Energy Choice
                            

Matters

ISO New England Capacity Auction Results in Shortfall for New Zone, Record $4 Billion Price Tag

February 4, 2015

Email This Story
Copyright 2010-15 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

ISO New England's forward capacity auction for the 2018/19 delivery year resulted in a shortfall of resources for the new Southeast Massachusetts/Rhode Island (SEMA/RI) zone.

The 2018/19 auction concluded system-wide with a clearing price of $9.55/kW-month. The auction continued for one additional round for New York imports, closing at $7.97/kW-month, and two additional rounds for New Brunswick imports, at a price of $3.94/kW-month.

The $9.55/kW-month clearing price will be paid in 2018-2019 to about 24,447 MW of new and existing capacity resources that cleared this auction in Rest of Pool, Connecticut and NEMA/Boston zones.

Administrative pricing rules were triggered because of the SEMA/RI zones's inadequate supply. Under these rules, the 353 MW of new resources in the zone will receive the auction starting price of $17.73/kW-month, while the 6,888 MW of existing resources in the zone will receive $11.08/kW-month, which is based on the net cost to build a new resource. The SEMA/RI zone is short about 238 MW of the 7,479 MW needed in 2018/2019, but the ISO said that such resource shortfalls may be filled through periodic reconfiguration auctions held over the next three years.

New York imports totaling 1,028 MW will be paid $7.97/kW-month, and 177 MW of New Brunswick imports will be paid $3.94/kW-month. Another 771 MW of existing resources with multi-year supply obligations will be paid at rates set in previous auctions, while 1,287 MW of self-supply resources will not be paid through the FCM.

A preliminary estimate of the total cost of the capacity market in New England in 2018–2019 is about $4 billion. For comparison, the previous auction resulted in an estimated total capacity market cost of about $3 billion for 2017-2018.

ADVERTISEMENT
NEW Jobs on RetailEnergyJobs.com:
• NEW! -- Director of Business Development -- Houston
• NEW! -- PJM Pricing Manager/Director -- Retail Supplier -- Houston
• NEW! -- Retail Energy Project Analyst -- New York
• NEW! -- Supply Manager -- Retail Supplier -- Houston
• NEW! -- Broker Sales REP III - Mid-Markets -- Texas
• NEW! -- Senior Analyst, Front Power Supply -- Retail Supplier
• NEW! -- Accounts Management Director -- Retail Supplier
• NEW! -- Regional Sales Manager-Mass Markets -- Retail Supplier -- Houston
• NEW! -- Digital Marketing Manager -- Retail Supplier
• Director, Business Development Power & Gas -- Retail Supplier
• Business Development Manager -- Retail Supplier -- Houston/DFW
• Energy Advisor