By Amanda Durish Cook

MISO will delay the introduction of seasonal and locational capacity constructs for a year, officials revealed Wednesday during the RTO’s first-ever Resource Adequacy Subcommittee meeting.

MISO acknowledged that it missed its original goal of making a FERC filing in December and now hopes for a May filing, said Executive Director of Resource Adequacy and Transmission Access Planning Renuka Chatterjee, who conducted the meeting as stakeholders were still working through selections for chairman and vice chairman.

“Let us have some additional time to look through anything we’re missing” before making the filing, Chatterjee told stakeholders.

The delay means the changes won’t be implemented until the 2018/19 planning year.

Two Seasons

MISO is contemplating two procurement seasons: a four-month summer season spanning June to September and an eight-month winter covering October to May. The locational change would allow for the formation of external resource zones for resources outside MISO and create capacity transfer rights for load-serving entities with long-term supply arrangements. (See MISO Proposes Two-Season Capacity Market.)

Chatterjee said the delay will ensure time for obtaining FERC approval and allows MISO time to define new reserve value requirements, capacity accreditation and capacity import limits. “We want to make sure [stakeholders’] commercial structures will be ready,” she explained.

Laura Rauch, MISO’s manager of resource adequacy coordination, said the delay was in response to stakeholder requests. “However, the same general proposal will hold. There will still be a two-season construct … and capacity accreditation will be based on planned outages,” she said.

Mark Volpe, senior director of regulatory affairs for Dynegy, said MISO should consider pushing the filing back to early July to give the RASC time to hold more meetings. “At Dynegy, we applaud the plan to defer this for a year,” Volpe said.

In light of the delay, the RASC decided to postpone a vote on new Tariff language implementing the seasonal construct. “We still think a vote is important, but for now we’d like to pull it back,” said Matt King of electricity consulting firm GDS Associates.

Changes to Capacity Transfer Rights

MISO’s Joe Milli said the RTO wants to make two changes to the draft Tariff language regarding capacity transfer rights. He said the consideration of transmission upgrades that increase capacity import limits and resources impacted by upcoming zonal boundary changes would come before historical supply arrangements and cost-shared projects in the capacity transfer rights hierarchy.

The changes stemmed from stakeholders asking if they would have a tool to protect themselves from risks resulting from the creation of external resource zones. Milli said auction clearing prices for external resources are currently priced at “whichever local resource zone they sneak into.”

MISO also announced that it will not apply different capacity accreditations when dealing with planned outages in resources that clear versus resources that do not clear. The RTO said its “proposed process will include planned outages during critical periods in capacity accreditation,” and that situation could become complicated for units that do not offer as capacity resources during a season, if they were treated differently than clearing units.

“We want to make sure the same paradigm applies to baseline units that clear over units that are new or units that were freshly clearing. Our concern is when those resources re-enter the auction, are we treating them the same as resources that have cleared? It’s really making sure we have comparable treatment among resources,” Rauch said.

David Sapper of Customized Energy Solutions suggested that MISO include a rate term definition of what the RTO should pay or what units should pay in outage rates. “We used to do it in the early days of MISO, and that’s a long tortured history, but maybe we could get back to that,” he said.

Cost-Benefit Analysis Sought

Marlene Parsley of Big Rivers Electric asked if MISO could provide a cost-benefit analysis of capacity accreditation. “I don’t recall [MISO] providing a cost-benefit analysis for any of this. If we do have these numbers, can we factor those in … to see what kind of benefit we’re going to get from this?”

Rauch said MISO wasn’t comfortable providing a cost-benefit analysis since the success of capacity accreditation depended heavily on market participants’ actions.

Chatterjee said stakeholders would benefit from a future workshop on capacity accreditation. She suggested that the future chair and vice chair call a special meeting, once they’re elected.

In the meantime, Milli, MISO liaison for the Competitive Retail Solutions Task Team, said his group hopes to post a design document that includes an overall auction modification recommendation on March 18. “This group will then pick that up and debate the merits,” Milli told the RASC.

The task team is currently hearing stakeholder proposals on changes to the auction rules. Dynegy and Exelon so far have asked MISO to consider singling out Zone 4 with three-year forward auctions separate from the rest of the RTO. (See Dynegy, Exelon Propose PJM-Type Capacity Auction for MISO Zone 4.)

Chatterjee said it was too soon to tell if an auction solution will be recommended by a RASC vote. “Ultimately the goal is to make a recommendation after we’ve heard a variety of proposals and MISO’s own thinking as to what would be responsive to the issues in front of us,” Chatterjee said.

If a RASC vote does occur, it won’t be in time to effect change on April’s 2016/17 Planning Resource Auction.

To protect competitive information in local resource zones with a small number of market participants, zones 3 (Iowa), 5 (Missouri) and 7 (Michigan) will again be grouped together, said John Harmon, MISO manager of resource adequacy. Zones 8 (Arkansas), 9 (Louisiana and Texas) and 10 (Mississippi) will also be combined. The grouped zones will share planning reserve margins, local resource requirements, unforced capacity values and installed capacity values, but not capacity import and export limits, non-pseudo tied resources and local clearing requirements.

Auction Timeline

• March 9: Deadline for submission of fixed resource adequacy plans (FRAPs) to MISO
• March 15: MISO completes review of FRAPs
• March 26: Market Monitor provides unit-specific threshold data
• March 29: Auction window opens
• April 1: MISO begins auction
• April 14: Auction results posted