NEPGA Files in Support and With a Limited Protest of Non-Commercial Capacity Financial Assurance Changes (Nos. ER20-395 and ER20-395)

On December 6, 2019 NEPGA filed two pleadings in response to the companion ISO-NE proposals to change the financial assurance requirements for non-commercial capacity (NCC) resources. First, NEPGA filed Comments in support of ISO-NE’s proposes to create a Trading FA value for any NCC resource that sheds a CSO (through an annual or monthly reconfiguration auction, or bilaterally) at a profit prior to becoming commercial (Docket No. ER20-394). Any profit derived from shedding the CSO will be summed with the “base” FA amount to create a total FA requirement for the resource. ISO-NE proposes to apply the Trading FA change to NCC that cleared new in FCA 13 and FCAs thereafter, but not to NCC that cleared new in FCAs 11 and 12. ISO-NE further proposes that any Trading FA incurred will be settled on a monthly basis during the associated capacity commitment period, rather than at the time of the shedding transaction. The NEPOOL Participants Committee unanimously approved the proposal. NEPGA’s Comments in support explain that Trading FA helps to better balance Project Sponsor risk with the risk it imposes on load and capacity suppliers by clearing and continuing to clear in subsequent Forward Capacity Auctions a resource that has yet to demonstrate commercial operation. Second, NEPGA filed Comments in support and a Limited Protest of ISO-NE’s proposal to change the “base” rate at which an NCC resource must post FA upon clearing an FCA, from the current rate of the FCA Clearing Price to the Net Cost of New Entry (Net CONE) value for that FCA (Docket No. ER20-395). Under the proposal, an NCC must post 1 x Net CONE upon clearing a first FCA (i.e., as new), 2 x Net CONE upon clearing a second, and 3 x Net CONE upon clearing a third (in each case, so long as it is non-commercial when it offers into the FCA). ISO-NE proposes to apply the “base” rate change only to those resources that clear new in FCA 14 and thereafter (i.e., to “grandfather” those cleared new in FCAs 11-13). The NEPOOL PC voted 61.5% in favor of the proposal, short of the 66% necessary to be considered a vote in favor of a change to the ISO-NE Financial Assurance Policy. NEPGA filed in support of the change, but protested ISO-NE’s proposed application, arguing that the change to Net CONE should apply to all non-commercial resources offering into FCA 14 and thereafter, and explaining that regardless of when a resource first clears the FCA it continues to impose the of risk non-delivery on load and capacity suppliers so long as it remains non-commercial.

 NEPGA-Mot-to-Interv-and-Comments_ER20-394.pdf  ISO-Filing_Base-FA-Rate_ER20-395.pdf
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