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Response of SSPAC to ISO-NE Proposed Revision to the Treatment of Dispatchable Capacity Imports over the Phase I/II HQ Interconnection. NEPOOL Markets Committee November 13, 2007 Kristine Mespelli Chair of SSPAC. Who is SSPAC?.
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NEPOOL Markets Committee
November 13, 2007
Chair of SSPAC
ISO-NE proposal is apparently based on the following section of the FCM Settlement Agreement :
“VI. Agreements Regarding External Resources. Market Rules, operating procedures and manuals shall be changed to allow External Resources to participate in the Forward Capacity Market and Transition Period on a basis comparable to internal generation Resources. Among the changes that are required are that the timing for Real Time contract submittals be modified to allow them to be made after the Day Ahead Energy Market closes and as soon as one hour before an operating hour in order to allow for the purchase of required transmission.”
ISO-NE proposal includes two significant changes to the treatment of dispatchable imports receiving capacity payments:
(1) removes the current requirement that Non-PTF transmission reservations be linked to associated transactions by 12:00 noon the day before the operating day;
-instead, as proposed, the transmission reservations will be allowed to be submitted any time prior to 60 minutes before the operating hour;
(2) removes the current requirement to have 24/7 transmission reservations linked to a dispatchable capacity import;
-instead, as proposed, transmission reservations will only be checked, and potential capacity availability penalties will only be imposed, if and when the EES dispatch rate for the hour is greater than the price submitted for the dispatchable energy transaction (i.e., only checked/penalized if the transaction would otherwise have been scheduled to flow but for the lack of a reservation).
In complying with Section VI, ISO-NE and NEPOOL must not ignore and violate understandings reached in other sections of the FCM Settlement Agreement…
“VIII. Agreements Regarding Transition Period…K. Phase I/II HQ Interconnection. During the Transition Period,...The remaining 600 MW of transmission may be used for UCAP over the Phase I/II interconnection by any supplier that arranges for transmissionover the Interconnection…” (emphasis added)
The ISO-NE proposal, with “Change (2)”, allows a supplier to use the interconnection for UCAP without ever purchasing transmission capacity from the SSPs who hold the transmission capacity rights.
- A supplier can simply price a dispatchable capacity import high enough to avoid being dispatched for energy in most, and often all, hours of a capacity commitment period. Transmission reservations will not be verified or required for any of those hours, yet the supplier will receive payments for UCAP.