Tuesday, March 28, 2017

FERC Staff OKs MISO Mitigation Changes; Refunds Possible

By Amanda Durish Cook

With FERC staff’s hesitant nod, MISO will apply a more stringent physical withholding rule and remove demand response and energy efficiency from market monitoring in next month’s Planning Resource Auction.

The commission released a short delegated order March 15 that accepted and suspended MISO’s proposed changes subject to refund (ER17-806).

FERC Director of Electric Power Regulation Penny Murrell, using authority delegated to her in the absence of a FERC quorum, said the commission’s preliminary review had not concluded the changes were just and reasonable and that the tentative approval was subject to further commission order.

The order will allow MISO to apply a 50-MW minimum for physical withholding rules to affiliated market participants collectively, rather than individually to each affiliated company. MISO’s Independent Market Monitor had recommended the change in its 2015 State of the Market Report, saying that as “capacity margins fall in MISO, the market will become more vulnerable to physical withholding.”

FERC MISO physical withholding

| MISO

The order also allows MISO to exempt DR, EE and external resources from PRA mitigation measures. The RTO said DR and EE resources are too small to have market power.

The rules will “provide stakeholders with greater certainty, prevent large suppliers from circumventing MISO’s mitigation provisions and encourage the participation of demand resources, energy efficiency resources and external resources” in the capacity auction, the RTO said. (See MISO Plans Additional Capacity Auction Revamps for 2017.)

A third change will allow planning resources to request facility-specific reference levels for the auction.

Reference levels are used to determine a resource’s marginal costs, including risk and opportunity costs and technical characteristics for physical offer parameters.

In its filing, MISO said its Tariff is vague as to the types of resources that can obtain a facility-specific reference level rather than using defaults. The change will permit facility-specific levels for planning resources not otherwise exempted from market mitigation.

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