New York State Electric and Gas (NYSEG) told FERC yesterday thesituation has reached a critical stage at the New York IndependentSystem Operator, where start-up problems continue to threaten theretail electricity markets. It has called on the Commission toinvestigate and initiate emergency actions to correct continuingproblems at the ISO.

“Quick action by FERC will allow the ISO an opportunity toaddress these transitional problems,” said Michael I. German,NYSEG’s president and chief operating officer. “These problemsbecame evident during testing last year and the ISO should not havegone as quickly as it did.” The ISO took operational control of thestate’s high-voltage electric transmission system from the New YorkPower Pool in November 1999.

“We are concerned that the ISO software and implementationproblems could strangle the nascent competitive retail electricitymarket in New York. That is unacceptable,” German said. “The ISOencountered significant problems last winter and continues toexperience major problems as we enter the summer peak period.”

German noted that FERC already has taken actions to protectevolving competitive power markets on the Pennsylvania-NewJersey-Maryland Interconnection, in California and in New England,”markets which are less complex and more mature than New York’s. Weare asking for the same kinds of actions and corrective measures tobe taken on behalf of New York’s electricity consumers,” Germansaid.

In addition to responsibility for the day-to-day operation ofthe transmission system across the state, the ISO is responsiblefor ensuring competitive access to the transmission system, andfacilitating the safe, reliable flow of electricity from generatorsto distributors. It is also responsible for maintaining a healthyand active electricity market in New York State. The ISO isgoverned by 10 outside directors, none of whom are affiliated withNew York’s electric utilities or other market participants.

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