I spoke with IPPNY's Executive Director and with the ISO's outside General 
Counsel this afternoon and learned that neither the FERC staff nor the ISO 
Board believes that the $150 soft price cap makes sense for New York. Carol 
Murphy, IPPNY's Exec Director, told me that she had spoken with Dan Larcamp, 
Director of Markets, Tariffs and Rates at FERC, who advised her (off the 
record) that NY's problem is supply driven and that IPPNY should put the 
spotlight on the NYPSC for not doing anything about increasing supply in New 
York. He saw little similarity between NY and California and was skeptical of 
the soft bid cap proposal for NY.  On a simialr vein, Ira Freilicher from 
Hunton and Williams, the NYISO's outside counsel, told me that their was no 
chance of the NYISO Board going along with the soft price cap proposal. He 
indicated that the Board had just concluded a two-day session and had Bill 
Hogan in to discuss the situation, and the recommendation from Hogan and 
others was that NY is not California, and that the $150 soft price cap was 
the wrong approach. Freilicher also reiterated that there was no interest by 
the Board in extending the NYC mitigation measures applicable to the divested 
Con Ed generation to other generation in the City, or to reducing the 
thresholds for market power mitigation, both of which were recommended by the 
NYPSC.  On the other hand, Freilicher indicated that there was very strong 
Board interest in adopting a "circuit breaker" mechanism to prevent big price 
runups this summer, and that politically, $1000 bid caps may no longer be 
acceptable. He also reiterated that the Board is interested in getting power 
to step in and change posted market prices after the fact (although in a 2 to 
3 day period, not 60 as had been originally reported) in the event the ISO 
finds that prices were affected by the exercise of market power. In th past, 
FERC has rejected efforts by the NYISO to retroactively adjust prices, and I 
believe refused to allow it in California as part of its Order last week.

In view of the sensitive nature of these discussions, I would appreciate 
folks not circulating this memo.