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We're here at FERC HQ for a pre-filing conference on ISO-NE's upcoming fuel security proposal. Stream: ferc.capitolconnection.org
ISO-NE requested the conference to discuss its proposal, to be filed in October, with FERC staff without ex parte rules.
ISO-NE requested the conference to discuss its proposal, to be filed in October, with FERC staff without ex parte rules.
FERC directed ISO-NE to devise a fuel security framework after it decided to provide cost recovery for a large Exelon gas plant (and adjacent LNG import facility). But it's quite controversial. Background: utilitydive.com/news/iso-ne-ge…
Core of the issue here is that much of ISO-NE's gas fleet — 30% or 4.6 GW, one official just said — may be unable to get fuel during extended cold snaps when gas is diverted for home heating.
Short-term solution is to retain Mystic (which Exelon threatened to close) and its adjacent LNG import facility with ratepayer $$. But going forward, FERC wants ISO-NE to devise a market-based incentive to keep such "fuel-secure" plants around. That's the topic today.
The topic is bigger, however. PJM completed a fuel security analysis last year and FERC Chair Chatterjee has floated having other grid operators report on the subject: bit.ly/2xKvp0O
ISO-NE is floating 3 market solutions for fuel security:
-New energy option reserve services that will provide "sufficient on-demand energy in reserve before each day"
-Series of multi-day energy markets
-Seasonal forward markets
-New energy option reserve services that will provide "sufficient on-demand energy in reserve before each day"
-Series of multi-day energy markets
-Seasonal forward markets
On the first point, ISO-NE is floating a new "on-call" energy option for plants that can be ready to go if the ISO calls on them unexpectedly.
In practice, this means ISO-NE would expand its energy-only market to include a "series of options" that would give the ISO the right to call on them in real time.
ISO-NE official from real-time transcript:
ISO-NE official from real-time transcript:
Some details on ISO-NE's fuel security option proposal:
Basically seems to boil down to a reserve product in the day-ahead market
Basically seems to boil down to a reserve product in the day-ahead market
(apologies for the blurry screenshots -- pulling them straight from the stream)
We're still going thru the details here, but a big Q I have off the bat: Isn't ISO-NE's capacity market supposed to solve for many of these issues already?
Oh -- Ari's got you covered as always
In long term, ISO-NE says fuel security changes in day-ahead market could result in long-duration storage investment, new LNG facilities for winter gen, and even new dual-fuel plants (v tough to permit in NE)
The Chairman just walked in and sat down. Commissioner Glick, the Democrat who's been critical of fuel security arguments, has been here the whole time.
ISO-NE now explaining their plan to expand the day-ahead market to SIX days. Participation would be voluntary, market would be re-cleared each day
More details here. Day-ahead energy options would be cleared each day.
"We want to give the market every opportunity over successive days to close that gap on its own accord, [and] only buy the option at the last opportunity to do so — one day before," ISO-NE says
"We want to give the market every opportunity over successive days to close that gap on its own accord, [and] only buy the option at the last opportunity to do so — one day before," ISO-NE says
ISO-NE expects some v interesting impacts on the capacity market from its proposal, including a "reshuffling" of the supply stack that would allow fuel-secure resources to clear more often
Here's how ISO-NE explained it from the real-time transcript.
Fuel-secure resources would get paid more thru new multi-day energy market, allowing them to lower their capacity market bids, which would mean more of them clear the capacity market.
Fuel-secure resources would get paid more thru new multi-day energy market, allowing them to lower their capacity market bids, which would mean more of them clear the capacity market.
So if you're a fuel-secure plant, you could get revenue from the new multi-day market AND have a better chance of clearing capacity market. Sounds like a p. good deal!
ISO-NE will file only multi-day energy market proposal in Oct. The seasonal forward market will take longer
We're back from a break and Com. Glick is asking whether ISO-NE should use incentives or penalties to ensure fuel security.
ISO-NE says they just want to make the incentive or penalty strong enough to push generators to keep fuel onsite.
ISO-NE says they just want to make the incentive or penalty strong enough to push generators to keep fuel onsite.
Sure sounds like ISO-NE may ask for an extension on the Oct. deadline...
yeah or this
We're back here after lunch and we're hearing from ISO-NE stakeholders on the proposal.
So far, most of the chat I've heard is folks bewildered by its complexity and frustrated that all of it won't be filed in October.
So far, most of the chat I've heard is folks bewildered by its complexity and frustrated that all of it won't be filed in October.
The other concern is being outlined by NESCOE right now.
Will the plan actually change generator behavior? Or will the new revenues in the multi-day market just be balanced out by lower capacity market revenues?
Will the plan actually change generator behavior? Or will the new revenues in the multi-day market just be balanced out by lower capacity market revenues?
From a different perspective, if the plan DOES end up paying generators more, aren't you just pancaking payments v. similar services in energy and capacity markets? That will be concern from consumer advocates, clean energy folks.
NESCOE wants FERC to "reassess" its October filing deadline for the ISO-NE fuel security proposal so the grid operator can give a "fully developed" proposal
Maine PUC Chair Bartlett outlines the consumer concern about the ISO-NE plan. He doesn't want to end up "compensating generators for what they’re already doing."
CT Com. Dykes raises the point below, saying ISO-NE proposal "addresses the same problems the capacity market was supposed to address," and be improved on by pay-for-performance.
R Street's Travis Kavulla (fmr MT regulator) is tweeting on the FERC meeting and noticed Com. Dykes's comment as well
Mass. DPU Chair Nelson is singing from the same sheet. State regulators really don't want to just pay plants more for nothing, and they aren't convinced the ISO proposal won't do that.
Commissioner Glick is here and looks profoundly uncomfortable as the states slam the ISO proposal.
Chatterjee didn't come back yet after lunch.
Chatterjee didn't come back yet after lunch.
New Hampshire Commissioner Bailey piles on as well:
“I implore you to consider altering the schedule to give us all time to make sure this is just and reasonable for our consumers.”
“I implore you to consider altering the schedule to give us all time to make sure this is just and reasonable for our consumers.”
Glick asks what FERC/ISO can do to make sure plants aren't just paid more to do the same
States say ISO needs to do a fuller impact analysis of the proposal. Multiple regulators have called for that as they urge FERC to alter its schedule here.
States say ISO needs to do a fuller impact analysis of the proposal. Multiple regulators have called for that as they urge FERC to alter its schedule here.
How would the impact analysis change things?
NESCOE says the consultant would look at how people would put their bids together under new market structure. That, in turn, "opens up 20 more questions," so more time is needed.
NESCOE says the consultant would look at how people would put their bids together under new market structure. That, in turn, "opens up 20 more questions," so more time is needed.
Nelson (Mass.) notes that ISO-NE has said it won't file the multi-day ahead market or seasonal reserve market in Oct.
FERC, states say, should delay to allow those two to be filed along with ancillary service changes, because they all fit together
FERC, states say, should delay to allow those two to be filed along with ancillary service changes, because they all fit together
Now the states are saying FERC should convene ANOTHER tech conference AFTER the impact analysis is completed.
But ISO hasn't said how long that analysis would take yet...
But ISO hasn't said how long that analysis would take yet...
Ok we're back after a break with the NEPOOL stakeholders — generators, end users, enviro. and consumer advocates and more.
Glick has left but Chatterjee is back and Com. McNamee has joined us for the first time today.
Glick has left but Chatterjee is back and Com. McNamee has joined us for the first time today.
NEPOOL doesn't have a position yet on the ISO-NE proposal because its members will vote on it in 3 months.
So we'll get a diverse cross section of views in this panel,
So we'll get a diverse cross section of views in this panel,
EDF says the proposal isn't fuel neutral. It "focuses exclusively on the supply side" and does not incentivize efficiency or renewables, both of which can reduce stress on pipelines.
Market rules could also limit storage to one charge/discharge per day, Director Liz Delaney says
Market rules could also limit storage to one charge/discharge per day, Director Liz Delaney says
NRG is hammering away on this, concerned any new payments attributed to onsite energy supplies "will be deducted" from the plant's capacity market revenues.
Net effect, Reg Affairs Director Neal Fitch says, is some plants may be worse off than if there were no changes at all
Net effect, Reg Affairs Director Neal Fitch says, is some plants may be worse off than if there were no changes at all
"Revenue-neutral solutions are no solutions at all," Fitch says.
Chatterjee also just stepped out. McNamee the only regulator remaining.
Chatterjee also just stepped out. McNamee the only regulator remaining.
CLF's David Ismay hits the plan for not valuing renewables, bringing up this ISO-NE analysis showing how offshore wind can reduce system stress during cold spells bit.ly/2lyxn1s
that analysis found a large offshore wind facility near Mass. would have operated at a 70% capacity factor during the 2018 bomb cyclone
Was writing, but NRG and Calpine have also now slammed the ISO plan and offered their own fuel security ideas.
McNamee also just got up and left.
McNamee also just got up and left.
