FERC signs off on new accreditation requirements for certain MISO resources

Washington — The US Federal Energy Regulatory Commission has given its nod to new requirements proposed by Midcontinent Independent System Operator for accrediting load modifying resources upon which the region has become increasingly dependent for grid resilience and reliability.

Beginning with the 2023-24 planning year, demand resources or behind-the-meter generation requiring more than six hours of notice to respond to an emergency event will no longer qualify for LMR capacity accreditation for resource adequacy purposes, as MISO garnered FERC approval to slash its maximum notification time requirement to six hours from 12 hours.

"We find that MISO's filing strikes a reasonable balance of ensuring reliability and allowing resources and state regulators to adjust to the new requirements," FERC said in an Aug. 14 order, which clears the way for MISO to accredit LMRs based on the notification time those resources need to deploy and the amount of times they can be called.

The tariff changes are part of MISO's multi-phase resource availability and need (RAN) program aimed at ensuring reliability and resilience as MISO's generation mix transitions from being dominated by coal and nuclear to a portfolio increasingly dependent on intermittent and emergency-only resources.

With dwindling excess reserve margins and a growing reliance on LMRs that respond to emergency events when capacity becomes scarce, the initiative involves a series of near-term changes to improve operational concerns while continuing work towards more holistic, long-term solutions.

The first phase of the RAN program entailed new resource availability requirements to enhance LMR participation in MISO's markets (ER19-650); mandates to annually test LMRs to ensure those resources can actually curtail firm load (ER19-651); and improvements to generator outage scheduling (ER19-915). Those filings were approved by FERC in early 2019 and have been implemented by MISO.

Second phase

The grid operator kicked off the second phase of that effort with a May 18 filing (ER20-1846) to FERC intended to ensure that LMRs are appropriately credited for their participation in MISO's annual planning resource auction.

The tariff changes halt the practice of uniformly accrediting LMRs based on their registered capacity. Instead, accreditation will be based on the resource's ability to timely respond to a maximum generation emergency event and its actual performance during those events.

These emergencies usually arise on short notice when multiple forced outages occur during periods of higher-than-normal demand. Because LMRs serve as one of MISO's "last lines of defense before having to engage in firm load shedding," sufficient availability of these resources is vital to MISO operations during times of emergency, the grid operator has said.

FERC agreed, finding that "MISO has sufficiently supported its proposal for enhanced LMR capacity accreditation requirements based on MISO's relatively short lead-time for identification of possible MaxGen events in conjunction with MISO's increased reliance on LMRs to meet its planning reserve margin requirement."

Deferred implementation

FERC also threw its support behind MISO's two-year, phased-in implementation plan, which defers implementation until the 2022-23 planning year.

Comments filed with the commission presented conflicting arguments over the speed in which the new LMR accreditation requirements should be enforced. The Coalition of Midwest Power Producers advocated implementation in the 2021-22 planning year, while Consumers Energy asked that implementation be pushed to no earlier than 2024-25 to allow additional time for utilities to renegotiate multi-year agreements with customers that participate in their demand response programs.

With regards to accelerating implementation, FERC said "the risks associated with a potential decrease of up to 2.6 GW in LMR capacity for the 2021-22 planning year outweigh the benefits of enhanced LMR accreditation requirements in the near-term."

Arguments for further delays were rejected as FERC concluded that MISO's plan "provides a reasonable amount of time to make regulatory or contractual adjustments necessary for LMRs to retain accreditation, while also improving MISO's ability to respond to MaxGen events."