By Amanda Durish Cook

MISO has signaled that it’s ready to address calls from its Independent Market Monitor and members to tighten capacity deliverability requirements, although some stakeholders are skeptical it can raise standards without increasing costs to customers.

The effort was launched last week with a new deliverability proposal for wind, solar and electric storage resources. The RTO draws a distinction between conventional and intermittent resources for deliverability.

The Monitor contends MISO doesn’t properly account for capacity deliverability because its loss-of-load expectation (LOLE) study assumes that all capacity resources are fully deliverable on an installed capacity (ICAP) basis. However, the RTO allows resources to demonstrate deliverability only up to the unforced capacity (UCAP) levels, which tend to be about 5 to 10% below full ICAP levels.

The Monitor has said MISO should assess deliverability for all capacity resources based on full ICAP. Potomac Economics staffer Michael Chiasson said the Monitor first became aware of “MISO’s interpretation of its Tariff” after the 2016 auction, when it determined that one unit came up short by “tens of megawatts.” However, he said the Monitor’s analysis of 2019/20 capacity auction results found that no zones went into capacity shortages because of MISO’s capacity deliverability structure.

At a Resource Adequacy Subcommittee meeting Wednesday, MISO floated three options to address the issue:

• Use a resource’s transmission service request value as the maximum historical output for the average capacity factor, which would stand to reduce capacity credits;
• Require deliverability up to the resource’s UCAP divided by MISO’s “PKmetric,” which is the average capacity factor for each commercial pricing node over the eight daily peak hours since 2005; or
• Require resources to be deliverable to the highest megawatt output value during the eight daily peak hours for the last three years.

MISO’s Darrin Landstrom said the three-year option has the most potential to be variable: “It’s going to be there for three years, then we’ll re-examine it. It could go up or down.”

The Coalition of Midwest Power Producers (COMPP) last year filed an unsuccessful complaint over the apparent gap in MISO’s accounting of capacity deliverability. (See FERC: No Merit in MISO Deliverability Complaint.) The group argued that the RTO’s “deliverable to load” requirement in the Tariff should be interpreted to require capacity resources to have firm transmission service up to their full ICAP levels. FERC rejected that argument, saying MISO had no Tariff provision to support the group’s reading and that there was no evidence the existing practice places reliability at risk.

Necessary?

But some stakeholders think it’s unrealistic to assume MISO has enough firm transmission to go around to allow for an increase the deliverability requirement. They also said the RTO should prove that its UCAP deliverability requirements are a problem before making proposals.

“You really think in some of these zones we’re going to be able to purchase firm transmission service up to our load? … I don’t have any hope that this will be the case,” Madison Gas and Electric’s Megan Wisersky challenged.

“That’s a good point,” MISO Executive Director of Resource Planning Patrick Brown said.

“And when do you want resource adequacy? Or do you want to bleed us dry for [cost of new entry]?” Wisersky continued, referring to the risk of putting more transmission service requests into MISO’s already overstuffed interconnection queue when there’s currently not sufficient transmission available to handle proposed generation.

“That’s a good point,” Brown repeated.

“This is a serious issue and has the potential for serious rate implications. We are potentially looking at rate shock for our retail customers,” Wisersky said.

MISO Director of Resource Adequacy Coordination Laura Rauch said the goal is for resources to carry firm service up to the output they would have in real-time operations. “We do think that there are resources that don’t have deliverability up to their summer peak day,” Rauch said during the Market Subcommittee meeting in July.

But Clean Grid Alliance’s Natalie McIntire questioned whether MISO needed a solution at all.

“My general philosophy is we’ve identified a gap, and we can address it,” Brown said. “Several years ago, when we had a 30% reserve margin, gaps like these weren’t a big deal. We don’t want to wait until this becomes a problem to address it.”

“I think this is a little bit half-baked,” WPPI Energy’s Steve Leovy said of the proposal.

Landstrom said MISO isn’t wed to any of the three options just yet. Brown also said that MISO will continue to study the impact on zones for any new deliverability proposal.

“We aren’t going to push someone into an insufficient position where they don’t have time to react,” Brown said.