By Amanda Durish Cook

MISO now has a fifth wintertime waiver of its $1,000/MWh offer cap in hand after FERC approved the RTO’s request on Nov. 16 (ER19-27).

The commission allowed a waiver with conditions identical to the last four. (See FERC Grants MISO 4th Winter Offer Cap Waiver.) The waiver is effective from Dec. 1 through April 30, 2019.

“MISO’s experiences during the 2014 polar vortex, as well as the cold weather events of January 2018, demonstrate that fuel costs can increase to a level such that the current $1,000/MWh offer cap prevents resources from submitting incremental energy offers that reflect their marginal production costs. If similar weather and natural gas supply conditions materialize in the 2018/2019 winter, some resources could face the untenable position of being forced to offer electricity at levels below their actual cost,” FERC said.

Last winter, MISO experienced extreme cold in its North subregion starting Dec. 27, with frigid temperatures hitting the entire footprint Jan. 1 to 6. In all, MISO said the cold snap lasted longer than the 2014 polar vortex. Less than two weeks later, MISO South faced another cold snap. The event is the subject of a joint FERC/NERC investigation, which was announced in early fall. (See FERC, NERC to Probe January Outages in MISO South.)

While MISO said published gas index prices did not hit the $67/MMBtu experienced during the polar vortex, “there were a few resources during late December 2017 that offered within a dollar of the $1,000/MWh energy offer price cap due to high intraday prices for procuring non-firm gas.” The RTO said its ongoing coordination work with neighboring balancing authorities and a lower outage rate kept prices below 2014 levels.

However, MISO said its fourth waiver was helpful in that it granted generator operators peace of mind that they could have recovered costs that inched above $1,000/MWh.

MISO has until Oct. 1, 2020, to implement a $2,000/MWh hard cap for verified cost-based incremental energy offers. (See MISO Granted Longer Deadline for Offer Caps.) The RTO is all but certain to request another offer cap waiver for the 2019/20 winter.

“After implementing the reforms required by Order No. 831, MISO will no longer require temporary waivers because these reforms are intended to provide for a long-term solution to the issues associated with MISO’s offer cap,” the commission said.

In its request for this year’s waiver, MISO said it couldn’t yet tell whether 2014-style price spikes could occur during the 2018/19 winter months.

This year, MISO is using forecasts of a warmer-than-normal winter in much of its footprint, though the RTO says it’s prepping for a 40% possibility of entering emergency procedures at least once during the season. (See MISO Foresees Manageable 2018/19 Winter.)