By Amanda Durish Cook
MISO has filed with FERC its proposal to implement a separate three-year forward capacity market with a downward-sloping demand curve for its retail-choice areas.
The nearly 1,700-page filing, submitted Nov. 1, creates Tariff Module E-3 and makes corresponding changes to modules A, D and E-1 (ER17-284). Jeff Bladen, MISO executive director of market services, said the RTO took pains to incorporate stakeholder advice into the proposal over the 20-month period since the initial issues statement.
“The proposal is a reflection of the breadth of advice we got throughout the process,” Bladen said during a conference call after the filing. “There are no surprises in what we filed this afternoon. … We look forward to the review process FERC will undertake.”
The filing came despite calls from some stakeholders for more discussion. Bladen said that although all stakeholders didn’t agree on MISO’s forward auction solution, virtually all stakeholders agree that a problem exists that needs to be corrected. Bladen pointed to the OMS-MISO Survey that found a possibility of a generation shortfall below the RTO’s minimum reserve margin requirement in 2018. (See OMS-MISO Survey: Generation Shortfall Possible.)
MISO’s plan is designed to “ensure conditions don’t deteriorate further,” Bladen said.
Bladen also noted that MISO’s Independent Market Monitor was heavily involved throughout the process, although the RTO and Monitor continue to have “philosophical differences.” (See MISO Delays Forward Auction Filing; Issues Draft Tariff and Business Rules.)
“It’s no secret that there has been difference in opinion about the preferred approach,” he said.
Bladen said the proposal is designed to provide equally valued capacity from both merchant generators and regulated utilities. An analysis from The Brattle Group has demonstrated that the proposal would ensure enough capacity to meet reserve margins.
MISO is requesting an effective date of March 1, 2017, the beginning of its implementation timeline for the 2018/19 planning year capacity auction. He would not speculate as to what the RTO might do if FERC doesn’t approve the changes by then. “There are many plausible ways FERC might act, so there are too many hypotheticals,” he said.
To respect state jurisdiction, the filing includes a prevailing state compensation mechanism modeled after one in PJM that will provide an alternative method for demonstrating long-term resource adequacy outside of the forward auction.
Under the mechanism, state regulators can facilitate settlements of compensation rates between their load-serving entities and suppliers outside of MISO’s processes. Authorities must notify MISO of the amount of demand under such agreements two months prior to the auction.
The filing also includes the late addition of a pivotal supplier test that Monitor David Patton said is based on language used by NYISO. (See Late Changes to MISO Auction Plan Renew Calls for Filing Delay.)
