FERC issues order accepting CASPR revisions to Forward Capacity Market

The Federal Energy Regulatory Commission (FERC) issued an order on March 9, 2018, accepting ISO New England’s CASPR proposal in its entirety and rejecting all of the arguments raised in protests. The Commission notes that out-of-market state revenues can result in building more capacity than a region needs, overpayment by consumers for capacity, inefficiently low capacity market prices and the erosion of investor confidence. The Commission concludes that the CASPR proposal, along with the New England region’s minimum offer price rules (MOPR), appropriately addresses the issues associated with out-of-market state revenues while ensuring that the overall capacity market can continue to attract and maintain appropriate levels of new resource investment.

“ISO New England is pleased that FERC has found CASPR consistent with the primary principles of capacity markets and that it will be New England’s most effective means of ensuring that our wholesale capacity market remains competitive while state policies drive investment in clean energy resources,” said Raymond Hepper, ISO New England Vice President, General Counsel, and Corporate Secretary. “The ISO and market participants can now begin our year-long process to prepare for FCA #13 with these new rules in place.”

The ISO had requested that the CASPR rules become effective on March 9, 2018, to coincide with the start of the approximately year-long auction-administration cycle for the 13th FCA. That auction will be administered by the ISO in February 2019 for the 2022-2023 Capacity Commitment Period, and coincides with the potential introduction into the markets of up to 1,200 MW of clean resources procured by Massachusetts pursuant to its 2016 Energy Diversity Act. Learn more about the CASPR proposal. View the CASPR project page on ISO New England’s website.