FERC Reduces Number of Local Capacity Zones in ISO New England Capacity Market

FERC has approved ISO New England's filing to model four zones in the Forward Capacity Auction for the 2017-18 delivery year, rather than the eight zones previously ordered, due to transmission upgrades alleviating constraints.

FERC said that it, "remains concerned, however, that despite having addressed zonal issues since 2010, ISO-NE has not developed an adequate process for determining the appropriate number of, and boundaries of, capacity zones in the New England region over time as conditions change."

FERC noted that ISO-NE has committed to commencing a stakeholder process in the second quarter of 2013 to address how capacity zones and the associated zonal requirements are determined, and "we will require ISO-NE to consider during that process: (1) the appropriate level of zonal modeling going forward; (2) the appropriate rules to govern intra- and inter-zonal transactions; and (3) whether objective criteria by which zones may automatically be created in response to rejected delist bids, generation retirements or other changes in system conditions would be appropriate in New England, or if not, why not."

FERC directed ISO-NE to explain in a subsequent filing how it has addressed these items in its stakeholder process, and to: (i) develop and file with the Commission revisions to the ISO-NE tariff that articulate appropriate objective criteria to revise the number and boundaries of capacity zones automatically as the relevant conditions change, or (ii) file with the Commission an explanation as to why such criteria are unnecessary. Within 60 days, ISO-NE must submit a schedule for the completion of these tasks.

Docket ER12-953