Monday, May 29, 2017

FERC Denies Rehearing of Winter Reliability Order

By William Opalka

FERC on Wednesday denied rehearing of its September order endorsing the interim Winter Reliability Program for ISO-NE (ER15-2208).

The commission had endorsed a proposal made by the New England Power Pool in a “jump ball” proceeding after ISO-NE and NEPOOL could not reach consensus. (See FERC Asked to Determine ISO-NE Winter Reliability Program.)

NEPOOL’s proposal was based on the 2014/15 winter program — which provided compensation for any unused oil or LNG remaining at the end of the winter — and added demand response.

ISO-NE’s proposal provided compensation for unused oil or LNG, but it would have also compensated nuclear, hydro, biomass and coal-fired resources and did not include DR.

iso-ne

Pilgrim nuclear plant (Source: Entergy)

Entergy had challenged the order, saying FERC’s stated preference for a market-based solution to mitigate winter natural gas supply constraints should have tipped the balance toward the RTO’s more fuel-neutral program.

“The record reflects that including such resources in the program would not provide any additional winter reliability benefit to the region,” the commission wrote. “While Entergy argues that additional payments to coal, nuclear and hydro resources would likely incentivize these resources to take incremental measures to ensure performance during the winter, this assertion is contradicted by substantial expert testimony supporting the NEPOOL proposal.”

FERC repeated its assertion that it prefers market-based solutions, but it said an out-of-market solution is “appropriate” until ISO-NE’s Pay-for-Performance program begins later in early 2018.

Shortly after the September order, Entergy’s Pilgrim nuclear plant in Massachusetts was removed as a capacity resource for the 2019/20 commitment period. It will be closed no later than 2019. (See Entergy Closing Pilgrim Nuclear Power Station.)

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