Last Updated: 06/13/2022
Below, affected participants can learn more about the changes to systems or procedures related to the Forward Capacity Market Cost Allocation & Accelerated Billing project. This project is one of several that 91³Ô¹ÏÍø has undertaken, in collaboration with stakeholders, for the continued development of the region’s wholesale electricity markets. Target dates indicated below are subject to change.
Refer to the Participant Readiness Project Outlook for more detail on affected customers and systems for this and other major projects.
Effective June 1, 2022, 91³Ô¹ÏÍø will introduce a new cost allocation methodology for Forward Capacity Market (FCM) costs and move to daily settlements and twice-weekly billing for most monthly charges. Participants that have FCM resources in Capacity Commitment Period 13 (CCP-13) or later will need to be aware of the following changes.
Currently, FCM costs are allocated using a single monthly charge rate for each capacity zone. This rate reflects all of the costs associated with resources located in the zone. The calculation of a single net regional clearing price (NRCP) makes it more difficult to determine the cost of each component that contributes to the single charge rate. Additionally, the current cost allocation methodology is not aligned with use of the Marginal Reliability Impact (MRI) based demand curves that were introduced for the 2020-2021 capacity commitment period.
Existing rules also use another mechanism, the capacity transfer rights fund, to reconcile settlement imbalances that arise from differences in the amount of capacity supply obligations (CSOs) of resources associated with a zone and the share of capacity market payment obligations assigned to the zone. This further obscures the overall calculation and allocation of capacity costs.
The new cost allocation changes will allocate capacity market costs that are determined using the MRI-based demand curves and a marginal value approach. Under this approach, the zonal charge rates will be calculated based on the marginal value of the capacity located in each zone, as reflected in the zonal clearing prices determined using the MRI-based demand curves.
FCM costs that are not associated with the locational value of capacity will be allocated to the capacity load obligation (CLO) across the total region on a pro rata basis rather than using the marginal value approach. These costs include:
The costs for specifically allocated CTRs associated with transmission upgrades will be allocated pro rata to CLO in the affected capacity zone.
Most FCM-related charges and adjustments will be settled daily and billed twice weekly with the ancillary services billing schedule. The change to twice-weekly billing for FCM charges will:
The residual CTR fund will no longer be necessary to settle imbalances arising from differences in the amount of CSO or resources associated with a zone and the share of payment obligations assigned to the zone, as the marginal value allocation will account for these differences.
Currently the deadline for confirming capacity load obligation bilaterals (CLOBs) is the second business day following the end of the settlement month. In order to provide LSEs information to assess their portion of the zonal capacity obligation (ZCO), a preliminary month-ahead settlement will be introduced. LSEs can use this information to determine whether to engage in a CLOB prior to the CLOB deadline, which will be noon on the first business day of the settlement month.
Additionally, the calculation of the ZCO will use the peak load obligation from the calendar year prior to the commitment period, rather than values from the calendar year two years prior to the commitment period.
Changes to FAM will introduce the new daily FCM requirements component. Daily FCM requirements will replace the capacity load charge that participants currently see as a monthly FCM requirement in FAM and the CSO payments currently included in the monthly capacity charge (MCC) of FCM delivery FA.
The daily FCM requirements are comprised of three components:
Participants will see the changes coming under this project in FAM according to the timing below:
After the changes take effect, the MCC will include the following monthly components:
Affected market participants should be mindful of the following time-bound items, some of which may require customers to take specific steps or adapt to changes in 91³Ô¹ÏÍø’s systems. Please subscribe to Participant Readiness, Market Notices, Information Technology (IT) Notices, and MIS Report Issues to receive notices posted to the calendar for future projects.
TIMING OR DEADLINE | SYSTEM | ACTION OR EVENT |
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June 1, 2022 |
Settlements |
Participants will see FCM charges and credits included in the twice-weekly bill. |
June 1, 2022 |
Internal Transactions |
CLOBs confirmed by the first business day of the settlement month will be included in the initial settlement. The preliminary month-ahead settlement will be run five business days before the start of the operating month. Results can be found in the SD_FCMPRELIMCLO report. |
June 1, 2022 |
Submit Peak Contribution |
Future dates will be allowed in the user interface and the file upload. |
91³Ô¹ÏÍø may offer online or classroom-based training, information sessions, and other opportunities for affected customers to learn about changes and ask questions in advance of project implementation. Please subscribe to ISO Training to receive notices posted to the calendar for this project.
DATE | EVENT AND SUPPORTING MATERIALS |
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April 8, 2022 |
Description of the self-paced training that is available in the FCM Cost Allocation Curriculum. |
April 8, 2022 |
Self-paced training available to explain the cost allocation methodology and the 10 charge rates that are used to calculate the FCM charges that load will pay. |
May 3, 2022 |
Self-paced training available to explain the financial assurance obligations associated with the FCM. |
Quarterly beginning 2021 Q3 |
Quarterly Settlements Forum
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Market participants affected by the project should consult the following documents for specific instructions on completing related tasks or processes and helpful answers to frequently asked questions.
DOCUMENT | NOTES (if necessary) |
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This document describes the use of the Settlements Market System (SMS) for IBTs. |
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This document describes how to submit Peak Contribution Values to the user interface. |
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Section III.13.7.5 and its subsections. |
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Red-lined submittal to the Participants Committee, beginning on page 82. |
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MIS Report Changes Report descriptions are available on page 7 of the 2022 Q1 Settlements Forum presentation |
New reports:
Retired reports:
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Invoice line item details for monthly credits in the FCM |
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Invoice line item details for monthly charges in the FCM |
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Invoice line item details for daily credits in the FCM |
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Invoice line item details for daily charges in the FCM |
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Detailed calculation for FCM reliability credits and charges |
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Detailed calculation for FCM daily credits and charges |
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Detailed calculation for FCM credits and charges |
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Detailed calculation for FCM month-ahead credits and charges |
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Includes the twice-weekly settlement timeline for the operating day and the monthly/resettlement timeline for the operating month. |
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Invoice and remittance advice format details. |
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FAQs regarding invoice or remittance advice line items. |