ISO-NE’s Capacity Auction Reforms (CAR) project will include an evaluation of additional resource accreditation modeling enhancements, the RTO told the NEPOOL Markets Committee on Sept. 10. 

The RTO also plans to estimate seasonal tie benefits in its resource adequacy assessment model, it said. The remarks came in response to feedback it solicited on the “straw scope” of the project, which aims to move the Forward Capacity Market to a prompt and seasonal market. (See ISO-NE Outlines ‘Straw Scope’ of Capacity Market Reforms.) 

Some stakeholders argued  ISO-NE’s resource accreditation modeling does not accurately reflect the region’s risk profile, including the duration of events. (See ISO-NE Capacity Accreditation Reforms Spur Energy Storage Concerns.) 

“As part of CAR, the ISO plans to assess whether it can make further enhancements to the modeling and accreditation proposal to better align accreditation values with contributions to resource adequacy,” said Chris Geissler, ISO-NE director of economic analysis. The RTO also plans to consider how it models intermittent and limited-energy resources, along with improvements to the load model, he said. 

Other stakeholders expressed concerns  the new accreditation methodology would not consider the marginal reliability impact (MRI) of tie benefits, potentially causing the RTO to overestimate the reliability benefits of interties. 

In comments submitted prior to the meeting, Calpine argued that “any supply source, including imports, used to meet capacity requirements should be counted similarly and subject to similar performance requirements” and that ISO-NE “should apply this standard to the CAR work.” 

Geissler said the RTO will work with its neighbors to evaluate seasonal tie benefits, which “represent the expected contribution from other regions during emergency conditions.” 

However, ISO-NE does not plan to calculate MRI values for tie benefits, or to subject tie benefits to Pay-for-Performance (PFP) rules, Geissler said. He noted that tie benefits will be modeled in resource adequacy assessments, which are used to determine the RTO’s installed capacity requirement. He added that “tie benefits are not directly competing” with capacity resources to meet this requirement. 

Geissler also told the MC that ISO-NE is not planning to include an evaluation of how the capacity market treats resource retentions. He added that, in a future phase of work, the RTO may consider broader changes to its rules for reliability-must-run contracts if it determines that retentions for energy security reasons are needed. 

The RTO also is not planning to model resource start times because of the constraints of GE MARS, its resource adequacy modeling software, despite interest from some stakeholder groups, Geissler said. 

“Assessing changes to the resource adequacy platform would be a significant, multiyear effort that would take resources away from other parts of the CAR effort and jeopardize the ISO’s ability to complete CAR in time for [capacity commitment period] 19,” Geissler said. 

In a memo published prior to the meeting, environmental advocacy groups pushed the RTO to model startup times, arguing it is a necessary step to fairly compensate resources for their ability to support the power system on short notice. 

“Units with lengthy startup times simply do not offer the same resource adequacy value as more flexible ones,” the organizations wrote. “We understand that this will involve substantial resources, but given that ISO has already committed to spending several years on overhauling its capacity market reform, now is the best time to address this important consideration.” 

The groups also urged the RTO to model “correlated outages and ambient temperature adjustments” as part of the CAR project. 

Gas and diesel resources are “susceptible to both cold and hot temperature-dependent forced outages,” the organizations said while calling on ISO-NE to “model these reliability impacts as accurately as possible.” 

Geissler said ISO-NE still is considering whether to include temperature adjustments and correlated outages in the project scope, noting that the topic “raises technical modeling questions that must be more fully assessed before a decision can be made.” 

He added that ISO-NE is planning to model correlated outages of gas resources related to the region’s gas constraints in the winter. 

IMM Quarterly Markets Report

Wholesale market energy costs were down by 23% this spring relative to that of 2023 because of lower natural gas prices and capacity clearing costs, according to the ISO-NE Internal Market Monitor’s quarterly markets report. 

The real-time hub LMP averaged $24.64/MWh, ranging from 9 to 13% lower than in spring 2023. The average load (11,869 MW) was up by about 180 MW per hour in part from higher temperatures in May compared to the prior year. 

Nuclear generation rebounded after several down seasons because of lower rates and accounted for about 28% of the average output. Natural gas remained the largest generation source at 45% of the average output. Imports decreased because of a drought in Canada that affected hydro reservoir levels.