United States of America Before the Federal Energy Regulatory Commission
ISO New England Inc. | Docket No. ER18-619-000
Comments of the New England States Committee on Electricity
Pursuant to the Federal Energy Regulatory Commission’s (“Commission” or “FERC”) January 8, 2018 Combined Notice of Filings #1, the New England States Committee on Electricity (“NESCOE”) hereby files these limited comments in the above-captioned proceeding. On January 8, 2018, ISO New England Inc. (“ISO-NE”) filed proposed Tariff revisions with the Commission to implement a proposal referred to as “Competitive Auctions with Sponsored Policy Resources” or “CASPR” (the “CASPR Filing”). CASPR would create a two-stage Forward Capacity Auction (“FCA”) structure, commencing with the thirteenth FCA. The CASPR design is intended to provide “financial incentives for existing resources to transfer their capacity obligations to new sponsored policy resources and to permanently exit the capacity market.” Through this design, ISO-NE seeks to accommodate the participation of sponsored policy resources in the capacity market while preserving competitive wholesale market pricing.
- DESCRIPTION OF COMMENTER
NESCOE is the Regional State Committee for New England. It is governed by a board of managers appointed by the Governors of Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont and is funded through a regional tariff that ISO-NE administers. NESCOE’s mission is to represent the interests of the citizens of the New England region by advancing policies that will provide electricity at the at the lowest possible price over the long term, consistent with maintaining reliable service and environmental quality. These comments represent the collective view of five of the New England states.
NESCOE supports the CASPR revisions, which are designed to promote competitive market pricing and the participation in the capacity market of certain state-sponsored clean energy resources that contribute to resource adequacy. NESCOE and the Commission have previously expressed concerns about excessive wholesale rates if the capacity market fails to accommodate the entry of state-sponsored renewable resources. CASPR provides a new mechanism for accommodating clean energy resources in the wholesale market and seeks to balance this objective with achieving competitive market pricing outcomes. NESCOE appreciates the work of the New England Power Pool (“NEPOOL”) in establishing the stakeholder process—known as Integrating Markets and Public Policies—through which the CASPR proposal emerged.
Striking an appropriate balance between the requirements of state laws and competitive wholesale markets, both of which exist to benefit consumers, is challenging but crucial if consumers and state policymakers are to continue supporting markets long-term. ISO-NE recounts in the CASPR Filing the various design objectives it sought to balance, concluding that (i) there is tension among the objectives, (ii) there exists “no perfect solution to” balancing the objectives, and (iii) “it is unlikely that all of these design objectives can be simultaneously achieved to all stakeholders’ satisfaction.”
Importantly, ISO-NE commits to “assess the performance of CASPR” following its implementation and to “working with stakeholders to refine or replace” CASPR if it fails to “achieve its intended purpose of accommodating state entry over time[.]” ISO-NE also commits that, “should state policies change, ISO-NE will work with stakeholders to determine if the new laws can and should be accommodated by CASPR” and may propose a revised definition of CASPR-eligible supply.
ISO-NE’s commitment to monitor CASPR’s performance and to propose appropriate remedies is critical—and a condition of NESCOE’s support. ISO-NE must revise CASPR if it falls short of its intent to accommodate the participation of state-sponsored resources or if it proves inflexible to the execution of state laws, which are not static. Indeed, should CASPR not accommodate the entry of state-sponsored resources, NESCOE expects that ISO-NE would act expeditiously, in collaboration with states and stakeholders, to develop and file revised market rules with the Commission—including interim rules as necessary—to protect against excessive consumer costs. If and when that circumstance should occur, the need for expedited action may be particularly acute given the planned phase out of the Renewable Technology Resource exemption, New England’s current just and reasonable mechanism for accommodating state-sponsored policy resources and limiting the risk of excessive consumer costs arising from redundant capacity purchases.
NESCOE respectfully requests that the Commission accept the CASPR Filing. NESCOE looks forward to continuing work with the Commission, ISO-NE, NEPOOL, and others to harmonize state laws and wholesale markets as both evolve over time for the benefit of consumers.
For the reasons stated herein, NESCOE respectfully requests that the Commission consider the above comments in this proceeding.
/s/ Jason Marshall
New England States Committee on Electricity
655 Longmeadow Street
Longmeadow, MA 01106
Tel: (617) 913-0342
Date: January 29, 2018