MISO agrees with nearly all the new market recommendations its Independent Market Monitor issued this year, though the grid operator said executing the ideas may take some time.
The Monitor issued five new recommendations in June in the annual State of the Market report. The recommendations focus on better management of flows across MISO’s seams, implementing dynamic transmission line ratings and disqualifying all energy efficiency resources from the capacity auction. (See IMM Issues 5 Recs in MISO State of the Market Report.)
Kevin Vannoy, MISO’s director of market design, said staff are persuaded on four out of the five ideas, questioning only whether the RTO can single out energy efficiency resources from participating in its annual capacity auction. Vannoy said FERC itself has included energy efficiency in its definition of distributed energy resources with its recent order on DER participation in wholesale markets.
“We feel that’s a reason that we should evaluate whether these resources can or should sell capacity in Planning Resource Auctions,” he told stakeholders during a Resource Adequacy Subcommittee teleconference Wednesday.
Monitor David Patton has said energy efficiency has no place in the capacity market.
“You can see that the quantities are growing rapidly, and MISO needs to look at this before it becomes 2,000 [or] 3,000 MW,” he said in July. “The only way to quantify energy efficiencies is to use a series of highly speculative assumptions, and I think MISO does a reasonable job. It’s just that they’re in an impossible situation.”
Energy efficiency installers are already paid once through savings on their bills, Patton argued.
“It’s hard to come to any conclusion but that [the additional capacity payment is] inefficient,” he said.
Staff say ambient-adjusted transmission line ratings are doable in the footprint, provided transmission owners are forthcoming with ratings. Vannoy said MISO will look for line constraints that could benefit most from variable ratings.
Patton said a “broad adoption” of ambient-adjusted ratings could have reduced the RTO’s congestion costs by as much as $150 million in 2018 and 2019. Over those two same years, TOs could have saved $114 million in congestion costs had they simply provided short-term emergency ratings.
Patton said MISO routinely exceeds $1 billion in the annual value of its real-time congestion, due in part to “very conservative, static ratings by most transmission operators.”
“I think more are becoming aware of this problem,” Patton said, citing last year’s FERC technical conference and the Organization of MISO States’ interest in the footprint’s TOs implementing dynamic ratings.
Vannoy said there will be more development on dynamic line ratings in 2021. The grid operator’s new modular market platform will make it easier for staff to employ dynamic line ratings, he added.
Past Recommendations Put to Bed
Staff said that since last year’s market report, they have fulfilled a 2014 recommendation to create a short-term energy reserve product and delivered on a 2016 recommendation to limit the duration of capacity resources’ outages. Additionally, in the 2021/22 capacity auction, MISO will require full transmission deliverability of capacity resources and enforce a stricter capacity accreditation for load-modifying resources. That will check off two 2017 recommendations.
The RTO said work remains on another 2014 recommendation to use seasonal capacity market procurements. MISO is now studying which hours throughout the year — not just a summer peak — may contain loss-of-load risk. Staff said they continue to explore a more accurate capacity accreditation by accounting for planning resources’ unreported or unforced outages.
MISO is also considering excluding offline resources from setting LMPs and upping its value of lost load and emergency pricing, which would button up Monitor recommendations made in 2015, 2016 and 2018, respectively.
