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Seams

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Seams. Cross-border price convergence is needed for regional liquidity Currently ... PJM calculations create Russian roulette for a market participant interested ... – PowerPoint PPT presentation

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Title: Seams


1
Seams
  • Cross-border price convergence is needed for
    regional liquidity Currently the random
    differences between NY's calculation of New
    England and PJM proxy buses and the respective
    New England / PJM calculations create Russian
    roulette for a market participant interested in
    consistent cross-border transactions. The NYISO
    needs to work with all its neighbors (not just
    New England) to improve cross border price
    convergence and develop market based solutions
    such as
  • Modelling of additional proxy busses
  • Allowing for shorter notice duration
    transactions
  • Better use of ramp
  • Elimination of through out-service fees
  • Better coordination management of interface
  • Recent derate of NY-NE interface undermines other
    efforts.

2
Credit Issues
  • The NYISO needs to pro-active about implementing
    options to allow the NYISO to properly calculate
    exposure and to allow market participants to
    manage their credit requirements.
  • Current TCC and Capacity Auctions
    over-collateralize bids (e.g. a market
    participant submitting bids 100 MW at 5/KW and
    100 MW at 3/KW would be perceived as having a
    800,000 potential obligation based on the sum of
    both bids whereas the actual exposure is 600,000
    based on buying 200 MW at 3).
  • PJM is discussing a twice a month billing cycle
    to reduce credit ... perhaps this would work for
    NY. Finally, mechanisms like PJM's eSchedule
    system that can permit market participants to
    share credit risk among themselves and reduce
    exposure with / to the NYISO have great benefit.
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