By Amanda Durish Cook
MISO has begun developing the software to create a 30-minute reserve product for use in late 2021.
Following FERC approval of the reserves’ Tariff definition late last month, the RTO said it moved the project status from conceptual design to a software build phase that will last less than two years. The project was originally scheduled to remain in the conceptual design phase through the first half of 2020.
MISO hopes to begin discussing the software with stakeholders at Market Subcommittee meetings during the second quarter of this year.
The reserves will be furnished by either online or offline resources capable of being deployed within 30 minutes to meet local, sub-regional and market-wide needs.
The RTO expects the new market product will reduce revenue sufficiency guarantee (RSG) make-whole payments, lessen out-of-market commitments, make market prices more transparent and provide pricing signals that incentivize a greater number of fast-start resources that can meet voltage and local reliability requirements more cheaply. Using the reserves, MISO estimates net production cost benefits of $5 million annually and a $1.6 million reduction in RSG make-whole payments paid in MISO South. (See “MISO Preps Tariff for Short-term Reserves,” MISO Market Subcommittee Briefs: Oct. 10, 2019.)
FERC approved MISO’s plan for implementing the reserve product on Jan. 31 (ER20–42).
In the order, the commission disagreed with criticisms raised by Entergy and state regulators in MISO South, who said the proposal was vague and was driven chiefly by economics, not reliability. Entergy and MISO South regulators also demanded MISO conduct more analysis to identify which market participants and load pockets would stand to benefit from the reserve product, arguing that MISO South customers could disproportionally foot the bill for the reserves because it will be used to manage flows on the regional dispatch transfer (RDT) limit between MISO Midwest and MISO South.
FERC said MISO’s reliability versus economic impetus was beside the point.
“Whether managing the RDT is a reliability or economic concern is irrelevant since the limit is a binding constraint that needs to be enforced pursuant to MISO’s settlement agreement with SPP,” the commission said.
FERC said MISO’s reserve design “reasonably allocates costs based on load-ratio share in grouped zones where constraints result in the need” for the reserves. MISO doesn’t need to model benefits according to load pocket, the commission said.
“We find that MISO has supported its proposed short-term reserve product as representing an efficient, transparent, market-based solution for managing post-contingency reserve needs,” FERC said.
