The California ISO plans to propose to the Federal Energy Regulatory Commission to delay until fall 2020 the implementation of FERC Order No. 831, which requires $2,000/MWh energy bid cap. Previously, the ISO planned to raise the energy bid cap in fall 2019. FERC Order No. 831 requires ISOs to allow an energy bid greater than $1,000/MWh up to $2,000/MWh to set market prices if the ISO can verify before the market that the bid represents expected or actual costs.
The ISO will propose the delay to allow additional time to develop a before-the-market cost verification methodology for import bids and to consider recently raised concerns regarding the administrative prices the ISO market would use to relax constraints in the market under the $2,000/MWh energy bid cap.
The ISO plans to post a revised straw proposal for an import bid cost verification methodology in August as part of its ongoing Import Bid Cost Verification initiative. Verifying costs of import energy will also be one of the subjects discussed at the ISO’s July 15 workshop on system market power. Information on the Import Bid Cost Verification initiative is located on the initiative webpage at http://www.caiso.com/informed/Pages/StakeholderProcesses/ImportBidCostVerification.aspx
The ISO plans to launch a new initiative, FERC Order No. 831 - Bid Cap, which will consider the ISO market constraint relaxation prices under the $2,000/MWh energy bid cap. The ISO plans to launch this initiative in Q3 2019. A future market notice will announce the ISO’s posting of an issue paper regarding this topic.