FW: NYISO Order approving extension of automatic mitigation ,
 Earlier today, FERC issued the attached order approving an extension of the=
 NYISO's Automated Mitigation Procedures (also known as the AMP or Circuit =
Breaker) through April 30, 2002, rather than until October 31 as had been s=
ought by the ISO. Enron had submitted comments opposing the ISO's request. =
FERC also directs the ISO to file a comprehensive mitigation proposal that =
addresses FERC's concerns with the AMP as well as FERC's concerns regarding=
 how the ISO's overall mitigation measures work together. This proposal is =
due by March 1, to be effective May 1.=20
=20
FERC acknowledges two problems with the AMP that the NYISO has already comm=
itted to fix: limiting the mitigation to specific zones and hours that fail=
 the impact test, and exempting bids of less than 50 MW unless thee is a de=
monstrated  market power concern. In addition, FERC directs the ISO to work=
 with market participants to (1) examine whether the AMP may serve as a bar=
rier to entry for new generation, and whether such new generation should be=
 exempted from the AMP; (2) examine whether other energy limited resources,=
 including those constrained by environmental rules, should be exempted fro=
m or accommodated in the AMP. Currently, only hydro units are exempted beca=
use their volatile bids often reflect their opportunity costs, not market p=
ower. FERC believes this logic applies to all energy limited resources as w=
ell; (3) file a comprehensive mitigation proposal which also explains how t=
he AMP will work in conjunction with other mitigation measures already in e=
ffect or proposed, including the in-city mitigation  measures. FERC is conc=
erned here that that all the pieces may not fit together and there may be i=
nconsistencies and gaps; and (4) consider must-run  mitigation measures con=
sistent with ISO-NE and PJM. Again, FERC seems to be concerned here with tr=
ansmission constraints within NYC. (Note that the Con Ed distribution syste=
m is not secured by the ISO and this has been at the root of most of the ou=
t-of-merit calls in the City.)  Finally, FERC cautions the NYISO that it ex=
pects one mitigation plan for the Northeast as part of the RTO process, and=
 it encourages them to collaborate with PJM and ISO-NE in formulating its M=
arch 1 comprehensive mitigation plan.
=20
-----Original Message-----
From: Leonardo, Samuel=20
Sent: Tuesday, November 27, 2001 11:24 AMexamine=20
To: Nicolay, Christi L.; Fulton, Donna; Stroup, Kerry; Novosel, Sarah; Lind=
berg, Susan
Cc: Fromer, Howard
Subject: NYISO.Order approving extension of automatic mitigation procedures=
 subject to conditions.11/27


=20
97 FERC ?  61, 242                                                    =20
                                    UNITED STATES OF AMERICA               =
  =20
     FEDERAL ENERGY REGULATORY COMMISSION
Before Commissioners: Pat Wood, III, Chairman;
     William L. Massey, Linda Breathitt,
     And Nora Mead Brownell.
=20
New York Independent System Operator, Inc.                        Docket No=
. ER01-3155-000
=20
ORDER APPROVING EXTENSION OF AUTOMATIC MITIGATION PROCEDURES SUBJECT TO CON=
DITIONS
(Issued November 27, 2001)
On September 28, 2001, the New York Independent System Operator, Inc. (NYIS=
O) filed, pursuant to section 205 of the Federal Power Act (FPA), [1] a req=
uest to extend the termination date for the Automated Mitigation Procedures=
 (AMP) [2] to=20
October 31, 2002.  The Commission's June 28, 2001 order [3] in this proceed=
ing approving the AMP required those automated procedures to expire on Octo=
ber 31, 2001.  In this order, we accept NYISO's proposed extension of the A=
MP until April 30, 2002, and we direct NYISO to file a comprehensive mitiga=
tion proposal that addresses the Commission's concerns with the AMP set for=
th in this order, as well as our concerns regarding how NYISO's overall mit=
igation measures work together.  NYISO is directed to file the comprehensiv=
e mitigation proposal by March 1, 2002 to be effective May 1, 2002.  The Co=
mmission's action here benefits customers by protecting them from market po=
wer, while establishing procedures to modify and improve the AMP mechanism,=
 as well as other mitigation measures in NYISO.
=20
=20
=20


I.  Procedural Background
=20
In a November 23, 1999 order, [4] the Commission accepted in part and rejec=
ted in part the market monitoring and mitigation plans filed by NYISO.  In =
instances where NYISO concludes that a specific market participant is exerc=
ising market power, the Commission accepted NYISO's proposal to allow it to=
 engage in discussions to resolve the issues informally or issue demand let=
ters requesting the participant cease certain behavior.  In addition, the C=
ommission stated that NYISO could file on a case-by-case basis under sectio=
n 205 of the FPA to impose specific mitigation measures, or to make such fi=
lings based on recurring types of conduct that warrant mitigation.  However=
, the Commission did not allow NYISO to reduce bid flexibility, impose fina=
ncial obligations to pay for operating reserves, or impose default bids, be=
cause this would give too much discretion to NYISO in price-setting and oth=
er similar regulatory functions without Commission review.  The Commission =
determined that NYISO had not described with sufficient specificity the typ=
es of conduct that would trigger the imposition of these measures; it had n=
ot established specific thresholds or bright line tests that would trigger =
the conclusion that market power had been exercised.
=20
In a March 29, 2000 order, [5] the Commission further clarified NYISO's aut=
hority under the plans.  Among other things, the Commission accepted the sp=
ecific thresholds proposed by NYISO to trigger possible mitigation, but rej=
ected NYISO's proposal to keep them confidential.  The Commission also allo=
wed NYISO limited discretion as to when to mitigate (e.g., NYISO may choose=
 not to impose mitigation if it is satisfied with the party's explanation f=
or its behavior) and for how long, but required NYISO to clarify that mitig=
ation for market power may be imposed only prospectively.=20
=20


In a complaint filed in Docket No. EL01-55-000, the Mirant Companies (Miran=
t) alleged that NYISO improperly intended to implement the AMP without fili=
ng any changes to the MMM pursuant to either section 205 or 206 of the FPA.=
  In its May 9, 2001 order on Mirant's complaint, [6] the Commission found =
that part of NYISO's proposal is within the bounds of its existing tariff, =
in that section 3.2(b) of the Market Mitigation Measures (MMM) specifically=
 envisions use of the Security Constrained Unit Commitment (SCUC) [7] to id=
entify questionable conduct.  However, the Commission also found that NYISO=
's AMP proposal needed to be examined in greater detail before it could be =
approved.  Further, the Commission noted that section 205(c) of the FPA req=
uires that NYISO keep on file with the Commission "practices and regulation=
s" affecting its rates, and that NYISO's tariff did not contain language ad=
equately specifying the timing and the process that are contained in the AM=
P.  Accordingly, the Commission concluded, that if NYISO wishes to implemen=
t its AMP proposal, it must file revised tariff sheets pursuant to section =
205 of the FPA to set forth the AMP procedures.  In that filing, the Commis=
sion added, NYISO must address the concerns raised by the parties in the Mi=
rant complaint proceeding, including: (1) whether the AMP provides sufficie=
nt opportunity for meaningful consultation; (2) whether inaccurate market-c=
learing prices will result even if the party whose bid was improperly mitig=
ated is ultimately made whole; (3) whether the AMP would establish a new $1=
50 threshold that never appears in the MMM; and, (4) whether NYISO proposes=
 to exclude hydro units, imports, and exports from the AMP.
=20
On March 17, 2001, in Docket No. ER01-2076-000, NYISO filed a new Attachmen=
t H to its Services Tariff which incorporated the proposed AMP procedures (=
March 17 Filing).  By order issued June 28, 2001, [8] the Commission accept=
ed NYISO's March 17 Filing allowed NYISO to implement the AMP mechanism for=
 2001 summer capability period when supplies may still be tight and when th=
e effectiveness of new demand response mechanisms are uncertain.  The Commi=
ssion viewed the proposed mechanism as only a temporary solution, and agree=
d with certain of the intervenors that the proposed AMP may mitigate bids i=
n situations where market power is not the cause for high or volatile bids,=
 and may not provide for sufficient consultation with generators to reasona=
bly establish that particular bids were attempts to exercise market power. =
 The Commission further explained that automatic market power mitigation ma=
y be most appropriate where it is tied to structural market power problems,=
 such as must-run situations where generators would otherwise be in a posit=
ion to name their price, and noted that both PJM and ISO-NE use this more l=
imited approach to automatic mitigation.
=20
=20


II.  NYISO's Market Mitigation Procedures, Including AMP
=20
          Under Commission orders allowing NYISO to implement its MMM, [9] =
 NYISO's Market Monitoring Unit (MMU), in consultation with NYISO's Market =
Advisor, is responsible for monitoring the markets administered or controll=
ed by NYISO and for mitigating a market party's conduct when NYISO determin=
es that market power has been exercised.  The MMM has specific threshold va=
lues for identifying generators or transmission facilities that exercise ma=
rket power.  NYISO imposes mitigation when a market party's conduct has a m=
aterial effect on prices or on guarantee payments.  Conduct and impact crit=
eria must be satisfied before NYISO may mitigate a generator's bid.  NYISO =
may not mitigate market prices retroactively.=20
=20
Under its manual procedures, prior to implementation of the AMP, NYISO is a=
ble to identify conduct and pricing impacts that exceed the MMM standards o=
nly after the SCUC runs for a given day-ahead market have been completed, w=
hich means that mitigation cannot be implemented until the next day's day-a=
head market.  The primary purpose of the AMP is to eliminate the one-day la=
g inherent in the manual application of the market mitigation thresholds th=
at currently exist in NYISO's market mitigation.  That delay can be importa=
nt when market conditions arise that permit an exercise of market power.  T=
he AMP procedures are activated when the SCUC that calculates day-ahead mar=
ket prices makes a preliminary determination that prices in a given area of=
 New York will exceed $150 absent mitigation. [10]  Once the AMP is activat=
ed, it only mitigates bids if specific thresholds for both bidding conduct =
and market impact are crossed.  The conduct and impact thresholds used by t=
he AMP are the same thresholds approved by the Commission under NYISO's Mar=
ket Mitigation Measures.  Under the automated procedures of the AMP, non-co=
mpetitive bidding behavior is still mitigated prospectively, as authorized =
in the MMM, but the mitigation will occur within the SCUC runs in which the=
 conduct and price effect thresholds of the MMM are crossed, without the on=
e-day delay that occurs under the manual procedures.=20


III.  This Filing
=20
On September 28, 2001, NYISO filed to extend the AMP, which would otherwise=
 expire on October 31, 2001, until October 31, 2002. [11]   NYISO requests =
waiver of the 60-day prior notice requirement to permit a November 1, 2001 =
effective date.  NYISO states that good cause exists for the waiver in orde=
r to prevent a gap in the availability of the AMP.
=20
NYISO believes the performance of the AMP was consistent with its design, w=
hich is to eliminate the delay of one Day-Ahead Market cycle inherent in ma=
nual application of the market mitigation thresholds.  NYISO explains that =
during Summer 2001, prices hit the $150 level 12 times, but the AMP imposed=
 bid caps only four times.  Of those four times, the largest average number=
 of megawatts mitigated was 481, while customers were protected from more t=
hat $11 million in unwarranted energy costs.  NYISO further states that onl=
y twice did AMP mitigation apply to more than one entity in one zone.  NYIS=
O concludes that while the AMP is an automated procedure, it does not autom=
atically apply bid caps whenever prices are high. =20
=20
Absent mitigation, NYISO states that significant unwarranted wealth transfe=
rs from buyers to sellers could take place especially during high-load summ=
er months when supply may be tight.  NYISO asserts however, that transmissi=
on constraints can create tight market conditions in small areas even durin=
g shoulder months.
=20
NYISO states that the conditions necessitating the need for the AMP are alm=
ost certain to be present this coming summer as they were this past summer,=
 and with the potential for market power problems to arise in shoulder peri=
ods as well, it is preferable to keep the AMP in place while improvements a=
re implemented and additional analysis under taken, rather than to summaril=
y terminate the AMP.
=20


NYISO states that the AMP, while working as intended, is subject to improve=
ments.  Specifically, NYISO states that it intends to make two improvements=
 in the AMP prior to Summer 2002.  The proposed modifications will have the=
 effect of narrowing the scope of the AMP to mitigate prices only when mark=
et power exists.   First, NYISO proposes to exclude from mitigation by the =
AMP a Market Participants' bids that trigger the conduct test for mitigatio=
n if the total quantity of those bids is 50 MW or less, unless analysis sho=
ws the relevant units are in a position to exercise market power at those q=
uantity levels.  At present, the AMP excludes bids by bidding entities with=
 50 MW or less of capacity.  NYISO stated the reason for exempting such bid=
s was because the withholding of such small amounts will rarely have a mate=
rial effect on prices.
=20
Second, NYISO proposes to limit mitigation to zones in which the price impa=
ct test for mitigation is met by implementing at least one additional AMP p=
ass in SCUC.  This proposed change would fine-tune the application of the A=
MP to limit mitigation to the specified zones and hours where the price imp=
act test is met.  At present, under the AMP, all bids subject to the AMP, t=
hat exceed the conduct thresholds in the areas where zonal prices exceed $1=
50, are tested for their impact on prices in a single SCUC pass.  If the pr=
ice impact threshold is exceeded in any hour or any zone, the results of th=
e mitigated pass are used to determine the Day-Ahead prices.  The proposed =
modification will appropriately exclude mitigation from occurring in those =
areas or hours where the price impact test is not met.
       =20
NYISO states that it will be working on correcting other minor flaws [12] i=
n the AMP and that it is committed to working with Market Participants to d=
etermine if other refinements or changes in the AMP design should be consid=
ered.
=20
IV.  Notice of Filing and Pleadings
=20


Notice of NYISO's filing was published in the Federal Register, 66 Fed. Reg=
. 51,650 (2001), with comments, protests, and interventions due on or befor=
e October 19, 2001.  Motions to intervene were filed by Constellation Power=
 Source, Inc., et al.; HQ Energy Services (U.S.) (late); the Member Systems=
; [13]  NRG Companies; and the PSEG Companies.  Motions to intervene and co=
mments in support of NYISO's filing were filed by the City of New York; Con=
solidated Edison Company of New York, Inc., and Orange and Rockland Utiliti=
es, Inc. (ConEd); the New York Consumer Protection Board (Consumer Board); =
the New York State Public Service Commission (New York Commission); and the=
 Multiple Intervenors.  Protests and motions to intervene were filed by Aqu=
ila Energy Marketing Corporation, et al. (Aquila);  Dynegy Power Marketing,=
 Inc. (Dynegy); The Electric Power Supply Association (EPSA); Enron Power M=
arketing, Inc. (Enron); The Independent Power Producers of New York, Inc. (=
Independent Producers) ; KeySpan-Ravenswood, Inc. (Keyspan) (late); the Mir=
ant Companies, et al. (Mirant); and Williams Energy Marketing & Trading Com=
pany (Williams).=20
=20
Pursuant to Rule 214 of the Commission's Rules of Practice and Procedure, 1=
8 C.F.R. ? 385.214 (2001), all the timely motions to intervene are granted =
and all late motions to intervene filed before the issue date of this order=
 are granted.  Granting late intervention at this stage of the proceeding w=
ill not disrupt the proceeding or place additional burdens on existing part=
ies.
=20
On October 31, 2001, the New York Commission filed a motion for leave to an=
swer the protests and comments.  Although Rule 213(a)(2) of the Commission'=
s Rules of Practice and Procedure, 18 C.F.R. ? 385.213(a)(2) (2001), genera=
lly prohibit answers to protests, we will accept the New York Commission's =
answer because it helps clarify issues under consideration in this proceedi=
ng.
=20
Intervenor Protests and Comments
=20
Five parties, as identified above, support NYISO's proposal.  New York City=
 believes that the extension of the AMP is a necessary (but not sufficient)=
 measure for mitigating excessive prices.  It maintains that the AMP does n=
ot adequately protect New York City consumers from excessive wholesale pric=
es because it sets too high a trigger for implementing the mitigation, noti=
ng that the AMP was not triggered on August 9, 2001, when day-ahead energy =
prices reached a record $1024/MWH in New York City.  Similarly, ConEd belie=
ves that the AMP remains necessary to prevent or identify and mitigate the =
exercise of market power in New York's day-ahead market.  It asserts that e=
xtending the AMP will permit NYISO to assess further the coordinated operat=
ion of the various mitigation measures that it administers.=20
=20


The New York Commission asserts that the AMP is needed throughout the year,=
  focuses only on high prices caused by market power, and has not unreasona=
bly disadvantaged generators.  It also believes that the AMP complements bu=
t does not duplicate the in-city mitigation measures, remains necessary des=
pite price-capped load bidding and virtual bidding, and conforms to the Com=
mission's preference for ex ante mitigation.  The Consumer Board maintains =
that the fundamental rationale for the AMP has not changed, the AMP is work=
ing as intended and has not unduly interfered with the performance of compe=
titive markets, NYISO has committed to make improvements in the AMP before =
next summer.  The Multiple Intervenors also agree that the AMP is necessary=
 to prevent the exercise of market power and believe that the Commission sh=
ould encourage NYISO to continue to improve the AMP. =20
=20
Eight parties, as identified above, filed protests concerning NYISO's propo=
sal.  Mirant asserts that NYISO has not shown the AMP is needed or addresse=
d the flaws in the AMP identified by the Commission.  It also states that t=
he AMP resulted in the improper mitigation of economically justifiable bids=
 during the 2001 Summer Capability Period and is likely to harm consumers b=
y discouraging efficient supply-side and demand-side decisions.  EPSA and W=
illiams make similar arguments.  EPSA further asserts that mitigation measu=
res should not be a part of the discussions to form a Northeastern RTO.  Th=
e Independent Producers maintain that the AMP is flawed because it improper=
ly mitigates bids that do not cross the impact threshold required for mitig=
ation, and because it mitigates a generator's bids for quantities that are =
not large enough to represent an exercise of market power.  They further st=
ate that some units were improperly mitigated as a result of flawed calcula=
tions of reference level curves, that the AMP has not been tied to structur=
al market power problems, and that the AMP improperly inhibits ICAP generat=
ors from managing their risk by choosing whether to sell in the day-ahead o=
r in the real-time market.  Enron supports the protests of EPSA and the Ind=
ependent Producers.
=20
Aquila makes many of the arguments described above and also asserts that NY=
ISO's AMP extension request ignores the improvements in market conditions t=
hat have occurred over the summer of 2001.  Aquila maintains that at a mini=
mum, the Commission should deny NYISO's request to continue the AMP, withou=
t prejudice to a subsequent filing by NYISO that address the flaws with the=
 current version of the AMP.  Keyspan suggests as an alternative that the A=
MP should only be extended until April 30, 2002, and only if the 50 MW exem=
ption is extended, the consultation process is revised, a structural power =
screen is added, and a firm timetable for completion of the items discussed=
 in NYISO's filing is provided.  =20
=20


In addition to arguments made by other protesters, Dynegy asserts that the =
AMP has not worked as designed, and that on August 9, 2001, 22 of its day-a=
head market bids for August 10 for its Roseton Units 1 and 2 had been mitig=
ated.  Dynegy maintains that these should not have been mitigated since the=
y did not cross the "conduct threshold" in NYISO's MMP, and that Dynegy sti=
ll has not received a direct explanation from NYISO as to why its bids were=
 mitigated, although recent NYISO reports and statements indicate that a mi=
stake was made with respect to Dynegy's bids.  Dynegy states that an explan=
ation of the performance of the AMP was provided in a memorandum (now avail=
able on NYISO's website) made available to those that attended a joint meet=
ing of the Scheduling & Pricing Working Group and the Market Structures Wor=
king Group held on October 9, 2001.  According to Dynegy, at that meeting, =
NYISO claimed that the AMP worked as designed since the coding for the comp=
uter programs worked as intended, although certain upstream data inputs cau=
sed Dynegy's bids to be improperly mitigated.  Further, Dynegy asserts that=
 NYISO has dropped the $100 million day price spike (June 26, 2000) as just=
ification for the AMP and now concedes that the price spike was due to seam=
s problems.
=20
Answers=20
=20
In its answer, the New York Commission reaffirms its support for the propos=
ed extension of the AMP until October 31, 2002.  The New York Commission st=
ates that the AMP is necessary to ensure that wholesale prices are just and=
 reasonable in light of the tight supply situation and transmission constra=
ints that continue to exist in New York. =20
In response to the arguments presented by the generators opposing the exten=
sion of the AMP, the New York Commission submits that: the AMP adequately d=
istinguishes between high prices associated with market power and high pric=
es associated with scarcity;  the AMP properly evaluates the combined impac=
t of generators; and the AMP is needed through the year, not just during th=
e summer capability period during high load periods, given transmission con=
straints and scheduled and unscheduled outages during shoulder months.  Fin=
ally, in response to generators' concerns that the AMP may mitigate in cert=
ain situations where mitigation should not have taken place, the New York C=
ommission says that it is just as important to protect against the occurren=
ce of market power that goes unmitigated should the AMP not be extended.  A=
bsent the AMP, the New York Commission states the harm of permitting unmiti=
gated market power would be far greater than any harm caused by improper mi=
tigation.  The New York Commission compares the $11 million withheld from g=
enerators as a result of the AMP being in effect during Summer 2001 with th=
e $100 million resulting from a single day of unmitigated market power in 2=
000.
=20
V.  Discussion
=20
NYISO has proposed to extend the same AMP the Commission approved in the Ju=
ne 28 Order, without modification.  NYISO states that it is committed to ma=
king further refinements to narrow the impact of the mitigation performed u=
nder the AMP and states it is committed to making what it refers to as two =
major improvements prior to Summer 2002:  limiting the mitigation to specif=
ic zones and hours that fail the impact test and exempting bids of less tha=
n 50 MW unless there is a demonstrated market power concern.               =
                             =20
=20


Our review of the AMP indicates that it appropriately attempts to distingui=
sh between  market power and scarcity.  The AMP closes the one day lag inhe=
rent in the manual application of mitigation measures in the current MMM an=
d thus advances the ability of NYISO to mitigate market power.  Implementat=
ion of the AMP is not without concerns, however.  The AMP, as noted by NYIS=
O and other market participants, requires some refinements and additional r=
eview, e.g., determination of Reference Prices, unnecessary mitigation, app=
lication to energy limited resources. =20
=20
Also, AMP may be one of the many barriers to entry for new generating facil=
ities.  We direct NYISO to work with market participants, especially the Ne=
w York Commission, to examine barriers to entry for new generation.  As par=
t of this process, the NYISO may consider exempting new generators from AMP=
 in its March filing.  We note that generators in PJM have an exemption fro=
m must-run mitigation.  If NYISO chooses to exempt new units, NYISO should =
address whether the exemption would encourage more rapid entry of new gener=
ators and the effect of such exemption would have on NYISO's comprehensive =
mitigation proposal.
=20
NYISO proposes to exempt hydro units from the AMP.  NYISO believes that hyd=
ro units should not be subject to such mitigation because their volatile bi=
ds often reflect their opportunity costs, not market power.  The Commission=
 believes this logic applies to all energy limited resources, including tho=
se constrained by environmental rules.  Therefore, we direct NYISO to work =
with market participants to determine whether there are other energy limite=
d resources and to develop an appropriate accommodation within the AMP proc=
edures.  This coordination should develop both standing protocols as well a=
s an accounting for possible day-to-day considerations affecting bids.     =
                                                                      =20
=20
Accordingly, we will extend the AMP until April 30, 2002, subject to the fo=
llowing conditions.  We note that NYISO has already indicated that it is co=
mmitted to working with market participants to determine if other refinemen=
ts or changes in the AMP design should be considered.  We direct NYISO meet=
 with market participants and to file a comprehensive mitigation proposal w=
hich addresses the Commission's concerns expressed in this order concerning=
 the AMP, as well as explain how AMP will work in conjunction with other mi=
tigation measures already in effect or proposed for NYISO. [14]=20


In this regard, we note that NYISO has several mitigation measures in place=
 or proposed, including its existing MMM and its proposed AMP, as well as  =
In-City mitigation.   We are concerned that these measures may not fully fi=
t together in a way that adequately addresses market power problems while a=
voiding unnecessary mitigation.  On the one hand, these measure may not mit=
igate all significant exercises of market power.  For example, the existing=
 MMM allows suppliers to exercise market power for one day before mitigatio=
n goes into effect.  On the other hand, other measures may create the poten=
tial for unnecessary mitigation.=20
=20
We also direct NYISO to consider must-run mitigation measures consistent wi=
th ISO-NE and PJM.  The  In-City mitigation measures address market power p=
roblems created by transmission constraints into New York City, but not tho=
se created by transmission constraints within New York City or elsewhere.  =
PJM and ISO-NE both have mitigation measures which provide for automatic mi=
tigation in defined must-run situations. =20
=20
Accordingly, we direct NYISO to file a comprehensive mitigation proposal by=
 March 1, 2002 to be effective May 1, 2002.  When developing a comprehensiv=
e mitigation plan, NYISO should bear in mind that the Commission expects on=
e mitigation plan for the Northeast as part of the RTO process. Therefore, =
we strongly urge NYISO to collaborate with PJM and ISO-NE in formulating it=
s comprehensive mitigation plan.=20
=20
The Commission orders:
=20
(A)  NYISO's request to extend the AMP is granted until April 31, 2002, sub=
ject to the conditions set forth in the body of this order.   =20
=20
(B) Waiver is granted to permit the proposal to take effect November 1, 200=
1.
=20
=20
=20
=20
=20
=20
=20
=20


(C)  NYISO is directed to file a comprehensive proposal for mitigation as d=
iscussed herein on or before March 1, 2002 to be effective May 1, 2002.
=20
By the Commission.
=20
( S E A L )
=20
=20
David P. Boergers,
      Secretary.
=20

  _____ =20

[1]16 U.S.C. ? 824(d) (1994).
[2]The AMP provisions appear in Attachment H to NYISO's Market Administrati=
on and Control Areas Services Tariff (Services Tariff).=20
[3]95 FERC ? 61,471 (2001).
[4]Central Hudson Gas & Electric Corp., et al., 89 FERC ? 61,196 (1999).
[5]Central Hudson Gas & Electric Corp., et al., 90 FERC ? 61,317 (2000), cl=
arified, 91 FERC ? 61,154 (2000).
[6]95 FERC ? 61,189 (2001).
[7]The SCUC is NYISO's Day-Ahead Software computer algorithm.  It performs =
a series of passes, or computer runs, that sequentially evaluate the genera=
tion resources bid into the Day-Ahead Market against demand bids, NYISO loa=
d forecasts, ancillary services needs and reliability requirements.  Throug=
h this analysis, the SCUC selects the optimal least-cost, security-constrai=
ned dispatch of generation and load.
[8]New York Independent System Operator, Inc., 95 FERC ? 61,471 (2001).
[9]86 FERC ? 61,062 (1999), 89 FERC ? 61,196 (1999), and 90 FERC           =
          ? 61,317 (2000).
[10]NYISO explains that this threshold was selected because it is unlikely =
that the thresholds for mitigation of bids will be exceeded if prices are b=
elow $150. =20
[11]No tariff sheets were submitted as part of the filing.
[12]NYISO describes minor changes that it will fix regarding the way it com=
putes reference levels that may have understated appropriate levels for uni=
ts whose final output blocks should have much higher reference levels.
[13]The Member Systems include Central Hudson Gas & Electric Corporation, C=
onsolidated Edison Company of New York, Inc., LIPA, Orange and Rockland Uti=
lities, Inc., the Power Authority of the State of New York, and Niagara Moh=
awk Power
Corporation.=20
[14]See Consolidated Edison Company of New York, Inc., 96 FERC ? 61,095 (20=
01), reh'g denied, 97 FERC ? 61,050 (2001) (orders directing NYISO to addre=
ss concerns regarding the coordination of NYISO's mitigation measures when =
NYISO files to extend any of its various temporary mitigation measures beyo=
nd October 31, 2001).