While the grid operator plans to launch its long-awaited wholesale market April 1, the California Independent System Operator is discussing starting another market--a capacity market--in 2010. Stakeholders were cautious at CAISO’s March 26 meeting. “Transition from a bilateral contract world to a tariff world is a shock,” said Doug Parker, Southern California Edison director of energy operations. That means, he added, that many of the terms that utilities have with generators’ direct contracts “would be moved into the CAISO market.” Other utility representatives also noted that the state has not faced a reliability problem, thus, starting a market that would trade in capacity is not immediately necessary. A capacity market would allow generators to bid in their un- or under-used power plants to be available to ramp up at the grid operator’s request. The availability is expected to keep the grid stable. The California Public Utilities Commission promoted a capacity market in 2005. At the time CAISO was skeptical. Workshops went on for years to shape a market at the commission, but it never was adopted. Subsequently, the grid operator opened up a stakeholder process to work out details. “It’s not a full-on capacity market. We’re not there,” said Laura Mantz, CAISO vice president of market infrastructure. It is set to define, however, a “standardized capacity product.” Generators were not unified on their response to the move. It was approved unanimously. The grid operator is most keen on the revamp of its wholesale market expected to go live on April 1, according to Steve Berberich, CAISO vice president of corporate services. An early part of the market, its day-ahead bidding program, began March 25. “Excited and trepidatious [sic],” added Berberich. The first day-ahead market is to actually run on March 31 at 1 p.m. At 11:52 p.m. participants should get their first dispatch to start sending electricity. At present, the grid operator’s wholesale market captures about 3 to 5 percent of transactions. It expects the revised market, called Market Redesign & Technology Upgrade, to expand the use of transactions. The meeting was director Tim Gage’s last after two terms.
