CARMEL, Ind. — MISO maintains that a member request to create a multiday gas purchase requirement for use during extreme cold is unnecessary but offered financial assurances for resources whose commitments are canceled.
MISO’s Jason Howard said instead of a multiday fuel purchase requirement for market participants, MISO wants to develop two new financial guarantees to resources committed days in advance of upcoming grid situations.
The first would be a canceled startup cost provision, where a resource would be guaranteed a portion of startup costs depending on when MISO cancels within the startup window. The second would be an “as-committed/as-dispatched” lesser of settlements rule, which would move multiday commitments into the day-ahead solution of an effective operating day and allow generators to earn make-whole payments based on the lesser of a real-time or day-ahead offer cost.
“We feel these are ideal to provide more security and assurance to resources,” Howard said at an Oct. 10 Market Subcommittee meeting. He said the rules are simpler than instituting a multiday market and that they help members feel more comfortable when they must contract for gas.
“When you compare this solution to doing the necessary software changes in our settlements system, that’s a huge cost benefit,” Howard said.
Howard also said the rules’ wording will establish assurances that extend beyond gas units.
MidAmerican Energy Co. — which serves natural gas customers in Iowa, Illinois, Nebraska and South Dakota — had argued that owners of natural gas units “undertake significant risk in purchasing or not purchasing natural gas when natural gas supplies are very tight” and are faced with either capacity loss or financial loss. MidAmerican said on rare occasions, there isn’t any natural gas available to buy after next-day trading in some portions of MISO. (See MISO’s MSC to Debate Multiday Gas Requirements.)
While some stakeholders have said the time is right for such a requirement, others said they worried about over-procurement of gas and whether the requirement would lead to pricing spikes at hubs.
Howard has said MISO already runs a multiday reliability assessment and commitment engine — the RTO’s Forward Reliability Assessment Commitment process — every day to position generation owners for upcoming obligations.
MidAmerican representative Dennis Kimm said he was happy with MISO’s compromise. He asked if the guarantees could be in place for upcoming cold weather.
“It might be a tough sell for this winter,” Howard said, referencing the settlements and tariff changes the rules will require.
