RASC: IMM Presentation on Seasonal Accredited Capacity (RASC010, 011, 012) (20211006)

Hoosier Energy is providing feedback with respect to the Independent Market Monitor’s (IMM) proposal from the October 6^th RASC meeting to adjust for the UCAP to SAC shift by shifting the aggregate accreditation of thermal resources.  The IMM believes that implementing Seasonal Accredited Capacity (SAC) for Resources will result in a misalignment between the UCAP-based PRMR and the SAC-based resource accreditation because the SAC/UCAP ratio only applied to thermal resources, which thus favors non-thermal resources and encourages their use.  In addition, moving the demand curve (PRMR) without moving all supply distorts clearing prices, revenues to resources and costs to load.  The misalignment is addressed in the IMM’s proposal by translating the PRMR in SAC terms using the SAC/UCAP ratio.

The IMM’s proposal is to move thermal supply instead of demand, which modifies the relative accreditation of thermal resources without changing the total supply.  The shape and order of the supply curve would be modified as above-average performing thermal resources gain accreditation while below-average performing resources lose accreditation causing a zero net change. LMRs and intermittent resources would see no change and the demand curve would not change.

Hoosier Energy believes that the IMM’s proposal has merit, but would like to see additional analysis performed by MISO that would provide more clarity regarding the benefits of the proposal.

See email attachment

Xcel Energy is supportive of the IMM's recommendation to convert the PSAC for conventional generation back to a "UCAP" value by applying the market ratio of UCAP/PCAP instead of applying the market ratio of SAC/UCAP to the PRMR.  We recommend that MISO further evaluate the concept and allow for an in-depth discussion with stakeholders at the October 20 workshop.  

Savion, LLC (“Savion”) would like to thank MISO for bringing this item to stakeholders for discussion.  In the October 6 meeting of the Resource Adequacy Subcommittee (RASC), the MISO Independent Market Monitor (IMM) offered a presentation on Converting UCAP Requirement under Seasonal Accredited Capacity (SAC).

Savion generally approves the recommended change to the SAC method.  However, barring non-thermal generation on the basis that the SAC method would be a benefit to renewable generation does not seem like a valid reason for non-thermal resource exclusion.  No distinction, other than the reliability characteristics of a resource, should be used to determine a resource’s impact on LOLE.  The argument for one rubric for thermal and a separate one for non-thermal (predicated on the thermal rubric would benefit non-thermal) is discrimination.

If the IMM supports the use of the SAC method to improve reliability, then use it for all generation.

The following feedback is offered by the Entergy Operating Companies ("EOCs")^[1]in response to MISO’s request made during the October 6, 2021 Resource Adequacy Subcommittee meeting relating to the IMM’s latest proposal on adjusting for the UCAP to SAC shift.

Under MISO’s existing tariff redlines, the Local Reliability Requirement (LRR) for each zone is multiplied by the Zonal Seasonal Accredited Capacity to Unforced Capacity ratio. As a result, the zonal Local Clearing Requirement (LCR) surplus/deficit positions using Seasonal Accredited Capacity (SAC) are equivalent to the LCR surplus/deficit positions when using the existing UCAP accreditation method. The EOC’s agree with this approach, and believe that if MISO adopts the IMM’s proposal, that a similar mechanism be put in place to ensure that the new SAC accreditation methodology does not result in a worse LCR surplus/deficit position than the LCR surplus/deficit position calculated using the existing UCAP accreditation method.

The EOCs appreciate the opportunity to comment.

Consumers Energy appreciates the opportunity to comment on IMM's Presentation on Converting UCAP requirement under SAC to shift thermal supply vs. MISO's latest iteration of the RA Construct proposal.

The IMM's alternative accreditation methodology eliminates the need for several draft changes to the existing construct including maintenance of existing PRMR, LRRR and LCR on a UCAP basis and eliminates discriminatory treatment between thermal and non-thermal resources.

CE supports the use of a SAC-modified UCAP that would allow use of existing tariff provisions which is a large simplification that should allow for increased stakeholder understanding and comfort with the proposed construct changes to improve confidence in resource deliverability.

Wolverine agrees with several of the IMM’s problems with MISO’s SAC/UCAP adjustment factor for PRMR and LCR, as identified during the October 6^th RASC meeting. Wolverine supports the consideration of alternative approaches, including the IMM’s alternative, that limit the extent of after-the-fact adjustments – adjustments that may subvert the objective LOLE analysis results to a subjective outcome.

Occidental Chemical Comments on the IMM 10/6/21 Presentation to the RASC

Ocotber 13, 2021 

Following the October 6, 2021 Resource Adequacy Subcommittee meeting, MISO requested stakeholder feedback on two items: 1) the current Resource Adequacy Reforms, including the new Seasonal Accreditation Capacity (“SAC”) construct, and 2) the IMM’s proposal to use the SAC/UCAP ratio to shift the thermal supply vs. MISO’s current proposal. Occidental Chemical Corporation (“OxyChem”) would like to submit the following comments in response to MISO’s request for feedback on the IMM's proposal.

OxyChem is the owner of a large Cogen located in the Amite South Load Pocket on Entergy Louisiana’s transmission system. The OxyChem Cogen provides both power and steam to its host chemical facility load and sells its excess power into the MISO wholesale market. The Cogen is registered as a “Hybrid Generator” in MISO and as such, it offers capacity into the PRA. Therefore, OxyChem will be affected by any changes to the current capacity accreditation methodology for thermal generators.

With regard to the second feedback item, OxyChem offers the following comments. Currently in the new SAC construct, MISO reduces the UCAP based Planning Reserve Margin Requirement (“PRMR”) by a SAC/UCAP ratio in order to align the UCAP PRMR to the to the SAC-based resource accreditation. However, as the IMM points out in his presentation (“Capacity Accreditation: Adjusting for the UCAP to SAC Shift”), MISO’s methodology creates other issues that require additional changes to account for the reduction of thermal generators accreditation and presents discriminatory treatment between thermal and non-thermal generators in its application. The alternative accreditation methodology proposed by the IMM is based on converting UCAP to SAC and back to an adjusted UCAP for all thermal resources. By doing so, it eliminates the need for additional changes and eliminates the discriminatory treatment between thermal and non-thermal generators. Given the expected benefits of the IMM proposal, OxyChem supports further investigation of this proposal by MISO. Therefore, OxyChem requests that MISO perform a detailed evaluation of the IMM accreditation proposal and report its conclusions and provide supporting material to stakeholders at the next scheduled RASC meeting

OxyChem thanks MISO for the opportunity to provide feedback. 

WEC Energy Group has reviewed the IMM's presentation comparing the alternatives of shifting the PRMR by the SAC/UCAP ratio versus shifting the thermal capacity supply and we believe the IMM's recommendation to shift the capacity accreditation from SAC to a "SAC-modified UCAP" has merit.  In addition to maintaining the PRMR, LRR, and LCR on a UCAP basis (which is must easier to understand and explain to regulators, etc.), the IMM's recommendation is akin to the "modified UCAP" approach proposed by stakeholders.  The conversion of a capacity resource's SAC into a "SAC-modified UCAP" is more reflective of the resource's availability during times of need than the traditional UCAP and it maintains a more understandable link to the existing RA mechanism.  The use of a SAC-modified UCAP appears to allow the use of all existing tariff provisions regarding deliverability, conversion to ZRCs and must offer requirements, which is a huge benefit and improvement.

WPPI offers the following thoughts on the IMM’s proposal as presented at the October 6 RASC meeting:

1. We see potential benefit in the IMM proposal to return PRMR to a UCAP (rather than SAC) basis, as converting to SAC would appear to complicate and potentially undermine existing auction processes.
2. The IMM proposal to scale up conventional capacity but not intermittent capacity appears incorrect.  Specifically, it appears to us that the “effective up-rate” for intermittent resources that the IMM refers to on slide 5 of his presentation, and which he suggests is improper, is in fact entirely appropriate.  This is because we are proposing to move to a construct in which planned outages are assumed to affect a generator’s Resource Adequacy contribution, and thus we should expect accreditation of intermittent resources—which already reflects all instances of unavailability—to increase relative to conventional generation newly evaluated on an historic-availability basis.  Accordingly, it does not appear to us that the IMM’s proposal to increase conventional accreditation relative to intermittent accreditation is either needed or appropriate.
3. We expect that MISO’s proposal could be modified to address issue 1 above without creating the inappropriate adjustment that the IMM proposes as described in issue 2, above.  We note that these are only our preliminary thoughts since the treatment of this topic at the October 6 RASC did not allow for enough informed discussion to resolve all questions.