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May 10, 2012 | NEPOOL markets committee Westborough, MA

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May 10, 2012 | NEPOOL markets committee Westborough, MA. Andrew Gillespie. Principal analyst | market development. FCM Compliance, Conformance, and Other FCM Changes in 2012. Agenda. Compliance Changes for FCM Redesign Conforming and Other Changes for FCM Redesign

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May 10, 2012 | NEPOOL markets committee

Westborough, MA

Andrew Gillespie

Principal analyst | market development

FCM Compliance, Conformance, and Other FCM Changes in 2012

agenda
Agenda
  • Compliance Changes for FCM Redesign
  • Conforming and Other Changes for FCM Redesign
  • Other Upcoming FCM Related Changes
  • Schedule
compliance changes for fcm redesign
Compliance Changes for FCM Redesign

Compliance with FERC Order ER12-953, issued March 30, 2012

scope of compliance changes
Scope of Compliance Changes
  • Rules already discussed; update needed
  • Rules already discussed
  • Rules already discussed
  • Apply Offer Review Trigger Price, plus
    • Eliminate the APR rules (APR-1, APR-2, and APR-3)
    • Eliminate the floor price
  • Apply Dynamic De-List Bid threshold ($1.00/kW-mo), plus
    • Eliminate the FCM Pivotal Supplier test
    • Modify de-list data (assumption about resources remaining in energy & ancillary markets)
  • Eliminate the use of CONE and the quantity rule
  • NEW – Implement 8 Capacity Zones
  • NEW - Carry-forward Out-of-Market (OOM) capacity from FCA 6 & FCA 7
background
Background
  • The March 30, 2012 Order approved the proposed changes to ‘hardwire’ four capacity zones, included in:
    • Section III.12 – Calculation of Capacity Requirements
    • Section III.13 – Forward Capacity Market (conforming changes)
  • The remaining proposed tariff changes are largely the same since presented to the Participants Committee in December 2011
  • At the December 9, 2011 Participants Committee meeting
    • The Schedule 22 changes (elimination of CONE) were approved by Participants Committee
    • The Budget & Finance Subcommittee recommended supporting the Financial Assurance Policy changes (elimination of CONE)
background cont
Background, Cont.
  • On December 6 & 7, 2011 the Markets Committee voted on these proposed changes:
    • Application of the Offer Review Trigger Price, plus
      • Elimination of the APR rules (APR-1, APR-2, and APR-3)
      • Elimination of the floor price
    • Application of the Dynamic De-List Bid threshold ($1.00/kW-mo), plus
      • Elimination the FCM Pivotal Supplier test
      • Modification of the de-list data (assumption about resource remaining in energy & ancillary markets)
    • Elimination of the use of CONE and the quantity rule
  • Participants Committee did not vote on proposed changes
status additional compliance tariff changes
Status: Additional Compliance Tariff Changes
  • The ISO will update the tariff red-line documents (a new base document is needed)
  • The ISO will take through the normal stakeholder process the additional compliance changes
    • 8 Capacity Zones
      • Primary discussions will occur at the Reliability Committee
    • Carry forward OOM
    • Update Offer Review Trigger Price provisions
      • Prior version specific to FCA 7
additional compliance tariff changes
Additional Compliance Tariff Changes
  • Carry forward OOM

“OOM resources entering in FCA 6 of any subsequent FCAs prior to the implementation of the new rules will be carried forward under the existing rules and treated as new in the first auction in which offer floor mitigation is put into place.”

- January 19 Order, 138 FERC 61,027 at P 47.

  • Update Offer Review Trigger Price provisions
      • “III.A.21.1.1 Offer Review Trigger Prices for the Seventh Forward Capacity Auction.”

- Proposed tariff changes, December 6-7, 2011 Markets Committee

conforming change proposals for fcm redesign
Conforming Change Proposals for FCM Redesign
  • Recall, some conforming changes were discussed in the context of the FCM Redesign compliance changes
    • ‘Update’ the administrative rate paid existing resources under Inadequate Supply or Insufficient Competition conditions
    • Specify treatment of resources with different asset types
    • Capacity Export Through Import-Constrained Zones (CETICZ)
      • Update settlement calculations
other changes for fcm redesign static de list bid changes
Other Changes for FCM Redesign:Static De-List Bid Changes
  • The ISO was also working out a means to improve the functionality of Static De-List Bids
  • An ISO proposal was presented at the January 10, 2012 Markets Committee meeting
  • An improved proposal will be presented to the Markets Committee, starting in May
fcm related changes fca 8
FCM Related Changes (FCA 8)
  • The ISO is reviewing the connection between the Forward Capacity Market and a resource’s Interconnection Agreement Terms
    • How actions and situations in the FCM should translate into an adjustment of the terms of a resource’s interconnection agreement
    • How the terms of a resource’s interconnection agreement should be used to limit or permit participation in the FCM
  • The ISO is also reviewing the relationship between Permanent De-List Bids and repowering offers
    • Timing between de-list and repowering, and affect on resource interconnection terms
    • Terms of de-list and associated interconnection affects
  • The target effective date for these related changes is prior to the Existing Capacity Qualification Deadline for FCA 8 (June 3, 2013)
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