Two competitive electricity organizations have protested FERC’s recent show-cause order to MISO that will ultimately downsize resources’ capacity accreditation values.
Vistra (NYSE:VST) and the Electric Power Supply Association (EPSA), a trade group representing competitive suppliers, said the commission should terminate its proceeding and immediately issue an order preventing MISO from updating the unforced capacity to intermediate seasonal accredited capacity ratio and lowering capacity credits.
They said a reworked ratio would upend load-serving entities’ supply plans that have been based on the capacity values MISO first published.
The grid operator is recalculating the ratio it uses to gauge supply in the capacity auction after FERC issued the show-cause order. It has delayed the first seasonal planning resource auction (PRA) until it can complete the calculation and notify market participants of any lowered accredited capacity values. (See FERC Order May Delay MISO’s 1st Seasonal Capacity Auction and Danly Addresses Capacity Auction Snafu at MISO Board Meeting.)
EPSA said a recalculated ratio “will create uncertainty by undermining bilateral agreements for the sale of capacity that have been entered into in advance of the PRA and upset the settled expectations of market participants that justifiably relied upon the ratio and seasonal accredited capacity values calculated by MISO.”
“The effect of recalculating the ratio will be to reset the seasonal accredited capacity values of [planning] resources over three months after these values were first posted and just days before the PRA offer window was scheduled to open,” Vistra said.
It said MISO’s commitment to revise seasonal accredited capacity values at the 11th hour “has cast a cloud of uncertainty over the MISO market.” It said revising the ratio at such a late stage will “fundamentally undermine” LSEs’ “carefully crafted supply plans” by decreasing resources’ accreditation.
Some LSEs’ self-supply and bilateral contracts made in advance of and outside the PRA will now be insufficient to cover resource adequacy obligations, Vistra said. It described a situation where LSEs are “forced to scramble to cover their now unmet resource adequacy requirements at the same time that other LSEs across the region are doing the same and as capacity values are decreasing — likely forcing LSEs to purchase capacity at a premium to its existing bilateral transactions and supply arrangements.”
“No amount of delay in the PRA will remedy the harm done to LSEs or customers by recalculating the ratio,” Vistra said.
