A U G U S T 5 , 2 0 1 4 | N E P O O L M A R K E T S C O M M I T T E E

Ryan McCarthyR Y M C C A R T H Y @ I S O - N E . C O M | 4 1 3 . 5 3 5 . 4 0 7 1

Market Rule conforming edits related to the FERC accepted non-commercial financial assurance (FA) changes

FCM Non-Commercial FA:Conforming Changes

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Background

• In November 2013, ISO New England submitted revisions to the Financial Assurance Policy (FAP) and to Section I.2.2 of the Tariff for Financial Assurance (FA) associated with Non-Commercial Capacity in the Forward Capacity Market– At its August 12, 2013, September 16, 2013 and October 25, 2013

meetings, the Budget and Finance Committee discussed these revisions

– The Participants Committee, at its November 8, 2013 meeting, supported these revisions

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Conforming changes are required in Section III.13 for financial assurance associated with Non-Commercial Capacity

• The objective of these conforming changes is to ensure that the Market Rule contains all of the provisions related to financial assurance associated with Non-Commercial Capacity and includes references, where needed, to the FAP

• This project will make the following changes to the tariff:– Remove redundant language in the Market Rule– Ensure proper use of defined terms in the Market Rule (e.g., FCM

Deposit, Non-Commercial Capacity Financial Assurance Amount) – Ensure appropriate sections of the FAP are referenced within the

Market Rule– Remove requirement to review these provisions within five years of

conducting the first FCA

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Additional topics related to FA for Non-Commercial Capacity are being evaluated

• For discussion later this year, and not as part of this project, the ISO is also evaluating:– Resource qualification for CSO Bilaterals and reconfiguration auctions

without participation in the Forward Capacity Auction– Provisions that require FA for Non-Commercial Capacity participating

in the reconfiguration auctions and CSO Bilaterals

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Proposal Summary and Schedule

• Conform Section III.13 to the FERC accepted FAP changes– Additional conforming changes to the FAP will be discussed with the

Budget and Finance Committee during this same time period

• Changes are scheduled to be effective February 2015

Date Committee Action

August 2014 Markets Committee Introduce ProjectSeptember 2014 Markets Committee Review Tariff Edits

October 2014 Markets Committee Vote ProposalNovember 2014 Participants Committee Vote Proposal