What Is the Reserve Market?
The reserve market consists of two distinct products for the provision of reserve capacity in New England. This capacity is available for dispatch during system contingencies, which are unplanned disconnections of power system elements, such as transmission facilities or generators, from the electricity grid.
- The Forward Reserve Market (FRM) is the procurement mechanism for delivery of reserve products to meet 10-minute non-synchronous reserve (TMNSR) and 30-minute operating reserve (TMOR) requirements in New England during on-peak hours. Market participants submit offers for FRM obligations in specific reserve zones to the Forward Reserve Market Auction, which occurs twice annually prior to each seasonal capability period. (The summer season period is June—September; the winter period is October—May). Payments for forward reserve delivery are made to market participants with FRM obligations based on the value of the forward reserve clearing price for the appropriate reserve zone and product. In order for participants to meet their obligations in the market, eligible forward-reserve resources must be assigned in advance of the operating day to provide reserves on an hourly basis.
- Real-time reserve capability on eligible assets is designated by the ISO during the operating day, and resources that provide these reserves will be paid based on the value of the five-minute real-time reserve clearing price for the appropriate reserve zone and product.
What Document(s) Contain Details about the Reserve Market?
Primary provisions for the settlement of the reserve market are included in, but not limited to, Market Rule 1, ISO New England Manual for Market Rule 1 Accounting Manual M-28, and ISO New England Manual for Forward Reserve M-36.
Who Incurs a Reserve Market Credit or Charge?
- The market participant with an obligation in the Forward Reserve Market will receive credits for service delivered, by zone and product, based on the forward reserve clearing prices determined in the auction. Obligations in the Forward Reserve Market are obtained through clearing in the auction; adjusted, as applicable, for bilateral trading of obligations.
- The market participant with ownership in a resource that provides real-time reserves will receive credits for service during five-minute intervals that the real-time reserve clearing price is not zero; however, payments are adjusted to prevent an asset from being compensated for both real-time reserve and forward reserve at the same time. The five-minute real-time reserve clearing prices are determined in accordance with Market Rule 1.
The market participant with an obligation in the Forward Reserve Market who fails to provide the service is subject to penalties. The total credits and penalty charges associated with the Forward Reserve Market and the total credits associated with real-time reserves are allocated as charges to market participants based on real-time load obligations in applicable load zones.
Related Standard Settlements
Related Billing Adjustments
The hourly services bill contains a single line item entitled "Reserve Market.” This line item is the net of charges and credits for both the Forward Reserve Market and real-time reserves.
Daily Financial Position Report
BL_DAILYPOSITION—Daily financial position, including all market service settlements and miscellaneous billing adjustments generated on a daily basis, issued to all active customers registered as a participant or non-participant
Reserve Asset Detail Report
SD_RSVASTDTL—Hourly detail of a participant’s reserve information by asset, issued upon settlement of the market day
Reserve Detail Five-Minute Report
SD_RSVDTL5MIN—Five-minute detail of a participant’s reserve information by asset, issued upon settlement of the market day
Forward Reserve Transaction Activity Report
SD_RSVTRANSACT—Hourly detail of a participant’s forward reserve ilateral transactions, issued upon settlement of the market day
Reserve Market Customer Charges Report
SR_RSVCHARGE—Summary of pool charges and participant’s charges by hour, issued upon settlement of the market day
Reserve Market Settlement Report
SR_RSVSTL—Summary of pool credits by hour and participant’s credits and charges by hour, issued upon settlement of the market day
Reserve Market Zonal Summary Report
SR_RSVZONESUM—Summary of a participant’s reserve market credits and charges by zone, product, and hour, issued upon settlement of the market day
Related Calculation Summary
Forward Reserve Market Calculation Summary
Real-Time Reserve Market Calculation Summary
Reserves are reported on the SP_EQR report, available on a monthly basis one month after the given settlement, as referenced in the line items prefaced with the titles “Forward Reserve Market” and “Real-Time Reserve Market” in ISO-NE Settlements to FERC EQR Product Mapping.