MISO’s Market Subcommittee likely will devote some time this year to discussing either a multiday gas purchase requirement or a multiday gas unit commitment process for use during extreme cold.
The RTO’s Steering Committee tasked the Market Subcommittee with consideration of the topic during a Feb. 6 teleconference. The issue was originally brought to the Steering Committee by member MidAmerican Energy.
In a written request, MidAmerican Energy’s Dennis Kimm said MISO should either introduce a multiday unit commitment process or adopt a requirement that natural gas generators buy fuel when weather is forecast that will send gas and electricity demand soaring. Kimm said the multiday commitments or natural gas procurements should not be used during normal operations.
Kimm said generators “undertake a significant economic risk in executing purchases for fuel and capacity without a guarantee that the generator will be dispatched.” He wrote that uncertainty regarding MISO dispatch “can act to discourage participation in the natural gas marketplace during times of greatest liquidity.”
MISO reported experiencing gas supply challenges, resulting in reduced generator availability, during the mid-January cold front that played out over a holiday weekend.
Kimm said some advance notice from MISO on what it plans to call up would “increase flexibility for natural gas-fired generators to obtain fuel and better situate the electric industry to adequately plan and prepare to deliver reliable service” during extreme cold.
But Executive Director of Market Operations J.T. Smith seemed unconvinced multiday commitments would improve natural gas generators’ performance issues during cold spells. He said a more successful approach would include better offers that reflect true capabilities, take into account lead times and consider temperatures and fuel procurement.
Smith said he understands generation owners want certainty, but there’s a “hesitancy from the membership” to provide true startup times and realistic availability of their generation in the market because it would harm their capacity accreditation values.
Smith said during cold snaps — including the latest widespread mid-January deep freeze — “we don’t get offers from our generators that reflect true availability.”
Smith said the optimization in MISO’s day-ahead market already gives owners and operators the signals to make commitment decisions days ahead of a weather event.
“In my mind, the multiday market already exists,” Smith said, adding he was “not so sure the problem” could be solved through MISO developing a new commitment model or fuel purchase requirement.
“Give me a valid offer of your true availability capabilities first,” he said.
Smith also said the topic likely contains resource adequacy implications that may need to be hashed out at the Resource Adequacy Subcommittee, in addition to the Market Subcommittee.
