Below, affected ISO customers can learn more about changes to systems or procedures related to the Competitive Auctions with Sponsored Policy Resources 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.
See Participant Readiness Project Outlook for more detail on specifically affected customers and systems for this and other major projects.
Implemented: February 4, 2019
Under the CASPR Project, ISO New England coordinated the entry of new sponsored policy resources (SPRs) with the retirement of existing resources in an effort to balance federal and state energy policies with the competitive wholesale electricity market. This was accomplished by establishing a substitution auction (SA) to be run after the primary Forward Capacity Auction (FCA) to minimize the impact that SPRs may have on competitively-based capacity prices, maintain resource adequacy, and reduce over-supply concerns.
Eligible resources may participate in the SA as either supply or demand. The supply side of the auction consists of new Forward Capacity Market (FCM)-qualified SPRs and the demand side is comprised of eligible retiring resources. SPRs participate in the SA in order to obtain a Capacity Supply Obligation (CSO) for qualified capacity that was not awarded a CSO in the primary auction. Eligible retiring resources that acquire a CSO in the primary auction participate in the SA to shed the portion of their CSO that was designated in their demand bid, not to exceed their CSO available, after the primary auction. The auction clearing price and MW quantity are determined by the intersection of the supply and demand curves which are developed using the bids and offers submitted during the SA Offer/Bid price window.
When the capacity commitment period (CCP) for the auction is reached the SPRs that acquired a CSO in the SA will receive capacity payments based on the SA’s lower clearing price. Retiring resources that are able to shed their CSO in the SA will receive payments equal to the primary auction price, but will pay the SA’s lower clearing price to the SPRs that acquired a CSO. With the full primary auction clearing price paid for the CSOs transferred in the SA and the SPRs’ MWs equal to the retiring resources’ MWs, there is a net zero effect on the primary auction results.
Resources eligible to participate in the FCA #13 substitution auction as supply are new SPRs that:
Resources eligible to participate in the FCA #13 substitution auction as demand include resources that:
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.
|TIMING OR DEADLINE
|ACTION OR EVENT
October 5, 2018
Deadline for completion of critical path schedule for existing resources participating as demand in the substitution auction
|October 16, 2018 to October 22, 2018
SA Offer/Bid price window for SPRs to submit supply offers consisting of at least one and up to five price-quantity pairs in ascending price order that represent the lowest price at which they would willingly sell capacity. If a supply offer is not submitted, a default supply offer will be submitted on the Market Participant’s (MP’s)behalf for the resource’s FCA qualified Capacity and priced at the FCA starting price.
SA Offer/Bid price window for eligible resources to submit demand bids consisting of at least one and up to five price-quantity pairs in descending price order that represent the lowest price at which they would willing pay to shed their CSO. If a demand bid is not submitted, a default demand bid will be submitted on the MP’s behalf for the total bid amount submitted by the MP or required for a retirement de-list and priced at the FCA starting price multiplied by negative one.
Offer prices cannot be greater than the primary auction’s starting price or lower than that starting price multiplied by negative one
February 4, 2019
Forward Capacity Auction
The SA takes place immediately following the primary auction based on the primary auction results and bids and offers submitted during the SA Offer/Bid price window
The SA clearing price for any capacity zone or external interface cannot exceed the FCA capacity clearing price for that location, and cannot be less than negative one multiplied by the FCA starting price.
Supply offers will not receive a multi-year rate lock for CSO acquired in the SA and are rationable, whereas demand bids are nonrationable
Auction results are available within 15 days of the auction being marked complete in FCTS
The ISO conducted online information sessions and other opportunities 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 future projects.
|EVENT AND SUPPORTING MATERIALS
Forward Capacity Market Substitution Auction for FCA#13 – Overview of the substitution auction, submitting bids and offers
Forward Capacity Market (FCM 101) – classroom training at the Hotel Northampton, Northampton, MA
Read more about the purpose and performance of the Forward Capacity Market (FCM) in the Markets Data and Information section of the ISO-NE website.
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.
Web guide revised to include CASPR requirements and procedures in the Forward Capacity Market (FCM).
2022-2023 CCP Substitution Auction Bid and Offer Summary
SA aggregate MW elections for FCA #13, CCP 2022-2023
Forward Capacity Auction Reports
As part of the project, FCA Results Auction Reports will be revised to include SA results
The most recent version of each FCA Results report can be found on the Auctions Reports web page
Market Rule 1
See more on the Wholesale Markets Project Plan page, the Competitive Auctions with Sponsored Policy Resources Key Project page, and the Wholesale Markets and State Public Policy Initiative forum materials