Benefits of ISOs and RTOs "“ ISO-NE Results Show Lower Prices, Increased Investment and Improved Efficiency, Reliability and Environmental Action

In its recently published "Progress of New England's Restructured Electric Industry and Competitive Markets: The Benefits of ISOs and RTOs," ISO-New England ("ISO-NE") lauds the long-term performance of its power market. Since the market's inception in 1999, New England wholesale electricity prices have declined by 5.7 percent, after adjustments for fuel costs, and the fuel-adjusted price decline experienced from 2001-2004 was 11 percent. Also during this time, ISO-NE estimates that more than $9 billion was invested in new power plants, and up to $4 billion was invested in transmission...

New England Set to Implement Day-Ahead Demand-Response Market Beginning June 1

The New England Power Pool and the ISO New England finally won FERC approval in April to expand their demand-response bidding beyond real-time to the day-ahead market ¾ the Day-Ahead Load-Response Program or DALRP. This approval joins other recent regulatory recognitions that conservation can often prove the least-cost answer to perceived supply shortages. When the new program goes into effect June 1, a firm-demand New England customer can elect to become a demand resource by registering in one of ISO-NE's load-response programs and then be able to offer demand reduction in the day-ahead...

FERC Asks for Comments on the Roles of RTOs and ISOs in Establishing Reference Prices for Mitigation

On April 1, 2005, FERC invited comments on the roles of Regional Transmission Organizations ("RTO"), Independent System Operators ("ISO"), or their market monitors in establishing reference prices to be used to lower or "mitigate" wholesale power prices deemed to be non-competitive. Public comments were due to FERC by May 2, 2005. Several RTOs and ISOs "• including the New York ISO, ISO-New England, California ISO, and the Midwest ISO "• use "conduct and impact" tests in their wholesale day-ahead and real-time electricity markets to determine whether to apply mitigation to assure just and...

FERC Seeks to Rectify Imbalance in OATT with New Rule Giving Lift to Wind

To integrate wind and other intermittent resources energy more completely into wholesale power markets, FERC has proposed a new rule that would relax the imbalance penalties that generators pay under the pro forma open-access transmission tariff ("OATT"). The proposed new generator imbalance service schedule is intended to address the unique characteristics and constraints of intermittent resources such as wind, solar and run-of-river hydro facilities that rely on the weather, and therefore have a limited ability to predict or control their output. Comments on the proposed imbalance rule are...

Mexican High Court Rejects Congressional Auditors' Challenge to Private Generation and Sales of Power

Private power south of the border narrowly escaped in April a congressional audit committee invalidating as unconstitutional their generation and sale of power to the national electricity monopoly, the Comisión Federal de Electricidad ("CFE"). At the request of Mexican President Vicente Fox, the Mexican Supreme Court by a 6-to-5 vote ruled that the audit committee of the opposition-dominated Congress did not have authority to rule on the constitutionality of the power purchase contracts between CFE and private generators. Had the high court affirmed the audit committee and ruled against...

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