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Petition to head off ISO-NE market changes receives support but may not be needed

Increase font size  Decrease font size Date:2019-03-11   Views:65
A petition opposing a possible retroactive change to the way ISO New England treats energy efficiency resources in its forward capacity market garnered early comments of support, but some said US Federal Energy Regulatory Commission action may not be needed at this stage.

Advanced Energy Economy and the Sustainable FERC Project in February asked FERC to declare that ISO-NE cannot retroactively change the way it measures the demand reduction value of energy efficiency resources cleared during the grid operator's 13th annual forward capacity auction, held February 4. They also sought FERC backing that any prospective changes to measurement and verification requirements that determine energy efficiency resources' FCM-qualified capacity ratings would need FERC approval.
Comments filed ahead of the Thursday close-of-business deadline agreed with the premise of the February 13 petition for declaratory order (EL19-43). Market participants must have certainty regarding the finality of capacity auctions and not be burdened with the potential for retroactive application of tariff or rule changes, comments from New England state agencies and energy efficiency providers concurred.

"It is imperative that resource owners have clarity regarding their rights and obligations in the FCM because those rights and obligations directly affect their financial and operational risks -- and their pricing of those risks -- in the FCM," the New England States Committee on Electricity said in its filing with FERC. "Consumers, of course, ultimately pay for the risk premiums that accompany uncertainty or eroded investor confidence."

But some commenters also noted that the concerns laid out in the petition were based on alleged one-on-one phone calls between ISO-NE staff and certain market participants with energy efficiency resources.

No formal proposal for a change to the terms and conditions governing resource FCM participation has materialized. Also, in response to the petition, an ISO-NE spokeswoman in February told reporters that the grid operator intended "to have a more full and complete discussion this year before any changes would be made" to the measurement and verification requirements for energy efficiency resources.

New England Power Pool, the region's principal stakeholder group, said in a Wednesday filing it "supports an outcome that ensures the necessary engagement in the stakeholder process, but it is unclear whether commission involvement or direction is necessary at this time based on the alleged facts."

Specifically, NEPOOL said it was unclear from the record "whether ISO-NE was seeking to provide notice and solicit feedback on future changes it was considering -- which is precisely what NEPOOL urges should occur -- whether ISO-NE was communicating the application of an alternative method already permitted under existing practices, or whether ISO-NE was signaling that it is considering making unilateral changes to its practices without full notice to stakeholders for feedback, which is what petitioners allege."

The stakeholder group contended that confirmation from ISO-NE that it intends to follow the NEPOOL stakeholder process would be a sufficient remedy.

In that case, "no commission order would be necessary and the petition should be dismissed without prejudice to the issues being re-raised if necessary following that process," NEPOOL said. It added that the stakeholder process would offer an opportunity for grievances to be addressed if a proposal were made that the petitioners or others opposed.

Still, the New Hampshire Office of the Consumer Advocate said FERC should issue a declaratory ruling to drive home "the impermissibility of retroactive changes to the rights and obligations of energy efficiency providers," and to highlight "the need for clarity and certainty with respect to the participation in future editions of the annual FCA."
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