FERC Adopts Winter Reliability Program For 2015-18 (Non-Market Costs To Retail Suppliers)

FERC has approved a winter reliability program for 2015-18 at ISO New England, adopting the alternative proposed by NEPOOL which was found to be less costly than the ISO's proposal.

The winter reliability program imposes non-market charges on LSEs such as retail suppliers, as there is no confidence that the capacity market can guarantee reliability.

NEPOOL claimed that its adopted solution reduces the supplemental out-of-market costs under the winter reliability program by as much as $46 million annually versus an expanded program proposed by ISO-NE.

Past-year winter reliability programs have ranged in cost from $46 million to $75 million.

NEPOOL, whose solution was supported by state regulators and certain power marketers, has said that the ISO-NE proposal rejected by FERC would have compensated nuclear, coal, and hydro resources for doing precisely what they already have been doing in preparation for energy and reserve market operations during the winter months.

NEPOOL's adopted proposal includes: (1) compensation for certain oil inventory that remains in New England following the end of each winter period; (2) end-of-season compensation for LNG contract volumes that were available for use during the winter but were not called upon to produce energy; and (3) a supplemental demand response program.

Docket No. ER15-2208