The advance purchase fractions of the final demand are the regulator's security blanket to ensure that system demand can be met for all hours of the year and for all possible future system conditions. If the regulator is worried that not enough resources will be available in time to satisfy this requirement, it can increase the share of the final demand that it purchases in each annual SFPFC auction. As shown previously, if too much SFPFC System Demand energy is purchased in an annual auction, it can be sold back to gen400 eration unit owners in a later auc360 MWh tion or the final true-up auction. 300 270 MWh Cross hedging between control180 MWh lable generation units and inter200 mittent renewable resources under 90 MWh this mechanism can be enforced by 100 tying the amount of SFPFC energy a generation unit owner can sell on Period 1 Period 2 Period 3 Period 4 an annual basis to the value of their Daily Demand firm energy. The system opera90 + 180 + 360 + 270 = 900 MWh tor would assign firm energy values for each generation unit using a mechanism similar to what is figure 7. Hourly system demands (10% lower). Energy (MWh) its load share for the month of these three purchases. This ensures a level playing field for retailers with respect to their long-term resource-adequacy obligation. All retailers face the same average price for the long-term resourceadequacy obligation associated with their realized demand for the month. MWh MWh MWh 180 135 108 90 81 72 54 54 27 Time 1 45 36 2 3 (a) 4 18 1 Time 2 3 4 (b) Time 1 2 3 4 (c) Three Firms: Firm 1 Sells 270 MWh Firm 2 Sells 180 MWh Firm 3 Sells 450 MWh Total Amount Sold by Three Firms = 900 Mwh figure 8. The hourly forward contract quantities for three suppliers (10% lower). The forward contract obligation per period for (a) Firm 1, (b) Firm 2, and (c) Firm 3. 38 ieee power & energy magazine january/february 2021