NEPOOL’s Markets Committee on Tuesday approved ISO-NE’s proposal to eliminate the minimum offer price rule (MOPR), rejecting an amendment that would have created a two-year transition period for the changes to the region’s capacity market.
The plan to eliminate the MOPR, which ISO-NE is pursuing after calls from FERC, will head to NEPOOL’s Participants Committee in February for final approval before the RTO files a tariff amendment with the commission later this quarter.
The proposal approved by the MC included some changes from the previous version, which were outlined by ISO-NE’s Ryan McCarthy at the meeting.
Most significantly, the new proposal removes part of the buyer-side market power review process. Specifically, it would get rid of a requirement that the Internal Market Monitor adjudicate whether a new resource’s offer would “materially reduce the clearing price in the auction.” The RTO said that provision was redundant with the “incentive rebuttal” process under which new resources receiving out-of-market support can avoid mitigation by proving that they do not have an incentive to exercise buyer-side market power.
Before approving the proposal, the committee voted down an amendment from Calpine and Dynegy that would have created a two-year transition period. The companies have argued that the proposal creates market and reliability risks and say their proposed delay would give the grid operator time to develop new mechanisms — such as capacity accreditation and enhanced reserves — to help mitigate those worries.
Ahead of Tuesday’s MC vote, the New England Power Generators Association complained that the proposal still suffers from unresolved flaws. The plan “allows uncompetitive offers to set uncompetitive clearing prices, violating the competitive, wholesale market construct and principles adopted by ISO-NE, agreed to by market participants and the New England states, and accepted by [FERC] decades ago,” NEPGA’s Bruce Anderson said. (See Monitor, Merchants Challenge ISO-NE Plan to Eliminate MOPR.)
Another amendment proposing the creation of a Scarcity Event Reduction Framework was withdrawn by its sponsor LS Power because it lacked support from ISO-NE. The plan would have added a new incentive to compensate resources that are able to perform in “very tight” conditions and forestall scarcity.
