122 FERC ¶ 61,297

UNITED STATES OF AMERICA

FEDERAL ENERGY REGULATORY COMMISSION

Before Commissioners: Joseph T. Kelliher, Chairman;

Suedeen G. Kelly, Marc Spitzer,

Philip D. Moeller, and Jon Wellinghoff.

+--------------------------------------------+----------+-------------+
| ISO New England Inc. -                     | Docket   | E           |
|                                            | Nos.     | R07-546-010 |
| EnerNOC, Inc.                              |          |             |
|                                            |          | E           |
| ISO New England Inc. -                     |          | R07-546-011 |
|                                            |          |             |
| Kimberly-Clark Corporation                 |          |             |
+--------------------------------------------+----------+-------------+

ORDER GRANTING WAIVERS

(Issued March 31, 2008)

1.  ISO New England Inc. (ISO-NE) is currently preparing to conduct its
    second Forward Capacity Auction (FCA). Two parties have asked for a
    waiver of ISO-NE\'s market rules regarding the requirements to
    participate in that auction. The Commission hereby grants the
    requested waivers.

# Background

2.  On March 6, 2006, ISO-NE filed a Settlement Agreement establishing
    the framework for New England's Forward Capacity Market (FCM).[^1]
    On February 15, 2007, ISO-NE filed revisions to its market rules to
    implement the FCM. The Commission accepted a portion of the market
    rules on April 16, 2007,[^2] and the remainder on June 5, 2007.[^3]
    In its June 5 Order, the Commission accepted market rules that
    outline the rights and obligations of capacity resources.

3.  Under the FCM mechanism, ISO-NE will provide capacity payments to
    resources that provide capacity to the New England region. Capacity
    resources compete to be selected to provide capacity, and receive
    payments, through a Forward Capacity Auction (FCA) to be held every
    three years. ISO-NE conducted its first FCA on February 4, 2008, and
    is preparing to conduct the second FCA in December 2008.

4.  Under the FCM market rules, ISO-NE has required resources wishing to
    participate in the FCA to provide ISO-NE with certain information,
    through a Show of Interest form that each resource must submit, that
    enables ISO-NE to determine whether that capacity resource is
    qualified to participate in the auction, and then must provide
    additional information for full qualification to participate in the
    auction. Section III.13.1.1.2.1 requires that the Show of Interest
    Form be accompanied by a demonstration that the applicant controls
    the site of the capacity resource.

5.  Further, section III.13.1.9.3 requires that a party seeking
    qualification must deposit funds with ISO-NE to ensure that ISO-NE
    is compensated for performing the qualification study, and that
    payment of that deposit must be received by ISO-NE no later than 10
    business days after ISO-NE issues an invoice to the party seeking
    qualification; otherwise ISO-NE will consider the project withdrawn.

6.  Projects wishing to be entered in the December 2008 auction were
    required to submit their Show of Interest forms to ISO-NE by
    November 14, 2007, and to provide a deposit to ISO-NE by December
    18, 2007. Parties must provide their full qualification packages to
    ISO-NE by April 29, 2008 to enable ISO-NE to consider those
    parties\' applications in the qualification process.

## Waiver Requests

7.  EnerNOC, Inc. (EnerNOC) and Kimberly-Clark Corporation (K-C), each
    of which is the sponsor of one or more capacity resources that are
    seeking to participate in the December 2008 FCA, have filed requests
    for a waiver of these market rules.

-   **ER07-546-010:** EnerNOC states that it was required to make
    payment of its deposit to ISO-NE by December 18, 2007. EnerNOC
    states that its check to ISO-NE was received one day late, on
    December 19, 2007, despite EnerNOC\'s good-faith efforts to ensure
    timely receipt, due to delays in postal service delivery. EnerNOC
    states that absent a waiver, fourteen of its projects will be unable
    to participate in the April 29 FCA. It asks the Commission to grant
    a waiver so as to enable ISO-NE to review EnerNOC's Show of Interest
    forms so that EnerNOC's resources can meet the new capacity
    qualification package submission deadline of April 29, 2008.

-   **ER07-546-011:** K-C states that although it submitted its Show of
    Interest form to ISO-NE on November 14, 2007, in timely fashion, it
    was unable to demonstrate site control at that time, due to its
    uncertainty regarding the appropriate evidence of such site control
    for generation being built at K-C\'s manufacturing plant. K-C states
    that it provided ISO-NE with evidence of site control on December
    10, 2007. K-C asks the Commission to grant a waiver of the
    requirement that proof of site control must be provided at the same
    time as the Show of Interest form, so as to enable K-C\'s capacity
    resource, a new and highly efficient project in capacity-constrained
    southwest Connecticut, to participate in the auction.

## Comments and Protests

8.  Notice of EnerNOC\'s request for waiver in Docket No. ER07-546-010
    was published in the *Federal Register*, with answers, motions to
    intervene and comments due on or before January 22, 2008.[^4] Notice
    of K-C\'s request for waiver in Docket No. ER07-546-011 was
    published in the *Federal Register*, with answers, motions to
    intervene and comments due on or before February 8, 2008.[^5] ISO-NE
    filed timely comments in both proceedings.

9.  In its comments in Docket No. ER07-546-010, ISO-NE states that it
    takes no position as to whether the Commission should grant or deny
    the request for waiver, but that if the Commission acts before April
    29, 2008, ISO-NE can accommodate inclusion of this resource in the
    second FCA. It requests, however, that if the Commission decides to
    grant the waiver, any such order explicitly provide that the waiver
    is limited to the specific and unique facts presented here and does
    not constitute established precedent that would allow parties to
    avoid these or other terms and conditions set forth in the ISO
    Tariff. ISO-NE states:

    Strict enforcement of deadlines in the FCM Rules, in particular, and
    in all markets, generally, is of critical importance to orderly
    administration of markets by the ISO. The ISO, however, recognizes
    that the FCM Rules are lengthy and complex. All of these
    counterbalancing factors should be considered by the Commission when
    it decides these matters.[^6]

10. ISO-NE also states that this action would be consistent with prior
    Commission actions.[^7] Further, however, ISO-NE asserts that it
    will strongly oppose additional requests to waive deadlines
    contained in the Market Rules, except for a demonstration of
    extraordinary circumstances.

11. ISO-NE makes virtually identical arguments in its comments in Docket
    No. ER07-546-011.

# Discussion

12. The Commission will grant the two requested waivers and allow
    EnerNOC and K-C to participate in the December 2008 FCA.

13. We note, however, that the waivers granted here are of limited
    scope. Previously, the Commission has granted waiver requests for
    parties that failed to follow proper procedures for participation in
    the first FCA.[^8] As we noted there, the voluminous and sometimes
    complex nature of the FCM market rules inevitably will lead to some
    confusion or misinterpretation of their directives.[^9] The
    Commission has granted relief in situations where: (1) the
    underlying error was made in good faith; (2) the waiver is of
    limited scope; (3) a concrete problem must be remedied; and (4) the
    waiver does not have undesirable consequences, such as harming third
    parties.[^10]

14. The Commission finds that the two requests for waiver here satisfy
    the aforementioned conditions. EnerNOC and K-C have stated that
    their failure to comply with the deadlines was inadvertent. These
    waivers will relate solely to deadlines for the FCA to be conducted
    in December 2008. The waivers address concrete problems (namely, the
    failure of EnerNOC to make timely payment on ISO-NE\'s invoice, and
    the failure of K-C to demonstrate site control in a timely fashion).
    As to the question of whether the waivers could have undesirable
    consequences, we conclude that no third parties will be harmed by
    granting these limited waivers of the New England market rules.
    Moreover, the Commission does not anticipate that granting these
    waivers will adversely affect ISO-NE\'s preparation for the December
    2008 FCA.

15. Due to the specific and unique facts presented above, the Commission
    will grant the parties' requests for limited waiver of the ISO-NE
    market rules. We emphasize the importance of enforcing the FCM rules
    in order to effectively administer the markets in New England, and
    note that we will not automatically grant such waiver requests in
    the future. However, given that ISO-NE does not expect the requested
    waivers to have an effect on the FCA, the Commission finds that
    granting of the waivers is appropriate.

    [The Commission orders]{.underline}:

    The requests for waiver are hereby granted, as discussed above.

By the Commission.

( S E A L )

> Kimberly D. Bose,
>
> Secretary.

[^1]: *See generally* *Devon Power LLC*, 115 FERC ¶ 61,340 (2006) (FCM
    Settlement Order), *order on reh'g*, 117 FERC ¶ 61,133 (2006) (FCM
    Rehearing Order).

[^2]: *ISO New England* *Inc.* 119 FERC ¶ 61,045 (April 16 Order),
    *order on reh\'g*, 120 FERC ¶ 61,087 (2007).

[^3]: *ISO New England* *Inc.*, 119 FERC ¶ 61,239 (2007) (June 5 Order),
    *reh\'g pending*.

[^4]: 73 Fed. Reg. 4202 (2008).

[^5]: 73 Fed. Reg. 7283 (2008).

[^6]: ISO-NE comments in Docket No. ER07-546-010 at 3.

[^7]: *Id*. at 3 n. 3, *citing Central Vermont Public Service Corp*.,
    121 FERC ¶ 61,225 (2007) (*Central Vermont*); *University of New
    Hampshire*, 121 FERC ¶ 61,185 (2007); *Waterbury Generation LLC*,
    120 FERC ¶ 61,007 (2007) (Waterbury); and *Acushnet Co.*, 122 FERC ¶
    61,045 (2008) (*Acushnet*).

[^8]: *Acushnet*, *supra*.

[^9]: *Id.* at P 14.

[^10]: *See Central Vermont*, *supra*; *Waterbury*, *supra*.