FERC has granted stakeholders a 24-day extension until Jan. 14 to file comments on MISO’s plan to redefine its capacity market during the 2023-24 planning year. Interested parties originally had until Dec. 21 to comment.
MISO has requested commission approval to conduct four seasonal capacity auctions, with separate reserve margins and using a seasonal accreditation based on a generating unit’s past performance during tight conditions (ER22-495).
The grid operator has also filed separately to create a minimum capacity obligation, where a MISO load-serving entity must demonstrate that at least 50% of the capacity required to meet their peak load is secured ahead of the voluntary capacity auction (ER22-496).
The RTO originally intended that a minimum capacity rule would be part of the seasonal auction design, but stakeholders said including the rule could risk FERC’s rejection of the entire capacity design.
The grid operator made both filings on Nov. 30 despite stakeholder discomfort with the design’s capacity accreditation and minimum capacity requirement components. They asked MISO to only file the seasonal auction and do further work on the availability-based accreditation before sending it to FERC. (See Last-minute Unease over MISO’s Seasonal Accreditation.)
Entergy asked for more time to comment on the seasonal auction and accreditation and a coalition of clean energy groups asked for an extension of the minimum capacity obligation. Both said the filings were too long and complex to digest and file comments before the holidays.
“The MISO region is experiencing significant shifts in generation resource retirement, increased reliance on intermittent resources, significant weather events with correlated generator outages, and declining excess reserve margins,” the RTO explained in its filing.
Organization of MISO States President Julie Fedorchak said the current annual reserve margins and accreditation have clearly become inadequate.
“The dynamics of the system are far, far different today,” she said during MISO’s December Board Week.
MISO’s Richard Doying said the new accreditation is necessary because it no longer relies on a forced outage rate for generators, but on a question of “were you there when we needed you?”
“We’re trusting that we’re setting ourselves up for the situation that’s on the doorstep,” MISO Executive Director of Market Development and Design Scott Wright said during a special November workshop to discuss the filing with stakeholders.
MISO made two late additions to its seasonal proposal in November. It will now factor in when generation owners make facility upgrades that stand to increase their capacity accreditation. In those cases, the RTO said it will reflect the generators’ increased capability in accreditation values.
The grid operator also said its zones can seasonally clear beyond its annual $257/MW-day cost of new entry (CONE). It said some seasons could clear in near-shortage conditions, making a clearing price of up to $1,000/MW-day appropriate.
Under MISO’s current planning resource auction setup, the maximum clearing price is set at CONE, which is calculated by dividing the new generator costs over 365 days. Now, CONE will be divided by a season’s days.
MISO said multiple seasons could possibly clear in near-shortage conditions, stacking revenues in excess of the annual CONE value. Should that happen, staff would retroactively reduce the clearing prices. Because the adjusted prices could create revenue sufficiency problems for generators MISO has proposed issuing make-whole payments in those instances.
Stakeholders have asked the RTO to first estimate the impacts of the auction’s greater offer cap. Some said pivotal suppliers in certain zones could manipulate an auction by making higher offers.
Staff has said suppliers are still bound to the Independent Market Monitor’s conduct thresholds and their own facility-specific reference levels.
