FERC denied rehearing of three orders related to ISO-NE’s Pay-for-Performance program that is intended to boost reliability starting in 2018. In jump ball proceedings, FERC had said neither ISO-NE’s nor the New England Power Pool’s proposals in themselves addressed performance adequacy, but the commission adopted elements of both.

• The first order directed ISO-NE to adopt a modified version of its proposed market design (ER14-1050, EL14-52-001). The commission accepted ISO-NE’s Tariff revisions regarding the increased reserve constraint penalty factors, the treatment of energy efficiency resources and ISO-NE’s proposal to retain the capacity performance payment rate and the dynamic de-list bid threshold.
• In the second order, FERC denied rehearing on a commission order regarding an ISO-NE compliance filing (ER14-2419, EL14-52-002). Connecticut and Rhode Island had argued that the order failed to ensure that the dynamic de-list bid threshold is reasonably calibrated in light of the increased reserve constraint penalty factors. The commission said their assumptions are based on an oversimplification of the relationship between the penalty factors, resource performance and the inputs into the dynamic de-list bid threshold formula.
• FERC also denied rehearing of a complaint by the New England Power Generators Association that alleged that the interaction between the penalty factor and ISO-NE’s peak energy rent mechanism is unjust and unreasonable (EL15-25). The PER requires suppliers to issue rebates to customers when energy prices exceed a strike price. The penalty factor, a component of the real-time dispatch and pricing algorithm, serves as a cap on the price that ISO-NE may pay to procure additional reserves. The commission found in its earlier order denying the complaint that NEPGA had not met its burden under Section 206 demonstrating that the existing Tariff provisions were unjust and unreasonable. (See FERC Upholds ISO-NE New Entry Pricing; Rejects Challenges by Generators.)

— William Opalka