CARMEL, Ind. — MISO might revise and refile a failed proposal designed to set penalties for non-capacity resources that exercise market power through physical withholding.

FERC Rejects MISO Expansion of Market Mitigation.)

“We’ve reached out to the IMM to get their view of things,” Executive Director of Market Operations Shawn McFarlane said at the Market Subcommittee’s meeting Thursday. “It seemed like FERC was colloquially ‘not on board.’”

McFarlane said the commission thought the proposal placed too much burden on generators to prove when their operations would be uneconomic. “We’d have to address that issue before a refile,” he said.

Dustin Grethen, MISO market design adviser, said the RTO has observed congestion and binding constraints that could be relieved by non-capacity resources.

MISO will continue to monitor those instances over the upcoming months while it considers the possibility of a future proposal, Grethen said.

MISO counsel Daniel Malabonga characterized the filing’s aims as “uphill in the first place.” He said the RTO will have to find new “middle ground” should it choose to refile.

Potential Dollar Limit on Some Resettlements

MISO’s settlements team is considering subjecting the issuance of certain market resettlements to a dollar value minimum.

Director of Settlements Laura Rauch said the costs of accounting for resettlements as a result of a continuing error (defined as a long-running error that’s not easily discovered) can exceed the cost of the resettlements themselves. For instance, she said a $5,000 resettlement can be entirely eaten up by the “accounting costs of tracking the resettlement charges for all other impacted parties.”

After performing corrective resettlements, MISO has redistributed amounts to impacted market participants ranging from $20 to $1 million, with a median of less than $50,000. In some cases, MISO collects the resettlement amounts from redistribution from up to 220 market participants.

Rauch said the dollar minimum would not apply to most of MISO’s settlement adjustments — which are resolved quickly with corrections settlement statements — or to stakeholder disputes over settlements submitted within the 120-day deadline from the trade date. MISO will also continue to pursue FERC-required resettlements, she said.

Rauch asked stakeholders to suggest a reasonable dollar threshold for resettlements resulting from continuing errors. She said she would likely return to the subcommittee for its April meeting with a proposal.

Spinning Reserves May Get Embedded Deployment Cost Recovery

MISO may give its spinning reserves a simpler means of recouping costs for providing energy, stakeholders heard at the meeting.

The current clearing process for selecting spin service resources doesn’t incorporate costs the resources incur when deployed as contingency reserves, including the shutdown costs for demand response participants. Resources cleared and deployed for spin service “may have real deployment costs that are not recovered under MISO’s current Tariff provisions,” the RTO said.

MISO adviser Michael Robinson said the current selection process is “inefficient, creating uplifts and distorting price signals.” The RTO could include expected deployment costs when it selects spinning reserves, he told stakeholders.

Spinning reserves are resources that remain online and synched to the grid, meant to be available within 10 minutes. MISO has not included energy deployment costs for spinning reserves since it began its ancillary services market in 2009. Spinning reserves committed by MISO are guaranteed to be made whole to their production costs; however, assets committed outside of the RTO’s market don’t have the same make-whole guarantee.

“In some cases, we make the units whole through uplift, and that’s not good. In other cases, we don’t make the resources whole, and that’s not good from the owner’s perspective. … We’d like to sort this out and get all that embedded in a market price,” Robinson said.

He said the gap hasn’t been burdensome so far but could become an issue as more varied types resources offer spinning reserves.

Customized Energy Solutions’ Ted Kuhn said MISO may not currently be selecting the best prices in spin service because it cannot see which assets have high deployment costs. Robinson agreed and said higher deployment costs have become more prevalent in recent years.

MISO stakeholders are requested to provide their opinions on the best means of embedding production costs. The topic will be taken up again at next month’s MSC.

— Amanda Durish Cook