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NRG Gripes That Few ISOs/RTOs Are Complying with FERC Order 809

August 26, 2015 By Cheryl Kaften

NRG Energy filed a protest with the Federal Energy Regulatory Commission (FERC) on August 18 – arguing that all independent system operators/regional transmission organizations (ISOs/RTOs) that have not changed their Day-Ahead Schedules in compliance with the commission’s Order 809 should be required to do so. Otherwise, the company said, generators will not have sufficient time to buy natural gas for the pipelines’ Timely Nomination Cycle deadline.

To date, only the East Coast operators – New York Independent System Operator (NYISO), Independent System Operator– New England (ISO-NE), and PJM Interconnection (PJM) – have complied with the order to extend the deadline for the day-ahead Timely Nomination Cycle from 11:30 am Central Clock Time (CCT) to 1:00 pm CCT.

The others – California Independent System Operator (CAL-ISO), Midcontinent Independent System Operator (MISO), and Southwest Power Pool (SPP) – all reasoned that they already were close enough to the new closing time to make any changes unnecessary.

Specifically, NRG stated, “MISO argues that its market participants have demonstrated their ability to mitigate risk associated with gas acquisition and scheduling. [CAL-ISO] explains that current practices in the West support reliable access to natural gas supply and transportation. SPP explains that ‘revisions are not necessary because SPP does not currently face many of the same issues’ that exist in some of the other regions regarding natural gas-fired generators’ ability to procure sufficient quantities and capacity for transport of natural gas.

“All of these statements,” said Houston-based NRG, “amount to an argument that [CAL-ISO}, MISO, and SPP are different from the eastern ISOs/RTOs and should not be required to meet the commission’s directives.”

“However,” the company’s filing noted, “If the commission only intended to subject the eastern markets to its directive, the commission would have just required PJM to change its deadlines since ISO-NE and NYISO already publish their day-ahead results prior to the Timely Nomination deadline.”

What’s more, by refusing to make the requested changes, the ISOs/RTOs are failing to protect themselves properly from risks, NRG submits. Pointing to recent emergencies, NRG commented, “The Eastern markets did not have natural gas challenges until they did. Quoting Monty Python, ‘No one expects the Spanish Inquisition!’”

Cal-ISO may not have had the same level of interruptions and outages that the eastern markets experienced, but NRG noted that on June 30 and July 1, the California system operator told generators about gas curtailments after they got their day-ahead awards. Such situations are more likely to happen in the winter, the company added.

For those and a number of other reasons, NRG urged FERC to reject CAL-ISO’s MISO’s and SPP’s Compliance Filings and to require these ISOs/RTOs to adjust the posting of their day-ahead market results to prior to the Timely Nomination cycle; as well as to mandate that ISOs/RTOs  set their day-ahead offer submission deadlines to a time after fixed-price gas has started trading (i.e., 10:30 a.m. Eastern Prevailing Time).

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