NSTAR Complaint and Northeast RTOs

On May 14, NSTAR filed a complaint against Sithe and PG&E Trading, arguing=
=20
that both have generation market power in the Northeastern Massachusetts Ar=
ea=20
(NEMA) during times of transmission constraints and should not be permitted=
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to sell power at market based rates in that region during times of=20
constraint. NSTAR contends that when transmission congestion occurs, the=
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market in NEMA cannot be considered workably competitive since Sithe and PG=
&E=20
own almost 90 percent (2,725 MW of the total 3,036 MW) of existing generati=
on=20
in NEMA. NSTAR alleges that, had competition existed from September 1, 199=
9=20
=01) May 31, 2000, the cost of congestion relief in NEMA would have been ar=
ound=20
$2.3 million. Due to Sithe=01,s and PGE=01,s market power, however, the co=
st was=20
actually $56 million.

Due to this market power, NSTAR asks the Commission to: 1) revoke Sithe=
=01,s=20
and PG&E=01,s market-based pricing authority during periods of transmission=
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constraint in NEMA; 2) require Sithe and PG&E to divest some of their=20
generation if they wish to have market-based rates during these times of=20
constraint; 3) develop a formula based on unit operation characteristics an=
d=20
fuel costs in order to calculate the marginal cost of each unit for Sithe a=
nd=20
PG&E; during times of constraint, these generators would be paid the higher=
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of the energy market clearing price (ECP) or their marginal cost; 4) requi=
re=20
NE ISO to make all bid data, including unit operating characteristics,=20
available 90 days after the fact and allow for public disclosure of data,=
=20
mitigation processes, and implementation of mitigation agreements; and 5)=
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order Sithe and PG&E to refund all money collected by them in excess of the=
=20
applicable NEPOOL ECP from the time when congestion became a problem in NEM=
A.

The Commission is requesting comments and protests to be filed by June 4. =
We=20
will intervene in this proceeding in order to monitor it, but please let me=
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know if you have any concerns or thoughts or would like us to take an activ=
e=20
role in this proceeding.

Also, PJM (including PJM West), New England and New York RTO proposals are =
on=20
FERC's agenda for Wednesday. Interestingly, FERC's agenda shows the New=20
England and New York RTO cases as being considered in one order. This may=
=20
just be a typo on FERC's part, but we will research it.

We'll keep you posted.

Sarah