Supply Participation in the FCM Substitution Auction

Immediately following the completion of the primary annual auction for the Forward Capacity Market (FCM), a substitution auction is held. (See FCM Substitution Auction Overview and Timeline.) Eligible new resources can participate as supply in the substitution auction.

To participate in the substitution auction, a new resource must meet all the following criteria:

Be a sponsored policy resource (SPR), which is a new capacity resource that meets these specifications:
Qualify to participate in the primary auction as a new generation, demand, or import capacity resource, or be conditionally qualified based on the eligibility and interconnection queue priority criteria described in Market Rule 1, Section III.13.2.8.2.1
Have available some portion of qualified capacity that did not obtain a capacity supply obligation (CSO) in the primary auction

Such resources remain eligible even if they are participating in a composite offer as a summer resource.

Resources participating as supply in the substitution auction enter sealed supply offers that:

Have at least one and up to five price-quantity pairs in ascending price order, not to exceed the difference between Forward Capacity Auction (FCA) qualified capacity (before any applicable renewable-technology-resource-related proration on FCA qualified capacity), and a CSO obtained in the primary auction
Have prices that may differ from the primary auction but cannot be greater than the primary auction’s starting price or lower than that starting price multiplied by −1
- Supply offer quantities with no price specified will be assigned the primary auction starting price.
Can be rationed and may be partially cleared
Are not subject to Internal Market Monitor review

Here are some key deadlines for supply offers in the substitution auction:

The election to participate must be made in April during the show of interest submission window and no later than the supply-election deadline for the new resource substitution auction.
The ISO must receive the SPR certification by the new capacity qualification deadline.
- Supply offer prices can be submitted five business days after the composite offer submittal window closes in October.

(Learn how to access the auction calendars.)

Use the Forward Capacity Tracking System (FCTS) to elect to participate as supply in the substitution auction. Note that once this election is made, it is binding for all newly qualified capacity, provided that the resource does not obtain a CSO for its full qualified capacity in the primary auction.
Certify that the resource meets the definition of an SPR as part of the new capacity qualification package submittal in the FCTS. (See package submittal guidance for new generating, new import, or new demand capacity resources.) The ISO recommends using the certification form available on the FCM webpage. This form contains detailed guidelines on certification criteria.
Final supply offers can be submitted using FCTS five business days after the composite offer submittal window closes in October.

Details regarding the substitution auction can be found in Market Rule 1, Section III.13.2.8, Capacity Substitution Auctions.
The various FCM new capacity qualification webinar materials available on the Training Materials webpage provide more instructions on the necessary steps to qualify new resources for supply participation in the substitution auction, including FCTS instructions and screenshots.