Assuming that the first FCA is held on February 1, 2008, any resource that is presently under construction may be treated as a new resource for the first FCA if the resource's commercial operation date is later than February 1, 2009.

Any resource that is presently under construction will be treated as an existing resource for the first FCA, if the resource's commercial operation date is before February 1, 2009, it is required by a contract, or it elects to be treated as an existing capacity. This new capacity resource must notify the ISO via the Show-of-Interest Application during the qualification process, for either the first or second FCA, that it wants to be treated as an existing capacity resource.

A resource must be commercial by March 1, 2007 in order to be treated as existing capacity in the first FCA without having to submit a Show of Interest application and New Capacity Qualification Package.

If a new capacity resource is not commercial before the cutoff date for notifying existing capacity of its summer and winter qualified capacity but submits a Show of Interest application and New Capacity Qualification Package (ex. Critical Path Schedule) indicating a projected commercial date before February 1, 2008, the resource will be treated as existing capacity in the first FCA. If a new capacity resource is not commercial before the cutoff date for notifying existing capacity of its summer and winter qualified capacity and does not submit a Show of Interest application and New Capacity Qualification Package but becomes commercial before February 1, 2008, the resource will not be included as capacity in the first FCA and therefore will not receive payments in the first Commitment Period. Such a resource will be treated as existing capacity for the second FCA and is not subject to the Alternative Price Rule.

If this resource submits a Show of Interest application and participates in qualification, and ISO New England determines it will become commercial during this time period, it will be treated as existing capacity in the first FCA. If the resource does not submit a Show of Interest application and qualify, it will not be included in the first FCA and therefore will not receive payments in the first Commitment Period. Such a resource will be treated as existing capacity for the second FCA and is not subject to the Alternative Price Rule.

If a new capacity resource intends to become commercial after February 1, 2009 it will be treated as new capacity in the first FCA in which it qualifies with one exception. The only exception to this rule occurs in the first FCA when a new capacity resource that becomes commercial after February 1, 2009 may elect to be treated as existing capacity. Such existing capacity is not subject to the Alternative Price Rule.

If a new capacity resource goes through the FCM qualification and auction process but does not clear in an FCA or a related reconfiguration auction, and does not otherwise have or acquire a capacity obligation thru a Bi-lateral Contract, that resource will not receive any revenue for that Commitment Period and will maintain its new status for the next FCA.

A new capacity resource that decides not to participate in the FCM qualification and auction process, and proceeds to build or install its new capacity resource anyway, may participate in an FCA following its commercial date as a new resource by submitting a Show of Interest application along with the other qualification requirements for New Capacity and would be subject to an overlapping impact review. The amount of capacity clearing in the FCA from this resource would be treated as existing capacity in subsequent FCAs. This resource will not receive revenue for its capacity during the period between its commercial operation date and the FCA Commitment Period for which it received an obligation, assuming its commercial operation date is outside of the FCM Transition Period (unless the resource qualifies for and clears in a reconfiguration auction or acquires an obligation thru a Bi-lateral Contract).

A new capacity resource that clears in the first FCA and becomes commercial after February 1, 2009 but before June 1, 2010 will receive FCM Transition Payments through May 31, 2010. This resource will also retain its multi-year commitment period if this option was elected as part of the resource's New Capacity Qualification Package as a result of qualifying as a new resource in the first FCA.

This resource would retain its multi-year commitment period that it elected as part of the resource's New Capacity Qualification Package as a result of qualifying as a new resource in the first FCA.

A capacity zone can not be smaller than an energy zone.

ISO-NE will seek to procure in each Forward Capacity Auction (FCA) 100 percent of New England's Installed Capacity Requirement (ICR) for the power year (defined as June 1 to May 31) beginning approximately three years later based on the FERC approved ICR projection for that future year.

If cleared, an existing capacity resource will have a one-year commitment for the power year for which the Forward Capacity Auction (FCA) is being held (commitment period), and a new capacity resource can choose a commitment period of up to five years, in one-year increments. Capacity resources are mapped to and paid the clearing price in the capacity zone in which they are electrically interconnected.

After each obligation month load will pay a blended regional clearing price based on megawatts weighted prices paid to capacity resources clearing in the FCA, all subsequent Reconfiguration Auctions as applicable, Capacity Supply Obligations Bilaterals, HQICC's used in the calculation of ICR, adjustments for peak energy rent (PER), and less any forfeited financial assurance.

Capacity zones are defined before each FCA. ISO-NE will determine and file capacity zones at least 90 days before the date of the FCA with the FERC, consistent with the Installed Capacity Requirement (ICR) filing. This information will be available earlier as part of the stakeholder process for developing ICR.

An import-constrained capacity zone will exist in the FCA if, for the commitment period, the forecasted capacity requirement in the capacity zone (existing + new + imports accepted in prior FCAs) minus permanent delist bids and export bids accepted in prior FCAs is less than the forecasted Local Sourcing Requirement (LSR). The LSR is the portion of the total capacity requirement of the load in a capacity zone that must be purchased from capacity resources located within that zone after taking into account all of the capacity that can be reliably imported into that zone.

An export-constrained capacity zone is a capacity zone that cannot export to other capacity zones all of the capacity available in that zone due to transmission transfer constraints. Export-constrained zones are always modeled in the Forward Capacity Auction (FCA).

Each capacity zone may have its own CONE depending on price separation in the Forward Capacity Auction (FCA). If there is no price separation between capacity zones, then a single CONE will be used for the region. CONE will be updated after each FCA and used in setting the starting price for the next FCA. If there is price separation in an FCA, the next FCA will have different CONEs for each zone. The CONE used in any annual Reconfiguration Auction to meet Installed Capacity Requirement (ICR) (buy or release) will be the CONE in effect for the year in which the Reconfiguration Auction is being held.

All capacity zones will begin the first FCA at the same price. The first FCA will begin with a price of $15/kW-month, which is twice the estimated CONE in the settlement agreement. If there is price separation in an FCA, the next FCA will have different CONEs for each zone. Under those conditions because the CONE for each zone is different the starting prices will be different.

Once a capacity zone is defined by an FCA, the capacity obligations remain throughout the commitment period and in every Reconfiguration Auction associated with that commitment period. A new capacity resource becomes an existing capacity resource upon completion of its initial commitment period term (1-5 years). It is also counted as existing capacity in determining the Installed Capacity Requirement (ICR) and Local Sourcing Requirement (LSR) in all subsequent FCAs.

CTRs are financial rights given to entitlement holders of specific generating units that have been grandfathered in the FCM and to Load Serving Entities within Import Constrained Capacity Zones. In the case of the specific generating units it is a right of the owner of that asset to be paid the clearing price of the capacity zone where the asset is located if their load is in an import-constrained zone. CTRs are only settled in the FCM and cannot be traded. Load that wants to self-supply using one of these grandfathered generating assets may use its CTR to be held financially neutral.

If a new capacity resouce is located in an import-constrained zone, and chooses a long-term obligation after it clears in a Forward Capacity Auction (FCA), the cost of that new capacity resource is allocated to the load in the import-constrained zone. Assuming, prior to the next FCA, that the import-constrained zone is no longer constrained and does not experience price separation in that FCA, the cost of that new capacity resource will be allocated to the Rest-of-Pool Capacity Zone.

A new capacity resource must select the length of its commitment obligation at the time it submits its qualification package.