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Proposal to Address Fuel Dependence Risks for Winter 2013/14

Proposal to Address Fuel Dependence Risks for Winter 2013/14. Con Ed Solutions Energy America Integrys Energy NOBLE Americas Energy Solutions PPL. Proposal – an ISO Issued RFP. An RFP is a relatively simple solution that can be implemented quickly

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Proposal to Address Fuel Dependence Risks for Winter 2013/14

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  1. Proposal to Address Fuel Dependence Risks for Winter 2013/14 Con Ed Solutions Energy America Integrys Energy NOBLE Americas Energy Solutions PPL

  2. Proposal – an ISO Issued RFP An RFP is a relatively simple solution that can be implemented quickly Existing Tariff language provides the framework and cost allocation Can be used for next winter and then used again in subsequent winters if desired

  3. Tariff language on ISO RFP’s Section III.11 of Market Rule 1 If ISO determines that a region may have a near-term reliability issue it may, after consultation with the Reliability Committee, issue a request for proposals (a “Gap RFP”). RFP must be filed with FERC Costs of RFP are allocated to network load in the affected Reliability Region

  4. Proposed RFP Details • RFP will solicit competitive bids for providing energy supply that is backed by firm fuel • The bid should be structured as a supplemental capacity payment ($/kW-month) • Bid should compensate the bidder for “firming up” existing fuel supply or costs for procuring alternate fuel supply (may not be helpful to firm up gas supply from pipelines to the West – this is a detail that needs to be worked out) • Energy costs will continue to be recovered in the energy market • RFP suppliers must provide evidence of firm fuel supply that will allow them to operate X hours per day for Y number of consecutive days, and replenish this supply within Z days. (X, Y, and Z to be determined by the ISO)

  5. Proposed RFP Details (continued) • RFP suppliers must be able to provide energy consistent with their physical parameters upon request from the ISO • RFP suppliers that do not have a capacity supply obligation must offer their energy consistent with the rules for non-intermittent generators with capacity supply obligations. • Another option is to require RFP suppliers to offer into the energy market at or above a strike price (much like a Forward Reserve resource); this ensures that they provide reserves not energy except under stressed conditions.

  6. Proposed RFP Details (continued) • ISO will determine the amount of MW’s that need to be procured through this RFP • The lowest cost set of resources to meet this requirement will be awarded an obligation under the RFP • Awarded resources will be paid as bid • RFP Suppliers that do not perform consistent with their obligations under the RFP will be subject to penalties • Penalty provisions are TBD

  7. Questions?

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