ISO-NE issues memo on resource re-entry, transmission security

ISO New England recently issued a memo to the New England Power Pool’s Participants Committee clarifying the ISO’s position on market re-entry of resources electing to retire, as well as related transmission security in the Northeastern Massachusetts/Boston area.

Background

During Forward Capacity Auction (FCA) #12 held in February 2018, ISO New England rejected bids from Exelon to de-list its Mystic units in Everett, Mass. because the units were needed to meet local transmission security requirements. After Exelon then sought to retire the Mystic units in FCA #13, the ISO retained them pursuant to new tariff language that permits retentions for fuel security reasons. The ensuing cost-of-service agreement covers the FCA #13 capacity commitment period (June 1, 2022 to May 31, 2023), as well as the period covered by FCA #14 (June 1, 2023 to May 31, 2024). The ISO can terminate the agreement for the latter period if the units are no longer needed for fuel security, while Exelon can also opt out of the agreement.

Because the Mystic units will retire no later than June 1, 2024, ISO New England has started work to address the needs arising from the retirement.

ISO position and plans

In the memo, the ISO reiterated that its tariff prevents a resource that is retained for reliability from re-entering the markets as an existing resource. The current retirement provisions in the tariff specifically state that a retiring resource will have its interconnection service terminated. After this termination, a resource would have to seek to qualify as a new capacity resource, which requires its owner to make investments as described in the tariff.

The ISO does not intend to modify its tariff to allow units that seek to retire to re-enter the markets as existing resources. As such, the region must prepare to meet the transmission and fuel security needs associated with the Mystic units’ retirement no later than June 1, 2024.

The ISO intends to rely on the long-term energy security improvements to meet the fuel security needs, while administering a competitive process, under FERC Order 1000, to solicit transmission solutions to meet local reliability needs in the Northeastern Massachusetts/Boston area. The ISO will work with stakeholders this year to develop the competitive solicitation, and plans to issue the request for proposals in December 2019.