BEC-5: I understand that there could be a payment adjustment under the (AIC) Capacity Agreement if the ZRCs are not from the compliance zone. Can you provide an example where the adjustment will add to the payment to Seller?

Under the terms of the (AIC) Capacity Agreement, payments to Seller will only be adjusted to reflect an increased payment if the Source Zone ACP is greater than the Compliance Zone ACP where the Compliance Zone is LRZ4. For purposes of the below example, the “ACP” refers to the Auction Clearing Price from the 2020/2021 MISO Planning Resource Auction and the Compliance Zone is LRZ4. See below for a hypothetical example.

No. of ZRCs won by Seller: 25 ZRCs from Zone 3
Average Winning Bid Price under the (AIC) Capacity Agreement: $50/MW-day
Payment to Seller = $50 x 25 ZRCs x 365 = $456,250
MISO 2020/2021 PRA Results:
LRZ 4 ACP = $30/MW-day
LRZ 3 ACP = $100/MW-day
Adjustment to Payment = ($100 – $30) x 25 ZRCs x 365 = $638,750
Adjusted Payment = $456,250 + $638,750 = $1,095,000