Multiple region cost-allocation changes coming January 2012

Beginning January 1, 2012, ISO New England is implementing a new method for allocating Net Commitment Period Compensation (NCPC) costs incurred when a resource is committed in two or more Reliability Regions as a Local Second Contingency Protection Resource (LSCPR) or for Voltage Ampere Reactive (VAR) Service for high voltage conditions.

Currently, these NCPC costs are divided equally between the affected Reliability Regions and then allocated to market participants based on the pro rata share of their load obligation in each Reliability Region for LSCPR related costs, or the pro rata share of their Network Load in each Reliability Region for VAR related costs. This results in a different cost per megawatt to market participants in the affected Reliability Regions.

The new method will allocate the LSCPR-related NCPC costs across the affected Reliability Regions based on pro rata share of the total load obligation in all affected Reliability Regions. Similarly, the VAR-related NCPC costs will be allocated across the affected Reliability Regions based on pro rata share of the total Network Load in all affected Reliability Regions. This will result in the same cost per megawatt to all market participants in the affected Reliability Regions. These changes are detailed in the October, 2011 joint filing made by ISO New England and NEPOOL to the Federal Energy Regulatory Commission. Note that the January 1 implementation date is contingent on receiving a FERC order accepting the joint filing by January 1, 2012.

Settlement Reporting

The OATT-Schedule 2 VAR settlement will include the new allocation method for VAR-related NCPC costs. No changes will be made to existing OATT-Schedule 2 VAR reports. The ISO will issue two new standard settlements for Day-Ahead and Real-Time LSCPR-related costs that will handle the reallocation of charges from the single region charged in the Day-Ahead or Real-Time NCPC settlement to the affected Reliability Regions using the new allocation method. These charges and credits will be reflected in the Day-Ahead NCPC and Real-Time NCPC line items on the bill. In addition, the ISO will issue two new standard settlement market information server (MIS) reports, SS_DANCPCLSCPRMRR and SS_RTNCPCLSCPRMRR, detailing the reallocation of these charges. 

Report details will be posted on the website under Report Descriptions, Templates & Samples, by December 1, 2011. Complete details of the new standard settlements will also be available on the Invoice & Remittance Advice Item Descriptions web page by December 1, 2011.

If you have questions regarding the new allocation method or the new MIS standard settlement reports, contact Customer Support at 413-540-4220 or custserv@iso-ne.com.