The adequacy standard should satisfy the chosen reliability index, typically the loss of load expectation (LOLE) of 1 day in 10 years (so called "1-in-10").
The ORM calculations account for the current generation and transmission outages and assume that all the demand response and interruptible power loads are connected.
The ICAP obligation is called upon not by a purchaser, but by the regional transmission organization, which also requires the suppliers to offer all available resources on a day-ahead basis ("must-offer").
[8] Typical regulator requires a load serving entity to purchase firm capacity RA contracts for 110-120% of its annual peak power.
[16] Wolak[13] points to the combination of offer caps and electricity shortage mitigation strategies (rolling blackouts) leading to the need for an RA mechanism (Wolak calls this dependency a reliability externality): the price cap creates an incentive for load-serving entities (LSEs) to underpay for the electricity on the forward market, while the rolling blackouts equally penalize the LSEs that did procure sufficient resources and the ones that did not.
[18] Per Wolak, lower offer caps complicate the situation,[16] as do the electrification of space heating, adoption of electric vehicles, and an increasing share of the variable renewable energy sources.