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Schedule of ICR-Related Values for 2020 FCM Auctions

This presentation provides the schedule for developing the ICR-Related Values for the Forward Capacity Market (FCM) auctions to be conducted in 2020. It covers background information, the revised assumptions accepted by FERC, development cycle of values, and meeting dates.

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Schedule of ICR-Related Values for 2020 FCM Auctions

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  1. Director, resource adequacy Schedule of ICR-Related Values for the Forward Capacity Market Auctions to be Conducted in 2020 Carissa P. Sedlacek April 24, 2019 | Westborough, MA

  2. Presentation Purpose and Topics • This presentation provides the RC with the 2019 PSPC development schedule for the HQICCs, ICRs, LSRs, TSAs, LRAs, MCLs and the MRI system and Capacity Zone Demand Curves (collectively the “ICR-Related Values”) for the FCM auctions that will be conducted in 2020 • This presentation covers: • Background on the recently revised assumptions to the ICR calculations accepted by FERC and the need to develop two sets of ICR-Related Values for FCA 14 • The schedule of the 2020 FCM auctions • The development cycle of ICR-Related Values and NEPOOL committees review schedule • The ICR-Related Values agenda items tentatively scheduled for the PSPC meetings • All meeting dates and agenda items included in this presentation are tentative and subject to change

  3. Background • The calculation of ICR-Related Values is conducted pursuant to Section III.12 of the Tariff • In November 2018, the ISO, joined by NEPOOL, filed with FERC proposed revisions to two assumptions used in the calculation of ICR-Related Values: • Change the modeling of load relief assumed obtainable through the implementation of 5% voltage reduction action of OP-4 from 1.5% of the 90/10 peak to 1.0% • Modify the unavailability of peaking generation resources in the TSA from a 20% deterministic adjustment factor to be the units’ EFORds • FERC accepted the proposed revisions in a January 8, 2019 letter order and the revised assumptions will be utilized in the upcoming ICR-Related Values calculations for the Forward Capacity Auction (FCA) and annual reconfiguration auctions (ARAs) that will be conducted in 2020

  4. Background, cont. • Mystic 8 & 9 were retained for fuel security reliability in FCA 13 • Pursuant to Docket Nos. ER18-1509-000 and EL18-182-000, the Commission ruled that Exelon could “…unconditionally retire Mystic 8 & 9 by the earlier of five business days after the Commission’s order on Mystic’s cost-of-service agreement, including its Annual Fixed Revenue Requirement, or January 4, 2019.”  • This decision was relevant for FCA 13 only • Exelon elected to continue to operate for CCP 13 • For FCA 14, the ISO must again evaluate whether Mystic 8 and 9 are needed for fuel security, and Exelon again has the option to unconditionally retire prior to FCA 14 • Pursuant to Market Rule 1, Section III.13.2.5.2.5. and Planning Procedure No. 10, Appendix I, ISO-NE will perform a fuel security reliability review where a determination will be made no later than June 6 • If Mystic 8 and 9 are not needed for fuel security for FCA 14, they will be informed in early fall 2019 • In addition, even if the Mystics are needed for FCA 14, Exelon has until Jan 10, 2020 to decide whether to retire at the end of the FCA 13 Capacity Commitment Period and not continue to operate for FCA 14 • Timing of the retirement decision of Mystic 8 & 9 by Exelon results in the need for ISO-NE to develop and file with FERC two sets of ICR-Related Values • Similar to how ICR-Related Values were developed with and without Clear River Unit 1 in FCA 13 • In January 2020, it is anticipated there will be more clarity on which FCA 14 ICR-Related Values will be used • Pending Exelon’s retirement decision on January 10, 2020 • Pending FERC’s approval of the ICR-Related Values in mid-January 2020

  5. Schedule of FCM Auctions To be conducted in 2020

  6. 2020 FCM Annual Auctions – Starting Dates • In 2020, ISO-NE will conduct four FCM auctions: • One FCA (FCA 14) • Includes a primary auction and a substitution auction • Three ARAs (with ARTs)

  7. ICR Values needed for the FCM Auctions Calculations to be completed in 2019 • ICR-Related Values for FCA 14 • Tie benefits for the 2023-2024 CCP • HQICCs, ICR, LSR, TSA, LRA, MCL • MRI system & Capacity Zone Demand Curves • ICR-Related Values for ARA 1 for the 2022-2023 CCP • ICR, LSR, TSA, LRA, MCL • MRI system & Capacity Zone Demand Curves • ICR-Related Values for ARA 2 for the 2021-2022 CCP • ICR, LSR, TSA, LRA, MCL • MRI system & Capacity Zone Demand Curves • ICR-Related Values for ARA 3 for the 2020-2021 CCP • Tie Benefits for 2020-2021 CCP • HQICC, ICR, LSR, TSA, LRA, MCL • MRI system & Capacity Zone Demand Curves

  8. Anticipated schedule FOR ICR Development 8

  9. FCA 14 ICR-Related Values Development Schedule • ICR-Related Values for FCA 14 (2023-2024)

  10. ARAs ICR-Related Values Development Schedule • ICR-Related Values for the ARAs to be conducted in 2020 will be calculated, reviewed and filed concurrently • 2020-2021 ARA 3 ICR-Related Values • 2021-2022 ARA 2 ICR-Related Values • 2022-2023 ARA 1 ICR-Related Values

  11. Details of PSPC Meeting Agenda Items • May 15 • ICR-Related Values development webinar • Will review the process for developing ICR-Related Values • May 30 • Present the 2019 schedule for the development of the ICR-Related Values • Review the FCA 14 transmission transfer capability and Capacity Zone determinations • Review the winter 2018-2019 DR performance and summer 2018 DR performance • Review assumptions for use in the FCA 14 ICR-Related Values calculations • Load forecast • Resource data based on qualified Existing Capacity Resources for FCA 14 • Generating Resource availability • DR availability • Load relief from OP-4 action relating to 5% voltage reduction • External transmission interface availability • Review assumptions for the tie benefits study

  12. Details of PSPC Meeting Agenda Items (cont’d) • June 20 • Discuss the methodology to develop ADCR availability assumptions • Review the BTM PV forecast as it relates to ICR-Related Values • Final review of load, resource and availability assumptions for FCA 14 ICR-Related Values calculations

  13. Details of PSPC Meeting Agenda Items (cont’d) • July 25 • Results of the tie benefits study with and without Mystic 8 & 9 for FCA 14 • August 9 • Item(s) relating to FCA 14 ICR-Related Values development • Review of proposed ICRs with and without Mystic 8 & 9 • Note: The proposed LSRs, TSAs, LRAs, MCLs and the MRI system and Capacity Zone Demand Curves with and without Mystic 8 & 9 will be reviewed in late August and early September • Item(s) relating to ARAs ICR-Related Values development • Review load, resource and availability assumptions for 2020-2021 ARA 3, 2021-2022 ARA 2 and 2022-2023 ARA 1 ICR-Related Values calculations • Review of assumptions for the 2020-2021 ARA 3 tie benefits study 1

  14. Details of PSPC Meeting Agenda Items (cont’d) • August 29 • Item(s) relating to FCA 14 ICR-Related Values development • Review proposed LSRs, TSAs, LRAs, MCLs and the MRI system and Capacity Zone Demand Curves without Mystic 8 & 9 • Item(s) relating to ARAs ICR-Related Values development • Review the 2020-2021 ARA 3 tie benefits study • Final review of load, resource and availability assumptions

  15. Details of PSPC Meeting Agenda Items (cont’d) • September 9 • Item(s) relating to FCA 14 ICR-Related Values development • Review of proposed LSRs, TSAs, LRAs, MCLs and the MRI system and Capacity Zone Demand Curves with Mystic 8 & 9 • Item(s) relating to ARAs ICR-Related Values development • Review of proposed ICRs for ARAs • October 8 • Discuss the estimated hours of system operating reserve deficiency of CCP 2023-2024 (FCA 14) both with and without Mystic 8 & 9 • Review proposed ICR-Related Values for 2020-2021 ARA 3, 2021-2022 ARA 2 and 2022-2023 ARA 1 • Note: The RC will review ICR-Related Values for FCA 14 on September 25 and for the 2020 ARAs on October 23

  16. Acronyms • ADCR – Active Demand Capacity Resource • ART – Annual Reconfiguration Transaction • BTM PV – Behind the meter photovoltaic • CCP – Capacity Commitment Period • DR – Demand Resource • EFORd – Equivalent Forced Outage Rate - Demand • FCA – Forward Capacity Auction • FCM – Forward Capacity Market • FERC – Federal Energy Regulatory Commission • HQICCs – Hydro-Quebec Interconnection Capability Credits • ICR – Installed Capacity Requirement • LRA – Local Resource Adequacy Requirement • LSR – Local Sourcing Requirement • MCL – Maximum Capacity Limit • MRI – Marginal Reliability Impact • OP-4 – Operating Procedure No. 4, Action During a Capacity Deficiency • PC – Participants Committee • PSPC – Power Supply Planning Committee • RC – Reliability Committee • TSA – Transmission Security Analysis Requirement

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