By Amanda Durish Cook

MISO is unlikely to meet a July 15 target for filing its proposed competitive retail solution (CRS) with FERC, raising doubts that changes can be implemented in time for the 2017/18 planning year.

Jeff Bladen, MISO executive director of market services, said the timeline has been placed on hold while the RTO and its Independent Market Monitor attempt to strike a compromise.

Bladen announced the delay during a Monday conference call of the Resource Adequacy Subcommittee (RASC), where the RTO had intended to review draft Tariff language. “Given the ongoing work with the Market Monitor on alternative approaches … we did not post draft Tariff language,” Bladen said.

He said MISO will continue to work with the Monitor until a “hybrid” version of the competitive retail solution emerges. MISO’s Board of Directors ordered staff and Potomac Economics into negotiations late last month. (See Board Orders Negotiation in Auction Disagreement.)

Pressed by stakeholders, Bladen said a July filing is becoming “less likely.”

Audrey Penner, market access and regulatory affairs officer at Manitoba Hydro, asked when MISO would have to file in order to implement changes in time for next year’s capacity auction.

MISO RASC liaison Renuka Chatterjee said a filing targeting 2017/18 implementation could be submitted as late as September. But she added, “We feel the further we get away from July, the less likely a 2017/18 implementation is.”

Dynegy’s Mark Volpe said “a 2017/18 implementation is paramount to Dynegy” and asked that August be used to vet the hybrid resolution.

Seeking Common Ground

While both MISO and the Monitor want unique auction treatment and use of a sloped demand curve for competitive retail areas such as Southern and Central Illinois, the two differ on other key elements:

• The Monitor maintains the entire footprint can be kept on a prompt auction schedule and says MISO’s proposed three-year forward auction will create doubt in generators wanting to suspend or retire.
• The Monitor wants all planning needs represented with a sloped demand curve; MISO wants to use the sloped curve only in competitive retail areas.

“What we’ve been talking about is a prompt hybrid and a forward hybrid, and at some point we’re going to have to choose which one to present to FERC,” Potomac’s Michael Chiasson said.

“While I can speak to what has been proposed, I can’t talk about what a final proposal would look like,” Bladen said. “We simply don’t have one today.”

Whatever hybrid resolution results, Bladen said there is “no chance” MISO will support a forward auction for the entire footprint.

Bladen said he hoped to have an outline of a hybrid proposal by the RASC’s next meeting, June 29-30.

Ameren, Dynegy, Industrials Weigh In

Both Ameren Illinois and Dynegy say they prefer the Monitor’s proposal over MISO’s. In comments submitted to the RTO last week, Ameren repeated its call for a single Planning Resource Auction with the addition of a sloped demand curve for deregulated areas.

“Our position at this time continues to be opposition to the MISO proposal in favor of the concepts put forth by the IMM. … Our support of the IMM proposal is conditioned on reviewing more detailed information in the future, including any proposed tariff language and/or changing dynamics in Illinois,” the company said.

Dynegy says MISO’s proposal does not address minimum offer price rules or other means for mitigating buyer market power. “Dynegy would prefer MISO embrace the co-optimized prompt year-only CRS market design proposed by the IMM because we believe Dr. [David] Patton’s proposal lays out a viable foundation for efficient price formation,” the company said.

Illinois Industrial Energy Consumers repeated its earlier stance that the entire proposal is unwarranted: “IIEC continues to believe the MISO [proposal] is unnecessary for either Southern Illinois or the broader MISO footprint and would act to unduly subsidize generation resources at the expense of consumers even when the capacity market is not tight.”

Bladen called the feedback “helpful” but declined to address any specific points raised by the three entities. “Having that kind of well-thought-out commentary is very valuable as MISO has these alternatives on the table,” he said.

Avoidable Costs Filing Remains on Track

MISO’s announcement of the delay comes little more than a week after it again pushed back its schedule for proposed seasonal and locational auction constructs. Meanwhile, RTO officials said the FERC-required filing on avoidable costs is expected to take place as planned on June 28.

During the meeting, Chiasson reviewed Tariff language on technology-specific avoidable costs that relies on PJM’s default values and the monthly Consumer Price Index. (See MISO Moves Forward on Auction Design; Seasonal Filing Delayed Again.)