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Split FERC Approves ISO-NE Plan For 2-Part Capacity Market Auctions

March 19, 2018

A divided Federal Energy Regulatory Commission approved a plan from ISO-New England to split the grid operator’s capacity market auctions into two parts. Under the proposal, the first part would work like the current auction; but in a second round, retiring resources that earn capacity supply obligations could transfer those obligations to new, subsidized resources that do not have one. The existing resource – an old gas plant, for example – would then retire and pay the subsidized resource, such as wind or solar, for meeting the obligation. The plan aims to prevent resources covered by tax credits or mandates from depressing prices in the capacity market.