Despite a three-month delay because of technical interfaceproblems, the California Independent System Operator and theCalifornia Power Exchange Corp. (PX) announced they have completeda week’s worth of testing and have notified FERC they’re ready toopen the statewide electricity market on March 31. They intend tocommence operations by accepting bids in the Day Ahead market onMarch 31 with the first full day of operations being the day after.

“The experience gained by the PX staff since December 1997 aswell as during an extensive March testing period has proven thatthe computer-based trading systems are very reliable,” PX CEODennis W. Loughridge said in a report to the PX board of governors.”We also are confident that when the problems arise, they can befixed promptly.” However, Loughridge said some tariff modificationswill be required to resolve issues involving zonal pricing and overgeneration of electricity. In the meantime, daily testing of the PXand ISO systems will continue through market opening.

Until the end of 2001, the state’s three major investor-ownedutilities are required, under California energy deregulation, topurchase all their electricity through the PX’s trading process.This will comprise 80% of the electricity used in California. ThePX will initially open with a day-ahead market, where a marketprice for energy is established for every hour in the following daythrough an electronic bidding process involving both electricityproducers and purchasers. The day-ahead market transactions willthen be scheduled for delivery with the ISO, which will operatemuch of the state’s high-voltage electrical transmission systems.The PX also will be responsible for settling accounts among itsparticipants.

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