Tuesday, March 19, 2019

FERC: No Merit in MISO Deliverability Complaint

By Amanda Durish Cook

FERC has rejected a trade group’s complaint that MISO is improperly accounting for the deliverability of some capacity resources, saying it could find no Tariff language to support a violation.

The commission on Thursday said MISO isn’t in violation of its resource adequacy construct over capacity deliverability as the Coalition of Midwest Power Producers (COMPP) alleged late last year (EL19-28).

Rather than finding any Tariff provisions that evidenced violation, FERC said that MISO is “responsible for determining whether … capacity resources are deliverable to load.”

“Although power producers contend that ‘deliverable to load’ should be read to mean that capacity resources must have firm transmission service up to their full installed capacity levels, power producers fail to identify any Tariff provisions that support this assertion,” FERC said.

The commission also said COMPP didn’t demonstrate that MISO’s current practice jeopardizes reliability.

| MISO

COMPP’s complaint alleged that MISO doesn’t properly account for capacity deliverability because its loss-of-load expectation (LOLE) study assumes that all capacity resources are fully deliverable on an installed capacity (ICAP) basis. However, the RTO allows resources to demonstrate deliverability only up to the unforced capacity (UCAP) levels, which tend to be about 5 to 10% below full ICAP levels. The group said MISO’s megawatt count from deliverable resources comes up short annually and drives down payments to capacity resources demonstrably positioned to deliver on their obligations. COMPP asked FERC to direct MISO to develop a solution to comply with its Tariff before the 2019/20 capacity auction. (See Trade Group Lodges Complaint over MISO Capacity Rules.)

MISO’s Tariff requires capacity resources to demonstrate deliverability either by having network resource interconnection service (NRIS), which stipulates that the entire ICAP of the resources must be deliverable, or by having energy resource interconnection service (ERIS) and procuring firm transmission service up its UCAP level.

No Discriminatory Treatment

In response to the complaint, MISO said it doesn’t hold capacity resources to different standards because it doesn’t require NRIS resources to perform to ICAP levels, instead requiring both to demonstrate deliverability up to their UCAP levels for the purposes of the capacity auction.

FERC agreed. “As described in its resource adequacy Business Practices Manual, MISO calculates the [UCAP] level of a resource by first determining its [ICAP] level. Once the [ICAP] value is determined, MISO applies the resource’s forced outage rate, thereby converting the [ICAP] level to a lower [UCAP] level. Next, MISO validates that the resource is deliverable by having the resource demonstrate deliverability up to its [UCAP] level,” FERC said.

The commission also said UCAP values are a vital part of MISO’s resource adequacy construct, with even the reserve margin formed as an “unforced capacity requirement.”

“Given the consistent use of unforced capacity values for purposes of resource adequacy in … its Tariff, we find that MISO reasonably implemented [its Tariff] by requiring capacity resources with ERIS to demonstrate deliverability up to their unforced capacity levels,” FERC said.

MISO said COMPP mischaracterized its Tariff “process improvements” discussions with the Independent Market Monitor as “admissions of Tariff violations.” The RTO has promised to have stakeholder discussions about resource deliverability and LOLE implications, with any potential fixes aimed at the 2020/21 capacity auction. (See “Capacity Auction Recommendations,” MISO Concurs with Monitor Ideas, Pledges More Study.) It said there was no evidence it violated Tariff provisions establishing a planning margin, the LOLE study methodology to create the planning margin or its duty to ensure the deliverability of capacity resources. MISO also said working on a rule change less than a month before the April capacity auction would seriously disrupt the auction.

At any rate, transmission deliverability is outside the scope of its LOLE analysis because the study assumes no internal transmission constraints, the RTO added.

However, the Monitor had asked FERC to side with COMPP, agreeing that “the terms of the Tariff result in a mismatch for some ERIS resources between the capacity assumed to be available in the LOLE studies and the capacity those suppliers can actually deliver.” But the Organization of MISO States urged FERC to hold off on ordering relief so the RTO could continue to address the issue through ongoing stakeholder discussions.

‘False Sense of Urgency’

MISO said the complaint created a “false sense of urgency” by implying that its recent emergency events had anything to do with capacity deliverability. To the contrary, the RTO said the events “have been driven largely by correlated planned outages and the use of emergency-only resources outside of the summer season.”

The RTO also argued that the power producers represented by COMPP are not prevented from auction participation nor are they suffering harm from MISO’s existing rules. It also said COMPP should have first sought dispute resolution with MISO. Finally, MISO alleged the complaint only sought to “disqualify 1,400 MW of generation owned by other auction participants to gain a competitive advantage.” The Monitor last year said as much as 1,400 MW worth of capacity resources needed to meet reserve requirements may not have been deliverable in the 2018/19 planning year.

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