Joel

My apologies if I mischaracterized the presentation, I simply interpreted
this excerpt from the PSC presentation..

As can be seen from the spreadsheet, no single
supplier, withholding 50 MW, can, on its own, cause the price to rise by the
$100
needed to breach the AMP's $100 price impact threshold. But, if a number of
large players, each acting unilaterally, withhold 50 MW due to the
profitability of
doing so, the combined effect on price could be over $100, which would be
both
very damaging to buyers, and very profitable to suppliers.

In my simple interpretation of the NYISO Market Monitoring Plan it is a
measure of conduct and impact.

As follows from the Market Monitoring Plan..

2.1

Conduct Subject to Mitigation

Mitigation Measures may be applied: (i) to the bidding, scheduling or
operation of an "Electric
Facility," defined for purposes of this Addendum to the Plan as an electric
generation resource or
transmission facility; or (ii) as specified in ? 2.3(b)).
2.3. Categories of Conduct that May Warrant Mitigation

a) The following categories of conduct, whether by a single firm or by
multiple firms acting
in concert, may cause a material effect on prices or guarantee payments in a
New York Electric Market
if exercised from a position of market power. Accordingly, the NYISO shall
monitor the New York
Electric Markets for the following categories of conduct, and shall impose
appropriate Mitigation
Measures if such conduct is detected and the other applicable conditions for
the imposition of Mitigation.


You state that one generator witholding 50 MW does not warrant mitigation
but a number of firms acting "unilaterally" would have an impact and should
be mitigated. The NYISO however according to section 2.3 (in my
interpretation of the Plan) a witholding of 50 MW (using your MW value) by
multiple firms cannot be market power if they are not acting in concert. You
admit that they are acting unilaterally and not acting in concert. If that
is the case the only way these firms should be mitigated is if they are
colluding or acting in concert.

Potentially splitting hairs here and I have no intention of swapping
interpretations of the Market Monitoring Plan when it is clearly the
function of the NYISO market Monitoring Unit, but what is the PSC's position
on one market participant trying to export 500 or 1000 MW to multiple export
points out of the NYISO; will this not have an impact on price, is this
market power because prices may go up?
Hopefully market power is not defined by high prices but by conduct as
defined in the Plan.

Regards..

Joe




-----Original Message-----
From: joel_brainard@dps.state.ny.us
[mailto:joel_brainard@dps.state.ny.us]
Sent: Friday, January 25, 2002 3:21 PM
To: NYISO TIE List
Subject: Reduction of OOM?


----- Forwarded by Joel Brainard/ORE/NYSDPS on 01/25/02 03:23 PM -----


"Kirkpatrick, Joe" <Joe.Kirkpatrick@constellation.com>
01/20/02 08:12 PM
Please respond to market_relations


        To:     NYISO TIE List <joel_brainard@dps.state.ny.us>
        cc:
        Subject:        Reduction of OOM?

Joe Kirkpatrick wrote:

On a side note it is interesting to note that there is a recent
presentation
to the AMP/ICM Task Force by one of the participants that has determined
that if all the large suppliers collude in tandem to withhold 50 MW each
that there could conceivably be an increase in price. While this
conspiracy
theory is of concern to said presenter it would seem highly unlikely,
especially considering that bid load or exports provide a much higher
impact
on price in reality than the unlikely scenario of some large suppliers all
colluding in tandem.


My comment:

This is a serious mischaracterization of what was said.   No collusion is
required.  All that is needed for a large impact on prices from the
exercise of market power is for the generators to act in their own self
interest.



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