News Digest was compiled June 21, 2001 by Bruce W. Radford, editor-in-chief, from contributions as noted from Carl J. Levesque, associate editor, and Phillip S. Cross and Lori A. Burkhart, contributing legal editors.
Automated Price Mitigation. Aquila Energy Marketing and Edison Mission Energy (among others) opposed the New York ISO's plan for automated price mitigation (AMP), filed May 17, which would employ a "Security Constrained Unit Commitment" (SCUC) computer program to quickly identify outlier bids from power suppliers that exceed thresholds for reasonableness (OK'd previously through the ISO's market mitigation and monitoring plan), and then weigh the effect of those bids on price-setting algorithms, and mitigate prices (by excluding the bids) if the bids also would have caused prices to exceed certain thresholds for reasonableness and volatility.
Aquila and Edison say the regime will mitigate too many bids and drive prices down to artificially low levels because the AMP model is apparently designed to take all bids that exceed the bidding thresholds and then to analyze their effects on the price-setting algorithm on a collective basis, rather than by analyzing each bid separately. In fact, they say they didn't fully understand the ISO's AMP method until reading the ISO's June 1 answer to a first round of protests filed in May. FERC Docket No. ER01-2076-000, protest filed June 15, 2001.-B.W.R.