Cut in NE Power Clearing Price Panned
Power sellers have urged FERC to reject two complaints that seek
to void a $6,000/MWh bid for imported electricity that was used to
set the market clearing price in the New England Independent System
Operator for five hours last May 8.
Extremely high temperatures that day, combined with a high level
of generation outages due to maintenance, forced the New England
ISO to import the high-priced power during the five-hour period in
order to maintain reliability in the region on May 8, electric
marketers said in protests filed at the Commission [EL00-100]. The
$6,000/MWh bid was not the result of market power or market flaws
in the region, they argued.
United Illuminating Co. (UI) and the Maine Public Utilities
Commission, which brought the complaints separately, called on FERC
to order the recalculation of energy prices in the New England ISO
to exclude the $6,000/MWh bid, and to provide refunds based on the
adjusted prices. But power sellers argued that the market selling
price was "legitimately established" by the $6,000/MWh bid, and
that any move by the Commission to interfere would destroy market
confidence and further hamper competition.
"In an era which was to be heralded as the one which opened and
deregulated the energy markets - but which is instead making news
for its imposition of price or bid caps in every
Commission-approved market - the Commission should resist the
invitation by UI to begin down the road of clearing-price
recalculations," said the wholesale power marketing affiliates of
PG&E National Energy Group.
Any move by FERC to retroactively adjust prices in the New
England ISO would "only act to undermine confidence and discourage
participation in the energy markets," concurred PPL Energy Plus
LLC, Kennebec Water District, Sparhawk Hydro and Small Hydro East.
Enron Power Marketing Inc. called UI's complaint "misguided" for
several reasons. First, it pointed out that even if the New England
ISO failed to properly administer the region's energy market under
the market rules by accepting the $6,000/MWh bid, "the Commission's
policy is to correct those rules prospectively, not to recalculate
prices and impose refunds on a retroactive basis."
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