Stepping Stones to FCA16 and Beyond | Capacity Watch Blog

Published August 12, 2021 | capacity-watch

Multiple Filings and proposals have yet to be decided by FERC. 

Capacity Watch™ provides clients with an in-depth outlook on PJM, ISO-New England, and NYISO Capacity prices.  In this blog, we highlight a portion of the analysis in the ISO-New England section of the Q2 Capacity Watch™.

ISO-NE is likely to see multiple changes leading up to the February 2022 FCA16 with many filings and proposals yet to be decided upon by FERC. While FERC has issued its ruling on Offer Review Trigger Prices (ORTP’s), the compliance filings on Net CONE and the MOPR and its subsequent proposals are still up in the air. 

Based on a recent FERC request, ISO-NE has updated the costs associated with the reference unit, which bolstered Gross and Net CONE by $0.30-1.00 since the March 2021 filing, but are still under the FCA15 values. 

  • Higher Net CONE = upward shift in MRI demand curve = higher clearing prices 

 …However, ESAI predicts de-list bids to take center stage in the near future. 

ISO-NE and NEPOOL both offered ORTP values for the FCA16, with $10+ spreads between the two. To the shock of market participants, FERC accepted the proposal that kept ORTP at the starting price….keeping offshore wind “MOPRed” out of the FCA and shifting the burden to developments for unit-specific offer floor requests. 

MOPR Reforms are still underway with a goal to make the necessary updates without jeopardizing the structure for efficient price signals. It is clear these reforms will take a few years to fully flesh out, but in the meantime, ESAI expects ISO-NE to implement a set of short-term enhancements to keep things moving forward while the official MOPR is being established. Beyond FCA17, the development of long-term solutions is ongoing. 

ESAI’s FCM forecast has been updated with several new parameters that has ultimately driven price expectations to trend upwards. Subscribers can access our recent Capacity Watch ISO-NE section for a deeper dive into price drivers and our long-term FCM forecast.   If you’re not a subscriber, fill out this form or email [email protected] to enquire about a free trial.

For more information about our Capacity Forecasts, see our Capacity Market Coverage.

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