Given that the New York Independent System Operator (NYISO) isalready working to remedy market flaws in its system, FERC rejectedthe relief sought by Niagara Mohawk Energy Marketing Inc. (NIMOMarketing) in connection with the NYISO’s software-related failureto export power to the Pennsylvania-New Jersey-Maryland (PJM)system in early May.

However, the Commission did require NYISO to submit a detailedreport in September outlining steps it has enacted to correct thesoftware problems identified by NIMO Marketing.

In its complaint filed in mid-June, NIMO Marketing asked thatmanual check procedures be immediately implemented to ensure thatthe NYISO’s day-ahead software — or SCUC software — does notfurther reject power exports, or that market participants becompensated for their “lost opportunity costs” when exporttransactions are wrongfully rejected.

NIMO Marketing took this action after NYISO failed to scheduleduring a four-hour period its request to export 50 MW in theday-ahead market from New York into PJM on May 5. This occurredeven 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’scomplaint and its requested relief, with some participants going asfar to say that NYISO’s denial of power exports representedregional economic protectionism and threatened the well-being ofconsumers in the power markets outside of New York.

But the Commission wasn’t as agreeable, saying instead that thesolutions sought by NIMO Marketing may be “impractical” at thistime. “Since the NYISO is currently implementing its software fixof this problem, it would be an inefficient use of the Commission’sand the affected parties’ limited resources to now develop acompensation mechanism. It is likely that the period of peak summerdemand for electricity will be over by the time specific tarifflanguage is proposed to and approved by the Commission” addressingthe compensation issue, the order said [EL00-82].

However, FERC said it would require a “comprehensive filedstatement of the status of the changes NYISO has made to correctthe 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 ifany further action, such as the implementation of a compensationmechanism, is appropriate” later. Both are due Sept. 1.

The report in NIMO Marketing’s case should be combined and filedtogether with another report that FERC ordered in a prior complaintcase involving NYISO, the order said. “In this combined report, theCommission should have the information necessary to determinewhether NYISO’s changes have solved the problems identified. If theproblems are not resolved, the Commission will have time to reviewthe data and take whatever action in then appropriate.”

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