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Enron Mail |
Mark, Thanks very much for your observations in response to my environmenta=
l =20 memo. I think I understand some of your concerns about the role of the ISO= =20 in general and, in particular, with regard to conservation programs. There= =20 are several ways in which I think the NYISO is inextricably involved with= =20 energy efficiency:=20 The current competitive market the NYISO is overseeing is quite simply not = =20 working when it comes to demand or load responding to prices. Supply or =20 generators are responding to price=01*imperfectly, but there is significant= =20 response. So we have "half a market." We should be seeking to put demand on= =20 a par with supply=01*treating load equally with generation. We are moving = in=20 the direction of facilitating that, but with basically all consumers on fl= at=20 or average rates, and with almost all LSEs (the regulated distribution=20 companies) able to pass along their energy costs, there is little basis fo= r=20 responding to high prices even when we have the software mechanisms in pla= ce=20 to do so. Someone needs to find a way to have consumers confronting real= =20 prices=01*or at least paying a risk premium for not having to do so. Someo= ne=20 needs to find a way to have LSEs have a financial incentive to keep prices= =20 down=01*they don=01,t now. One way LSEs could do so would be to encourage = their=20 (fixed price) customers, through incentives, to reduce their use when pric= es=20 are high. Environmentally, there is a lot at stake in getting the market t= o=20 work right, and the ISO plays a major role in that, even when it is not it= s=20 immediate responsibility.=20 The emergency measures the ISO is considering have very significant =20 environmental impacts. Small diesel generators may be needed to avoid the = =20 significant social costs of outages. One environmental concern here is that= =20 such generators be restricted to emergency conditions, and not become a new= =20 breed of economic peak clippers. And also, it seems reasonable that the =20 emergency program "clean up after itself" by having offsets or mitigation = =20 associated with it. Actual demand reductions are a preferable alternative = =20 since they do not have health and environmental impacts=01*and help lower= =20 market prices at the same time.=20 I don=01,t mean to suggest that the NYISO is responsible for all of the iss= ues =20 raised here=01*clearly the PSC, DEC, NYSERDA and others have very important= =20 roles. I think the NYISO needs to work with these other agencies to get=20 competition to work more or less right, and pull down prices and protect t= he=20 environment at the same time.=20 Sorry if I have fallen into the trap of repeating myself=01(at length. Than= ks =20 for your comments. Larry
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