CARMEL, Ind. — MISO is nearing an overhaul of its capacity accreditation methods for load-modifying resources (LMRs) and demand response that would be based on whether they can assist during periods of high system risk.
The grid operator plans to accredit LMRs and its emergency DR and behind-the-meter generation depending on their offers during low-margin and risky hours where a capacity advisory, maximum generation alert or warning, or energy emergency is in place. The RTO reasoned that those hours best reflect when it is likely to need those resources.
MISO said it would require DR and LMRs to designate a response time when registering their assets. It plans to dock accreditation when resources report inaccurate availability.
Joshua Schabla, MISO market design economist, said the RTO has “dozens” of DR resources that have never updated availability throughout a planning year.
“We want to accredit a resource based on when it’s most needed. That’s the crux of this,” Schabla told the Resource Adequacy Subcommittee on Feb. 26. He warned that MISO compensates resources that never perform, and he said some resources “look like they exist when they in fact do not.”
MISO said data from its demand-side resource interface show that about 2 GW of DR is accredited but is never designated as available or self-scheduled.
The RTO plans to rely on the past year as a reference for accreditation. Staff said they are aware that using a single year makes for a more severe accreditation style, but that is by design to send a signal to respond. Last year it mulled using the past three years as a reference but decided that would water down accreditation too much.
Additionally, the RTO plans to split its LMR category into rapid responders with greater responsibility and those with a more lenient availability scheme by the 2028/29 planning year. (See MISO Closing in on New LMR Accreditation.) Nimbler LMRs would have a maximum response time of 30 minutes and presumed availability for all maximum generation emergency step 2 events. Slower LMRs would have a maximum six-hour response time and would be called up earlier — sometimes on a voluntary basis — during maximum generation warnings.
The accreditation plan would have an all-or-nothing aspect: MISO plans to assign zero values for the entire duration of an emergency or near-emergency event when resources fail to make any contributions for even one hour.
“It sounds harsh; it sounds mean. But that’s the line we’ve drawn in the sand. … That’s the tension we experience between availability and adequacy,” Schabla said.
He also said MISO wants to transition to an unlimited number of deployments instead of limiting DR’s deployments to a handful of times per season, as is practice now.
However, after a DR resource, BTM generator or the slower LMR type deploys once in a year, they can choose to declare themselves as unavailable in future deployment calls in exchange for reduced accreditation. Schabla said those resources can decide if a deployment is too expensive to carry out. The category of faster LMRs, on the other hand, would not be permitted to designate themselves as unavailable under any circumstances.
MISO staff have stressed that it is imperative that LMRs respond when called upon to retain resource adequacy as the fleet transitions.
“We want to make sure their accreditation is tied to their performance,” Zak Joundi, executive director of market innovation, said in front of MISO South regulators Feb. 24. Joundi reminded attendees that LMRs have chosen to register as capacity resources.
As part of its accreditation filing, MISO plans to debut a capacity availability tolerance band for DR resources, in which they would be required to perform between 88 and 112% of their stated load-reduction capability. MISO would cap the tolerance band at no less than 1 MW and no more than 30 MW for underperforming resources. Despite the upper bounds of the tolerance band, DR resources would not be penalized for overperformance.
Some stakeholders have said the tolerance band is too complex to include in the new accreditation method.
“Forecast errors are inevitable, and penalties are not appropriate for LMRs providing good-faith estimates,” WPPI Energy’s Steve Leovy said. MISO should waive accreditation penalties when LMRs provide “near-real-time demand data” or have used rigorous forecasting methods to estimate their availability, he said. A few tens of megawatts of standard deviation should not make a difference to MISO operations, he argued.
Schabla said LMRs using a firm service level to gauge reductions instead of a megawatt amount would not face accreditation penalties without the tolerance band. He pointed out that LMRs specifying megawatt reductions likewise face performance penalties. MISO’s DR resources can use either a firm service level or a megawatt value as the measuring stick for their reductions.
“We believe it’s fair to treat all demand response resources the same,” Schabla said, stressing that resources should be indicating their availability. He said there are LMRs in MISO who input the same availability information year-round, never adjusting for likely seasonal changes. The RTO expects DR to perform when called on, even if it proves expensive for the resource. Schabla said it is only fair that unresponsive resources take hits to their accreditation when unavailable.
“We’re paying you for years in between deployments,” he explained, adding that MISO compensates LMRs to respond only in emergency situations.
The RTO has called up LMRs 12 times since 2017, with half of those occurring during winter storms over the last few years.
“These events are very infrequent, and that’s to be expected in a system with a one-day-in-10-years reliability standard,” Schabla said.
