On March 9, 2018, the Federal Energy Regulatory Commission (FERC) in a split vote approved ISO-New England Inc.’s (ISO-NE) proposed tariff revisions intended to accommodate the entry of additional clean energy resources into the Forward Capacity Market (FCM). ISO-NE’s Competitive Auctions with Sponsored Policy Resources (CASPR) revises the Forward Capacity Auction (FCA) rules to include a secondary auction to “facilitate the transfer of capacity supply obligations [CSOs] from existing capacity resources, which commit to permanently exit ISO-NE’s wholesale markets” to new, state-incentivized clean energy resources known as “Sponsored Policy Resources.” Existing resources that shed their CSO in the substitution auction will retain a one-time “severance payment” that equals the difference between the primary auction clearing price and the substitution auction clearing price.
With the exception of approved tariff changes regarding FCM settlements, CASPR takes effect immediately, to coincide with the start of the year-long auction administration cycle for FCA 13.
FERC’s order is an important one, as it approves tariff revisions that attempt to reconcile the need to maintain competitive capacity auction markets with the gradual entry into those markets of new clean energy resources supported by state driven policies, two imperatives that are “fundamentally in tension,” according to ISO-NE. Please see Pierce Atwood’s new energy infrastructure blog for more detailed summary and analysis of the order.
For questions regarding FERC’s order or any other energy-related issue, please contact Jared S. des Rosiers at firstname.lastname@example.org or 207.791.1391; James M. Avery at email@example.com or 617.488.8125, or Ruta Skucas at firstname.lastname@example.org or 202.530.6428.