MSC: Market Implementation Error and Continuing Error Tariff Language (MSC-2022-2) (20220526)

Xcel Energy appreciates the opportunity to provide feedback regarding MISO's Tariff redlines for enhancements to the Market Implementation Error (MIE) and Continuing Error (CE) provisions in the Tariff.  Our understanding from the May 25 MSC discussion was that the average daily gross market activity would be calculated based on the daily gross market activity across the twelve months prior to the date when the error was identified. We believe this should be explicitly defined in Module A to clarify that the gross market activity is not based solely on the Operating Days in question. 

In addition, we propose that the materiality threshold be based on the average of the financial impact across days that will be corrected, not on the daily value.   For example, assume the materiality threshold of 0.5% of the average daily gross market activity was $550K.   Under the existing proposal, if an error was found that crossed 10 days, but the error on five days was $600K/day and the error on the remaining five days was $525K, only the five days with an error of $600K/day would be resettled.  The remaining five days with an error of $525K would not be resettled, even though the average across all ten days exceeds $550K.

MEMORANDUM
TO: MISO MARKET SUBCOMMITTEE
FROM: THE ENTERGY OPERATING COMPANIES
SUBJECT: MARKET IMPLEMENTATION ERROR REPRICING AND CONTINUING ERROR RESETTLEMENTS
DATE: JUNE 10, 2022

The following feedback is offered by the Entergy Operating Companies ("EOCs")[1] in response to the request made during the May 26, 2022, Market Subcommittee (MSC) meeting concerning MISO’s proposed changes to the Market Implementation Error (MIE) Repricing and Continuous Error (CE) Resettlements. 

The EOCs agree with MISO’s proposed changes related to expanding the MIE window to include the Operating Day (OD) +13 calendar days. 

We feel that it is very important to include pricing errors when resettling CE and think MISO should continue to do so using the current thresholds (over 12 continuous months, either affected Market Participant is impacted at least $7,500 or MISO as a whole is impacted at least $100K) that are in place. 

As stated in previous feedback, we still believe that the Continuing Error time bar should remain at 2 years and not be reduced to 1 year.  The EOCs understand MISO’s concern related to the time and cost associated with resettling the Market, but given the potential dollar impact to the Market, the current two-year time bar for CE seems an appropriate compromise.  This, versus having an unlimited look back time frame which had been the case previous to the current time bar.     

The EOCs ask that MISO provide additional details and justification for the proposed CE time bar change to one year (i.e., what processes and systems have been improved to such a large degree that the proposed limited time bar would not exclude needed material resettlements.)  We firmly believe the current two-year time bar is already an appropriate compromise.   

The EOCs appreciate the opportunity to comment

Pine Gate Renewables (PGR) appreciates the opportunity to provide feedback to MISO on its proposed revisions to its tariff provisions addressing MIE and CE. PGR supports the proposed revisions to the tariff provisions addressing MIE and submits two comments regarding the proposed revisions addressing CE. In particular, PGR respectfully suggests that:

 (1) MISO retain the current 2-year time period for resettlement of confirmed CEs as these errors are infrequent and may have persisted undetected for more than 1 year.

 (2) MISO retain but revise the threshold for impacts to individual Market Participants from CEs. While PGR understands the need for certainty and the significant efforts that are required for resettlement, each Market Participant should have the opportunity to recoup/resettle where a CE has significantly impacted it - regardless of whether the CE impacted the market at large. As not all Market Participants are large enough to absorb an impact of over $100,000, an individual threshold of at least $25,000 would seem reasonable.

Thank you again for the opportunity to provide input and we look forward to the continued stakeholder process.

Consumers Energy appreciates the opportunity to provide feedback on MISO’s Market Implementation Error (MIE) Repricing and Continuing Error (CE) Resettlement provisions and recommended Tariff enhancements.

Consumers Energy support's MISO's proposed tariff language regarding the 12Ag thresholds and one year resettlement and pricing error notification and resolution timeframe.

At the 5/26/2022 MSC, MISO provided an updated proposal addressing Market Implementation Errors and Continuing Errors:

• MIE: Increase time to make a price correction, Operating Day plus 13 days vs. current plus about 5 days (tied to timing of notice of price correction).
• CE:

‒         Decrease timebar, 1 year vs. current 2 years.

‒         In determining whether a corrective resettlement should be performed, remove impact on individual Market Participants ($7500).

‒         Pricing error (CE): In determining whether a corrective resettlement should be performed, increase market impact threshold, 0.5% of gross market activity vs. current $100K.

WPPI does not have concerns re MISO’s proposed changes to MIE, but we continue to have concerns re MISO’s proposed changes to CE.

• Timebar: We continue to think a 2-year period for resettlement is reasonable. While MISO markets do undergo changes, they are infrequent and deliberate.
• Impact on individual Market Participants: Rather than eliminate, we suggest increasing from $7500 to $35K. Note: There is nothing magic about $35K other than it is substantial increase yet still some distance from the non-price market impact threshold ($100K).
• Pricing error: We definitely do not want to spend more money on MISO administering a pricing error correction than the magnitude of the pricing error itself. However, the proposed threshold seems far more than the cost of correcting a pricing error. From MISO’s response to the feedback, the current market impact threshold of $100K amounts to 0.00025% of the gross settlement activity in the MISO market in 2021. Putting MISO’s proposal in these terms, the proposed threshold is $200,750,000. We suggest a pricing error market impact threshold that can be reasonably expected to cover the cost of MISO administering a pricing error correction. What is a reasonable estimate of those costs over the years?

Taking MISO’s proposal as is, we reviewed the proposed edits to the tariff. We emailed our feedback to Stakeholder Relations (we added our feedback, in redline, to the word documents posted with the MSC, 5/26/2022 meeting materials).