FERC approves reliability program for winters 2015/2016, 2016/2017, and 2017/2018

 

Proposal selected is nearly identical to last year’s program

On July 15, 2015, ISO New England and the New England Power Pool (NEPOOL) filed alternative Winter Reliability Program (WRP) proposals with the Federal Energy Regulatory Commission (FERC) to address the region’s well-documented reliability challenges over the next three winters.

Building on the critical role the first and second Winter Reliability programs’ played in ensuring power system reliability through two difficult winters, the proposals for winters 2015/2016, 2016/2017, and 2017/2018 were designed to carry the region through until 2018, when new market-based performance incentives will go into effect that are expected to address the region’s reliability concerns.

NEPOOL and the ISO agree on the need for a Winter Reliability Program for the next few years, and on many of the design elements; the primary difference between the two proposals was in the types of resources that would be allowed to participate.

ISO New England’s proposed WRP design conformed to FERC’s most recent order calling for a program that provides the greatest fuel neutrality. Oil-fired, natural-gas-fired, and dual-fuel generators would be allowed to participate, as before, but the proposal would also allow other types of generators that are supplied by on-site fuel to participate, including coal, nuclear, biomass and hydro resources. Demand-response resources would not be eligible because they are inconsistent with the proposal’s goal of fuel assurance.

NEPOOL’s proposal is based on the most recent WRP design, which included components for oil-fired resources, dual-fuel resources, resources that contract for liquefied natural gas (LNG), and demand-response resources.

Both proposals would compensate resources for some, but not all, of the carrying costs of unused fuel at the end of the winter.

The proposals were filed simultaneously with FERC in accordance with a provision of the ISO New England Participants Agreement that outlines a “jump ball” process for times when the ISO and NEPOOL have differing proposals for a market rule. If the NEPOOL Participants Committee votes 60% or more in favor of a market rule proposal that is different from an ISO proposal, the ISO is required to submit both proposals to FERC. FERC may adopt any part of or all of either proposal.

FERC’s Selection

FERC recognized that the ISO’s proposal complied with the Commission’s request to work with stakeholders to expand the types of resources eligible to participate in the program. However, FERC selected the NEPOOL proposal, effective September 14, 2015. In its order, FERC says the NEPOOL proposal is similar to last year’s program, which successfully provided reliability benefits and is largely supported in the region by a substantial majority of stakeholders representing all six stakeholder sectors. ISO New England has 45 days to revise the ISO New England Inc. Transmission, Markets, and Services Tariff to reflect the program rules.