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NYISO Files to Implement $1,300/MWh Caps

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.

Rocco Canonica

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