By Amanda Durish Cook
CARMEL, Ind. — MISO and its Independent Market Monitor are making several changes to market mitigation procedures — most of which will increase the Monitor’s authority to invoke mitigation and issue penalties.
At the Monitor’s behest, MISO has agreed to refine Tariff language that only revokes make-whole payment eligibility when a market participant has been “determined to be manipulating or gaming” the RTO’s market.
IMM David Patton seeks to have the Tariff clarify that MISO — and the Monitor — aren’t required to “establish the intent of the market participant to manipulate or game” the market in order to rescind eligibility for make-whole payments, but need only identify the participant has been “unduly extracting” payments.
MISO will also more strictly monitor generation shift factor (GSF) cutoffs for lower-voltage constraints that tend to have fewer competing suppliers. While the IMM will continue to monitor resources with a GSF of 6% or higher for areas at or above 345 kV, the GSF cutoff will drop to 4% for areas between 138 and 345 kV and even to 3% for areas at or below 138 kV.
Entergy representatives questioned whether the lower GSF cutoffs would lead to over-mitigation of generators.
“This just identifies more appropriate resources to be screened,” MISO Director of Market Design Kevin Vannoy said during a Market Subcommittee meeting Thursday.
Patton also said he’d like to remedy a “flaw” in MISO’s Tariff where non-capacity resources are excluded from physical withholding mitigation even if they have market power.
He said the rule should not be considered an extension of MISO’s must-offer rule, which he doesn’t believe is strong enough anyway.
“If MISO were to propose to eliminate the must-offer, I wouldn’t fall on my sword to save it. I believe in markets, that prices should motivate people to want to offer,” Patton said at the Market Subcommittee meeting in July.
Patton said the expansion of physical withholding penalties would apply only in “clearly” uneconomic behavior from units. Suppliers without market power will not be beholden to the new rule and are not under an obligation to offer, he said.
The Monitor also wants to raise the threshold for determining impacts to market clearing prices from $10/MWh to $50/MWh.
“The $50 impact threshold is just much too high,” Patton said.
Most ancillary service products price below $10/MWh anyway, Patton added, with market clearing prices generally ranging from $1 to $15/MWh.
Patton said he doesn’t expect the $50 threshold to result in more mitigation; rather, the change serves to close a rule gap.
MISO intends to file the bundle of changes with FERC later this month or in September.
