Despite dire warnings from generators that its market redesign will head off electricity supplies instead of encouraging them, the California Independent System Operator voted to send two of its "conceptual" market redesign elements to federal regulators on a unanimous vote May 6. This initial phase of the market redesign filing, is an attempt to mitigate physical withholding from the market through bid caps, local market power mitigation with local constraints, and adder for frequently mitigated units. Bid caps were the outstanding issue of the multilayered market redesign proposal. Generators, such as Williams, maintain the $250\/MWh cap will discourage forward contracting, and keep supplies out of the market when they're needed because the price it too low. "Low bid caps will not encourage demand-response," and will not ration limited resources, according to Brian Theaker, formerly CAISO staff, now regional governmental affairs manager for Williams. "We tried raising the bid caps and that didn't work," countered Frank Wolak, CAISO market survelliance committee chair, referring to the energy crisis. "Let's try the right way first. Only if consumers have the ability to protect themselves" should price caps be raised, he added. CAISO staff said the finding the right balance is not an easy job because the grid operator doesn't want to create a situation where a unit owner will lose money by participating in the market. Thus, CAISO intends to raise the cap four-fold, but over a four-year transition, to a $1,000\/MWh price cap. The two elements voted on in the meeting?along with the hour-ahead scheduling procedure approved last year by the board that strives to make sure suppliers are hedged against price volatility?must be approved by the Federal Energy Regulatory Commission. Among items left on the grid operator's platter needed to complete its market redesign are seller's contracts and residual unit commitment. CAISO plans to resolve those by this summer, according to staff. A redesign congestion revenue rights allocation isn't expected until fall. The grid operator hopes to have it in place by 2007.