Forward Reserve Frequently Asked Questions

Yes. Penalties are associated to a failure-to-reserve MW and a failure-to-activate MW.  They are detailed in Manual 28, section 2.3 and 2.6.1.

If a Market Participant fails to reserve sufficient Forward Reserve in the Real-Time Energy Market to meet its Forward Reserve Obligation, a Forward Reserve Failure-to-Reserve Penalty is assessed for each hour of the Operating Day during which failure-to-reserve occurs.

NOTE: When the failure to reserve penalties are assessed, the unit is also not paid for Reserve delivery

A Forward Reserve Failure-to-Activate Penalty is assessed if a Market Participant's Forward Reserve Resource fails to provide the energy associated with that Resource's Forward Reserve Delivered Megawatts when activated by the ISO in any hour of the Forward Reserve Delivery Period during an Operating Day.

Manual 28: Market Rule 1 Accounting

Participation in the Forward Reserve Market (FRM) begins by clearing a portfolio of mw's in the Forward Reserve auction in a reserve category (TMOR or TMNSR) to meet either zonal or system wide reserve requirements. Once the offer has cleared, the reserve obligation must then be met by assigning mw's to a specific unit(s). MR-1, III.9.5.1 describes the criteria for eligibility for both online and offline units to be designated to cover FRM obligations. An online unit must have a dispatchable range of mw's available within the timeframe of the assigned FRM obligation. An offline unit must be a fast start generator with established Claim 10 or Claim 30 values. A fast start generator is defined in Manual 35 as follows:

Fast Start Generator
Fast Start Generator shall mean a generating unit that the ISO may dispatch within the hour through electronic dispatch and that meets the following criteria: (i) minimum run time does not exceed one hour; (ii) minimum down time does not exceed one hour; (iii) time to start does not exceed 30 minutes; (iv) available for dispatch and manned or has automatic remote dispatch capability; (v) capable of receiving and acknowledging a start-up or shut-down dispatch instruction electronically (vi); and has satisfied its minimum down time.

The guidelines for establishing Claim 10 and Claim 30 values are described in MR-1, III.9.5.2. First, an updated NX-12 form must be submitted, requesting fast start status and Claim 10 and/or Claim 30 eligibility. Once the proper administrative changes have been made by the ISO, and the unit has been assigned fast start eligibility, the participant must request a demonstration for their generator, to establish a specific value for Claim 10 and Claim 30 capability. The ISO control room will then conduct an audit using the target mw's and time frame provided by the participant. If the unit attains 90% of that target or greater within the designated time frame, the desired capability value will be assigned to the unit. At this point, the participant can then assign mw's up to the demonstrated capability value of the unit to cover their FRM obligation on an hourly basis.

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