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Capacity Market Changes: Transition Period

Capacity Market Changes: Transition Period. Demand Resources Working Group April 2012. FCM Conforming Changes – Transition Period. Filed with the Commission on January 31, 2012.

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Capacity Market Changes: Transition Period

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  1. Capacity Market Changes: Transition Period Demand Resources Working Group April 2012

  2. FCM Conforming Changes – Transition Period • Filed with the Commission on January 31, 2012. • See ISO New England Inc. and New England Power Pool, Docket No. ER12-947-000; Price-Responsive Demand FCM Conforming Changes (January 31, 2012). • Three substantive rule changes: • Energy Compensation for FCM-Related Demand Reductions, • Use of PRD Baseline Methodology for Real-Time Demand Response (“RTDR”) and Real-Time Emergency Generation (“RTEG”) Resources, and • Elimination of Demand Resource Forecast Peak Hours.

  3. Energy Compensation • Assets associated with RTDR and RTEG Resources will be compensated for energy when demand is reduced pursuant to a Dispatch Instruction in response to OP4 or capacity audit (“capacity event”). • When a RTDR or RTEG is dispatched for a capacity event, the associated assets’ demand reductions will be eligible for payments or charges at the full Real-Time Zonal LMP based upon the following rules: • Asset is only eligible for the duration of the capacity event. • Demand reductions measured at the customer meter will be grossed-up by the percent average avoided peak distribution losses (e.g., 6.5%) – the same factor as proposed in PRD rules. • Any “push-back” associated with the asset is not eligible for energy payments. • The “push-back” continues to be eligible to provide capacity during the transition period.

  4. PRD Baseline Methodology • The baseline methodology proposed under the Order 745 compliance filing (see Section III.8 of Market Rule 1) will be applied to all assets associated with RTDR and RTEG resources participating in the FCM. • For purposes of measurement and verification, all RTDR and RTEG will be obligated to comply with this baseline methodology.

  5. Demand Resource Forecast Peak Hours • Eliminate the dispatch associated with Demand Resource Forecast Peak Hours, but continue to provide notification to Market Participants that Real-Time Demand Response may be dispatched on the subsequent operating day. • Demand Resource Forecast Peak Hours are those hours in which ISO New England recent next-day forecast shows a shortage of Thirty-Minute Operating Reserve (i.e., OP4) in the absent any dispatch of Real-Time Demand Response Resources.

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