By Chris O’Malley

Dynegy told federal regulators last week they should reject complaints over its bidding in MISO’s capacity auction last April, saying the challenges suffer from a “fatal” procedural flaw.

In May, the Illinois Attorney General and Public Citizen filed complaints asking the Federal Energy Regulatory Commission to investigate Dynegy’s behavior in the Planning Resource Auction, which resulted in a nine-fold price increase for Zone 4 (EL15-70). Several other market participants, including Southwestern Electric Cooperative, also have filed protests over the results.

Dynegy, which has the commanding share of capacity in Zone 4, has previously denied there was any manipulation or underlying flaws in the MISO auction. (See Dynegy: No Evidence of Misconduct in Auction.)

In a July 30 filing, Dynegy said efforts by Illinois Attorney General Lisa Madigan to retroactively change the results of the auction “run squarely afoul” of previous FERC decisions.

Precedent Cited

The company cited a 2008 challenge by the Maryland Public Service Commission over PJM capacity auction results. The commission ruled that it would not invalidate results of completed capacity auctions that were conducted in accordance with approved market mitigation measures and were deemed by an independent market monitor to be competitive.

“So too here: because the complainants in these cases have not alleged that MISO violated its Tariff, and because [MISO Market Monitor David Patton] has confirmed that the results of the [auction] were competitive, the complainants’ challenges to those rules fail as a matter of policy,” Dynegy told FERC.

Dynegy said that although the attorney general wants the auction retroactively invalidated, “it never alleges, much less substantiates, any violation of the MISO Tariff.”

The company also said that Southwestern, which filed a complaint alleging that the auction results were unreasonable, also fails to show that MISO violated its Tariff.

“The complainants’ failure to clear that hurdle was fatal from the outset. Their more recent continued silence on the point only serves to underscore that failure,” Dynegy told FERC.

Changes to MISO Auction Sought

Last month Madigan joined industrial consumers and Southwestern in calling for changes to MISO’s capacity auction rules. (See Illinois Attorney General Joins Call for Changes to MISO Auction Rules.)