By Amanda Durish Cook

TRAVERSE CITY, Mich. — MISO executives last week said they continue to seek ways to improve the RTO’s response to an increasing number of emergency events.

The issue became a point of discussion at a June 18 meeting of the MISO Board of Directors’ Markets Committee when the RTO and its Independent Market Monitor expressed different conclusions about the management of a mid-May emergency in MISO South.

Executive Director of System Operations Renuka Chatterjee said MISO experienced tight operating conditions in its southern region because of multiple forced outages coinciding with above-average temperatures. Planned outages totaled about 9 GW in MISO South on May 16 and unplanned outages and derates took another 7 GW offline.

“When we lose that many megawatts in such a short period of time, that’s outside of our band of tolerance,” Chatterjee said.

“We’re not aware of the reasons behind these forced outages yet. Operators have until the end of June to let us know,” she said, adding that MISO is considering requiring operators to more quickly report the reasons behind forced outages.

But Monitor David Patton also pointed out that multiple generators extended their planned outages in May, exacerbating the situation.

“The planned outages that were supposed to go away get extended,” Patton explained. “If your outages don’t ramp down as quickly as you hoped, you get these tighter operating conditions in May.”

Altogether, the RTO said projected capacity shortages in mid-May “were reliably mitigated with good coordination and communication between MISO and its members in the southern region.”

But Patton has said he disagrees with the RTO’s decision to call an alert and deploy load-modifying resources in MISO South on May 16. (See “MISO South May Emergency,” Stakeholders: MISO System Fix Too Late for Summer.)

“Our conclusion is not quite the same as MISO’s,” Patton said at this month’s Market Subcommittee meeting.

During the emergency, MISO ended up retracting a call for LMRs with 12-hour lead times.

MISO’s decision-making behind conservative operations and emergency declarations has been “inconsistent,” Patton said. “We want to work with MISO to clarify what the triggers are so costs are reasonable event-to-event.”

Chatterjee said MISO has been declaring emergencies to access LMRs with some regularity since 2017.

MISO President Clair Moeller also pointed out the RTO used LMRs once in 2017, twice in 2018 and three times already in 2019. He said MISO will naturally find ways to improve the process as emergencies “dramatically increase.”

“We’re gaining experience by having experiences,” he said with a smile.

Moeller also pointed out that LMR operators that signed up to modify load might have to delay action to “become safe.” For instance, plant operators with a “crucible full of steel” can’t immediately work to shave load, he said.

“There’s turbulence behind the operating environment,” Moeller added.

The 5-Year Supply Picture

Despite the emergencies, MISO now doesn’t expect a capacity shortfall until 2023 or 2024 and predicts a generation surplus of about 3 to 6 GW in 2020, according to the most recent annual resource adequacy survey produced jointly by the RTO and the Organization of MISO States. (See Supply Future Brighter, OMS-MISO Survey Shows.) In four to five years, MISO could see anything from a 7-GW surplus to a 1.3- to 2.3-GW deficit.

“It’s not uncommon to see this kind of imbalance in the further-out years,” Chatterjee said, pointing out the difficulty of identifying long-term capacity deficiencies.

“Is this causing any raised eyebrows? Is this similar to what we’ve seen in prior years?” Director Barbara Krumsiek asked.

Chatterjee responded that MISO must rely more heavily on intermittent resources and LMRs in the future. But she also noted recent implementation of three new short-term resource availability and need rulesets that impose stricter outage scheduling, tighten LMR availability requirements and enforce annual real power testing for demand response. (See FERC OKs MISO Outage Scheduling Rules, DR Testing.) The RTO will gauge the impact of the new rules over the next year and expects the associated “incentives” to improve supply, she said.

“I have a bit of a problem with the word ‘incentive.’ It’s more of a carrot than a stick, isn’t it?” Krumsiek asked. Chatterjee agreed.

Summertime Adequacy?

MISO foresees a 70% probability that it will declare an emergency to call on LMRs this summer despite having an estimated 149 GW of resources on hand to cover a 125-GW projected peak.

But Patton sees the summertime supply picture differently, predicting just 137 GW of available resources to manage a 124.7-GW peak — and just 129 GW in a realistic scenario with the usual emergency no-shows and unforeseen outages. He criticized as unrealistic MISO’s forecasting assumptions of unequivocal availability of emergency resources and no unforced outages.

“It’s frequent that we don’t see emergencies coming more than two hours in advance,” Patton said, noting that time constraints effectively disqualify many emergency resources. “If you don’t see the emergency coming, it’s almost useless to you.”

However, he said MISO’s ample import capability and willing neighbors make up for already tight margins.

Krumsiek inquired about MISO’s estimate that it was only able to access about 75% of LMRs that committed to being available last summer.

Chatterjee said MISO is expecting a similar response this summer as well, adding that “75 to 80% is actually a pretty good number.” She said the RTO may not always be able to call on LMRs in excess of their required start-up commitments.

Patton offered the prediction that capacity margins will likely fall as “fossil resources retire and suppliers continue to export capacity to PJM.” The Monitor said he remains concerned that capacity is increasingly being supplied by LMRs, which require an emergency declaration in order to be accessed. He said it is “increasingly important” that MISO begin making changes to its capacity market so the auction sends more efficient economic signals “to maintain an adequate resource base.”

Low Auction Prices, Again

Any changes in emergency declaration protocols must be considered in tandem with measures that make the capacity market more economic, Patton argued.

The bulk of MISO planning resources cleared at $2.99/MW-day in this year’s capacity auction; last year, most of the footprint cleared at $10/MW-day. (See Most MISO Zones Clear at $3/MW-day in 2019/20 PRA.)

Unsurprisingly, Patton again derided those prices as “close to zero.” He said the price is “well below” the $200/MW-day he estimates would motivate new generation investment or the $100/MW-day needed to keep older existing units in operation.

“I have to say that,” he said wryly. “It’s probably the biggest issue in MISO.”

Patton also said MISO cleared a large generator in Michigan that will be unavailable for the entire 2019/20 planning year. If MISO disqualified the generator from the auction, prices in the Michigan’s Zone 7 might have hit $243.37/MW-day — right around the cost of new entry benchmark — instead of the $24.30/MW-day clearing price.

“We’re counting on a unit that’s on an approved planned outage for the entirety of the planning year,” Patton said.

“That to me says something is broken in MISO resource adequacy,” Independent Power Producers representative Mark Volpe said a day later at an Advisory Committee meeting.

Meanwhile, MISO reported an average 69.7 GW of load from March through May, with the 97.7-GW spring peak occurring March 5. Energy prices averaged $25.78/MWh, a 7% decline from last spring.