By Rich Heidorn Jr.

The results of ISO-NE’s Forward Capacity Auction 13 became effective “by operation of law” Sept. 24 because FERC was unable to muster a quorum following the departure of Commissioner Cheryl LaFleur and the recusal of Commissioner Richard Glick.

The commission issued a notice on the action Sept. 25 (ER19-1166), and Chairman Neil Chatterjee and Commissioner Bernard McNamee issued a joint statement Friday saying that they would have voted to accept the results despite multiple protests.

The auction for June 2022 through May 2023 produced a clearing price of $3.80/kW-month, well below FCA 12’s $4.63/kW-month and the RTO’s lowest price in six years. It was the first auction run under the Competitive Auctions with Sponsored Policy Resources (CASPR) rules, which established a secondary substitution auction in which new generation resources could assume the obligations of resources that retire in the same commitment period. The substitution auction had a $0 clearing price, and no demand bids below that price cleared. (See ISO-NE Completes FCA 13 Despite Controversy.)

ISO-NE filed the results on Feb. 28. The results became effective when the commission failed to act within the 60-day deadline for filings under Federal Power Act Section 205. FERC said the clock began on July 26, when ISO-NE responded to the second of two FERC deficiency notices.

Glick, a former lobbyist for Avangrid, said he recused himself because the Vineyard Wind offshore project, a joint venture between Copenhagen Infrastructure Partners and Avangrid Renewables, filed a protest in the docket. (See Glick Recusal May Mean No MOPR Ruling Before December.)

LaFleur, who began abstaining from ISO-NE orders before leaving the commission at the end of August, joined the RTO’s Board of Directors on Sept. 13. (See LaFleur Elected to ISO-NE Board.)

Chatterjee and McNamee said they would have upheld the auction results as just and reasonable, dismissing multiple protests as outside the scope of the proceeding or collateral attacks on past commission orders. They rejected arguments by Calpine, which said market design defects suppressed prices, and Public Citizen, which said consumers were overcharged in the substitution auction because only 10% of the supply offers cleared.

Waiver Request

Chatterjee and McNamee said they also would have voted to grant ISO-NE’s request for a waiver from a rule requiring it to grant access to confidential information to parties that sign nondisclosure agreements. The RTO made the request so it wouldn’t have to disclose resource-specific cost data submitted by the Killingly Energy Center, a 650-MW natural gas-fired generator slated to begin operations in Connecticut in 2022.

The commissioners acknowledged that FERC has “recognized both that parties have an interest in protecting the confidentiality of their data and that they must be permitted to participate meaningfully in proceedings.” They said they had sought to allow both by requiring NDAs to access the confidential material. “But the commission has also recognized that it is inappropriate to disclose confidential material that can create adverse impacts to competition, even under a nondisclosure agreement,” they wrote. “Specifically, in the FCA 8 order and 2017 waiver order, the commission ruled that release of resource-specific privileged information was inappropriate because that information would remain sensitive beyond the FCAs in question and could harm the competitiveness of FCAs going forward.”

Chatterjee and McNamee also said they would have rejected the argument of a group of capacity suppliers (Cogentrix Energy Power Management, Great River Hydro, NRG Power Marketing and Vistra Energy) who challenged the ISO-NE Internal Market Monitor’s unit-specific offer floor price for Killingly. They said it must have been at or below $3.79/kW-month — less than half the $8.19/kW-month default offer floor applicable to Killingly.

“We would have found that Killingly was appropriately mitigated,” the commissioners wrote. “Based on an evaluation of the data submitted in the deficiency response in this docket, we believe that the IMM complied with its responsibilities as outlined in the Tariff. For example, we would have found that through its deficiency response, ISO-NE demonstrated that its review was not focused solely on whether Killingly received out-of-market revenues but rather that the IMM scrutinized all aspects of Killingly’s offer to ensure they were consistent with prevailing market conditions, including all relevant cost components and revenue assumptions that support Killingly’s offer.”

Vineyard Wind MOPR

Also rejected were arguments by Vineyard Wind, Massachusetts Attorney General Maura Healey, Public Citizen and “Clean Energy Advocates” — Acadia Center, Conservation Law Foundation and the Sierra Club — that the auction resulted in unjust and unreasonable rates because Vineyard Wind was not exempted from the minimum offer price rule (MOPR) as a renewable technology resource (RTR).

The deadline to qualify as an RTR was Oct. 2, 2018. It wasn’t until Jan. 29, 2019 — six days before the auction was conducted — that the commission accepted revisions to the Tariff allowing offshore wind resources to qualify as RTRs.

The commission never acted on Vineyard Wind’s request for a Tariff waiver to participate in FCA 13. The request remains pending.

Clean Energy Advocates and Public Citizen complained that Vineyard Wind’s exclusion as an RTR showed the substitution auction failed to accommodate state policies and will be an inadequate substitute once the RTR exemption is phased out.

“With respect to the substitution auction, the commission previously found that the substitution auction construct and gradual phase-out of the renewable technology resource exemption struck a just and reasonable balance between the competing objectives of maintaining competitive capacity market prices and accommodating state policy interests,” Chatterjee and McNamee wrote. “The commission added that the substitution auction is not rendered unjust and unreasonable simply because it does not guarantee that state-sponsored resources will obtain capacity supply obligations.”