RASC: Resource Adequacy Construct (RASC010, 011, 012) (20210804)

Savion, LLC (“Savion”) would like to thank MISO for bringing this item to stakeholders for discussion.  In the August 4 meeting of the Resource Adequacy Subcommittee (RASC), MISO requested feedback on sub-annual construct changes: proposed transition, capacity replacement, and must-offer obligation calculation.

Proposed Transition: Slide 19 details the transition path for accreditation of solar generation.  From the current to the proposed method, solar generation runs a risk of a large decrease in accreditation only to have the post-filing enhancement of an ELCC method increasing accreditation to be more in line with current values.  This transition plan will cause a great deal of volatility in solar accreditation.

Savion holds in the post-filing enhancements all generation, whether renewable or thermal, be subject to uniform ELCC-based evaluation for accreditation.

Capacity Replacement:  Slide 23 details the type of outage that would require replacement capacity.  However, this definition is vague.  Savion suggests that MISO adopt am outage definition from NERC GADS reporting requirements to better define the types of events that would trigger the need for replacement capacity.

Must Offer Obligation:  Slide 26 details the Must-Offer calculation.  No opinion at this time.

Submitted on behalf of Southwest Louisiana EMC by David Sandefur of Daymark Energy Advisors 

Southwest Louisiana Electric Membership Corporation (SLEMCO) submits the following comments on the Minimum Capacity Requirement of the RAN Reliability Requirements and Sub-Annual Construct (RASC011).

SLEMCO is a transmission-dependent rural electric cooperative in Louisiana located in Zone 9. SLEMCO continues to have concerns about portions of the proposal, as well as MISO comments and recommendations as presented in the August 4, 2021, presentation to the Resource Adequacy Subcommittee.  MISO requested formal stakeholder feedback on their current RAN proposal (RASC010, RASC011 and RASC012) design elements by August 18, 2021, in their RASC RAN Workshop on August 4, 2021 (subsequently extended to August 23 2021).  Below are SLEMCO’s comments.

Use of Workshops:

These Resource Adequacy Reforms are complex and multi-faceted.  The time allotted during the monthly RASC meetings and the Workshops to-date have been inadequate to address all Stakeholder concerns and often seem rushed to complete on time. SLEMCO suggests that a series of Workshops be scheduled to deal with sub-sets of the overall proposal so that focused time and analysis can be devoted to each issue. For example, the MISO presentation at the August RASC meeting included three slides (out of 38) on the MCR issue, with very limited presentation and comment time spent on the issue. The same could be said of other issues. While SLEMCO appreciates the amount of analysis and time that MISO has invested in this initiative, it is very complex and carries a lot of risk if it is not done well and fully understood by the Stakeholders.

Minimum Capacity Requirement:             

MISO’s proposal to require LSEs to procure at least 50% of their PRMR prior to the auction has not been shown to solve any current market concern.  SLEMCO understands the rational for mandating each entity to produce a capacity plan and not rely on the annual CRA for all its needs, although once again, this has not been an issue.

MISO’s new proposal to add a sub-regional component is especially concerning. The inclusion of a sub-regional component creates a potentially significant market power issue, especially for those entities doing business in MISO South, where a small number of generators provide a high percentage of the generation capacity in this sub-region.  MISO has acknowledged this potential by starting an effort to develop market mitigation procedures to protect against this concern.  It appears to SLEMCO that MISO is going through a lot of effort to eliminate one potential problem, namely over-reliance on the CRA by small entities (which has not been seen historically), yet creating a new perhaps larger potential problem, that of financially benefiting generators in a specific region by restricting capacity market competition. Simply layering regulatory requirements on top of a functioning market can easily distort market prices in ways that yield unintended consequences.

Instead, MISO should:

1. Focus on modifying its CRA structure if it believes the CRA is not sending the appropriate price signal to all market participants, and
2. Formulate plans to reduce transmission constraints between MISO South and MISO North/Central if it believes there is insufficient transfer capability for a MISO-wide capacity market.

As a cooperative utility dedicated to providing least cost service to our customers, we believe this proposal would benefit from additional analysis and explanation to make sure it, in fact, improves resource adequacy, assures reliability and meets the needs of all customers.

Big Rivers Electric Corporation, Hoosier Energy Rural Electric Cooperative, and Southern Illinois Power Cooperative, (“The Respondents”) thank MISO for the opportunity to provide feedback on the proposed sub-annual resource adequacy construct elements discussed at the August 4^th, 2021, RASC meeting.

As we’ve stated in past comments, the Respondents still lack the information to have a position either for or against all of MISO’s proposed changes to the PRA and still believe that MISO’s analysis lacks the requisite cost/benefit analysis that would convince us that these changes are necessary. The Respondents are customer-owned member cooperatives, therefore ensuring we provide our members with the reliable capacity and energy at the lowest cost is incredibly important. Thus, the Respondents are concerned that this proposal will only raise capacity prices in the region by reducing the amount of available supply and increasing the Planning Reserve Margin Requirements (“PRMR”) in both individual Local Resource Zones (“LRZ”) and the entire region without a corresponding increase in reliability.

In the presentation made in August, MISO provided a spreadsheet with a template for LSE specific information to be calculated. For this the Respondents are appreciative but are still concerned that this is not a full picture of how their portfolios will be impacted by the changes. This information is vital. The Respondents are very concerned that this data does not adequately reflect how all the different pieces of the proposal will impact their accreditation including the 30-day replacement provisions, the 50% Minimum Capacity Requirement and the Planned Outage Exemptions. These different pieces of the proposal also highlight The Respondents’ concern that MISO’s proposal is overly complicated. With potentially large impacts to the accreditation of their generating resources and raising costs to serve their members we urge MISO to provide more comprehensive information for each LSE prior to the filing and give adequate time for LSEs to internally assess the impacts to their resource portfolios.

Accreditation: The Respondents remain concerned about the 20% weighting for Tier I and 80% weighting for Tier II outages. 80% weighting for Tier II outages which only comprise of 3% of the hours in the year at most, still places a large component of the accreditation penalties on bad timing, especially during the non-summer months. Generator Operators cannot predict when shortages will occur any better than MISO can.  Punishment for not having clear foresight of tight margin hours is far from an incentive.  MISO should provide more substantive support and analysis behind the 80/20 split in penalties.   The impact of a much heavier weighting in Tier II will create a large amount of volatility in accreditation year to year if an unusual event occurs and increase costs to customers. The Respondents believe that the ability to avoid penalties is left to chance and prudent outage planning could still leave us with large, volatile hits to our accreditation under MISO’s final proposal. Stressing the need to have LSE-specific data on how this proposal would impact us is further emphasized to determine the level of volatility we may see in our accreditation.

Impact Analysis Results: The Respondents remain concerned about the impact analysis MISO presented in August and the missing impacts to accreditation for LMRs, renewable resources, and understated forced outages in the LOLE modeling. MISO stated that without that information, the footprint remains in a surplus since reductions in seasonal accredited capacity are generally offset by reductions in planning reserve requirements and while this sounds reasonable the Impact Analysis could look completely different with these additional items being factored in. This could have a dramatic impact on the amount of available capacity and thus cost in each season, for all Local Resource Zones.

Capacity Replacement: The Respondents remain very concerned around MISO’s capacity replacement rules and the 30-day outage provision. While we recognize that availability within the season is crucial to MISO maintaining reliability, excluding resources for being unavailable for 30+ days due to a planned outage puts undue pressure on prudent outage planning. Currently MISO does not allow units that are on outage 90 out of the first 120 days of the Planning Year (i.e., the Summer Peak season which the annual requirements are based on) to be ineligible for the PRA. This is drastically different than saying a unit can’t participate in a season if an outage is 31 or more days in a 90-day season where conditions may not be as tight as the Summer. Many long-term outages consist of major overhauls of generating equipment which need to be performed, generally every 8 years to ensure that unit is performing at its best during Tier II hours and are taken when load levels are generally at their lowest (Spring/Fall). Limiting the ability to plan these outages which generally takes 4 to 6 weeks puts undue pressure on the maintenance of units which could require additional repairs once the outage is underway. The Respondents would be much more comfortable if the minimum outage time for exclusion was 45 days rather than 30 days to account for the variability in the longer-term overhauls which happen to larger units every couple of years or that MISO applies partial credit to these units for the days in which they are available rather than disqualifying them for the entire season. 30 days is simply too short and might put generator owners in a bind for an outage that was planned a year or more in advance of the PRA and increase the capacity costs to serve their customers.

Additionally, LSEs with smaller portfolios are at risk of not only having to replace capacity from a unit on an outage greater than 30 days but also being exposed to not having enough capacity to meet their Minimum Capacity Requirement if one or more units are deemed ineligible for a given season. The Respondents can envision scenario where a unit is on outage for 45 days in the Spring and another unit in their portfolio is on outage for the remaining 45 days. This would disqualify both of those units from being eligible to cover the LSE’s requirements and therefore missing their MCR exposing them to 150% of CONE for the incremental MWs that aren’t covered under the 50% requirement. With these units ineligible for capacity, their LRZ clears at CONE pricing of $1,000 MW-day exposing them to even greater costs without any meaningful increase in reliability. In addition, it’s entirely possible that this zone has adequate capacity margins based on MISO’s Maintenance Margin calculation. This scenario seems entirely plausible under MISO’s proposal and would only serve to dramatically increase cost to customers while maintaining an existing level of reliability when the actual number of available resources hasn’t changed for a season that has little to no LOLE risk.

Cost of New Entry: MISO’s change to the CONE pricing has the Respondents concerned given the cost impact that we could be exposed to for one deficient season. While it may be reasonable based on the current Annual CONE values MISO calculates, $1,000/MW-day could be incredibly punitive for a single season depending on their capacity position. This also ties into the 30-day outage exclusion referenced above. An LSE may have a large unit being overhauled that’s excluded from a season with little LOLE risk and have a large amount of load exposed to CONE pricing in a season where the likelihood of a LOLE event is very low. This seems extreme and the Respondents are in opposition to the CONE pricing method being proposed by MISO.   

Planned Outage Exemption: The Respondents remain concerned that MISO’s proposal will have a dramatic effect on the availability of units during short-term maintenance outages. Short-term maintenance outages should be exempted from penalty when sufficient margin exists, recognizing that opportunity outages taken during times of sufficient margin improve reliability of the system by keeping that unit from being forced offline during a Tier II hour. Not allowing a Tier I exemption for these outages means that no matter what we do, our capacity accreditation will be penalized for an outage during a time which could have  a glut of capacity. This flies in the face of efficiency, reliability, and prudent outage planning and may cause changes in behavior that are detrimental to the unit’s availability when needed (i.e., more units deferring maintenance and thus increasing the potential for a forced outage later). The Respondents would recommend MISO allow Tier I exemptions for planned outages less than 14 days ahead of the current day so long as MISO forecasts adequate margins. The Respondents are also concerned this will have unintended consequences on planned outage patterns. While we understand that MISO’s proposal is designed to invoke changes, the desired behavior should be understood and analyzed prior to the filing.

Timing: Respondents continue to have concerns that MISO’s timeline is overly aggressive and the need for a September filing at FERC is exaggerated. While we recognize that MISO has already deferred their filing from June to September, a September filing gives us less than 60 days to complete evaluation of the proposal in which MISO still has not provided many crucial details on the mechanics of how this proposal will operate and the impacts this proposal will have on LSEs. Without this information, Respondents do not believe a September filing is feasible at this juncture and MISO should evaluate a potential phase-in of changes to allow both staff and members to get comfortable with this substantial change to the PRA.

Seasonal LOLE targets: As mentioned in the August RASC, MISO intends to apply a 0.025 LOLE target for all seasons, resulting in a cumulative LOLE of 0.1 annually. While this method allows MISO to produce stable ELCC values for wind resources, the Respondents are concerned that this method may over-procure capacity when margins are sufficient and may under-procure when margins are tight. This is exactly the opposite of logic and reliability which this proposal is striving to achieve. The Respondents believe that MISO should make its best effort to capture the actual LOLE for each season and allocate LOLE to the season where the risk actually occurs rather than arbitrarily assigning LOLE risk to seasons without any true risk being calculated in the LOLE study.

Transition: The Respondents are supportive of MISO’s proposal to “phase-in” the accreditation changes over the subsequent 3 planning years following the changes MISO files.

Thank you in advance for considering this feedback.

DTE appreciates the opportunity to provide feedback on MISO’s revised sub-annual Resource Adequacy construct design elements. DTE is still concerned with the aggressive filing timeline and believes that the accreditation elements of the proposal need to be more thoroughly vetted before it is ready for filing with FERC. MISO has yet to substantively address many stakeholder concerns with the current proposal and there have been no results of robust analyses justifying these major changes.

As outlined in DTE’s July RASC feedback, the specific elements of the proposal that DTE believes merit further discussion include:

• Tier Weighting – Neither the 80/20 tier weighting nor the selection of RA hours have been justified by a sufficiently robust analysis. Additionally, MISO recommended that seasons with under 65 RA hours would be supplemented with the average offered capacity of the top 3% margin hours for that year. This recommendation appears nonsensical as utilizing performance in unrelated seasons to supplement a deficient season’s performance goes against the foundational principles of a seasonal capacity auction and likely are not indicative of a unit’s performance in the deficient season.
• Planned Outage Exemptions – The current proposal fails to recognize prudently planned outages’ contribution to resource adequacy by removing exemptions for tier 2 hours when scheduling an outage within 120 days of the start date.  
• Enhanced Capacity Replacement – The new capacity replacement rules have been introduced to stakeholders only two months prior to the planned filing date. These requirements will likely have far-reaching and costly implications for market participants – given the potentially substantial and harmful impacts to customers, these provisions merit more fulsome discussion through the stakeholder process prior to filing.

Therefore, DTE strongly recommends that MISO delay any such filing pending further stakeholder discussion on key issues.

• AES Indiana can re-create and calculate the current UCAP based Capacity Construct.  To this point, we are not able to do the same for the new proposed construct.  We want to be able to calculate our capacity position going forward with the new proposed construct.  The following questions are about being able to create the capacity position with the proposed rules
• Can MISO provide the calculations to arrive at the Requirement changes? 
• Can MISO provide the unit by unit calculations (and not just the final results) for credit by season including which tightest need hours were used and the calculation of SAC impact and seasonal impact?  We follow the generic example that has been provided, but would like to see specific calculations for our units.  (Example referenced:  https://cdn.misoenergy.org/20210804%20RASC%20Item%2003b%20RASC%20Step%20by%20Step%20SAC%20Calculation%20Example575252.xlsx)
• What assumptions/data sources are being used on seasonal peak forecasts?
• Please provide any additional calculations needed to come to the complete AES Indiana Capacity position.
• In the values you have provided to stakeholders, are all LMRs being given credit in every season?  Since the current construct is annual, effectively Summer LMRs get credit for the whole year.  In the examples shown, the current construct is shown as the baseline for every season with adjustments made for changes in generator accreditation.     
• Has MISO looked at the zone by zone aggregate capacity positions by season going forward?  The disqualification of generators for entire seasons for >30 day outages may have a significant impact. 
• Has MISO given any additional consideration to the “2 units with non-overlapping >30 day outages in a single season” issue?
• Is it correct that both generators would not have the chance to participate in the PRA?
• If capacity from either generator is used to replace capacity from the other, what is the benefit of this?  Would replacing the capacity eliminate auction payments due?  Would it impact the rating of the generator going forward?

Comments

of the

Association of Businesses Advocating Tariff Equity (ABATE),

Illinois Industrial Energy Consumers (IIEC),

Louisiana Energy Users Group (LEUG),

Midwest Industrial Customers (MIC),

Texas Industrial Energy Consumers (TIEC),

Coalition of MISO Transmission Customers (CMTC),

Midwest Industrial Customers (MIC),

and

NIPSCO Large Customer Group (NLCG)[1]

Regarding

RASC RAN: Resource Adequacy Proposal

(RASC010, 011, 012) (20210804)

August 23, 2021

ABATE, IIEC, LEUG, TIEC, CMTC, MIC and APGI, as representatives of the End-Use Customer (EUC) Sector, and NLCG appreciate this opportunity to provide comments to MISO.

Background

At the August 4, 2021 MISO Resource Adequacy Subcommittee (RASC) meeting, MISO requested additional comments on the latest iteration of what it is now referring to as its Resource Adequacy (RA) Proposal.  In its latest form, as further modified by MISO’s August 16, 2021 draft whitepaper, the proposal consists of three major elements:

1. A Sub-annual Construct — MISO proposes to move from an annual resource adequacy requirement to a four 3-month seasonal resource adequacy requirements while maintaining a single annual Planning Resource Auction (PRA) for those four seasons that continues to be performed a few months before the start of each MISO planning year.

1. Capacity Accreditation Changes – MISO proposes to increase the alignment of its capacity accreditation for resources to their availability during the high resource adequacy risk periods of each season.

1. A Minimum Capacity Requirement – MISO proposes to require that Load Serving Entities (LSEs) acquire or contract for capacity from the same subregion[2] their load is located within for at least 50% of their seasonal Planning Reserve Margin Requirement (PRMR) amounts prior to MISO’s annual performance of its PRA.

MISO currently intends to file the final version of its proposal sometime during the 3^rd or 4^th quarter of this year to become effective beginning with the MISO 2023/2024 Planning Year with a phase in of some elements.  For example, the Minimum Capacity Requirement would be able to be met from capacity located anywhere within MISO for the 2023/2024 and 2024/2025 Planning Years, but would be required to come from the same Subregion as the LSE’s load is located in starting with the 2025/2026 Planning Year.

Please find below our comments on the latest iteration of MISO’s RA Proposal.  Our silence with respect to any aspect of the latest iteration of MISO’s RA Proposal should not be interpreted as a tacit endorsement of that aspect of MISO’s proposal.

Load Modifying Resource (LMR) Demand Resource (DR) Capacity Accreditation (MISO August 4, 2021 Presentation at Slide 20 and MISO August 16, 2021 Resource Adequacy Reforms Conceptual Design DRAFT Whitepaper at page 16)

MISO in its August 4, 2021 presentation proposed the following changes to the capacity accreditation for Load Modifying Resource (LMR) Demand Resources (DRs):

This would change the capacity accreditation for LMR DRs from 80% for allowing 5 to 9 interruption calls per MISO Planning Year and 100% for allowing 10 or more interruption calls per MISO Planning Year to (i) 100% capacity accreditation for Summer for allowing at least 5 calls per Summer, (ii) 100% capacity accreditation for Fall for allowing at least 3 calls per Fall, (iii) 100% capacity accreditation for Winter for allowing at least 5 calls per Winter and (iv) 100% capacity accreditation for Spring for allowing at least 3 calls per Spring.  In total, for 100% capacity accreditation for an entire planning year, instead of having to allow up to 10 interruption calls per planning year, a LMR DR would now have to allow up to 16 interruption calls per planning year.

MISO has not presented any new analysis to justify changing from 80% capacity accreditation for allowing 5 to 9 interruption calls per MISO Planning Year and 100% capacity accreditation for allowing 10 or more interruption calls per MISO Planning Year.  Instead, MISO on page 16 of its August 16, 2021 Draft Whitepaper justifies requiring at least 16 calls per year based on MISO’s 2019 analysis that was used by MISO to change to the 10 call per year requirement that is currently in place and slated to go into effect beginning with the MISO 2022/2023 Planning Year.  We strongly disagree with MISO’s re-interpretation of its 2019 analysis.  MISO’s previous interpretation of its 2019 analysis was that it supported requiring at least 10 calls per planning year for 100% accreditation and at least 5 calls per planning year for 80% accreditation, not that at least 15 calls per year are needed for 100% accreditation.

While we do not oppose MISO’s proposal for a minimum number of calls that need to be made available in each season to receive 100% capacity accreditation for that season, in receiving that accreditation, no LMR DR should be required to be subject to more than 10 interruption calls in total during any given planning year.  So, for example, if a LMR DR was registered for all four seasons of a given planning year, MISO would be able to call it up to 5 times during the Summer, up to 3 times during the Fall, up to 5 times per Winter and up to 3 times per Spring provided that MISO does not call on the LMR DR to interrupt more than 10 times in total during that planning year.  MISO needs to modify its proposal such that it does not require any LMR DR to be subject to more than 10 interruption calls per planning year.

Minimum Capacity Requirement (MISO August 4, 2021 Presentation at Slides 30-33 and MISO August 16, 2021 Resource Adequacy Reforms Conceptual Design DRAFT Whitepaper at pages 25-26)

As noted earlier above, MISO proposes to require that Load Serving Entities (LSEs) acquire or contract for capacity from the same subregion  their load is located within for at least 50% of their seasonal Planning Reserve Margin Requirement (PRMR) amounts prior to MISO’s annual performance of its PRA.

As we have indicated in our past comments of September 23, 2020, January 20, 2021, March 24, 2021, May 28, 2021 and June 23, 2021, we oppose MISO’s Minimum Capacity Requirement Proposal.  MISO has still not demonstrated the need to impose a forward (i.e., pre-Planning Resource Auction) capacity demonstration requirement on individual LSEs to supplement the MISO Planning Resource Auction (PRA).  In particular, it has still not presented evidence that its current resource adequacy construct is unlikely to attract and retain sufficient capacity to meet MISO’s one day in ten year loss of load expectation standard in the long term absent the addition of a forward capacity demonstration requirement.  Nor has MISO shown that a significant capacity shortfall is imminent within MISO without the addition of a forward capacity demonstration requirement to supplement the PRA.  Moreover, MISO has still not demonstrated that individual LSEs are excessively relying on the PRA for their capacity requirements to an extent that threatens system reliability or that inappropriately shifts costs to other market participants.  As the MISO Independent Market Monitor indicated at the June 9, 2021 MISO RASC meeting, MISO’s proposal is a solution looking for a problem.  MISO has not presented a demonstrable need to impose a minimum capacity requirement on individual LSEs, even one that does not require the capacity be sourced in the same LRZ as the LSE’s load.

Furthermore, MISO has further aggravated the situation by now proposing that the capacity acquired or contracted for to meet the requirement come from the same MISO Subregion as the LSE’s load is located within.  This will likely introduce similar market power concerns that were associated with MISO’s earlier proposal to require the capacity to come from the same Local Resource Zone as the LSE’s load is located within.

We are also greatly concerned with MISO’s claim that it has vetted its proposal in retail choice areas and uncovered no firm impediments to compliance with the proposal.  We are completely mystified with respect to this claim given MISO has not provided any detail with respect to how customer switching between retail suppliers would work under its Minimum Capacity Requirement proposal and we are not aware of any outreach to any member of the End-User Customer Sector with respect to the viability of the proposal under retail customer choice.

In conclusion, as we have previously indicated, MISO should drop any further pursuit of its minimum capacity requirement proposal.

MISO’s Zonal Impact Analysis (MISO August 4, 2021 Presentation at Slide 45

MISO in its August 4, 2021 Presentation provided the following zonal impact analysis results for its RA Proposal:

The analysis estimates large drops in surplus capacity in excess of the Local Clearing requirement (LCR) during summer for Zone 1 (MN/ND/SD/MT/W.WI), Zone 3 (IA) and Zone 9 (LA/TX) and significant drops in surplus capacity in excess of the LCR during the summer for most of the remaining zones.  MISO attributes the drops in Zone 1 and Zone 3 to high renewable variability, but provides no explanation with respect to the large drop in surplus capacity in Zone 9 or the significant drop in surplus capacity in the remaining zones.  MISO needs to more thoroughly explore and explain what is driving drops in surplus capacity in excess of the LCR and to do so, not only for Zone 1 and 3, but also for each of the remaining zones to help ensure its proposal is reasonable.

Thank you for providing us an opportunity to provide these comments.  If you have any questions concerning our comments, please do not hesitate to contact:

Jim Dauphinais

Brubaker & Associates, Inc.

(Consultants to ABATE, IIEC, LEUG, NLCG and TIEC)

(636) 898-6725

jdauphinais@consultbai.com

Ali Al-Jabir

Brubaker & Associates, Inc.

(Consultants to ABATE, IIEC, LEUG, NLCG and TIEC)

(361) 994-1767

aaljabir@consultbai.com

Kevin Murray

McNees Wallace & Nurick LLC (for CMTC)

(614) 719-2844

murraykm@mcneeslaw.com

Kavita Maini

KM Energy Consulting, LLC (Consultants to MIC)

(262) 646-3981

kmaini@wi.rr.com

Wolverine continues to support MISO’s focus on the identification, value, and compensation of “available” capacity and its importance towards system reliability and long-term resource adequacy during an industry transition of increasing intermittent resource installations and dispatchable resource retirements. While MISO’s current seasonal proposal appropriately addresses “availability” within some of its elements, further considerations are needed for other elements.

Prior Feedback

Support –

1. Wolverine continues to support MISO’s efforts to disqualify resources if they plan to be unavailable (on planned outage) during a certain portion of the season. Significant unavailability provides zero reliability value to the system and cannot be compensated as though it does.
2. Wolverine continues to support the appropriate accreditation for LMRs based on their availability consistent with MISO’s reliance on LMRs.

Concerns –

1. Like other stakeholders, Wolverine requests MISO produce a forecast impact and individual market participant estimates that include all components of the seasonal proposal. This request includes the impact of accreditation versus a resources NRIS value.
2. Adjustments to the Capacity Import Limit (CIL) methodology that considers “availability” such that exporting zones are simultaneously monitored for their own needs at the same time the CIL for the importing zones is determined.

New Feedback

General feedback from the August 18 RAN Workshop –

1. Due to the sizeable number of outstanding questions, and elements still to be discussed, Wolverine supports a delay to the September filing.

August 4 RASC Presentation –

1. Slides 28 and 29 - More often than not, resources on planned outage are performing maintenance work required to maintain the availability and reliability of the resource. For MISO to penalize resources during such an event is counter-productive. To address the resource adequacy deficiencies, MISO should focus on what is causing the issues:
   1. Outage coordination - MISO is the entity responsible for approving planned outage requests, in other words managing the resource "availability." Therefore, it is unreasonable to penalize resource owners for performing maintenance work during MISO-approved outages. Could MISO be approving too many concurrent outages?
   2. Unplanned (Forced) Outages and Derates – As shown in the recap of the February and June 2021 MaxGen events at the MSC and Informational Forums, unplanned outages and derates were multiple times higher (e.g., in the case of June 10, even a driver of the event) than planned outages. A capacity construct should account for the unplanned outages and derates via the reserve margin, so it begs the question – Is MISO’s LOLE analysis appropriately considering the high magnitude of unplanned outages and derates?
   3. Slide 19 - Is MISO considering the use of ELCC for solar? Will solar continue to be accredited based on a limited number of hours during the season?
   4. Slide 20 – Beyond the number of calls and notification requirements - What are the must-offer obligations for DR? What are the penalties for failure to respond for DR?

Again, Wolverine supports MISO’s efforts to appropriately identify, value, and compensate for the “availability” of capacity, especially during this time of significant transition for renewable integration and traditional resource retirement where system reliability and long-term resource adequacy are at risk.

Energy Michigan is submitting feedback on the RASC presentation of August 4, 2021, "Resource Adequacy Reforms," pages 31-33.

A memo containing our feedback is attached.

for Energy Michigan

Alex Zakem

734-751-2166

Consumers Energy appreciates the opportunity to provide feedback regarding MISO’s sub-annual construct changes, proposed transition, capacity replacement and must-offer obligation calculation.

 Consumers Energy’s concerns mostly revolve around the lack of enough detail and specificity of the changes contained in MISO’s proposed construct.  Areas that require more information and/or further development via the MISO stakeholder process include:

• The treatment of prudently planned outages which are over 30 days in duration, their ability to participate in the seasonal auctions and their impacts to accreditation.
• The implementation of the new construct and the development of a phase-in approach for that construct such that certain decisions (e.g. outage scheduling) which were made under existing rules do not adversely impact accreditation and other metrics under the new rules.
• Additional calculation details and examples regarding exempted planned outages and derates in such a manner so as to enable stakeholders to replicate the results.  The ability to replicate the results will lead to better planning for future outages and market offers on the part of stakeholders.
• Clarity regarding accreditation for available resources that are not dispatched.

 Thank you once again for the opportunity to provide feedback on these important topics.

See attachment sent via email.

MISO’s August 19 RAN workshop and August 4 RAN presentation have not alleviated Alliant Energy’s concerns.  Further, MISO has not provided enough data for transparency and stakeholder understanding of the future impact of the RAN implementation.

The SAC calculations are complex and not reasonable to independently produce by MPs without significant data from MISO.  MPs will not understand the impact of these calculations without the granular data.  MISO needs to provide this data for all units immediately as opposed to waiting for implementation where impacts will potentially be a surprise to MPs.  Regardless of calculation complexity and understanding, Alliant Energy remains concerned about accredited capacity volatility and lack of confidence that MISO’s accreditation values are truly representative of expected performance over a future Planning Year.

MISO should clearly state its intentions for implementation schedule (2023-2024 Planning Year?) and the phase-in plans for various components of the RAN initiative.  MISO should also defend that its implementation schedule is reasonable considering interconnection queue times and clearly show the incremental ramp-up of capacity need of the MISO footprint and individual zones (using MISO-OMS projections, for example).  Such projections should address zonal PRMR adequacy, not just LCR.

Alliant Energy’s comments and data requests from July are repeated below, with some minor changes.

Alliant Energy appreciates MISO’s preliminary results analysis.  MISO needs to provide additional analysis and data to understand the full impacts and risks of the proposed construct.  As a high-level summary in response to the (July) seasonal construct slides:

• Volatility - Tight margin hour accreditation calculations are extremely limited, and the 80/20 weighting is arbitrary and does not suitably mitigate volatility.
• Projections - Analysis based on the current Planning Year does not uncover the challenges for the near-future.  MISO needs to identify such future challenges to understand the speed at which LSEs will need to react to cover their obligations.  MISO should perform impact analysis with 5- and 10-year models.
  • This is critical as MISO identifies that Zone 1 (MN) and Zone 3 (IA), which have high renewable penetration, are the most affected.  Due to the pace and direction of evolution in the generation industry, many other zones will be soon be in a similar position and MISO needs to provide transparency for these zones and the footprint.
• Outage exemptions - We are concerned that MISO’s lack of exemption from Tier 2 impacts for outages <120 days and/or maintenance margin <0 sets an unrealistic expectation on operations and unit performance.  This concern is further magnified by an 80% weight on a limited number of hours which greatly impacts unit accredited capacity, without necessary providing a good measure of future performance.  The end effect may be to drive out the dispatchable resources that MISO desperately needs.
• Data requests - Specific data requests related to the presentation:
  • Provide slide 21 (July presentation, zonal LCR capacity for all seasons) at the PRMR level, which is also an obligation for LSEs. 
  • Provide, confidentially to each party, the individual unit data UCAP and SAC for all seasons.  In essence this is a granular reveal of the data presented in slide 22 (July presentation) for all resources and in all seasons (not just winter).
    • Provide this data at a granular level such as individual utility, Zone & LBA as opposed to rolled-up MP data as previously provided by MISO.
    • Also provide to utilities the seasonal accreditation for renewable resources such as wind, solar, and hydro.
• Resource Planning guidance - MISO needs to provide a template of forward-looking resource planning information so LSEs can economically and reliably develop plans for the short-term and long-term future.  MISO needs to provide this information now, even if indicative, to fully unveil the seasonal construct.  LSEs need 5-year and 10-year projections of seasonal values at the footprint and zonal level for the following:
  • PRM and PRMR for footprint and individual zones,
  • LRR and LCR,
  • CIL and CEL, with noteworthy step changes,
  • Wind and solar ELCC,
  • 4-hour battery storage ELCC,
  • Long-duration storage ELCC (8-hour, 12-hour, 24-hour, 72-hour),
  • Theoretical dates and times of projected seasonal peaks and tight margin hours correlating with footprint and zonal LCR and PRMR (especially if this is projected to be night/day to understand solar performance).

Additional detailed concerns not addressed above are noted below:

• Slide 15 (July presentation) – It is a significant concern that MISO has not captured all impacts in its preliminary analysis, in particular wind and solar (and presumably storage for varying duration) ELCC.
  • MISO states that the largest impact to zones is heavy renewable penetration (such as Zone 1 and Zone 3) – which drives the need for further caution as it flags these inputs as a sensitivity.
  • We understand that some of this information (wind and solar but not storage) will be presented in September.  Stakeholders; however, need to understand potential impacts from proposed changes prior to a FERC filing being made.

SMMPA and WPPI Energy generally support MJMEUC's feedback.

CMPAS and SMMPA generally support WPPI Energy's feedback.

Thanks,

David Sapper

dsapper@ces-ltd.com

 The following feedback is offered by the Entergy Operating Companies ("EOCs")^[1]in response to the request made during the August 4th, 2021 Resource Adequacy Subcommittee meeting concerning the Sub-Annual Construct proposals and refinements.

The EOCs appreciate MISOs efforts to develop the outlined resource adequacy reforms thus far. Given the complexity of MISO’s proposal, the EOCs are struggling to fully comprehend what is being proposed and are seeking to better understand the final impacts of the proposal. In past RASC presentations, and through data provided directly to the EOCs, MISO calculated the estimated impacts that the proposal would have to MISO as a whole and to the individual EOCs surplus/deficit positions. However, given MISO’s recent changes to the RA hour selection methodology, these projected impacts are no longer accurate. The EOCs request that MISO provide updated projected impact data for MISO wide impacts, EOC summary impacts, and individual EOC unit impacts. Without this projected impact data, it is difficult for the EOCs to evaluate and provide feedback on MISO’s proposal. Given these issues, a target FERC filing date of September for the sub-annual construct and resource accreditation proposals is too aggressive and should be delayed so that MISO stakeholders can have more time to understand and provide input on MISO’s proposed changes. However, with regard to the MISO’s Minimum Capacity Requirement, the EOCs believe this proposal has been thoroughly considered through the stakeholder process and is ready to be filed separately with FERC once stakeholders have reviewed final tariff language.

Below the EOCs have provided high-level feedback and clarifying questions related to the material presented in the August RASC.

Resource Accreditation

-          The EOCs continue to suggest that MISO revise the current proposed tier weighting of 20% for Tier 1 and 80% for Tier 2 to a 50%/50% weighting. This change would help decrease resource accreditation volatility.

-          The EOCs appreciate that MISO’s updated proposal regarding low or no RA hours aims to increase the sample size of RA hours, however, the EOCs are concerned that this approach undermines the intent of the seasonal construct, because it results in seasonal unit accreditation ratings that are influenced by historic unit performance during seasons that differ from the relevant season.  Additionally, taking an average accreditation from tight margin hours across an entire year may be a poor predictor of that resource’s future performance for a given season. The EOCs suggest that MISO consider removing the 125% cap on the top RA hour selection criteria so that there is never a shortage of RA hours for a given season.

Planning Resource Auction

-          The EOCs have serious concerns that the 30-day PRA eligibility requirement will limit the ability of generation owners to perform needed planned maintenance and could significantly lower the amount of capacity that is eligible for the fall and spring PRAs. The EOC’s request that MISO revise this proposal to provide more flexibility to generation owners in scheduling necessary planned maintenance outages that exceed 30 days.

• For example, MISO should consider a sliding accreditation scale for units that have planned outages exceeding 30 days and/or consider allowing a resource with a 30+ day planned outage to participate in the PRA if the generation owner provides make-up capacity for each day beyond 30.

-          The EOCs believe that MISOs current proposed CONE pricing scheme, which results in the same total financial penalty regardless of the number of seasons deficient, is punitive. The EOCs believe that the CONE payment should vary by number of deficient seasons.

LRZ 10 Winter ZIA:

-          The EOCs continue to be concerned about the forecasted deficit position relative to the LCR requirement for LRZ 10 in the winter season. The EOCs believe that the methodology used by MISO to calculate the seasonal ZIA’s is flawed and needs to be revised.

The EOCs appreciate the opportunity to comment.

WEC Energy Group appreciates MISO's request for feedback on the design components of the seasonal RA proposal and capacity accreditation construct.  However, we are having difficulty internalizing the design components and providing meaningful feedback as those components are still undergoing significant changes.  We fully support making improvements to the proposal but fear that the proposed September filing deadline is not allowing enough time for stakeholders to digest and respond to the RA enhancements as a complete package.  We recommend that MISO delay the filing of the RA enhancements until such time as stakeholder concerns and issues are resolved.  We believe the benefits of delaying implementation from the 2023-2024 Planning Year to 2024-2025 outweigh the risks.

WEC Energy Group has concerns with several design components such as:

1. The determination of Tier 2 RA Hours - further development of process to "backfill" Tier 2 hours when there are less than 65 hours of seasonal RA Hours is needed
2. The proposed transition - we support a transition plan but it was just recently introduced and more time is needed to consider it in relation to the entire RA enhancement package
3. Planned outage safe harbor provisions - we support a safe harbor for outages with less than 14 days’ notice if certain criteria are meet, such as sufficient Maintenance Margin and favorable MOM forecast
4. 30-day cumulative unavailability cutoff for seasonal ZRCs – WEC previously suggested a weighted ZRC availability based on length of outage rather than an “all or nothing” but no discussion of that suggestion has taken place
5. Capacity replacement - requires more design work to integrate with the rules for the 30-day cumulative unavailability cutoff
6. SAC and deliverability – WEC has engaged MISO staff and other industry SMEs regarding the application of deliverability to the determination of a resource's SAC – significant (and appropriate) debate on this issue is on-going
7. Basis for the Tier 1/Tier 2 weighting structure – we would like to see a sensitivity performed that considers different weightings, to help justify the final weighting proposal

The Missouri Joint Municipal Electric Utility Commission (MJMEUC) appreciates the opportunity to provide feedback on MISO’s Resource Adequacy Design proposal. MJMEUC understands and agrees that as we transition to more intermittent resources in the MISO footprint, resource adequacy reforms are needed. However, MJMEUC believes that MISO’s Resource Accreditation proposal has several shortcomings that MISO should reconsider:

• If MISO is going to impose penalties for resources that are not available during tight hours, then it should be done consistently to both thermal and intermittent resources.
• With the rapid increase of intermittent resource penetration into the MISO footprint, conventional resources are more valuable than ever, not less.  Being penalized for normal and necessary planned outages that just happen to occur in hindsight is not the way to incent these resources to remain in service and to be available when needed.
• If a thermal resource does prudent outage planning and follows all the rules, under this proposal the resource could still face accreditation reductions through no fault of their own. Even if the resource did everything right a material reduction in capacity accreditation can occur in a season. A penalty based on luck of the draw does not deter bad behavior, it actually punishes prudent behavior. Such a penalty is counterproductive to good planning.
• Another problem is that the proposed “look back” method of accreditation cannot be planned or accounted for by the resources.  Accreditation should not be based on criteria that relies on factors that are not transparent and cannot be determined at the time that an outage is being planned.
• It would be reasonable for MISO to penalize resources for forced outages that fail to perform when they said they would. However, it is not reasonable for MISO to punish resources that plan prudently and follow all the rules in scheduling a planned maintenance outage. Compounding this is the proposal to force the Market Participant to then purchase additional capacity – essentially excess capacity. This double hit is unfair and MISO should reconsider it.
• MJMEUC would not support any “clawback” for planned outages (i.e. require resources to give back payments already received) for not being available during tight hours identified only in hindsight.
• MISO should rethink its proposed 30-day outage limit in a particular season. The inherent length of conventional resource planned outages can negate their eligibility of clearing for capacity within certain seasons. This could have unintended consequences of resources “cramming” their outages into certain months and times of the year (i.e. over the seams of auction seasons). This could literally force a shortfall of resources created only by the outage methodology. 
• MISO should also reconsider the speed of the implementation irrespective of stakeholder objections. This is a complex, wide-ranging and far-reaching proposal. Members need time to discuss and plan with operators to determine how to comply with any changes. Given the breadth and complexity of MISO’s proposal, more time is necessary to ensure safe and reliable operations.

Overall, WPPI is concerned with MISO’s plan to file this proposal when multiple elements are not finalized or are planned to be discussed at later time.  We strongly suggest holding the filing until this proposal is more complete and MISO has adequately addressed previous stakeholder feedback (particularly the feedback posted with the August 4 RASC materials).  At the very least, the issues regarding this proposal should be addressed as soon as possible and management plan should be updated to address the remaining issues to allow the necessary time to work through.

 Resource Adequacy Construct Proposal elements still needing to be vetted or provided:

1. Under the proposal MISO just mentioned in RAN RA Concept Design Workshop, the hours identified for Tier II have changed.  Also, it was said that exemptions have not been included in the calculation for resource accreditation.  Therefore, the estimates provided to MPs do not correspond to their actual capacity requirements or accreditation of their resources.  With the September filing soon approaching, providing this information to MPs prior to the filing is critical.
2. How will seasonal adjustments to NRIS be calculated?  It is our understanding this will be reviewed at later time (perhaps at IPWG) but this should be addressed soon.
3. Will there be any adjustments to withholding rules in Module D given the increased scope of capacity replacement requirements?
4. For resources that do not clear for specific season, MISO has indicated they will use an annualized value to calculate their accreditation for that season.  What does MISO propose to do if some of the Annual RA hours occur in the season in which the resource did not clear?
   1. Also, does MISO have concern that some of the RA hours used in the Annual RA hours’ identification will overlap the hours used Tier I?
5. How will MISO accredit external resources?  Do they have visibility into offers in other markets?
6. What system will MISO use to add exemptions to derates?

Feedback to MISO’s specific questions is below:

 Phased transition

The phased transition seems reasonable.

 Capacity Replacement

We need a clear understanding and tariff language for how ZRC replacement for a portion of a season would work, and how a resource that is itself disqualified for a planned outage exceeding 30 days can provide replacement capacity for a period when it is in service.  Also, to the extent that replacement capacity becomes more widely used, there should be a system put in place for MPs to understand what available replacement capacity is available in each season and in each region to help with creation of transactions of replacement capacity.

MidAmerican Energy appreciates the opportunity to provide feedback on the resource adequacy reforms. As we transition to fewer controllable resources in the MISO footprint, it is necessary to change the way MISO looks at resource adequacy. We are concerned, however, about proposals that do not reflect an engineering-based solution. Our concerns are below in no specific order.

Given the definition of Seasonal Accredited Capacity (SAC) with the use of Tier 1 and Tier 2 hours, a unit’s future accreditation would be based on past performance during tight hours. MidAmerican does not believe there is a causal relationship between past performance during tight hours and future performance during tight hours.  MidAmerican believes that If the proposal is not weighing all hours equally, the proposal should use hours that correlate to unit performance, for example, extreme temperature. That would reduce the element of luck. For spring and fall, MISO needs to focus on incenting generators to take outages at appropriate times to spread out risk. MISO also needs to focus on multi-day unit commitment, making sure the market is carrying enough reserves based on wind and load forecast risk and making sure their load forecasting models are more accurate for real time decisions.

If MISO does go with the Tier 1 and Tier 2 approach, it’s not reasonable to use annual average offered capacity during RA hours to fill in any season that does not have 3% of the hours in Tier 2. It is expected that there will be times in the spring and the fall where there are not enough Tier 2 hours. Generating units normally experience issues that result in derates during weather extremes; these derates normally do not occur during the spring and the fall. If a season does not have enough tight hours to fulfill the Tier 2 requirements, it would make more sense to use the Tier 1 average during that same season to fill in the rest of the hours.

MISO should not be providing incentives for market participants to commit units to avoid capacity accreditation penalties that are contrary to other market and reliability issues. MISO has the best visibility into load shed and congestion issues as the market operator. Units with lead time over 24 hours should not be penalized if MISO decides not to commit the unit for Tier 2 hours. MISO also has not provided a response indicating how to address units that are not committed and should not be committed during Tier 2 hours due to temporary transmission conditions. When starting a unit could increase risk of load shed or congestion, MISO should not be incentivizing units to start up simply to avoid accreditation penalties.

MISO also needs to reconsider how it treats units with outages expected to exceed 30 days within a season. MISO should increase that to 50 days or allow the unit to clear in the seasonal PRA. If a tight hour occurs and that unit has not been replaced in the MECT system, then the unit would receive a zero for that hour. Doing this will encourage proper behavior when scheduling outages and will allow for non-simultaneous 30 plus day outage to occur without being unreasonably penalized.

MISO should consider giving Tier 1 outage exemptions up to 3 days ahead. MISO knows much more about system conditions 3 days out than can be known 14 days out or longer. Decreasing the lead-time to obtain an exemption aligns with MISO’s goal for units to take outages at appropriate times.

MISO should enable a phase in of the seasonal construct and provide data annually to each market participant for several years in the future to ensure enough time is available to adjust resource plans to the new construct. One of the main features behind a resource adequacy construct is that additional generation is added when needed and additional generation takes time to plan and time to build. The resource adequacy construct should be focused on providing stable signals to market participants to ensure that the correct type and size of generation is added to the system. To that end,

MidAmerican agrees that MISO is adding proper mechanisms in the energy market and should continue to work and refine those efforts to ensure proper price signals are being sent to the market.

The current resource adequacy proposal fails to address the issues that MISO is experiencing. Certain proposals introduce elements of luck, randomness, and are not engineering-based. MISO should resolve these issues before filing tariff changes for seasonal resource adequacy.