CALIFORNIA ISO MARKET NOTICE

Requested Client Action:  Information Only

 

Date of Distribution:  March 5, 2008

 

Categories:  Settlements and Market Clearing

 

Subject:  Adjustment of the Start-Up Cost Charge

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Summary:  The CAISO will adjust the Start-Up Cost charge effective January 1, 2008.

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Main Text:  In accordance with the June 19, 2001 FERC Order in ER04-835, the California ISO (CAISO) pays generators for Start-Up fuel costs incurred when generators are required to run in accordance with CAISO Dispatch Instructions and the must-offer provisions.  As directed by FERC, the CAISO began reimbursing generators for such costs beginning on operating day June 21, 2001.  In addition, the CAISO has been collecting a Start-Up charge on all metered load within the CAISO Control Area and Real-Time gross exports to other in-state control areas.  The Start-Up rates have been based on an estimate of Start-Up fuel costs. 

 

In the December 27, 2006 Order in ER04-835, the Federal Energy Regulatory Commission (FERC) directed the CAISO to allocate Start-Up Costs in the same manner as Minimum Load Cost Compensation (MLCC) costs.  In its November 20, 2007 Order on rehearing, FERC clarified that the CAISO may use “Estimated” Start-Up Costs when allocating Start-Up Costs in the same manner as MLCC costs. 

 

According to the CAISO Tariff (Section 40.12.4 Adjustment of the Start-Up Cost Charge), the CAISO may adjust the Start-Up Cost charge as needed.  The CAISO needs to adjust the rates for Start-Up effective January 1, 2008 for two reasons:  1) due to the difference between actual Cost Demand and projected Cost Demand; and  2) use of an estimated Monthly Start-Up Cost Charge instead of a per megawatt-hour (MWh) rate. 

 

Detailed calculations for the Start-Up Cost charge amount can be found on the CAISO website at: http://www.caiso.com/docs/2005/09/23/2005092315410212329.html.

 

The CAISO will continue to monitor the current Start-Up Cost Charge account to maintain sufficient, but not excess balances, to fully pay submitted invoices.  If the CAISO Start-Up Trust account has a negative balance due to under-collection of Start-Up charges, Start-Up invoices submitted will be paid pro-rata as funds become available each month until the invoices are paid in full in accordance with Tariff Section 40.12.7.

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For More Information Contact:  Catherine Bodine at 916-351-2395 or cbodine@caiso.com