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FERC approves ISO-NE plan to make more resources subject to economic dispatch

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FERC approves ISO-NE plan to make more resources subject to economic dispatch

FERC signed off on proposed rule changes that will broaden the range of resources subject to electronic economic dispatch by ISO New England Inc.

In a joint filing, the ISO-NE and New England Power Pool said resources that agree to be dispatchable when submitting offers into the energy market must be capable of increasing or decreasing output at a moment's notice in order to maintain system reliability.

The ISO-NE instructs those resources to take such actions using electronic signals, avoiding the manual dispatch process that can take up precious time during emergencies and increase the risk to system reliability.

In contrast, nondispatchable resources are incapable of receiving electronic dispatch instructions and instead provide power using self-scheduling. If the ISO-NE needs such a resource to change its output, the grid operator must send instructions manually, such as by using the phone.

According to the filing, 82% of the generation in New England is fully dispatchable. However, about 5,200 MW of New England generation capacity — roughly 300 MW of settlement-only resources, 900 MW of intermittent resources and 4,000 MW of nuclear and solar resources — still is not required to respond to electronic dispatch instructions.

Asserting that even relatively small amounts of nondispatchable generation can have important impacts on price and reliability, the ISO-NE and NEPOOL proposed to require more of the nondispatchable, non-nuclear resources to be dispatchable, with the primary impact on intermittent resources.

The proposal would require those resources to be economically dispatchable and would clarify the rules on dispatchability. Solar resources would be exempted from the new requirements until the ISO-NE develops the means to forecast site-specific solar generation at a facility.

The filing said nuclear plants will remain nondispatchable because communication with those facilities takes place by telephone to avoid any potential confusion with respect to plant operation. Settlement-only resources, which must be less than 5 MW in capacity, also are excluded because they are unlikely to cause reliability concerns.

In a Dec. 9 order, FERC approved the proposal, citing the undisputed benefits it will provide.

Eversource Energy Service Co. had asserted that the proposed revisions would violate the rights of qualifying facilities and integrate many of them into the ISO-NE energy markets even though they are exempt from Federal Power Act sections 205 and 206. But FERC shot down those arguments, reasoning that a qualifying facility does not have to participate in the ISO-NE administered energy markets but can instead operate exclusively as a behind-the-meter resource and therefore not be subject to the proposed revisions.

The commission also rejected Eversource's argument that the revisions restrict the amount of energy qualifying facilities can sell to their host utilities and the requirement that those utilities must buy that energy, citing various strategies and market mechanisms they can use to preserve their obligations and rights under the Public Utility Regulatory Policies Act.

Finally, the agency disagreed with Eversource that the proposed revisions could compromise qualifying facilities' protection from curtailments other than in system emergencies.

FERC said the different sections of the proposed revisions will take effect Dec. 12, 2016; Dec. 1, 2018; and June 1, 2020, as requested. (FERC docket ER17-68)