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.
Before opening the submission window for a reconfiguration auction, the ISO publishes the qualified capacity for all resources in the Forward Capacity Tracking System (FCTS).
See Qualified Capacity for CSO Bilateral Periods and Reconfiguration Auctions.
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 and 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 the curves were modeled for the FCA in the associated capacity commitment period. 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.
The ISO will apply the reconfiguration auction limitations criteria described in Market Rule 1, Section III.13.4, Reconfiguration Auctions, to reconfiguration auction bids and offers. Demand bids and supply offers submitted during a reconfiguration auction must respect all modeled limits.
At clearing quantities less than the import-constrained capacity zone limit (truncation point), no CSO is allowed to move out of the import-constrained zone. Demand bids submitted may only clear against supply offers submitted in the same import-constrained zone. The price in the bound zone (or interface) will be set by the marginal bid or offer within the zone.
Fixed zonal limits are used in monthly reconfiguration auctions. These fixed zonal limits will correspond to the truncation point of the respective zonal sloped demand curve. The capacity transfer limit (CTL) will remain a fixed limit.
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 Asset 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 Participant 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 that has achieved FCM Commercial Operation has a qualified capacity value for the third annual reconfiguration auction (ARA 3) that 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 smallest shortfall, which is the smallest monthly difference between its CSO and its qualified capacity for the relevant CCP. A significant decrease in a resource’s capacity will be triggered if the smallest shortfall exceeds the following thresholds for the applicable capacity commitment periods:
a. Calculate the smallest shortfall of the CSO (CSO minus qualified capacity) across all 12 months.
b. For the month with the smallest shortfall, calculate the greater of 20% of the CSO or 2 MW.
c. Take the lesser value of either the result from (b) or 40 MW.
d. The result is the resource’s significant-decrease threshold.
e. The resource will be flagged if the smallest shortfall is greater than the significant-decrease threshold.
a. Calculate the smallest shortfall of the CSO (CSO minus qualified capacity) across all 12 months.
b. For the month with the smallest shortfall, calculate the greater of 10% of the CSO or 2 MW.
c. Take the lesser value of either the result from (b) of 10 MW.
d. The result is the resource’s significant-decrease threshold.
e. The resource will be flagged if the smallest shortfall is greater than the significant-decrease threshold.
For details, see Market Rule 1, Section III.13.4.2.1.3, 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.
Beginning with the tenth capacity commitment period, which started on June 1, 2019, the ISO no longer enters mandatory demand bids into the third annual reconfiguration auction on behalf of participants with a delayed project. Instead, failure-to-cover charges are applied to any CSO for which a participant cannot demonstrate its ability to deliver from noncommercial megawatts.
For capacity commitment periods beginning before June 1, 2022, the failure-to-cover charge rate for a given capacity zone is the higher of the capacity clearing price and the clearing price in any annual reconfiguration auction for that capacity commitment period.
For CCPs beginning on or after June 1, 2022, the failure-to-cover charge rate for a given capacity zone will be the price determined by a second clearing of the third annual reconfiguration auction before the start of the relevant CCP. See Market Rule 1, Section III.13.3.4, Covering Capacity Supply Obligations, for full details.
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 are rejected for the resource. | |
| Review takes into account transmission and resource outage schedules approved for the month. | |
