Tuesday, January 22, 2019

MISO Agrees to Implement Most of IMM’s Recommendations

By Amanda Durish Cook

MISO said it generally agrees with the recommendations its Independent Marker Monitor laid out in its 2015 State of the Market report, but the RTO won’t implement a few recommendations and wants additional analysis on some others.

On a conference call of the Market Committee of the Board of Directors on Oct. 24, MISO said there is only a “minority of problems identified where [it] believes additional analysis is necessary to confirm [the] problem or to identify alternative solutions.”

Under their Tariff, the RTO has 120 days to respond to the Monitor’s recommendations.

Software Changes Required

MISO Executive Director of Market Design Jeff Bladen said the RTO is working on expanding eligibility for online units to set prices in extended locational marginal pricing (ELMP), but changes to the software would be difficult and it wanted to focus on other Market Roadmap projects first. However, MISO still breaks with the Monitor on suspending offline pricing in ELMP. (See “MISO to Expand ELMP Price Setting, but not to IMM’s Specs,” MISO Market Subcommittee Briefs.)

Process that MISO will use to address the concerns of their Independent Market Monitor

Bladen said implementing the Monitor’s full suggestion would require a complex software modification. “There are no simple code changes to the software at this point. It certainly isn’t a one-day change,” he said.

Market Monitor David Patton said the difficult software change stems from software vendors “hard coding” software where it cannot be opened later to expand design parameters.

Bladen said although it agrees with the Monitor that it should implement firm capacity delivery procedures with PJM, MISO has been unable to move the solution through the two-party approval process because of resistance from PJM earlier this year and has put its proposed solution on hold. (See “Ready for Pseudo-Tie Switchover,” MISO/PJM Joint and Common Market Meeting Briefs.)

“It’s PJM that requires resources external to PJM to be pseudo-tied,” Patton agreed. He said he and MISO are considering asking FERC to open a Section 206 proceeding against PJM to force a change in its Tariff.

‘Weaponizing’ FERC Filing

MISO Director Michael Curran said he would rather not build a relationship with PJM by “provoking” them with a 206 proceeding and cautioned against “weaponizing” FERC filings. CEO John Bear said MISO is developing alternatives to firm capacity procedures to present to PJM.

The MISO Independent Market Monitor David Patton

MISO Market Monitor David Patton | © RTO Insider

Bladen said the Monitor’s advice to improve the modeling of transmission constraints in the Planning Resource Auction was not prioritized by stakeholders as a key concern, but MISO would work on scoping a study.

The RTO also said it agreed with the expansion of temperature-adjusted and short-term emergency ratings for transmission facilities and will work with its transmission owners on improvements.

However, MISO is unlikely to increase physical withholding mitigation measures in the PRA by addressing uneconomic retirements. The RTO said the concept of uneconomic retirements itself is a problematic, as such instances would be difficult to determine.

Patton countered that the problem could crop up when a large generator clearly retires to give affiliates a higher clearing price. Bladen said the threat of an entity’s permanent loss of injection rights if it is found to be gaming the market is “sufficient deterrent” to such retirements. He said the RTO is working on a suggestion from 2013 to subject suspended resources to withholding rules, but he didn’t see the need to include retiring generation.

However, MISO has committed to expanding withholding mitigation in the PRA by recognizing affiliates’ connections. Bladen said MISO and Patton will discuss the issue with stakeholders. “We think it’s important to look at the affiliate nature of resources and examine them for physical withholding,” Bladen said.

On the other hand, MISO sees gray areas around a few of Patton’s recommendations. MISO says it is awaiting further details from the Monitor on how to improve the modeling of transmission constraints in the PRA and is looking for changes that can be achieved in the near term.

Transfer Constraint

MISO took a similar wait-and-see stance on Patton’s suggestion to increase the transfer constraint between the RTO’s South and North regions in the PRA. The RTO said it is holding stakeholder discussions and has support for a study to examine the benefits of developing its own transmission to link the interfaces, as an alternative to SPP’s transmission. (See MISO Proposes Study to Measure Benefits of New North-South Tx.)

The study will be rolled into other analyses as part of MISO’s 2017 Transmission Expansion Plan. MISO said the annual cost to maintain constraints under the SPP settlement can be as much as $38 million.

The RTO also has mixed feelings about modeling its voltage and local reliability requirements in the day-ahead market, saying it already models the requirement but doesn’t include it in the day-ahead market. However, it said it would discuss potential advantages of an automated market process with the Monitor

Bladen said it will take five to seven years to implement all of the 2015 solutions MISO agrees with, calling the timeframe in line with the RTO’s “robust stakeholder process.”

Bladen also said all recommendations made prior to 2011 have been resolved. It takes MISO an average of 2.3 years to close out suggestions, according to the RTO.

Patton said implementation of software fixes for his recommendations are sometimes slowed by difficulty scheduling work with MISO’s software vendors or getting the attention of RTO executives responsible for multiple market improvements.

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