FERC accepts tighter timeframe for reponses to non-price retirement requests in FCA


The Federal Energy Regulatory Committee (FERC) issued a letter order on June 4, 2014, accepting a tighter deadline for providing notice of intent to retire an existing capacity or demand resource despite rejection of a non-price retirement request (NPRR). The proposed rule change was filed in April by ISO New England and the New England Power Pool (NEPOOL) in order to improve the function of the Forward Capacity Auction (FCA).

Effective June 9, 2014, resource owners in these cases must notify the ISO of the intent to retire a resource no later than 15 days prior to the commencement of the FCA. Previously, notification was required within six months of the ISO’s notice that the NPRR was not approved. 

Why the change was needed

An NPRR for an existing capacity or demand resource may not be approved by the ISO when the resource is needed for reliability, pursuant to Market Rule I of the ISO Tariff. Regardless of the ISO denial of the NPRR, however, the resource owner still has the option to retire the resource, if desired.

Due to the length of the previous requirement (six-months notice), a needed NPRR resource could have its capacity counted in the FCA only to inform the ISO shortly after the auction that it would no longer be in service for the relevant capacity commitment period. This situation could potentially mean distortions in auction clearing prices. The notification timeframe was shortened so that it is known at the time of the Forward Capacity Auction whether or not these resources will in fact remain in service.

Learn more

Read about other recent changes in the Forward Capacity Market (FCM):

Industry News & Developments
FERC, forward capacity market