During the April 21, 2022, Markets Subcommittee (MSC) meeting, MISO provided background on MISO’s Market Implementation Error (MIE) and Continuing Error (CE) provisions and recommend enhancements to the Tariff. MISO is requesting feedback on the proposed enhancements to the MIE and CE provisions with the following questions in mind:
Please provide feedback by May 6.
Consumers Energy appreciates the opportunity to provide feedback on MISO’s Market Implementation Error (MIE) and Continuing Error (CE) provisions and recommended Tariff enhancements.
Consumers Energy support's MISO's proposed 14 day timeframe for MIE adjustments and 1 year for CE resettlements to include from time of MISO formal acknowledgement of an issue identified by MISO staff and/or stakeholders.
WPPI’s feedback on the proposed changes to the Market Implementation Error (MIE) and Continuing Error (CE) provisions discussed at the MSC on 4/21/2021 (per the questions posed by MISO) is as follows:
(1) How can MISO best ensure price certainty within the MIE/CE changes?
Price certainty is important to WPPI, but so is price accuracy. The current MIE timeframe of identification and resolution within 5 calendar facilitates market price certainty. On the other hand, the current CE timeframe of resettling up to two years facilitates price accuracy.
(2) What is the right timeframe for MIE adjustments?
As discussed under Q1, the current MIE timeframe along with the current CE timeframe facilitate an appropriate balance between price certainty and accuracy.
(3) What is the right timeframe for CE resettlements?
See responses to Q1 and Q2.
Thank you for the opportunity to provide feedback on MISO’s proposal for enhancements to the Market Implementation Error (MIE) and Continuing Error (CE) provisions in the MISO Tariff.
DTE supports the extension of price MIE to the S14, as this seems reasonable to give Market Participants and MISO staff more time to properly investigate issues and take corrective action. DTE does not support the proposed changes to the CE provisions, particularly excluding retroactive correction of prices. DTE appreciates the need for price certainty, but price accuracy is just as important and should not be sacrificed. Pricing errors that represent significant pricing inaccuracy should remain subject to the CE provisions and to the possibility of resettlement. DTE is open to discussion with MISO and other Stakeholders to reevaluate what constitutes a material threshold for resettlement within the CE provision.
TO: MISO MARKET SUBCOMMITTEE
FROM: THE ENTERGY OPERATING COMPANIES
SUBJECT: GENERATION OUTAGE CAUSE CODE REVIEW
DATE: MAY 6, 2022
The following feedback is offered by the Entergy Operating Companies ("EOCs") in response to the request made during the April 21, 2022, Market Subcommittee (MSC) meeting concerning MISO’s proposed changes to the Market Implementation Error Repricing and Continuous Error Resettlements.
The EOC’s support MISO’s desire to remedy the Market Implementation Errors before the S14.
The EOC’s do not agree with Continuous Errors excluding pricing impacts. We believe that pricing impacts should be included in the Continuing Errors.
The EOC’s do not agree with the 1 year limit of resettlement. We believe that Continuing Errors should stay at a 2 year resettlement.
The EOCs look forward to working with MISO to improve the Market Implementation Error Repricing and Continuous Error Resettlements process and appreciate the opportunity to comment
The Entergy Operating Companies are Entergy Arkansas, LLC, Entergy Louisiana, LLC, Entergy Mississippi, LLC, Entergy New Orleans, LLC, and Entergy Texas, Inc.
WEC Energy Group supports MISO’s efforts to identify and remediate Market Implementation pricing Errors (MIEs) as close to the Operating Day as possible. WEC Energy Group is not opposed to extending the MIE remediation deadline to the S14 settlement statement but we are concerned that elimination of pricing impacts from Continuing Errors (CEs) removes a strong incentive to identify pricing errors within the MIE window. Price certainty is important but price accuracy is equally important. Pricing errors that are not identified within the MIE window that represent significant pricing inaccuracy should remain subject to the CE provisions to make “appropriate adjustments” (i.e. resettlement).
WEC Energy Group is open to discussion of the appropriate threshold for a CE to ensure MISO is not utilizing resources that are more costly than the pricing error itself. Additionally, we understand that in the past, CEs that met the current MISO-wide threshold of $100,000 resulted in several MP resettlement of “pennies”. In these cases, we suggest that MISO and stakeholders consider an individual MP resettlement threshold such that if the MISO-wide threshold is met but individual MPs are impacted by less than a resettlement threshold, that MP is not resettled. This should avoid the resettlement of “pennies”.
WEC Energy Group also agrees with the recommendation from Alcoa that CE resettlement should occur retroactively from the date of “issue identification” rather than “MISO’s confirmation” of an issue.
Xcel Energy appreciates the opportunity to provide feedback regarding MISO's proposal for enhancements to the Market Implementation Error (MIE) and Continuing Error (CE) provisions in the Tariff, as presented on April 20, 2022 at the MSC. Currently, MISO must address price errors outside the current MIE timeframe of 5 days if they meet the Continuing Error (CE) thresholds (over 12 continuous months, either affected Market Participant is impacted at least $7500 or MISO as a whole is impacted at least $100K). If these thresholds are exceeded, MISO must resettle up to 2 years from the date MISO formally confirms the CE.
MISO is proposing that only price errors identified within 14 days of the Operating Day would be eligible for resettlement. While this may be appropriate for the majority of the settlement periods, we believe that an anomalous, extreme event could create settlement issues that would be very difficult to identify within 14 days. This was proven during Hurricane Laura (8/27/2020), as there was a major adjustment for this time period that was uncovered nearly a year later and resettled through the R350. This resettlement of $10M would not have occurred if MISO's proposed Tariff revisions had been in place.
We believe the current Tariff language provides the appropriate balance between price certainty and accuracy by incentivizing MISO to identify Market Implementation Errors quickly (within 5 days) but allowing up to two years for resettlement if extraneous circumstances arise and minimum thresholds are exceeded. Therefore, we recommend that MISO allow the current Tariff language to stand and take no action on the MIE/CE proposal.
Proposed Changes to Market Implementation Error (MIE) and Continuing Error (CE) Resettlements
5/5/2022
Responding to request during the April 21, 2022, Markets Subcommittee (MSC) meeting, Big Rivers is providing feedback on the proposed enhancements to the Market Implementation Error (MIE) and Continuing Error (CE) provisions in the MISO Tariff.
Per the April 21, 2022 presentation, MIE changes will require price finalization to occur within OD + 13 calendar days, and CE will exclude retroactive correction of prices and corrections to be limited to the past one (1) year from date of MISO’s formal acknowledgement (slide 5).
Big Rivers recommends MISO keep the MIE and CE thresholds/timeframe/scope as they currently exist.
The distinction between MIE and CE should be well-understood so that the correction of one does not preclude correction of the other. We recommend MISO provide examples so all stakeholders fully understand the distinction.
We recognize the need for price certainty, but the need for certainty should not preclude accuracy, especially as some of the mentioned errors can be material. While it is inefficient to resettle the market for merely pennies in difference, the resulting resettlement can significantly shift costs between Market Participants. We agree that errors should be discovered and fixed quickly, but there are times when the problem is not identified quickly, nor diagnosed quickly, nor fully vetted within the timeframes listed.
Slide 4 of the 3/8/2022 Settlement User Group Presentations states “What should happen when a CE is deemed to have happened in the software or system used in setting prices which wasn’t first identified as a MIE?” The tariff should be aligned between the MIE and CE provisions. From a fairness perspective a continuing error which was not identified until later should be resettled, but sometimes may warrant a “rough justice” or less rigorous method for resettlements long in the past, while at the same time forward settlements would follow the more precise method which corrects the errors.
We appreciate that the current construct includes some materiality thresholds, whereby a Market Participant must be impacted by $7,500 or MISO as a whole is impacted by at least $100k for resettlement. It is possible the materiality thresholds could be re-evaluated and vetted among stakeholders and MISO. For errors that extend for a long time but have minimal impact, possibly MISO could propose some method to estimate the impact as opposed to re-running all settlements.
Alcoa Power Generating, Inc. (APGI)
Comments On
MSC: Market Implementation Error Reprising and Continuous Error Resettlements (MSC-2022-2)
May 06, 2022
During the April 21, 2022, Markets Subcommittee (MSC) meeting, MISO requested feedback on proposed enhancements to the Market Implementation Error (MIE) and Continuing Error (CE) provisions in the MISO Tariff.
As a MISO market participant with both Generation and Demand Response Resources in the Energy and Ancillary Services Markets, Alcoa Power Generating Inc (APGI) has been impacted in the past by the current MIE and CE provisions. Because of the limited number of DR Resources in the MISO market, APGI has been particularly impacted by software MIEs related to DRR on multiple occasions. In the April 21 MSC, MISO recommended that “MIEs shall be remedied before the S14,” “CE adjustments shall exclude pricing impacts,” and that “CE will be limited to a 1-year resettlement.”
APGI supports these changes as proposed by MISO.
MISO asked for feedback on the following specific questions:
Price certainty is particularly important to APGI because of the unique nature of its business model that does not have broad cost recovery mechanisms and only conducts limited and discreet transactions in the wholesale market. DR participation relies on accurate pricing to support operational decisions that impact the end use customer. Changes to market pricing could lead to inefficient operational decisions and, in extreme cases, require reforecast of financial statements and restatement of earnings. Ensuring price certainty begins with robust testing of price formation changes ahead of changes to market software modifications and parallel price comparisons to ensure appropriate outcomes. Some previous issues could have been caught by comparing pre and post implementation changes.
The extension of price MIE to the S14 seems reasonable to give both Market Participants and MISO staff time to properly examine any issues and take corrective action, if needed. APGI supports this change but would emphasize that when a potential issue is identified, it should be a high priority to resolve the issue in as short a time as possible.
APGI supports the change to a 1-year resettlement from the point at which an issue is identified by either MISO staff or stakeholders. Longer term resettlement can have significant business impacts that span multiple earning cycles, so the 1-year is reasonable.
APGI requests MISO to reexamine the proposal to implement resettlement “to include the past one (1) year from date of MISO’s formal acknowledgement.” MISO should implement resettlement “once MISO has confirmed the issue to include the past one (1) year from date the issue was identified.” APGI’s concern is that, in the past, errors have been identified by Market Participants like APGI have taken many months to study for validity. MISO did not “acknowledge” these issues for months. The proposed change would create improper settlement for an issue that was clearly identified by the Market Participant.
APGI appreciates the opportunity to provide feedback on this issue.
If there are any questions or comments, please feel free to reach out to:
Sherry Rhodes
Alcoa Power Generating, Inc.
(812) 853-1033
Steve Dowell
ESS LLC, Alcoa Power Generating Inc.
(812) 853-1135
DeWayne Todd
DDT LLC
(812) 573-8052