Price Formation in Energy and Ancillary Services, Markets Operated by Regional Transmission, Organizations and Independent System Operators: Supplemental Notice of Workshop on Price Formation: Scarcity and Shortage Pricing, Offer Mitigation, and Offer Caps in RTO and ISO Markets, 63619-63621 [2014-25322]

Download as PDF asabaliauskas on DSK5VPTVN1PROD with NOTICES Federal Register / Vol. 79, No. 206 / Friday, October 24, 2014 / Notices e. How is the planning of transmission, generation and other resources coordinated between retail and wholesale markets? 12:15 p.m.–1:00 p.m. Lunch Break 1:00 p.m.–3:00 p.m. Panel Two: Role of NYISO’s capacity market in attracting investment in resources and infrastructure needed to meet public policy objectives This session will focus on whether, and to what extent, NYISO’s capacity market should play a role in attracting investment in resources and infrastructure to meet public policy objectives. There may be a range of public policy objectives, including increasing renewable resources; maintaining or increasing clean energy resources to meet emission reduction goals; increasing distributed resources; increasing energy efficiency and demand response resources; maintaining fuel diversity; maintaining price stability for customers (wholesale, retail, commercial and industrial); economic development; and spurring investment in resources and infrastructure (both power lines and gas pipelines). Panelists should address whether these objectives are appropriately addressed through the NYISO capacity market. If so, this session will also include a discussion of whether certain aspects of the current NYISO capacity market design—in particular the capacity market product definition—need to change to achieve the requisite public policy objectives. The discussion may also explore whether some of these objectives are complementary or in conflict with other objectives. Panelists should be prepared to discuss the following questions: a. Are changes to the capacity market needed to account for fuel availability/ firmness of fuel, or to differentiate the value of capacity resources based on the ‘‘firmness’’ of fuel arrangements? b. Should the capacity market specifically account for or otherwise value resources that are intended to meet current or future public policy goals (e.g., fuel diversity or emission reduction goals)? How should there be modifications to the buyer-side mitigation rules to help achieve those goals? c. What price signals and tariff changes may be needed to achieve the objectives under discussion in the PSC’s Reforming the Energy Vision (REV) proceeding? d. Are there market, environmental, or other barriers to entry in certain locations or for certain kinds of resources (e.g., repowering assets in New York City)? VerDate Sep<11>2014 20:00 Oct 23, 2014 Jkt 235001 e. Are there broader market design features outside of the capacity market (e.g., scarcity and shortage pricing) that could be adjusted to account for public policy objectives (e.g., increasing renewables)? 3:00 p.m.–3:15 p.m. Break 3:15 p.m.–4:00 p.m. Roundtable discussion among Commissioners/ Wrap up Discussion of possible paths forward for identified issues and solutions. [FR Doc. 2014–25323 Filed 10–23–14; 8:45 am] BILLING CODE 6717–01–P DEPARTMENT OF ENERGY Federal Energy Regulatory Commission [Docket. No. AD14–14–000] Price Formation in Energy and Ancillary Services, Markets Operated by Regional Transmission, Organizations and Independent System Operators: Supplemental Notice of Workshop on Price Formation: Scarcity and Shortage Pricing, Offer Mitigation, and Offer Caps in RTO and ISO Markets As announced in a Notice issued on September 5, 2014, the Federal Energy Regulatory Commission (Commission) will hold a workshop on Tuesday, October 28, 2014 to commence a discussion with industry on scarcity and shortage pricing, offer mitigation, and offer caps in energy and ancillary service markets operated by the Regional Transmission Organizations and Independent System Operators (RTOs/ISOs). The workshop will commence at 8:45 a.m. and conclude at 5 p.m. and will be held at the Federal Energy Regulatory Commission, 888 First Street NE., Washington, DC 20426. This workshop is free of charge and open to the public. Commission members may participate in the workshop. The agenda and a list of participants for this workshop are attached. Those who plan to attend the workshop are encouraged to complete the registration form located at https://www.ferc.gov/ whats-new/registration/10-28-14form.aspx. There is no registration deadline. The workshop will be transcribed. Transcripts of the workshop will be available for a fee from Ace-Federal Reporters, Inc. (202–347–3700 or 1– 800–336–6646). Additionally, there will be a free webcast of the workshop. The webcast will allow persons to listen to the workshop but not participate. PO 00000 Frm 00023 Fmt 4703 Sfmt 4703 63619 Anyone with Internet access who wants to listen to the workshop can do so by navigating to the Calendar of Events at www.ferc.gov, locating the technical workshop in the Calendar, and clicking on the webcast link. The Capitol Connection provides technical support for the webcast and offers the option of listening to the meeting via phonebridge for a fee. If you have any questions, visit www.CapitolConnection.org or call 703– 993–3100. While this workshop is not for the purpose of discussing specific cases, the workshop may address matters at issue in the following Commission proceedings that are pending: Astoria Generating Company L.P. v. New York Independent System Operator, Inc., Docket Nos. EL11–42 and EL11–50; California Independent System Operator Corporation, Docket No. ER14–1386 and ER14–2484; Hudson Transmission Partners, LLC v. New York Independent System Operator, Inc., Docket No. EL12–98; Independent Power Producers of New York, Inc. v. New York Independent System Operator, Inc., Docket No. EL13–62; ISO New England, Inc. and New England Power Pool, Docket Nos. EL14–52, ER 14–1050, ER14–2419, and ER14–2929; Midcontinent Independent System Operator, Inc., Docket Nos. ER14–2156, and ER11–4081; PJM Interconnection, L.L.C., Docket Nos. ER14–1144 and ER14–1145; New York Independent System Operator, Inc., Docket No. EL07–39; Old Dominion Electric Cooperative, Docket No. ER14–2242; Seneca Power Partners, L.P. v. New York Independent System Operator, Inc., Docket No. EL12–6; and Southwest Power Pool, Inc., Docket No. ER15–21. Commission workshops are accessible under section 508 of the Rehabilitation Act of 1973. For accessibility accommodations please send an email to accessibility@ferc.gov or call toll free (866) 208–3372 (voice) or (202) 502– 8659 (TTY), or send a fax to (202) 208– 2106 with the requested accommodations. For more information about the workshop, please contact: Logistical information: Sarah McKinley, Office of External Affairs, Federal Energy Regulatory Commission, 888 First Street NE., Washington, DC 20426, (202) 502–8368, sarah.mckinley@ferc.gov. Scarcity/shortage pricing: Bob Hellrich-Dawson, Office of Energy Policy and Innovation, Federal Energy Regulatory Commission, 888 First Street NE., Washington, DC 20426, (202) 502– 6360, bob.hellrich-dawson@ferc.gov. E:\FR\FM\24OCN1.SGM 24OCN1 63620 Offer mitigation and offer caps: Emma Nicholson, Office of Energy Policy and Innovation, Federal Energy Regulatory Commission, 888 First Street NE., Washington, DC 20426, (202) 502–8846, emma.nicholson@ferc.gov. Dated: October 10, 2014. Kimberly D. Bose, Secretary. Price Formation in Energy and Ancillary Services Markets Operated by Regional Transmission Organizations and Independent System Operators Scarcity and Shortage Pricing, Offer Mitigation, and Offer Caps Workshop Docket No. AD14–14–000 October 28, 2014 asabaliauskas on DSK5VPTVN1PROD with NOTICES Agenda On October 28, 2014 a second conference will be held to address matters of price formation in the energy and ancillary services markets administered by the Regional Transmission Organizations (RTOs) and Independent System Operators (ISOs).1 It will have three areas of focus: Scarcity and shortage pricing, offer mitigation and offer caps in the RTO/ISO markets. The RTO/ISO markets rely on security constrained economic dispatch and locational marginal pricing to ensure efficient dispatch of, and compensation to, resources. Ideally, RTO/ISO market designs would rely on competitive pressure to ensure that resource offers reflect marginal cost. Because the markets are imperfect at times (e.g., structural issues, inelastic demand), the RTO/ISO tariffs include specific rules to ensure prices remain just and reasonable. These rules take the form of market power mitigation, offer caps and scarcity pricing. Working together, these rules are intended to protect against the exercise of market power while allowing prices in the markets to rise in response to predetermined triggers (e.g., an operating reserve deficiency) to elicit a market response (e.g., generator 1 Price Formation in Energy and Ancillary Services Markets Operated by Regional Transmission Organizations and Independent System Operators, Notice of Workshop, Docket No. AD14–14–000 (Sept. 4, 2014). VerDate Sep<11>2014 20:00 Oct 23, 2014 Jkt 235001 performance, load response) to support the reliable and efficient operation of the market. These rules would ideally reflect the value to load of maintaining reliability and avoiding involuntary load curtailments. Through this conference and any papers Commission staff may release in advance, Commission staff will explore the technical, operational and market issues related to shortage pricing, offer mitigation, and offer caps. 8:45 a.m.–9 a.m.—Welcome and Opening Remarks 9 a.m.–10:30 a.m.—Panel 1: Goals of Scarcity and Shortage Pricing and Performance of Existing Pricing Rules Generally speaking, shortage pricing is the method RTOs/ISOs employ to price energy and operating reserves during scarcity and shortage conditions. Scarcity and shortage prices are intended to achieve two primary goals. The first goal of scarcity and shortage pricing is to send a short-term price signal to incentivize operation of existing resources to help maintain reliability. In the short term, these prices should be high enough to induce existing resources to be available to the maximum extent possible and to induce imports to offer from neighboring areas. The high prices should also signal consumers to reduce demand. The second goal of scarcity and shortage pricing is to contribute to efficient long-term economic entry and exit. When scarcity and shortage prices accurately reflect consumers’ valuation of avoidance of an involuntary load curtailment, the resulting energy and ancillary services prices can contribute to efficient long-run market participation (entry and exit) by addressing part of the ‘‘missing money’’ problem.2 While scarcity and shortage pricing rules are designed to achieve these two goals, in practice, system operator practices and experiences may influence how the rules are administered and thus their efficacy. Panel 1 will explore how the goals of scarcity and shortage pricing are balanced against the operational realities of employing administrative pricing rules. The discussion will also focus on the following: 2 See, e.g., Johannes P. Pfeifenberger and Kathleen Spees, The Brattle Group, and Kevin Carden and Nick Wintermantel, Astrape Consulting, Resource Adequacy Requirements: Reliability and Economic Implications at 83–84 (Sept. 2013), available at http://www.brattle.com/system/publications/pdfs/ 000/004/984/original/Resource_Adequacy_ Requirements_Pfeifenberger_Spees_FERC_Sept_ 2013.pdf?1392303166. PO 00000 Frm 00024 Fmt 4703 Sfmt 4703 D How the definition of a scarcity or shortage event and the pricing triggers compare across RTO and ISO markets; D The frequency and duration of scarcity or shortage events; D To what extent the frequency and duration of scarcity or shortage events support efficient entry and exit; D How the actions system operators take to avert a scarcity or shortage event are reflected in energy and ancillary service prices; D Whether scarcity and shortage pricing rules and import/export timing are sufficiently coordinated such that market participants can schedule exports and imports efficiently to respond to shortage conditions. Panelists: • Matthew White, ISO New England Inc. • Todd Ramey, Midcontinent Independent System Operator, Inc. • Robert Pike, New York Independent System Operator, Inc. • Adam Keech, PJM Interconnection, L.L.C. • Richard Dillon, Southwest Power Pool, Inc. 10:30 a.m.–10:45 a.m.—Break 10:45 a.m.–12:30 p.m.—Panel 2: Lessons Learned from Existing Scarcity and Shortage Pricing Rules Panel 2 will explore lessons learned from existing scarcity and shortage pricing rules. Possible discussion items could include the topics discussed in Panel 1 in addition to any other concerns panelists may have. The RTOs/ISOs and the RTO/ISO market monitoring units will be given an opportunity to discuss any issues raised by panelists. Panelists: • Joseph Cavicchi, Compass Lexecon, speaking on behalf of Electric Power Supply Association. • Erica Bowman, America’s Natural Gas Alliance. • John Citrolo, PSEG Power. • Charlie Bayless, North Carolina Electric Membership Corporation. • Joseph Bowring, Monitoring Analytics. 12:30 p.m.–1:30 p.m.—Lunch 1:30 p.m.–3:30 p.m.—Panel 3: Goals of Offer Caps and Market Power Mitigation Panel 3 will provide the RTO/ISO Market Monitors an opportunity to discuss the goals of the current incremental energy offer cap and market power mitigation provisions in their respective markets, and to provide a performance assessment with respect to those goals. The market monitors will be asked to discuss the role the $1,000/ MWh offer cap plays in both the E:\FR\FM\24OCN1.SGM 24OCN1 EN24OC14.018</GPH> Federal Register / Vol. 79, No. 206 / Friday, October 24, 2014 / Notices asabaliauskas on DSK5VPTVN1PROD with NOTICES Federal Register / Vol. 79, No. 206 / Friday, October 24, 2014 / Notices mitigation rules and the shortage pricing rules. The market monitors will also be asked to discuss whether: (1) Market power mitigation provisions have a material impact on the price formation process; (2) the short-run marginal costs estimates that underlie market power mitigation provisions sufficiently account for all resource supply costs, including opportunity costs; (3) RTO/ ISO offer rules provide sufficient flexibility for resources to reflect cost changes that occur between day-ahead and real-time and across hours in realtime; and (4) RTO/ISO rules provide sufficient protection against the exercise of market power. Panelists: • Eric Hildebrandt, California Independent System Operator Corporation. • Jeffrey McDonald, ISO New England Inc. • Shaun Johnson, New York Independent System Operator, Inc. • Joseph Bowring, Monitoring Analytics. • Catherine Mooney, Southwest Power Pool, Inc. • David Patton, Potomac Economics. 3:30 p.m.–3:45 p.m.—Break 3:45p.m.–4:45p.m.—Panel 4: Impacts of Offer Caps and Market Power Mitigation Panel 4 will focus on the impacts that offer caps and offer mitigation have on both buyers and sellers in wholesale markets. Discussion will include comments from resource owners about whether the current $1,000/MWh offer cap permits them to reflect their costs fully in supply bids. Resource owners will also be asked to discuss: (1) Whether the RTOs/ISOs permit all of the relevant costs, including opportunity costs, to be included in the marginal cost estimates that underlie market power mitigation provisions; and (2) whether RTO/ISO offer rules permit resources to reflect changes in resource supply costs that occur between day-ahead and real-time and across hours in real-time. Panelists will be asked to comment on the role that offer caps and market power mitigation procedures play in ensuring just and reasonable rates. Of particular interest will be the extent to which offers capped at some value (like the current $1000/MWh cap) play a meaningful role in consumer protection. The RTOs/ISOs and the RTO/ISO market monitoring units will be given an opportunity to discuss any issues raised by panelists. Panelists: • Joseph Cavicchi, Compass Lexecon, speaking on behalf of Electric Power Supply Association. VerDate Sep<11>2014 20:00 Oct 23, 2014 Jkt 235001 • Abraham Silverman, NRG Energy, Inc. • Edward Tatum, Old Dominion Electric Cooperative. • Jeffrey Nelson, Southern California Edison. • Charlie Bayless, North Carolina Electric Membership Corporation. • Patrick Connors, WPPI Energy, speaking on behalf of Transmission Access Policy Study Group. 4:45 p.m.–5 p.m.—Closing [FR Doc. 2014–25322 Filed 10–23–14; 8:45 am] BILLING CODE 6717–01–P DEPARTMENT OF ENERGY Federal Energy Regulatory Commission [Docket No. AD14–14–000] Price Formation in Energy and Ancillary Services, Markets Operated by Regional Transmission Organizations, and Independent System Operators: Notice of Workshop As announced in the Notice issued on June 19, 2014, the Federal Energy Regulatory Commission (Commission) directed its staff to convene workshops as necessary to commence a discussion with industry on existing market rules and operational practices affecting price formation issues in energy and ancillary services markets operated by Regional Transmission Organizations (RTOs) and Independent System Operators (ISOs). The June 19 Notice listed four areas of interest: uplift payments, offer price mitigation and offer price caps, scarcity and shortage pricing, and operator actions that affect prices. The first workshop, held on September 8, 2014, addressed uplift payments and the second workshop, scheduled for October 28, 2014, will address offer price mitigation and offer price caps and scarcity and shortage pricing. The third workshop will address technical, operational, and market issues related to operator actions in energy and ancillary services markets operated by RTOs and ISOs, and will be held on Tuesday, December 9, 2014 from 8:45 a.m. to 5 p.m. in the Commission Meeting Room at the Federal Energy Regulatory Commission, 888 First Street NE., Washington, DC 20426. Commission members may participate in the workshop. The workshop will be open for the public to attend. Advance registration is not required, but is encouraged. Attendees may register at the following Web page: https://www.ferc.gov/whatsnew/registration/12-09-14-form.asp. PO 00000 Frm 00025 Fmt 4703 Sfmt 9990 63621 Those wishing to participate in the program for this event should nominate themselves through the online registration form no later than October 29, 2014 at the following Web page: https://www.ferc.gov/whats-new/ registration/12-09-14-speaker-form.asp. At this Web page, please provide an abstract (1,500 character limit) of the issue(s) you propose to address. Due to time constraints, we may not be able to accommodate all those interested in speaking. Further details and a formal agenda will be issued prior to the workshop. Information on this event will be posted on the Calendar of Events on the Commission’s Web site, www.ferc.gov, prior to the event. The workshop will also be Webcast and transcribed. Anyone with Internet access who desires to listen to this event can do so by navigating to the Calendar of Events at www.ferc.gov and locating this event in the Calendar. The event will contain a link to the Webcast. The Capitol Connection provides technical support for Webcasts and offers the option of listening to the meeting via phonebridge for a fee. If you have any questions, visit www.CapitolConnection.org or call 703– 993–3100. Commission workshops are accessible under section 508 of the Rehabilitation Act of 1973. For accessibility accommodations, please send an email to accessibility@ferc.gov or call toll free 1–866–208–3372 (voice) or 202–502– 8659 (TTY), or send a FAX to 202–208– 2106 with the required accommodations. For further information on this workshop, please contact: Logistical Information Sarah McKinley, Office of External Affairs, Federal Energy Regulatory Commission, 888 First Street NE., Washington, DC 20426, (202) 502–8368, sarah.mckinley@ferc.gov. Technical Information Emma Nicholson, Office of Energy Policy and Innovation, Federal Energy Regulatory Commission, 888 First Street NE., Washington, DC 20426, (202) 502– 8846, emma.nicholson@ferc.gov. Dated: October 10, 2014. Kimberly D. Bose, Secretary. [FR Doc. 2014–25320 Filed 10–23–14; 8:45 am] BILLING CODE 6717–01–P E:\FR\FM\24OCN1.SGM 24OCN1

Agencies

[Federal Register Volume 79, Number 206 (Friday, October 24, 2014)]
[Notices]
[Pages 63619-63621]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-25322]


-----------------------------------------------------------------------

DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket. No. AD14-14-000]


Price Formation in Energy and Ancillary Services, Markets 
Operated by Regional Transmission, Organizations and Independent System 
Operators: Supplemental Notice of Workshop on Price Formation: Scarcity 
and Shortage Pricing, Offer Mitigation, and Offer Caps in RTO and ISO 
Markets

    As announced in a Notice issued on September 5, 2014, the Federal 
Energy Regulatory Commission (Commission) will hold a workshop on 
Tuesday, October 28, 2014 to commence a discussion with industry on 
scarcity and shortage pricing, offer mitigation, and offer caps in 
energy and ancillary service markets operated by the Regional 
Transmission Organizations and Independent System Operators (RTOs/
ISOs). The workshop will commence at 8:45 a.m. and conclude at 5 p.m. 
and will be held at the Federal Energy Regulatory Commission, 888 First 
Street NE., Washington, DC 20426. This workshop is free of charge and 
open to the public. Commission members may participate in the workshop.
    The agenda and a list of participants for this workshop are 
attached. Those who plan to attend the workshop are encouraged to 
complete the registration form located at https://www.ferc.gov/whats-new/registration/10-28-14-form.aspx. There is no registration deadline.
    The workshop will be transcribed. Transcripts of the workshop will 
be available for a fee from Ace-Federal Reporters, Inc. (202-347-3700 
or 1-800-336-6646). Additionally, there will be a free webcast of the 
workshop. The webcast will allow persons to listen to the workshop but 
not participate. Anyone with Internet access who wants to listen to the 
workshop can do so by navigating to the Calendar of Events at 
www.ferc.gov, locating the technical workshop in the Calendar, and 
clicking on the webcast link. The Capitol Connection provides technical 
support for the webcast and offers the option of listening to the 
meeting via phone-bridge for a fee. If you have any questions, visit 
www.CapitolConnection.org or call 703-993-3100.
    While this workshop is not for the purpose of discussing specific 
cases, the workshop may address matters at issue in the following 
Commission proceedings that are pending: Astoria Generating Company 
L.P. v. New York Independent System Operator, Inc., Docket Nos. EL11-42 
and EL11-50; California Independent System Operator Corporation, Docket 
No. ER14-1386 and ER14-2484; Hudson Transmission Partners, LLC v. New 
York Independent System Operator, Inc., Docket No. EL12-98; Independent 
Power Producers of New York, Inc. v. New York Independent System 
Operator, Inc., Docket No. EL13-62; ISO New England, Inc. and New 
England Power Pool, Docket Nos. EL14-52, ER 14-1050, ER14-2419, and 
ER14-2929; Midcontinent Independent System Operator, Inc., Docket Nos. 
ER14-2156, and ER11-4081; PJM Interconnection, L.L.C., Docket Nos. 
ER14-1144 and ER14-1145; New York Independent System Operator, Inc., 
Docket No. EL07-39; Old Dominion Electric Cooperative, Docket No. ER14-
2242; Seneca Power Partners, L.P. v. New York Independent System 
Operator, Inc., Docket No. EL12-6; and Southwest Power Pool, Inc., 
Docket No. ER15-21.
    Commission workshops are accessible under section 508 of the 
Rehabilitation Act of 1973. For accessibility accommodations please 
send an email to accessibility@ferc.gov or call toll free (866) 208-
3372 (voice) or (202) 502-8659 (TTY), or send a fax to (202) 208-2106 
with the requested accommodations.
    For more information about the workshop, please contact:
    Logistical information: Sarah McKinley, Office of External Affairs, 
Federal Energy Regulatory Commission, 888 First Street NE., Washington, 
DC 20426, (202) 502-8368, sarah.mckinley@ferc.gov.

    Scarcity/shortage pricing: Bob Hellrich-Dawson, Office of Energy 
Policy and Innovation, Federal Energy Regulatory Commission, 888 First 
Street NE., Washington, DC 20426, (202) 502-6360, bob.hellrich-dawson@ferc.gov.


[[Page 63620]]


    Offer mitigation and offer caps: Emma Nicholson, Office of Energy 
Policy and Innovation, Federal Energy Regulatory Commission, 888 First 
Street NE., Washington, DC 20426, (202) 502-8846, 
emma.nicholson@ferc.gov.

    Dated: October 10, 2014.
Kimberly D. Bose,
Secretary.
[GRAPHIC] [TIFF OMITTED] TN24OC14.018

Price Formation in Energy and Ancillary Services Markets Operated by 
Regional Transmission Organizations and Independent System Operators

Scarcity and Shortage Pricing, Offer Mitigation, and Offer Caps 
Workshop

Docket No. AD14-14-000

    October 28, 2014

Agenda

    On October 28, 2014 a second conference will be held to address 
matters of price formation in the energy and ancillary services markets 
administered by the Regional Transmission Organizations (RTOs) and 
Independent System Operators (ISOs).\1\ It will have three areas of 
focus: Scarcity and shortage pricing, offer mitigation and offer caps 
in the RTO/ISO markets. The RTO/ISO markets rely on security 
constrained economic dispatch and locational marginal pricing to ensure 
efficient dispatch of, and compensation to, resources. Ideally, RTO/ISO 
market designs would rely on competitive pressure to ensure that 
resource offers reflect marginal cost. Because the markets are 
imperfect at times (e.g., structural issues, inelastic demand), the 
RTO/ISO tariffs include specific rules to ensure prices remain just and 
reasonable. These rules take the form of market power mitigation, offer 
caps and scarcity pricing. Working together, these rules are intended 
to protect against the exercise of market power while allowing prices 
in the markets to rise in response to predetermined triggers (e.g., an 
operating reserve deficiency) to elicit a market response (e.g., 
generator performance, load response) to support the reliable and 
efficient operation of the market. These rules would ideally reflect 
the value to load of maintaining reliability and avoiding involuntary 
load curtailments.
---------------------------------------------------------------------------

    \1\ Price Formation in Energy and Ancillary Services Markets 
Operated by Regional Transmission Organizations and Independent 
System Operators, Notice of Workshop, Docket No. AD14-14-000 (Sept. 
4, 2014).
---------------------------------------------------------------------------

    Through this conference and any papers Commission staff may release 
in advance, Commission staff will explore the technical, operational 
and market issues related to shortage pricing, offer mitigation, and 
offer caps.

8:45 a.m.-9 a.m.--Welcome and Opening Remarks
9 a.m.-10:30 a.m.--Panel 1: Goals of Scarcity and Shortage Pricing and 
Performance of Existing Pricing Rules

    Generally speaking, shortage pricing is the method RTOs/ISOs employ 
to price energy and operating reserves during scarcity and shortage 
conditions. Scarcity and shortage prices are intended to achieve two 
primary goals. The first goal of scarcity and shortage pricing is to 
send a short-term price signal to incentivize operation of existing 
resources to help maintain reliability. In the short term, these prices 
should be high enough to induce existing resources to be available to 
the maximum extent possible and to induce imports to offer from 
neighboring areas. The high prices should also signal consumers to 
reduce demand.
    The second goal of scarcity and shortage pricing is to contribute 
to efficient long-term economic entry and exit. When scarcity and 
shortage prices accurately reflect consumers' valuation of avoidance of 
an involuntary load curtailment, the resulting energy and ancillary 
services prices can contribute to efficient long-run market 
participation (entry and exit) by addressing part of the ``missing 
money'' problem.\2\
---------------------------------------------------------------------------

    \2\ See, e.g., Johannes P. Pfeifenberger and Kathleen Spees, The 
Brattle Group, and Kevin Carden and Nick Wintermantel, Astrape 
Consulting, Resource Adequacy Requirements: Reliability and Economic 
Implications at 83-84 (Sept. 2013), available at http://www.brattle.com/system/publications/pdfs/000/004/984/original/Resource_Adequacy_Requirements_Pfeifenberger_Spees_FERC_Sept_2013.pdf?1392303166.
---------------------------------------------------------------------------

    While scarcity and shortage pricing rules are designed to achieve 
these two goals, in practice, system operator practices and experiences 
may influence how the rules are administered and thus their efficacy.
    Panel 1 will explore how the goals of scarcity and shortage pricing 
are balanced against the operational realities of employing 
administrative pricing rules. The discussion will also focus on the 
following:
    [ssquf] How the definition of a scarcity or shortage event and the 
pricing triggers compare across RTO and ISO markets;
    [ssquf] The frequency and duration of scarcity or shortage events;
    [ssquf] To what extent the frequency and duration of scarcity or 
shortage events support efficient entry and exit;
    [ssquf] How the actions system operators take to avert a scarcity 
or shortage event are reflected in energy and ancillary service prices;
    [ssquf] Whether scarcity and shortage pricing rules and import/
export timing are sufficiently coordinated such that market 
participants can schedule exports and imports efficiently to respond to 
shortage conditions.
    Panelists:
     Matthew White, ISO New England Inc.
     Todd Ramey, Midcontinent Independent System Operator, Inc.
     Robert Pike, New York Independent System Operator, Inc.
     Adam Keech, PJM Interconnection, L.L.C.
     Richard Dillon, Southwest Power Pool, Inc.

10:30 a.m.-10:45 a.m.--Break
10:45 a.m.-12:30 p.m.--Panel 2: Lessons Learned from Existing Scarcity 
and Shortage Pricing Rules

    Panel 2 will explore lessons learned from existing scarcity and 
shortage pricing rules. Possible discussion items could include the 
topics discussed in Panel 1 in addition to any other concerns panelists 
may have. The RTOs/ISOs and the RTO/ISO market monitoring units will be 
given an opportunity to discuss any issues raised by panelists.
    Panelists:
     Joseph Cavicchi, Compass Lexecon, speaking on behalf of 
Electric Power Supply Association.
     Erica Bowman, America's Natural Gas Alliance.
     John Citrolo, PSEG Power.
     Charlie Bayless, North Carolina Electric Membership 
Corporation.
     Joseph Bowring, Monitoring Analytics.

12:30 p.m.-1:30 p.m.--Lunch
1:30 p.m.-3:30 p.m.--Panel 3: Goals of Offer Caps and Market Power 
Mitigation

    Panel 3 will provide the RTO/ISO Market Monitors an opportunity to 
discuss the goals of the current incremental energy offer cap and 
market power mitigation provisions in their respective markets, and to 
provide a performance assessment with respect to those goals. The 
market monitors will be asked to discuss the role the $1,000/MWh offer 
cap plays in both the

[[Page 63621]]

mitigation rules and the shortage pricing rules. The market monitors 
will also be asked to discuss whether: (1) Market power mitigation 
provisions have a material impact on the price formation process; (2) 
the short-run marginal costs estimates that underlie market power 
mitigation provisions sufficiently account for all resource supply 
costs, including opportunity costs; (3) RTO/ISO offer rules provide 
sufficient flexibility for resources to reflect cost changes that occur 
between day-ahead and real-time and across hours in real-time; and (4) 
RTO/ISO rules provide sufficient protection against the exercise of 
market power.
    Panelists:
     Eric Hildebrandt, California Independent System Operator 
Corporation.
     Jeffrey McDonald, ISO New England Inc.
     Shaun Johnson, New York Independent System Operator, Inc.
     Joseph Bowring, Monitoring Analytics.
     Catherine Mooney, Southwest Power Pool, Inc.
     David Patton, Potomac Economics.

3:30 p.m.-3:45 p.m.--Break
3:45p.m.-4:45p.m.--Panel 4: Impacts of Offer Caps and Market Power 
Mitigation

    Panel 4 will focus on the impacts that offer caps and offer 
mitigation have on both buyers and sellers in wholesale markets. 
Discussion will include comments from resource owners about whether the 
current $1,000/MWh offer cap permits them to reflect their costs fully 
in supply bids. Resource owners will also be asked to discuss: (1) 
Whether the RTOs/ISOs permit all of the relevant costs, including 
opportunity costs, to be included in the marginal cost estimates that 
underlie market power mitigation provisions; and (2) whether RTO/ISO 
offer rules permit resources to reflect changes in resource supply 
costs that occur between day-ahead and real-time and across hours in 
real-time. Panelists will be asked to comment on the role that offer 
caps and market power mitigation procedures play in ensuring just and 
reasonable rates. Of particular interest will be the extent to which 
offers capped at some value (like the current $1000/MWh cap) play a 
meaningful role in consumer protection. The RTOs/ISOs and the RTO/ISO 
market monitoring units will be given an opportunity to discuss any 
issues raised by panelists.
    Panelists:
     Joseph Cavicchi, Compass Lexecon, speaking on behalf of 
Electric Power Supply Association.
     Abraham Silverman, NRG Energy, Inc.
     Edward Tatum, Old Dominion Electric Cooperative.
     Jeffrey Nelson, Southern California Edison.
     Charlie Bayless, North Carolina Electric Membership 
Corporation.
     Patrick Connors, WPPI Energy, speaking on behalf of 
Transmission Access Policy Study Group.

4:45 p.m.-5 p.m.--Closing

[FR Doc. 2014-25322 Filed 10-23-14; 8:45 am]
BILLING CODE 6717-01-P