The New York Independent System Operator has filed a requestwith FERC to implement temporary power bid caps of $1,300/MWh forenergy until Oct. 28 (see docket EL00-3038). The ISO requested awaiver of the normal Commission notice period and an effective datefor the caps of July 6.

It also told FERC it is working on an “effective demand sidemarket mechanism” for next summer as “a permanent solution to theload-price responsiveness problem.” Despite good examples ofdemand-side management programs put in place recently by otherISOs, the NYISO said there is inadequate time for it to puttogether a similar program for New York in time for the imminentsummer peak demand season.

The decision to set the price caps at $1,300 followed an appealof an earlier ruling approved by 63% by the ISO’s managementcommittee that would have set the caps at $1,000. The New YorkPublic Service Commission in May first proposed price caps.

“Despite its philosophical aversion to any form of pricecontrol, the NYISO Board has concluded after extensive review thattemporary bid caps are an appropriate interim solution to asignificant market problem, namely, the near total absence of priceresponsive demand, which the NYISO cannot address, in theshort-term by less intrusive means.”

The board said its cap proposal avoids a “number ofinefficiencies and distortions that would have been inadvertentlycreated by a proposal for price caps” by the ISO’s own managementcommittee, which includes multiple power market stakeholders.

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