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Commitment cost enhancements

This initiative is a continuation of the Commitment Cost Enhancements Phase 2 initiative and will entail developing a methodology for calculating use-limited resource opportunity costs and creating opportunity cost adders for bidding into the ISO market using the proxy cost option. Upon implementing these changes, the registered cost option will be eliminated and all use-limited resources must bid using the new methodology.

 

Outcome

Effective April 1, 2019, the ISO activated system changes to calculate use-limited resource opportunity costs and create opportunity cost adders for bidding into the ISO market using the proxy cost option. Effective May 1, 2019, the calculated Opportunity Cost Adders are available for use in the ISO markets. This implementation improves the management of use limited resources by allowing translation of most cases into standard limitations, therefore reducing the amount of cases requiring negotiation of opportunity costs.

Phase 3
Implemented: April 1, 2019
FERC approval: March 28, 2019
Tariff amendment filing: March 23, 2018
Board of Governors approval: March 25, 2016

Phase 2
Implemented: November 1, 2016

Phase 1
Tariff changes effective: December 30, 2014

 

Market notices

Phase 3

Implementation

FERC filings and orders

Tariff development

Policy development

Workshops

 

Completed initiatives

On November 1, 2016, the ISO implemented tariff and policy changes to clarify the transition cost calculation definition and provide guidelines on how it will be calculated.
Implemented: November 1, 2016
FERC approval: November 3, 2016, September 9, 2015
Tariff amendment filing: June 5, 2015 (ER15-1875)
Board of Governors approval: March 26, 2015
  • Outcome
    On November 1, 2016, the ISO implemented tariff and policy changes to clarify the transition cost calculation definition and provide guidelines on how it will be calculated.— Implemented: Nov. 1, 2016; FERC approval: Nov. 3, 2016, and Sept. 9, 2015; Tariff amendment filing: June 5, 2015 (ER15-1875); Board of Governors approval: March 26, 2015
  • Commitment cost enhancements phase 2 - relevant market notices
  • Commitment cost enhancements phase 2 - tariff language
  • Commitment cost enhancements phase 2 - papers and proposals
The ISO implemented tariff changes that: 1) allow the ISO, in the event of a significant price spike, to execute and settle the market using a gas price published on the morning of the day-ahead market run rather than the prior evening’s calculated gas price index; 2) increased the existing proxy cost bid cap from 100 percent of the resource’s calculated proxy cost to 125 percent; and 3) eliminated the registered cost option for all resources except use-limited resources. FERC directed the ISO to submit an informational report concerning the impact of these changes on longer term market design changes for commitment costs by August 1, 2015.
Tariff changes effective: December 30, 2014
FERC approval: December 30, 2014
Tariff amendment filing: October 1, 2014 (ER15-15)
Board approval: September 18, 2014
  • Outcome
    The ISO implemented tariff changes that: 1) allow the ISO, in the event of a significant price spike, to execute and settle the market using a gas price published on the morning of the day-ahead market run rather than the prior evening’s calculated gas price index; 2) increased the existing proxy cost bid cap from 100 percent of the resource’s calculated proxy cost to 125 percent; and 3) eliminated the registered cost option for all resources except use-limited resources. FERC directed the ISO to submit an informational report concerning the impact of these changes on longer term market design changes for commitment costs by August 1, 2015.— Tariff changes effective: Dec. 30, 2014; FERC approval: Dec. 30, 2014; Tariff amendment filing: Oct. 1, 2014 (ER15-15); Board approval: Sept. 18, 2014
  • Commitment cost enhancements phase 1 - relevant market notices
  • Commitment cost enhancements phase 1 - tariff language
  • Commitment cost enhancements phase 1 - papers and proposals