Other= =20 prohibited bidding practices identified include: pricing a single unit much= =20 higher than other units in a supplier portfolio and changes in bids due to= =20 increased scarcity rather than changes in generator costs. West-Wide Section 206 Investigation =01) Opens a section 206 investigation= =20 concerning the J&R of wholesale power in the WSCC other than sales to the= =20 CAISO market. FERC requests comments on the scope and nature of price=20 mitigation. However its proposal is that refund conditions apply only in= =20 real time (markets for power less than 24 hours in advance of R/T) spot=20 markets when contingency within a control area falls below 7% within a=20 control area. FERC is attempting to mirror the rules applied in=20 California. Comments are due in 10 days on the 206 investigations. Althou= gh=20 it is still formulating its price mitigation plan for the non-California PN= W,=20 the FERC sets the refund effective date is 60 days from publication of the= =20 Order. NOx Limits in California -- Must sell requirements do not apply if a unit = is=20 prohibited from running by law. However, it appears that incurring fines= =20 does not overcome the must sell requirement- just include the fines as part= =20 of the price bid. Also if NOx is limited, may seek to show that generation= =20 would have been sold elsewhere or at different times for determining price.= =20 Surcharge to pay past amount due -- Comments are due in 30 days on (1)=20 whether FERC should require the ISO to surcharge parties for payment into a= n=20 escrow account to pay past costs and (2) the effect this surcharge would ha= ve=20 on the PG&E bankruptcy filing. =20 Treatment of the CAISO=01,s Market Stabilization Plan (MSP). The FERC rejec= ts=20 the CAISO=01,s MSP saying that FERC=01,s plan for market mitigation is suff= icient. =20 It expressly rejects CAISO=01,s plan to create a day-ahead and hour-ahead e= nergy=20 markets are expressly reject and tells CAISO to stop actions to implement= =20 software changes to effectuate such markets. Unfortunately, it does not=20 expressly reject CAISO=01,s plan to cut exports. In general, no mention wa= s=20 made as to issue of exports of power from California although the statement= =20 that CAISO must become a real RTO would support the notion that CAISO must= =20 honor firm schedules on its system..=20 Recap of Dates Identified in the Order ? Issue date: 4/26/01 ? Heat rate emission filing from generators due: 5 days (5/1/01) ? Comments due on WSCC-wide price mitigation: 10 days (5/6/01) ? ISO Tariff filing due: 15 days (5/11/01) ? Comments on ISO Tariff due: 5 days thereafter (5/16/01) ? Comments on whether Commission should allow a premium to recover unpaid= =20 generator bills: 5/30/01 ? Effective date of proxy prices: 5/29/01 ? Demand responsive bids from load serving entities: 6/1/01 ? Refund effective date begins: 60 days after publishing in Federal Regist= er=20 (late June?) ? First ISO quarterly report: 9/14/01 ? Comments on first ISO quarterly report: 15 days thereafter (9/29/01) ? Plan terminates: 4/26/02 RA & GAC
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