Consolidated Edison called on FERC yesterday to protect itscustomers this summer by instituting mechanisms to reduce potentialprice spikes in the New York wholesale power market.
It also urged the Commission to correct market flaws that allowpower generators to exercise market power, and to penalize thosegenerators that are found to be gaming the market to their ownadvantage.
The utility’s “major concern” is the exercise of market power bygenerators during periods of tight supply in the New York market,said Michael Forte, general manager for energy trading. Currentmechanisms for dealing with market power are “after the fact,” hesaid, adding that Con Ed is advocating identifying market power inadvance. It wants to “proactively prevent” the high bids ofgenerators from setting the market-clearing prices.
Con Ed also held a teleconference yesterday to assure investorsthat, while the New York power market has its share of problems, itdoes not expect to come even close to the crisis level seen inCalifornia. For one, Con Ed and other New York utilities aren’tfacing a severe supply crunch, and they are allowed to pass throughtheir wholesale power costs to their customers, Forte said.
Most importantly, “policymakers in New York understand that youcan’t correct those [market] problems by taking it out of thefinancial strength of the distribution companies,” said JoanFrielich, executive vice president and chief financial officer.
Con Ed called for the changes in New York during a FERCconference yesterday addressing the New York Independent SystemOperator’s (NYISO) handling of the electric wholesale market there.Included in the proposed changes was a new “circuit breaker”mechanism to hold prices down when the bulk power market is notcompetitive, which usually occurs when demand is high and supply istight.
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