FERC last week said it needs more description behind MISO’s plan to adopt sloped demand curves for its capacity auctions before it decides the matter.

Among the commission’s questions in its deficiency letter: a request that MISO better explain how its opt-out provision would work (ER23-2977).

MISO’s provision to allow utilities to opt out of the auction for three years at a time drew the most criticism based on stakeholders’ mixed reactions to the filing. (See MISO Stakeholders Split on Sloped Demand Curve Proposal.)

FERC ordered MISO to justify how its plan to impose a “X% adder” on load-serving entities that opt out constitutes comparable treatment between utilities. The adder would require load-serving entities (LSEs) to secure more capacity than strictly necessary to meet MISO’s one-day-in-10-years system reliability standard. The adder would be based on how much excess capacity is procured through the auction using the sloped demand curve in previous years. FERC asked exactly how MISO would calculate the adder beyond the 2025/26 planning year, because MISO included detailed calculations only for the first planning year the sloped curve would be in play.

The commission asked MISO to shed more light on why LSEs electing to opt out of the auction would completely forgo the auction and not a portion of their resource adequacy requirements.

FERC was left curious as to how MISO would handle establishing planning reserve margin requirements (PRMRs), considering some LSEs would opt out and affect the remaining capacity requirements.

The commission also asked how MISO would establish PRMRs for LSEs in states that have overridden MISO’s planning reserve margin and how the opt-out provision would interact with the final figure. The commission said MISO’s tariff was silent regarding such circumstances and whether an LSE’s final PRMR would depend on its opt-out status.

FERC inquired after several other details around MISO’s proposal. It asked whether MISO would forgo an annual price cap or use a replacement annual clearing price cap for local resource zones. MISO proposed to remove its existing cost of new entry multiplied by 1.75 cumulative price cap on local resource zones when zones are in shortage or near-shortage conditions.

FERC also asked how MISO would line up the calculation of its cost of new entry with the calculation of the sloped demand curve.

The commission said it needed to know which components of MISO’s sloped demand curve would change every three years and which would be subject to change annually. MISO proposed to produce an entirely new sloped demand curve every three years after performing an analysis to see what’s changed in auction supply and demand.

Finally, FERC asked MISO what unit of measure it would use to express marginal reliability impact curves.

MISO’s sloped demand curve shape relies on marginal reliability impact curves, or the depiction of the diminishing reliability value of incremental capacity during abundant supply and the increasing importance of incremental capacity during scarce supply. FERC said it needed to know MISO’s schedule for determining both its marginal reliability impact curves and the resulting sloped demand curves.