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FCA 6 Resource Termination Timing Problem

FCA 6 Resource Termination Timing Problem. April Markets Committee Meeting. Timing problem between when resources are terminated and when the auction takes place.

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FCA 6 Resource Termination Timing Problem

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  1. FCA 6 Resource Termination Timing Problem

  2. April Markets Committee Meeting • Timing problem between when resources are terminated and when the auction takes place. • FCA 6 takes place on April 2, 2012. ISO will begin terminating non-performing FCA 1 resources June 1, 2012 but will require these resources to participate in FCA 6. The ISO counted these resources as existing resources in their reliability studies and also for purposes of deciding which zones to model.

  3. From the ISO’s January 10th presentation at the MC • From the ISO’s January 10th presentation at the MC – “There are approximately 428 MW of new resources that were to be commercial by June 1, 2010 but have not yet reached commercial operation” • An additional 170 MW of new resources for June 1, 2011 • The 2010 and 2011 resources are now on monthly Critical Path Schedule (CPS) monitoring • “In accordance with Market Rule 1, Section III.13.3.4. the 2010 and 2011 resources are eligible for termination despite having covered [un]successfully for two years” • Termination will reduce the pool of existing resources for monthly and annual auctions/bilaterals as well as future FCAs • A filing with FERC is made when resources are terminated April Markets Committee Meeting

  4. Problems Reliability concerns – The ISO relies on phantom MWs in their reliability studies. Pricing – The phantom MWs mute appropriate pricing signals Proration –Phantom MWs if cleared in the FCA will be included in the proration MWs forcing incorrect pro-rationing levels on all commercial resources. Rules will force pro-ration so that less than ICR might be procured. April Markets Committee Meeting

  5. Possible Fixes • Reduce a non-commercial resource’s ability to cure from 2 years to 17 months after the start date of the initial commitment period for which they cleared. Options to resolve the five month shortfall include: • Allow resources to cover their shortfalls through monthly reconfiguration auctions and/or monthly bilaterals • Require resources to cover their shortfall in an annual reconfiguration auction (but they can sell their excess MW’s into monthly reconfiguration auctions) • Allow resources to cover their obligations through a newly created five month reconfiguration auction or five month bilateral • Others ? April Markets Committee Meeting

  6. QUESTIONS? April Markets Committee Meeting

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