FERC has granted MISO a waiver of its $1,000/MWh offer cap for winter, providing the RTO relief before the commission’s pre-Thanksgiving order that doubled the hard offer cap for all grid operators takes effect.
FERC’s Nov. 17 ruling setting the offer cap for day-ahead and real-time markets to $2,000/MWh in all RTOs and ISOs won’t take effect until 75 days after publication in the Federal Register (RM16-5). (See New FERC Rule Will Double RTO Offer Caps.)
Thus the commission on Nov. 29 granted MISO’s request that resources with incremental energy costs above the current $1,000/MWh offer cap be allowed to recover costs effective Dec. 1 (ER16-2685). FERC approved similar MISO requests for the winters of 2014/15 and 2015/16.
The waiver and FERC’s new rule require that energy costs that exceed $1,000/MWh must be verified before the offer is used to set LMPs. FERC acknowledged the rule in the order granting the waiver, calling it “a long-term solution.”
“MISO’s experience during the polar vortex of the 2013/14 winter demonstrates that fuel costs can increase to a level such that the current $1,000/MWh offer cap prevents resources from submitting incremental energy offers that reflect their marginal production costs. If similar weather and natural gas supply conditions materialize in the 2016/17 winter, some resources could face the untenable position of being forced to offer electricity at levels below their actual cost,” the commission said.
As with MISO’s two previous waivers, the order instructs MISO’s Market Monitor to file a report within 30 days after the waiver period ends April 30 with statistics on offers above $1,000/MWh.
– Amanda Durish Cook
