November 17, 2003—The Federal Energy Regulatory Commission (FERC) is helping the California Independent System Operator (CAISO) establish a framework to make California energy markets more efficient and reliable by approving the general concepts of a market design proposal.
CAISO’s proposal is part of its Comprehensive Market Design 2002, a three-part plan to redesign its congestion management system in addition to creating and implementing a day-ahead energy market.
Terms of the framework include:
- a proposal to implement Locational Marginal Pricing and the Integrated Forward Market in redesigning CAISO’s congestion management system;
- a residual unit commitment process;
- proposed bidding and scheduling concepts, subject to further review;
- study of a proposed congestion revenue rights allocation process, and an initial filing of allocation information at least three months prior to its tariff filing;
- further analysis of CAISO’s Existing Transmission Contract proposal;
- the filing of any changes to CAISO’s market redesign proposal as a result of any final California Public Utilities Commission ruling on procurement;
- giving generators the choice to fulfill the must-offer obligation either in the day-ahead or real-time market; and,
- market power mitigation measures for a technical conference to create a mitigation package that will be effective within the CAISO’s market design.
