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Enron Mail |
On Friday, about 3:00 pm, the ISO filed for emergency tariff changes, some of
which are effective as of December 8, 2000 beginning HE 1600, and others that take effect Tuesday, December 12, 2000. As a consequence, we no longer have the luxury of waiting until Jan 1, 2001 to start documenting certain costs; we must start documenting the verifiable costs to support supplemental energy and ancillary services energy bids in excess of the $250 soft cap immediately. I understand that at least some of the traders have been informed of these changes, but I thought that it might be helpful for everyone to have a concise summary of the main points of this filing. 1. The ISO has changed the $250 hard cap on Supplemental Energy bids and Ancillary Service Energy bids to a soft cap. It's similar to the FERC's proposed soft cap in its Nov. 1 Order. Sellers can bid over $250 for supplemental energy bids and ancillary services energy bids. If the ISO accepts a bid greater than $250, settlement will be as-bid and subject to refund if costs cannot be verified. SCs must submit cost documentation to the FERC, ISO, and California Electric Oversight Board for all energy dispatched in excess of the soft cap. Effective December 8, 2000. 2. Beginning Trade Day December 12, 2000, the ISO is going to charge SCs who underschedule load or schedule generation that does not show up in real time, based on each SC's net regional negative uninstructed deviations. ("Net Negative Uninstructed Deviations" is a new ISO defined term, see below.) These SCs will be charged for (1) amounts paid by the ISO to purchase Energy from bids above the price cap, and (2) costs for Energy associated with out-of-market Dispatch instructions issued due to underscheduling. 3. Participating Generators that fail to respond to ISO Dispatch instructions will be assessed a penalty equal to double the highest price paid by the ISO for Energy for the hour in which the Generator failed to respond. The penalty will not be assessed if the Generating Unit gave the ISO advance notice of a de-rate or outage that would limit the Generator's ability to respond to a Dispatch instruction. If the outage or de-rate occurs in real-time, then a reason code provided with a decline or partial acceptance of an ADS instruction will constitute notice and no penalty will be assessed (subject to some additional conditions). If the ISO has to curtail firm load to manage a System Emergency, the Generator will pay an additional penalty of $1000/MWh for dispatched energy it failed to deliver. 4. Bilateral arrangements with the ISO, i.e., out of market purchases, will not be altered by the ISO's Amendment 33. 5. From December 1-5, the ISO paid an average of $5 million per day for real time energy. On December 5th, the ISO paid $36 million and on December 7th $81 million. 6. The published ex post price will not exceed $250. 7. There is still a hard cap of $250 on Ancillary Services capacity bids. 8. Net Negative Uninstructed Deviations: Penalties for being short in real-time (either underscheduled load or generation scheduled in forward markets that does not show up) are based on net deviations for each BEEP interval, based on an SC's entire portfolio, including Load, Generation, Imports, and Exports. 9. Action: We need to start documenting costs of Supplemental Energy and Ancillary Services Energy bids immediately. Much of the groundwork for figuring out what information to collect has been done with respect to the real-time and services desks, but we need to make sure that someone is collecting this information on a daily basis. For now, I am willing to be the point person to make sure the information is collected and filed with the appropriate agencies, but eventually someone from the floor should take on this responsibility. I will be here early on Monday, and we can coordinate our efforts then. Steve
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