Even though the decision by the Federal Energy Regulatory Commission on the method of charging for new interconnections on the grid appeared to be out of the hands of the hands of the California Independent System Operator (CAISO), the chair of the CAISO board leapt at the opportunity to castigate federal regulators on the matter. ?Once again the federal government is making rules for us,? Michael Kahn, CAISO board chair, said at the September 25 board meeting. The cost of interconnections would be rolled into transmission rates instead of being paid up front by generators. FERC?s large-generator interconnection rule, Order 2003, ?goes out of its way to fashion a policy that works with the region,? proffered Steve Greenleaf, CAISO director of regulatory policy. But Kahn would have none of it. Suspecting that federal regulators are listening to electric generators and not to state politicians, Kahn said, ?Generators are saying [the payment plan] is fair and open. I?m not comforted. We have to be careful about allowing the federal government to create barriers? to new generation. Kahn accepted that CAISO is ?stuck in this mess? but settled on sending a policy message to federal regulators that he is unhappy with the imposition. CAISO has to file its response to FERC on this issue October 20. CAISO directors also discovered this week that a move by FERC is costing millions in congestion costs. FERC removed its requirement for out-of-state market participants to bid zero, thus taking whatever the clearing price was that hour. When that happened at the end of June, bids went from an average of 600 MW\/day to 1,300 MW\/day, according to CAISO spokesperson Gregg Fishman. That?s resulted in $5.2 million in payments for incremental bids and $3.5 million for decremental bids, Greg Cook, CAISO director of market monitoring, said. Cook explained that the costs have been exacerbated by new generation coming on line from Mexico?thus causing congestion from the south?as well as a Southern California substation being derated for use because of a fire earlier this year.