Entries in fuel security (9)


ISO-NE files proposal to retain retiring resources for fuel security

ISO New England has filed a proposal with the Federal Energy Regulatory Commission (FERC) to retain resources seeking retirement on the basis of a fuel-security reliability need. The proposal was filed August 31 in response to a deadline imposed by FERC last month and concludes a months-long stakeholder process to develop interim tariff changes to address fuel-security concerns in the near term. Several amendments to the ISO proposal were considered by stakeholders through the NEPOOL Markets, Reliability, and Participants committees. Some stakeholder amendments were incorporated into the ISO’s final proposal. Following the August 31 filing, the ISO will begin stakeholder discussions to develop a market-based mechanism to address long-term fuel-security challenges facing the region. For background, read our Update on ISO-NE’s operational fuel security initiatives.


Update on ISO-NE’s operational fuel security initiatives

Market changes are fast-tracked to address serious challenges

Soon after releasing its Operational Fuel-Security Analysis (OFSA) in January 2018, the ISO began meeting with stakeholders to discuss the results and developing plans to address the region’s fuel security risks in the short- and long-term. However within a few months of issuing the analysis, Exelon Generation announced that it intended to retire its Mystic Station generating units effective May 31, 2022. These units and their fuel source, a neighboring liquefied natural gas (LNG) import terminal, were explicitly identified in the OFSA as critical to the region’s fuel security. Given the increased urgency of the region’s fuel-security challenges, the ISO accelerated efforts already underway to address these risks.

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“Pay-for-performance” capacity market incentives implemented as of June 1, 2018

“Pay-for-performance” (PFP)—a cornerstone of ISO New England’s ongoing, multi-faceted effort to address trends that are challenging power system reliability—became effective on June 1, 2018. PFP is part of New England’s Forward Capacity Market (FCM) design, which acquires obligations from resources needed to meet demand three years into the future. The new PFP rules provide enhanced incentives, in a carrot-and-stick approach, for resource owners to ensure their resources are ready and able to meet their obligations to provide energy and reserves or reduce demand during times of stress on the regional power system. Now, resources with a capacity obligation can be penalized $2,000 per megawatt-hour (MWh) for failing to meet their obligation during energy shortfalls, while resources that over-perform relative to their obligation (including resources with no obligation) can receive $2,000/MWh of additional revenue. This performance payment rate is scheduled to increase to $5,455/MWh over the next six years.

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ISO-NE CEO keynotes New England Council’s regional energy forum

On April 27, ISO-NE’s president and CEO Gordon van Welie provided the keynote address to more than 130 people attending the New England Council’s (NEC) Regional Energy Forum at St. Anselm College’s New Hampshire Institute of Politics. van Welie covered the region’s changing energy landscape and discussed how fuel security, especially in the winter, poses power grid reliability risks.

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ISO, FERC discuss grid resiliency at roundtable in Boston

On March 16, 2018, ISO New England President and CEO Gordon van Welie delivered a keynote address at the New England Electricity Restructuring Roundtable on the region's growing fuel security risk. FERC Commissioner Robert Powelson also gave a keynote on grid resiliency, touching on the Commission's Resilience Order.

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ISO-NE responds to FERC's grid resilience order

ISO New England has filed its response to the January 8, 2018, Federal Energy Regulatory Commission Resilience Order.  The ISO’s response focuses on the most significant challenge for the New England bulk power system’s resilience – fuel security– or the assurance that power plants will have or be able to obtain the fuel they need to run during winter as coal, oil, and nuclear units retire, fuel infrastructure is constrained, and permits to operating dual-fuel generating capability remain difficult to obtain. The ISO  is  already  at  the  forefront  of  this  issue, having issued its Operational Fuel Security Analysis in January. In its March 9 response, the ISO requests the Commission afford the ISO time to work with regional stakeholders to develop a long-term solution to the fuel-security challenges. The response, however, indicates that, should circumstances dictate, the ISO will take the necessary actions to address near-term reliability risks. These topics are also covered in the ISO’s 2018 Regional Electricity Outlook.