FERC Approves NYISO Plan To Pay Generators For Costs Above Cap
February 05, 2014
The Federal Energy Regulatory Commission granted NYISO’s request for a tariff waiver to make generators whole for times when spiking natural gas prices exceeded the market’s bid cap. Prices surged to $120/MMBTU as cold gripped New York late last month compared to price increases of just under $40/MMBTU last winter. Those high prices meant generators using the fuel had costs above the $1,000/MWh price cap, so the ISO asked FERC to let it make them whole through payments to any generators with legitimate costs above the cap. FERC found the waiver addressed a concrete problem that generators might be required to provide service to support reliability without being able to recover their costs. NYISO will pay generators up to their demonstrated, actual costs of producing incremental energy and/or minimum generation through uplift via a bid production cost guarantee payment. The waiver is in place from Jan 22 through Feb 28.