By Michael Kuser
FERC on Friday rejected a request by ISO-NE and the New England Power Pool to roll back the sunset date for a Tariff provision that allows the RTO to retain a resource for fuel security reasons.
ISO-NE and NEPOOL sought permission to sunset the Forward Capacity Market mechanism one year earlier than the May 31, 2025, expiration currently specified in the Tariff (ER20-645).
The RTO’s Fuel Security Reliability Retention Mechanism allows it to retain resources needed for fuel security but are seeking to retire in Forward Capacity Auctions 13, 14 or 15.
The commission found the rollback request “unjust and unreasonable because it would prematurely terminate” the mechanism prior to the submission of ISO-NE’s energy security improvements (ESI) initiative, which has been taking longer than anticipated. FERC last August granted the RTO a second extension to file the plan, to April 15.
“While the commission aims to limit the unnecessary use of out-of-market actions, the permanent market solution is not yet before us … [and] therefore, we cannot ensure that [it] will be implemented on or before the sunset date proposed,” the commission said.
Exelon argued against the request, saying an early sunset would be premature and unnecessarily limit the RTO’s options for addressing fuel security needs when it’s unclear that the permanent market solution will be in place by FCA 15.
NEPOOL disputed Exelon’s argument and pointed to initial analysis supporting ISO-NE’s request to retain Mystic 8 and 9, which found that the units were only needed through May 2024 (covered by FCA 14), and not May 2025 (covered by FCA 15). The organization said that its members showed an “overwhelming” preference to procure reliability services through competitive solutions and limit non-market mechanisms where feasible.
“We disagree with NEPOOL’s argument. … On the contrary, the [operational fuel-security analysis] demonstrated that there would be load shedding and depletion of operating reserves during the winter 2024-2025 if Mystic 8 and 9 … retired,” the commission said.
The commission additionally found that “ISO-NE fails to acknowledge that the settlement agreement specified the Forward Capacity Market design, its implementation date, and the transition period preceding its implementation in great detail.”
