Grid Operator Presses for Feb. 2009 Market Start

By Published On: October 31, 2008

Despite trader concerns over software problems in test runs, the California Independent System Operator’s board concluded its new wholesale market plan should launch in February 2009. The board expressed some doubts, however, about the new market’s ability to handle all its functions–including a day-ahead energy and capacity market, as well as transmission congestion management. Yet on October 25, the board instructed staff to proceed with its planned start date. The software simulations have not been “production grade,” according to grid operator chief executive officer Yakout Mansour. In spite of that, board chair Mason Willrich said the market introduction cannot slip another time because of the large amount of momentum and time and capital invested. We can’t get “off the bus,” he said. “The benefits are too great to let it go away,” added board member Tom Page. The market introduction is about a year later than originally envisioned. In deference to traders’ concerns, the board agreed to another market software check in late November. In other grid operator action, the board approved a $2,500/MWh ceiling and floor for settlements through its wholesale market. Currently, there’s a bid cap of $500, but staff notes that settlement prices can go higher than that. CAISO staff noted the move is to prevent any unknown market moves. Traders opposed the move.

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