United States of America Before the Federal Energy Regulatory Commission
ISO New England Inc. and New England Power Pool  | Docket No. ER20-1967-000
Comments of the New England States Committee on Electricity

Pursuant to the Federal Energy Regulatory Commission’s (“Commission” or “FERC”) June 2, 2020 Notice of Filings #1, the New England States Committee on Electricity (“NESCOE”) hereby files these comments in the above-captioned proceeding.[1]  On June 2, 2020, ISO New England Inc. (“ISO-NE”) and the New England Power Pool Participants Committee (“NEPOOL”) jointly filed with the Commission proposed Tariff revisions “to address an implementation issue regarding the treatment of energy efficiency resources during Capacity Scarcity Conditions and to more fully align the Tariff rules with the Commission’s directives” regarding the implementation of ISO-NE’s “Pay For Performance” (“PFP”) mechanism[2] (the “Balancing Ratio Changes”).[3]

NESCOE supports the Balancing Ratio Changes.  The June 2 Filing recounts the origin of the proposed revisions, beginning with a September 2018 scarcity event and leading to over a year of stakeholder discussions that included supporting technical analysis.[4]  The Balancing Ratio Changes provide a fair and streamlined method for addressing the unanticipated settlement imbalances and associated mutual insurance pool charges that only became widely understood after PFP became effective in 2018.[5]  NESCOE joins over 94% of NEPOOL markets participants and stakeholders—reflecting a supermajority across all NEPOOL sectors—in supporting these reasonable changes.[6]

The June 2 Filing briefly describes the stakeholder process that culminated in the Balancing Ratio Changes.[7]  ISO-NE convened the Demand Response Working Group (“DRWG”) at the direction of the NEPOOL Markets Committee.[8]  The DRWG met numerous times over the course of 2019 and considered a range of approaches for estimating the performance of energy efficiency resources across all hours.[9]  In reviewing the various alternative approaches available, the Markets Committee instructed the DRWG that it should “prioritize options that require the least time and expense to develop and implement.”[10]  The DRWG presented its Final Report to the Markets Committee in September 2019.[11]

The Final Report described five options that the DRWG considered.  It concluded that “among the options reviewed by the DRWG,” an approach referred to as “Shaping Option A” had been “identified as the option requiring the least time and expense to develop and implement.”[12]  The Final Report also identified drawbacks with the other four options considered.[13]  It noted, however, that none of the options achieved consensus and also described concerns that some participants expressed regarding Shaping Option A.[14]

NESCOE took initial steps to receive feedback regarding its preliminary interest in advancing Shaping Option A through the stakeholder process.[15]  NESCOE noted that, absent Tariff changes, energy efficiency resources would face continued uncertainty regarding system charges in contravention of the Commission’s directives in the PFP Order.[16]

Following stakeholder feedback at the Markets Committee,[17] NESCOE materially revised its proposal in the interest of securing broader support.[18]  NESCOE advocated for what ultimately became the Balancing Ratio Changes and achieved its objective as reflected in the backing of all NEPOOL sectors.[19]  For the reasons set forth in the July 2 Filing, ISO-NE’s proposal, borne out of broad regional consensus and guided by the Commission’s directives in the PFP Order, represents an appropriate and fair market rule revision.

Respectfully submitted,

/s/ Jason Marshall                             

Jason Marshall
General Counsel
New England States Committee on Electricity
655 Longmeadow Street
Longmeadow, MA  01106
Tel: (617) 913-0342
Email:  jasonmarshall@nescoe.com

Date: June 23, 2020