News April-June 2005
News Release: June 30, 2005 | View Printable PDF Version |
California Power Market Redesign receives Commission's
approval; Finding on CAISO Board independence clears way for CAISO
to administer enforcement protocol
In a group of orders today, the Federal Energy Regulatory Commission
approved in principle key structural changes in California's electricity
market and authorized the market monitoring unit of the California
Independent System Operator (CAISO) to administer the enforcement
protocol provisions of the CAISO tariff. The Commission also determined
that the CAISO's governing board is sufficiently independent,
and accepted the California grid operator's generator interconnection
compliance filing.
The Commission provided approval to conceptual elements of CAISO's
Market Redesign and Technology Upgrade (MRTU) proposal, including
(1) the clearing of demand bids at load aggregation points; (2)
a revised simplified hour-ahead market known as the hour-ahead
scheduling process; and (3) market-power mitigation measures that
would include as modified the CAISO's proposal to have an incremental,
multiyear transition to a $1,000 per megawatt-hour bid cap, a
level consistent with caps in effect in other regional markets.
The order also directs Commission staff to convene a technical
conference to explore opportunities for wholesale demand response
in California.
Today's approval in principle of the MRTU design elements is the
last in a series of orders intended to provide guidance to the
CAISO so that it can make a detailed tariff filing in November
that supports the market restructuring elements (Docket No. ER02-1656-026).
In a separate order, the Commission defines the universe of existing
transmission service contracts that will be in place after the
CAISO market redesign is implemented in February 2007. The order
also addresses the applicable standard of review for each existing
transmission contract in question (Docket Nos. ER04-928-000, ER02-1656-021
and ER02-1656-023).
Separately, the Commission concludes that the CAISO's proposed
board selection process, which entails using an independent search
firm to seek out qualified board candidates, is acceptable for
the purposes of the independence requirements of Order Nos. 888
and 2000, and that the CAISO board as presently constituted meets
the Commission's independence requirements (Docket Nos. EL05-114-000
and EL01-35-002).
The Commission in previous orders limited the CAISO's ability
to unilaterally administer the enforcement protocol provisions
of CAISO's market restructuring effort pending the establishment
of an independent governing board at the grid operator. The Commission
today found that CAISO's market monitoring unit, or MMU, "may
now administer the Enforcement Protocol provisions related to
behavior that is objectively identifiable and for which violations
have clear Commission-approved sanctions set forth in the [CAISO]
tariff." The order directs a filing within 30 days of tariff revisions
to the enforcement protocol as outlined in the order (Docket No.
ER03-1102-009).
Further, the Commission accepts in part and rejects in part the
CAISO's proposed revisions to its pro forma large generator interconnection
procedures and interconnection study requirements, required under
Commission Order Nos. 2003, 2003-A and 2003-B. It similarly accepts
in part and rejects in part the large generator interconnection
agreement filed by the CAISO and the three participating transmission
owners, Southern California Edison Co., Pacific Gas and Electric
Co. and San Diego Gas & Electric Co. The Commission accepted the
transmission owners' conforming tariff filings and, consistent
with the finding that the CAISO board is independent, is evaluating
the generator interconnection filings under the independent entity
variation standard (Docket Nos. ER04-445-005, et al.).
For more information, see the Commission's website at www.ferc.gov.
R-05-41
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