The lower-of-bid or proxy cost rule only applies during System Emergencies.  The rest of the time the ISO uses your bid, assuming you have submitted one.  This so-called improvement only makes things worse because during System Emergencies you cannot bid above the proxy price because the software will default to proxy prices if your bid exceeds the proxy price.

 -----Original Message-----
From: 	Comnes, Alan  
Sent:	Monday, August 27, 2001 4:23 PM
To:	Foster, Chris H.; Williams III, Bill
Cc:	Hall, Steve C. (Legal)
Subject:	Do Supplemental Energy Bids Matter?

Bill, Chris,

I think this is the market notice you two were refering to.  Yes, CAISO  will use the lower of SC-submitted bids or a unit's proxy cost for purposes of determining dispatch order and the MCP of supplemental energy and A/S. However, my understanding is that this adjustment only affects the auction for supplemental energy and A/S.  If you have costs above the current price cap and your costs are above your unit's proxy costs (and are willing to justify them), you should bid your higher-than-proxy costs. If you are accepted, you are supposed to be paid as bid.

Let me know if you want me to follow up with CAISO (or let me know if you have asked them about this).


 << File: Market Notice Change in Proxy Bid Calc.pdf >>