Docket No.  ER22-1528-000

We vote to accept ISO-NE’s tariff filing because it sets the region on course to eliminate the Minimum Offer Price Rule (MOPR), a likely unjust and unreasonable tariff mechanism that, if left uncorrected, could force customers in New England to pay millions or even billions to prop up capacity that they do not want or need. 

Each of the six New England states have enacted renewable and alternative portfolio standards, and some have enacted statutes and regulations to promote the development of clean energy resources by facilitating their financing through long-term power purchase agreements.[1]  Yet, if left unchecked, ISO-NE’s MOPR could exclude many of these resources from the capacity market, essentially ignoring the available capacity from these resources and forcing consumers to pay higher prices for unneeded capacity in a region with among the highest electricity prices in the nation.[2]  A just and reasonable market design should reflect actual supply available.  Instead, the existing MOPR actively disregards those resources most likely to come online and interferes with legitimate action by states to shape their generation mix.

While immediate elimination of the MOPR would likely better serve ISO-NE’s customers than the proposal that has been filed, such a proposal is unfortunately not before us.  And at this late hour, nor could the MOPR be immediately eliminated without causing great uncertainty and delay for FCA 17.[3]  As ISO-NE explains in its answer, “[i]n a standalone Section 205 proceeding such as this, where the only issue before the Commission is the proposed tariff changes,”[4] the Commission could institute a Federal Power Act section 206 proceeding via an order establishing further process, but a replacement rate may only be instituted “after a hearing held upon [the Commission’s] own motion or upon complaint.”[5]  Even the most expeditious action on a paper hearing could be months in the future, and would necessitate granting ISO-NE permission “to open a new retirement and permanent de-list bid window for resources to provide contingent bids pending the outcome of any Section 206 proceeding, [] the IMM [would] have to begin its review period anew,” and “numerous other qualification review windows and ISO review processes” would need to be adjusted because they are “tied to or are influenced by the retirement and permanent de-list bid review window.”[6]   

Given this reality, accepting ISO-NE’s tariff filing is the “path forward” to eliminating MOPR that “provides the greatest certainty to the marketplace,”[7] and the fastest way to reform the existing capacity market rules.[8]  As such, we reluctantly accept ISO-NE’s proposal, while cautioning that we believe this proceeding presents unique circumstances, which may not be present in the case of a similar transition mechanism in a different setting.  Finally, with respect to the concerns about a reliable transition to a new resource mix and potential flaws in ISO-NE’s markets identified by ISO-NE and other commenters,[9] such as ISO-NE’s capacity accreditation method, we emphasize that while appropriately addressed separately from this section 205 proceeding, we take these concerns very seriously and urge ISO-NE and stakeholders to address them promptly.  In the absence of swift action on the part of ISO-NE, Commission action to ensure reliability in the New England region may well prove necessary. 

For these reasons, we respectfully concur.

[1] See New England States Committee on Electricity Comments at 3-4 (NESCOE Comments). 

[2] See Clean Energy and Consumer Advocates Protest, Ex. B, Brattle Aff. at 6.

[3] Alternatively, leaving status quo rules in place for FCA 17 threatens to expose states and customers to “the worst of both worlds for the next auction: the existing MOPR remains in place with no RTR exemption.”  NESCOE Comments at 11.

[4] ISO-NE Answer at 47.

[5] 16 U.S.C. 824e(a).

[6] ISO-NE Answer at 49.

[7] Id. at 49-50.

[8] NESCOE Comments at 11.

[9] See, e.g., ISO-NE Filing at 37-41 (discussing the need for necessary market reforms); Advanced Energy Economy Comments at 20 (discussing the need for capacity accreditation and day-ahead ancillary service reforms to “address the underlying reliability challenges ISO-NE has identified”); Connecticut Department of Energy and Environmental Protection Comments at 7-8, 8 n. 19 (discussing flaws and deficiencies in the wholesale markets, including need for energy and ancillary service market reforms, seasonal markets, and reforms to capacity accreditation); ISO New England’s External Market Monitor Comments at 5-6 (discussing the need for “accreditation improvements”); ISO New England’s Internal Market Monitor Comments at 15 (noting importance of resource accreditation reforms and day-ahead ancillary services improvements); NESCOE Comments at 8-9 (citing 2021 NESCOE report to Governors recommending various wholesale market reforms).

This page was last updated on May 27, 2022