By Rich Heidorn Jr.

FERC has agreed to New England’s request for a public “prefiling” meeting to discuss the region’s plans for long-term fuel security.

The staff-led session at FERC’s headquarters in D.C. on July 15 will include three, 90-minute presentations by ISO-NE, New England Power Pool stakeholders and state officials followed by questions from commissioners and staff (EL18-182, ER18-2364, et. al.).

ISO-NE, NEPOOL and the New England States Committee on Electricity (NESCOE) jointly requested the meeting in April, saying ex parte rules had prevented them from discussing with the commission their efforts to develop a long-term, market-based energy security plan, as the commission ordered last July. ISO-NE’s proposed Tariff revisions are due Oct. 15. (See FERC Denies ISO-NE Mystic Waiver, Orders Tariff Changes.)

“The solutions and alternatives under consideration are complex,” the request said. “It would be particularly helpful if the region can preview its proposals and issues with commission staff, both to assist the commission’s understanding of the issues and to receive any preliminary feedback and direction.”

The commission’s July 2 show-cause order instituted a Federal Power Act Section 206 proceeding after finding that ISO-NE’s Tariff is not just and reasonable because the RTO lacks a way to address fuel security concerns that it said could result in reliability violations as soon as 2022.

ISO-NE last month issued a white paper on the challenges the region faces because of its increasing reliance on natural gas-fired generation — which may be unable to obtain fuel in the winter — and intermittent renewables. The paper said ISO-NE’s efforts to encourage gas-fired generators to invest in dual-fuel capability or LNG storage had proven inadequate because of “misaligned incentives.”

“Making these discrete investments, if they meaningfully reduce the risk of electricity supply shortages (and therefore the risk of high prices), entails up-front costs to the generator — yet reduce the energy market price the generator receives,” the RTO explained.

As a result, the RTO is proposing:

• Expanding the one-day-ahead market into a multiday-ahead market that optimizes energy (including stored fuel) over several days.
• Creating new ancillary services in the day-ahead market to compensate generators for providing the flexibility of energy “on demand” to manage uncertainties during the operating day.
• Creating a seasonal forward market to provide resources with incentives to invest in supplemental fuel supplies for the winter.

The paper said the RTO is “in the early, conceptual stages of evaluating designs” for the forward market and that its “immediate focus is to first work with regional stakeholders to develop the … multiday-ahead markets and their integrated new ancillary services.”

RTO officials discussed the multiday-ahead proposal with stakeholders at NEPOOL’s Markets Committee meeting May 7.