FERC OKs Settlement On ISO-NE Peak Energy Rent Mechanism, Says Applicability To FCA 9 Beyond Scope
FERC has approved a settlement among various New England stakeholders which resolves all issues set for hearing in the Commission’s January 19, 2017 order on NEPGA's complaint concerning ISO-NE’s Peak Energy Rent (PER) mechanism.
The Settlement revises ISO-NE’s method for calculating the PER Strike Price, requiring ISO-NE to increase the PER Strike Price for each hour by the amounts that actual five-minute reserve shadow prices exceed the pre-December 2014 Reserve Constraint Penalty Factors values for thirty-minute operating reserves and ten-minute non-spinning reserves ($500/MWh and $850/MWh, respectively) (Adjusted PER Strike Price).
The Settlement provides that the Parties and Non-Opposing Intervenors do not agree regarding the application of the Strike Price methodology agreed to in the Settlement to the ninth Forward Capacity Auction (FCA 9) Capacity Commitment Period (June 1, 2018 – May 31, 2019, Capacity Commitment Period 9).
FERC said in approving the settlement that, with respect to this issue, "we note that, as discussed in the Complaint Order, the PER Strike Price was shown to be unjust and unreasonable for the period at issue in NEPGA’s complaint, i.e., September 30, 2016 – May 31, 2018."
"Accordingly, the applicability of the Adjusted Hourly PER Strike Price to any events that occur during Capacity Commitment Period 9 is beyond the scope of this proceeding," FERC said