Federal Register / Vol. 79, No. 206 / Friday, October 24, 2014 / Notices 63619 

e. How is the planning of 

transmission, generation and other 

resources coordinated between retail 

and wholesale markets? 

12:15 p.m.–1:00 p.m. Lunch Break 

1:00 p.m.–3:00 p.m. Panel Two: Role of 

NYISO’s capacity market in 

attracting investment in resources 

and infrastructure needed to meet 

public policy objectives 

This session will focus on whether, 

and to what extent, NYISO’s capacity 

market should play a role in attracting 

investment in resources and 

infrastructure to meet public policy 

objectives. There may be a range of 

public policy objectives, including 

increasing renewable resources; 

maintaining or increasing clean energy 

resources to meet emission reduction 

goals; increasing distributed resources; 

increasing energy efficiency and 

demand response resources; 

maintaining fuel diversity; maintaining 

price stability for customers (wholesale, 

retail, commercial and industrial); 

economic development; and spurring 

investment in resources and 

infrastructure (both power lines and gas 

pipelines). Panelists should address 

whether these objectives are 

appropriately addressed through the 

NYISO capacity market. If so, this 

session will also include a discussion of 

whether certain aspects of the current 

NYISO capacity market design—in 

particular the capacity market product 

definition—need to change to achieve 

the requisite public policy objectives. 

The discussion may also explore 

whether some of these objectives are 

complementary or in conflict with other 

objectives. 

Panelists should be prepared to 

discuss the following questions: 

a. Are changes to the capacity market 

needed to account for fuel availability/ 

firmness of fuel, or to differentiate the 

value of capacity resources based on the 

‘‘firmness’’ of fuel arrangements? 

b. Should the capacity market 

specifically account for or otherwise 

value resources that are intended to 

meet current or future public policy 

goals (e.g., fuel diversity or emission 

reduction goals)? How should there be 

modifications to the buyer-side 

mitigation rules to help achieve those 

goals? 

c. What price signals and tariff 

changes may be needed to achieve the 

objectives under discussion in the PSC’s 

Reforming the Energy Vision (REV) 

proceeding? 

d. Are there market, environmental, or 

other barriers to entry in certain 

locations or for certain kinds of 

resources (e.g., repowering assets in 

New York City)? 

e. Are there broader market design 

features outside of the capacity market 

(e.g., scarcity and shortage pricing) that 

could be adjusted to account for public 

policy objectives (e.g., increasing 

renewables)? 

3:00 p.m.–3:15 p.m. Break 

3:15 p.m.–4:00 p.m. Roundtable 

discussion among Commissioners/

Wrap up 

Discussion of possible paths forward 

for identified issues and solutions. 

[FR Doc. 2014–25323 Filed 10–23–14; 8:45 am] 

BILLING CODE 6717–01–P 

DEPARTMENT OF ENERGY 

Federal Energy Regulatory 

Commission 

[Docket. No. AD14–14–000] 

Price Formation in Energy and 

Ancillary Services, Markets Operated 

by Regional Transmission, 

Organizations and Independent 

System Operators: Supplemental 

Notice of Workshop on Price 

Formation: Scarcity and Shortage 

Pricing, Offer Mitigation, and Offer 

Caps in RTO and ISO Markets 

As announced in a Notice issued on 

September 5, 2014, the Federal Energy 

Regulatory Commission (Commission) 

will hold a workshop on Tuesday, 

October 28, 2014 to commence a 

discussion with industry on scarcity 

and shortage pricing, offer mitigation, 

and offer caps in energy and ancillary 

service markets operated by the 

Regional Transmission Organizations 

and Independent System Operators 

(RTOs/ISOs). The workshop will 

commence at 8:45 a.m. and conclude at 

5 p.m. and will be held at the Federal 

Energy Regulatory Commission, 888 

First Street NE., Washington, DC 20426. 

This workshop is free of charge and 

open to the public. Commission 

members may participate in the 

workshop. 

The agenda and a list of participants 

for this workshop are attached. Those 

who plan to attend the workshop are 

encouraged to complete the registration 

form located at https://www.ferc.gov/

whats-new/registration/10-28-14- 

form.aspx. There is no registration 

deadline. 

The workshop will be transcribed. 

Transcripts of the workshop will be 

available for a fee from Ace-Federal 

Reporters, Inc. (202–347–3700 or 1– 

800–336–6646). Additionally, there will 

be a free webcast of the workshop. The 

webcast will allow persons to listen to 

the workshop but not participate. 

Anyone with Internet access who wants 

to listen to the workshop can do so by 

navigating to the Calendar of Events at 

www.ferc.gov, locating the technical 

workshop in the Calendar, and clicking 

on the webcast link. The Capitol 

Connection provides technical support 

for the webcast and offers the option of 

listening to the meeting via phonebridge for a fee. If you have any 

questions, visit 

www.CapitolConnection.org or call 703– 

993–3100. 

While this workshop is not for the 

purpose of discussing specific cases, the 

workshop may address matters at issue 

in the following Commission 

proceedings that are pending: Astoria 

Generating Company L.P. v. New York 

Independent System Operator, Inc., 

Docket Nos. EL11–42 and EL11–50; 

California Independent System Operator 

Corporation, Docket No. ER14–1386 and 

ER14–2484; Hudson Transmission 

Partners, LLC v. New York Independent 

System Operator, Inc., Docket No. 

EL12–98; Independent Power Producers 

of New York, Inc. v. New York 

Independent System Operator, Inc., 

Docket No. EL13–62; ISO New England, 

Inc. and New England Power Pool, 

Docket Nos. EL14–52, ER 14–1050, 

ER14–2419, and ER14–2929; 

Midcontinent Independent System 

Operator, Inc., Docket Nos. ER14–2156, 

and ER11–4081; PJM Interconnection, 

L.L.C., Docket Nos. ER14–1144 and 

ER14–1145; New York Independent 

System Operator, Inc., Docket No. 

EL07–39; Old Dominion Electric 

Cooperative, Docket No. ER14–2242; 

Seneca Power Partners, L.P. v. New York 

Independent System Operator, Inc., 

Docket No. EL12–6; and Southwest 

Power Pool, Inc., Docket No. ER15–21. 

Commission workshops are accessible 

under section 508 of the Rehabilitation 

Act of 1973. For accessibility 

accommodations please send an email 

to accessibility@ferc.gov or call toll free 

(866) 208–3372 (voice) or (202) 502– 

8659 (TTY), or send a fax to (202) 208– 

2106 with the requested 

accommodations. 

For more information about the 

workshop, please contact: 

Logistical information: Sarah 

McKinley, Office of External Affairs, 

Federal Energy Regulatory Commission, 

888 First Street NE., Washington, DC 

20426, (202) 502–8368, 

sarah.mckinley@ferc.gov. 

Scarcity/shortage pricing: Bob 

Hellrich-Dawson, Office of Energy 

Policy and Innovation, Federal Energy 

Regulatory Commission, 888 First Street 

NE., Washington, DC 20426, (202) 502– 

6360, bob.hellrich-dawson@ferc.gov. 


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63620 Federal Register / Vol. 79, No. 206 / Friday, October 24, 2014 / Notices 

1Price Formation in Energy and Ancillary 

Services Markets Operated by Regional 

Transmission Organizations and Independent 

System Operators, Notice of Workshop, Docket No. 

AD14–14–000 (Sept. 4, 2014). 

2See, e.g., Johannes P. Pfeifenberger and Kathleen 

Spees, The Brattle Group, and Kevin Carden and 

Nick Wintermantel, Astrape Consulting, Resource 

Adequacy Requirements: Reliability and Economic 

Implications at 83–84 (Sept. 2013), available at 

http://www.brattle.com/system/publications/pdfs/

000/004/984/original/Resource_Adequacy_

Requirements_Pfeifenberger_Spees_FERC_Sept_

2013.pdf?1392303166. 

Offer mitigation and offer caps: Emma 

Nicholson, Office of Energy Policy and 

Innovation, Federal Energy Regulatory 

Commission, 888 First Street NE., 

Washington, DC 20426, (202) 502–8846, 

emma.nicholson@ferc.gov. 

Dated: October 10, 2014. 

Kimberly D. Bose, 

Secretary. 

Price Formation in Energy and 

Ancillary Services Markets Operated 

by Regional Transmission 

Organizations and Independent System 

Operators 

Scarcity and Shortage Pricing, Offer 

Mitigation, and Offer Caps Workshop 

Docket No. AD14–14–000 

October 28, 2014 

Agenda 

On October 28, 2014 a second 

conference will be held to address 

matters of price formation in the energy 

and ancillary services markets 

administered by the Regional 

Transmission Organizations (RTOs) and 

Independent System Operators (ISOs).1

It will have three areas of focus: Scarcity 

and shortage pricing, offer mitigation 

and offer caps in the RTO/ISO markets. 

The RTO/ISO markets rely on security 

constrained economic dispatch and 

locational marginal pricing to ensure 

efficient dispatch of, and compensation 

to, resources. Ideally, RTO/ISO market 

designs would rely on competitive 

pressure to ensure that resource offers 

reflect marginal cost. Because the 

markets are imperfect at times (e.g., 

structural issues, inelastic demand), the 

RTO/ISO tariffs include specific rules to 

ensure prices remain just and 

reasonable. These rules take the form of 

market power mitigation, offer caps and 

scarcity pricing. Working together, these 

rules are intended to protect against the 

exercise of market power while allowing 

prices in the markets to rise in response 

to predetermined triggers (e.g., an 

operating reserve deficiency) to elicit a 

market response (e.g., generator 

performance, load response) to support 

the reliable and efficient operation of 

the market. These rules would ideally 

reflect the value to load of maintaining 

reliability and avoiding involuntary 

load curtailments. 

Through this conference and any 

papers Commission staff may release in 

advance, Commission staff will explore 

the technical, operational and market 

issues related to shortage pricing, offer 

mitigation, and offer caps. 

8:45 a.m.–9 a.m.—Welcome and 

Opening Remarks 

9 a.m.–10:30 a.m.—Panel 1: Goals of 

Scarcity and Shortage Pricing and 

Performance of Existing Pricing 

Rules 

Generally speaking, shortage pricing 

is the method RTOs/ISOs employ to 

price energy and operating reserves 

during scarcity and shortage conditions. 

Scarcity and shortage prices are 

intended to achieve two primary goals. 

The first goal of scarcity and shortage 

pricing is to send a short-term price 

signal to incentivize operation of 

existing resources to help maintain 

reliability. In the short term, these 

prices should be high enough to induce 

existing resources to be available to the 

maximum extent possible and to induce 

imports to offer from neighboring areas. 

The high prices should also signal 

consumers to reduce demand. 

The second goal of scarcity and 

shortage pricing is to contribute to 

efficient long-term economic entry and 

exit. When scarcity and shortage prices 

accurately reflect consumers’ valuation 

of avoidance of an involuntary load 

curtailment, the resulting energy and 

ancillary services prices can contribute 

to efficient long-run market 

participation (entry and exit) by 

addressing part of the ‘‘missing money’’ 

problem.2

While scarcity and shortage pricing 

rules are designed to achieve these two 

goals, in practice, system operator 

practices and experiences may influence 

how the rules are administered and thus 

their efficacy. 

Panel 1 will explore how the goals of 

scarcity and shortage pricing are 

balanced against the operational 

realities of employing administrative 

pricing rules. The discussion will also 

focus on the following: 

D How the definition of a scarcity or 

shortage event and the pricing triggers 

compare across RTO and ISO markets; 

D The frequency and duration of 

scarcity or shortage events; 

D To what extent the frequency and 

duration of scarcity or shortage events 

support efficient entry and exit; 

D How the actions system operators 

take to avert a scarcity or shortage event 

are reflected in energy and ancillary 

service prices; 

D Whether scarcity and shortage 

pricing rules and import/export timing 

are sufficiently coordinated such that 

market participants can schedule 

exports and imports efficiently to 

respond to shortage conditions. 

Panelists: 

• Matthew White, ISO New England 

Inc. 

• Todd Ramey, Midcontinent 

Independent System Operator, Inc. 

• Robert Pike, New York Independent 

System Operator, Inc. 

• Adam Keech, PJM Interconnection, 

L.L.C. 

• Richard Dillon, Southwest Power 

Pool, Inc. 

10:30 a.m.–10:45 a.m.—Break 

10:45 a.m.–12:30 p.m.—Panel 2: Lessons 

Learned from Existing Scarcity and 

Shortage Pricing Rules 

Panel 2 will explore lessons learned 

from existing scarcity and shortage 

pricing rules. Possible discussion items 

could include the topics discussed in 

Panel 1 in addition to any other 

concerns panelists may have. The 

RTOs/ISOs and the RTO/ISO market 

monitoring units will be given an 

opportunity to discuss any issues raised 

by panelists. 

Panelists: 

• Joseph Cavicchi, Compass Lexecon, 

speaking on behalf of Electric Power 

Supply Association. 

• Erica Bowman, America’s Natural 

Gas Alliance. 

• John Citrolo, PSEG Power. 

• Charlie Bayless, North Carolina 

Electric Membership Corporation. 

• Joseph Bowring, Monitoring 

Analytics. 

12:30 p.m.–1:30 p.m.—Lunch 

1:30 p.m.–3:30 p.m.—Panel 3: Goals of 

Offer Caps and Market Power 

Mitigation 

Panel 3 will provide the RTO/ISO 

Market Monitors an opportunity to 

discuss the goals of the current 

incremental energy offer cap and market 

power mitigation provisions in their 

respective markets, and to provide a 

performance assessment with respect to 

those goals. The market monitors will be 

asked to discuss the role the $1,000/

MWh offer cap plays in both the 


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Federal Register / Vol. 79, No. 206 / Friday, October 24, 2014 / Notices 63621 

mitigation rules and the shortage pricing 

rules. The market monitors will also be 

asked to discuss whether: (1) Market 

power mitigation provisions have a 

material impact on the price formation 

process; (2) the short-run marginal costs 

estimates that underlie market power 

mitigation provisions sufficiently 

account for all resource supply costs, 

including opportunity costs; (3) RTO/

ISO offer rules provide sufficient 

flexibility for resources to reflect cost 

changes that occur between day-ahead 

and real-time and across hours in realtime; and (4) RTO/ISO rules provide 

sufficient protection against the exercise 

of market power. 

Panelists: 

• Eric Hildebrandt, California 

Independent System Operator 

Corporation. 

• Jeffrey McDonald, ISO New 

England Inc. 

• Shaun Johnson, New York 

Independent System Operator, Inc. 

• Joseph Bowring, Monitoring 

Analytics. 

• Catherine Mooney, Southwest 

Power Pool, Inc. 

• David Patton, Potomac Economics. 

3:30 p.m.–3:45 p.m.—Break 

3:45p.m.–4:45p.m.—Panel 4: Impacts of 

Offer Caps and Market Power 

Mitigation 

Panel 4 will focus on the impacts that 

offer caps and offer mitigation have on 

both buyers and sellers in wholesale 

markets. Discussion will include 

comments from resource owners about 

whether the current $1,000/MWh offer 

cap permits them to reflect their costs 

fully in supply bids. Resource owners 

will also be asked to discuss: (1) 

Whether the RTOs/ISOs permit all of 

the relevant costs, including 

opportunity costs, to be included in the 

marginal cost estimates that underlie 

market power mitigation provisions; 

and (2) whether RTO/ISO offer rules 

permit resources to reflect changes in 

resource supply costs that occur 

between day-ahead and real-time and 

across hours in real-time. Panelists will 

be asked to comment on the role that 

offer caps and market power mitigation 

procedures play in ensuring just and 

reasonable rates. Of particular interest 

will be the extent to which offers 

capped at some value (like the current 

$1000/MWh cap) play a meaningful role 

in consumer protection. The RTOs/ISOs 

and the RTO/ISO market monitoring 

units will be given an opportunity to 

discuss any issues raised by panelists. 

Panelists: 

• Joseph Cavicchi, Compass Lexecon, 

speaking on behalf of Electric Power 

Supply Association. 

• Abraham Silverman, NRG Energy, 

Inc. 

• Edward Tatum, Old Dominion 

Electric Cooperative. 

• Jeffrey Nelson, Southern California 

Edison. 

• Charlie Bayless, North Carolina 

Electric Membership Corporation. 

• Patrick Connors, WPPI Energy, 

speaking on behalf of Transmission 

Access Policy Study Group. 

4:45 p.m.–5 p.m.—Closing 

[FR Doc. 2014–25322 Filed 10–23–14; 8:45 am] 

BILLING CODE 6717–01–P 

DEPARTMENT OF ENERGY 

Federal Energy Regulatory 

Commission 

[Docket No. AD14–14–000] 

Price Formation in Energy and 

Ancillary Services, Markets Operated 

by Regional Transmission 

Organizations, and Independent 

System Operators: Notice of Workshop 

As announced in the Notice issued on 

June 19, 2014, the Federal Energy 

Regulatory Commission (Commission) 

directed its staff to convene workshops 

as necessary to commence a discussion 

with industry on existing market rules 

and operational practices affecting price 

formation issues in energy and ancillary 

services markets operated by Regional 

Transmission Organizations (RTOs) and 

Independent System Operators (ISOs). 

The June 19 Notice listed four areas of 

interest: uplift payments, offer price 

mitigation and offer price caps, scarcity 

and shortage pricing, and operator 

actions that affect prices. The first 

workshop, held on September 8, 2014, 

addressed uplift payments and the 

second workshop, scheduled for 

October 28, 2014, will address offer 

price mitigation and offer price caps and 

scarcity and shortage pricing. The third 

workshop will address technical, 

operational, and market issues related to 

operator actions in energy and ancillary 

services markets operated by RTOs and 

ISOs, and will be held on Tuesday, 

December 9, 2014 from 8:45 a.m. to 5 

p.m. in the Commission Meeting Room 

at the Federal Energy Regulatory 

Commission, 888 First Street NE., 

Washington, DC 20426. Commission 

members may participate in the 

workshop. 

The workshop will be open for the 

public to attend. Advance registration is 

not required, but is encouraged. 

Attendees may register at the following 

Web page: https://www.ferc.gov/whatsnew/registration/12-09-14-form.asp. 

Those wishing to participate in the 

program for this event should nominate 

themselves through the online 

registration form no later than October 

29, 2014 at the following Web page: 

https://www.ferc.gov/whats-new/

registration/12-09-14-speaker-form.asp. 

At this Web page, please provide an 

abstract (1,500 character limit) of the 

issue(s) you propose to address. Due to 

time constraints, we may not be able to 

accommodate all those interested in 

speaking. 

Further details and a formal agenda 

will be issued prior to the workshop. 

Information on this event will be 

posted on the Calendar of Events on the 

Commission’s Web site, www.ferc.gov, 

prior to the event. The workshop will 

also be Webcast and transcribed. 

Anyone with Internet access who 

desires to listen to this event can do so 

by navigating to the Calendar of Events 

at www.ferc.gov and locating this event 

in the Calendar. The event will contain 

a link to the Webcast. The Capitol 

Connection provides technical support 

for Webcasts and offers the option of 

listening to the meeting via phonebridge for a fee. If you have any 

questions, visit 

www.CapitolConnection.org or call 703– 

993–3100. 

Commission workshops are accessible 

under section 508 of the Rehabilitation 

Act of 1973. For accessibility 

accommodations, please send an email 

to accessibility@ferc.gov or call toll free 

1–866–208–3372 (voice) or 202–502– 

8659 (TTY), or send a FAX to 202–208– 

2106 with the required 

accommodations. 

For further information on this 

workshop, please contact: 

Logistical Information 

Sarah McKinley, Office of External 

Affairs, Federal Energy Regulatory 

Commission, 888 First Street NE., 

Washington, DC 20426, (202) 502–8368, 

sarah.mckinley@ferc.gov. 

Technical Information 

Emma Nicholson, Office of Energy 

Policy and Innovation, Federal Energy 

Regulatory Commission, 888 First Street 

NE., Washington, DC 20426, (202) 502– 

8846, emma.nicholson@ferc.gov. 

Dated: October 10, 2014. 

Kimberly D. Bose, 

Secretary. 

[FR Doc. 2014–25320 Filed 10–23–14; 8:45 am] 

BILLING CODE 6717–01–P 


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