Albany, NY — An audit released by the Federal Energy Regulatory
Commission (FERC) shows that the New York Independent System Operator (NYISO),
the organization that runs the state's wholesale electric market, has major
flaws in the way it operates. FERC found that the NYISO’s independent
market monitor is not as independent as it should be and the internal
monitoring structure has the potential for conflicts of interest. These
monitoring mechanisms are supposed to keep any market manipulation in check. Download AuditReport on NYISO-1_
FERC also found that the NYISO was slow to notify FERC and
utilities that participate in the market when it uncovered problems with its
tariff. The tariff sets how the NYISO’s pricing and regulation systems
will work. The NYISO is required to notify FERC and market participants when
there are problems with the tariff but the NYISO failed to do so.
In the audit FERC recommends that the NYISO change its
organizational structure and review its internal monitoring resources.
"The FERC audit confirms our suspicions. There is
a glaring lack of accountability and transparency in the management of New
the Legislature to consider real governance reform at the ISO to ensure its
actions are consistent with the interest of the public and the market participants."
said Assemblyman Cahill, Chair of the Assembly Energy Committee.
“This is the first crack in the veneer of New
bizarre and unfair electricity market,” said Assemblyman Richard Brodsky
(D-Westchester) (pictured). “This organization has overcharged New Yorkers billions of
dollars a year, and it’s got to stop. The audit by FERC was a good first step
toward uncovering the problems within this system, but additional steps must be
taken by the legislature.”
"I appreciate that FERC has identified deficiencies in
the NYISO's independence in relation to monitoring electricity markets,” said
Assemblyman Jim Brennan (D-Brooklyn). “But even FERC's review fails to
address the fact that a cost-based regulatory system would be more beneficial
The Assembly Committee on Corporations, Authorities, and
Commissions and the Assembly Committee on Energy have been investigating the
Electricity market and the NYISO’s use of the market clearing price mechanism
for the past year. Currently, Assemblyman Brodsky has introduced
legislation to end the market clearing price mechanism (A.1563).