NYISO’s cost allocation plan approved by FERC


Sept. 24, 2003 — The Federal Energy Regulatory Commission (FERC) on Monday approved New York ISO’s proposal to more fairly spread costs among its electricity providers and purchasers.

FERC’s order approving NYISO’s cost allocation plan will assign costs to all market participants in proportion to the dollar value of their transactions in the spot power market, Dow Jones reported.

Under the current system, contributions to NYISO’s working capital fund and default costs are divided among electricity consumers based on the number of megawatt-hours they use.

In addition, FERC accepted the grid operator’s default recovery proposal which allows the ISO to make use of the collateral posted with it by the defaulting customer. If the amount didn’t take care of the loss, the operator could try to use the customer’s contribution to the working capital fund. A further step would allow the ISO to make a claim against the customer’s loss protection insurance. Leftover losses would be spread evenly among all customers.

NYISO was also given permission to get credit insurance.

FERC will not allow NYISO’s to require 90 days of security for non-investment grade companies. The commission said the maximum period between a company’s default and the grid operator’s termination of service for nonpayment is 50 days.

NYISO will have 30 days to turn in any changes and clarifications. The changes will go into effect 90 days from Monday, according to FERC’s order.

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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 Jennifer.Runyon@ClarionEvents.com.

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