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Scheduling Coordinators: Market Fears and Profit Margins

Fortnightly Magazine - January 15 1998

The PX plans to run it as an "iterative" market where set bids create a preliminary market-clearing price. Participants will be free to change their bids on the buy and sell sides, but a series of activity rules will prevent gaming through the iterations. The software to prevent the gaming won't be in place until June.

Kritikson bats away Cazalet's claim that APX's week-ahead auction is beneficial. "They can't submit the schedule until a day before, just like us," he says. "So the transmission arrangements aren't firm until you get down to a day ahead when you submit the schedules to the ISO and there's a determination of whether there's

to be congestion."

Identifying the Options

Kritikson says from his PX roost, he sees people still uncertain of how the exchange will work on scheduling issues. He says the PX will enable contracts for existing transmission and for future power service contracts. "I think people need to understand they can arrange, in effect, for delivery of their contract power through the power exchange and get additional flexibility," he says.

He also has been asked: "If I have a bilateral contract, do I have to become an SC in order to get my contract scheduled directly with the ISO?" The answer is no. The contract can be effectuated by a simple buy-sell, or contract for differences, in the PX or through a coordinator.

Kritikson wants people to know, too, that if they're California PX participants, whenever there's over-generation, the PX energy price will drop to zero. Participants will be able to arrange for free power.

The number of retail customers who opt out of their current utility will drive development of the market. The more people who exit, the more likely the remaining IOUs will have QF take-or-

pay or nuclear and other contracts not susceptible to curtailment.

Changes are ahead for SCs, although perhaps not in all the areas these market participants raise. Susan Schneider, client services vice president at the California ISO, says the ISO will consider a market study to determine different levels of ISO service and charges.

"Now, you pay the grid management charge or you don't," she says. "Clearly, not everyone gets the same services from the ISO. Maybe people should have a choice about what they do, what they get from us and what they don't."

In 1998, the ISO will prioritize and analyze costs of changes.

The system operator also is very aware of the issue of data integrity.

"This whole system depends on people being honest and competent," Schneider says. "And most people will be both of those. But some people might not be one or the other and the question is, 'If there are problems, can we detect problems?' And then, 'Do we have something we can really do about it?'

"The only thing we can do now is say, 'Well, we revoke your ability to do business.' Well, for an inadvertent mistake, that's really a little bit much."

Ackerman thinks the future's scheduling process will be simplified.

"We've created a far too complex