By William Opalka
FERC on Friday granted New York officials’ request to exempt new “special case resources” (SCR) from buyer-side market power mitigation rules in NYISO (EL16-92).
The commission, however, denied a request to exempt SCRs currently subject to mitigation. An SCR is a demand-side resource that participates as a supplier in NYISO’s capacity market.
The order addresses an issue left unresolved by the commission in a previous order that addressed market power concerns in the capacity market. (See FERC Upholds Most of New York City Market Power Order.)
NYISO’s rules apply the minimum offer price rule (MOPR) to new capacity resources in the New York City or G-J Locality ICAP markets.
The Advanced Energy Management Alliance, the Natural Resources Defense Council and several New York state agencies, including the Public Service Commission, filed a complaint last June seeking the exemption. They said subjecting SCRs to NYISO’s buyer-side market power mitigation rules presents an “unreasonable barrier” for demand response providers that increases consumer costs and interferes with state policy objectives under the Reforming the Energy Vision initiative.
NYISO agreed with the complainants, saying mitigation was unwarranted because SCRs do not have the ability to suppress capacity prices.
FERC also agreed, rejecting arguments from the Independent Power Producers of New York and the Electric Power Supply Association that SCRs could have the same influence on installed capacity prices as other resources.
The commission said the argument is “based on the incorrect assumption that SCRs — which are generally individual or small aggregated sets of ‘resources’ — have the same ability to suppress ICAP market prices as a single, large market participant.”
Commissioner Norman Bay added a six-and-a-half-page concurring statement that questioned the overall efficacy of the MOPR. “I concur with this result but would go further in reconsidering the MOPR’s rationale and applicability in the wholesale electricity markets,” Bay wrote.
He appended a similar statement to another order on Friday that approved a MOPR exemption for renewable energy in ISO-NE. (See related story, Bay Blasts MOPR on Way Out the Door.)
The commission also ruled as moot a request for rehearing and its dismissal of a related NYISO compliance filing (EL07-39-007).