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August 7 -8, 2012|NEPOOL Markets committee

August 7 -8, 2012|NEPOOL Markets committee. Dave Naughton. Senior Market analyst, internal market monitor. Adjustments to Proposed FCM Offer Review Trigger Prices. Recap – Calculation of Offer Review Trigger Prices Presented at the October 2011 Markets Committee Meetings.

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August 7 -8, 2012|NEPOOL Markets committee

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  1. August 7 -8, 2012|NEPOOL Markets committee Dave Naughton Senior Market analyst, internal market monitor Adjustments to Proposed FCM Offer Review Trigger Prices

  2. Recap – Calculation of Offer Review Trigger PricesPresented at the October 2011 Markets Committee Meetings

  3. Adjustments to Offer Review Trigger Prices • Producer Price Index - Draft Tariff Language • “Any Offer Review Trigger Price that has not been recalculated using updated data since the previous Forward Capacity Auction shall be adjusted at a rate equal to the year over year percentage change in the Producer Price Index for electric power generation as determined by the United States Bureau of Labor Statistics. These adjusted Offer Review Trigger Prices shall be maintained on the ISO’s website” Appendix A: III.A.21.1.2(a). • http://data.bls.gov/timeseries/PCU221110221110

  4. Adjustments to Offer Review Trigger Prices • Initial and Subsequent Adjustments • Prices to apply for FCA8 • Beyond FCA8 • Offer Review Trigger Prices for FCA8 • Model assumptions were in 2011 $ terms • 2011 PPI Value = 140.8 • Average 2012 YTD PPI Value = 120.2 • Adjustment = (120.2/140.8)-1 = -14.7%

  5. Adjustments to Offer Review Trigger Prices • Beyond FCA8 • Mechanics of PPI adjustment - Inputs: • Average of last 12 monthly index values available at time of publication (e.g. M-12 to M-1) • Average of the preceding 12 monthly index values (e.g. M-24 to M-13) • Previously published Offer Review Trigger Prices • Offer Review Trigger Prices to be recalculated using updated data no later than 2015 for FCA 10

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