Carissa P. Sedlacek

Carissa P. SedlacekM A N A G E R , R E S O U R C E I N T E G R A T I O N A N D A N A L Y S I S

Reliability Committee Meeting

Forward Capacity Auction #6 (FCA #6) Results Summary

M A Y 1 5 , 2 0 1 2 | W E S T B O R O U G H , M A

Stephen J. RourkeV I C E P R E S I D E N T , S Y S T E M P L A N N I N G

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Highlights

• The sixth Forward Capacity Auction (FCA #6) was held April 2-3 and successfully procured resources to satisfy the region’s Installed Capacity Requirement (ICR) for the 2015/2016 Capacity Commitment Period (CCP)

• Approximately 38,601 MW of qualified resources competed to provide the needed 33,456 MW of capacity (Net ICR)

• Of the qualified new resources, about 84% (or 2,041 MW) of new resources (generation, imports, demand resources) cleared the auction and have a Capacity Supply Obligation (CSO)

• Approximately 1,889 MW of de-list bids submitted were approved. Those not approved and retained for reliability were in the NEMA/Boston load zone

• A dynamic de-list bid for Vermont Yankee (604 MW) was accepted

• The ISO filed results of FCA #6 with FERC on April 30

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FCA #6 Overview

• There were seven rounds in which Participants could submit bids and offers

• Starting price was $11.446/kW-mo

• Ending price was $3.434/kW-mo

• Cleared MW will receive a prorated payment of $3.129/kW-mo unless they elect to prorate their MW obligation

• FCA #6 results FERC Filing made on April 30 is available at:– http://www.iso-ne.com/regulatory/ferc/filings/2012/apr/er12-___-000_04-30-12_6th_fc

a_results_filing.pdf

• The resource proration election window was April 9-11 and results were provided to Participants (via MIS report) in early May– No resources in the NEMA/Boston load zone were allowed to prorate due to

the fact some resources were retained for reliability

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FCA #6 Auction Details

• ICR for June 1, 2015 through May 31, 2016 is 34,498 MW– After accounting for 1,042 MW of Hydro-Québec Installed Capacity Credits, 33,456

MW remained to be procured (Net ICR)

• Approximately 38,731 MW of resources qualified to participate in FCA #6 at the time of the Informational Filing – However, due to new resource termination and/or withdrawal from Critical Path

Schedule monitoring, only 38,601 MW of qualified resources actually did participate – Qualified Existing Resources (36,174 MW)

• 32,076 MW of Generating Capacity, including Intermittent*• 315 MW of Import Capacity• 3,783 MW of Demand Resources

– Qualified New Resources (2,427 MW)• New Supply Resources (1,953 MW)

– 133 MW Generating Capacity– 1,820 MW Import Capacity

• New Demand Resources (474 MW)

* Includes new RTEG which receives existing treatment in the auction

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FCA #6 Auction Details, cont.

• Approximately 617 MW (uncapped by Maximum Capacity Limit (MCL) and Real-Time Emergency Generation (RTEG)) remained at the floor price– Existing Resources (34,285 MW)*

• 30,954 MW of Existing Supply Resources– 30,678 MW of Generation Capacity– 276 MW of Import Capacity

• 3,331 MW of Existing Demand Resources– New Resources (2,041 MW)

• New Supply Resources (1,727 MW)– 79 MW of Generation Capacity– 1,648 MW of Import Capacity**

• New Demand Resources (314 MW)

• Approximately 36,309 MW (capped by RTEG) total capacity was used to calculate the effective payment rate

* Accounts for Non-Price Retirements and includes new RTEG ** Capped by Interface Limits

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New Capacity Resources by State

CT16%

MA46%

ME7%

NH5%

RI17%

VT9%

Demand Resources*314 MW

Generation79 MW

* Includes 8% T&D Gross-up and new RTEG

MA28%

ME 60%

NH12%

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On Peak 65%

Real Time21%

Real Time EG1%

Seasonal Peak 13%

New Demand Resources by Type314 MW Total

Includes approximately 247 MW of New Energy Efficiency Projects

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New Generation by Type79 MW Total

Combined Cycle13%

Hydraulic Turbine

14%

Photovoltaic1%

Wind Turbine72%

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Trends in New Capacity Resources

FCA #1 FCA #2 FCA #3 FCA #4 FCA #5 FCA #6FCA New Cleared Capacity

0

500

1000

1500

2000

2500

3000

3500

Generation Imports Demand Response

MW

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FCA #6 De-list Details

• A total of 191 de-list bids (approximately 1,968 MW) were received from resources in all six New England states. Approximately 96% were accepted– Permanent, static, exports and administrative export bids were submitted

prior to the auction at prices greater than 0.8 X Cost of New Entry (CONE)• 10 resources submitted (approximately 351 MW)

– All 351 MW were accepted– Additional static de-list bids were submitted by the ISO on behalf of the

Participant due to the inability to qualify winter MW (“low winter flag”)• Submitted for 31 resources representing 122 MW (22 MW in NEMA)

– All 122 MW were accepted– Dynamic de-list bids are submitted during the auction at prices less than 0.8 X

CONE (or below $4.758/kW-mo) • 150 dynamic de-list bids (approximately 1,495 MW)

– 1,416 MW accepted– 79 MW denied (6 dynamic de-list bids in the NEMA/Boston load zone)

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Approved Submitted De-list Bids by State

1,889 MW Total

CT29%

Imports2%

MA24%

ME6%

NH2%

RI3%

VT34%

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FCA #6 De-list Details, cont.• A dynamic de-list bid for Vermont Yankee (604 MW) was accepted for FCA #6

based on completion of various system upgrades in MA and VT that resolve identified reliability concerns

– A dynamic de-list bid was also submitted in FCA #4 & 5 but the resource was retained for reliability in those auctions

• De-list bid submittal trends are starting to emerge– AES Thames

• Cleared a Dynamic De-list bid for the unit in FCA #5 & 6 – West Springfield 3

• Cleared a Dynamic De-list bid for the unit FCA #5• Cleared a Static De-list bid for the unit FCA #6

– Bridgeport Harbor 2• Cleared a Dynamic De-list bid for the unit in FCA #4, 5, & 6

– Somerset Jet 2• Cleared a Static De-list bid for the unit in FCA #3, 4, & 5• Cleared a Permanent De-list bid for the unit in FCA #6• Retired effective 4/20/2012

– Somerset 6• Cleared a Static De-list bid for the unit in FCA #1, 2, 3, 4, & 5• Cleared a Permanent De-list bid for the unit in FCA #6• Retired effective 4/18/2012

• Resources are also exiting the market via Annual Reconfiguration Auctions and Bilaterals

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Example – Real Time Emergency GenerationChange in Capacity Supply Obligations (CSOs)

0

100

200

300

400

500

600

700

800

900

1000

FCA 1 FCA 2 FCA 3 FCA 4 FCA 5 FCA 6

FCA Cleared CSO Latest CSO

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Resources Retained for Reliability

• Few resources retained for reliability previous auctions– Norwalk Harbor Unit 1 in FCA #1

• Unit #2 was later allowed to de-list– Salem Harbor Units 3 & 4 for FCA #3, 4 and 5

• Area transmission upgrades ongoing• Restudy results for the fourth Capacity Commitment Period being

discussed later today– Vermont Yankee for FCA # 4 and 5

• Area transmission upgrades ongoing• Restudy results for the fourth Capacity Commitment Period being

discussed later today

• These resources were retained for local reliability reasons

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0

500

1,000

1,500

2,000

2,500

3,000

FCA #1 FCA #2 FCA #3 FCA #4 FCA #5 FCA #6

DR Generator Import

Meg

awatt

sTrends in De-list Bids Submitted

79 MW Rejected604 MW

Rejected

1,191 MW Rejected581 MW

Rejected

0 MW Rejected

330 MW Rejected

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Resources Retained for Reliability in FCA #6

• There were six dynamic de-list bids (79 MW) rejected– All in the NEMA/Boston load zone– Five demand resources– One partial de-list from the Kendall Steam generating facility

• Restudy of these rejected de-list bids will begin this summer with the hope of allowing these resources to de-list based on changes in load forecast and other assumptions

Price ID Resource Name De-list BidAmount (MW) Round Resource

Type

$4.577 37871 RTDR_50017_Boston (7507) -38.866 5 DR$4.577 37040 KENDALL STEAM -27.379 5 GEN$4.292 37997 RTEG_50017_North Shore (7508) -4.830 5 DR$4.291 37986 RTDR_RTEG_50689_North Shore (7508) - Grp A -2.526 6 DR$4.291 17301 RTEG_50689_North Shore (7508) -3.500 6 DR$3.863 37991 RTEG_50017_Boston (7507) -1.512 6 DR

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Next Steps for the Rejected De-list Bid

• A presentation to the RC is expected to be made in June to discuss in detail the resources that were retained for reliability (de-list bid rejection)

• In accordance with Planning Procedure No. 10, Section 7.5.1., an advisory RC vote regarding concurrence with how the analyses for the rejected De-list Bids was conducted is required and expected in June – “…The Reliability Committee shall provide formal input and advice to the ISO

with regard to rejected de-list bids after the relevant FCA through an advisory vote….”

• Pursuant to Market Rule 1, Section III.13.2.5.2.5.1(a)(ii), these resources will continue to be re-evaluated prior to June 1, 2014 to determine if it may be allowed to de-list

Reliability Committee Meeting

Forward Capacity Auction #6 (FCA #6) Results Summary – Appendix

M A Y 1 5 , 2 0 1 2 | W E S T B O R O U G H , M A

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Summary of Auction Rounds withExcess Supply and Price Changes

Round Start Price End Price Delta $ Excess Start1 Excess End1 Delta MW

1 11.446 6.868 4.578 4656.835 4372.869 283.966

2 6.868 5.723 1.145 4372.869 4280.766 92.103

3 5.723 5.151 0.572 4280.766 4197.273 83.493

4 5.151 4.578 0.573 4197.273 4151.505 45.768

5 4.578 4.292 0.286 4151.505 2956.207 1195.298

6 4.292 3.863 0.429 2956.207 2840.203 116.004

7 3.863 3.434 0.429 2840.203 2821.658 18.545

1capped by Import Interface Limits and MCL

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Results of New England’s FCA #6

Price at end of auction:$3.434/kW-Mo

(Floor price: 0.6 X CONE)

Resources Capped by RTEG 36,309 MW

Need in 2015 (NICR):

33,456 MW

Effective Payment Rate ($/kW-Mo):

$3.129

RTEG:$3.044

Price at beginning of auction:

$11.446/kW-Mo(2 X CONE)

On Peak 1,288 MW

Seasonal Peak 355 MW

Real Time 1,385 MW

Real Time EG 617 MW

New Resources: 2,427 MW

Existing Resources:36,174 MW

Demand: 474 MW

Generating:32,076 MW

Imports:315 MW

Imports:1,820 MW

Demand:3,783 MW

Generating:133 MW

Excess Capacity:2,853 MW

(Total cleared minus net ICR capped by

RTEG)

Capacity Zones: One

No Price Separation

Qualified Resources Entering the Auction:

38,601 MW

Existing:30,678 MW

New:79 MW

Generating Resources:30,757 MW

Existing:3,331 MW

New:314 MW

Demand Resources:3,645 MW

Existing:276 MW

New:1,648 MW

Cleared Imports:1,924 MW

Import: 39 MW

Demand: 452 MW

Generating: 1,398 MW

MW from existing resources requesting

to de-list 1,968 MW

Rejected:79 MW

Approved: 1,889 MW

Resources cleared (uncapped) in the

auction at the floor price:

36,326 MW