Annual Reconfiguration Transactions (ARTs) Project

Last update: 05/21/2019

Below, affected ISO customers can learn more about changes to existing systems or procedures related to the Annual Reconfiguration Transactions (ARTs) Project. This project is one of several that ISO New England has undertaken, in collaboration with stakeholders, for the continued development of the region’s wholesale electricity markets. Target dates indicated below are subject to change.

See Participant Readiness Project Outlook for more detail on specifically affected customers and systems for this and other major projects.

• Project Overview
• Required Participant Actions
• Participant Training Opportunities
• Technical Documentation, Rules, and Procedures
• Project Development Materials

Project Overview

Implemented: April 30, 2019

Under the Annual Reconfiguration Transactions (ARTs) project, ISO New England replaced the annual capacity supply obligation (CSO) bilaterals with the new ARTs model to allow participants and their counterparties to acquire or shed CSO with price certainty. The previous annual CSO bilateral method, which transfered CSOs from one resource to another on a kilowatt-for-kilowatt basis, became obsolete when the marginal reliability impact (MRI) zonal demand curves were implemented with Forward Capacity Auction (FCA) #11 for capacity commitment period (CCP) 2020-2021. Under the MRI-based zonal curves, capacity was no longer considered fully substitutable on a kW-for-kW basis across zonal boundaries.

The new ARTs model, when used in conjunction with a demand bid or supply offer in an ARA, facilitates the equivalent of an annual private transaction. The demand bid or supply offer in the ARA accounts for each resource’s change in CSO quantity and any effect from partial substitutability, and the ART provides price certainty for the CSO transfer or acquisition.

Participants may opt to first become a party to a provisional ART prior to the ART submission window. The provisional ART option is provided to allow participants more time to enter ART data during the much longer provisional ART window, which opens when the FCA is approved and closes concurrent with the opening of the ART and ARA submission window. Provisional ARTs automatically convert to ARTs upon the opening of the ART and ARA submission window.

During the conversion, provisional ARTs are validated as if the ART was entered upon the opening of the ART and ARA submission window. Provisional ARTs that fail validation during the conversion process are not converted to an ART and the related participants are notified.

ARTs entered during the provisional ARTs submission window or the ART and ARA submission window require the initiating participant to:

• Identify the resource to be involved in the ART
• Indicate whether the resource will be participating in the ART as the capacity transferring resource or the capacity acquiring resource
• Enter the nominal megawatt amount which must not exceed the larger of
  • the capacity transferring resource’s CSO (maximum demand bid amount) less the quantity of any previously confirmed ARTs (as the capacity transferring resource)
  • the capacity acquiring resource’s unobligated qualified capacity amount (maximum supply offer) less the quantity of any previously confirmed ARTs (as the capacity acquiring resource)
• Select a fixed price that is greater than or equal to zero and less than or equal to the FCA starting price
• Specify the ART capacity zone in effect for the associated CCP
• Designate the counterparty to the transaction
• Attest that the transaction is backed by a physical transaction

The counterparty responding to the transaction is required to:

• Identify the resource
• Confirm that the transaction is backed by a physical transaction

Participants with ARTs also enter their associated bids or offers into the ARA; however, ARA bids or offers that do not clear the ARA will not result in a cancellation of the related ARTs.

ARTs are not approved under the following circumstances:

• ARTs associated with a resource whose ARA demand bid or supply offer is rejected for reliability reasons
• Unconfirmed provisional ARTs or unconfirmed ARTs withdrawn by the initiating party
• Confirmed provisional ARTs or confirmed ARTs that are subsequently withdrawn by the initiating party and confirmed by the counterparty
• ARTs that are not confirmed by the close of the ART submission window are automatically withdrawn with no further action by either party
• ARTs and ARA bids or offers are rejected if either party does not have sufficient financial assurance (FA) with the exception of mandatory demand bids which will not be rejected

Before the ARA is conducted and through the closing of the ART and ARA window, FA exposure due to confirmed ARTs (along with ARA activity) is calculated and assessed on a daily basis based on the possible auction outcome with the highest FA obligation. Upon the close of the ART and ARA window, FA is assessed for the ARTs and ARAs.  After the ARA is complete, FA from confirmed ARTs and cleared bids and offers is recalculated based on the actual auction clearing prices.

Required Participant Actions

Affected market participants were required to take specific steps or adapt to changes in ISO Systems, as described below and should be mindful of additional time-bound items, some of which may require customers to take specific steps or adapt to changes in ISO systems after the project implementation date.

Please consider subscribing to Participant Readiness, Market Notices, Information Technology (IT) Notices, and MIS Report Issues to receive notices posted to the ISO calendar for future projects.

Participant Training Opportunities

The ISO conducted online training and information sessions for affected customers to learn about changes and ask questions in advance of project implementation. Please consider subscribing to ISO Training to receive notices posted to the ISO calendar for this project.

Technical Documentation, Rules, and Procedures

The following documents were provided to market  participants affected by the project for specific instructions on completing  related tasks or processes and helpful answers to frequently asked questions.

Technical Specifications and Documentation

Project Development Materials

• FERC Order ER18-455-000 Accepting ART Revisions
• 2017-06-13 and 2017-06-14 MC A07 Zonal Demand Curves: CSO Transactions using MRI Demand Curves
• 2017-07-11 and 2017-07-12 MC A06 Zonal Demand Curves: CSO Transactions using MRI Demand Curves
• 2017-08-08-09-10 MC A08 Zonal Demand Curves: CSO Transactions using MRI Demand Curves