MOU Pilot Programs

cking@nyiso.com writes to the NYISO_TECH_EXCHANGE Discussion List:

Roy,

Thanks for sharing your concerns regarding the MOU pilot programs. I will
include below a portion of the draft minutes from the April 18th NYISO
Management Committee meeting which discuss the NYISO position on the CIT
project. Initially, this project was viewed as a "quick hit" which could be
completed swiftly, at minimal cost, and with minimal impact on staff and
ongoing
project work. Further discussion with PJM reveals that this will not be the
case.

Question on CIT/CSS:

In thinking over the discussions at the BIC meeting I found two areas
related to interactions with PJM where I am a bit confused due to what is
either my misunderstanding, or conflicting information provided by NY and
PJM. I would appreciate it if the NYISO would clarify these items. I will
also make a similar request of PJM.

1) Common interface tool.

My understand from the PJM EMC meeting was that PJM was going basically do
this entirely (or almost entirely) on their own, and just allocate some
costs between NY and PJM. The product as I understood it would be available
to participants of both pools for transactions scheduling. The users would
input to the tool, and NY and PJM would basically get screened/coordinated
input simultaneously in order to accelerate scheduling and minimize checkout
problems etc.

If this was the case, I don't understand the comments at the BIC that NY
wont be able to do this by the summer. Is this a PJM or NY constraint? Is
PJM unable to complete what they offered? I can understand that that would
hold things up as they proposed to do most of the work. However at the PJM
EMC I got the impression that PJM was all set to go, could make the
schedule, and just needed NY agreement. If this is a NY constraint I would
also like to know more about it.

Can you please clarify what is going on here?

Response:

(Reported by Mr. Museler to the MC on 4-18-2001)

1. There have been recent developments in the NYISO / PJM CIT process. At
the
present time, no software requirements document has been created, no vendor
contracts have been signed, and a number of issues, including ensuring the
confidentiality of data, providing redundancy in New York in case the PJM
based
system fails, and liability, all have to be resolved.

When the project was originally proposed, the NYISO believed it could be done
quickly with a limited amount of resources. This has not proven to be the
case.
Completing this project immediately would take resources away from other
projects need for Summer 2001 and will have a budget impact of approximately
$1
million. The NYISO does not believe it would be prudent to allow this project
to come ahead of the Summer 2001 issues, or to proceed without vendor
contracts
in place and other outstanding issues resolved. The NYISO will continue work
on
the CIT process and will keep the Committees informed of developments.

Question:

2) Inter ISO Congestion Pilot. I was disappointed in the "lukewarm"
presentation that Rick Gonzales made at the BIC. I realize that this program
is very limited in scope, but it seems to me this is a very important
precedent to the future coordination of the ISO's. As we left things it
seems likely that this will die in committee before the summer.

However, I would like a technical explanation of one of things that Rick
said. He commented that one of his discomforts related to a request by PJM
that NY pay for some generation in Northern New Jersey. At first blush this
got a very negative response in the group.

Then I started to think about this more. My understanding is the basic
structure of the agreement is that ISO A only makes payments to ISO B if B
is taking an action such as re-dispatch to ease a constraint in A. Thus if
PJM was suggesting NY pay for North Jersey generation, presumably this was
to be for PJM adding generation there to ease a NY constraint. Now I am not
a great electrical engineer, but my limited understanding of the systems
suggests to me that if PJM is adding generation in North Jersey to help NY,
this has to do with modification to the PAR flows and support of SENY
through the PSEG cable. Is this correct?

IF CORRECT, DOES THIS MEAN THAT THE NYISO HAS REJECTED A PROPOSAL TO
INCREASE SUPPLIES TO SENY FOR THIS SUMMER BECAUSE THEY WOULD HAVE TO PAY FOR
REDISPATCH IN PJM?

I hope that this is an incorrect conclusion, otherwise we have some big
problems.

I would appreciate a further explanation of this, as perhaps I don't
understand what is physically happening.

Thanks for the help

Response:

With regard to the inter-ISO Congestion management pilot, Rick Gonzales offers
the following response to your comments:

2. Please be advised that the NYISO fully supports the Inter-regional
Congestion
Pilot program. The Congestion Pilot will be presented again for comment at the
Market Structures WG for further discussion and to facilitate the potential
implementation of this program.

One of the major issues noted in the presentation that limits the extent to
which the Pilot program can be used is the potential for cost-shifting between
ISOs. In addition to providing a list of 'candidate' operational constraints,
it
was also noted that it is the responsibility of each ISO to re-dispatch its
internal control area resources to solve its own internal constraints. This
concept is in agreement with your understanding that 'ISO A only makes
payments
to ISO B if B is taking an action such as re-dispatch to ease a constraint in
A'.

Any futher conclusions that one might imply from the Inter-regional Congestion
Pilot should be discussed at the next Market Structures WG meeting.

C. King adds the following with regard to the notion of increasing supplies to
SENY and the operation of the PARs (Waldwick & Linden-Goethals/Hudson
faragut):

Since the initiation of the NYISO Markets, the full capability of the
Hudson-Farragut PARs has not been available due to equipment failure. The
equipment is expected to be back in service on or about the May-June period.
In
preparation for the return of the outaged PAR to service, NYISO and PJM staff
have been discussing the operation of the PARs and the relationship of the PAR
schedules to the PSEG-Con Edison Energy Transfer Agreements which have long
been
associated with this equipment. It would be pre-mature to establish a
congestion-management pilot involving facilities in the electrical vicinity of
the PARs, until the operating procedures related to the operation of the PARs
is
fully discussed and agreed to.
Both PJM & NYISO acknowledged this at the Stakeholder Meeting in Toronto
earlier
this year, so this is nothing new.

Presently the equipment owners (PSEG & Con Edison) as well as NYISO and PJM
are
engaged in discussions which should ultimately result in an operating
agreement
between PJM and NYISO regarding the operation and scheduling of the PARs.
Progress is being made, thus I think that every effort is being made to insure
that energy can flow between PJM and SENY, and between NY and New Jersey for
this summer and beyond. We appreciate your encouragement of these efforts and
other efforts to address seams issues in the northeast.

See you in Springfield next Wednesday!

Chuck