By Amanda Durish Cook

NEW ORLEANS — A seasonal post-mortem at MISO’s Board Week provided stakeholders with insight into the RTO’s market performance during the near past, near future — and beyond.

MISO and its Independent Market Monitor agreed that markets generally performed well during a challenging winter, and the RTO predicts more operational efficiency throughout spring. But it foresees considerable market changes over the next decade.

The RTO said the sustained cold snap that opened the year was “managed nearly routinely by MISO and members.”

Executive Director of Strategy Shawn McFarlane said the RTO’s $31/MWh December-February average energy price was about 10% higher than last winter.

MISO’s winter peak of 106.1 GW, set on Jan. 17, was 3.2 GW lower than its all-time winter peak set in January 2014. Loads exceeded 100 GW for the first five days of 2018, with forced and planned outages reaching 36 GW. (See MISO Breaks down Recent Cold Snap.)

“While it wasn’t routine, it was handled quite routinely — not a lot of excitement,” McFarlane said during a March 27 meeting of the Markets Committee of the Board of Directors.

MISO committed one unnecessary unit on Jan. 1, an inefficient outcome in what was an otherwise more efficient performance when compared to 2014’s polar vortex weather event.

However, the RTO said a brief mid-January cold spell concentrated in MISO South “proved more challenging, but reliability maintained.” During his quarterly report, Monitor David Patton agreed that mid-January generation patterns “were more fascinating.”

In that instance, another round of arctic air pushed loads above 106 GW over Jan. 17-18, and MISO South set a new winter peak of 32.1 GW in the face of record low temperatures in the region. (See Louisiana Regulators Question MISO South Max Gen Event.) MISO was forced to call a maximum generation event in the South region Jan. 17 after outages there hit 17 GW.

McFarlane said MISO South’s icy weather froze the region’s water and air lines, which are not nearly as insulated as in MISO Midwest. The RTO compensated for South’s shortfall with generation from Midwest, at one point flowing just over 3,000 MW — the maximum allowed by the MISO-SPP agreement — along the contract path between the regions.

“The [South] generators just aren’t as prepared for freezing temperatures,” Patton said. “Part of the reason we were in such bad shape is because the forced outages kept growing and growing. … This is about the most stressful situation I can imagine for MISO South.”

Patton said if the RTO had not made emergency power purchases for the South on Jan. 17, regional supply would have dipped below load for about three to four hours. He referred to the “lights going out in MISO South.”

But Director Michael Curran immediately rebuked Patton’s use of such dramatic language, while also responding that MISO should “burn down” SPP’s transmission on the contract path before it allows MISO South to shed load.

[EDITOR’S NOTE: Curran has denied using the words “burn down.” See related story, SPP Seeks FERC Meet in MISO Tx Dispute.]

Patton said the situation highlights the need to create a regional capacity reserve product that can be delivered within 30 minutes, a recommendation he repeated from last year’s State of the Market report. He also said MISO’s emergency prices are still too low because its extended locational marginal pricing (ELMP) does not properly account for regional dispatch transfer flows. Accounting for such flows in ELMP would be an easy fix, he added.

Spring

Executive Director of System Operations Renuka Chatterjee reiterated a previous report of MISO’s spring preparedness but noted that volatile spring weather can “break load patterns.”

MISO staff said earlier in March that the RTO faces a small possibility of spring emergency conditions if either loads or forced outages are higher than normal. (See Outages Small Risk for MISO Spring Operations.)

Director Thomas Rainwater asked if the outage risk comes from large, thermal units whose loss “MISO has to scramble to replace.”

“Yes, it’s obviously the 1,000-MW units,” Chatterjee replied.

She said as little as an additional 2 GW in forced outages over forecasted load could force the RTO to call upon reserves this spring.

“We’ve seen a chance in the last couple of years of tight operating conditions in the shoulder seasons,” Chatterjee said. “[Reserves] are the end of our stack, and we’ll get into those if we have to.”

However, Chatterjee reassured the board that MISO faces a very slim chance of spring load shedding.

Patton said he now recommends that some generators take planned outages during winter rather than spring to lessen the impacts of mass outages in shoulder periods.

Beyond

With winter and spring covered, a MISO executive outlined a rough to-do list to design a market for a future grid that includes renewables, storage and smart devices.

Richard Doying, now head of future market design, delivered to the board the first report of his exploratory-style role. (See “MISO Shuffles Leadership,” MISO Informational Forum Briefs: Jan. 23, 2018.)

“MISO will be operating transmission with very different assets in the future,” he said.

Doying and MISO staff are evaluating what changes are needed to incorporate renewables, distributed energy supply and storage, and digital flow control devices such as smart appliances and thermostats. The RTO will complete an analysis of market, operational and planning impacts, and prepare a report by the first quarter of 2019, he said.

“Software cycle time really drives digitalization. When you think about an app on your phone that you can install today that wasn’t available yesterday — that took just a few weeks for someone to develop,” Doying said.

Digitalization will affect the grid much more than owners and operators may realize. “Although we can’t see when the changes will arrive, we know that they are coming,” he said. “Waiting until they arrive is a problem and will be imprudent.”

MISO must address, for instance, windy nights when LMPs fall to negative values, a situation that becomes unworkable for non-wind generators serving load. He also said the RTO’s market team will investigate how to properly value essential reliability services.

Director Baljit Dail asked what the RTO’s version of California’s “duck curve” may look like.

Doying responded that MISO is investigating a “double up” of its renewable sources in the next 10 to 15 years, as indicated by new entrants to the queue, but he didn’t elaborate on specific demand curve shapes.

“This is an exciting, but scary, pallet of issues,” said Director Barbara Krumsiek.

Rainwater asked how MISO will begin to value other attributes in a system designed around cost-based ratemaking.

Doying did not get into specifics, but he said that “pricing will be a critical element of any reforms.”