Multiple stakeholders are seeking a FERC re-evaluation of MISO’s approved seasonal auction design, arguing that the plan’s capacity accreditation based on generators’ past performance is untested and unfair.

The Louisiana and Mississippi public service commissions said that while they don’t “in concept” oppose capacity accreditation rules “based upon some measure of historic generator performance,” MISO didn’t provide evidence to back up its availability-based accreditation.

They acknowledged that FERC defers to and gives grid operators latitude in designing their markets.

“But when the vast majority of utilities and many state regulators, with thousands of years of cumulative experience regulating utilities and serving retail customers, vociferously object to an expensive, untried, untested and unmodeled market experiment that is highly unlikely to address the resource adequacy concerns developing in MISO, FERC needs to listen,” the state commissions wrote.

FERC in late August gave MISO the go-ahead to establish four seasonal capacity auctions — with separate reserve margins by 2024 and apply a seasonal accreditation based on a generating unit’s past performance during tight system conditions. However, the commission disallowed MISO’s proposal to institute a minimum capacity obligation, in which a load-serving entity must demonstrate that it has secured at least 50% of the capacity required to meet their peak load in advance of the RTO’s voluntary capacity auctions (ER22-495 and ER22-496). (See FERC OKs MISO Seasonal Auction, Accreditation.)

Consumers Energy said the availability-based accreditation will breed “unreasonable volatility for market participants and increased costs to customers without demonstrated reliability benefit.” The company asked FERC to consider delaying implementation until the 2024/2025 planning year if it chooses to let the accreditation design stand.

DTE Energy and Alliant Energy seconded Consumers’ claims that the accreditation will aggravate volatility and raise costs. They called the design a “flawed and insufficiently supported approach that will handicap prudent planning practices by stakeholders.”

Entergy, Cleco Power and other MISO South electric cooperatives said the accreditation will yield “large and unreasonable fluctuations in accredited capacity from one season in one year to the same season in the next year.” They said LSEs stand to lose “significant capacity value” in one season based on performance during one or two days with small operating reserves.

The MISO South stakeholders also took issue with the RTO’s 31-day outage limit in a given season. They said the rule “places unreasonable limits and costs on a utility that wishes to engage in prudent maintenance practices at times when sufficient resources are expected to be available to maintain reliability.”

The Clean Energy Coalition — which includes Clean Grid Alliance, Sierra Club, Natural Resources Defense Council, Sustainable FERC Project, Fresh Energy, GridLab, American Clean Power Association and Solar Energy Industries Association — said MISO’s plan to apply different accreditation methods between thermal and non-thermal generating resources is unjustified and unlawfully discriminates based on resource type.

MISO’s new capacity accreditation design applies only to thermal generation; the RTO is still working on a separate accreditation for its renewable and load-modifying resources.

MISO Submits Rehearing Request for Different Reason

Meanwhile, MISO is asking FERC review its decision to reject the minimum capacity obligation (MCO).

The grid operator said the commission’s denial “failed to recognize the proposal as a solution to encourage prudent planning by load-serving entities, utilities, suppliers and regulators to address immediate resource adequacy concerns and the widening gap between available capacity and rising demand.”

MISO said the MCO is not meant to incent generation construction, as FERC assumed.

“Instead, the MCO is a solution designed to serve as a guardrail for the region’s increased reliance on the PRA [Planning Resource Auction] for more than residual capacity needs,” the RTO said. It added that the rule would help avoid “last-minute capacity shortfalls in the PRA by requiring a minimum level of prudent, forward planning by LSEs.”

MISO said years of low capacity prices have led to expedited retirements and deferred investment in generating facilities, with some LSEs depending on its residual auction to stock all their capacity needs.