Despite discord among some stakeholders, the Midcontinent ISO moved forward with its effort to address the region's changing resource availability, submitting two tariff filings with FERC and promising a third in January 2019. The filings aim to free up 5,000 MW to 10,000 MW of capacity before the spring outage season.
MISO said the proposed tariff revisions in the two filings submitted Dec. 21 will allow it "to more effectively assess the capabilities of [load-modifying resources, or LMRs] that MISO operators are depending upon to maintain the resilience and reliability of the grid."
MISO has seen its excess reserve margins dwindle and has become more dependent on LMRs that respond to emergency events when capacity becomes scarce.
Its concurrent filings with FERC seek to enhance LMR participation in its markets by revising certain resource availability requirements (ER19-650) and ensure that demand resources participating in its markets as LMRs can actually curtail firm load by mandating annual testing (ER19-651).
Earlier in the month, the proposals drew concern from some MISO stakeholders over the fast pace with which the ISO crafted the tariff filings and whether the proposed tariff changes would free up the 5,000 MW to 10,000 MW of capacity MISO set as its near-term objective to reduce real-time operational risks.
The criticism led MISO to split its proposal into three separate filings with FERC. Submittal of the third filing, which focuses on improving generator outage scheduling, was pushed back to January 2019 to allow time for MISO to better understand stakeholder "concerns about the impact of the proposal on necessary near-term planned outages," the grid operator said.
The filings are "one part of a small number of 'short-term fixes' intended to moderate current operational concerns while continuing to work with stakeholders in parallel towards a more holistic set of longer term solutions in the months and years to come," MISO added.
LMRs that clear MISO's planning resource auction are only required to be available to respond to certain summer-season emergency events.
Emergencies usually arise on short notice when multiple forced outages occur during periods of higher-than-normal demand. MISO said that recently "these conditions have frequently been occurring outside the summer season, as generator forced outages and high-load conditions converge with high levels of planned generator outages typically scheduled in spring and fall."
"The capacity scarcity that manifests in these conditions does not align well with the requirements of LMRs that currently have no non-summer obligation to serve MISO load," and are afforded up to 12 hours of notice for startup, "further limiting their requirement to respond to short-notice emergency needs," MISO said.
MISO proposed aligning LMR requirements with their capabilities. Specifically, LMRs would be required to "offer based on their actual availability in all seasons" and "deploy based on the shortest notification requirements that they can consistently meet," MISO said in one of the tariff filings.
That filing also would "allow MISO to notify LMRs of a planned deployment prior to anticipated emergency conditions to position resources to serve emergency needs while allowing for their required notice."
The ability to schedule LMRs would "increase system efficiency by removing barriers that have historically inhibited the use of longer-lead (e.g., two to 12 hour) LMRs to balance load with supply at the start, and through the duration, of emergencies," MISO said.
MISO requested an effective date of Feb. 20, 2019, for those tariff changes so it can implement the new requirements in the 2019-2020 planning resource auction.
The other tariff filing is expected to provide MISO with greater certainty that demand resources on its system can curtail load during an emergency in accordance with MISO's instructions.
It mandates an annual demonstration by demand resources that can be satisfied either by meeting a curtailment instruction or by submitting the results of a real power test ahead of qualifying to participate in MISO's planning resource auction.
Behind-the-meter generation LMRs and most other capacity resources in MISO are already subject to annual tests to qualify for the auction.
The tariff changes would allow market participants and load-serving entities to decide when they test demand resources and include a transition period for existing demand resources with contracts that preclude testing to renegotiate those contracts in order to comply with the new testing requirements.
Testing opt-out, waivers available
Demand resources may also opt out of the testing requirement under the proposal, but doing so would subject them to an increased financial penalty if they were to not perform or underperform, MISO said. That penalty would be "three times the costs that were otherwise incurred to replace the amount of the specified demand reduction that was not actually achieved when called upon by MISO," according to the filing.
The grid operator said LMR underperformance during longer notice events prompted the proposed testing requirement. MISO added that the ability of these resources to deploy when called upon in accordance with their indicated availability is "especially important given the limited, emergency-only circumstances in which these resources can be called … when the system is already in a stressed condition."
MISO's filing notes that testing would be waived for demand resources with retail tariffs overseen by states or other regulatory jurisdictions that mandate their own testing requirements.
MISO intends for the mandatory testing to begin in the 2020-2021 planning year and asked FERC to approve this proposal with an effective date of March 31, 2019.
Jasmin Melvin is a reporter for S&P Global Platts, which, like S&P Global Market Intelligence, is owned by S&P Global Inc.