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ARTICLE · 29 DECEMBER 2016

FERC Proposes Fast-Start Resource Pricing Rules For RTOs And ISOs

Troutman Pepper Locke LLP
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To account for the unique characteristics of fast-start resources, each RTO and ISO has developed pricing rules to recognize that fast-start resources are, for all intents and purposes...

United StatesEnergy and Natural Resources
Christopher Nalls
Christopher Nalls
Christopher Zentz
Christopher Zentz
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On December 15, 2016, FERC issued a notice of proposed rulemaking ("NOPR") that proposed to establish a set of fast-start pricing requirements applicable to regional transmission organizations ("RTO") and independent system operators ("ISO"). FERC indicated it was issuing the NOPR to address concerns that rates for fast-start resources in RTO and ISO day-ahead and real-time markets do not reflect the value of fast-start resources.

FERC defines a fast-start resource as any resource that is able to start up within ten minutes or less, that has a minimum run time of one hour or less, and that submitted an economic energy offer to the market. In RTO and ISO markets, locational marginal price ("LMP") reflects the system marginal cost of serving the next increment of load. Only resources that can be dispatched up or down in response to changes in system conditions are eligible to set the LMP. Fast start resources are often dispatched to their inflexible minimum or maximum

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