Thursday, January 24, 2019

MISO Monitor Floats Plan for Partial-year Capacity Resources

By Amanda Durish Cook

CARMEL, Ind. — MISO’s Independent Market Monitor last week floated a plan that would allow resources that are unavailable for the full planning year to offer into the RTO’s capacity auction.

MISO CAISO Market Monitor Clean Power Plan

Chiasson | © RTO Insider

Speaking during a May 9 Resource Adequacy Subcommittee meeting, the IMM’s Michael Chiasson said that capacity resources that become unavailable and fail to replace themselves — but are not needed for reliability — should incur a financial penalty rather than a Tariff violation. The penalty price should be baked into a resource’s facility-specific reference level calculation, he said.

Chiasson also proposed that MISO designate monthly limits on how much capacity can be disqualified without replacement in order to maintain reliability.

“If there’s not a reliability issue, let it be a penalty rather than it just being a Tariff violation,” Chiasson urged. “How many megawatts of room are out there? Then put a hard stop on it.”

But he said the treatment should not extend to generators that are unavailable during the summer peak.

“If they can’t be available for the summer peak, then they shouldn’t be a planning resource. That’s our view,” he said.

MISO’s Tariff currently requires capacity resources retiring or suspending prior to the end of the planning year to replace themselves with uncleared zonal resource credits. It allows credits from outside the local resource zone only when zonal import and export limits permit.

Chiasson said it may be difficult for generators to find 100% of their replacement capacity in their own zones.

“It could be that there’s nothing left to clear in your zone,” he said.

Failure to come up with replacement credits triggers a Tariff violation and counts against a resource’s physical withholding conduct threshold. However, MISO gives a pass on physical withholding consequences to capacity resources that cannot deliver after Feb. 28 because March 1 is viewed as the end of peak system conditions. Those resources are encouraged to obtain a facility-specific reference level that includes the cost of zonal resource credit replacement. Chiasson pointed out that MISO does not extend that option to partial-year capacity resources.

Some stakeholders note that a MISO monetary penalty determination might not be the end of the concerns for capacity resources available for part of the year, which could still face resource adequacy rule violations with their state regulators.

Alliant Energy’s Jamie Niccolls cautioned that the Monitor’s plan could introduce a new reliability risk by allowing offers from units that cannot perform for the entire planning year.

Chiasson said MISO could mitigate that risk by memorializing a monthly reliability limit calculation in its Tariff.

Niccolls also said it would be difficult for a resource owner to quantify the risk of being unable to replace capacity in setting the penalty cost in the unit’s reference level.

“All we expect people to do is to make a reasonable business decision,” Chiasson said.