By Rich Heidorn Jr.
FERC last week rejected a request to expand its time frame for relief in a dispute over ISO-NE rules punishing resource withholding (EL16-120-001).
In January 2017, FERC agreed with the New England Power Generators Association (NEPGA) that ISO-NE’s peak energy rent (PER) adjustment should be raised. In light of the RTO’s new reserve constraint penalty factors, the commission said, the relationship between the compensation that suppliers in scarcity periods and the amount that they must rebate under the PER mechanism was no longer just and reasonable. (See ISO-NE Scarcity Rules Unfair to Generators, FERC Says.)
FERC set a refund effective date of Sept. 30, 2016, the date NEPGA filed its complaint.
NEPGA filed a rehearing request asking the commission to apply the revised PER — and any resulting refunds to capacity suppliers — to an Aug. 11, 2016, scarcity event.
FERC on Thursday rejected the request, saying it would impose “an unforeseen and significant increase in costs” to load.
“Such application is inconsistent with the commission’s notice requirements under the [Federal Power Act],” FERC said. “We recognize that there is a lag between when the event occurs and when the billing to reflect the PER adjustment takes place; that lag in billing, however, does not satisfy the notice requirements under the FPA.”
The January order said the amount of the PER increase would be determined in an evidentiary proceeding if stakeholders were unable to reach a settlement.
On Aug. 31, Settlement Judge H. Peter Young certified an uncontested settlement requiring ISO-NE to increase the daily PER strike price for each hour “by the amounts that actual five-minute reserve shadow prices exceed the pre-December 2014 reserve constraint penalty factors (RCPF) values for 30-minute operating reserves and 10-minute non-spinning reserves ($500/MWh and $850/MWh, respectively).”
The revised strike price will replace the strike price value in hourly PER calculations for Sept. 30, 2016, through May 31, 2018. The settlement has not been approved by the commission.
NEPGA President Dan Dolan and ISO-NE officials could not be reached for comment.
