FERC accepts ISO-NE’s four-zone model for FCA #8; ISO-NE to embark on stakeholder process

In its May 31, 2013 order, the Federal Energy Regulatory Commission (FERC) approved the ISO’s four-zone model for FCA #8—New England’s eighth Forward Capacity Auction (FCA). The ISO will begin a stakeholder process to analyze capacity zones for future FCAs on June 18, 2013.

Combining Eight Zones Into Four

The Forward Capacity Market (FCM) was developed by the ISO, the six New England states, and industry stakeholders to promote investment in generation and demand-response resources to meet future demand. Under the FCM, the ISO projects the capacity needs of the region’s power system three years in advance, and then holds an annual auction—the FCA—to purchase the necessary power resources. Resources that clear in the auction are obligated to provide power or curtail demand when called upon by the ISO.

In February 2014, FCA #8 will procure capacity for the June 1, 2017 to May 31, 2018 commitment period. The ISO had previously proposed modeling eight capacity zones for FCA #8, based on the eight existing energy load zones. However, the ISO argued in December 2012 and aMarch 14 follow-up filing that major power system improvements have eased the flow of power around the region, and that eight zones could result in substantial inefficiency in the FCM.

Instead, the ISO requested that the four-zone model used in FCA #7 be retained for FCA #8 and beyond, pending further analysis by the ISO and stakeholders. This four-zone model breaks out Maine, Connecticut and Northeast Massachusetts and Greater Boston (NEMA/Boston) into separate zones and combines five of the eight energy zones (New Hampshire, Rhode Island, Southeastern Massachusetts, Vermont, and Western/Central Massachusetts) into a single Rest-of-Pool (ROP) Capacity Zone.

Stakeholder Process

The ISO has committed to a stakeholder process beginning in the second quarter of 2013 to address how New England’s capacity zones and associated zonal requirements are determined over time. This process will consider, for example:

  • the appropriate level of zonal modeling going forward
  • the appropriate rules to govern intra- and inter-zonal transactions
  • objective criteria to revise the number and boundaries of capacity zones automatically as the relevant conditions change.

The first meeting on this matter will take place June 18. See the ISO’s Reliability Committee page for details. The ISO will file a schedule for completion of these tasks with FERC no later than July 30, 2013.

Resources For FCA #8 Participants

FCA #8 materials, such as schedules and qualifications, can be found on the ISO’s Forward Capacity Market page.

The ISO also held a series of related web conferences earlier this year. Recordings are available on the ISO’s Training & Events Network (ISO-TEN):

You can also access the conference materials on the FCM training materials page.