FERC Market Reform Effort Draws Support, Warnings

Long List of Stakeholders Weigh in on First 2 Changes

Economic Consulting | Utility Markets Today (Reprint)

December 3, 2015

Comments poured into FERC this week on its recent NOPR marking the first two proposed changes in the commission's efforts to reform energy markets (UMT, Sept-18). The NOPR proposed to align settlement and dispatch intervals and to make it so shortage-pricing rules are triggered when reserves fall short. Some of the ISO/RTOs already comply with the proposals while others will have to make significant changes, the ISO/RTO Council (IRC) told FERC in comments. Many of IRC's members have already either implemented or have at least worked on aligning settlement and dispatch intervals. 

The change will require significant settlement system upgrades on those ISO/RTOs that have yet to make them, so the IRC asked for flexibility in implementation timelines. The IRC did not come together on the shortage-pricing question and instead noted its members have quite different markets and urged FERC to respect those differences in instituting changes that could be major for some.

NYISO used the same settlement and dispatch intervals since its markets started, but the ISO asked FERC to let it keep settling station power (used by power plants to meet their own onsite energy needs) and limited storage resources that take part in reserves markets on an hourly basis. NYISO also uses demand curves to price shortages, which raise prices as they get worse, and that would comply with FERC's proposal. The ISO supports the rule because it has worked well already.

To view the full story on Utility Markets Today's website, please visit http://www.utilitymarketstoday.com/members/FERC-market-reform-effort-draws-support-warnings.cfm.

Posted with permission from Modern Markets Intelligence, Inc. Copyright ©2015. All rights reserved.

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