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Enron Mail |
In regard to the market monitoring issue below, this effectively adopts NY'=
s=20 circuit breaker proposal for mitigation. FERC's approval leaves little hop= e=20 to overturn this in NY and makes it likely that similar measures will be=20 adopted in other markets. This is not a good development. It entrenches= =20 regulatory manipulation and will serve to dampen volatility. Tom From: Sarah Novosel on 05/08/2001 10:04 AM EDT To: Kevin M Presto/HOU/ECT@ECT, Mark Dana Davis/HOU/ECT@ECT, Jeff=20 Ader/HOU/EES@EES, Edward D Baughman/Enron@EnronXGate, Joe=20 Gordon/Enron@EnronXGate, Janelle Scheuer/Enron@EnronXGate, mbrown9@enron.co= m,=20 Mark Bernstein/HOU/EES@EES, John Llodra/Corp/Enron@ENRON, George=20 Wood/Corp/Enron@Enron, Paul J Broderick/HOU/ECT@ECT, Jason=20 Thompkins/Enron@EnronXGate, Mason Hamlin/HOU/ECT@ECT, Robert=20 Stalford/NA/Enron@Enron, Tom May/Corp/Enron@Enron, Gautam Gupta/HOU/ECT@ECT= ,=20 Narsimha Misra/NA/Enron@Enron, Steve Montovano/NA/Enron@Enron, Garrett=20 Tripp/TOR/ECT@ECT, Berney C Aucoin/HOU/ECT@ECT, Jason=20 Thompkins/Enron@EnronXGate, Rob Wheeler/Enron@EnronXGate, Jim=20 Meyn/NA/Enron@Enron, Aleck Dadson/TOR/ECT@ECT, Daniel=20 Allegretti/NA/Enron@Enron, Pearce W Hammond/HOU/EES@EES, Joe=20 Hartsoe/Corp/Enron@ENRON, Donna Fulton/Corp/Enron@ENRON, Howard=20 Fromer/NA/Enron@Enron, Kathleen Sullivan/NA/Enron@ENRON, Tom=20 Hoatson/NA/Enron@Enron, Thane Twiggs/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT,= =20 Sarah Novosel/Corp/Enron@ENRON, Christi L Nicolay/HOU/ECT@ECT, James D=20 Steffes/NA/Enron@Enron, Linda Robertson/NA/Enron@ENRON, Richard=20 Shapiro/NA/Enron@Enron, Steven J Kean/NA/Enron@Enron, Charles=20 Decker/HOU/EES@EES cc: =20 Subject: FERC Orders The following are a few summaries of recent New England orders. Please let= =20 us know if you have any questions. Sarah FERC Approves NEPOOL's Three-Part Bids On April 25, FERC approved NEPOOL=01,s proposal to implement a system where= =20 generators can submit three-part supply offers consisting of a start-up=20 price, an hourly no-load price, and an incremental energy price. NEPOOL al= so=20 proposed that when a supplier=01,s total revenues over a day from the energ= y and=20 operating reserves markets were less than its total bid costs, the shortfal= l=20 would be paid to the supplier as net commitment period compensation (NCPC)= =20 uplift. There was disagreement within NEPOOL as to who will pay these upli= ft=20 costs. In approving NEPOOL=01,s three-part bid system, FERC finds that the system = is=20 consistent with the policies in place in New York and PJM. With regard to= =20 NCPC uplift cost allocation, FERC finds that NEPOOL=01,s exiting method of= =20 allocating NCPC uplift costs broadly, based on electrical load, is=20 appropriate since it is difficult to determine who causes what amount of=20 uplift costs. The new three-part bid system will take effect July 1, 2001. FERC Rejects Proposal to Disclose Bidding Information In an April 13 FERC order of no overall interest to us, FERC includes a=20 discussion about the rules for disclosure of bidding and other data gathere= d=20 by the ISO. Braintree had argued that FERC should require public disclosur= e=20 of bidding and other data in order to allow NEPOOL participants to monitor= =20 the actions of others. FERC rejected Braintree=01,s arguments, finding tha= t=20 FERC=01,s rules strike an appropriate balance between the need to disclose = as=20 much information as possible and the desire to avoid disclosure requirement= s=20 that will make it more difficult for the ISO to obtain information from=20 market participants in the first place. FERC states that because data=20 collection is critical to the ISO=01,s ability to monitor the NEPOOL market= s, it=20 does not want to take action that would impede the ISO=01,s ability to coll= ect=20 this information. Information Policy NEPOOL submitted a March 5, 2001 request for revisions to NEPOOL=01,s=20 Information Policy, to be effective May 5, 2001, which permits FERC to obta= in=20 NEPOOL Participant confidential information directly from ISO-NE. On April= =20 25, 2001, FERC issued an order approving the filing. FERC stated that ISO-= NE=20 should be able to turn over confidential information to FERC without first= =20 being required to notify the affected member of receipt of a request for=20 information. However, the Commission notes that the information given to= =20 FERC will be treated confidentially by FERC until FERC rules otherwise, and= =20 those Participants' whose information is given to FERC will retain the=20 opportunity to oppose release of that information to the general public=20 before FERC makes the information public. Market Monitor Information Collection ISO filed revised procedures intended to give ISO the authority to monitor= =20 for generator physical and economic withholding as a way to raise prices. = =20 Under the revised procedures, a reference price is calculated for each 10MW= =20 block for each generating unit. The specific reference price is an average= =20 of in-merit bids over the last 30 days. ISO will investigate all bids that= =20 deviate significantly from the reference price. =20 Under the ISO's proposed procedures, prospective mitigation will occur if I= SO=20 determines that the bid will have a significant effect on the relevant mark= et=20 clearing price or uplift payment and the generator cannot adequately justif= y=20 why its bid is not anti-competitive. If a bid is mitigated, ISO will=20 substitute the generator=01,s reference price as its default bid. ISO will= =20 implement these new mitigation measures on July 1. ISO also proposed to=20 release bid data after a 3 months delay (FERC previously ordered ISO to=20 release bid data after a 6 month delay). Many generators opposed the procedures; Braintree argued they do not go far= =20 enough. On April 26, FERC accepted ISO=01,s changes, finding that they do = not=20 give ISO too much discretion and are consistent with NYISO mitigation=20 procedures. FERC rejected ISO=01,s proposal to release data 3 months=20 after-the-fact and directed ISO to wait 6 months before release.
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