The D.C. Circuit Court of Appeals rejected Entergy’s challenge of MISO’s seasonal capacity accreditation and generator outage rules, two years after FERC approved the rules.

The court in a July 26 order decided FERC adequately explained why it allowed the new capacity accreditation and denied Entergy’s petition for review (22-1335).

Entergy argued that MISO’s new capacity accreditation would result in volatile and fluctuating capacity scores and that MISO’s seasonal outage rules for generators were burdensome.

MISO’s capacity accreditation assigns values based on resources’ performance over the past three years. The accreditation calculation gives a heftier, 80% weight to the 65 hours in a year when supply is the tightest and gives all other hours in a year a 20% weight.

Entergy contended MISO’s method over-relied on just 65 hours, and a generator’s accreditation could be tremendously affected if a planned outage happened to occur during some of the riskiest 65 hours. The company made similar arguments when requesting a rehearing of FERC’s 2022 approval. (See Regulators, LSEs Ask FERC to Reconsider MISO’s Seasonal Capacity Accreditation.)

But the D.C. Circuit decided FERC appropriately evaluated the accreditation style using a MISO-created analysis that compared existing and proposed accreditation methods to actual resource availability over 11 days containing emergency conditions in 2021. MISO found its old methodology overestimated resources’ offerings anywhere from 8 to 22%, while its new process was off by just 1%.

The court said FERC was correct to assume MISO’s new accreditation would be “more accurate than its prior approach when predicting resource performance during periods of highest demand.”

Entergy argued MISO’s 11-day sample size was too small. But the court said its hands were tied on considering MISO’s sample size because Entergy didn’t specifically raise that concern in its rehearing request with FERC. The court cited the Federal Power Act’s “unusually strict” exhaustion requirement.

The court also noted MISO uses a three-year rolling average when taking stock of a resource’s availability for accreditation, reducing year-to-year accreditation volatility.

“If bad luck besets a resource one year, the impact of such bad luck is blunted by the fact that other years can help balance out an anomalous season,” the court said.

The court didn’t see anything amiss with MISO’s generator outage length and notice requirements, either. It agreed with FERC that MISO’s 31-day limit “would give generators enough time to perform maintenance, while also ensuring that generators would be online for the majority of each season.” It disagreed with Entergy that the threshold would hinder necessary, extended outages.

MISO requires capacity resource owners either must acquire replacement capacity or pay penalties if they are offline for more than 31 days in a season and that they must notify it 120 days in advance of planned outages to be exempt from accreditation reductions.

“FERC reasonably explained that owners of such resources have four options: shortening maintenance; acquiring replacement capacity; opting out of the capacity market for a season while maintenance is undertaken; and scheduling maintenance so that it straddles two seasons, enabling planned outages of up to 62 days in length,” the court said. “As FERC explained, it is unfair for resources to go offline for more than 31 days in a season when distributors have paid for the resource’s commitment to supply electricity during that season.”

The court further said it made sense for MISO to require notification of outages before the start of a season so it can anticipate capacity supply.

MISO began using the seasonal, availability-based capacity accreditation in the 2023/24 planning year. FERC last year rejected Entergy’s attempts to secure waivers for two of its plants so it wasn’t affected by MISO’s accreditation rule, which assigns thermal units a zero-capacity credit when they take longer than 24 hours to start up. (See FERC Rejects MISO South Waiver Requests from MISO Accreditation Standard.)

Despite MISO’s relatively recent move to its current accreditation method, it isn’t here to stay for long. MISO again plans to modify its accreditation style so nearly all resources are valued based on a combination of probabilistic and historical availability. (See MISO: New Capacity Accreditation Filing Imminent.)