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Energy trade group protests California market design

By Sylvie Dale, Online Editor

June 5, 2002 — An energy industry trade group filed a protest Tuesday on a California energy market proposal, saying that it was too restrictive for traders and would fail in its goal to establish a healthy market.

The Independent Energy Producers (IEP) association (www.iepa.com), a group made up of virtually all major providers of wholesale electricity in California, has filed with the Federal Energy Regulatory Commission (FERC) that California Independent System Operator’s (ISO) plan filed on May 1 calls for mitigation measures, but does not have an overall comprehensive market design and does not encourage investment in resources and transmission infrastructure, Dow Jones reported.

The California ISO plan calls for a soft cap on electricity prices of $108/MWh and a “must offer” rule which would force generators to bid their available, unscheduled electricity into the market.

The IEP said it supports the must offer rule with some small modifications, but that the price cap at $108/MWh was inappropriate. In general, IEP’s filing continued, the entire plan contains mechanisms that are essentially overkill for what is needed.

The existing market plan expires on Oct. 1, and California ISO has asked FERC to reply to its proposal by July 31.

To read the complete IEP filing protesting the design, visit http://www.iepa.com/.%5Cdocuments%5C020601_protest_ER02-1656_FINAL.pdf.

To read the California ISO market design filing, visit http://www.caiso.com/docs/2001/12/21/2001122108490719681.html.