In its Octoorder, FERC rejected ISO-NE’s proposal as unjust and unreasonable, finding that the ESI Products would impose significant costs on consumers without meaningfully improving fuel security. Finally, in order to avoid interference between its Interim Solutions and the ESI Proposal, ISO-NE asked to sunset the two Interim Solutions a year earlier than expected, thereby matching the start date of the ESI Proposal. ISO-NE further identified that the New England Power Pool (“NEPOOL”) had proposed an alternative solution, with three changes to ISO-NE’s proposal. Based on its impact assessment, ISO-NE estimated that the ESI Proposal would improve overall reliability of the system, but would increase consumer costs by between $20 to $257 million per year. ISO-NE further proposed that ESI Products be voluntary options, where market participants seeking to sell such products would submit a single option offer specifying the minimum price they would be willing to accept to provide any of the ESI Products. ISO-NE proposed to create three new day-ahead ancillary services: (i) the Energy Imbalance Reserve, which would assist ISO-NE in meeting gaps between day-ahead cleared energy demand and forecasted real-time load (ii) the Generation Contingency Reserve, which would cover ISO-NE’s existing real-time operating reserve requirements and (iii) the Replacement Energy Reserve, which would assist ISO-NE in procuring resources to ensure that the system’s real-time reserves can be fully restored within the NERC specified timeframes (“ESI Products”). On April 15, 2020, ISO-NE proposed a long-term, market-based Energy Security Improvement (“ESI”) solution to begin June 1, 2024, in line with start of the capacity commitment period associated with FCA 15 (“ESI Proposal”). Both of the Interim Solutions are scheduled to be in effect through ISO-NE’s 15th Forward Capacity Auction (“FCA”), which aligns with ISO-NE’s 2024-2025 capacity commitment period. FERC accepted these two tariff proposals, referred to herein as the “Interim Solutions,” in a Maand a Jorder, respectively. In the second, ISO-NE proposed to implement a program to compensate resources for maintaining inventoried energy during the winter months ( see Apedition of the WER). In the first, ISO-NE proposed to revise its tariff to include, among other things, provisions for a short-term cost of service agreement for resources retained for fuel security reasons ( see Decemedition of the WER). ISO-NE previously proposed, and FERC accepted, two filings concerning fuel security. ISO-NE’s proposal is its latest effort to address FERC’s Jorder directing ISO-NE to file tariff revisions to address fuel security concerns and improve the market design in New England. FERC found that ISO-NE’s proposed solutions would substantially increase consumer costs without meaningfully improving fuel security in the region, and offered guidance on how ISO-NE might develop a just and reasonable approach to address its fuel security concerns.
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On October 30, 2020, FERC rejected ISO New England Inc.’s (“ISO-NE”) proposed revisions to the ISO-NE tariff to resolve long-term fuel security concerns in the New England region.