FW: ER01-1385 ConEd v. NYISO -- FERC Order Rejecting Extension of ,
 In yet another Order issued yesterday (see attached), FERC rejects the requ=
est by Con Edison to extend the Revised Localized Market-Power Mitigation M=
easures (Revised LMM)* until October 31, 2002. The Revised LMM had been app=
roved by FERC on July 20  (on rehearing after initially rejected them on Ma=
y 16), but were required in that Order to expire on October 31, 2001. FERC =
denies Con Ed's requested extension because it was "procedurally improper,"=
 and directs the NYISO to address FERC's concerns regarding the revised LMM=
 as part of the comprehensive mitigation proposal FERC required the NYISO t=
o prepare by March 1 in its AMP extension order also issued yesterday. (An =
email regarding that Order has been sent to you separately.) In particular,=
 FERC wants to know how the revised LMM will work in conjunction with other=
 mitigation measures in effect or proposed; whether the mitigation is desig=
ned to apply only in must-run situations or more broadly and why; whether m=
arket conditions in NYC warrant structural triggers for market power mitiga=
tion; and whether in-city mitigation measures should apply to all generatio=
n in the City or just to the units divested by Con Edison. FERC again direc=
ts the NYISO to consider mitigation measures used by PJM and ISO-NE to aid =
in the transition to a Northeast RTO. Finally, FERC directs Con Ed and the =
NYISO to make a filing that removes all in-city mitigation measures from Co=
n Ed's tariff and puts them into the ISO's tariff. Significantly, FERC dire=
cts the NYISO to address in that filing, "and remedy to the extent required=
 in NYISO's tariff and in the operations of NYISO and ConEd, allegations...=
that ConEd currently has operational responsibility for the New York City t=
ransmission grid and can direct out-of-merit dispatch. Ultimate responsibil=
ity for such functions, if not hands-on operational control, must lie with =
NYISO rather than ConEd." Elimination of ConEd's ability to dispatch units =
out-of-merit is crucial to the proper functioning of the markets in New Yor=
k City. Development of the comprehensive market mitigation plan called for =
in both this and the AMP order by March 1 is going to be an enormous and ti=
me consuming undertaking for the NYISO and market participants over the nex=
t three months.
----------------
* The Revised LMM expanded the application of the LMM approved by FERC in 1=
998 as part of Con Ed's generation divestiture proposal to: (1) bids for sa=
le of energy in the real time markets during constrained periods; (2) bids =
for min gen and start-up whenever gen must be operated out-of-merit due to =
local reliability requirements; (3) bids for start-up and min gen during co=
nstrained periods (i.e., whenever mitigation would apply to a unit's increm=
ental energy bid); and (4) all generators located electrically within NYC, =
not just those divested by Con Edison.

 -----Original Message-----
From: =09Lauren Mildren [mailto:lmildren@bracepatt.com]=20
Sent:=09Tuesday, November 27, 2001 2:24 PM
To:=09Andrea Settanni; Yeung, Charles; cnicola@enron.com; Fulton, Donna; hf=
romer@enron.com; snovose@enron.com; Lindberg, Susan
Subject:=09ER01-1385 ConEd v. NYISO -- Special Market Power MitigationMeasu=
res for NYC