ISO-NE: Installed capacity requirement for 2017/2018 is 33,855 MW

ISO New England (ISO-NE), in its recent installed capacity requirement (ICR) filing with FERC, said that the ICR for 2017/2018 is 33,855 MW, which is the amount of generation and demand side resources that must be acquired in the eighth forward capacity market auction (FCA), to begin on Feb. 3, 2014.

According to the Nov. 5 filing, in which ISO-NE was joined by the New England Power Pool Participants Committee, the ICR is a measure of the installed resources that are projected to be necessary to meet reliability standards in light of total forecast load requirements for the New England Control Area and to maintain sufficient reserve capacity to meet reliability standards.

More specifically, the filing noted, the ICR is the amount of resources needed to meet the reliability requirements defined for the New England Control Area of disconnecting non-interruptible customers – a loss of load expectation, or LOLE – no more than once every 10 years.

ISO-NE said in its Nov. 26 ISO Newswire that the filing also noted the level of resources needed in import-constrained and export-constrained load zones in New England.

The local sourcing requirements (LSR) for the import-constrained Connecticut and Northeast Massachusetts/Boston (NEMA/Boston) load zones are 7,319 MW and 3,428 MW, respectively. The maximum capacity limit for Maine, which is an export-constrained zone, is set at 3,960 MW, ISO-NE added.

According to the filing, an LSR is “the minimum amount of capacity that must be electrically located within an import-constrained load zone,” while a maximum capacity limit is “the maximum amount of capacity that can be procured in an export-constrained load zone [to meet the installed capacity requirement].”

The general purpose of LSR and maximum capacity limits is to procure capacity resources such that, when considered in combination with the transfer capability of the transmission system, are electrically distributed within the New England Control Area in a manner that ensures that the minimum amount of resources purchased in the FCA will meet the Northeast Power Coordinating Council’s and ISO-NE’s bulk power system reliability planning criteria.

The filing further noted that the 2017/2018 capability year begins on June 1, 2017, and ends on May 31, 2018. The upcoming February auction is the primary FCA for the 2017/2018 capability year.

ISO-NE proposes an installed capacity requirement value of 34,923 MW, which accounts for tie benefits, or emergency energy assistance, assumed obtainable from New Brunswick, New York and Quebec of 1,870 MW, but it does not reflect a reduction in capacity requirements relating to Hydro-Québec Interconnection Capability Credits (HQICCs).

HQICCs are capacity credits that are allocated to the interconnection rights holders, which are entities that pay for and, consequently, hold certain rights over the Hydro-Québec Phase I/II HVDC transmission facilities.

The HQICC value of 1,068 MW per month is applied to reduce the portion of the ICR that is allocated to the interconnection rights holders. Thus, the filing added, the net amount of capacity to be purchased in the FCA to meet the ICR, after deducting the HQICC value of 1,068 MW per month, is 33,855 MW.

ISO-NE requested that FERC accept the values reflected in the filing effective Jan. 6, 2014.

The values for this year’s filing, as in previous years, are based on three essential components: the load forecast, resource availability and tie benefits. As in past years, the filing added, ISO-NE developed the initial ICR recommendation with stakeholder input, which was provided in part through the NEPOOL committee processes through review by NEPOOL’s Power Supply Planning Committee during the course of four meetings, by the NEPOOL Reliability Committee at its Sept. 18 meeting, and by the NEPOOL Participants Committee at its Oct. 4 meeting.

In discussing load forecast, the filing noted, for instance, that the projected New England Control Area summer 50/50 peak load for the 2017/2018 capability year is 29,790 MW.

Among other things, the filing said that tie benefits from neighboring control areas reduce the ICR and the need to buy capacity to meet the New England resource adequacy criterion. The tie benefits from neighboring control areas reflect the amount of emergency assistance from neighboring control areas that New England could rely on, without jeopardizing reliability in New England or the neighboring control areas, in the event of a capacity shortage in New England.

ISO forecasts adequate capacity to meet electricity demand this winter

In a Dec. 4 statement, ISO-NE said that resources needed to meet consumer demand for electricity are expected to be adequate during the 2013/2014 winter season in New England.

However, the region’s reliance on natural gas power plants to produce more than half of the electricity generated in the region, combined with the “just-in-time” fuel delivery system to these power plants, can challenge the power system’s reliable operation. Those reliability risks are especially acute during cold weather when demand for natural gas for heating and electricity generation is high, ISO-NE added.

ISO-NE has implemented a winter reliability program to run from Dec. 1 to Feb. 28, 2014, as an interim solution to help improve resource availability and power system reliability in the event of colder-than-normal weather. ISO-NE added that through a competitive bidding process, the program successfully procured nearly 2 million megawatt-hours of incremental energy from oil-fired generators, dual-fuel generators and demand response resources that can reduce power consumption.

At normal winter temperatures of about 7 degrees Fahrenheit, the peak demand is projected to be about 21,300 MW, ISO-NE said, adding that if extreme winter weather of 2 degrees Fahrenheit occurs, demand could reach 21,935 MW.

Both forecasts take into account reductions in electricity demand from region-wide energy efficiency programs. Without the effect of about 1,145 MW from energy efficiency acquired through the region’s forward capacity market (FCM), the forecast for peak demand during normal winter weather would be 22,445 MW and the peak demand forecast for extreme winter weather conditions would be 23,080 MW, ISO-NE added.

Generation totaling about 29,835 MW has an obligation through the FCM to be available this winter, but a generator’s maximum possible output may be greater than its capacity supply obligation, ISO-NE said.

Through the FCM, the region has also procured about 1,080 MW of net electricity imports from neighboring power systems and about 565 MW of demand response resources that can be called on to reduce electricity use during tight system conditions, the ISO said.

Among other things, ISO-NE said that last winter, the demand for electricity peaked at 20,887 MW on Jan. 24, 2013, and the all-time winter peak of 22,818 MW was set on Jan. 15, 2004, during a cold snap. The highest demand ever recorded in the region was 28,130 MW, which was reached on Aug. 2, 2006, the ISO said.

About Corina Rivera-Linares 3152 Articles
Corina Rivera-Linares, chief editor for TransmissionHub, has covered the U.S. power industry for the past 15 years. Before joining TransmissionHub, Corina covered renewable energy and environmental issues, as well as transmission, generation, regulation, legislation and ISO/RTO matters at SNL Financial. She has also covered such topics as health, politics, and education for weekly newspapers and national magazines. She can be reached at clinares@endeavorb2b.com.