During the September 2, 2021 Markets Subcommittee (MSC) meeting, MISO reviewed emergency pricing construct. MISO initiated discussions to address stakeholder concerns regarding the emergency pricing construct, following the June 10 Max Gen Event in North and Central subregions. Stakeholders were invited to provide comments on the presentation and discussion.
Please provide feedback by September 16
DTE Electric appreciates this opportunity to provide feedback on the important topic of emergency pricing and how MISO’s pricing constructs could be refined considering the lessons learned from the June 10th Maximum Generation Event. With respect to the feedback prompt from MISO, DTE provides the following feedback:
During the June 10th event, DTE observed price signals that were not reaching the level to utilize all available generation from DTE’s fleet. MISO called on LMRs prior to utilizing all available generation, which is contrary to their emergency procedures. Emergency pricing was invoked which incentivized imports to increase; however, emergency pricing was not used to dispatch generation resources within the MISO footprint. DTE believes this is a less than desirable outcome for DTE customers as it artificially raises prices while there are cheaper generation options available. DTE does acknowledge the need to give imports price signals but believes there needs to be a way to tap into all economical MISO generation first.
As baseload and dispatchable generation retires and the system becomes more dependent on intermittent renewables and Load Modifying Resources/Demand Response, events like the June 10th Maximum Generation Event will become more commonplace. DTE believes MISO needs to improve their processes and pricing to better manage these types of events. DTE supports MISO’s efforts to improve emergency and scarcity pricing as well as its efforts to articulate the reliability requirements that the resource portfolio of the future will need to provide. MISO mentioned on the 9/2 MSC call, and DTE agrees, that MISO should investigate developing a four-hour uncertainty product, which would procure the availability of resources throughout the day-ahead and real-time markets needed to manage uncertainty. Additionally, MISO must take steps to ensure it is fully utilizing ALL available generation resources before resorting to LMR deployment. Improving the use of and identifying reforms to emergency procedures and pricing for dispatching generation resources could accomplish this. DTE would also like to see this issue added to the management plan for further discussion.
Based on the discussion of the June 10 Max Gen Event in the North and Central areas of MISO (MSC 9/2/2021), it doesn’t seem to WPPI that changes to the emergency pricing construct are needed. As it turned out, system conditions improved on June 10 such that emergency resources were not the marginal resource. Pricing in the market should reflect the actual cost of serving an additional MW of load and shouldn’t be forced to reflect the cost of emergency resources.