Friday, December 14, 2018

Supply Sufficiency ‘Hot Topic’ at MISO Board Week

By Amanda Durish Cook

INDIANAPOLIS — MISO could ensure sufficient energy supply by improving demand response rules, devising a storage participation model and better coordinating outages, among other efforts, Advisory Committee members said last week during a “hot topic” discussion on resource adequacy at the RTO’s Board Week.

Hillman | © RTO Insider

The RTO has declared 12 maximum generation events since June 2016 — nine of which occurred in winter and shoulder-season months. That represents a sharp increase from the past pattern of one event “about every two years or once a year,” said MISO Chief Customer Officer Todd Hillman, who moderated the discussion during a June 20 Advisory Committee meeting.

Hillman said the RTO is looking to abandon the standard that it has adequate resources on hand if it can reliably serve load during the one summertime peak hour of the year “when air conditioners run hard.”

Vistra Energy’s Mark Volpe, of the Independent Power Producers sector, said he wasn’t certain how much of MISO’s 12 GW of DR will respond to dispatch signals during maximum generation events. A MISO report last month showed that load-modifying resources underperformed during a mid-January emergency, and the RTO has signaled it will reconsider its rules for LMR participation. (See “LMR Performance in January,” MISO Mulls Additional Emergency Communication.) In 2017, 9% of the capacity load-serving entities committed to the forecasted summer peak consisted of emergency-only resources, MISO has said.

The MISO Advisory Committee discussion meeting on June 20, 2018 | © RTO Insider

“I think we agree that LMRs have value, and a lot of these processes were designed before MISO was in existence,” said WEC Energy Group’s Chris Plante, representative of the Transmission-Dependent Utilities sector. “Right now, we have an annual resource adequacy construct. … Do we need to look at a more granular resource adequacy construct to respect the temporal nature of LMRs?” he asked.

Representing MISO’s End-User Customers sector, Kevin Murray of the Coalition of Midwest Transmission Customers said the RTO should switch from negative to positive reinforcement for DR performance.

“If MISO is getting to the point where it thinks its current Tariff structure is not blending well with operational needs, well, it needs to look at positive rewards,” Murray said.

MISO could employ a practice where resources agree to voluntarily remove load from the system when prices reach a certain level. He also said the RTO could improve its communication with state commissioners on resource adequacy efforts.

“You’re not going to change behavior until MISO communicates what it needs,” Murray said of LMR performance.

Madison Gas and Electric’s Megan Wisersky said LMRs were originally designed to address capacity emergencies but are now being called on to solve transmission emergencies.

“You have LMRs that have to be available at 2 a.m. on a Sunday now,” Wisersky said. “You’re asking them to do something they weren’t designed to do.”

She also criticized the MISO Communications System — where LMRs report their emergency availability — for being “hard to use” and inflexible.

Hillman asked where distributed energy resources fit into efforts to manage load in tight capacity conditions.

Murray said he saw a place for DERs in controlling load. “How many Nest thermostats does it take to offset a 1,000-MW gas unit?” Murray asked rhetorically. “It’s a crop that’s ready to harvest. It just needs the pickers.”

Great Plains Institute Policy Associate Matt Prorok, the Environmental sector representative, said he agreed DERs could unlock value by “shaving loads, shifting loads and shimmying loads.”

More Outage Control?

Hillman pivoted the discussion.

“OK, increasing outages,” he said. “What do we do?”

Multiple committee members said MISO should discount outages from capacity performance.

“Don’t we do that already?” Hillman asked, referencing the three years of generation data MISO uses to produce unit-specific forced outage rates.

Plante suggested MISO include in the rate planned and maintenance outages, in addition to unplanned outages.

Stakeholders also repeated a longstanding suggestion that MISO give itself a stronger role in outage coordination, perhaps with the authority to approve outages.

But Michigan Public Service Commission Chairman Sally Talberg said the Organization of MISO States does not support the RTO having authority over outage scheduling.

MISO Director Phyllis Currie asked if generation and transmission owners were communicating enough about the conditions of their resources to the RTO so it can better predict when and where outages will occur.

“Generation doesn’t take outages because they want to be out. They take outages because they want to be on,” Murray said. PJM provides more forward-looking information about resource need than MISO, he said, noting that last week the Mid-Atlantic grid operator issued a hot-weather alert for its footprint with a request that asset owners wrap up outages early, if feasible.

“We didn’t see a similar hot-weather notice” in MISO until two days later, Murray said. He added the notice was another example of the positive reinforcement he advocates: Generation owners could reap higher prices if they come online in a hot-weather, high-demand situation.

Wisersky agreed that MISO should communicate when it most needs equipment to return online.

Energy Storage

OMS President and Arkansas Public Service Commission Chair Ted Thomas said storage can help address resource availability issues.

“Storage is crazy flexible. It’s the most flexible thing I’ve seen,” Thomas said.

However, he thinks MISO and regulators should create rules to ensure storage has a monetary value in the market.

FERC can’t do it all in wholesale, and we can’t do it all in retail,” Thomas said of creating compensation rules. “Who is going to do the aggregation? These questions are really complex.”

LS Power’s Pat Hayes, of the Competitive Transmission Developers sector, said a storage asset in MISO cannot currently generate enough revenue as a standalone resource. He said it should find ways to value storage resources as both a transmission facility and generation asset.

MISO is currently examining how storage resources can function as reliability transmission projects in its annual Transmission Expansion Plan. It is also considering permitting storage resources to bypass the interconnection queue when the resources will be used exclusively as a transmission asset.

‘One Thing’

“If there’s one thing MISO could be working on, what would it be?” Hillman asked, pointing at Advisory Committee members around the panel.

“Creating flexibility for the future — getting all resources on a level playing field. I can’t minimize how difficult that is, but clearly the evolving future requires it,” said Alcoa’s DeWayne Todd.

“Challenge MISO’s current planning assumptions to see if they reflect reality,” Exelon’s David Bloom responded.

“We need to take a hard look at policy associated with resource adequacy,” Plante said.

“Enabling competition among all resources,” Prorok added.

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