NYISO Files Clarifications to Market Power Mitigation Measures

The New York ISO has filed with FERC proposed tariff amendments to revise provisions concerning the Market Power Mitigation Measures and the Market Monitoring Plan.

The majority of changes are more than ministerial, but still only reflect clarifications or memorialization of current practice, rather than new policy.

However, NYISO did propose a substantive change to the data it uses to calculate LBMP-based reference levels based on practical experience it has gained with implementing these reference levels over a period of years.

Using LBMPs from the lowest priced 25 percent of hours in which a Generator is committed frequently results in the development of reference levels that are below the Generator's marginal cost. The NYISO said that it is frequently required to override LBMP-based reference levels to avoid implementing reference levels that would require the Bid submitted for a Generator to be below that Generator's marginal cost.

The NYISO proposed addressing this concern by modifying the calculation to use LBMPs at the Generator's location during the lowest 50 percent of hours that the Generator was dispatched over the most recent 90 days. This change will require modifications to the NYISO's software, and NYISO proposed implementing the change in late June of 2011.