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Minimum Price Cap Proposal

Minimum Price Cap Proposal . Michelle C. Gardner NextEra Energy Resources. Markets Committee March 12-13, 2014. NextEra’s Amendment to increase the minimum price cap will make the demand curve fairly resilient to E&AS offset uncertainty and errors in forecasting Net CONE.

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Minimum Price Cap Proposal

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  1. Minimum Price Cap Proposal Michelle C. Gardner NextEra Energy Resources Markets Committee March 12-13, 2014

  2. NextEra’s Amendment to increase the minimum price cap will make the demand curve fairly resilient to E&AS offset uncertainty and errors in forecasting Net CONE Minimum Price Cap Proposal • NextEra will offer an amendment to use 1.25 times Gross CONE as the minimum, as compared to the current ISO-NE proposal of 1 times Gross CONE • Gross CONE is $14.04/kW-month for FCA-9 using the selected reference technology • The current 1.65 times Net CONE price cap proposed by ISO-NE equals $18.27/kW-month • NextEra’s minimum price cap is equal to $17.55/kW-month • ISO-NE’s minimum price cap is equal to $14.04/kW-month

  3. NextEra Tariff Amendment in Red Below NextEra Minimum Price Cap Amendment III.13.2.2. Amount of Capacity Cleared in Each Forward Capacity Auction. • The total amount of capacity cleared in each Forward Capacity Auction shall be determined using the System-Wide Capacity Demand Curve pursuant to Section III.13.2.3.3. • The System-Wide Capacity Demand Curve is defined as follows: • For quantities (net of HQICCs) less than 0.143 LOLE, the price is max [1.65 multiplied by Net CONE, 1.25 timesCONE]; • For quantities (net of HQICCs) equal to or greater than 0.143 LOLE, but less than 0.063 LOLE, the price will be determined by a straight line between the price at 0.143 LOLE (which shall be max [1.65 multiplied by Net CONE, 1.25 times CONE] and the price at 0.063 LOLE (which shall be 0.7 multiplied by Net CONE);

  4. NextEra Tariff Amendment in Red Below NextEra Minimum Price Cap Amendment III.13.2.4. Forward Capacity Auction Starting Price and the Cost of New Entry. • The Forward Capacity Auction Starting Price is max [1.65 multiplied by Net CONE, 1.25 timesCONE].

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