Message-ID: <8780238.1075848230275.JavaMail.evans@thyme> Date: Tue, 19 Dec 2000 09:35:00 -0800 (PST) From: howard.fromer@enron.com To: richard.shapiro@enron.com, steven.kean@enron.com, steve.montovano@enron.com, james.steffes@enron.com, thane.twiggs@enron.com, tom.may@enron.com Subject: NYPSC Report on ISO - More Info Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit X-From: Howard Fromer X-To: Richard Shapiro, Steven J Kean, Steve Montovano, James D Steffes, Thane Twiggs, Tom May X-cc: X-bcc: X-Folder: \Steven_Kean_June2001_5\Notes Folders\New york X-Origin: KEAN-S X-FileName: skean.nsf I spoke with IPPNY's Executive Director and with the ISO's outside General Counsel this afternoon and learned that neither the FERC staff nor the ISO Board believes that the $150 soft price cap makes sense for New York. Carol Murphy, IPPNY's Exec Director, told me that she had spoken with Dan Larcamp, Director of Markets, Tariffs and Rates at FERC, who advised her (off the record) that NY's problem is supply driven and that IPPNY should put the spotlight on the NYPSC for not doing anything about increasing supply in New York. He saw little similarity between NY and California and was skeptical of the soft bid cap proposal for NY. On a simialr vein, Ira Freilicher from Hunton and Williams, the NYISO's outside counsel, told me that their was no chance of the NYISO Board going along with the soft price cap proposal. He indicated that the Board had just concluded a two-day session and had Bill Hogan in to discuss the situation, and the recommendation from Hogan and others was that NY is not California, and that the $150 soft price cap was the wrong approach. Freilicher also reiterated that there was no interest by the Board in extending the NYC mitigation measures applicable to the divested Con Ed generation to other generation in the City, or to reducing the thresholds for market power mitigation, both of which were recommended by the NYPSC. On the other hand, Freilicher indicated that there was very strong Board interest in adopting a "circuit breaker" mechanism to prevent big price runups this summer, and that politically, $1000 bid caps may no longer be acceptable. He also reiterated that the Board is interested in getting power to step in and change posted market prices after the fact (although in a 2 to 3 day period, not 60 as had been originally reported) in the event the ISO finds that prices were affected by the exercise of market power. In th past, FERC has rejected efforts by the NYISO to retroactively adjust prices, and I believe refused to allow it in California as part of its Order last week. In view of the sensitive nature of these discussions, I would appreciate folks not circulating this memo.