Pay for performance regulation

FERC Order No. 755 required that the ISO modify the compensation mechanism for regulation to include a performance payment with an accuracy adjustment in addition to the existing capacity payment. The ISO has FERC approval of the proposed tariff modifications, and is conducting a one year evaluation of the methodology for calculating mileage accuracy and assessing whether the minimum performance standard and any additional items should be revised.

Outcome

Effective May 1, 2013 the ISO implemented functionality to comply with FERC Order 755 for compensation of frequency regulation in organized wholesale power markets. The ISO developed a two-part structure to establish the prices for regulation capacity and mileage, which is a performance based payment. Resources that receive regulation capacity awards must also receive a mileage award and vice versa. The ISO measures a resource’s actual performance in how well it responds to a dispatch signal. 

FERC ruling: January 30, 2015
Implementation: May 1, 2013
Tariff amendment filing: December 2, 2014
Board of Governors approval: November 13, 2014


FERC filings and orders

  • Mar 7, 2013 Tariff amendment - order 755 average instructed mileage - docket no ER13-1055-000
  • Apr 27, 2012 Amendment - frequency regulation compensation - docket no ER12-1630-000
  • Feb 27, 2013 Tariff amendment - pay for performance - docket no ER13-995-000
  • Dec 2, 2014 Tariff amendment - pay for performance year one changes (ER15-554)

Implementation

Tariff development

Policy development

History

Implementation: In compliance with FERC Order 755 – Pay for Performance (PFP) API Report, the ISO deployed a new API AS_MILEAGE_CALC, which provides the system performance accuracy, average instructed mileage and system mileage multiplier publication, with the fall 2013 release.
FERC approval: September 20, 2012
Tariff amendment filing: April 27, 2012
Board of Governors approval: March 23, 2012