Stakeholders asked FERC to force MISO to cut or dilute some of the harsher requirements of its proposed demand response participation and accreditation package of revisions.
MISO in March proposed an overhaul of its capacity accreditation methods for load-modifying resources (LMRs) and DR that would be based on whether they can help during system risk (ER25-1886). (See MISO Approaching LMR/DR Accreditation Based on Availability.)
Comments on the proposal arrived May 5, with a majority asking FERC to give demand resources more slack in accreditation reductions, response time thresholds or exemptions for outages. Multiple stakeholders also told FERC the plan would create an inconsistency between DR accreditation and how MISO’s load-serving entities prepare for peak demand.
The grid operator proposed to accredit LMRs, emergency DR and behind-the-meter generation depending on their offers during both low-margin and risky hours, when a capacity advisory, maximum generation alert or warning, or energy emergency is in place. MISO has reasoned that those hours best indicate when it is likely to need demand curtailments.
The RTO plans to split its LMR category into rapid responders with greater responsibility and slower DR with more relaxed expectations and smaller capacity values by the 2028/29 planning year. (See MISO Closing in on New LMR Accreditation.) More agile LMRs would have a maximum response time of 30 minutes and presumed availability for all maximum generation emergency Step 2 events. Slower LMRs would have a maximum six-hour response time and would be called up earlier during maximum generation warnings.
The plan would be uncompromising: MISO would ascribe accreditation values of zero for the entirety of an emergency or near-emergency event when resources fail to contribute anything for even one hour.
MISO plans to rely on the past year to get an idea of resource availability for accreditation. That’s in contrast to other capacity resources that rely on average availability over the past three years. Staff have said the accreditation is designed to be unforgiving because the RTO expects LMRs and emergency-designated DR to be available during emergencies that usually crop up after years of downtime for the resources.
The RTO would require DR and LMRs to designate a response time when registering their assets. It plans to deduct accredited values when resources report inaccurate availability.
The new accreditation would affect MISO’s approximately 12 GW of demand-side capacity resources, or about 10% of its 122-GW 2024 summertime peak load.
Under the current framework, demand resources receive a 100% accreditation of their reported capacity rating. The RTO said recent data from its demand-side resource interface show that about 2 GW of DR is accredited but never is designated as available or self-scheduled in its system.
Concerns over Declining DR, and a Clash with MISO’s RA M.O.
The Organization of MISO States said while it believed the RTO’s filing was acceptable overall, it harbored concerns about the new accreditation method making DR participation less attractive, the complexity of the proposal and a budding discrepancy between how the RTO sets margin requirements for utilities compared to how it accredits their DR.
Most OMS regulators agreed MISO “streamlined and simplified” DR participation and accreditation, “although the process is still complex.” The organization said it appreciated the RTO had to react to system risk shifting away from the usual planning around a summer peak and said it was correct to try to ensure LMRs are available when called up while cutting down on gaming opportunities and being able to access DR outside of emergency procedures.
However, OMS said it “remains concerned about the impact of the new accreditation approach on the amount of DR resources available for emergencies.” It said the new structure “may make running DR programs for load-serving entities more burdensome, more costly and more difficult to explain to participating customers, making operating such programs ultimately less attractive.” It warned MISO against “over-solving” a problem. It also said the RTO’s “all-or-nothing” approach pressures resource owners to respond to every call or risk accreditation values.
Finally, OMS noted that MISO left a mismatch between its DR accreditation and the amount of planning reserve margin responsibilities it puts on its LSEs. It said that while margin requirements still are set by utilities’ energy consumption on the peak hour, LMR accreditations would move to an availability model during risky hours that likely won’t line up with coincident peaks.
MISO has said it eventually will set new reserve margin obligations based on anticipated risk rather than LSEs’ load forecasts for its coincident peak. (See MISO Ponders Redistributing LSEs’ MW Obligations Based on Demand During Risky Periods.)
OMS urged MISO to set new reserve margin obligations as soon as possible to minimize confusion.
The Illinois Municipal Electric Agency seconded the need for MISO to iron out LMR accreditation in relation to how it sets LSEs’ reserve requirements. It said the current accreditation raises doubt over how LSEs will use their LMRs to meet upcoming peak demand responsibilities. The agency also said the RTO should cut its expectation of demand reductions to within 30 minutes or less to 90 minutes or more. It asked FERC to issue MISO a deficiency letter until it resolves both issues.
Minnesota Power said many of its 300 MW of demand resources have vowed to stop participating in MISO if the new accreditation and stricter testing is enforced.
“Through these reforms, MISO is requiring demand response customers to choose between being called upon far more frequently than they currently are or being called upon in a time frame that they cannot safely or commercially respond within,” the Duluth-based company said. It predicted the plan would “erode the value proposition” of industry to sign on for demand reductions, thereby driving up rates.
Minnesota Power also agreed MISO should have worked out a companion proposal on its reserve margin assignments before introducing a proposal that is incompatible with how its other procedures define resource adequacy.
Advanced Energy United echoed concerns that the more unforgiving accreditation could block some resources from participating and could lower accreditation too much when resources take necessary outages. The trade association added that MISO was being too strict by using just the past year instead of an average of the past three years to calculate availability; by categorizing partial failures to reduce usage as total failures; and by requiring hourly meter data on demand resources and five-minute meter data during calls for faster demand resources that can respond in less than an hour.
A group of municipal utilities — Michigan Public Power Agency (MPPA), Lansing Board of Water & Light, Central Minnesota Municipal Power Agency, Northwestern Wisconsin Electric Co. and Upper Midwest Municipal Energy Group — took issue with MISO’s proposal lumping dispatchable behind-the-meter generation in with DR and subjecting it to a harsher accreditation than other thermal generators, which use three-year averages to measure availability. They said the RTO would unfairly slash accreditation for a behind-the-meter generator if risky hours or an emergency event unfolds during a planned outage.
At MISO Board Week in March, MPPA’s Tom Weeks said the RTO’s accreditation would discriminate against dispatchable, behind-the-meter thermal generation that is built because of the difficulties with getting interconnected to the grid. Weeks said multiple municipalities rely on such generation.
“I guess if I were to use a phrase to convey my concerns, it would be, ‘throwing the baby out with the bathwater,’” Weeks said.
However, the Coalition of Midwest Power Producers (COMPP) said more nuanced participation and a stricter accreditation for DR are necessary considering MISO will rely on DR more as the fleet evolves and reliability risk enters high season. It said the RTO took a step toward making sure its DR fleet is “prepared and capable of performing as expected and needed during periods of system stress” and is paid commensurate with the value it provides the system.
COMPP also said MISO’s stepped-up testing will help cut down on market participants collecting payment for phantom load reductions, citing recent instances that include dummy company Ketchup Caddy and aggregator Voltus. (See Voltus Agrees to $18M Fine to Settle DR Tariff Violations in MISO.)
“The current capacity construct for demand resources at MISO has been built by piecing together disparate retail programs from the various MISO member states. However, this fragmented and ad hoc approach is no longer sufficient for MISO to meet the rapidly evolving demands of the grid,” the coalition said.
Voltus itself protested the filing over what it called an overlooked provision: MISO would cease allowing DR aggregations to cut use down to a predetermined baseline and instead require specific megawatt reductions.
“Many demand response resources, from the largest industrial loads to small commercial manufacturers, respond to deployments by turning off all loads except for non-curtailable baseload,” Voltus argued.
The aggregation company said instead of a drastic accreditation, MISO could be better served by launching an availability requirement for DR where assets must show they dropped use near or to accredited values or risk replacing their capacity or buying out their shortfalls at the latest capacity auction clearing prices.
A second group of utilities clustered around the Great Lakes also maintained it wasn’t fair that MISO would never allow behind-the-meter generation a planned outage without it risking its accreditation value. It also asked FERC to allow demand resources three years of average availability for accreditation purposes like other generators.
Entergy also said demand-side resources should be afforded an average of three years of past performance for a larger sample size for accreditation. The corporation seconded requests for exempted planned outages for behind-the-meter generation and to allow aggregations to dip to a firm service level instead of reducing by a megawatt amount.
