Wednesday, March 20, 2019

Trade Group Lodges Complaint over MISO Capacity Rules

By Amanda Durish Cook

A group representing MISO power producers filed a complaint with FERC on Monday alleging that the RTO is improperly accounting for the deliverability of some capacity resources, driving down payments to those demonstrably positioned to deliver on their obligations.

The Coalition of Midwest Power Producers (COMPP) urged FERC to force MISO to properly account for deliverability of capacity resources before the annual capacity auction in April in order to safeguard reliability (EL19-28).

MISO control room | MISO

COMPP said MISO’s loss-of-load expectation (LOLE) study process is flawed because it assumes that all capacity resources are fully deliverable on an installed capacity (ICAP) basis. However, the group argued, MISO’s megawatt count from deliverable resources comes up short annually because the RTO allows certain resources to demonstrate deliverability only up to the unforced capacity (UCAP) level.

MISO’s Tariff requires capacity resources to demonstrate either network resource interconnection service (NRIS) or energy resource interconnection service (ERIS) coupled with firm transmission service up to each resource’s ICAP level. While the RTO already requires that all resources be deliverable to load to qualify as capacity resources, its deliverability requirements stipulate that ERIS resources must only secure firm transmission for their UCAP values, which tend to be about 5 to 10% below full ICAP levels.

The discrepancy amounts to a Tariff violation and risks MISO’s adherence to its own planning reserve margin, COMPP said.

“By failing to ensure deliverability on an ICAP basis for all capacity resources, MISO is acting contrary to the assumptions of its LOLE study and failing to procure enough fully deliverable resources needed to meet its [planning reserve margin] as its Tariff requires,” COMPP said.

“The seriousness of this issue is evident in the historically low reserve margins that MISO is experiencing,” COMPP said. “Requiring compliance with the Tariff for the upcoming [Planning Resource Auction] is essential both to maintaining reliability and to ensuring rates are just and reasonable and not unduly discriminatory. Yet, despite the gravity of the situation, the RTO is proceeding in a manner that will continue to improperly count approximately 1,400 MW of undeliverable generation toward satisfying its reliability requirement.”

MISO’s Independent Market Monitor last year also advised the RTO to require a planning resource’s ICAP be deliverable over the network regardless of which interconnection service it uses. (See MISO Concurs with Monitor Ideas, Pledges More Study.) The Monitor found it problematic that MISO’s LOLE study assumes all ICAP megawatts are deliverable when they’re not.

It later pointed out that during past PRAs, as much as 1,400 MW in capacity may not have been capable of delivering to load. At the time, MISO said it would work on rule changes in time for the 2020/21 PRA.

For COMPP, those changes won’t come soon enough. The group pointed out the problem is poised to recur in the upcoming 2019/20 PRA “despite the IMM having recommended that MISO fix it for the past two auctions.” It also maintains that swings even smaller than 1,400 MW “can lead to material differences in the clearing price that fails to send accurate price signals for entry and exit.”

COMPP said that despite MISO’s apparent agreement with the Monitor, it contended that the RTO has designated the issue a low priority by “only targeting to correct its failure” for the 2020/21 PRA.

“Leaving this problem unaddressed for another day fails to abide with [Federal Power Act Section] 206’s requirements and should be deemed unacceptable by the commission. … The lack of urgency on this issue is particularly galling given MISO’s focus on dealing with current reliability issues that have resulted in some 19 emergency actions since the start of the 2016/2017 planning year,” COMPP said.

The organization also requested fast-track treatment from FERC.

MISO said it was in the process of reviewing the complaint.