Message-ID: <19684023.1075859533741.JavaMail.evans@thyme> Date: Mon, 11 Dec 2000 05:29:00 -0800 (PST) From: alan.comnes@enron.com To: tim.belden@enron.com, christian.yoder@enron.com, jeff.richter@enron.com, robert.badeer@enron.com, john.forney@enron.com, greg.wolfe@enron.com, mary.hain@enron.com, mwood@stoel.com, elizabeth.sager@enron.com, steve.hall@enron.com Subject: Bullet Summary of the ISO's Amendment No. 33 (December 8 Filing) Mime-Version: 1.0 Content-Type: text/plain; charset=ANSI_X3.4-1968 Content-Transfer-Encoding: quoted-printable X-From: Alan Comnes X-To: Tim Belden, Christian Yoder, Jeff Richter, Robert Badeer, John M Forney, Greg Wolfe, Mary Hain, mwood@stoel.com, Elizabeth Sager, steve.hall@enron.com X-cc: X-bcc: X-Folder: \Elizabeth_Sager_Dec2000\Notes Folders\All documents X-Origin: Sager-E X-FileName: esager.nsf After I wrote this I was forwarded Steve Hall's summary. There's some=20 redundancy but hopefully, this provides a few more details. Also, Mary H= .=20 and I are informed that on Friday the FERC issued an order that appears to= =20 approve the ISO=01,s request in full. Bullet Summary of the ISO's Amendment No. 33 (December 8 Filing): The following is a summary of the filing made by the ISO. 1) ISO=01,s $250/MWh Soft Cap a) Summarized: ISO Claims its proposal is identical to the FERC proposed so= ft=20 cap but raises the soft cap level to $250 from the $150/MWh proposed by the= =20 FERC: =01&The ISO would replace the current cap on Imbalance Energy bids wi= th an=20 interim =01&soft=018 price cap based on the price mitigation proposal in th= e=20 Commission=01,s November 1 Order. The ISO=01,s scheduling system will not r= eject=20 Energy bids priced in excess of the $250/MWh price cap, but will evaluate= =20 those bids in price merit order. However, if the ISO issues Dispatch=20 instructions to Scheduling Coordinators for Energy that has been bid in=20 excess of the $250 soft cap, those bids will not set the Market Clearing=20 Price for Imbalance Energy. Rather, those Scheduling Coordinators will be= =20 paid in accordance with their bids.=018 b) Refund risk and cost documentation above $250. =01&Imbalance Energy abov= e the=20 level of the soft price cap would be subject to refund, based on subsequent= =20 review by the Commission. It also should require Scheduling Coordinators th= at=20 submit such bids to supply supporting cost information to the Commission, a= s=20 well as to the ISO and to the California Electricity Oversight Board so tha= t=20 they may bring questionable bids to the Commission=01,s attention. i) Appears to imply that the proposed reporting requirement is supplemental= =20 to what was requested by the FERC. See p. 8 ii) Regarding production costs: fuel, taxes, emission credits, startup cos= ts=20 are all listed as costs. However, no mention of noncontiguous scheduling= =20 costs or reasonable profit. iii) Quasi safe harbor on opportunity costs: In a footnote to cover letter= ,=20 ISO states it will particularly scrutinize any opportunity costs in excess = of=20 10% of the production costs or $25/MWh, whichever is lesser. c) Useful quote: =01&In light of current fuel prices and the ISO=01,s recen= t=20 experience in receiving less than a thousand MW of Imbalance Energy bids at= =20 prices of $150 or less in many hours, the ISO believes that a $150 soft cap= =20 would be tantamount to procuring all Imbalance Energy on an as-bid basis.= =018 d) Effective date: 4 p.m. PST 12/8/00.=20 e) Term of this soft cap: lesser of 3 mo (3/8/01) or whenever the Commissi= on=20 supercedes it by its own order. f) Applicable tariff sections. Section 2.5.23.2 and .3. See attachments= =20 A1/B1 to the filing. 2) Participating Generator Penalties a) Summary: =01&the ISO proposes in Amendment No. 33 to assess penalties ag= ainst=20 Participating Generators that refuse to operate in response to an ISO=20 Dispatch instruction during a System Emergency or when the ISO is acting to= =20 avoid an imminent or threatened System Emergency. They would be charged an= =20 amount equal to twice the highest price that the ISO paid for Energy for ea= ch=20 hour in which the Participating Generator failed to respond. In addition, i= f,=20 during that hour, the ISO curtailed Load to manage a System Emergency other= =20 than Load that has not been designated by agreement or regulation as=20 interruptible, the Participating Generator would pay an additional penalty = of=20 $1000/MWh for the Energy that it failed to deliver.=018 b) Allowed excuse: The penalties would not apply if the Participating=20 Generator has notified the ISO (within the hour of instruction), and=20 subsequently demonstrates (documentation within 72 hours) , that its=20 Generating Unit, System Unit or System Resource was physically unable to=20 operate or that operation would violate a legal restriction that could not = be=20 waived. c) Applicable tariff sections. Amends portions of 5.6.1 .2 and .3. See=20 attachments A2/B2 to the filing. d) Effective date: Same as the ISO=01,s new soft cap: 4 p.m. PST 12/8/00 e) Term: I did not see any sort of sunset provision. 3) Load Imbalance Penalties a) Summary: =01&Scheduling Coordinators who rely on that market to serve t= heir=20 Loads the ISO=01,s costs of obtaining Energy through bids above the propose= d=20 soft price cap or through out-of-market Dispatches when bids are=20 insufficient. Specifically, those costs would be allocated to Scheduling=20 Coordinators in proportion to their Demand that appears unscheduled in=20 real-time (underscheduled Load) and Generation that is scheduled but does n= ot=20 appear in real-time, except to the extent that the underscheduled Load or= =20 undelivered Generation is balanced within the Scheduling Coordinator=01,s= =20 portfolio.=018 The costs of dispatching units that have bid above the Mark= et=20 Clearing Price for Energy to Scheduling Coordinators in proportion to their= =20 Net Negative Uninstructed Deviations (in essence, the amount by which their= =20 metered Demand exceed their metered Generation). Cover letter, p. 10.=20 b) Net Negative Uninstructed Deviation (NNUD) defined: =01&The real time ch= ange=20 in Generation or Demand associated with underscheduled Load (i.e., Load tha= t=20 appears unscheduled in real time) and overscheduled Generation (i.e.,=20 Generation that is scheduled in forward markets and does not appear in real= =20 time). Deviations are netted for each BEEP Interval, apply to a Scheduling= =20 Coordinator=01,s entire portfolio, and include Load, Generation, Imports an= d=20 Exports=018 c) Applicable tariff sections. Amends portions of 11.2.4.2.1. See=20 attachments A3/A3/B3 to the filing. d) Effective date: For loads scheduled for 12/12/00. (Essentially, loads= =20 scheduled on 11/11 for next day). e) Term: I did not see any sort of sunset provision. 4) Useful Info from the Detmers Declaration a) =01&During the recent 7-day period from December 1, 2000 through Decembe= r 7,=20 2000, planned Generating Unit outages have averaged roughly 4,000 MW. Durin= g=20 this same 7-day period, forced or unplanned outages of generating have be= =20 very high, averaging approximately 7,000 MW. =01& b) =01&For example, for the last four days (December 4, 2000 to December 7,= =20 2000) we have purchased 255,000 MWh of OOM Energy. The cost of these=20 purchases were approximately $167 million. MWh.=018 (Equivalent to an aver= age=20 OOM cost of $655/MWh.)