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News Digest (July 15, 2001)

Fortnightly Magazine - July 15 2001

energy to satisfy ICAP requirements, it will recall energy on a least-cost basis before shedding load or instituting a voltage reduction, and that at least for now, recall bids will not be used to set real-time or day-ahead locational marginal prices. Docket No. ER00-1483-001, 95 FERC ¶61,406, June 15, 2001. -B.W.R.

Palo Verde Trading. Automated Power Exchange submitted a plan to FERC to set up a computerized platform to facilitate bilateral, power trading in hourly and daily markets at the Palo Verde (Ariz.) Hub, with bid/ask and double-auction trading, in similar fashion to other functioning APX markets, as the first step in setting up an APX West Wide Market at numerous trading hubs across the Western Systems Coordinating Council. APX would charge a one-time, fixed participant setup fee of $1,000, a training fee of $1,000 per session (the first session is free), a monthly minimum fee of $500, and transaction fees of 10 cents (hourly market) and 3 cents (daily market) per megawatt-hour. FERC Docket No. ER01- 2216-000, filed June 4, 2001. -B.W.R.

Transmission and ISOs

Congestion Management. In a bizarre twist, there was near-unanimous support for a new standard market design (SMD) for congestion management and settlements for wholesale power markets in New England, based on the PJM model, and yet by mid-June, both ISO New England and the participants' committee of the New England Power Pool had found it necessary to submit three independent market design proposals- with each proposal being essentially identical- as the ISO and each NEPOOL feared that opponents might attack its legal authority to propose and adopt a market redesign in unilateral action and thus delay market reform (as in fact happened when Mirant challenged a different market proposal by ISO-NE on procedural grounds on June 20 in FERC Docket No. EL01-92-000 .)

Comments on first-filed market design (the ISO proposal) were due by June 21. See FERC Docket Nos. ER01-2102-000, EL01-85-000 (ISO Market Rule IX), filed May 31, 2001; No. ER01-2223 (NEPOOL SMD), filed June 4, 2001; No. ER01-2329 (joint ISO/NEPOOL proposal), filed June 19, 2001. -B.W.R.

At-Risk Construction. The FERC clarified a prior order concerning grid upgrades in ISO New England by noting that while any new grid project generally must comply with a competitive bid process, such a step is not required if a participating transmission owner or third party indicates that it would be willing to construct, own, and maintain a project at its own risk. That is, the owner would not receive compensation through an ISO grid access fee, nor cost recovery through ISO rates. Docket Nos. EL00-62-004 et al., 95 FERC ¶ 61,384, June 13, 2001. -L.A.B.

Neptune Undersea Line. Along with the PJM ISO, several electric utilities in the Northeast have protested the request by Project Neptune for authority "in concept" to recover system benefits for adding capacity to regional transmission grids, fearing that in reality, the project might actually impose more costs on regional grid operators, and also might end up adding 1200 megawatts in new load in PJM- at least during the first phase of the project,