Nepool files ICAP rules change with FERC

Electricity sold outside the ISO New England's control area would not be subject to recall except to avoid blackouts, under a proposal New England Power Pool (Nepool) filed Friday with federal regulators. Presently, in emergencies the ISO New England can recall power sold as installed capacity (ICAP) outside the region.


By the OGJ Online Staff

HOUSTON, July 9 -- Electricity sold outside the ISO New England's control area would not be subject to recall except to avoid blackouts, under a proposal New England Power Pool (Nepool) filed Friday with federal regulators.

The proposed market rule is focused primarily on New England's largest export market, New York, but could be expanded to include Canada's Hydro Quebec and New Brunswick, said David Doot, secretary of the organization that governs New England power markets.

Presently, in emergencies the ISO New England can recall power sold as installed capacity (ICAP) outside the region. Under the proposed rule the New England grid operator could no longer recall power sold outside its control area. ICAP could only be curtailed prior to blackouts.

Generators have complained the recall option on energy exports from Nepool generators has prevented New England generators from transactions in which they sell ICAP into New York and receive ICAP credit for those transactions.

Installed capacity is a controversial regulatory commodity intended to encourage construction of new power plants and adequate supply of electricity.

Utilities and other load serving entities are charged for not scheduling enough power to serve their customers. Utilities claim the ICAP charge is expensive and unnecessary, but generators say it's necessary to encourage new generation.

Nepool asked the Federal Energy Regulatory Commission to approve the proposal in time for September.

FERC ended the Nepool installed capacity auction in June and directed the ISO to establish an ICAP deficiency charge that would remain in place until the grid operator can establish another system. It reestablished an $8.75/kw-month charge. A federal appeals court asked regulators to justify the fee in June.

More in Pipelines & Transportation