Retirement Bid Flexibility Proposal

The NEPOOL Markets Committee on Wednesday approved a proposal from Calpine that would make changes to the resource retirement process to allow retirement bids to be updated later in order to give generators more flexibility.

Currently, retirement bids are due in March, 11 months before the Forward Capacity Auction, a time period that Sigma Consultants’ Bill Fowler said adds “significant, unnecessary risk.” (See NE Stakeholders Propose Retirement, Financial Assurance Changes.)

The rule change would allow bids to be updated in October, by at most 25% below their initial submission. The committee approved the proposal by voice vote.

Calpine is planning to bring a second part of its proposed retirement changes — removing the “repowering rule” that requires a minimum investment to re-enter the market after retirement — to a vote in the committee next month. That change is intended to provide generators a way to mothball units and return them to service if there are significant changes in the region, Fowler said.

Financial Assurance Proposal

The committee also discussed a plan from Competitive Power Ventures to hike financial penalties for resources that fail to reach milestones prior to their delivery year and commercial operation — a timely topic as Killingly Energy Center contests a recent FERC ruling affirming ISO-NE’s decision to terminate its capacity supply obligation (ER22-355). (See FERC Accepts ISO-NE Request to Terminate Killingly CSO.)

Killingly and projects like it have “little financial incentive to withdraw a failed project,” CPV’s Joel Gordon said in a presentation, with penalties currently only assessed after resources have failed to reach their initial commercial operation date. And the only tool that the grid operator currently has to respond to such failures is termination, which Gordon called a “sledgehammer.”

When failed projects participate in capacity auctions, it harms other CSO holders through lower clearing prices and higher performance risk, and it can displace “shovel-ready” projects, Gordon argued.

CPV’s proposal would create new financial assurance requirements for projects that fail to meet certain milestones. It’s similar to a previous proposal by the New England Power Generators Association, which has raised the issue as well in recent weeks in response to Killingly. NEPGA’s Dan Dolan told RTO Insider that the group would support escalating penalties for delays.

The MC was supposed to vote on the plan Wednesday, but CPV deferred to the committee’s next meeting to try to hash out differences with ISO-NE, which said in a recent memo that the plan is not complete and needs further development to define the root cause of the conditions it describes.

GIS Revisions

The committee also voted to approve changes to NEPOOL’s Generation Information System, including:

• metering for certain residential solar generators in the Connecticut Residential Solar Investment Program;
• the treatment of energy storage facilities in the GIS; and
• enhancements to the GIS to address incorrect inputs on fuel splits for dual-fuel units.