RASC: Resource Adequacy Reforms (RASC010, 011, 012) (20211006)

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.

The EOCs continue to support and would request that MISO consider the following transition mechanisms:

• During the first three years under the new construct, use UCAP unit ratings measured on a seasonal basis; [2]
• During the first three years under the new construct, constrain the Local Clearing Requirements (LCR) for the non-summer seasons so the non-summer LCRs do not exceed the summer LCR value;
• During the first four years, do not implement the capacity replacement requirement for planned outages that exceed 30 days; and
• During the first four years under the new construct, do not adjust the daily CONE value based on the number of seasons an LRZ is deficient relative to the LCR requirement. To explain further, during this four-year period, the daily CONE value should always be equal to the annual CONE value divided by the number of days in the planning year.

The EOCs continue to have the following questions and requests related to MISO’s sub annual resource adequacy construct proposal:

• More information/explanation regarding MISO’s analysis showing that most of the Entergy Operating Companies would have their highest Planning Reserve Margin Requirements in the Spring season, which is traditionally considered an off peak season in the South region during which significant maintenance outages are taken. Additionally, an explanation of when is the best time for MISO South generation owners to be scheduling planned maintenance outages according to the insight provided by MISO’s proposed resource adequacy construct – recognizing that reasonable planned maintenance outages are essential to maintaining generation resources in good working order and thus to meeting customer demand at times of peak demand.
• Analysis showing the number of planned outages in recent years that exceeded 30 days across MISO and an estimate for how much replacement capacity would be needed as a result. More specifically, data showing the average length of time for nuclear refueling outages in MISO.
• Analysis comparing the level of volatility associated with UCAP unit ratings vs Seasonal Accredited Capacity (SAC) unit ratings.
• Analysis showing how MISO determined the 20/80 tier 1 to tier 2 weighting and data showing the impact of using a 50/50 tier 1 to tier 2 weighting.
• Analysis demonstrating how the LSE PRMR requirements and surplus/deficit positions would change if MISO calculated the SAC to UCAP ratio on a regional basis (in alignment with how RA hours are selected), as opposed to on a MISO wide basis as currently proposed.
• Updated analysis showing the projected LRZ surplus/deficit position relative to the LCR requirement when using the new RA hour selection methodology described by MISO in August 2021.
• RASC discussion and BPM updates on reforms to the seasonal ZIA methodology
• More explanation and clarity on whether replacement costs can be included in the offer price of a generation resource that will be in a planned outage for more than 30 days in a season.

Additionally, the only comment that the EOCs would express on the tariff redlines is regarding the number of hours that LMRs would need to respond. The redlines indicate that for PY 23/24 a resource must have a notification time of less than 6 hours, whereas the EOCs believe it should read “less than or equal to 6 hours”.

The EOCs appreciate the opportunity to comment.

Consumers Energy appreciates the opportunity to provide additional questions regarding elements of the current Resource Adequacy Construct proposal.

 Additional Comments:

- CE supports a gradual transition mechanism to allow greater time for planning and a more gradual adoption of the latest (or still to be finalized) MISO proposed construct will not result in significant unintended auction or market volatility.
- CE supports MISO also separating the Seasonal Auction filing from the Seasonal Accredited Capacity portion to allow for greater time to finalize and address outstanding questions regarding this piece of the proposed construct. This might also allow for renewable resource seasonal accreditation review to align resource capacity accreditation for a Market Participant's entire fleet as well as other renewable resource developers sooner than later.

 Additional Questions: 

1. Currently the SAC data is calculated using the “RT Offer EmerMax.” average over the previous 3 years
a. Where can MP get this number for their units?
b. If a MP does an upgrade to a unit that would increase their output/GVTC, how is that accounted for in the SAC calculation once the upgrade is completed? Is the MP not going to get full credit for their upgrade until 3 years after installation?

2. Will MP’s continue to complete GVTC’s on an annual basis and if so what will the GVTC data be used for?

3. In the SAC calculation, recall time for a unit that is not online and not in an outage is 12 hours. If it takes 24 hours for the unit to get online and you are called to start, does the MP loose all credit for the event or just the 12 hours extra that it took them to get online and they will receive capacity credits once online?

4. Due to the importance of outage exemptions and the requirement to provide 120 day notice to get an exemption, is MISO considering maximum number of days to respond to the MP’s request? If not, how with MISO work with MP’s to ensure they are getting proper reliability work done without exemptions if the outage is denied with short notice?

5. Does MISO believe that there is going to be any significant shift in the amount of PRMR required over the next 5-10 years?

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 and is based more on “feel” than a technical basis. We understand that MISO is unwilling to change their proposal, but we feel it is necessary to reiterate our concerns. We also are suggesting transitional mechanisms that may soften the impact of components that have not been fully vetted.   

It seems to MidAmerican, based on an accumulation of MaxGen events and capacity advisories, MISO’s real-time operating issues are a result of planned and forced outages combined with a lack of wind generation. The current proposal does not at all address intermittent resources and if the current construct gets approved by FERC and any future efforts addressing intermittent resources does not get approved, MISO will find itself with a resource adequacy construct that is unjust and unreasonable. In fact, the IMM indicates in their October 6 presentation at the RASC that the current proposal does discriminate in favor of non-thermal resources. MidAmerican would support a more encompassing approach where all resource types are addressed in one single filing. Until this fully gets address resource planners, especially those with large amounts of intermittent resources, are just in a holding pattern waiting to see how intermittent resources are addressed in Q1 of 2022.

The current MISO proposal, in fact, doesn’t increase reliability in the short term, but rather hopes to increase reliability in the future by redistributing the value of a resources based on performance in 3% of a season’s hours assuming utilities will make changes to their resource fleet to be more likely to be available in the future when the randomness of an RA hour occurs. As communicated by the IMM, “uncertainty will always cause tight hours to occur unpredictably.” MidAmerican states once again that there is no technical basis for weighting 80% of the SAC accreditation based on 3% of unpredictable hours. We would therefore propose the weighting be transitioned from something much less restricted such as 50/50 the first year, 60/40 the second year, etc. Although MidAmerican does not believe this would still not have any technical basis, the impact of randomness would at least be minimized.

MidAmerican is also concerned about the capacity replacement requirement for planned outages that exceed 30 days. Given a seasonal construct, a load serving entity could have their peak load change throughout the season significantly. For example, a peak load in September could be 15% higher than the peak load in November, yet a 30-day outage in September and early October is treated identical to an outage in late October and November.  Although MidAmerican believes this approach has not been properly vetted, MidAmerican would like to recommend that MISO does not implement the capacity replacement requirement for planned outages that exceed 30 days during the first four years. MidAmerican would be fine if a unit with a schedule outage lasting more the 2/3 of the season be ineligible for capacity during that season.

MidAmerican would prefer an enhanced UCAP seasonal approach including both forced outages and scheduled outage that are not scheduled with a positive operating margin so that the LOLE study would result in a higher overall PRMR, which would increase overall reliability. In addition, MidAmerican would also support a requirement for a portion of the PRMR having specific characteristics that would include things such as start time or ramp rate. For example, the RA construct could require 10% of your PRMR be able to be online within 4 hours from a cold start. Of course, the actual values would be based on technical analysis and not what “feels” appropriate.

AMP, MGE, MPPA, and MRES generally support WPPI's feedback; and they request that MISO do out-year CIL and CEL analysis for Zones 1, 3, and 7 in addition to Zone 2.

Thanks,

David Sapper

dsapper@ces-ltd.com

See email attachment sent under the subject "RASC: IMM Presentation on Seasonal Accredited Capacity".

These comments are offered by the Environmental Sector in response to MISO’s October 6, 2021 request for additional feedback on MISO’s resource adequacy reform proposal. The Environmental Sector thanks MISO once again for the opportunity to submit these questions and looks forward to working further with MISO to refine the latest resource adequacy proposals to ensure that they are workable and designed to ensure the highest levels of reliability in the MISO system.

1. Can MISO provide more explanation of how its proposed rules relative to a seasonal capacity construct and new accreditation rules will still ensure that there are sufficient capacity resources online in every hour to meet load?  We would particularly like to better understand how the allowance of up to 30 days’ outage in any season for a resource whose capacity is accredited in that season impacts MISO's “stack” of resources relative to what is expected to be available to meet the Planning Resource Margin in any hour.  It would be very helpful to have a visual representation of how MISO considers available capacity that has cleared the PRA for a season, and expected outages relative to capacity requirements to meet peak load plus a margin.

2. How are transmission constraints considered when allowing uncleared ZRCs to replace cleared ZRCs in the Planning Resource Auction?

3. Regarding the language “New or existing Resources that do not have at least 60 days of Real-Time offered availability when designated for RAR over the last three (3) years for each Season (Summer, Fall, Winter, Spring) will have a SAC based on the Class Average SAC to ICAP Ratio for its Resource type” in Section V of the most recent (October 1) draft of new Schedule 53, we have the following question: Does this mean that if a particular Resource does not clear or is routinely withheld from the Planning Resource Auction and is used for the purpose of providing potential replacement ZRCs later (cf. August 4 presentation at slide 23, final bullet point), then whenever it is ultimately used for capacity replacement in the PRA (cf. Section 69A.3.1.h of proposed Module E-1 language), its accreditation will be based on a Class Average accreditation ratio, even though it was historically functioning to essentially boost the accreditation of another resource?  Isn't that double counting the capability of the replacing Resource and/or artificially boosting the accreditation of the replaced resource (i.e., the cleared resource that underperformed)?

4. Has MISO conducted a system-level loss of load modeling analysis to assess the periods or hours in which there is greatest risk of not serving load? And if so, is this the same foundation for assessing the accreditation value for all resources, including thermal generators and renewable generators?

5. In the SAC calculation example provided by MISO for the August 4, 2021 RASC meeting, MISO appears to be allowing for up to 24 hours of cold-start time. For example, according to the Step2 tab of the spreadsheet, column N: a unit that is offline (but not on outage) that will take 18 hours to start up is considered “available.”  At first glance, this seems to be inconsistent with the 12-hour cold-start time threshold that MISO is using for the operating margin calculation.  Please explain this discrepancy.

6. How will MISO determine retrospectively, for those years that predate the start of this new construct, whether a Tier 2 outage exemption applies or not?

7. What process will MISO use to evaluate whether market participants are using the correct inputs to determine their accredited capacities under the SAC methodology?

8. Has MISO worked with affected state utility commissions and/or electric utilities to plan for the incorporation of this new seasonal resource adequacy construct in integrated resource planning or other state generation planning processes?  Does MISO believe that LSEs and utility commissions have the tools to successfully model and plan for seasonal capacity requirements? If so, based on what information:, which state processes and planning/modeling software packages models have been specifically analyzed?

Submitted on behalf of East Texas Electric Cooperative, Inc. (ETEC):

ETEC appreciates the opportunity to submit the following questions and requests to MISO:

1. ETEC generally refers back to its questions submitted September 29 since those were not addressed by MISO. ETEC is still seeking responses to those questions and suggestions.
2. Please provide at least 10 years of historical peak date / times for MISO and each LRZ on a seasonal basis in a format similar to what is provided under the current annual construct. If MISO is unable or unwilling to provide historical peak information, please explain why.
3. Please provide a guide to explain what information market participants can request from MISO related to its RA proposal, how that information is organized, relevant assumptions / sources of data, and how the data should be interpreted.
4. ETEC has identified issues related to the data it has received from MISO thus far and is working with MISO staff to understand and correct those issues.

Xcel Energy appreciates the opportunity to provide feedback regarding Resource Adequacy construct reforms and to ask additional questions: 

• Xcel Energy is supportive of the following transitional mechanisms (beyond the phase-out of RAN Phase I planned exemptions):
• Transition of the 80/20 weighting over three years (so that the 80/20 weighting would be accomplished in the third planning year of implementation)
• Guard rails to ensure that small MPs with limited resources have ample time to adapt since their impacts will be proportionally greater than larger MPs with a diversified portfolio
• Delaying the greater than 31 day planned outage capacity replacement requirement for at least three years

• Xcel Energy also requests more information regarding the transition of the seasonal GVTC cap on the RT Emergency Max hourly offer. The summer GVTC value is available but what source will MISO use to calculate the GVTC value for non-summer months for the first two years of implementation?   What source was used in the data provided to MPs?

WEC Energy Group has the following questions:

1. Does MISO and the IMM have the resources to review multiple requests (perhaps dozens) to forego participation in PRA each season (for outages or partials > 31 days)?
2. What criteria will the IMM use to evaluate requests to forego participation in the seasonal PRAs?  Is there a request queue?
3. The CROW is a tool designed for operations rather than accreditation.  How will MISO and IMM ensure that the CROW is not used to "hoard" maintenance margin?
4. If the IMM's recommendation to apply the SAC/UCAP conversion factor to the capacity side of the equation (rather than PRMR), how will that affect inclusion of deliverability, conversion to ZRCs?
5. Why isn't the performance-based accreditation proposal applied to all resources, including wind and solar?  Shouldn't wind and solar receive credit for their contribution to availability during Tier 1 and Tier 2 hours?

Occidental Chemical Comments on Resource Adequacy Reforms

October 13

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 current Resource Adequacy Reforms.

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 first feedback item, OxyChem offers the following comments on the two-tiered weighting structure used to calculate SAC, which is proposed in the Resource Adequacy Reforms. MISO’s current proposal for SAC, uses a two-tiered weighting structure to calculate the seasonal accreditation of generators. Availability during non-Resource Adequacy Hours (Tier 1 hours) are given a 20% weighting factor while availability during Resource Adequacy Hours (Tier 2 hours) are given an 80% weighting factor. OxyChem agrees with many of the stakeholders who have expressed concern that the 80% weighting factor for the Tier 2 hours is excessive in the initial implementation given the potential volatility and risk associated with the new accreditation methodology. OxyChem believes that a 40%/60% or even a 50%/50% ratio would be a more appropriate ratio to use in the initial implementation until the impacts on system reliability, due to the new accreditation methodology, are known.

OxyChem thanks MISO for the opportunity to provide feedback. 

ITC Holdings Corp. (ITC) appreciates the opportunity to provide feedback on MISO’s proposed Tariff redlines concerning Resource Adequacy construct reforms.

ITC suggests adding the following language to Module E 1 concerning Capacity Replacement Non-Compliance Charges and Distribution:

3. Capacity Replacement and Non-Compliance Charges that are levied in any given planning year will be included in the publicly-available PRA materials for the respective planning year at the LRZ level.

Price signals from the PRA are an important source of public information for generation and transmission planning.  Non Compliance charges that are levied ex-post represent important information on de facto final auction prices and should be made publicly available just a actual auction results are.

Transitional Mechanism:

WPPI is supportive of the stakeholder transition plan suggestions.  We believe implementing these will be beneficial in decreasing chances of volatility while we are transitioning to a new RA construct.

Additional Questions:

I.             Per MISO’s new proposal of allowing resources to forego offering resource’s ZRCs if expected outage >31 days and reducing the economic withholding conduct threshold to ~$25/MW-day, we believe these will ultimately limit market participants’ freedom to offering into the auction in a manner befitting their circumstances.  At the last RASC meeting though there were no assurances provided that the IMM would allow resources to either forego offering or adjusting their market offer to account for the non-compliance charge penalty (or include cost to replace in their offer).  We find the need to involve the IMM simply to manage ZRC replacement risk very problematic.

For example:

If a resource has a 45 day outage, per the new rules they will face a non-compliance charge for 14 days (45-31).  The options left to this resource are:

1.            Replace

a.            Due to the complexity to replace this would not be a desired avenue to pursue for most MPs.

2.            Modify Offer Price to account for Non-Compliance charge or costs to replace

a.            This would likely be the desired approach by MPs.  However, with the economic threshold limited to $25/MW-day this would require MPs to request IMM approval of their new reference level.

i.             As it stands, if a resource tries to account for Non-Compliance charge in market offer, any outage greater than 9 days would be subject to IMM approval, if adjusting one’s market offer

1.            $90,000 (approx. annual Cone) / 365 days in year = ~$250/MW-day

2.            $250/MW-day * 9 day outage / 90 days in season (to adjust to market offer of season) = $25/MW-day

ii.            What assurances do MPs have that the IMM would allow MPs to account for costs to replace or Non-compliance charges within their auction offer?

iii.           Why can’t MISO simply modify the tariff to create a presumption that a capacity offer may reflect expected Non-compliance charges consistent with planned outage days scheduled at the time of the auction?

3.            Choose not to participate in the season where resource is in outage >31 days

a.            In this instance once again, MP would need IMM approval and is not guaranteed that IMM would allow.  It seems that IMM may be pretty strict on the justification of the outage.  Therefore, per the discussion at the last RASC it sounds unlikely that IMM would approve a resource to forego offering.

b.            What assurances do MPs have that IMM will allow them to forego offering?  In what instances will IMM deem the outage unjustified and deny the request?

As it stands, it seems resources will be forced to either replace or coordinate with IMM who may or may not approve any measures MPs try to use to mitigate the financial impacts of clearing.  This will significantly constraint resource owners’ choices in offering into the auction, and will give the IMM both more work and more involvement in deciding how and which resources are offered into the auction.  We see this as an undesirable outcome.  We note that we have suggested an alternative –allowing resource owners a fourth option of converting only a portion of capacity to ZRCs—which would address these problems, but MISO has declined to consider this proposal.

II.           A primary goal of the seasonal construct was to facilitate seasonal economic resource suspensions.  How does MISO’s proposed tariff accommodate such suspensions? 

III.          The current BPM provides that ZRC replacement for Retirement/Suspension must occur at least 7 days prior to Retirement/Suspension.  What are the timing requirements for replacement associated with planned outages exceeding 31 days?