Inventoried Energy Program (IEP)

Last update: 03/14/2024

Below, affected ISO New England (ISO-NE) participants can learn more about changes to existing systems or procedures related to the Inventoried Energy Program (IEP). This project is one of several that ISO-NE has undertaken, in collaboration with stakeholders, for the continued development of the region’s wholesale electricity markets.

See the Participant Readiness Project Outlook for a summary of specifically affected participants 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

To address winter energy security challenges, ISO-NE is offering an interim program to compensate certain resources that provide fuel security. Beginning September 1, 2023, participants may elect to participate in the Inventoried Energy Program (IEP) with certain generating assets defined in Market Rule 1 Appendix K and per FERC order EL23-89-000. IEP is a voluntary, interim program designed to provide incremental compensation for participants that maintain inventoried energy for their assets during extreme cold periods when winter energy security is most stressed. The program is offered during the 2023–2024 and 2024–2025 winters (December to February) for commitment periods associated with the 14th and 15th Forward Capacity Auctions (FCAs).

Participants may choose to participate in IEP via either 1.) the forward component and spot component or 2.) the spot-only component. Requirements and payments (or possible charges) for the two types of participation are as follows:

1. Forward and spot components participation:
• Participants request to participate in the forward component (and thereby the spot component as well) by submitting the information required in Market Rule 1 Appendix K between September 1, 2023, and  October 1, 2023, for the first winter period, and again by October 1, 2024, if they choose to participate in the next winter period. ISO New England System Operations reviews and approves requests for participation. Approval notification will be provided to participants by November 1 of each program year.
• Participants approved to participate in the forward component receive a daily base payment for committing to maintain a minimum inventory level for the winter period. Participants are paid daily base payments in December, January, and February of each program year. The base payment is equal to the participant’s forward energy inventory election, multiplied by the base payment rate per megawatt-hour, and divided by the total number of days in the winter period.
• Fifteen days before the start of each winter period, participants in the forward component begin to submit energy inventory data periodically for use in calculating the IEP financial assurance (FA) requirement. If at any time during the program there is no reported inventory within the prior 15 days, the asset inventory value will be set to zero, resulting in the IEP FA being calculated at its maximum value. The IEP FA will appear on the Requirements tab and the Obligations tab in the Financial Assurance Management (FAM) system once the program begins.
• In addition, forward component participants have an IEP FA requirement due by December 1 of each program year per section III.D of the ISO New England Financial Assurance Policy (FAP).
• Forward component participants also participate in the spot component, which can result in spot payments or charges when an inventoried energy day (IED) has been declared. ISO-NE will declare an IED when the average of the high and low temperature is less than or equal to 17 degrees Fahrenheit as reported by the National Weather Service at Bradley International Airport. When an IED occurs, participants measure their real-time energy inventory as defined in Market Rule 1 Appendix K between 7:00 a.m. and 8:00 a.m. the operating day following the IED. Participants submit their real-time inventoried energy data, along with an affidavit, by 1:00 p.m. the second business day after the IED declaration for use in calculating the spot payment. Whether participants may receive a payment or will incur a charge is dependent upon on whether their reported real-time energy inventory covers their forward inventory election.
2. Spot-only component participation:
• Participants request to participate in the spot-only component by submitting the information required in Market Rule 1 Appendix K at any time during each winter period. Spot-only component participants are eligible for spot payments after ISO New England System Operations approves them for participation.
• Spot-only participants may receive a payment, but never a charge, when an IED is declared because their forward inventory election is zero. ISO-NE will declare an IED when the average of the high and low temperature is less than or equal to 17 degrees Fahrenheit as reported by the National Weather Service at Bradley International Airport. When an IED occurs, participants measure their real-time energy inventory as defined in Market Rule 1 Appendix K between 7:00 a.m. and 8:00 a.m. the operating day following the IED. Participants submit their real-time inventoried energy data, along with an affidavit, by 1:00 p.m. the second business day after the IED declaration for use in calculating the spot payment.
• Spot-only participants do not receive daily base payments.
• Spot-only participants are not subject to an IEP FA obligation.

Please note the special circumstances related to liquefied natural gas (LNG) inventory proration described in Market Rule 1 Appendix K.

Required Participant Actions

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

Participant Training Opportunities

ISO New England may offer online or classroom-based training, information sessions, and other opportunities for affected customers to learn about changes and ask questions in advance of project implementation.

Technical Documentation, Rules, and Procedures

Market participants affected by the project should consult the following documents for specific instructions on completing related tasks or processes and helpful answers to frequently asked questions.

Technical Specifications and Documentation

Rules and Procedures

Project Development Materials

• EL23-89-000 Order Granting Brookfield Renewable Pumped Storage Electric Storage Facilities
• ER19-1428 Initial IEP filings, Federal Energy Regulatory Commission (FERC) orders, and compliance filing to limit resource participation
• ER19-1483-003 Order accepting IEP
• ER23-705-00 Revisions to incorporate FA and billing policy changes related to IEP
• ER23-705-000 Order accepting revisions related to IEP
• ER23-1588 Revisions, answer to protests, deficiency letter, and response to deficiency letter for IEP
• Nos. 19-1224 ISO Intervenors Brief on IEP
• 2019-10-01 EGOC A4.1 Overview of ISO-NE Inventoried Energy Program V1
• 2019-12-10 and 2019-12-11 MC A06 Memo regarding proposed early sunset of IEP
• 2022-08-23 BFS A01.b IEP FA requirement including examples of IEP FA calculation
• 2022-10-11 BFS A02 Draft billing policy and FA policy conforming language changes for IEP
• 2022-10-12-13 MC A02 IEP compliance revisions
• 2022-11-08-10 MC A04 IEP parameter updates
• 2022-12-06-08 MC A03 IEP parameter updates
• 2023-01-10-12 MC A06 IEP parameter updates
• 2023-02-07-09 MC A05 IEP parameter updates
• 2023-03-02 PC Initial notice, supplemental notice, composite materials, and notice of actions with IEP parameter updates
• ER23-1588-000 and ER23-1588-001 Order Accepting Revisions to Appendix K