23.4.5.7.15Forecasts Under the Buyer Side Market Power Mitigation Measures  

The rules set forth in this Section 23.4.5.7.15 apply to (i) the ISO’s determinations pursuant to Section 23.4.5.7, et seq. of ICAP Spot Market Auction forecast prices (“BSM ICAP Forecast”) and (ii) Energy and Ancillary Services revenues when determining Unit Net CONE under Sections 23.4.5.7, et seq. (collectively for purposes of this Section, a “BSM Forecast”).  The rule for Excluded Capacity set forth in Section 23.4.5.7.15.7.3 shall apply to Self Supply Capacity and Additional Self Supply Capacity under Section 23.4.5.7.14.3.  The ISO shall post on its website the BSM Forecast inputs determined in accordance with this Section 23.4.5.7.15, subject to any restrictions on the disclosure of Confidential Information or Critical Energy Infrastructure Information, on or before the commencement of the Initial Decision Periods for the Class Year Study, Additional SDU Study and the Expedited Deliverability Study.  This posting will include sources of or references for publicly available information “demonstrating with reasonable certainty,” as defined in Section 23.4.5.7.15.2, used to develop the BSM Forecast.

23.4.5.7.15.1For the purposes of Section 23.4.5.7.15, a “positive indicator” that a Generator or UDR project will repair and return to service includes indications that a return to service is, in the ISO’s judgment, likely and imminent, such as visible site activity, executed labor or fuel supply arrangements, or unit testing. 

23.4.5.7.15.2For the purposes of Section 23.4.5.7.15, publicly available information “demonstrating with reasonable certainty” shall be limited to information that has been released, authorized, capitulated, or endorsed by an individual or entity having the authority or right to take specific, definitive, actions; and – if such information is contested, to take unilateral actions regarding the operational status of the facility.

23.4.5.7.15.3When establishing a BSM Forecast, the ISO shall incorporate the parameters and inputs identified in the following subsections. The ISO shall make assumptions necessary to account for any other value or input not expressly addressed in the following subsections in accordance with ISO Procedures.

23.4.5.7.15.3.1When establishing a BSM Forecast, the ISO shall include Existing Units and Additional Units, as defined in Sections 23.4.5.7.15.4 and .5, less Omitted Units, as defined in Section 23.4.5.7.15.6.

23.4.5.7.15.3.2When establishing a BSM Forecast, the ISO shall utilize the Load forecast as set forth in the most recently published Load and Capacity Data (Gold Book), or as most recently posted to the ISO’s public website and in accordance with ISO Procedures.  

23.4.5.7.15.3.3When determining a BSM ICAP Forecast, the ISO shall reflect Special Case Resource enrollment at a level consistent with average enrollment over the 3 prior Capability Years.

23.4.5.7.15.3.4When determining a BSM ICAP Forecast, the ISO shall identify the projected ICAP Demand Curve by applying the “inflation index” as defined in Section 23.4.5.7.4.  When determining a BSM ICAP Forecast for an Indicative Buyer-Side Mitigation Exemption Determination under Sections 23.4.5.7.2.2 and 23.4.5.7.2.4 when the Commission has not yet accepted the first ICAP Demand Curve to apply specifically to the Mitigated Capacity Zone in which the NCZ Examined Project is located, such inflation rate shall be applied to the ICAP Demand Curve the ISO filed pursuant to Services Tariff Section 5.14.1.2.2.4.11.

23.4.5.7.15.4Existing Units

Except for the Generators and UDR projects that are excluded without limitation under an exception set forth in Section 23.4.5.7.15.7, the ISO shall identify “Existing Units” as the set of Generators and UDR projects identified in the ISO’s most-recently published Gold Book that have CRIS, and are operating at the time that the ISO determines the forecast; including but not limited to Generators in Forced Outage or Inactive Reserve status.

23.4.5.7.15.5Additional Units

Subject to the exceptions set forth in Section 23.4.5.7.15.7, the ISO shall identify “Additional Units” as each Generator and UDR project that: has been found to be exempt from an Offer Floor as described in Section 23.4.5.7.15.5.2 or (i) has previously offered to supply UCAP, (ii) has CRIS, (iii) is not in Existing Units, and (iv) if a Generator, is in an ICAP Ineligible Forced Outage, Mothball Outage, or Retired; if either: (a) the ISO concludes in its sole judgment that there are sufficient positive indicators that the Generator or UDR project will repair and return to service, or (b) the ISO determines that a return to service of the Generator or UDR project would have a positive Net Present Value as set forth in Section 23.4.5.7.15.8.

23.4.5.7.15.5.1When establishing a BSM Forecast, the inclusion of Generators and UDR projects identified pursuant to Section 23.4.5.7.15.5 (b) as Additional Units shall reflect the persistence of their operation as being contingent on the projected recovery of their forecasted Going Forward Costs.

23.4.5.7.15.5.2When the ISO establishes a BSM Forecast to complete the BSM determinations for a Class Year Study, Additional SDU Study or Expedited Deliverability Study, the ISO shall not double-count exemptions.  The ISO, in consultation with the Market Monitoring Unit, shall include for each set of decision round determinations: (i) all Examined Facilities that the ISO has previously exempted from an Offer Floor under Section 23.4.5.7.13 or as a Public Policy Resource under Section 23.4.5.7.3.1 in a Class Year Study, or Additional SDU Study or Expedited Deliverability Study in the first Capability Year in which the Examined Facility was granted such exemption, provided, however, for any exemption granted to an Examined Facility under Section 23.4.5.7.13 or as a Public Policy Resource under Section 23.4.5.7.3.1 prior to the most recently completed Class Year Study, the ISO shall exclude the Examined Facility if it has determined it is reasonable to project the Examined Facility will not enter the market, and (ii) all Examined Facilities that the ISO determines will receive a Renewable Exemption or a Part A Exemption in the currently ongoing Class Year Study, Additional SDU Study or Expedited Deliverability Study until and unless an Examined Facility rejects its cost allocation or otherwise drops out of such Class Year Study, Additional SDU Study or Expedited Deliverability Study.  Any Examined Facility that was granted an exemption by the ISO in a previously completed Class Year Study, Additional SDU Study, or Expedited Deliverability Study pursuant to Section 23.4.5.7.2(a) if issued prior to the start of Class Year 2019, Section 23.4.5.7.2(b), Section 23.4.5.7.2(c) or Section 23.4.5.7.2(ed) shall also be included in the BSM Forecast for each set of decision round determinations for such Class Year Study, Additional SDU Study or Expedited Deliverability Study if the ISO has determined that 5% or more of its respective total project’s costs have been spent.

23.4.5.7.15.6Omitted Units

Subject to the exceptions set forth in Section 23.4.5.7.15.7, the ISO shall identify “Omitted Units” as the set of Generators and UDR projects that meet the criteria in the following subsections.

23.4.5.7.15.6.1Generators and UDR projects (i) that have transferred CRIS; (ii) for which the CRIS has expired; (iii) that have CRIS for which a request has been received by the ISO for an evaluation of a CRIS transfer from another location in the Class Year Facilities Study commencing in a calendar year in or preceding the Mitigation Study Period; or (iv) that are an expected transferor of transferred CRIS at the same location.  For any CRIS transfer described in (iii) or (iv) of this Section, the transferor or the transferee must have notified the ISO of the transfer pursuant to OATT Attachment S Section 25.9.4 and the transfer must be reasonably expected to be effective on a date within the Mitigation Study Period.

23.4.5.7.15.6.2Generators in ICAP Ineligible Forced Outages (even if resulting from Catastrophic Failures), Mothball Outages, or that are Retired; provided they are not identified under Section 23.4.5.7.15.5 as an Additional Unit or an exception under Section 23.4.5.7.15.7.

23.4.5.7.15.6.3Generators that have submitted a Generation Deactivation Notice, beginning with the proposed deactivation date identified in such notice, provided that: (i) the ISO does not identify sufficient positive indicators that the Generator will repair and return to service and (ii) the ISO determines that a return to service or continued operation of the Generator does not have a positive Net Present Value as set forth in Section 23.4.5.7.15.8.

23.4.5.7.15.7Exceptions

The rules set forth in the following subsections take precedence over the rules described elsewhere in Section 23.4.5.7.15 under the facts and circumstances defined therein.

23.4.5.7.15.7.1Generators that have submitted a Generation Deactivation Notice, for which the ISO has not yet completed its Short-Term Assessment of Reliability or Generation Deactivation Assessment, shall not be identified by the ISO as Omitted Units, unless there is publicly available information demonstrating with reasonable certainty that the Generator or UDR project will indefinitely cease operation.

23.4.5.7.15.7.2Initiating Generators with an associated Generator Deactivation Reliability Need for which a Short-Term Reliability Process Solution has not yet been identified, RMR Generators, and Interim Service Providers that are required to keep their generating unit(s) in-service, shall be included in Existing Units for the expected duration of such Generator Deactivation Reliability Need with which they are associated.  Such Generators shall also be included in Existing Units beyond the expected duration of the Generator Deactivation Reliability Need if either: (a) the ISO determines, in its sole judgment, that a return to service or continued operation of the Generator has a positive Net Present Value as set forth in Section 23.4.5.7.15.8, or (b) there is publicly available information demonstrating with reasonable certainty that the Generator will continue operation.

23.4.5.7.15.7.3Except for those included in Existing Units pursuant to Section 23.4.5.7.15.7.2, Generators and UDR projects for which there is publicly available information demonstrating with reasonable certainty that they will indefinitely cease operation, shall be identified as Excluded Capacity beginning with the date determined by the ISO to be consistent with the expected cessation of operations.

23.4.5.7.15.7.4Generators and UDR projects for which there is publicly available information demonstrating with reasonable certainty that (a) they will return to service shall be included in Additional Units beginning with the date determined by the ISO to be consistent with its expected return to service, or (b) they will continue operations shall be included in Additional Units until the date determined by the ISO to be consistent with its expected continuation of operations.

23.4.5.7.15.7.5Where determined by the ISO in its sole judgment to be reasonable, the additional capability associated with the repair of a Generator or UDR project that has been operating under a long term partial derate (such as due to the delay or deferral of repairs) may be treated as if it were in and of itself a separate Generator or UDR project in an ICAP Ineligible Forced Outage for the purposes of Section 23.4.5.7.15.  In such instances, the net present value of the investment required to for the Generator or UDR facility to return to its original capability or capability prior to the long term partial derate shall be evaluated in place of the cost of returning to service.

23.4.5.7.15.7.6The ISO shall not be required pursuant to Section 23.4.5.7.15 to determine whether a return to service or continued operation would have a positive Net Present Value as set forth in Section 23.4.5.7.15.8 for: (i) Generators in ICAP Ineligible Forced Outages that the ISO determined to have resulted from a Catastrophic Failure; and (ii) Generators that are Retired, provided that in the case of (ii),  in the ISO’s sole judgment, (a) the Generator was subject to actions that rendered it permanently inoperable, (b) the reversal of such actions would be a nontrivial undertaking, and (c) the ISO has received confirmation from it that it has permanently ceased operations.

23.4.5.7.15.7.7The production and sale of energy from Generators and UDR projects that only have ERIS and no CRIS, or that will have ERIS only after a transfer of CRIS, for which the ISO has received notice or made a determination in the Class Year as described in the next sentence, shall be modeled in the BSM Forecasts, but such units shall be excluded from the BSM ICAP Forecast.  In accordance with Attachment S of the OATT, the ISO must have received notice that the transaction is final if a transfer of CRIS at the same location, or have determined the facility receiving the transfer is deliverable and such transferee is either in the Class Year being examined, or remained in a prior Class Year at the time of its completion, if a transfer of CRIS from a different location.

23.4.5.7.15.8Net Present Value Analysis

Where required by Section 23.4.5.7.15, the ISO shall determine if a Generator or UDR project that potentially could return to service or continue in operation would have a positive net present value under ISO-predicted market conditions and recognizing the entry of projects in the current Class Year and those that remained in prior Class Years at the time of their completion, in accordance with ISO Procedures.  If the ISO-estimated net present value is greater than zero, then the criterion of this Section will be considered to have been met.

23.4.5.7.15.8.1The ISO’s net present value analysis shall consider, at a minimum: (a) the ISO-estimated costs and opportunity costs associated with returning a Generator or UDR project to service if the unit is not currently operating, and of continued operation through the end of the Mitigation Study Period, or the end of the investment horizon as reasonably determined by the ISO, whichever is of greater length (including, if applicable, the expected lost revenues of the rest of the portfolio of the Installed Capacity Supplier attributable to reductions in ICAP Spot Market Auction prices caused by the Generator or UDR project’s return to service); (b) the ISO-estimated revenues, over the same time period, from the production and sale of Energy, Ancillary Services, and capacity, and (c) the effect that additional risk associated with the age, condition, and location of the Generator or UDR project may have on the required return on investment.

23.4.5.7.15.8.2The ISO’s net present value analysis shall be for a period beginning after the reasonably anticipated commencement of the Initial Decision Period but before the starting Capability Period of the Mitigation Study Period, through the end of Mitigation Study Period, or until the investment horizon as reasonably assumed by the ISO, whichever is of greater length.

23.4.5.7.15.8.3The ISO shall consider data received from the Generator and UDR project for which it is performing a net present value analysis pursuant to this Section 23.4.5.7.15.8, and information received pursuant to Section 30.25 of the OATT, along with any new, updated, or relevant information that the ISO, in its sole judgment and in accordance with ISO Procedures, has verified is reasonable and accurate.  If the ISO has not timely received sufficient information from the owner or representative of a Generator or UDR project, or if the ISO has received information but determined it is not suitable or reliable to be used for the purposes of a net present value analysis pursuant to Section 23.4.5.7.8, the ISO can substitute suitable estimated data, or identify the Generator or UDR project as Omitted Units.