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Groups Call Phase-II Filing "Frankenstein"

Fortnightly Magazine - August 1997

Two California watchdog groups, The Utility Reform Network and Utility Consumers Action Network, have filed a joint protest at the Federal Energy Regulatory Commission against the proposed structure of California's independent system operator and power exchange (Docket Nos. EC96-19-003 and ER96-1663-003).

The groups believe the proposed structures would hurt small consumers. They noted that although small consumers use about one-third of the state's electricity, they only have two votes out of 26 in both the PX and the ISO. They claim that the ISO will not be truly independent by allowing large players to dominate and allow abuses of market power.

The groups charge that in the Phase II filing, a "Frankenstein" of a model is proposed. It has bilateral contracting as the central feature, special exceptions for bilateral traders, a "jumbled" series of market protocols, a "market separation constraint" that all schedule coordinators must comply with and an "anemic" PX that is "sewn on" as an afterthought.

According to Mike Florio, TURN senior electric attorney, "The utilities and big industrial customers have the money, the rules, the information and the sophistication to use them."

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