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Requested Relief for Power Export Glitches in NY Denied

Requested Relief for Power Export Glitches in NY Denied

Given that the New York Independent System Operator (NYISO) is already working to remedy market flaws in its system, FERC has rejected the relief sought by Niagara Mohawk Energy Marketing Inc. (NIMO Marketing) in connection with the NYISO's software-related failure to export power to the Pennsylvania-New Jersey-Maryland (PJM) system in early May.

However, the Commission did require the NYISO to submit a detailed report in September outlining steps it has enacted to correct the software problems that have been identified by NIMO Marketing.

In its complaint filed in mid-June, NIMO Marketing asked that manual check procedures be immediately implemented to ensure that the NYISO's day-ahead software - or SCUC software - does not further reject power exports, or that market participants be compensated for their "lost opportunity costs" when export transactions are wrongfully rejected.

NIMO Marketing took this action after the NYISO failed to schedule during a four-hour period its request to export 50 MW in the day-ahead market from New York into PJM on May 5. This occurred even though the transaction carried a "decremental bid" of $9,999/MWh to ensure it wouldn't be denied for "economic reasons," the marketer said.

There has been wide-scale market support for NIMO Marketing's complaint and its requested relief, with some market participants going as far to say that the NYISO's denial of power exports represented regional economic protectionism and threatened the well-being of consumers in the power markets outside of New York.

But the Commission wasn't as agreeable, saying instead that the solutions recommended by NIMO Marketing may be "impractical" at this time. "Since the NYISO is currently implementing its software fix of this problem, it would be an inefficient use of the Commission's and the affected parties' limited resources to now develop a compensation mechanism. It is likely that the period of peak summer demand for electricity will be over by the time specific tariff language is proposed to and approved by the Commission" addressing the compensation issue, the order said [EL00-82].

However, FERC said it would require a "comprehensive filed statement [on] the status of the changes the NYISO has made to correct the market flaws identified by NIMO Marketing in this proceeding, and a report on the effects of the changes on the NYISO's markets. This will be necessary in order for the Commission to determine if any further action, such as the implementation of a compensation mechanism, is appropriate" later. Both are due Sept. 1.

The report in NIMO Marketing's case should be combined and filed together with another report that FERC ordered in a prior complaint case involving the NYISO, the order said. "In this combined report, the Commission should have the information necessary to determine whether the NYISO's changes have solved the problems identified. If the problems are not resolved, the Commission will have time to review the data and take whatever action in then appropriate."

Susan Parker

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