ICAP Import Contract Delivery Penalty

A Market Participant entering an ICAP Import Contracts may be charged a monthly failure to deliver penalty. Section III.8.3.7.3.1.2 of Market Rule 1 provides for the imposition of penalties for failure to deliver energy as required under the energy transactions supporting and ICAP Import Contract. The delivery test is an hourly test and a delivery shortfall will be calculated for all required hours identified as having delivery MW less than the requested delivery MW. For each month, any delivery shortfall hours identified will be summed to determine the monthly total number of delivery shortfall hours. In addition, the number of hours in which energy was requested for delivery will be summed to determine the monthly total number of requested hours. The Market Participant entering the ICAP Import Contract will be charged a failure to deliver penalty equal to the monthly percentage of required hours without full delivery relative to required hours that energy was requested, times the UCAP value of the ICAP Import Contract, times twice the ICAP Transition Rates in Section III.8.1 or Market Rule 1.

A Market Participant entering an ICAP Import Contract may determine failure to deliver penalties by reviewing the report of actual energy data from ISO-NE by selecting the "Download RT Actuals" button in the External Energy Scheduling (EES) system. The resulting XML download file contains details of the actual Real-Time hourly energy transaction scheduling process that can be used to determine required hours that energy was requested and required hours without full delivery for an ICAP Import Contract:

Required Hours: The required hours that energy was requested can be identified as those actual hourly energy transaction records for energy transactions supporting an ICAP Import Contract where either i) the Actual Energy is greater than 0 (zero) MW or ii) the Actual Energy is equal to 0 (zero) MW and the Reason is either "MW adjusted to match neighboring CA" or "Not submitted in neighboring control area"

Shortfall Hours: The required hours that energy was requested without full delivery can be identified as those actual hourly energy transaction records for energy transactions supporting an ICAP Import Contract where the Reason is either "MW adjusted to match neighboring CA" or "Not submitted in neighboring control area"

The percentage of required hours without full delivery relative to required hours that energy was requested may change over the duration of the month, and is subject to ISO review of the required hours without full delivery, but the failure to delivery penalty may be calculated at any time by the Market Participant to determine a "to date" expected penalty.

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