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FERC Approves CAISO Virtual Award Charge

July 26, 2011
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FERC approved the California ISO's proposed level of its virtual award charge, which applies to scheduling coordinators engaged in convergence bidding (ER11-2128 et. al.)

Specifically, FERC accepted a virtual award charge equal to nine percent of the Forward Scheduling Charge and Market Usage - Forward Energy services categories. For 2011, this equals $0.0618 per gross cleared megawatt-hour.

CAISO arrived at the nine percent figure using estimates of virtual trading in other ISOs, given that, as a new market feature, there was no convergence bidding history to use in setting the charge in CAISO.

Several financial marketers protested the specific periods CAISO selected at other RTOs to determine the level of virtual trading, and also argued that the virtual trading fees across RTOs were not comparable as they recover different costs. FERC dismissed such protests.

FERC did order that CAISO shall file, for informational purposes, a study after 18-months of convergence bidding market experience that includes data demonstrating whether the estimated level of bidding resulting from convergence bidding is an accurate representation of actual activity in the CAISO market

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