Toronto: The IESO has established a new Working Group to address problems in the power market related to unusually low bids from generators. While negative bidding can often recognize real operational costs and produce efficient market behaviour, some participants are concerned that certain contract language may be leading to inefficient bidding practices which can exacerbate surplus generation problems.
The first meeting of the Floor Price Working Group is set for November 21. The meeting is open to all interested parties, and focuses on Principle 10 of the Renewable Integration Design Principles, which reads as follows:
Principle 10 - The IESO may establish various floor prices for offers from baseload generators (e.g. wind, must-run hydro, nuclear, etc.) to ensure efficient dispatches during periods of local and/or global surplus baseload generation (SBG) events.
For more information on the Renewable Integration Initiative, please visit: http://www.ieso.ca/imoweb/consult/consult_se91.asp.