ISO New England draws heat for price cuts

Hoping to prevent price gouging, ISO New England retroactively cut prices for some electricity sold to it during a two-day heat wave in June-a move that steamed many traders.

The two-day hot spell tested the limits of electricity systems from Toronto to Washington D.C., cutting power to industrial customers and closing state offices.

The ISO said it revised clearing prices to reflect the lower cost of running limited energy optimization (LEO) units or hydro plants used during emergencies. Called into service on short notice, these plants weren`t immediately calculated into the clearing prices displayed on the ISO`s web site.

Many New England traders said they would be less likely to sell power to the ISO during the next crisis, and several said they were considering challenging the revised prices in court.

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