MARKET NOTICE
January 16, 2002
Revised Operating Procedure M-401
Real-Time and Forward Intra-Zonal Congestion Management
ISO Market Participants:
On December 12, 2001 the ISO posted on its web site a version of ISO
Operating Procedure M-401 that included certain language potentially giving
the impression that the ISO determines what is and what is not a reasonable
competitive bid.  Additionally, this version of the Operation Procedure
included a provision for the exclusive use of Reliability Must-Run (RMR)
units in areas the ISO has deemed to be noncompetitive and this provision is
in conflict with the requirements of Section 4.1 of the Must-Run Service
Agreement. 
The ISO has removed the December 12, 2001 version of operating procedure
M-401 from the ISO web site and posted a revised version at
http://www.caiso.com/thegrid/operations/opsdoc/marketops/.  The revised
version includes procedures for: 
*	Eliminating "competitive" and "non-competitive" intra-zonal
congestion areas;
*	Modifying the use of RMR units for resolving intra-zonal congestion
to reflect the requirements of the Must-Run Service Agreement;
*	Eliminating the ISO's review of market bids for "reasonableness",
while retaining the ISO's obligation to report bids it considers potentially
noncompetitive to the ISO's Department of Market Analysis and to the Federal
Energy Regulatory Commission; and  
*	Modifying the steps the ISO will take to relieve intra-zonal
congestion it predicts may occur due to pre-scheduled clearances.
The revised Operating Procedure M-401 has been posted on the ISO web site at
www.caiso.com/thegrid/operations/opsdoc/marketops.
If you have questions, please contact The ISO Operating Procedures Control
Desk at procctrldesk@caiso.com <mailto:procctrldesk@caiso.com>  or your
Account Manager.
Client Relations Communications.0715
CRCommunications@caiso.com