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Forced outages in MISO South this autumn prompt regulator queries

Excessive forced generation outages in the Midcontinent Independent System Operator's South Region has prompted one of that region's state regulators to wonder whether penalties are inadequate for generators that fail to be available during high-demand circumstances, stakeholders learned Friday.

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The issue arose during a quarterly meeting of the Entergy Regional State Committee, a panel of state and local regulatory agencies that oversee the MISO footprint served by Entergy utilities in Arkansas, Louisiana, Mississippi and Texas.

David Patton, president of Potomac Economics, MISO's independent market monitor, said planned and forced outages contributed to an increase in congestion costs in the South Region by more than 40%, which caused MISO South prices to be generally higher than those in MISO's northern areas during the period.

For example, S&P Global Platts pricing data shows MISO Texas day-ahead on-peak locational marginal prices averaged $39.11/MWh in October and $28.04/MWh in November, compared with the MISO Indiana Hub averages of $37.21/MWh in October and $21.45/MWh in November.

"I think it's fair to say the level of outages in the south were extraordinary in October and in early November, most of which were planned outages," Patton said.

A later operations report showed that total outages, including derates, averaged 18.3 GW this October, up from 15.9 GW in October 2015 and 14.2 GW in October 2014. The increase was therefore about 15.6% from October 2015 to October 2016.

As a share of MISO South capacity, October's total outages, excluding derates, totaled about 38% in October and 42% in November, according to Patton's presentation, compared with percentages of about 21% in October 2015 and 24% in November 2015.

The forced-outage component averaged 5.3 GW in October 2016, up 27.2% from 4.2 GW in October 2015, which was up 26.5% from 3.3 GW in October 2014.

"That trend line in forced outages over the last three years -- that's pretty disturbing," said Kenneth Anderson, a member of the Public Utility Commission of Texas. "That's just not a good trend. It goes to whether there's significant-enough negative penalties for unit failure."

Anderson asked how soon the individual units involved in these forced outages might be identified.

"I think a little public shaming might be a good thing here," Anderson said. "I realize the owners out there are squirming ... but this indicates to me that there are insufficient penalties for being unprepared."

MISO staff said they did not know at Friday's meeting how soon the individual units might be publicly identified, and they would respond to Anderson's inquiry later.

MISO is working on a report about the outages and the notices of conservative and maximum generation conditions that arose in October and November, which were initiated by extraordinarily warm weather and heavy loads for the period, according to the operations report presented by Tag Short, MISO South Region operations director.

One outage-related factor that contributed to the congestion cost jump this autumn was the fact that a nuclear unit that had been offline was returned to operation earlier than expected without proper notification of MISO's grid operators, Patton said.

When asked by Anderson whether the lack of communication over the nuclear plant's return to service was caused by the generation operator or MISO, Patton said, "We're still looking into it."

"I think it's fair to say there's a lot of latitude for market participants on outage scheduling," Patton said.

MISO can overrule a market participant's outage decisions if such actions might affect reliability, but the consequences in this nuclear plant's instance were economic, Patton said.

--Mark Watson,

--Edited by Lisa Miller,