Forward Capacity Market Pay-for-Performance (FCM PFP) Project

In this section

Below, affected ISO customers can learn more about the changes to systems or procedures related to the Forward Capacity Market Pay-for-Performance (FCM PFP) Project. This project was 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.

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

Project Overview

Project Implemented: June 1, 2018

The FCM PFP Project increased financial incentives for resource owners to make investments to ensure their resource’s reliability during periods of scarcity. The FCM PFP Project accomplished the following:

Replaced the current FCM availability metrics with a capacity performance metric based on energy and reserve delivery
Penalized or reward resources based on their performance below or above their share of the system’s requirements
Capped a resource’s performance at its desired dispatch point (DDP) when the resource is subject to a transmission constraint to avoid incentivizing over-performance
Implemented a stop-loss mechanism that prevents unlimited risk exposure for poorly performing resources
Allowed capacity scarcity conditions to occur within any capacity zone
Calculated monthly capacity performance payments (CPPs) by introducing the:
- Balancing ratio calculation
- Actual capacity provided calculation
- Capacity performance score (CPS) calculation
Allocated the excess or deficiency in capacity performance payments collection to capacity supply obligations (CSOs)
Introduced capacity performance bilateral transactions to transfer all or part of a resource’s positive performance score to a resource that was subject to the same capacity scarcity condition
Added the Capacity Performance Bilateral User Interface (UI) for trading performance scores
Update the Metering UI and related web services to:
- Required values for every interval for demand resources (DR)
- Replaced the DR type with a reduction method
Collateralized the potential for resources with CSOs to have negative capacity payments under the new PFP rules by adding a financial assurance requirement for FCM delivery
Eliminated the many exceptions allowed for underperformance under the current FCM rules
Retired the existing performance provisions for shortage events, demand response, and external transactions

This project was scheduled to be released concurrently with the Price-Responsive Demand (PRD) Project. Affected participants were reminded to refer to the PRD project page for related information and system changes that may impact market participants and demand-designated entities (DDEs) with demand-response assets.

CPPs for Resources Without FCM Obligations or Participation

Under the FCM PFP Project CPPs will now be provided to resources that have performed during a capacity scarcity condition (CSC) despite not being in the FCM or having an FCM obligation. Please note:

New passive demand resources must designate “PFP Only” when submitting a show of interest (SOI) in the Forward Capacity Tracking System if they wish to be eligible for CPPs without taking on a capacity supply obligation.
Generating assets, active demand response resources, and imports will be eligible for CPPs without being formally designated through the SOI process.

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.

TIMING OR DEADLINE	SYSTEM	ACTION OR EVENT
April 16–27, 2018	Forward Capacity Tracking System (FCTS)	Lead participants designated new passive resources as “PFP Only” during the show of interest submission window.
June 1, 2018	Enhanced Energy Scheduler (EES)	Market Participants submitting a priced External Transaction supporting an Import Capacity Resource with a Capacity Supply Obligation to the Real-Time Energy Market on an external interface where advance transmission reservations are now required to link the transaction to the associated transmission reservation and NERC E-Tag no later than one hour before the operating hour in order to be eligible for scheduling in the Real-Time Energy Market.
June 1, 2018	Financial Assurance Management (FAM)	Financial assurance should be closely monitored due to the change in the use of FCM offsets against hourly and non-hourly requirements. Please refer to the Participant Training Opportunities section for the Financial Assurance for the Forward Capacity Market training and the Technical Documentation, Rules, and Procedures for the FCM Pay-for-Performance Financial Assurance Model Spreadsheet to assist with estimating FA.
April 2, 2018 (Sandbox) June 1, 2018 (Production)	SMD Applications	Metering UI, related upload formats and web services were updated to: Require DG Output MWs for all hours of the day when DG asset readings are submitted Replace DR type with Reduction Method Require submissions after go-live to comply with post-PFP formats and data validations The Supplemental Availability Designation application was retired. Supplemental Availability Bilaterals for pre-PFP resettlements during the data reconciliation period was allowed. Capacity Performance Bilaterals was introduced within the Internal Transactions UI.

Participant Training Opportunities

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.

DATE	EVENT AND SUPPORTING MATERIALS
May 2, 2018	Pay-For-Performance (PFP) and Timing of Performance Reporting for On Peak and Seasonal Peak Demand Resources Presentation Presented to the May 2, 2018 Demand Response Working Group
Q2 2018	Outreach and subsequent reminders to customers regarding Metering UI upload file formats and data requirements
March 2018	Pay-for-Performance web-based training Pay-for-Performance Introduction Pay-for-Performance Overview and Settlement Pay-for-Performance Stop-Loss Mechanism
March 13, 2018	Financial Assurance instructional memo and FCM Delivery FA Model to approximate Delivery FA requirements FCM Pay-for-Performance Financial Assurance Instructions including FCM Delivery FA Calculation FCM Pay-for-Performance Financial Assurance Model Spreadsheet
May 05, 2022	Financial Assurance training updated for PFP changes Financial Assurance for the Forward Capacity Market
March 29, 2018	Passive Demand Response Registration and Auditing Training will include PRD-related changes for passive DR Link to presentation Link to recorded webinar
Currently Available	FCM 101: Lesson 6B3 – Annual Reconfiguration Transaction (ART) FCM 101: Lesson 6B4 – FCM Pay-for-Performance Evaluations and Net FCM Payments
Quarterly beginning Q3 2017	Quarterly Settlements Issues Forum (QSIF) Link to Q3 2017 Presentation Link to Q4 2017 Presentation Link to Q1 2018 Presentation

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

DOCUMENT	NOTES (if necessary)
MIS Reports March 5, 2018 notice	MIS report descriptions, templates, and sample files will be revised. The report list, descriptions, and templates will be announced as they become available. Revised reports: SD_FCMCLOSTLDTL SD_FCMPRECAPREQ SR_FCMNRCPSUM SR_FCMSTLSUM SP_EQR New reports: SD_FCMPFPACPPRELIM SD_FCMPFPSCOREPRELIM SD_FCMPFPACP SD_FCMPFPRESPYMT SD_FCMPFPCPSBT SD_FCMPFPSCORE SD_FCMNSCDTL2 WW_SCARCITY_CONDITION Retired Reports: SD_MONTHLYEPOH SR_FCMANNUALEPOH SD_FCMPREAVAIL SD_FCMNSCDTL SD_FCMAVAIL SR_EXTICAPTRANPEN SR_FCMAVAILSUM SD_FCMIMPORTPENALTYCRD SD_FCMIMPORTPENALTYCHG The most recent version of each MIS report can be found on the MIS Report Descriptions, Template and Samples webpage.
Metering UI Web services	Capacity Scarcity Conditions (CSC) data will be published to the web under the FCM auction reports section. CSV will only be published for days with CSC. Metering UI, related upload formats, and web services: Meter Reading Data Exchange Specification Meter Reading XSD files
Metering UI User Guide	Meter Reading Submittal User Guide
IBT UI File Upload and File Download documents	Revised to remove obsolete ICAP references; performance bilaterals will not be accepted or reported via file uploads/downloads IBT File Download Formats Internal Contract File Upload Formats submit_contracts_1_6.dtd submit_schedules_1_4.dtd terminate_contracts_1_4.dtd
Submitting Internal Bilateral Transactions Using SMS	Updated with changes under the PFP project
Internal Bilateral Transactions FAQs	Updated with changes under the project prior to SMD sandbox
Reports and data that will not be published after May 2018	These include: Shortage Event Availability Score Availability Penalties and Credits Demand Response Performance Penalties and Incentives Daily Offer Threshold Price External Transactions Penalties Daily Settlement External Transactions Penalties Monthly Settlement Available Capacity Commitment Period Allotment Hours FCM Import Penalty Charge FCM Import Penalty Credit
FCM Participation Guide	Web guide describing the process to participate in the Forward Capacity Market
Seasonal Peak Hours report	Monthly report is updated as scarcity conditions occur
FERC Electric Quarterly Reporting (EQR)	EQR Report was revised for changes under the FCM PFP Project

Rules and Procedures

DOCUMENT	NOTES (if necessary)
Transmission, Markets, and Services Tariff	Sections updated for the PFP project: Section I, General Terms and Conditions Section III.13, Forward Capacity Market Exhibit IA, Financial Assurance Policy
System Operating Procedures	Procedures updated for the PFP project: CROP.10002, Implement Capacity Remedial Actions CROP.10003, Implement Disturbance Remedial Actions CROP.25006, Dispatch using UDS during an RTUC failure CROP.31001, Scheduling External Transactions CROP.35003, Reserve Requirement Adjustments CROP.35005, Dispatch using RTUC and UDS

DOCUMENT

NOTES
(if necessary)

Transmission, Markets, and Services Tariff

Sections updated for the PFP project:

Section I, General Terms and Conditions
Section III.13, Forward Capacity Market
Exhibit IA, Financial Assurance Policy

System Operating Procedures

Procedures updated for the PFP project:

CROP.10002, Implement Capacity Remedial Actions
CROP.10003, Implement Disturbance Remedial Actions
CROP.25006, Dispatch using UDS during an RTUC failure
CROP.31001, Scheduling External Transactions
CROP.35003, Reserve Requirement Adjustments
CROP.35005, Dispatch using RTUC and UDS

Project Development Materials

ER18-944-000 FERC acceptance of Tariff revisions related to FCM Financial Assurance Requirements
2017-12-05 MC A03 Tariff Redlines—FCM Performance Incentive Conforming Changes
ER14-1050-000, 001, Order on Tariff Filing and Instituting Section 206 Proceeding
ER14-2419-000, 001, Order on Compliance Filing
FCM Performance Incentives Key Project page