Access documents related to the Competitive Auctions with Sponsored Policy Resources (CASPR) project.
Stakeholders in the region have been looking at ways to balance state public policies with the competitive wholesale electricity market structures in the region. See Integrating Markets and State Public Policies (IMAPP). The ISO’s proposal (Competitive Auctions with Sponsored Resources: CASPR) accommodates public policy resources into the Forward Capacity Market (FCM) over the time, while minimizing the impact that such resources have on competitively-based capacity prices that encourage the development of resources in the region when needed.
CASPR introduces a substitution auction (SA) that runs immediately after the Forward Capacity Auction (FCA) to coordinate the entry of new publicly-sponsored resources in the capacity market with the exit of older existing capacity resources willing to permanently leave. The SA settles at a distinct clearing price, based on its supply and demand, which is paid by the retiring resources to the new public policy resources that take on the Capacity Supply Obligations of the FCM. Existing resources that exit the market via the SA receive a final payment equal to the difference between the (higher) FCA clearing price and the (lower) SA clearing price.
By pairing entry and exit in the SA, over-supply concerns are reduced and resource adequacy in New England is maintained.
The CASPR project is just one of several key projects at the ISO, which continuously undertakes a variety of short- and long-term projects to enhance the region’s competitive wholesale electricity markets and ensure reliable operation of the power grid.