The Installed Capacity Requirement (ICR) represents the minimum total system capacity needed in New England to meet the Northeast Power Coordinating Council (NPCC) Full Member Resource Adequacy Criteria. The ICR, as well as the net Installed Capacity Requirement (NICR), are calculated for each Forward Capacity Auction (FCA) and annual reconfiguration auction (ARA) and are inputs to the sloped demand curves.
The ICR and NICR are determined through a stakeholder and regulatory process:
The ICR is determined using the General Electric Multi-Area Reliability Simulation Model (GE MARS). GE MARS is a computer program that uses a sequential Monte Carlo simulation to probabilistically compute the resource adequacy of a bulk electric power system by simulating the random behavior of both loads and resources. For the ICR calculation, the GE MARS model is used as a one-bus model, and the New England transmission system is assumed to have no constraints within this simulation.
See the ICR Report webpage for detailed reports on the methodology and development of the ICR for each FCA, including the applicable assumptions.
Under the FCM and the emergency operating procedure (EOP) actions of ISO New England Operating Procedure No. 4—Action During a Capacity Deficiency (OP 4), ISO system operators can purchase emergency assistance (i.e., tie benefits) from neighboring balancing authority areas to balance real-time system supply with demand. OP 4 actions are used as load- and capacity-relief assumptions within the development of the ICR values. This means that load and capacity relief assumed obtainable from implementing certain OP 4 actions are direct substitutes for capacity resources in meeting the reliability criterion.
The net Installed Capacity Requirement (NICR) value is the ICR for the region, minus the tie-reliability benefits associated with the Hydro-Québec Phase I/II Interface (HQ Phase II tie). The tie benefits assumed obtainable from the HQ Phase II tie represent the Hydro-Québec Interconnection Capability Credits (HQICCs), which reduce a portion of the ICR allocated to interconnection rights holders (IHR), reflecting the capacity benefits of the HQ Interconnection. Thus, the NICR is the amount of capacity to be purchased in an auction to meet the ICR, after deducting the HQICC value.
Locational capacity requirement values are also calculated for any specific capacity zones determined to be either import-constrained or export-constrained. (See Capacity Zone Development.) In an FCA or an annual reconfiguration auction (ARA), local areas must secure sufficient capacity to maintain reliability when transmission constraints prevent the system from either delivering needed capacity to an import-constrained area or delivering capacity from an export-constrained area to the rest of the system.
For import-constrained areas, the ISO reports the local sourcing requirement (LSR), which represents the minimum capacity level that satisfies the following requirements. The LSR is set at the higher of the following:
For export-constrained areas, the ISO reports the maximum capacity limit (MCL). To determine the MCL, the New England NICR and the LRA for Rest of New England need to be identified. The difference between the two is the maximum amount of resources that can be purchased within an export-constrained capacity zone, given the following:
Areas neither import- nor export-constrained are collapsed into a Rest-of-Pool capacity zone.
Administratively determined sloped demand curves are designed to ensure that the region procures sufficient capacity to meet its mandatory resource adequacy planning criteria. Read more.