1 Also cited as contributing factors are the lack of long-term contracting, operating problems in the ISO and power exchange (PX) markets, and suggestions that owners of generation took advantage of the supply shortage and the design of California's wholesale power markets to exercise market power to drive prices higher.

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* All four of the operational independent system operators (ISOs) in the United States experience market-power problems when demand is high (typically during the summer). As a consequence, the four ISOs impose price or bid caps on the participating generators. A robust demand side that participated in bulk-power markets might obviate the need for such caps.

 

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With undersea cable linking Canada to Manhattan, Project Neptune could remake the transmission biz.

1 Staff Report to the Federal Energy Commission on Western Markets and the Causes of the Summer 2000 Price Abnormalities—Part 1, Nov. 1, 2000 (Staff Report), p. 6-1.

2 Order Directing Remedies For California Wholesale Electric Markets, . Note that while FERC recognizes that siting matters and retail demand response programs reside within exclusive state jurisdiction, FERC urges state officials to take certain actions in these areas.

1 ISO terminology is complex and often misleading. A Stage 1 emergency occurs when the ISO does not meet its own reserve criteria. Stage 2 occurs when it cannot meet a 5 percent reserve margin. A Stage 3 takes place when it cannot meet at 1.5 percent reserve margin. An ISO emergency can take place even when local resources are available-so long as they have not been bid into its daily reserve purchasing.

 

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