The ISO operates under the 91³Ô¹ÏÍø. Transmission, Markets, and Services Tariff (ISO tariff), which defines the rates, terms, and conditions for the transmission, market, and other services 91³Ô¹ÏÍø provides, as approved by the Federal Energy Regulatory Commission (FERC).
Section I of the ISO tariff contains general terms and conditions. Section II of the ISO tariff is the Open Access Transmission Tariff (OATT), which provides the rights for electric energy suppliers and describes their responsibilities and fees for accessing the region's transmission system to transport electricity throughout New England. The terms and conditions of the OATT provide for nondiscriminatory open-access transmission service over the New England transmission system.
In addition to defining the rules and responsibilities of the ISO and market participants, the tariff outlines various schedules for the revenues the ISO must collect for its operations and for compensating transmission owners for constructing and maintaining the transmission infrastructure controlled by the ISO. The tariff also defines revenues for providing ancillary services, which are not provided through markets. The OATT addresses the collection and distribution of payments for the following transmission services:
Section III of the ISO tariff is Market Rule 1, which governs the operation of New England’s wholesale electric power markets. Section IV of the ISO tariff addresses the ISO’s funding mechanisms and capital funding arrangements, which control how the ISO collects funds to pay for administrative functions and certain capital acquisitions. This section contains rates, charges, terms, and conditions for the functions of the ISO. These services are as follows:
References:
Regional network service (RNS) is a transmission service offered under Schedule 9 of the OATT. Network customers purchase RNS to serve their regional network load in the New England Balancing Authority Area.
Reference: Open Access Transmission Tariff
Any customer with a monthly regional network load is charged for RNS per the OATT Schedule 9.
A customer’s monthly charge equals its regional network load value, which the TO of the customer’s local network submits to the ISO, multiplied by the RNS rate. The basis of the RNS rate is the TO’s annual revenue requirement for covering its costs of owning the pool transmission facilities (PTF). The allocation to the TOs of the RNS charges collected from regional network load customers is based on a TO’s share of the total revenue requirement.
The total monthly RNS bill also includes a charge for OATT Schedule 1 service. This charge recovers the scheduling, system control, and dispatch costs a TO incurs, and its distribution to the TOs is based on each TO’s share of these costs. Each customer’s network load value is multiplied by the OATT Schedule 1 rate to determine its monthly charge for this component of the RNS bill. OATT Schedule 1 rates are effective June 1 of each year.
Yes, all customers pay the same RNS rate regardless of the regional network load location.
The ISO provides the regional scheduling, system control, and dispatch services to transmission customers that purchase RNS. The rate for Schedule 1 service under the ISO Funding Mechanism is established each year, effective January 1.
All RNS customers pay for ISO Fund Mechanism Schedule 1 service each month. The charges for each customer are based on the customer’s monthly regional network load.
Through-or-out service is a transmission service offered under Schedule 8 of the 91³Ô¹ÏÍø OATT. Transmission customers purchase TOUT service to move power through or from New England to another balancing authority area.
Transmission customers who have requested TOUT from 91³Ô¹ÏÍø are charged for the service. TOUT charges are based on the megawatts of reserved transmission capacity, as submitted to the . OASIS is an electronic posting system that provides transmission customers with timely access to transmission information that enables them to obtain comparable, nondiscriminatory, open-access transmission service. Effective with the implementation of Coordinated Transaction Scheduling (CTS), coordinated external transactions (CET) are submitted using the Joint Energy Scheduling System (JESS) available on the New York ISO (NYISO) website.
The OATT’s TOUT charge equals a customer’s megawatts of reserved transmission capacity for each hourly TOUT purchase multiplied by the TOUT hourly rate. A customer’s total charge for the month equals the sum of the TOUT charges associated with all its transmission reservations. The TOUT revenues are distributed among the transmission owners.
Customers who purchase TOUT also pay for OATT Schedule 1 service. This TOUT Schedule 1 charge on the total monthly TOUT bill recovers the scheduling, system control, and dispatch costs the TOs incur. Its distribution to the TOs is pro rata, based on a TO’s share of these costs. A customer’s monthly charge for this component of the TOUT bill equals the customer’s megawatts of reserved transmission capacity for each hourly TOUT purchase multiplied by the OATT Schedule 1 rate, which is established June 1 each year.
The Schedule 1 TOUT charge equals the reserved capacity, for each hourly TOUT purchase, multiplied by the Schedule 1 hourly rate. A customer’s total charge for the month is the sum of the Schedule 1 charges associated with all its TOUT reservations. The total charges collected for the ISO’s Schedule 1 TOUT service are allocated as credits to all regional network load customers on the basis of each one’s pro rata share of the total NEPOOL monthly regional network load.
Schedule 1 of the ISO Funding Mechanism addresses the funding for scheduling the movement of power through, out of, within, or into of the New England Balancing Authority Area. This is the only portion of the ISO Funding Mechanism where the money collected is not for the ISO. Per this schedule, the ISO charges transmission customers that have transmission reservations, except for those reservations associated with coordinated external transactions (CET), and it pays transmission customers with regional network load.
Schedule 1 of the 91³Ô¹ÏÍø Funding Mechanisms contains information on the rates, which are effective January 1 of each year.
Schedule 2 of the OATT addresses reactive supply and voltage control (i.e., voltage-ampere reactive, or VAR) service from generation sources. The ISO operates generation facilities to produce or absorb reactive power, as necessary to maintain transmission voltages within acceptable limits. The ISO collects Schedule 2 charges to compensate generating facilities that provide this service each month.
Note that a resource committed by the ISO for VAR service in the day-ahead or real-time energy market that does not recover its effective offer is eligible for Net Commitment-Period Compensation (NCPC). NCPC VAR payments are calculated and reported in daily day-ahead and real-time settlements but are not included in the twice-weekly billing. Instead, the charge allocation for these payments is reported in the monthly VAR settlement; the credits and charges are billed in the monthly OATT Schedule 2 VAR line item. The NCPC and VAR reporting are described further in subsequent questions.
Any transmission customer who uses regional network service or through-or-out service during the month incurs this charge.
Generating resources that provide reactive supply to the transmission system are compensated by different mechanisms, as applicable. The total OATT Schedule 2 payments for any month equals the sum of the following fixed and variable payments:
Fixed payments (VAR capacity payment details are available in the VAR Capacity Cost Payment Report, SD_VARCCPMT):
Variable payments (VAR variable energy payment details are available in the day-ahead and real-time NCPC reports, including but not limited to the Day-Ahead Net Commitment-Period Compensation Payment Report, SD_DANCPCPYMT, and the Real-Time Net Commitment-Period Compensation Payment Report, SD_RTNCPCPYMTHR.
High-Voltage VAR Cost Reallocation, SS High-Voltage VAR (SS_HVVAR)—compensation for NCPC associated with dispatachable asset-related demand (DARD) pump
The hourly determinant for each transmission customer equals the sum of the customer’s monthly regional network load plus the customer's through-or-out service reservation, except for those reservations associated with coordinated external transactions (CETs) for the hour. The hourly Schedule 2 charges are allocated to all transmission customers on the basis of the customer’s pro rata share of the total of the determinants. Hours flagged for high-voltage VAR support are charged to the reliability region supported. Allocation details are also in the Calculation Summary.
See Section II.4 and Schedule 2 of the 91³Ô¹ÏÍø OATT.
Hourly Schedule 2 payments and charges are included in the participant’s Market Information Server (MIS) report. Also see the OATT Schedule 2—VAR reports and the OATT rates. VAR variable energy payment details are available in the day-ahead and real-time NCPC reports, including but not limited to SD_DANCPCPYMT and SD_RTNCPCPYMTHR.
VAR variable energy payment details as well as assets participating are available in the day-ahead and real-time NCPC reports, including but not limited to SD_DANCPCPYMT and SD_RTNCPCPYMTHR. In the rare occasion adynamic reactive power resource has VAR, see the VAR Cost of Energy Consumed Payment Report, SD_VARCECPMT; the VAR Cost of Energy Produced Payment Report, SD_VARCEPPMT; and the VAR Lost Opportunity Cost Payment Report, SD_VARLOCPMT.
The High-Voltage VAR Cost Reallocation Report, SS_HVVAR, is not included in the summaryreport but is part of the total of bill line item OATT Schedule 2 VAR. Thedifference between the OATT Schedule 2 VAR line item on the bill and the MISsummary report will be the SS_HVVAR report.
Schedule 16 of the OATT addresses black-start service, which facilitates a stable and orderly system restoration following a partial or complete shutdown of the New England transmission system. Owners of black-start resources enter into an agreement with the ISO to offer their resources for this service. The resources under agreement, which are called designated black-start resources, must provide black-start service when called on, for which they will receive compensation. The ISO selects those resources whose locations and capabilities support the New England System Restoration Plan.
Any transmission customer purchasing regional network service under the OATT is also billed for Schedule 16 black-start service.
The allocation of the total payments to all designated black-start resources for providing Schedule 16 black-start service is pro-rata among transmission customers based on their monthly regional network load.
Read Section II.47 and Schedule 16 of the 91³Ô¹ÏÍø OATT.
Reference: OATT Schedule 16 – Black-Start Service.
Special-constraint resource service is provided under Schedule 19 of the OATT. For maintaining local-area reliability, transmission owners or distribution companies can request that the ISO commit out-of-merit generation to provide relief for thermal, voltage, or stability constraints on a local-area network. Schedule 19 charges are collected to compensate these generators.
References:
The transmission owner or distribution company making the request for SCR service, or on whose behalf of a local control center (LCC) makes a request, are charged for this service.
Read Section II.4 and Schedule 19 of the ISO OATT for more information on SCRs.
The transmission owner or distribution company making the request, or on whose behalf a local control center makes a request, are charged an amount equal to the Net Commitment-Period Compensation credited to the SCR resource.
References:
The ISO provides energy administration service (EAS) to administer the energy market. This administration includes the core operation of the energy market, generation dispatch, and energy accounting. The charge is a part of the recovery of costs to operate 91³Ô¹ÏÍø. The rates for 91³Ô¹ÏÍø Funding Mechanism Schedule 2 charges are established each year effective Jan 1.
More information is available at the 91³Ô¹ÏÍø Schedule 2 webpage.
Any market participant with an account for energy settled by the ISO for the month incurs a Schedule 2 charge.
The allocation of EAS is based on different billing units: energy transaction units* (TUs) and volumetric measure* (VM). Customers accrue a TU for every hour a transaction is in place during the month, where transactions are contracts, demand bids, supply offers, or nonzero spot market energy settlements. The VM billing units equal the amount of real-time load and generation obligation megawatts in a customer's settlement each month. Billing units also exist for incremental offers (i.e., virtual supply) and decremental bids (virtual demand) submitted and cleared and for FTRs submitted and cleared.
*Coordinated external transactions (CET) are excluded from the TU and VM billing units.
References: Schedule 2 of the 91³Ô¹ÏÍø Funding Mechanisms contains information on EAS and the rates for this service. Also see the OATT and ISO tariff rate schedules.
Market Information Server (MIS) report data are available to the market participants via the 91³Ô¹ÏÍø FTP file server. The MIS report description document contains field descriptions of all the report data, and the templates provide descriptive headers for these data. A summary of TU and VM data is included in the MIS report prefixed with the file name TR_SCH2DT.
The ISO provides reliability administration service to administer the reliability markets and to provide other reliability and informational services. The charge is a part of the recovery of costs to operate 91³Ô¹ÏÍø. The rates for 91³Ô¹ÏÍø Schedule 3 are established each year effective Jan 1.
Reference: OATT and ISO tariff rate schedules
The following participants incur ISO Funding Mechanism Schedule 3 charges:
See the Schedule 3 of the 91³Ô¹ÏÍø Funding Mechanisms.
A Schedule 3 charge for a nonmarket participant transmission customer is based on the participant’s number of hours of point-to-point transmission service for the month.
Schedule 3 charges for market participants are based on the participant’s NCPC real-time load obligations for the month, or the participants’ megawatts of exports.
A summary of the 91³Ô¹ÏÍø Schedule 3 calculations is included in the MIS report prefixed with the file name TR_SCH3P2.
There are no day-Ahead internal bilateral for load transactions. Market participants can enter into IBL transactions in the Real-Time Energy Market only.
IBL will incur Schedule 2 transactional unit charges for bilateral contract block hours. IBLs also incur Schedule 2 volumetric measure charges because it affects the real-time load obligation. IBLs may possibly incur a Schedule 3 charge if it coincides with non-coincidental peak load obligation.
Reference: Manual 28, Section 3.1.2
Market participants may enter into IBMs associated with energy in either the Day-Ahead Energy Market, in which case the transaction automatically carries forward into the Real-Time Energy Market, or just the Real-Time Energy Market. Thus, the day-ahead IBMs always flow in real time. As a result, the day-ahead IBM accrues Schedule 2 TU charges for each bilateral contract block-hour. More importantly, IBM transactions that flow from day ahead to real time are only counted once, in real time, even though their origin may have been day ahead.
A day-ahead IBM does not incur Schedule 2 VM or Schedule 3 charges because the IBM only affects the day-ahead or real-time adjusted load obligation, which is not a billing determinant for calculating these charges.
Reference: Manual 28, Section 3.1.2
A generator may be subject to the following Schedule 2 charges of the ISO Funding Mechanisms:
A generator also is subject to an ISO Funding Mechanism Schedule 3 charge for non-coincident peak load obligations for station service load (If the generator owns the station service load asset)
Also see the tables at the end of these FAQs.
Potential OATT and ISO Funding Mechanism costs for external sales transactions could include the following:
Except for coordinated external transactions (CET) associated with Coordinated Transaction Scheduling (CTS) implementation, which are excluded from the ISO Funding Mechanism Schedule 1, ISO Funding Mechanism Schedule 2, ISO Funding Mechanism Schedule 3 and OATT Schedule 2 (VAR) charges above.
The ISO acts as the billing and collection agent for NESCOE for recovering the amounts reflected in the NESCOE’s annual budget.
All RNS customers pay for Schedule 5 each month. Charges are determined for each customer based on the customer’s monthly regional network load.
Reference: See Schedule 5 of the ISO Funding Mechanisms.
Schedule 5 of the 91³Ô¹ÏÍø Funding Mechanisms contains information on NESCOE funding.
A customer’s monthly charge is determined by multiplying its network load value, as submitted to the ISO by the transmission owner of the customer’s local network with the monthly ISO Funding Mechanism Schedule 5 rate.
Reference: See Schedule 5 of the ISO Funding Mechanisms.
Activity |
OATT |
OATT |
OATT |
OATT |
OATT |
|
RNS |
TOUT |
VAR |
TOUT |
RNS |
Black Start |
|
Regional network load |
x |
|
x |
|
x |
x |
External transaction through* |
|
x |
x |
x |
|
|
External transaction export* |
|
x |
x |
x |
|
|
*CET transactions are excluded from OATT Schedule 2 charges.
ISO |
ISO |
ISO Schedule 3* |
ISO Schedule 5 |
||||||||
RNS |
TOUT |
VMs |
TUs |
Virtual TUs Submitted |
Virtual TUs Cleared |
FTRs Submitted |
FTRs Cleared |
NCP Load Obligation |
Exports |
RNS |
|
Regional network load |
X |
|
|
|
|
|
|
|
|
|
X |
External transaction through |
|
X |
|
X |
|
|
|
|
|
|
|
External transaction export* |
|
X |
X |
X |
|
|
|
|
|
X |
|
External transaction import* |
|
|
X |
X |
|
|
|
|
|
|
|
Internal bilateral for market |
|
|
|
X |
|
|
|
|
|
|
|
Internal bilateral for load |
|
|
X |
X |
|
|
|
|
X |
|
|
Metered generation |
|
|
X |
X |
|
|
|
|
|
|
|
Metered load |
|
|
X |
X |
|
|
|
|
X |
|
|
Supply Offer |
X |
||||||||||
Demand Bid |
X |
||||||||||
Demand Reduction Offer |
X |
||||||||||
Asset-related demand bid |
|
|
|
X |
|
|
|
|
|
|
|
Increment offer |
|
|
|
|
X |
X |
|
|
|
|
|
Decrement bids |
|
|
|
|
X |
X |
|
|
|
|
|
FTR bids |
|
|
|
|
|
|
X |
X |
|
|
|
Units of measure |
kW |
kW |
MW |
Transaction unit |
kW |
MW |
kW |
||||
Calculation |
Monthly value |
Monthly value |
Monthly sum |
Monthly count |
Monthly value |
Monthly sum |
Monthly value |
*CET transactions are excluded from these charges.