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Enron Mail |
Participants:
-Prof. Charles Cicchetti, Univ. of Southern California -Comm. Robert Nelson, Mich. Pub. Serv. Comm. -Marji Phillips, Exelon Power Team (attorney) -Sonny Popowski, PA Office of Consumer Advocate -Craig Roach, Boston Pacific -Anjali Sheffrin, Dir. Market Analysis, Cal ISO Summary: Market Monitor (MM) should be independent. Too much MM transparency is a problem -- MM function should be done privately to FERC. MM should be an early warning signal. Specifics: The morning started on a rather humorous note with Marji Phillips introducing herself as "the guilty party so to speak in front of you" (referencing the PECO/Exelon purported violation of standards of conduct). She stated that it is not the role of the MM to interfere to make sure that power prices are the lowest in each hour -- the MM should monitor the RTO and the markets and be part of a creative solution (without imposing its own MM penalties/mitigation). She used the Midwest price spikes of 98 as an example, and stated that a poor MM would probably have worsened the market solution that was reached without intervention. Most of the group agreed with Prof. Cicchetti that the MM should not be the policeman, judge and jury. He also stressed the importance of the MM being aware of the interaction of markets (i.e., California: gas, electricity, NOx). As Craig Roach said, the MM should look at more than market power -- it should also look at market conditions and market rules and be a vehicle for innovation. Moreover, other issues are equally important, such as environmental issues and the ability of new entrants to both enter the market and raise capital. Moreover, most markets involve traders (which a market needs). The MM should not "go to the farmer for costs." Markets don't act simply on costs and MMs should not be attempting to run their own market simulation. Spot markets are critical. Many thought that there should be some standardization of the information provided to the MM. Most agreed that the information should be provided on a confidential basis, especially before any specific problem has been found. Sonny Popowski stated that the RTO must be truly independent or the MM simply catalogs the market failures. Comm. Nelson said that the MM should have unfettered access to all costs and should have the ability for "cease and desist" orders. Also, stated that ITCs/transcos should be monitored to the extent that they favor transmission solutions over DG and generation. On the very positive side, he said RTO policy should proceed. Ms. Sheffrin said that it would be simple to implement a rolling 12 month cost plus 10% competitive benchmark, and prices above this should be mitigated. She said this would allow bidders to "self police" so as to not hit the benchmark. Most of the others disagreed with her, pointing out that a simplistic test such as this does not account for market conditions. It was pointed out that there were too many different MMs in Cal with no one acting. Someone also commented that one reason participants did not want to turn data over to Cal ISO was because it was a contesting party. All thought that DSM should be included in the market in order to be considered in mitigation. Comm. Breathitt asked Ms. Sheffrin why the price cap wouldn't work in Cal. She responded that the problems in Cal were with the need for LT contracts and other issues (she also said that it is not a zonal/lmp issue). Importantly, she said that consumers are now conserving 3000-5000 MWs annually since getting the appropriate price signals. Mr. Popowski said that he likes the price caps in PJM. Margie countered and said that "icap" in PJM is the problem. FERC staff asked if the MM should monitor bilaterals. Marji said absolutely not (between consenting companies and should not be unraveled). Both agreed that the MM may at times need access to these in order to understand what was happening in the spot market.
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