By Tom Kleckner

HOUSTON — Market monitors from the Eastern Interconnection and ERCOT last week debated their roles in the RTOs they oversee and the need for effective monitoring programs at the Gulf Coast Power Association’s annual spring conference.

“Part of our role is to dig into the garbage and the bad side of things,” Keith Collins, executive director of the SPP Market Monitoring Unit, said at the Gulf Coast Power Association’s annual spring conference. “Most people would be surprised at what other people are attempting to do. Unfortunately, that gives us the job security that we have.”

“We maintain credibility by being credible,” said Potomac Economics’ Pallas LeeVanSchaick, director of NYISO’s MMU. “We’ve established our reputation by providing information and transparency into the market. When we have opinions, and we have a lot of market suggestions, we back that up with rationale. We’re not promoting one set of participants over another.”

Potomac’s Steve Reedy, deputy director of ERCOT’s Independent Market Monitor, said his group considers its role to be that of an educator.

“Certainly, we advocate certain positions, but we look to make sure an honest discussion is held on all important issues,” Reedy said. “We don’t win every battle, and not every issue we advocate passes. But as long as we feel the issue is properly understood by all sides and by the [Public Utility Commission] in its votes — we feel that is our most important role.”

“Our primary function is to help support and maintain competitive prices,” said Monitoring Analytics President Joe Bowring, whose firm serves as PJM’s IMM. “We have three sub tasks: looking for instances of market power and reporting on them; making proposals that improve market design; and continuing to support market design changes that support competition.”

Asked how to keep monitors from being seen as just another stakeholder in the market, Bowring said, “I’ve been accused of many things. I’ve been accused of being pro-load, I’ve been accused of being pro-generation. I’ve never been accused of being just another stakeholder. We’re used to losses in the stakeholder process.”

Reedy also addressed the coming summer in Texas, saying he has seen August forward prices of $200/MWh. ERCOT is expecting record peak demand that month, but it only has a 9.3% reserve margin after a wave of coal-fired retirements last fall.

“It’s been quite a while since things have been this tight in ERCOT,” Reedy said. “It will test the political resolve of certain entities and whether they want to commit to an energy-only market. All indications so far are they want to continue, but that could change with multiple hours of $9,000 prices [per megawatt-hour for scarcity pricing]. From an IMM perspective, it’s very interesting to us.”