CARMEL, Ind. — Midwestern power producers are asking for re-evaluation of MISO’s cost of new entry in light of recent clean energy goals.
The Coalition of Midwest Power Producers (COMPP) recently approached MISO’s Market Subcommittee to ask that MISO reconsider cost of new entry (CONE) being rooted in 20-year gas plants.
Currently, MISO’s CONE represents the cost of building an advanced combustion turbine and differs by zone to reflect regional differences in construction costs. The CONE calculation assumes a 20-year lifespan and loan term; considers debt-to-equity ratio and interest rates; and includes capital costs, property taxes, insurance costs, and operations and maintenance expenses. Values are used to set the limit for clearing prices in the RTO’s capacity auctions.
COMPP pointed out that Illinois in 2021 passed the Climate and Equitable Jobs Act (CEJA), which stipulates that most combustion turbines be retired by 2040. The group said it’s no longer appropriate to presume a 20-year project life and loan term for gas plants in Zone 4’s CONE calculation and asked MISO to “develop a process to adjust” Southern Illinois’ Zone 4 CONE “by reducing the assumed project life and loan term to capture CEJA’s retirement mandates.”
COMPP said MISO might expand its CONE investigation into other local clearing zones as they rev up and implement clean energy goals and 20-year gas plant waypoints go out of fashion.
MISO’s CONE averages nearly $330/MW-day; the dollar value has been climbing in the past few years. (See MISO 2024 CONE Values Jump on Inflation.)
COMPP asked that the RTO readjust its Zone 4 CONE assumptions by the 2025/26 planning year.
MISO is set to discuss a possible CONE recalibration with stakeholders at upcoming meetings of its Resource Adequacy Subcommittee.
