As with the first and second annual reconfiguration auctions, a resource’s qualified capacity (QC) and commercial status determine how many megawatts it can add to its capacity supply obligation (CSO) in the third annual reconfiguration auction (ARA #3). However, ARA #3 has different rules for determining qualified capacity. Additionally, a resource may be flagged for a significant decrease in capacity during ARA #3 qualification.
The qualification process for the bilateral period associated with ARA #3 begins in October when the ISO calculates the qualified capacity values for all resources that can participate in this bilateral period.
The process involves the following:
If a resource’s qualified capacity value for ARA #3 is less than its CSO for that capacity commitment period, the resource may be flagged for a significant decrease in capacity. A significant decrease in capacity is calculated using a resource’s biggest shortfall, which is the largest monthly difference between the resource’s CSO and its qualified capacity for the relevant CCP. A significant decrease in capacity will be triggered if the biggest shortfall exceeds the lesser of 40 megawatts (MW) or 20% of the resource’s CSO for the month with the largest deficit. For details, see Market Rule 1, Section III.220.127.116.11.3, Adjustment for Significant Decreases in Capacity.
If a significant decrease in capacity is triggered, the source has two options:
Note that a critical path schedule (CPS) should be included as part of the detailed plan for how the resource plans will mitigate the shortfall. This CPS should describe the major milestones needed to solve the problems at the facility and the timeline for completing those milestones. At a minimum, the following should be included in the CPS:
The restoration plan can be submitted during the 10-business-day restoration plan submission window beginning in late October. The ISO will notify the project sponsor of the exact window date via an email notice. If you would like to receive these emails, as well as all other FCM notices, subscribe to the Capacity (ICAP and FCM) Announcements mailing list (hit send when the subscription email opens up).
See the Reconfiguration Auctions and CSO Bilateral Periods section and the Annual and Monthly FCM Events calendars available on the FCM page for more information about the timing of the bilateral period submission windows.
Once the ISO has completed the review of the restoration plan, the final qualified capacity values will be published to the Position tab in the FCTS under the published data for ARA #3 Bilateral Period 1. After the final qualified capacity values are calculated, an email notice will be sent out to prompt participants to review their final resource information for the bilateral period. (See email subscription details above.)