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CAISO, Parties File Settlement Regarding Assignment of Costs Created by Market Participant Defaults

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October 4, 2010

The California ISO, several California generators, and the state's major investor-owned utilities have filed a settlement at FERC governing the allocation of payments required of market participants to cover defaults in the CAISO market.  Several municipal utilities as well as FERC Staff have indicated that they do not oppose the settlement, which addresses issues raised in a complaint by generators and other net wholesale suppliers in EL09-62.

Under the settlement, the ISO tariff would be revised to provide that each payment default amount that remains unpaid by the defaulting CAISO Debtor will be allocated on the next practicable Invoices to Default-Invoiced Scheduling Coordinator ID Codes (SCIDs) using the following methodology:

  1. Cleared Day-Ahead Schedules to supply Energy, plus Day-Ahead Ancillary Services Awards and qualified Self-Provided Ancillary Services, plus scheduled supply obligation for Ancillary Services (including imports but excluding RUC Schedules), plus Virtual Supply Awards;
  2. Metered Generation, plus Real-Time Interchange Import Schedules, plus Real-Time Ancillary Services Awards and qualified Self-Provided Ancillary Services, plus HASP Ancillary Services Awards and qualified Self-Provided Ancillary Services, plus Real- Time supply obligation for Ancillary Services;
  3. Cleared Day-Ahead Schedules for Demand (including Demand served by Pumped-Storage Hydro Units and exports) multiplied by 103% to reflect Transmission Losses, plus scheduled demand obligation for Ancillary Services, plus Virtual Demand Awards;
  4. Metered Load multiplied by 103% to reflect Transmission Losses, plus Real-Time Interchange Export Schedules, plus Real-Time demand obligation for Ancillary Services; or
  5. The greater of (A) the quantity of CRRs acquired in CRR Auctions or transferred through the Secondary Registration System (excluding CRRs acquired in CRR Allocations) or (B) Inter-SC Trades of Energy.

In some circumstances, the Revised Default Allocation Tariff Provisions allow market participants that are Scheduling Coordinators, CRR Holders, Candidate CRR Holders, or Participating Transmission Owners to elect to consolidate data among multiple related SCIDs.

Since the tariff revisions will use a "look back" approach including prior calendar quarters, Market Participants that subsequently exit the ISO markets will continue to be responsible for allocated shares of payment default amounts to the extent required by the Revised Default Allocation Tariff Provisions even after their exit from the market.

   
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