ISO received a dispute that RMR owners may currently be underpaid in the market for their capacity payments. Under the RMR policy, costs and revenues are compared to determine potential excess revenues. If the costs exceed revenues, that means an absence of excess revenue where the full capacity payment amount should be paid. If, instead, the revenues are greater than the costs for these RMR resources, the ISO will claw back that amount. This is done by adjusting the capacity payment amount by the RMR excess revenue amount which uses the net costs.
Because of this adjustment, the capacity payments referenced in the dispute above are being reduced as the RUC commitment costs are not being taken into account when determining the RTM RMR excess revenue amount. Because the cost calculation did not include RUC commitment costs, the calculation showed that there was excess revenue.
Settlements has updated the configuration guide for the RTM Net Amount Pre-calculation to include RUC costs. The updated calculations combine the RTM and RUC revenues and costs together. Including the RUC commitment costs will allow for the correct calculation of the combined RUC and RTM excess revenues. This will reduce the claw back of excess revenues in the RMR capacity payments that RMR owners receive. Charge code 7020 (Daily RMR Capacity Payment) will be indirectly impacted as it receives the RMR excess revenues from the RTM Net Amount Pre-calculation.