By Amanda Durish Cook
CARMEL, Ind. — MISO is working quickly to ensure its capacity resources are mostly accessible for the planning year after this spring’s auction cleared a Michigan generator scheduled to be on outage for the entire period.
The RTO proposed a provisional solution at the Resource Adequacy Subcommittee meeting Wednesday that would limit extended planned outages to fewer than 90 days to qualify for participation in the Planning Resource Auction. Additionally, resources expected to be unavailable for the first 90 days of the planning year would not qualify for PRA participation.
Cleared resources with planned outages lasting 90 days or longer must replace their capacity or be penalized at MISO’s approximately $250/MW-day cost of new entry. Currently, the RTO doesn’t impose any penalties for capacity resources that take extended outages.
“If you think about MISO’s resource adequacy construct, there is a reasonable expectation of availability,” Director of Resource Adequacy Coordination Matt Ellis said.
MISO plans to file the proposal with FERC by mid-October to have it in place in time for the 2020/21 PRA, an unusually fast turnaround for the RTO, which can spend several months to a few years formulating new Tariff language. MISO said it also plans to seek more fleshed-out outage rules for the 2021/22 auction.
Ellis said that while MISO may not be able to make a comprehensive filing now because it must examine several possible unintended consequences, it can impose a straightforward, 90-day requirement.
“It’s an incremental change. It’s intended to be a step in the right direction — something we can refine further as we go along,” Ellis said.
April’s PRA cleared a large generator in Michigan’s Zone 7 as a capacity resource for the 2019/20 planning year even though it is slated to be on an extended outage for the entire year. The Independent Market Monitor first criticized the move in June. (See “Extended Outages and the Capacity Auction,” Monitor Splits with MISO on Summer Readiness.)
Ellis said the 90-day requirement is meant to capture the possibility that a planning resource will be out for an entire season. Requiring availability in the first 90 days of the planning year also ensures that capacity resources will be available during summer months when availability is more critical. MISO planning years begin June 1.
Stakeholders immediately inquired about planned outages that come in just under the threshold, but Ellis said MISO is starting by drawing the line at 90 days.
“And honestly, when we discussed this internally, that’s the first thing that came up: ‘What if units take an 89-day outage?’” Ellis said. “What’s the bright line? We chose 90.”
Ellis said MISO will revisit its proposal if 88- to 89-day outages begin to become “habitual.”
When stakeholders asked what would happen if a generator extends an outage to 90 days or longer, Ellis responded it wouldn’t be retroactively penalized to cover replacement capacity. However, MISO and the Monitor would keep a sharp eye for resource owners that might be seeking to game the rule with sudden extensions. Under the plan, the Monitor would have Tariff authority to audit outages for physical withholding.
Stakeholders said the proposal could encourage generators to take forced outages — and the accompanying hit to resource accreditation — over taking a long-term planned outage that would exclude them from a capacity payment for a planning year or face having to replace the capacity at a high cost.
MISO has left the proposal open to other stakeholder comments through Aug. 23.
