Reconfiguration auctions provide an auction-based mechanism for resources to acquire, increase, or shed all or part of their capacity supply obligations (CSOs) for the entire capacity commitment period (CCP). CSOs may be adjusted through annual reconfiguration auctions (ARAs) or for specific months of the CCP through monthly reconfiguration auctions (MRAs). A resource can adjust its CSO by submitting the following:
Unlike CSO bilaterals, no counterparty is needed to participate in a reconfiguration auction.
Additionally, ARAs allow the ISO to procure or release capacity on behalf of load by using sloped demand curves in the auction. The ISO does not participate in MRAs, which do not use sloped demand curves.
The specific dates when reconfiguration auction submission windows open and close are available in the FCA calendars.
The objective of the reconfiguration auction is to clear supply offers and demand bids for each capacity zone to maximize social welfare, subject to the constraints modeled in the auction.
Clearing prices are created for each capacity zone and import interface. All supply offers and demand bids may be cleared in whole or in part:
Capacity demand curves will be modeled in each ARA consistent with how they were modeled for the FCA for the associated capacity commitment period. Beginning with CCP 2020–2021, annual reconfiguration auctions will also use zonal capacity demand curves. Capacity demand curves are not used in the MRAs. For more information about the capacity demand curves, see About the FCM and Its Auctions.
The capacity zones modeled in each reconfiguration auction include those that were used in the FCA for that capacity commitment period. (Previously, for CCP 2010–2011 to CCP 2015–2016, capacity zones included those that had distinct clearing prices from the FCA.)
Demand bids and supply offers are submitted in the Forward Capacity Market Reconfiguration Auction User Interface. A digital certificate is required to access the system. You must ask your security administrator for the ISO’s Customer and Assets Management System (CAMS) to provide you with one of the following roles based on your expected activities:
If you don’t know who your security administrator is, contact Customer Support.
To access the system, click the Forward Capacity Market Reconfiguration Auction button on the SMD applications home page. See the User Guide for the Forward Capacity Market Reconfiguration Auction for instructions and screenshots.
To submit a supply offer or demand bid, you must identify the following:
Both supply offers and demand bids can be offered in up to five price-megawatt pairs.
It is important to understand the effects of cleared supply offers and demand bids on FCM payments:
If a resource’s qualified capacity value for the third annual reconfiguration auction (ARA #3) is less than its CSO for that capacity commitment period, the resource may be flagged for a significant decrease in capacity. A significant decrease in capacity is calculated using a resource’s biggest shortfall, which is the largest monthly difference between the resource’s CSO and its qualified capacity for the relevant CCP. A significant decrease in capacity will be triggered if the biggest shortfall exceeds the lesser of 40 MW or 20% of the resource’s CSO for the month with the largest deficit. For details, see Market Rule 1, Section III.220.127.116.11.3, Adjustment for Significant Decreases in Capacity.
If a significant decrease in capacity is triggered,—see Third Annual Reconfiguration Auction Bilateral Period: Qualification and Significant Decreases for details.
The CSO cover charges will begin with the tenth capacity commitment period, which starts on June 1, 2019. These changes describe the process, obligations, and consequences if a new resource is or may be delayed. With this change, the requirement in Market Rule 1, Section III.13.3.4 (b) for the ISO to submit a demand bid into the third annual reconfiguration auction on behalf of a participant with a delayed project was removed. In its place are rules that will determine a new charge rate on the basis of a second run of the third annual reconfiguration auction that will apply to resources with undemonstrated megawatt quantities.
The submission of a demand bid is reviewed against financial assurance (FA) requirements:
For ARA #3, if the ISO enters a mandatory demand bid on behalf of a resource with a significant decrease in capacity (see sections above), it will be entered at the FCA starting price and will be reflected in the Forward Capacity Tracking System (FCTS) as a noneditable bid. This may have the following FA effects:
For more information, refer to the ISO New England Financial Assurance Policy.
The ISO also performs reliability reviews on cleared supply offers and demand bids, as follows:
Annual Reconfiguration Auctions
Monthly Reconfiguration Auctions
|Review considers annual period.||Review considers monthly period.|
|Bids and offers may only be rejected in whole.|
|Review takes into account transmission and resource outage schedules approved for the month.|