FERC clears new MISO process for restoring power, allocating costs after blackouts

Washington — Midcontinent Independent System Operator was given the go-ahead to institute a new framework for handling the restoration of power and allocation of costs associated with that effort.

The new permanent framework for handling a restoration event replaces what MISO called an inefficient process of addressing these events on a case-by-case basis.

With FERC's sign-off, MISO can proceed with adding Schedule 52 to its tariff. The new schedule is intended to "make the process of recovery and allocation of costs more efficient and timely, ensuring that each event is treated in the same manner, and provide market participants advance notice of how a restoration event will be handled," MISO said in its April 28 filing (ER20-1673).

FERC made the tariff changes effective June 28, as MISO requested. No protests or adverse comments were filed in regards to the filing, the commission said in a July 10 letter order delegated to staff.

Schedule 52 will be applied to all future restoration events with oversight from MISO's independent market monitor.

Restoration events

Pulling from a mandatory reliability standard governing system restoration coordination, Schedule 52 will declare a restoration event when "black start resources are utilized to re-energize a shutdown area of the bulk electric system, or separation has occurred between neighboring reliability coordinators, or an energized island has been formed on the BES within the reliability coordinator area."

When such an event occurs, under the new framework, the transmission provider is tasked with issuing a formal statement so all parties are on notice, while transmission operators and local balancing authorities are responsible for restoring energy to the affected area.

Schedule 52 also stipulates that generation resources that respond to the restoration event will be compensated for actual energy injections during the event, and specifies what can be claimed as production costs.

The framework provides a mechanism for updating real-time offers after the start of a restoration event and revising reference levels that reflect a resource's marginal costs. Those changes, subject to monitoring by the IMM, are then used for the restoration compensation calculation.

Under the framework, transmission operators and local balancing authorities can make emergency energy purchases to re-energize the area of the blackout. Those costs would be included in the calculation of the event costs to be allocated to market participants.

Cost allocation method

The cost allocation method "fairly distributes the costs to load by splitting the costs into two different allocation methods, one for start-up costs and one for ongoing resource costs and energy purchases," according to MISO's filing. "All load zones share in the start-up costs based on total load ratio share for the entire event, while the remaining costs are allocated on an hourly load ratio share based on the actual energy withdrawal hour by hour."

Schedule 52 calls on the transmission provider to prepare a report revealing the total cost of the restoration event by commercial pricing node and the load ratio share percentage for the affected load zones. That report would have to be posted online 14 days prior to any charges or credits being issued on settlement statements to provide market participants with notice.