The Forward Capacity Auction (FCA) consists of a primary auction followed by a substitution auction. The primary auction is an online, descending-clock auction. It’s run by an auctioneer over multiple rounds for each capacity zone and any associated external interfaces. Capacity zones are subregions of the New England Control Area that may represent load zones that are export-constrained, import-constrained, or contiguous (neither export- nor import-constrained). Resources that clear the auction receive a capacity supply obligation (CSO) for the corresponding capacity commitment period (CCP) in three years’ time.
Accessing the Online Primary Auction System
- The primary auction is conducted on a secure website with minimal system requirements. Participants can access the site from their own computers. All submitted information is encrypted using Secure Sockets Layer technology to ensure security and confidentiality.
- The auction usually begins on the first or second Monday in February, with the auction system going online at 8:00 a.m. Eastern Prevailing Time. You can find the specific dates in the appropriate auction calendar on the FCM page.
- Each primary auction can be run for as many as five business days (absent extraordinary circumstances) with up to eight rounds per day.
- Each participant can nominate up to five authorized individuals to submit offers and dynamic de-list bids during the auction.
- Before the FCA, a user guide is provided to authorized bidders. Bidders can also participate in a resource review and mock auction to become familiar with the auction software. This hands-on training is strongly recommended.
How the Primary Auction Works
- Before the beginning of each round, the auctioneer announces to all participants a start-of-round price and a lower end-of-round price per kilowatt-month for each capacity zone and any associated external interfaces.
- During the round, participants indicate their willingness to keep specific megawatt quantities in the auction within the range of the start- and end-of-round prices:
- Bidders with new capacity resources place offers to indicate the megawatts they are willing to supply.
- Bidders with existing capacity resources utilize dynamic de-list bids to indicate the megawatts they are willing to supply at specific price points below the dynamic threshold. (Additional information is available in Market Rule 1, Section III.13.1.2.3.1.A, Dynamic De-List Bid Threshold. For specific details for each FCA, see the FCM Parameters.)
- The primary auction closes when all capacity zones and their associated external interfaces have closed due to supply and demand intersecting on the systemwide and zonal sloped demand curves.
- All the capacity resources remaining in the auction when it closes then enter the second stage of the primary auction. In this stage, the market-clearing auction software is run to determine the capacity clearing price. This step also includes a post-processing procedure that determines the final payment rate for each resource and its CSO for the CCP.
After the Primary Auction
More Information
- Market and auction details can be found in Market Rule 1, Section III.13.2, Annual Forward Capacity Auction.
- FCM 101 training and training materials are available on the Training Materials webpage.
