California ISO approves power market design

April 26, 2002 — The California Independent System Operator (ISO) on Thursday approved its electricity market plan.

The organization will submit the plan on May 1 to the Federal Energy Regulatory Commission (FERC), according to Dow Jones Newswires.

The market design, which would go into effect Oct. 1, includes a must-offer requirement, a damage control bid cap and bid screens, which are designed to protect consumers from rising electric rates in case FERC rejects its request to extend the present price caps beyond Sept. 30.

According to the must-offer rule, power providers would have to bid their available, unscheduled electricity into the market. The ISO would then use bid screens to cancel bids that are abnormally high for operating conditions. The bid cap would limit what generators could bid for power.

The ISO board chose a cap of $108 per MWh. The figure is indexed to natural gas and could rise when gas prices climb above $5.95 per million BTUs.

FERC Chairman Pat Wood III has said he probably won’t extend price controls beyond Sept. 30, Dow Jones reported.

ISO is still working on tariff rules to go with the package, which it plans to add by June 15 to take effect April 1, 2003.

If FERC approves the plan, utilities could have to prove starting April 1, 2003, that they have enough electricity to meet demand.

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The Clarion Energy Content Team is made up of editors from various publications, including POWERGRID International, Power Engineering, Renewable Energy World, Hydro Review, Smart Energy International, and Power Engineering International. Contact the content lead for this publication at

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