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MISO expects to have enough power to meet slightly lower demand this summer

Despite decreases in generation capacity, the Midcontinent Independent System Operator should have plenty of power to meet what has been diminishing demand this summer, stakeholders learned Tuesday.

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MISO's planning reserve margin, at 22.9 GW, should equal 18.2% of an expected peak of 125.9 GW of demand, the ISO's Summer Resource Assessment document said. The 18.2% is slightly larger than the 2015 forecast reserve margin of 23 GW, which equaled 18% of expected peak demand of 127.3 GW.

These percentages are from MISO's Base Reserve Margin Scenario, which is generally used for reliability purposes. If an extra 7.2 GW of forced generation outages occurred, this scenario would result in actual anticipated reserves of 15.7 GW for a reserve margin of 12.5%. MISO has set a minimum reserve requirement of 15.2%.

"MISO and its members have worked hard to ensure reliability this coming summer," Todd Ramey, vice president of system operations, said in a statement. "While we are predicting adequate resources, generation retirements across the region create a new operating reality. MISO will continue to work with stakeholders to make sure MISO is well-positioned for the future."

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MISO also produced separate scenarios labeled Probable Reserve Margin Scenario and High Demand High Outage Scenario.

In the probable scenario, MISO anticipates an extra 1.3 GW of capacity available, establishing a reserve margin of 19.2% without extra forced outages, or 13.5% with extra forced outages.

In the scenario with more demand and outages, demand would hit 132.2 GW and forced outages would grow to 9.2 GW, bringing the reserve margin down to 13.5% without the extra outages, or 6.6% with the extra outages.

In the base scenario, 2.9 GW of capacity in the MISO South region is assumed not transferable to the North and Central regions, John Reinhart, MISO resource adequacy coordinator, said during the workshop.

Stakeholders also received updates about the transmission system, hurricane readiness, fuel availability, emergency pricing, demand response, training, emergency procedures and communications protocols with government officials.

Phil Van Schaack, MISO electric-gas operations coordinator, pointed out that the natural gas market ended the winter season with a record 2,480 Bcf in storage and prices have hit 17-year lows.

Therefore, he said stakeholders can expect "significant power burns" similar to what occurred in the summer of 2012.

Mike Robinson, a MISO stakeholder relations staffer, pointed out that MISO has new emergency pricing procedures to set price floors, thus counteracting price suppression when emergency resources are deployed.

During the first step of an emergency event, when emergency generation is dispatched, prices have a floor at the highest available economic offer.

During the second step, when "load-modifying resources" are dispatched, a new floor is set at the highest available economic offer following the second step's declaration.

MISO has new requirements for demand-response market participants to inform MISO through a web page. This information will be about what resources the market participant plans to curtail and by how much.

--Mark Watson, markham.watson@spglobal.com
--Edited by Jason Lindquist, jason.lindquist@spglobal.com