NEPGA Answer ISO-NE on FCA 13 Installed Capacity Requirement Value – No. ER19-291

On December 20, NEPGA filed an Answer to ISO-NE’s answer in the FERC proceeding concerning the Installed Capacity Requirement (ICR) and associated demand curve values for FCA 13 (together, FCA 13 Values) (No. ER19-291). On November 27 and December 12, respectively, NEPGA filed a Conditional Protest and Supplemental Protest of the FCA 13 Values.  NEPGA conditioned its protest on FERC accepting ISO-NE’s proposal to re-price to $0/kW-month the Retirement De-List Bid offers of resources that are uneconomic in the Forward Capacity Auction but eligible for a cost-of-service agreement in order to meet a demonstrated fuel security need (in the case of FCA 13, Mystic Units 8 and 9). NEPGA argued that if FERC accepted the pricing treatment proposed by ISO-NE, ISO-NE must adjust the ICR value (and associated points on the MRI Demand Curve) based on the assumptions ISO-NE uses to establish whether a resource meets a demonstrated fuel security need, which assumptions if applied to the ICR calculation would result in a higher ICR value. FERC accepted the price-taker treatment by order on December 3. In its Supplemental Protest, NEPGA argued that FERC’s reasoning in accepting ISO-NE’s re-pricing proposal is consistent with the relief NEPGA requests. FERC relied heavily on its precedent in two proceedings concerning NYISO’s capacity market, in which FERC reasoned that re-pricing resources held to meet a reliability need is the administrative equivalent of creating a binding constraint in the capacity auction reflecting the fuel security reliability. The FCA models constraints, but only those reflecting transmission constraints. NEPGA argues that an administrative action cannot be the equivalent of a constraint that does not exist (as is the case with the Forward Capacity Auction and fuel security) and that the reasoning could only plausibly apply to the FCA if its reliability standard is set to meet the higher fuel security standard. ISO-NE answered NEPGA’s Conditional Protest on December 12, arguing that it calculated the ICR value according to the Tariff, that NEPGA’s relief requires a change to the Tariff which request can only come through a complaint, and that NEPGA otherwise failed to establish a finding that the ICR and MRI demand curve values are unjust and unreasonable. In its Answer, NEPGA explained that its relief may be granted whether through its protest or by FERC acting according to its Section 206 authority, and that ISO-NE’s arguments on the merits were otherwise unpersuasive.


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