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Enron Mail |
"Kirkpatrick, Joe" <joe.kirkpatrick@nrgenergy.com< writes to the
NYISO_TECH_EXCHANGE Discussion List: The NYISO has chosen $150 as representative of a level to trigger market mitigation. I believe the basis for this was a determination of a price that was calculated to be representative of the statewide price of $50. A 300% increase or an increase of $100 is $150, coincidently the same price. I am questioning the determination of this price ($50) and its application in the market mitigation plan. In determining market power according to the market mitigation plan specific generator or unit bids are examined to identify economic withholding. How does the $50 price reference a specific unit, I am not sure where in the Market Mitigation Plan it says to examine the entire statewide price and then compare it to a generator's bid. If a generator's fuel costs (without fixed cost recovery) is $150 that unit would presumably never bid below its cost, it would always bid as a minimum $150. How could that generator exceed the thresholds identified in the market mitigation plan. A 300% increase would be $450 and an increase of $100 would be $250, and yet using the AMP interpretation of the mitigation plan the threshold for identifying economic withholding is $150. It would seem that the AMP methodology is improperly applying the Market Mitigation Plan. The Mitigation Plan is supposed to identify generator conduct and clearly in the application of the AMP it is not. The simple question would be is the $150 threshold representative of every generator's bid to determine economic withholding. The answer can only be no, how can it be? The Market Mitigation Plan was intended to determine whether a generator was exercising market power. The determination of whether a generator was exercising market power would and should take into consideration all of the prevalent market, unit and system conditions to determine if that unit was in fact exercising market power. The more complex the system the more complex the analysis of whether marker power was exercised. How does a price trigger (or any automatic threshold) take all of the complexities of a situation into account? It cannot, I suspect that is why due process is required whether it is a court case or a market power determination. The full facts are presented and evaluated, every case is unique and requires deliberation and analysis of every supporting fact. In other words automatic judgement is not an option and yet under the NYISO AMP it is offered as a solution. I do agree that prices should not be posted in the DAM if they are high as a result of market power. A better solution would be to delay the prices or hold them in reserve until a proper determination is made. In the same way that prices are held in reserve for software flaws they should be held in reserve for determination of market power. Prices can be posted and flagged subject to change pending review of market power, at least then due process can be followed. Market participants can be consulted in accordance with the Plan and if required SCUC can be rerun. External proxy bus prices may need to be frozen to ensure that flows are consistent with the orginal DAM posting if a longer period of time is required for market power evaluation. The AMP is still in place but is only used to identify potential market power until a "human" evaluation is done. Joe Kirkpatrick
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