By William Opalka
New England power generators asked a federal appeals court to overturn Federal Energy Regulatory Commission orders that accepted ISO-NE’s change to a sloped demand curve in advance of this year’s Forward Capacity Auction.
NextEra Energy Resources, NRG Energy and Public Service Enterprise Group filed a petition for review Monday in the D.C. Circuit Court of Appeals.
A year ago, ISO-NE and the New England Power Pool Participants Committee jointly filed revisions to the RTO’s Tariff to establish a system-wide sloped demand curve for the Forward Capacity Market, which were accepted by FERC (ER14-1369). A rehearing request of what became known as the Demand Curve Order was denied by FERC on Jan. 30.
ISO-NE formerly used a vertical demand curve, which produces a single clearing price for all cleared resources at the point where the demand and supply curves intersect. Before the eighth Forward Capacity Auction in February 2014, ISO-NE determined a potential for a capacity shortage, which would invoke administrative pricing provisions in the Tariff. Capacity prices in FCA 8 tripled to about $3 billion.
In response to a FERC order just prior to FCA 8, ISO-NE posited that a sloped demand curve would be a long-term solution, eliminating the need for administrative pricing rules.
In filings last year, PSEG asserted that the sloped curve failed to meet the one-day-in-10-years loss-of-load expectation.