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March 2004 (off-peak) FTR Auction Results

March 2004 (off-peak) FTR Auction Results. Presentation to Markets Committee March 10, 2004 Michael Taniwha Manager, Market Administration. March 2004 off-peak FTR case approved with branch violation. Case approved with branch violation on Ascutney K15-VT radial line

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March 2004 (off-peak) FTR Auction Results

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  1. March 2004 (off-peak) FTR Auction Results Presentation to Markets Committee March 10, 2004 Michael Taniwha Manager, Market Administration

  2. March 2004 off-peak FTR case approved with branch violation • Case approved with branch violation on Ascutney K15-VT radial line • Results have clearing price of $55,404.11 at LD.WINDSOR 115 pNode and $1,517.96 at Vermont zone • Auction revenue of $512,312.21 • Specific impacts of approved case: • Higher than normal Vermont zonal clearing price due to the load weighted average of the Vermont pNode clearing prices from the LD.WINDSOR 115 clearing price • High negative FTR award dollars allocations to Market Participants with FTRs that have Vermont zone as “source” • Follow on impact to Qualified Upgrade Award (QUA) calculations which require a feasible FTR Auction case • Follow on impact to Auction Revenue Rights (ARR) calculations from using the FTR clearing prices

  3. Background to problem • K15_VT line (Auscutney115 to Windsor 115) rated at 119 MW for January-June 2004 long term FTR Auction • K15_VT line de-rated by Transmission Owner to 33 MW to include in-line transformer limit (effective late December 2003)

  4. Background to problem cont.. • Long-term FTR Auction 50% of transmission capacity made available • KT15_VT line modeled as 59.5 MW line (1/2 of 119 MW) • Total of 36.27 MW of long-term FTRs cleared to LD.WINDSOR 115 pNode • 29.5 MW point to point FTR with LD.WINDSOR 115 as sink • Approximately 6.77 MW as nodal proportion of net 278.1 MW of FTRs to the Vermont zone as sink • Long-term FTRs now preloaded in each subsequent monthly FTR Auction as fixed “sink” awards

  5. Background to problem cont.. • Monthly FTR Auction now includes 36.27 MW fixed injection at LD.WINDSOR 115 • Although line is only rated at 33 MW • January and February FTR Auctions cleared OK due to sufficient “source” FTRs bids to Vermont zone creating counter flow on KT15_VT line greater than 3.27 MW • March FTR Auction had insufficient or zero “source” bids to LD.WINDSOR 115 and Vermont Zone resulting in branch violation on KT15_VT line (no sink bids cleared)

  6. Solution & corrected results • Correct solution is achieved by relaxing the branch limit on KT15_VT line until feasible case solved • Effectively re-rate line in monthly FTR Auction to 36.27 MW equivalent of the awarded long-term FTRs at the LD.WINDSOR 115 pNode • Correct results • LD.WINDSOR 115 clearing price $11,317.88 • Vermont zone clearing price $365.28 • One additional FTR of 1 MW clears from UN.PILGRIM 22.8PILG to Vermont zone (sink) and sets marginal clearing price • Auction revenue of $534,477.55

  7. Corrective actions taken • Business processes, procedures and log sheets changed so that FTR cases with violations are not approved • Process will require constraint violations to be relaxed • New MOI reports developed to display minimum and maximum nodal clearing prices for all pNodes • Not just those pNodes that have cleared FTRs • Report issue to Markets Committee and brief FERC staff

  8. Rules restrict posting of correct results • Market Rule 1, section 7, clause 7.3.1 states ”That the ISO shall conduct auctions in accordance with the standards and procedures set forth in the NEPOOL Manuals and ISO Administrative Procedures”. • Manual 6, section 3, clause 3.5.2 (5) Monthly Auctions states”FTR Auction results are final when initially posted and the ISO shall not modify the results unless such modifications are directed by an order of the Commission or a court of competent jurisdiction”.

  9. Recommendations • Markets Committee should consider options and if rule change is required Questions?

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