NYISO Files to Implement $1,300/MWh Caps
The New York Independent System Operator has filed a request
with FERC to implement temporary power bid caps of $1,300/MWh for
energy until Oct. 28 (see docket EL00-3038). The ISO requested a
waiver of the normal Commission notice period and an effective date
for the caps of July 6.
It also told FERC it is working on an "effective demand side
market mechanism" for next summer as "a permanent solution to the
load-price responsiveness problem." Despite good examples of
demand-side management programs put in place recently by other
ISOs, the NYISO said there is inadequate time for it to put
together a similar program for New York in time for the imminent
summer peak demand season.
The decision to set the price caps at $1,300 followed an appeal
of an earlier ruling approved by 63% by the ISO's management
committee that would have set the caps at $1,000. The New York
Public Service Commission in May first proposed price caps.
"Despite its philosophical aversion to any form of price
control, the NYISO Board has concluded after extensive review that
temporary bid caps are an appropriate interim solution to a
significant market problem, namely, the near total absence of price
responsive demand, which the NYISO cannot address, in the
short-term by less intrusive means."
The board said its cap proposal avoids a "number of
inefficiencies and distortions that would have been inadvertently
created by a proposal for price caps" by the ISO's own management
committee, which includes multiple power market stakeholders.
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