Best Practices in Energy Efficiency Program Screening - Synapse ...

peak demand. In New England, utilities and competitive suppliers acquire capacity from
the Forward Capacity Market (FCM) (Synapse 2011, p.1-3).
Under the FCM, ISO-NE acquires sufficient capacity to satisfy the installed capacity
requirement it has set for a given power year through a forward capacity auction (FCA)
for that power year. The price for capacity in that power year is based upon the results
of the FCA for that year. The FCA for each power year is conducted roughly three years
in advance of the start of that year. (Synapse 2011, pp.2-4, 2-5).
The 2011 AESC Study’s projection of capacity prices is based on the fourth FCA
(FCA 4) observed supply curve and extrapolations of that curve. This was considered
the best approach for the AESC Study based on the information available and a fair
representation of the impacts of projected capacity retirements and additions. (Synapse
2011, p.6-1).
Under the 2011 FCM rules, each FCA will have a ceiling price and a floor price through
the sixth FCA (FCA 6). The status of floor prices for auctions after FCA 6 is at this time
uncertain. For the first four FCAs, the floors averaged $3.50/kW-month. Each of these
auctions concluded when it reached the floor price (Synapse 2011, pp.2-4, 2-5).
Figure A.2. Avoided Capacity Costs
Figure A.2 presents the annual avoided capacity costs developed by the AESC Study,
as well as the 20 year levelized avoided costs (see Synapse 2011, App. B). 33 As
33 The avoided capacity costs in $/kW-month were converted to $/MWh in order to make them comparable
with the other avoided costs presented in this appendix.
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