Step 1: Qualification of Existing Resources
This section provides an overview of how existing resources are qualified for a Forward Capacity Auction (FCA). Details can be found by accessing the “FCM Existing Capacity Qualification Process” training module available on the Training Materials webpage.
An existing generator is one that previously has been either of the following:
- Listed as a resource in the Forward Capacity Market (FCM)
- In receipt of a capacity supply obligation (CSO) for a prior capacity commitment period (CCP)
The capacity of each resource must be at least 100 kW to participate in a Forward Capacity Auction, except for resources registered with the ISO before February 2007 or renewable technology resources (RTRs) that were at least 100 kW when they first qualified as new, but were impacted by RTR proration.
Qualification Timeline
Actual Forward Capacity Auction (FCA) schedules are available in the Forward Capacity Tracking System (FCTS) and posted to the ISO website.
Here is a basic/typical timeline of events for an existing resource:
Deadline for Submitting Characteristic Changes
Participants may request to change a resource or asset attribute by contacting Participant Support. The requested attribute change must be finalized within the window described in Market Rule 1, Section III.13.1.2.1.1, which can only occur shortly after the completion of the preceding FCA. (Learn how to access the auction calendars.)
Qualifying Increments or Modifications with a Show of Interest (SOI)
Existing capacity resources that meet the criteria noted in Market Rule 1, Section III.13.1.1.1.2, Resources Previously Counted as Capacity, can enter a show of interest (SOI) application during the SOI window to qualify the capacity as new. (See the Qualification Process section information for new resources.)
Proposals to increase an existing resource’s capacity that meet the criteria set forth in Market Rule 1, Section III.13.1.1.1.3(a), Incremental Capacity of Resources Previously Counted as Capacity, can enter an SOI application during the SOI window to qualify the incremental capacity as new. This section defines the megawatt threshold that must be met to have increased megawatts considered as new incremental capacity. If these megawatts do not meet the minimum cost criteria set forth in Section III.13.1.1.1.3(b), the project may be treated as “existing” in the FCA (see Market Rule 1, Section III.13.1.2.2.5, Adjustment for Certain Significant Increases in Capacity).
Seasonal significant increase amounts plus the seasonal existing qualified capacity values must be less than the resource’s capacity network resource capability (CNRC), unless a valid interconnection request was submitted before the SOI window for that CCP.
Note that qualified incremental projects or significant increase projects may be subject to the ISO’s automatic matching of qualified additional capacity.
Existing Capacity Summer/Winter Maximum Values
The maximum existing capacity value is the maximum capacity the resource cleared in an FCA capped by the CNRC value assigned to the resource. This value is calculated separately for both summer and winter seasons.
Lead Market Participant Changes
Any modifications to the resource’s listed lead market participant must be made no later than 15 days before the FCA. To transfer the lead market participant on an FCM resource, submit an Ask ISO case with a completed Lead Market Participant Change Request form. The ISO will review and process the transfer.
Rationing Minimum Limit Changes
Changes to the resource’s rationing minimum limit must be made before the close of the static de-list bid finalization window. To change the rationing minimum limit, submit an Ask ISO case with the new value.
Step 2: View Your Existing Qualified Capacity
Calculation
The ISO will calculate the appropriate qualified capacity values for existing resources and notify participants via the Existing Capacity Qualification Market Information Server (MIS) report. Once these values are posted, the ISO opens the challenge window.
The existing qualified capacity value for generators is calculated as detailed in Market Rule 1, Section III.13.1.2.2, Qualified Capacity for Existing Generating Capacity Resources. In short:
- Non-intermittent generators: Summer and winter qualified capacity will be calculated as the median of the most recent five summer and winter claimed capability ratings, with only positive, nonzero ratings included in the calculation.
- Intermittent power resources: Summer qualified capacity is the average of the median of the resource’s net output during hours ending 2:00 p.m. to 6:00 p.m. for the most recent five years. Winter qualified capacity is the average of the median of the resource’s net output during hours ending 6:00 p.m. to 7:00 p.m. for the most recent five years.
Viewing Your Qualified Capacity Value
After the ISO issues initial MIS reports, existing qualified capacity values will be viewable in the Forward Capacity Tracking System (FCTS). Issuance dates for initial MIS reports vary by Forward Capacity Auction. You can find the specific date in the appropriate auction calendar. (Learn how to access the auction calendars.) An email notice will be sent out to prompt participants to review their resource information. To receive these emails, as well as all other FCM notices, subscribe to the Capacity (ICAP and FCM) Announcements mailing list (hit send when the subscription email opens).
To view your existing qualified capacity values in the FCTS:
- Select the resource on the Existing Capacity Summary Link search screen.
- On the Resource Information page, select the Summary tab to see the Existing Qualified Capacity Values.
Any changes to a resource’s qualified capacity will be reflected in the initial MIS report. The report will also flag any significant decreases in capacity, if applicable. Resources that have been flagged with a significant decrease can submit a critical path schedule describing the measures that will be taken to restore the summer qualified capacity. If a critical path schedule is not submitted, the summer qualified capacity will be de-rated to the most recent summer seasonal claimed capability value. For more details, see the “FCM Existing Capacity Qualification Process,” training module available on the Training Materials webpage.
Challenging the Qualified Capacity Value
Within a window of five business days, participants may request, via the FCTS, a change to either or both a resource’s summer or winter existing qualified capacity values if they believe the calculation of qualified capacity megawatts contained an error. This window is only to address the qualified capacity calculation. To increase a resource’s capacity, a show of interest must be submitted. To reduce the qualified capacity, a de-list bid must be submitted. For details on challenge options, see the “FCM Existing Capacity Qualification Process” training (see More Information below). All challenges are subject to the ISO’s review.
Final Qualified Megawatts
Five business days after the challenge window closes, the ISO releases a second MIS report to the FTP sites with the final qualified megawatt amounts, which will also be viewable in FCTS.
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Step 3: Remove Capacity for a Single CCP (Optional)
FCM participants can remove existing resources, in part or entirely, from participation in one or more Forward Capacity Auctions (FCAs) by submitting de-list bids. If an existing resource does not submit a de-list bid during the appropriate window, the resource will be entered in the FCA. Some key points are as follows:
- If the ISO accepts the de-list bids, as discussed below, the capacity will be removed for a single capacity commitment period (CCP) only. The megawatts associated with the de-list bid are treated as existing capacity in the next CCP.
- Resources that wish to permanently retire some or all capacity should see the section on submitting a permanent de-list bid or retirement de-list bid.
Except in the case of a retirement de-list bid, all de-listed megawatts are allowed to continue participation in the energy and ancillary markets.
Types of Single CCP De-List Bids
Several types of de-list bids exist, all of which must be submitted during the qualification period before an FCA except dynamic de-list bids:
- Export bids provide an option to remove capacity from the capacity market to export capacity to an external control area (cost justification required).
- Administrative export de-list bids provide an option to remove capacity from the capacity market if an export bid has been entered and has cleared in a prior FCA.
- The lead market participant must submit documentation demonstrating a contractual obligation to sell capacity outside the New England Control Area.
- Static de-list bids (ambient air) provide an option to remove capacity from the capacity market for up to the megawatt amount that may not be physically available due to the difference between the summer qualified capacity at 90掳F and the expected rating of the resource at 100掳F.
- Static de-list bids (general) provide the ability to remove capacity from the capacity market at prices at or above the dynamic de-list bid threshold for a single CCP (cost justification required).
- Prices submitted must be equal to or greater than the dynamic de-list bid threshold.*
- The lead market participant must submit a completed cost workbook and an affidavit executed by a corporate officer attesting to the accuracy of the de-list package.
- The lead market participant must indicate whether a resource will be participating in the energy and ancillary service markets.
- Dynamic de-list bids provide the ability to remove capacity from the capacity market at prices below the dynamic de-list bid threshold for a single CCP.*
* Additional information is available in Market Rule 1, Section III.13.1.2.3.1.A, Dynamic De-List Bid Threshold. For specific details for each FCA, see the FCM Parameters.
How to Submit a De-List Bid
Use the appropriate online system noted below to submit the desired type of de-list bid. See the “FCM Delisting” training module available on the Training Materials webpage for detailed instructions.
To prepare and calculate a de-list bid, follow these steps:
- Email AskISO@iso-ne.com to request the inframarginal rent (IMR) and the inflation index as published by the Federal Reserve Bank of Cleveland. These are inputs into the resource’s net going-forward costs.
- Download and complete de-list models and user guides available on the FCM page. This workbook, along with supporting documentation, should be uploaded into the Forward Capacity Tracking System (FCTS) before the existing capacity qualification deadline. Check for the specific deadline date in the FCA calendar. (Learn how to access the auction calendars.) Please note:
- The net going-forward costs are costs incremental to obtaining a capacity supply obligation (CSO) and are therefore avoidable if the resource does not have a CSO. Unavoidable costs are not to be included in the calculation of the net going-forward costs.
- Any adjustments to components of the bid to reflect typical power year operations, such as revenues, fuel, and emissions, must include a description of the components being adjusted and the adjustment methodology.
- In your documentation, include data on the expected number and duration of capacity scarcity conditions, as well as the unit’s expected average capacity balancing ratio and expected average performance during those capacity scarcity conditions.
- You must include details of the risk premium analysis calculation. An affidavit executed by a corporate officer attesting to the accuracy of the risk premium calculation is optional.
- You must also provide additional detail and supporting evidence concerning opportunity costs including, but not limited to the following:
- Regulatory orders
- Environmental operating permits
- Contracts
Dynamic De-List Bids
Online System
Submitting dynamic de-list bids occurs in the FCA auction system via the auction bid/offer functions. Each bidder receives an FCA user guide, which provides instructions on how to submit dynamic de-list bids.
Deadline
Submissions occur during the FCA when prices are within the allowable range, as described in Market Rule 1, Section III.13.1.2.3.1.A, Dynamic De-List Bid Threshold.
All Other Types of Single CCP De-List Bids
Online System
Other types of de-list bids are submitted using the FCTS. See the Existing Qualification tab of the CCP in which the resource is de-listing.
Deadlines
Check for specific deadline dates in the FCA calendar. (Learn how to access the auction calendars.)
- Initial submissions are due by the existing capacity qualification deadline.
- Participants may modify static de-list bids during the static de-list bid finalization window no later than seven days after the ISO’s issuance of the qualification determination notification (QDN).
- Changes to a resource’s rationing minimum limit must also be submitted via an case before the close of the static de-list bid finalization window.
Pricing and Payment of De-List Bids
Accepted Bids
- Administrative export de-list bids are submitted at the FCA starting price. Once triggered, the associated capacity is removed at the start of the FCA.
- Static de-lists bids approved by the Internal Market Monitor (IMM) at prices greater than the FCA starting price are entered into the FCA at the FCA starting price.
- A resource with a static de-list bid cannot receive a CSO at the FCA starting price unless it has been retained for reliability.
- Static de-list bids at the FCA starting price retained for reliability will be subject to compensation under Market Rule 1, Section III.13.2.5.2.5.1, Compensation for Bids Rejected for Reliability Reasons.
Rejected Bids
- If a de-list bid is rejected for reliability reasons, the resource will be paid a “just and reasonable” rate as determined by FERC.
- If the IMM rejects a de-list bid for economic reasons during its review, resources deemed pivotal will not be allowed to de-list in the FCA at the submitted price.
Review of De-List Bids
De-list bids may be subject to review by the IMM, and all de-list bids are subject to a reliability review. Details can be found in ISO Planning Procedure No. 10, Planning Procedure to Support the Forward Capacity Market (PP 10), Section 7.
Dynamic de-list bids will undergo their reliability review between rounds of the FCA. Dynamic de-list bids will be accepted or rejected for reliability before the auction resumes.
Ambient Air Static De-List Bids
For ambient air static de-list bids, the ISO will validate physical limits (i.e., review the resource’s claim of temperature constraint limitations on its machines) during the qualification process.
An ambient air de-list bid is not subject to a cost review by the IMM. However, it is subject to an IMM market manipulation review.
Ambient air static de-list bids may not be altered after the close of the submission window for de-list bids.
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Step 4: Remove Capacity Permanently (Optional)
Forward Capacity Market (FCM) resources can exit the FCM permanently by using retirement de-list bids or permanent de-list bids.
You cannot use a permanent or retirement de-list bid in combination with single capacity commitment period (CCP) de-list bids. Single CCP de-list bids allow you to remove a resource from the FCM at a certain price for a specific CCP. (Learn about using single CCP de-list bids.)
Existing resources that don’t submit any type of de-list bid during the appropriate window will be entered in the Forward Capacity Auction.
Types of De-List Bids that Permanently Remove Capacity
The two types of bids that permanently remove capacity are as follows:
- Permanent de-list bids provide the option to permanently remove capacity from the capacity market at the start of the CCP.
- Retirement de-list bids are irrevocable requests to permanently remove capacity from all ISO markets at the start of the CCP.
Regarding participation in a substitution auction: Beginning with the February 2019 FCA, existing generating capacity resources or existing import capacity resources associated with external elective transmission upgrades may also participate in a substitution auction to retire. Resources submitting retirement de-list bids are required to participate. Be aware that some of the deadlines for the substitution auction overlap with those for the primary auction. See FCM Substitution Auction Overview and Timeline and Demand Participation in the FCM Substitution Auction for details.
Permanent and retirement de-list bids can be submitted for all or just a portion of a resource’s capacity:
- A partial de-list bid allows a resource to remove a portion of its megawatts from all ISO markets or from only the capacity market, depending on the type of de-list bid submitted:
- When a partial retirement de-list bid clears in the FCA, the resource remains active and all its interconnection rights are reduced to the appropriate megawatt level as described in Section II.48 of the Open Access Transmission Tariff (OATT).
- When a partial permanent de-list bid clears in the FCA, the qualified capacity value for the resource is reduced and its capacity related interconnection rights will be reduced to the appropriate megawatt level as described in Section II.48 of the OATT.
- A full de-list bid allows the resource to remove all its megawatts from all ISO markets or from only the capacity market, depending on the type of de-list bid submitted:
- Upon clearing a full retirement de-list bid, the resource and asset will be retired from all ISO markets and all the interconnection rights for the resource will be completely removed.
- Upon clearing a full permanent de-list bid, the resource will be removed from the capacity market starting with the CCP for which the de-list bid was accepted and the capacity-related interconnection rights will be completely terminated.
Deadlines and Process
- Permanent and retirement de-list bids are due by the existing capacity retirement deadline. (Learn how to access the auction calendars.)
- Use the Forward Capacity Tracking System (FCTS) to submit a permanent or retirement de-list bid. See the Existing Qualification tab for the CCP in which the resource is de-listing. See the “FCM Delisting” training module available on the Training Materials webpage for detailed instructions.
- Note the following when submitting the de-list bid:
- Prices must be submitted at greater than the dynamic de-list bid threshold in the first CCP from which the resource is seeking to permanently remove capacity. (Additional information is available in Market Rule 1, Section III.13.1.2.3.1.A, Dynamic De-List Bid Threshold. For specific details for each FCA, see the FCM Parameters.)
- The lead market participant must submit a completed cost workbook and an affidavit executed by a corporate officer attesting to the accuracy of the de-list package.
- For permanent de-list bids, the lead market participant must indicate whether a resource will be participating in the energy and ancillary service markets.
- The Internal Market Monitor (IMM) will review these requests and release a retirement determination notification (RDN) at least five business days before the existing capacity qualification deadline.
- Once the RDNs are released, the lead market participants for these resources have five business days to elect either retirement or conditional treatment (where the resource will retire unless the FCA clears above the submitted price). If no election is made, the default is to accept the price in the retirement determination notification.
- The ISO will make an informational filing with the Federal Energy Regulatory Commission no later than 20 days after the issuance of the RDNs.
- After the IMM informational filing, the ISO will discuss the reliability review with the NEPOOL Reliability Committee in August. Shortly after, the reliability determination notifications will be released.
- Before the auction, the ISO will review in descending price order all permanent and retirement de-list bids at or above the FCA starting price and permanent and retirement de-list bids for which the participant has opted for the ISO to review transmission security reliability. Participants will be notified whether their resource is needed for transmission security reliability following the ISO’s consultation with the Reliability Committee in August.
- The lead market participant can decline to provide the associated capacity for reliability no later than the fifth business day in September after the Reliability Committee meeting.
- If the resource requesting to retire does not clear a retirement de-list bid and instead obtains a capacity supply obligation, the resource’s retirement de-list bid will be automatically carried forward to the next FCA. The lead market participant can adjust the retirement de-list bid price, if desired, by submitting an updated cost workbook by the existing capacity retirement deadline.
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Step 5: Submit a Composite Offer (Optional)
A composite offer allows capacity resources that have each received a qualified capacity value to participate together to maximize their combined offer in a Forward Capacity Auction (FCA).
Submission Window
Composite offers can be submitted during the composite offer window for the desired FCA. (Learn how to access the auction calendars.) Composite offers can be modified or withdrawn in the Forward Capacity Tracking System (FCTS) until the composite offer deadline.
Finding Partners
- The ISO Seasonal Resource Capacity eBulletin Board provides a place where project sponsors of single-season capability resources can find a partner to participate in an FCA through a composite offer.
- An individual resource may also self-composite when that resource has an existing component and a new component. Note that in certain instances, the ISO will automatically match an existing resource’s newly qualified additional megawatts with existing seasonal capacity at the same resource.
Partner Eligibility Rules
Throughout the composite offer submittal process, the FCTS will enforce various validation rules on partner eligibility:
- Summer resources in import-constrained capacity zones may only pair with winter resources located in the same capacity zones.
- Summer resources in export-constrained capacity zones may pair with any winter resource in the same export-constrained zone.
- Summer resources in the Rest-of-Pool zone may pair with any resource not located in an export-constrained zone.
- A resource associated with a renewable technology resource election may only participate in a composite offer if its FCA qualified capacity has not been prorated.
Submitting the Offer
Composite offers are submitted into the Forward Capacity Tracking System (FCTS) by selecting a specific new or existing resource. For new resources, select the New Qualification tab, then the Composite Offer tab:
For existing resources, select the Existing Qualification tab, then the Composite Offer tab:
The project sponsors for the summer and winter resources must then cooperate to complete the following steps by the deadline. Composite offers submitted after the deadline will not be considered in the FCA. Please note:
- The FCTS will not automatically alert your composite offer partner that they must take action. You must do this.
- If submitting a self-composite, you must close the FCTS completely between steps.
FCTS Actions Required by Each Partner |
Summer resource |
|
Winter resource |
Initiate the composite offer in the FCTS. The Composite Offer Status will display as “Pending.” Ask your winter partner to act. |
1 |
|
|
2 |
Designate the winter resource to the composite offer. Status remains “Pending.” Ask your summer partner to act. |
Submit the composite offer. Status displays “Confirmed.” Ask your winter partner to act. |
3 |
|
|
4 |
Verify submission. Both participating resources should appear under Winter Resource Information (MW). If they don’t, contact Participant Support. |
Auction Bidding
Only the summer resource partner in a composite offer should bid in an FCA. Both resources do not need to bid individually.
Payments
Each resource will be paid individually.
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Step 6: Designate Self-Supplied Capacity (Optional)
A market participant may choose to cover its FCM obligations by using resources it owns or has contracted with. The contract or agreement usually takes place outside the ISO marketplace. Designating capacity from a resource as self-supply allows a load-serving entity (LSE) to satisfy its capacity load obligation using resources owned by or under contractual obligation to the LSE.
Deadline
For all resources—new or existing—the lead market participant must designate a resource as self鈥恠upplied no later than the date new resources are required to post their financial assurance for the same capacity commitment period. (Learn how to access the auction calendars.)
How to Designate Self-Supply
All self-supply designations are done through the Forward Capacity Tracking System (FCTS). The designation window opens after the ISO posts Market Information Server (MIS) reports on each load-serving entity’s projected share of the Installed Capacity Requirement.
The steps to submit a self-supply designation, which must be completed by the self-supply submittal deadline, are as follows:
- A resource’s lead market participant selects a specific LSE and capacity zone and designates the amount of qualified megawatts from a specific resource to be considered as self-supplied megawatts, indicating if any specifically allocated capacity transfer rights are used in the self-supply designation.
- The LSE confirms its applicable self-supply designations.
Eligibility Rules
Throughout the designation process, the FCTS will enforce various validation rules on eligibility:
- The total amount of capacity designated as self-supply for an LSE is limited to the calculated projected share of Installed Capacity Requirement per capacity zone.
- The maximum amount of capacity a resource may designate as self-supply is the lower of its summer and winter qualified capacity values.
- A resource located in an export-constrained capacity zone may not self-supply load located in another capacity zone.
- A resource located outside an import-constrained capacity zone may not self-supply load located in an import-constrained zone.
- Any capacity that already received an obligation from a prior FCA by choosing a multiyear capacity commitment period may not be designated as self-supply.
- For new capacity resources with a project type of “increase above threshold,” “environmental upgrade,” or “repowering,” the maximum amount of capacity that can be designated as self-supply equals the lesser amount of qualified megawatts for either new or existing capacity resources.
- For new capacity resources with a project type of “incremental capacity,” the existing capacity resource must be designated as self-supply up to its maximum before any self-supplied megawatts can be allocated to the new capacity project.
- An LSE may not confirm more self-supplied capacity than its projected share of the Installed Capacity Requirement.
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