Addressing ISO-NE’s Performance Incentives. Markets Committee Meeting September 20, 2013. Alternative to ISO’s Performance Incentive Proposal. Problem Statement
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The ISO will determine the ICAP value for each Supply Resource using the latest results of a resource’s Summer Seasonal Claimed Capability test.
The ISO will then utilize the EFORd FCA value, which is equal to the resource’s forced outage data for the 12 months ending September 30 prior to the FCA, in determining the UCAP value of a unit offered into the FCA as follows:
As an additional incentive to improve performance, the EFORd approach will require resources to true-up to meet its obligation, based on their most recent years performance, prior to the Capacity Commitment Period.
The ISO will utilize the EFORdARA3 value, equal to the resource’s forced outage data for the 12 months ending September 30, to determine the resource’s UCAP value prior to the third Annual Reconfiguration Auction (3rd ARA).
Supply resources will be required to Buy or Sell MWs during the 3rd ARA,based on their most recent years performance, to true-up to their obligations prior to the commencement of the Capacity Commitment Period.
3rd Annual Reconfiguration Auction True-up Example
Resources who improve their performance have the opportunity to sell MWs during the 3rd ARA, and those resources whose performance declines must buy MWs to cover their positions during the 3rd ARA.