Markets Committee Meeting Minutes

MINUTES OF THE

MARKETS COMMITTEE (MC) MEETING

HELD ON WEDNESDAY AND THURSDAY, NOVEMBER 13 and 14, 2013

IN WESTBOROUGH, MASSACHUSETTS

Attendee / 11/13 / 11/14 / Member/
Alternate / Market Participant
A. DiGrande / ü / ü / Chair / ISO New England Inc.
E. Abend / ü* / ü* / Member / Summit Hydropower, Inc.
K. Abernethy / ü* / Member / Ameresco CT LLC
B. C. Beauregard / ü* / Member / Holyoke Gas & Electric Department
C. Belew / ü / Alternate / Mass Attorney General’s Office
R. Borghesani / ü* / ü / Member / The Energy Consortium
Temporary Alternate / Associated Industries of Massachusetts, Harvard Dedicated Energy Limited, and The Energy Council of Rhode Island
C. A. Bowie / ü / ü / Member / Northeast Utilities Service Company
T. J. Brennan / ü / ü / Member / National Grid, US
R. Cables / ü / ü / Member / United Illuminating Company
B. Callnan / ü / ü* / Alternate / Vermont Public Power Supply Authority
D. Cavanaugh / ü / ü / Member / Wallingford, Town of
Alternate / Braintree Electric Light Department, Concord Municipal Light Plant, Hingham Municipal Lighting Plant, Littleton (MA) Electric Light Department, and Wellesley Municipal Light Plant
N. Chafetz / ü / ü / Member / Galt Power Inc.
Temporary Alternate / Customized Energy Solutions for BP Energy Company, Energy America, LLC, Gulf Oil, Hess Corporation, and Integrys Energy Services, Inc.
J. Dannels / ü / Member / Consolidated Edison Energy, Inc.
K. Dell Orto / ü / ü / Alternate / Millenium Power Partners, LP
S. Dimou / ü / ü / Member / Bangor Hydro-Electric Company
J. Driscoll / ü* / Member / Comverge, Inc.
D. J. Duffy / ü / ü / Member / Generation Group Member
J. Elmer / ü / ü / Alternate / Conservation Law Foundation
D. A. Errichetti / ü / ü / Alternate / Northeast Utilities Service Company
M. A. Erskine / ü* / ü* / Alternate / Central Maine Power Company
F. Ettori / ü / ü / Member / Vermont Electric Power Company, Inc.
J. Flumerfelt / ü / ü / Member / Calpine Energy Services, LP
B. Forshaw / ü / ü / Alternate / CMEEC
W. Fowler / ü / ü / Member / Granite Ridge Energy, LLC
Alternate / EquiPower Resources Management, LLC and Exelon New England Holdings, LLC
Temporary Alternate / Dynegy Power Marketing, LLC and Entergy Nuclear Power Marketing LLC
P. Fuller / ü* / ü* / Member / NRG Power Marketing, LLC
M. Gardner / ü / ü / Member / NextEra Energy Resources, LLC
G. Geller / ü / ü / Alternate / EnerNOC, Inc.
J. S. Gordon / ü / ü / Member / PSEG Energy Resources & Trade LLC
Temporary Alternate / NRG Power Marketing, LLC
L. Guilbault / ü / Member / H.Q. Energy Services (U.S.) Inc.
R. Hart / ü* / ü* / Member / Dominion Energy Marketing, Inc.
D. Hurley / ü / ü / Member / Conservation Services Group, Inc. and Energy Federation Inc.
Alternate / NH Office of Consumer Advocate and Seneca Energy II, LLC
Temporary Alternate / EnerNOC, Inc., The Energy Consortium, Union of Concerned Scientists and Vermont Energy Investment Corporation
S. Jackson / ü / Alternate / CT Office of Consumer Counsel and Vermont Energy Investment Corporation
Temporary Alternate / Conservation Services Group, Inc., NH Office of Consumer Advocate, PowerOptions, Inc., and Union of Concerned Scientists
S. Kaminski / ü* / ü* / Member / New Hampshire Electric Cooperative, Inc.
T. Kaslow / ü / ü / Vice-Chair/
Member / GDF SUEZ Energy Marketing NA, Inc./FirstLight Power Resources Management, LLC
Temporary Alternate / Calpine Energy Services, LP
J. Keene / ü / ü / Member / First Wind Energy Marketing
C. Kieny / ü* / ü* / Member / Vermont Electric Cooperative
Alternate / Littleton (NH) Water and Light Department
W. Killgoar / ü / ü / Member / Long Island Power Authority
S. Kirk / ü / ü / Member / Exelon New England Holdings, LLC
A. Krich / ü / ü / Alternate / Generation Group Member
A. W. Kuznecow / ü / ü / Secretary / ISO New England Inc.
A. Mitreski / ü / ü / Member / Brookfield Energy Marketing, Inc.
P. Peterson / ü* / ü / Member / NH Office of Consumer Advocate and Union of Concerned Scientist,
Temporary Alternate / CT Office of Consumer Counsel, The Energy Consortium, Utility Services, Inc. and Vermont Energy Investment Corporation
F. Plett / ü / ü / Temporary Alternate / Mass Attorney General’s Office
G. Poole / ü / ü / Member / Verso Maine Energy LLC
Temporary Alternate / Competitive Energy Services
M. Q. Riding / ü* / ü* / Member / Essential Power Massachusetts, LLC
J. A. Rotger / ü / ü / Member / Cross Sound Cable Company, LLC
W. G. Ryan / ü* / Alternate / Vermont Electric Power Company, Inc.
D. J. Sipe / ü* / ü / Member / Industrial Energy Consumer Group and Maine Skiing Inc.
R. de R. Stein / ü / ü / Alternate / Signal Hill for Footprint Power LLC and H.Q. Energy Services (U.S.) Inc.
Temporary Alternate / Signal Hill for First Wind Energy Marketing and Generation Group Member
B. Swalwell / ü* / ü* / Member / Tangent Energy Solutions, Inc.
P. Tarmey / ü / Member / Mass Attorney General’s Office
B. Trayers / ü / ü / Member / Citigroup Energy Inc.
A. Trotta / ü / Alternate / United Illuminating Company
J. Wadsworth / ü / ü / Member / Vitol Inc.
C. Walsh / ü* / Temporary Alternate / CP Energy Marketing (US) Inc.
S. J. Weber / ü* / ü* / Member / PPL EnergyPlus LLC
G. Will / ü* / ü / Member / MMWEC
Temporary Alternate / CMEEC
Guest / Affiliation
P. Alivand / ü / ISO New England Inc.
B. Anderson / ü / ü / NEPGA
P. Asarese / ü / ü / ISO New England Inc.
J. Bentz / ü / ü / NESCOE
J. Brennan / ü* / FERC
R. Burke / ü* / ü* / ISO New England Inc.
M. Caley / ü / ISO New England Inc.
V. Chadalavada / ü / ISO New England Inc.
R. Coutu / ü / ISO New England Inc.
M. DePillis / ü / ISO New England Inc.
J. Douglass / ü / ü / ISO New England Inc.
J. Dwyer / ü / ü / ISO New England Inc.
R. Ethier / ü / ISO New England Inc.
L. Fink / ü* / ME PUC
S. Garwood / ü* / Power Grid Strategies
C. Geissler / ü / ISO New England Inc.
A. George / ü / ISO New England Inc.
M. Giaimo / ü / ü / ISO New England Inc.
A. Gillespie / ü / ü / ISO New England Inc.
C. Hamlen / ü / ISO New England Inc.
R. Hepper / ü / ISO New England Inc.
S. Hodgdon / ü / ISO New England Inc.
E. Jacobi / ü / CT DEEP
M. J. Krolewski / ü / ü / VT PSB
D. LaPlante / ü / ISO New England Inc.
R. Laurita / ü / ISO New England Inc.
S. Lombardi / ü / ü / Day Pitney
C. Markham / ü / Constellation
K. May / ü / ISO New England Inc.
G. McCluskey / ü / ü / NH PUC
E. McNamara / ü / ü / VT DPS
R. Morrow / ü* / ü* / ISO New England Inc.
J. Murphy / ü / ü / MA DPU
D. Naughton / ü / ISO New England Inc.
C. Parent / ü / ü / ISO New England Inc.
R. Pelletier / ü / ü / MA DPU
C. Sedlacek / ü / ISO New England Inc.
P. Smith / ü / PCS Power Consulting Services LLC
N. Ucci / ü* / ü* / RI PUC
M. White / ü / ISO New England Inc.
J. Wilson / ü* / Wilson Energy Economics
H. Yoshimura / ü / ISO New England Inc.

* -- Indicates participated by telephone

ii

After determining that a quorum was present, the meeting was called to order.

Agenda Item #1: CHAIRWOMAN’S OPENING REMARKS

The Chair welcomed the Committee members and had those participating by telephone identify themselves. It was moved, seconded and approved (with one abstention) by the Markets Committee on a show of hands to accept the minutes of the September 20th, October 2nd, and October 8th and 9th Markets Committee meetings. Mr. Lombardi on behalf of the Nominating Committee announced the nominees for the Markets Committee Vice-Chair position (Ms. Gardner, Mr. Ettori, Mr. Dimou and Mr. Mitreski). Ballots and related information will be e-mailed to the Committee members/alternates in the near future. There are no Sector restrictions on voting. Once a nominee has more than 50% that individual will be presented to the Markets Committee for its action. A Committee member asked if sector-weighted voting applied. Mr. Lombardi answered yes; the voting will follow the same procedure as Tariff voting.

Agenda Item #2: FORWARD CAPACITY AUCTION #9 – OFFER REVIEW TRIGGER PRICES

The Chair introduced the subject and noted that the previous discussion of this subject resulted in the Committee voting to defer any action at the October 8, 2013 meeting, therefore, that option is not available at today’s meeting. Mr. Laurita noted that the objections posed at the last meeting and the ISO’s position are summarized in a memo posted for today’s meeting. Mr. Laurita proceeded to present the IMM’s proposed revisions to Appendix A to Market Rule 1 implementing the ORTP for FCA #9, the revised methodology for Demand Response ORTP, and annual indexing for years between triennial recalculations to the Committee. The only change from the last meeting was clarifying language on DR. During and after the presentation, the following point was raised:

(1) A Committee member questioned the criterion of 15 MW for on-shore wind. What is the advantage to using this and thus limiting the pool to four resources rather than a larger group that would appear more indicative of actual resources coming on line.

(IMM: The IMM replied we are trying to look at representative units recently built (i.e., commercial for a minimum of six months) and not smaller generally older resources.)

The Chair proceeded to ask the Committee to move the ISO proposal. The following motion was moved and seconded by the Markets Committee:

RESOLVED, that the Markets Committee recommends that the Participants Committee support the revisions to Appendix A to Market Rule 1 implementing the proposed revisions to the Offer Review Trigger Prices (ORTP) for FCA #9, the revised methodology for Demand Response ORTP, and an annual index for years between triennial full recalculations proposed by the ISO as circulated for this meeting with those further changes recommended by this Committee and supported by the ISO and such further non-substantive changes as the Chair and Vice-Chair approve.

Mr. Geller presented the EnerNOC amendment to the Committee. After the presentation, a Committee member asked if it would be fair to say the proposed different measurement is due to different measure types. Mr. Geller replied for RTEGs, one would know the type when qualifying; for other types that is not perhaps known until later in the FCM process. Before the main motion could be voted, it was moved and seconded by the Markets Committee to amend the main motion to add a new Section III.13.1.4.2.4 to Market Rule 1 as follows:

“III.13.1.4.2.4 Consistency of the New Demand Resource Qualification Package and the Registration of Demand Resource Customers:

A Project Sponsor is prohibited from enrolling a customer with a different measure type than was selected in the New Demand Resource Qualification Package if the customer or Project Sponsor has received any out-of-market revenues associated with the installation or delivery of that different measure type.”

During the discussion of the motion, the following points were raised:

(1) A Committee member asked if there would be an option to clear the auction as load reduction and fulfill the obligation with Distributed Generation (DG) and vice versa.

(EnerNOC: Mr. Geller answered yes, if the resource had not received out-of-market revenues. We are unable four years in advance to know for sure in the Qualification process what the make-up of the Demand Response capacity resource will be.)

(2) A Committee member said it was his recollection that the LICAP settlement established a cut-off date for DG requiring it be in place before 2006. Would those criteria still apply?

(EnerNOC: Mr. Geller replied he did not know. Perhaps we should discuss that subject outside of this meeting.)

(3) A Committee member asked couldn’t this be done at the Show of Interest point and target that type of resource.

(EnerNOC: Mr. Geller replied right now, we are locked into whatever we said at the Qualification stage and a number of items can change in the 1-3 years between then and asset registration.)

(4) A Committee member suggested that, at the Qualification stage, DR Providers would likely err on the side of load management but that she shared the earlier speaker’s concern (see (1) above) about fulfilling CSO based upon load response with DG after the auction. Have you considered taking on the higher ORTP and then substituting lower ORTP resources at a later date?

(EnerNOC: Mr. Geller answered yes, however, we are then subjecting the majority of the New Demand Response Capacity Resource (which will be made up of load management) to an ORTP at the auction starting price.)

The Committee member stated DR Providers could structure separate resources reflecting some expectation of DG substitution. Any proposal will need to address concerns about this after-the-fact review.

(5) A Committee member offered an analogy to changing turbine type for generators. What are generators allowed to do in that regard?

(IMM: The IMM answered interconnection drives that process so generators cannot change their physical parameters significantly without violating their Interconnection Agreements. The IMM stated that he is not familiar enough with the FCM Qualification rules to answer what they would allow for generators.)

(6) A Committee member expressed concern that the effectiveness of the Minimum Offer Price Review with these Offer Review Trigger Prices is already questionable and creating an ability to toggle between ORTPs (as opposed to using the higher of the two and having the ISO allow reduction) creates even more questions/concerns.

(7) A Committee member said he believed the 2006 cut-off in the FCM Settlement Agreement was for passive DR. We designed Qualification to be four years prior to delivery rather than a year to accommodate central station generators. For Demand Response Providers’ business cycle allowing flexibility is an alternative to moving the auctions closer to delivery to deal with uncertainties.