FERC has ruled it’s appropriate for MISO to continue to preclude renewable resources from providing ancillary services in its markets, countering a solar trade group’s complaint.
FERC said the Solar Energy Industries Association (SEIA) didn’t present evidence that MISO’s policy of barring renewable output from ancillary services was producing unfair rates (EL23-28).
In an Aug. 31 order, the commission said much like its recent order authorizing MISO’s ban on wind and solar generation from supplying ramping capability, it remains the case that renewables rarely are the most economic choice to supply operating reserves because their locations exacerbate already binding transmission constraints. (See related story, FERC: MISO Can Ban Intermittent Resources from Providing Ramp.)
SEIA lodged the complaint early this year in part because of MISO’s effort to bar renewables from furnishing ramping. (See Solar Trade Group Challenges MISO Ban on Renewable Ancillary Services.) The group argued that MISO’s dispatchable intermittent resources are operationally capable of providing regulation service, spinning reserves and supplemental reserves and that MISO’s market rules today discriminate against some resources because they’re tailored to the large, centralized power plants of the past. It also said instating renewables’ eligibility for such services would foster competition.
But FERC said SEIA didn’t demonstrate that renewables “can reliably deliver the ancillary services they are cleared to provide to the MISO market in a manner comparable” with other resources.
The commission acknowledged MISO’s current market clearing software isn’t sophisticated enough to consider locations of resources and nearby congestion rendering them non-deliverable. It said if MISO were to clear operating reserves from renewable sources, congestion would prevent them from making it to market in most cases. Thus, allowing procurement would create a reliability issue and payments to unhelpful resources, FERC decided.
The commission also agreed with MISO that it’s far more lucrative for renewable resources to provide energy over ancillary services.
Lastly, FERC said SEIA’s arguments differed from the commission’s previous regulations requiring open access transmission service and establishing separate performance and capacity payments for frequency regulation service, and its ruling against the undue discrimination of electric storage resources.
“Those orders did not require that every resource type must be allowed to provide such services,” FERC said.
FERC said though it’s “undisputed” MISO’s tariff treats renewable and nonrenewable resources differently with respect to ancillary services, SEIA didn’t prove that renewable and nonrenewable resources are “similarly situated” because when renewables are cleared to provide ancillary services, they’re trapped behind a transmission constraint.
As with their order blocking MISO renewables from providing ramp capability, Chairman Willie Phillips and Commissioner Allison Clements issued a joint statement to emphasize that the order was limited. The two said MISO’s market dynamics are set to change — and the snub likely will be temporary — as renewable energy becomes more prevalent.
“We strongly urge MISO to continue to improve and enhance the software on which its markets rely. Both MISO and the commission recognize the limitations of MISO’s current software, and the record suggests that these shortcomings are contributing to problems that go beyond [renewable] integration alone,” Phillips and Clements wrote. “We anticipate the continued development of these resources and encourage MISO to be ready for them as they come online.” They said MISO should devise ways to account for locational congestion in its software when selecting resources.
