FCA #9: New offer review trigger prices (ORTPs) are accepted by FERC
Friday, May 23, 2014 at 12:00PM
ISO New England in FERC, Industry News & Developments, fcm, market development, renewable resources, wind

Revised ORTPs went into effect May 13

On May 12, 2014, the Federal Energy Regulatory Commission (FERC) approved several revisions ISO New England proposed to offer review trigger prices (ORTPs) in the Forward Capacity Market (FCM). The new ORTPs are effective May 13, 2014, to ensure that market participants preparing qualification packages for the ninth Forward Capacity Auction (FCA #9) have certainty regarding the applicable ORTPs in advance of the June 17, 2014, qualification deadline.

Defining and Determining ORTPs

ORTPs are developed by the ISO’s Internal Market Monitor (IMM) and used as a tool to screen for new resources offering into the FCA at levels that could inappropriately suppress capacity prices.

In December 2012, as part of its Forward Capacity Market Redesign Compliance filing, the ISO committed to considering ORTP updates in time for FCA #9, as well as to developing with stakeholders a mechanism whereby the ORTPs are adjusted to reflect prevailing market conditions in years for which no full recalculation is performed.

After six months of comprehensive stakeholder discussion at the New England Power Pool (NEPOOL) Markets and Participants Committees, the ISO submitted proposed revisions to FERC on December 13, 2013.  On February 11, 2014, FERC issued an order partially accepting the ISO’s proposed tariff revisions. FERC accepted as just and reasonable:

However, certain proposed tariff revisions were not accepted:

Accordingly, on March 13, the ISO submitted a filing to strike the rejected ORTPs for on-shore wind resources and demand resources comprised of distributed generation, which FERC accepted by letter order on May 12. On March 13, the ISO also submitted a filing with revised ORTPs, which FERC accepted in a May 12 order.

Updates to onshore wind ORTPs

Future updates to the ORTP for onshore wind resources related to tax credits will be considered during the full ORTP recalculation process, which involves stakeholder input and Commission review, or in a separate ISO filing.

In the May 12, 2014, order, FERC rejected the ISO’s proposal to require the Internal Market Monitor to update the ORTP for onshore wind resources annually based on changes to federal tax law. The ISO will submit a compliance filing to remove the rejected Tariff language within 30 days.

·         FERC rejected the ISO’s proposed $0.00/kW-month ORTP for onshore wind, noting that some resources participating in FCA #9 may not receive Production Tax Credit revenues. (While Congress has previously renewed the credit, it is currently unavailable to wind projects that did not begin construction prior to December 31, 2013.)

Article originally appeared on ISO Newswire (http://isonewswire.com/).
See website for complete article licensing information.