CARMEL, Ind. — MISO says it will wait another year before moving to tighten deliverability requirements in its capacity auctions, a decision that has irked stakeholders who say guaranteed deliverability to load is too essential to put on hold.
MISO’s Independent Market Monitor has argued that the RTO doesn’t properly account for capacity deliverability because its loss-of-load expectation (LOLE) study assumes that all capacity resources are fully deliverable on an installed capacity (ICAP) basis. However, MISO allows resources to demonstrate deliverability only up to the unforced capacity levels, which tend to be about 5 to 10% below full ICAP levels.
The Monitor has said MISO should require deliverability for all capacity resources based on full ICAP, after finding that one unit came up short by “tens of megawatts” in the 2016 Planning Resource Auction.
The RTO has so far developed possible solutions only for intermittent resources, citing the increasing number of wind curtailments in the footprint. It noted that curtailments rose to an all-time high of nearly 5 GW in May — although multiple stakeholders said it is missing key context on when such curtailments occur, arguing that curtailment at peak demand is very different from curtailment at 3 a.m.
At a Resource Adequacy Subcommittee meeting Wednesday, MISO adviser Darrin Landstrom said the RTO plans to estimate the average capacity factor for intermittent resources based on their transmission service request values, which will possibly reduce capacity credits.
The solution is one of three options MISO shopped in August to address the issue. (See MISO Deliverability Plan Prompts Skepticism.)
But that solution wouldn’t apply to the capacity auction until the 2021/22 planning year, staff said. Landstrom said MISO would likely be unable to make a filing before the end of the year.
“I really don’t think it’s acceptable that MISO will delay a solution another calendar year,” Gabel Associates’ Travis Stewart said, urging staff to come up with a temporary solution in time for the 2020/21 planning year.
MISO has acknowledged that the Monitor might dispute capacity auction rights if the deliverability gap causes a “significant” change in clearing prices.
IMM staffer Michael Chiasson said MISO does not need to make a FERC filing to apply stricter deliverability requirements for conventional generation; it need only change its Business Practices Manuals.
But RASC liaison Patrick Brown said capacity resources need time to react to the change. He also said the RTO needs a year to make complex software changes to accommodate new deliverability requirements.
Complaint over Extended Outage Rule Change
MISO is sticking with a less aggressive plan designed to dissuade capacity resources from taking long outages that could risk supply and plans to submit a FERC filing later this month.
The provisional change would limit extended planned outages to a cumulative 90 days of the first 120 days of the planning year — June 1 to Sept. 30 — which MISO deems the most critical months in terms of demand. Resources that are unavailable for more than 90 days during the first four months of the planning year would be disqualified from auction participation. (See MISO Eases New Rules on Extended Outages.)
Tim Bachus, MISO’s capacity market administration analyst, said the temporary change is only meant for the 2020/21 planning year auction. He said he’s heard criticism that the proposal is too lenient, with some stakeholders asking instead for a 30-day outage limit.
“This is really a short-term fix … one, maybe two years total,” Bachus said. “We just want to address resources that take capacity payments but aren’t available at the most critical times.”
The short-term proposal might tackle Wolverine Power Supply Cooperative’s late September complaint with FERC over MISO allowing a yearlong planned outage of a large resource in Michigan in the 2019/20 auction (EL19-102). The RTO currently issues no penalties for capacity resources that take extended outages.
The co-op said MISO’s Tariff flaw “was exposed most recently by the results of the 2019/2020 PRA that created a capacity shortfall in Michigan’s Lower Peninsula; yielded objectively unjust and unreasonable clearing prices well below the prices that would motivate new investment or keep older existing units in operation; and ensured that market participants were inadequately compensated for their actual capacity contributions.” Wolverine argued it’s not fair to consumers and market participants that MISO allows resources to set clearing prices even when their owners are aware they will be unavailable for the planning year, undercutting market principles and jeopardizes reliability.
New PRA Deadlines Approved
In a brief letter order Oct. 3, FERC gave MISO permission to shift its deadlines for its capacity auctions, allowing market participants more time to prepare data submittals and end the RTO’s practice of opening and closing the offer window in the middle of the night (ER19-2559).
Under the rule changes, demand response testing, submission of generator verification testing data, behind-the-meter registration, unforced capacity values and the posting of preliminary auction data will be due at different points in the winter instead of fall. MISO will also open its four-day offer window at 8 a.m. ET and close at 6 p.m. instead of the usual midnight-to-midnight run. (See “New PRA Deadlines Before FERC,” MISO Resource Adequacy Subcomm. Briefs: Sept. 12, 2019.)
The new deadlines will take effect beginning with the 2020/21 PRA. Some planning resource performance data, including generation verification test capacity, is due Oct. 31. Load-serving entities must submit their peak demand forecasts for the upcoming planning year by Nov. 1, the same date that MISO will publish the results of its annual LOLE study.
— Amanda Durish Cook
