Summer heat hit New England early this year, with load peaking at 20,181 MW on May 18 as temperatures in Boston and Hartford topped out in the mid-90s, resulting in transmission and unit outages and reductions that led to operational constraints, congestion and divergent pricing.
ISO-NE, which had 5,700 MW in planned outages, was hit with another 2,790 MW in forced outages at the peak hour ending at 6 p.m., COO Vamsi Chadalavada told the summer meeting of the New England Power Pool Participants Committee on Tuesday in his operations report for May.
Chadalavada said that the grid operator initiated an abnormal conditions alert (master/local control center procedure no. 2) at 9:30 a.m., which lasted until 10 p.m.
The Hydro-Quebec Phase II import limit dropped from 1,760 to 1,000 MW, while the NY-Northern Interface was nearly full at peak as total transfer capability dropped to 900 MW due to line outages. Northbound imports over the peak hours, coupled with constraints in Maine, resulted in congestion at the North-South Interface.
Fast-start generation was dispatched to meet the peak hour, pushing the average real-time price during the peak hour to $389.17/MWh, almost four times the average day-ahead price of $100/MWh. Real-time prices ranged from a high of $758.88/MWh in the Northeastern Massachusetts and Boston pricing zone, to a low of -$71.07/MWh for power from New Brunswick.
The energy market value in May was $283 million, up $3 million from April 2017 and up $67 million from a year ago. May natural gas prices were 4.7% lower than April but still 44% higher from a year earlier. Average real-time LMPs were $29.44/MWh in May, down 6.6% from April, but up 38% from a year earlier.
Committee Approves Settlement Terms for PER Complaint
Meeting in executive session, the Participants Committee on June 27 approved settlement terms that address all issues set for hearing in a dispute over the peak energy rent mechanism in the Forward Capacity Market.
In January, FERC granted a complaint by the New England Power Generators Association (NEPGA) against ISO-NE, agreeing that a penalty imposed during a summer heat wave proved that the PER is unjust and unreasonable (EL16-120). The commission agreed with the generators that the PER adjustment should be raised but said the amount should be determined in an evidentiary proceeding if stakeholders could not reach a settlement. (See ISO-NE Scarcity Rules Unfair to Generators, FERC Says.)
The settlement term sheet was approved by a show of hands with one vote in opposition and several abstentions.
The motion authorized officers of the Participants Committee to approve the formal settlement offer on the condition that all six committee officers agree. If the officers do not agree unanimously, the committee would need to hold a special meeting on July 14, 2017.
According to a memorandum from NEPOOL counsel David Doot, an agreement on Tariff language needs to wait until the commission rules on the issue of how to reflect capacity invoices issued after the refund effective date of Sept. 30, 2016. “Accordingly, the plan now is to finalize and file an offer of partial settlement without tariff language, and to approve changes to the tariff only if and after FERC rules on the proposed partial settlement and this unresolved, contested issue,” the memorandum said.
Terms of the settlement were not publicly disclosed.
NEPOOL Approves Tariff Changes for DR Integration
The Participants Committee on June 28 approved four Tariff amendments related to the June 2018 full integration of demand response resources (DRRs) into the energy, reserves and capacity markets. The changes integrate DRRs into the base Price Responsive Demand market design, as well as into new market designs implemented since the last New England Tariff filing under FERC Order 745 on DR compensation.
— Michael Kuser