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Phase II: NYISO COMPREHENSIVE PLANNING PROCESS CONSIDERATION OF ECONOMIC NEEDS

Phase II: NYISO COMPREHENSIVE PLANNING PROCESS CONSIDERATION OF ECONOMIC NEEDS. Prepared By John P. Buechler ESPWG Meeting September 15, 2004 Albany. Possible Approaches (Suggested by NYISO on August 11 th ). Information approach “PJM-type” approach

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Phase II: NYISO COMPREHENSIVE PLANNING PROCESS CONSIDERATION OF ECONOMIC NEEDS

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  1. Phase II: NYISO COMPREHENSIVE PLANNING PROCESSCONSIDERATION OF ECONOMIC NEEDS Prepared By John P. Buechler ESPWG Meeting September 15, 2004 Albany

  2. Possible Approaches(Suggested by NYISO on August 11th) • Information approach • “PJM-type” approach • Development of additional market-based mechanisms • Bill Hogan’s “Transmission Market Design” Concept

  3. Calpine Comments • Planning for economic needs should allow for consideration of all physical and procedural alternatives on an equal basis • The presence of transmission congestion should not be the sole measure of whether an “economic need” exists • A transmission solution may not be the most efficient one • Strongly favors implementation of an “information approach” to economic needs • Not in favor or pursuing the other approaches discussed by the NYISO in August

  4. National Grid Comments • Supports the “PJM Approach” as the only comprehensive economic planning process • Information Approach is a necessary, but not sufficient, component of the process • Additional market-based initiatives will not provide a solution if the market does not respond • Hogan approach is not a comprehensive process—but only addresses one aspect of the issue

  5. NYSEG/RGE Comments • Favor a “go slow” approach to economic planning for the NYISO • Prefers to let the marketplace decide economic issues • Would support some combination of the “informational approach” and the “market-based mechanisms” going forward • Forecasting congestion may pose some problems • Examining market enhancements appears worthwhile • Merit in looking at various TCC issues • Not in favor of pursing either the “PJM approach” or the Bill Hogan proposal

  6. Larry DeWitt’s Comments • We agree on using the “bid production cost” definition for congestion costs • Should develop a plan for estimating current and prospective economic congestion • Define “persistance” • Define “significant” • No immediate need for intervention with a regulated solution • FERC may feel otherwise • PSC intervention will likely be required

  7. Larry DeWitt (Cont’d) • Possible Options to avoid development of a new planning process for economic needs • Option 1: General Description • Details to be worked on an ad hoc basis and filed only when, and if needed • Specific process requirements will likely be case-specific • Nothing on the horizon at present • Option 2: Adopt CRP process, with modifications • Fundamental approaches should be the same • Put this proposal up for a committee vote • If no consensus, let NYISO Board decide what to do

  8. Discussion • Information approach • Scope • Model to be used (PROBE?) • PJM-type approach • Market mechanisms • NYISO suggestions • Others? • Larry DeWitt’s procedural suggestions • Other comments/approaches?

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