FERC agrees California ISO is ready to start new market design

In its determination, FERC said the ISO is "in the best position to evaluate its systems and assess the concerns of its customers and market participants in making the decision to launch."

Once the MRTU is launched, ISO markets will operate under the new tariffs and business practices, FERC said, adding that the ISO will "remedy" any "system deficiencies."

In response to concerns raised by some market participants, FERC accepted ISO's promise to create a rapid-response team to identify and address situations where a market participant may be accruing liabilities at an excessive rate.

If after the launch of the MRTU, the ISO and participants believe more measures are needed to "protect against undue and inadvertent financial distress," FERC encouraged the parties to vet any proposals through a stakeholder process and file a consensus plan with the commission.

FERC's order also found that the ISO "has numerous mechanisms in place to ensure proper functioning of the MRTU market including market monitoring and mitigation, bid caps, price cap and floor and the exceptional dispatch mechanism."

Further, the commission said the ISO "has already addressed a number of the anomalous pricing results" either by explaining the cause or by correcting software flaws that might have contributed to the irregular pricing. For the "small number of remaining problems," FERC said it expects the ISO to follow through on its commitment to address the issues before the launch, as well as quickly validate and correct prices after the MRTU begins.