ISO-NE files questionable capacity requirements for February Forward Capacity Auction

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ISO-NE files questionable capacity requirements for February Forward Capacity Auction

After filing its installed capacity requirements for the upcoming Forward Capacity Auction, regional transmission organization ISO New England has come up against stiff opposition from the New England Power Generators Association, which argues the RTO's power to alter the government-regulated metrics used to collect its figures.

According to RTO Insider, the Federal Energy Regulatory Committee has until January 9 to decide whether 390 megawatts' worth of reductions in peak load forecasts based on photovoltaic solar installations scattered across the Northeast qualifies as a legitimate value for ISO-NE's ICR, as well as if the energy authority overstep its bounds in including distributed energy sources as a factor.

If FERC approves ISO-NE's ICR, what could this mean in terms of reliability for ratepayers living in New England? What could happen if it is opposed? And how does this decision impact DERs like solar play a greater role in wholesale energy markets and the industry in general?

Is ISO-NE really willing to bet big on solar energy?Is ISO-NE really willing to bet big on solar energy?

ISO-NE must show its hand, says NEPGA
NEPGA's motion stresses a number of reasons why ISO-NE must refile a proper ICR or, at the very least, disclose how it landed on its 390-megawatt figure for future DER deployments, as the upcoming auction pertains to service in 2019 and 2020. The organization cites Section 205 of the Federal Power Act as precedent, stating ISO-NE must obtain "approval of Tariff changes defining new treatment of behind the meter resources in peak load forecast."

Since the generating parties within NEPGA are held responsible for producing enough power to sustain the region's electricity markets, they believe ISO-NE could put service in jeopardy unless FERC signs off on the alteration to the ICR process.

Solar's increasing authority puts reliability in flux
As distributed energy resources like solar power play a more active role in U.S. consumption and generation, its reach will incrementally seep into the finer points of wholesale markets and how they're regulated. Recently, the Energy Information Administration announced it would start including small-scale solar PV installations in how it calculates state-to-state capacity and generation estimates, according to PV Magazine – a worthwhile endeavor since the agency revealed distributed solar made up almost one-third of all electricity flowing through the national grid.

"390 megawatts of solar for 2019 and 2020 might actually be a conservative estimate."

That said, plenty of downsides exist for energy interests which begin accounting for solar prematurely or without transparency, like the case against ISO-NE. For whatever reason, should future solar installations fail to hold up its end of the bargain when push comes to shove, it could create demand concerns for ratepayers in affected areas, resulting in steep increases in energy costs.

However, as ISO-NE reported in its 2015 Regional Electricity Outlook, New England solar installations produced well over 1,000 megawatts in 2014. Given solar's meteoric rise over the last decade, 390 megawatts for 2019 and 2020 might actually be a conservative estimate. Regardless, to convince NEPGA and the New England Power Pool, the organization that votes on ICR values, ISO-NE may have to play ball the old-fashioned way to bring innovations like DERs into the conversation.

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