Existing DDT Price and Progression

Increasing the Dynamic De-list
Bid Threshold
Jeff McDonald
• The Dynamic Delist Threshold Price (DDT Price) establishes a value
below which existing resources that have chosen to be price takers
in the FCA can opt to leave the auction.
• The DDT Price serves as a threshold below which
– there is sufficient supply relative to the requirement, and
– there is adequate competition that remaining existing resources are not
beholden to a mitigated price or a true “price taker” price.
• Resources that wish to leave the auction at a price below the DDT
Price do not have to submit a delist bid for IMM review.
• Target clearing quantities will price in the FCA near Net CONE,
which is considerably higher than the existing DDT Price.
• Raising the existing DDT Price will reduce the burden of delist bid
submission for those resources already willing to stay in the auction
well beyond the target clearing quantity.
Existing DDT Price and Progression
• The current DDT Price is $3.94 / kW-mo. and was set using a
formula that reflected the cost of a representative fossil steam
units. This is the type of existing resource most likely to leave
the auction and therefore could be the marginal unit.
• DDT Price will increase over time as the Performance Payment
Rate (PPR) increases
– PPR is $2,000 / MWh until FCA 12, increases to $3,500 for FCA 12 to
FCA 15, and then increases to $5,455 for FCA 15 forward.
– The calculated DDT prices corresponding to these PPR values* are
$3.94, $4.83, and $6.96
* Keeping all other terms constant
Existing Dynamic Delist Threshold Price
• Dynamic Delist Threshold Price = Net Going Forward Cost +
Expected Capacity Performance Charge
• Where:
• Net Going Forward Cost is based on a representative fossil
steam unit reviewed by the IMM for FCA8
• Expected Capacity Performance Charge is based on the
expected performance of the fossil steam unit during capacity
scarcity condition hours, relative to their share of system
• The DDT Price will be the greater of
– A value between $5.00 / kW-month and $6.00 / kW-month (tbd), or
– The risk-adjusted going forward cost and capacity performance charge
for a characteristic fossil steam unit (as is done today) with system and
market parameters updated as new data become available.
• The PPR value used in the calculation will reflect the
established progression over time.
• Other values used in the calculation will be based on
the original values and updated as necessary to
reflect additional and more recent market data.

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