In the March 9 meeting of the Resource Adequacy Subcommittee, stakeholders were asked to consider and respond to a series of guiding questions pertaining to Accreditation Reforms for Non-Thermal Resources. In your response, please consider the following:
Comments are due by March 23.
Xcel Energy appreciates the opportunity to provide feedback regarding capacity accreditation for non-thermal resources. This is a difficult topic that will take a high level of involvement by stakeholders to develop an approach that is reasonable and satisfies the Key Considerations.
Should non-thermal accreditation be based on retrospective or prospective outlooks? Or some combination of the two?
The selected methodology needs to balance investment indications for future years with Planning Year reliability/resource adequacy considerations. Forward marginal evaluation is needed to inform resource planning; otherwise, we risk planning being misaligned with the actual capability provided by that resource addition. MISO should provide forward looking guidance that reflects the marginal contribution of a particular resource type that MPs can reference in their planning.
How should resource types be grouped for the purpose of accreditation to ensure equity and accurately measure the differing characteristics of each resource type?
This should fall out of the evaluation analysis. We have reviewed E3’s slides that were developed for capacity accreditation discussions at NYISO and believe it would be very beneficial to the stakeholder discussion for MISO to engage with E3 to develop a similar slide deck based on MISO’s system.
MISO should also evaluate the interactive effect of the non-thermal methods with the SAC approach and UCAP approach.
What concerns are there with today’s non-thermal accreditation methodologies (current and pending FERC approval)?
We have identified the following issues with the current accreditation methodologies for non-thermal resources:
(1) They don’t reflect marginal contribution to meeting load, as they are solely dependent upon the current penetration level and provide little to no forward guidance that MPs can use in planning. This is a challenge because our stakeholders and regulators often rely on MISO guidance to evaluate our plans.
(2) There may be a misalignment between the impacts of customer-sited solar in the load forecast and the assigned capacity accreditation
(3) Potential diversity benefits are not accounted for
(4) The peak hours in winter may be misaligned with demand response resources
What should the solution space look like for evaluation?
At this point, we believe all accreditation methodologies should be left on the table. The Marginal ELCC approach should include an evaluation of the “Vintaged Marginal” method, (i.e. assigning capacity credit to resources according to the year of commercial service).
As the methodologies are evaluated, we would ask that MISO provide the capability of each to provide accreditation guidance, likely in the form of declining capacity accreditation curves by resource type, for 5/10/15 year estimates by leveraging the Regional Resource Assessment.
Each weather year should be analyzed independently then calculate the average ELCC by season as the average of weather years prior to the calculation of the ELCC reduces the variability. We also think it is valuable to examine the extents of those ELCC values across weather years to understand the variability.
What other key considerations have not yet been discussed?
We have identified the following key considerations:
(1) At least for the planning space, using peak load hours is not adequate; recent events in CAISO exemplify this;
(2) When evaluating different methods, we believe there should be some consideration of regional differentiation that recognizes capacity in one zone or region may not be deliverable to all others;
(3) In general, we believe there are larger downsides to the forward planning guidance over-accrediting resources than underestimating their contribution to load (within reason).
MidAmerican appreciates the opportunity to provide feedback on Accreditation Reforms for Non-Thermal Resources.
MidAmerican believes that MISO needs to consider the following:
RASC: Accreditation Reforms for Non-Thermal Resources (RASC-2019-2, RASC-2020-4) (20220309)
"In the March 9 meeting of the Resource Adequacy Subcommittee, stakeholders were asked to consider and respond to a series of guiding questions pertaining to Accreditation Reforms for Non-Thermal Resources."
Public Service Commission of Wisconsin Office of Regional Markets Staff appreciate the opportunity to respond this feedback request and provide the following responses and considerations to the proposed questions as part of this feedback request:
1) Have the correct problem statement, scope and key considerations been achieved?
Response: Broadly speaking, MISO’s revised problem statement and scope reflect previous comments submitted by OMS, and therefore, are an improvement from the previous version. One suggestion is that the problem statement could be modified to reflect “the availability of resources when MISO’s load requires it” as an alternative to the focus on “periods of highest reliability risk.” In this manner, ensuring consistency with the “all hours matter” concept and the comparative accreditation of thermal resources (which we discuss in more detail in response to item 2 below) may be appropriate considerations.
For instance, in practice solar PV is highly likely to contribute energy during MISO’s peak, which remains in the summer afternoons. If hours later in the day require resources as the sun sets, then the appropriate pricing or capacity signals should be sent to deliver energy in those hours. The concept of “netting out” solar’s contribution to load would call into question this notion and could lead to artificially de-rating or de-valuing this resource versus other resource types, despite the value being provided to meet load. Resources that contribute to meeting load should be valued accordingly. PSCW staff would support further discussion of these considerations and scenarios.
2) How should resource types be grouped for the purpose of accreditation to ensure equity and accurately measure the differing characteristics of each resource type?
Response: At this point, we do not know whether there is a “right” or “wrong” way to categorize resources types (i.e., non-thermal, energy storage, etc.) as different accreditation methodologies will likely require different ways of grouping assets to ensure equitable treatment under different mathematical formulae. One suggestion that could help stakeholders such as ourselves would include MISO doing analysis and sharing it with stakeholders that would evaluate each accreditation methodology under the following three scenarios; 1) Methodology A/B/C etc. under the current asset grouping framework; 2) Methodology A/B/C etc. with more granular asset groupings (i.e., solar, wind, hybrid, etc.); and 3) Methodology A/B/C with all asset types in a single group (i.e., thermal, non-thermal, energy storage, demand response all combined into a single group).
3) Should non-thermal accreditation be based on retrospective or prospective outlooks? Or some combination of the two?
Response: Similar to the previous response, MISO should evaluate both alternatives to provide analysis, and share that analysis with stakeholders, so that working together we can compare the results and collectively determine whether a historical or forward-looking approach is more accurate and/or equitable.
4) What concerns are there with today’s non-thermal accreditation methodologies (current and pending FERC approval)?
Response: The biggest risk we see right now with non-thermal accreditation is the uncertainty for if, when, and (if so) how solar PV accreditation will change going forward. Secondarily, a significant risk is whether solar resources that are already built, or have been contracted for, before a certain date will retain their capacity accreditation going forward. Working towards an analytically correct evaluation of solar’s capacity value and working through the vintage issue (if capacity value is held constant based on when it’s built) that can be durable for years to come is recommended to provide greater certainty around these questions.
5) What should the solution space look like for evaluation?
Response: See response to the question about how resources should be grouped together for a description of a potential solution space (question 2).
6) What other key considerations have not yet been discussed?
Response: How will MISO ensure that the new capacity accreditation methodology remains relevant and accurate moving forward? MISO may consider a periodic evaluation of the RA construct every 5 or 10 years as part of the PRA, RRA, or other regularly scheduled modeling processes. Doing so would ensure that the RA metrics and methodologies are evaluated against changing generation mixes and demand shapes that will continue to evolve.
Thank you again for this opportunity to provide feedback on this manner. We look forward to further, robust discussion.
The Entergy Operating Companies ("EOCs")[1] appreciate the opportunity to respond to MISO’s questions pertaining to accreditation reforms for Non-Thermal Resources.
MISO Question: How should resource types be grouped for the purpose of accreditation to ensure equity and accurately measure the differing characteristics of each resource type?
MISO Question: What concerns are there with today’s non-thermal accreditation methodologies (current and pending FERC approval)?
MISO Question: What should the solution space look like for evaluation?
[1] The Entergy Operating Companies are Entergy Arkansas, LLC, Entergy Louisiana, LLC, Entergy Mississippi, LLC, Entergy New Orleans, LLC, and Entergy Texas, Inc.
Savion, LLC (“Savion”), a Shell Group portfolio company operating on a stand-alone basis, is an industry-leading solar and energy storage organization built on a foundation of specialized experience and mastery in the craft of development. With a growing portfolio of more than 19GW, Savion is currently one of the country’s largest and most technologically advanced utility-scale solar and energy storage project development companies. Savion’s diverse team provides comprehensive services at each phase of renewable energy project development, from conception through construction. Savion is committed to helping decarbonize the energy grid by replacing electric power generation with renewable sources and delivering cost-competitive electricity to the marketplace. Savion would like to thank MISO for bringing this topic to stakeholders for discussion.
Savion agrees with CGA’s comments on this topic. Savion holds that thermal and non-thermal assets both are necessary for the future reliability of the MISO system. As such both need to be treated in a similar manner. If different methods are proposed, positive reasons for why the difference is needed must be brought forth. In other words, equal treatment should be the starting point and deviations from equal treatment should be have to be defended.
Savion appreciates the opportunity to participate in further consideration of this matter.
National Grid Renewables provides the following feedback on the questions presented at the March Market Subcommittee.
“Have the correct problem statement, scope, and key considerations been achieved?”
PROBLEM STATEMENT
This problem statement is conceptually appropriate. National Grid Renewables notes that to accomplish this scope, the “periods of highest reliability risk” should be a discrete set of hours for the relevant prospective seasonal period and may be based on a retrospective assessment of some rolling back cast. Transparently identifying critical periods on a forward-looking basis is the most effective way to enable market participants to manage their resources to be available during those periods and provides an appropriate market incentive for that availability. Accreditation should be based on the actual performance of individual resources, as opposed to a general aggregate value based on resource type.
Specifically and appropriately defining “periods of highest reliability” in terms of transparent, prospective hours will be a significant driver of this conversation and critical to facilitating both system reliability and equitable capacity accreditation. MISO should focus on clarifying the definition of “periods of highest reliability risk” to stakeholders to the greatest extent possible, as early as possible.
SCOPE
The draft scope emphasizes the prioritization of resources with the “greatest reliability impact”. National Grid Renewables appreciate the effort to accommodate quickly growing resource types but notes that all resource types can contribute to reliability and there is no reason to prioritize one resource type over another. In fact, doing so may be counterproductive to the desired outcome, as capacity accreditation can contribute to the value proposition of a resource and incent its development in the MISO footprint. MISO should ensure this initiative incents the management of all resource types to support the reliability needs of the system in real-time.
KEY CONSIDERATIONS
National Grid Renewables appreciates the key considerations presented, and offers the following additional thoughts for MISO’s consideration:
In keeping with the above comments on the draft “key considerations”, as a general matter, performance and functionality of individual resources should be key drivers in developing an accreditation methodology, as opposed to generic or arbitrary accreditation based on resource types.
“How should resource types be grouped for the purpose of accreditation to ensure equity and accurately measure the differing characteristics of each resource type?”
National Grid Renewables notes that many of the key considerations are not exclusive to non-thermal resources and that principles of parity should be kept in mind when there is no distinction between functionality and performance relative to the defined reliability periods.
National Grid Renewables believes that key drivers for non-thermal resources should be performance and functionality. The deterministic methodologies presented by MISO at the March RASC are appropriately performance based and transparent, and National Grid Renewables supports a deterministic approach.
The capabilities of storage and storage-hybrid resources are significantly different than standalone wind and solar, and more closely resemble the capabilities of thermal resources, or higher on the “controllable availability” dimension of the chart provided. Under a deterministic methodology standalone storage resources and storage-hybrids should be grouped separately from standalone wind and solar resources.
“Should non-thermal accreditation be based on retrospective or prospective outlooks, or some combination of the two?”
As discussed, National Grid Renewables supports a deterministic methodology. Resource owners should be given forward-looking certainty on the metrics and hours by which they will be accredited. Market participants will benefit from the consistency and predictability of a deterministic methodology, and in many cases, will be able to adjust their behavior to better contribute to reliability when necessary. National Grid Renewables recognizes that the definition of risk hours that most accurately reflect and encourage reliability will be important and complex.
Although the reliability periods for each season should be forward looking (provided to MPs ahead of time) and transparent, the definition of those periods will necessarily be based on a retrospective look back on system risk periods (e.g., 3-year rolling average or some similar approach).
“What concerns with today’s non-thermal accreditation methodologies (current and pending FERC approval)?”
For hybrid resources, the sum-of-parts methodology is not appropriate under a deterministic methodology, as it may not necessarily reflect actual performance and functionality. It may be appropriate under other accreditation methodologies.
Additionally, in a sum-of-parts methodology, when a resource is under study, currently each component is scaled down proportionally if the resource is oversized relative to its firm service. Scaling down proportionally may not reflect actual operations- in high-risk hours, for example, the storage component of a hybrid resource may be contributing to a higher proportion of the resource’s output.
“What should the solution space look like for evaluation? (Accreditation by class, Distribution of accreditation for individual resources within a class, or an estimation process)”
As discussed above, National Grid Renewables believes that a deterministic methodology is most appropriate and should be determined on a resource-by-resource basis, rather than across a resource class.
Response of the Solar Energy Industries Association
The Solar Energy Industries Association (SEIA) appreciates the opportunity to provide feedback on MISO’s revised problem statement and scope on Accreditation Reforms for Non-Thermal Resources before the Resource Adequacy Subcommittee (RASC-2019-2, RASC-2020-4). SEIA thanks MISO for its willingness to consider stakeholder feedback in the development of an Effective Load Carrying Capability (ELCC) accreditation methodology that can support an evolving resource mix.
SEIA recommends MISO create consistency in the accreditation processes applied to all capacity technologies; thermal and non-thermal resources. Although MISO only presently applies ELCC to wind resources, it is important that MISO include thermal resources in the future. This will ensure the ELCC models appropriately capture thermal outages when assigning capacity values. The ELCC methodology was installed in MISO as a way to account for variable and energy-limited resources, changing weather, and operational practices. These shifting risk profiles, it is unrealistic to assume a near-perfect thermal resource accreditation, an assumption that has already had negative implications to resource adequacy and planning.
The thermal outages that are identified as reserve requirements are not included in ELCC accreditation and observed outages generally exceed MISO’s outage rates. A study presented in PJM, found the total capacity market may be procuring 7 GW or more of thermal generating capacity is unlikely to perform when needed. To improve reliability, numerous categories of outages need to be identified that include fuel availability along with outage asymmetry, common mode failure outage, and weather dependent outages. As part of the changing resource landscape, thermal generation accreditation is needed to be evaluated in the same way non-thermal resources are evaluated to ensure that thermal resources are capable of meeting capacity obligations.
In addition, thermal resources need to be reevaluated because the current accreditation method for these resources has become detrimental to the MISO market. As MISO noted in its February 2021 Winter Artic Event, the significant failures were from thermal resources which prompted MISO to take emergency procedures during the winter storm. MISO’s report demonstrates that temperature and load have a significant impact on the reliability of thermal resources. Now is the right time to reevaluate all resources to ensure accreditation methods will ensure accurate capacity values and availability of all resources in the MISO region.
It is imperative for MISO to evaluate all resources and apply a uniform resource adequacy accreditation methodology. Outage risks exist for thermal resources and these risks will only grow as the resource landscape continues to change and serious weather events occur. While load bears the risk for correlated risk outages for thermal resources, suppliers bear the risk for ELCC resources. Maintaining the status quo will allow potentially prejudicial and disparate treatment among resource types and continue to put the MISO footprint at unnecessary risk to MISO markets and the bulk electric system. By evaluating both thermal and non-thermal resources, MISO can ensure all resources can adequately deliver when needed.
Michigan Public Power Agency and Missouri River Energy Services generally support WPPI Energy's feedback.
Thanks,
David Sapper
dsapper@ces-ltd.com
CGA/ACP Comments to the RASC - Accreditation of Non-thermal Resources
Clean Grid Alliance (CGA) and the American Clean Power Association (ACP) appreciate the opportunity to provide this feedback to the RASC regarding the continuing discussions of resource adequacy and capacity accreditation.
Problem Statement:
MISO’s problem statement as written suggests that it is appropriate to treat non-thermal generators differently than thermal generators with respect to accreditation methodologies. But this has not been justified. We urge consideration of a consistent accreditation approach for all resources. Comparative analysis is needed regarding the effects of accrediting thermals and renewables using different accreditation approaches. This effort should include a technology neutral and holistic assessment of accreditation to ensure resource adequacy.
We request MISO make the underlined additions below to the proposed Problem Statement.
Resource accreditation should reflect the availability of all resources when they are most needed. Significant growth of variable, energy-limited resources in the MISO footprint, along with changing weather impacts and operational practices, are shifting risk profiles in highly dynamic ways with implications to Resource Adequacy and planning. MISO’s existing accreditation methods for both thermal and non-thermal resources require further evaluation to ensure that the accredited capacity value reflects the capability and availability of the resource during periods of highest reliability risk and that accreditation methodologies for all resource types result in a sound resource adequacy construct.
Scope: MISO proposes to focus on accreditation for those non-thermal resources that will have the greatest reliability impact in the near future. MISO should focus on evaluating accreditation of the most prevalent technologies both on the grid today and expected to be on the grid in the near future (wind, solar, and thermal), and return to discussions about revising accreditation for emerging technologies (storage and hybrids) in the future, when there is a better understanding of how they will participate in the market. Limiting the scope in this way is appropriate because of the expected operation of battery enabled technologies and their low adoption rate. The current requirement to verify the capabilities of the battery over a period of 4 hours correctly captures the duration and availability of these resources, and they function much more like gas CTs than like wind or solar.
Key Considerations: We urge MISO to add the following to the Key Considerations.
In addition, we request that MISO begin this process of revisiting accreditation of non-thermal resources by working with stakeholders to identify a set of principles that should apply to accreditation of all capacity resources and to the capacity construct as a whole. This could begin with the set of key considerations.
Below are responses to the questions MISO posed in the March RASC meeting.
How should resource types be grouped for the purpose of accreditation to ensure equity and accurately measure the differing characteristics of each resource type?
In order to develop a sound resource adequacy construct, all resource types should be accredited in a similar manner and relative to the same set of high-risk hours. No grouping should be needed as the process should be resource agnostic.
MISO and stakeholders should:
1) identify the metrics that are important to ensure that resource adequacy needs are met in the future (which may include things like diversity of resources/geographic locations, and consideration of outages and fuel constraints); and
2) find an accreditation method that properly values each of the identified metrics across all resources.
Should non-thermal accreditation be based on retrospective or prospective outlooks? Or some combination of the two?
MISO’s recent proposal for thermal accreditation is retrospective and is supposed to be based on actual output during historic high-risk hours. While wind accreditation is prospective and retrospective using both an ELCC methodology and historic output during peak hours. Solar is based solely on historic output during peak hours. We need to better understand both retrospective and prospective approaches (or a combination) to understand how they compare and work together to enhance reliability. And to ultimately address duration issues, MISO should consider the introduction of Normalized Expected Unserved Energy (NEUE) metrics in the future.
What concerns are there with today’s non-thermal accreditation methodologies (current and pending FERC approval)?
Wind and solar accreditation methodologies are not based on the same RA or high-risk hours as accreditation for thermal generators. And, as stated above, accreditation methodologies do not align in the time horizon considered - with thermal and solar accreditation being retrospective and wind accreditation being both retrospective and prospective.
What should the solution space look like for evaluation?
A multi-dimensional view of correlated risk and energy availability is ultimately needed. Some of those dimensions are captured adequately, but some are not. MISO should expand its technical analysis of resource adequacy risk through the LOLE Working Group. Topics to be evaluated should include NEUE and resiliency metrics. MISO needs to engage in a holistic evaluation of the entire system and to be transparent in demonstrating how accreditation for non-thermal and thermal resources align (or don’t align). If new insights arise from the discussions of non-thermal accreditation, MISO must take those into account for all resources, not just non-thermal resources. Additionally, methodologies that require marginal accreditation of individual resources below the average value of the entire resource class should not be considered, since they result in underpayment of the individual resource’s RA contribution.
What other key considerations have not yet been discussed?
MISO should conduct extreme event stress tests to understand the resilience of the MISO system and its connection with neighbors. These tests should simulate extreme weather events, which might include, but are not limited to, heat waves, cold snaps, hurricanes, and drought. Analysis should also explore interregional transmission capability and value in supporting resource adequacy and managing resilience risks.
WPPI appreciates the opportunity to provide feedback on this matter. Our response to each of MISO’s questions are below.
Question: Have the correct problem statement scope and key considerations been achieved?
Response: WPPI finds the proposed problem statement satisfactory, though we would suggest replacing “the availability of resources when they are most needed” with “resources’ contributions to resource adequacy.”
Question: How should resource types be grouped for the purpose of accreditation to ensure equity and accurately measure the differing characteristics of each resource type?
Response: A key issue is recognition of differing characteristics of different resources, and accounting for them to the extent they are significant for resource adequacy. These characteristics include dispatchability, propensity to take planned outages and energy limitations, among others.
Question: Should non-thermal accreditation be based on retrospective or prospective outlooks (or on some combination of the two)?
Response: To the extent that retrospective analysis gives a good indication of future expectations, it provides a reasonable basis for accreditation. Where retrospective data analysis may be insufficient, for example in representing rare weather circumstances of particular resource-adequacy importance, a different approach may be required.
Question: What concerns are there with today’s non-thermal accreditation methodologies (current and pending FERC approval)?
Response: WPPI believes that wind accreditation is currently performed in a manner that is largely technically appropriate, though it may be appropriate to adjust the allocation to individual units of MISO-wide ELCC to move from the highest-load to highest-LOLE hours as these become increasingly distinct. We expect that moving to an ELCC methodology for photovoltaic (PV) generation will become increasingly appropriate as PV penetration increases. As filed, MISO proposes to scale up the accreditation of Schedule 53 resources on the basis of the UCAP/ISAC ratio, while leaving wind accreditation unchanged. This improperly over-accredits the former with respect to the later.
Question: What should the solution space look like for evaluation?
Response: MISO has proposed a reasonable starting point for solution evaluation. WPPI believes a marginal accreditation approach that accredits a particular resource type, in aggregate, at less than the aggregate reliability contribution of the resource would be inappropriate.
Question: What other key considerations have not yet been discussed?
Response: WPPI has no suggested additions at this time.
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: Accreditation Reforms for Non-Thermal Resources
(RASC-2019-2, RASC-2020-4) (20220309)
March 23, 2022
ABATE, IIEC, LEUG, TIEC, CMTC and MIC, as representatives of the End-Use Customer (EUC) Sector, and NLCG appreciate this opportunity to provide comments to MISO.
Background
MISO over the course of the last two MISO Resource Adequacy Subcommittee (RASC) meetings has made presentations with respect to a proposed problem statement and work plan for examining potential reforms to MISO’s capacity accreditation for non-thermal resources -- specifically, solar resources, wind resources and Load Modifying Resources (LMRs). At the March 9, 2021 MISO Resource Adequacy RASC meeting, stakeholders were asked to consider and respond to a series of questions pertaining to Accreditation Reforms for Non-Thermal Resources. In particular, stakeholders were asked to consider the following:
Comments
The EUC Sector supports further examination with respect to whether there is a need to pursue additional reforms for the capacity accreditation for one or more types of non-thermal resources. In addition, we do not at this time have any concern with the latest draft language MISO has presented for the proposed problem statement and scope. However, based on our past experience with MISO discussions at the RASC with respect to capacity accreditation for LMRs, we do have concerns with respect to how the proposed problem statement and scope may be applied by MISO to a particular class of LMRs -- specifically, LMR Demand Resources utilizing the Firm Service Level Option. To this end, we wanted to bring our concerns to the attention of MISO and stakeholders sooner rather than later to ensure proper consideration of this class LMRs with respect to capacity accreditation is part of MISO’s analysis from the outset of MISO’s work addressing the proposed problem statement and scope.
LMR Demand Resources using the Firm Service Level option are generally end-use customer loads that, as a minimum, have committed to not operate above their specified firm service level when instructed not to do so during Step 2a or higher of MISO Maximum Generation Events. Depending on what is permitted within the retail regulatory jurisdiction of the end-use customer’s load, this commitment is made by the end-use customer via either: (i) a regulated retail tariff or contract rate, (ii) a contractual arrangement with the end-use customer’s Alternative Retail Electric Supplier (AES or ARES); (iii) a contractual arrangement with an Aggregator of Retail Customers (ARC); or (iv) direct registration with MISO as an LMR.
This LMR type is the most common type associated with traditional interruptible retail electric service. Under traditional interruptible retail electric service, an end-use customer is required to be sufficiently available to shut down all of its non-firm load such that it is not necessary to carry any generation capacity (including for planning reserve margin and transmission losses) to cover that non-firm load. The option to curtail their non-firm demand in this manner, under which they shut down all of their non-firm load to get below their firm service level rather than curtail the demand of their load down by a specified amount, is critical to many of these end-use customers in order for them to be able to participate as interruptible load. This is because the curtailment of the demand of their load by a specified amount, rather than to simply shutting down all of their non-firm load, could potentially require them to shut off systems required for safety or security, or, alternatively, require them to inefficiently run processes in order to be available to provide a specified amount of load reduction. Curtailment down to a firm service level allows these end-user customers to assure they will receive their specified level of firm service to ensure safety and security while eliminating the need for them to inefficiently force processes to run in order to provide a certain amount of load reduction.
Prior to the 2014/2015 Planning Year, this LMR type was generally captured, when addressing resource adequacy, by excluding, or subtracting off, the end-use customer’s forecasted non-firm demand at the time of the system peak from the forecasted system peak demand of the end-use customer’s Load Serving Entity (LSE). Under that practice, the LSE of the end-use customer was appropriately not required to carry capacity (including that for planning reserve margin and transmission losses) for the end-use customer’s non-firm load since the non-firm load would be sufficiently available to be completely shut down as necessary during MISO Maximum Generation Events.
Starting with the 2014/2015 Planning Year, MISO’s resource adequacy provisions were modified to remove this physical load netting option. Specifically, MISO replaced the physical net load netting option with an option to virtually net load. Under this virtual netting option, an LSE’s peak system demand forecast could no longer directly exclude the end-use customer’s non-firm load. However, instead, MISO would grant capacity in the form of Zonal Resource Credits (ZRCs), for the forecasted non-firm demand of the end-use customer at the time of the system peak, that are grossed up for planning reserve margin and transmission losses. To the extent the LSE then chose to apply those ZRCs to its total capacity responsibility (Planning Reserve Margin Requirement), it would leave the LSE with a net capacity responsibility that is identical to what it would have been if physical load netting were still permitted.[2] Like under the former physical load netting option, under the virtual load netting option, the LSE is appropriately not required to carry capacity (including that for planning reserve margin and transmission losses) for the end-use customer’s non-firm load. This virtual load netting option remains available under the current MISO Tariff and continues to be used by many LSEs for their interruptible end-use customer load that is registered as an LMR Demand Resource.
Many of the end-use customers within the MISO footprint whose load is currently registered as an LMR Demand Resource using the Firm Service Level Option have been participating in interruptible electric service provisions, which require them to completely shut down their non-firm load when required, in one form or another for several decades. This has reduced the amount of generation facilities that would have otherwise been necessary to be constructed within the MISO footprint to provide resource adequacy while at the same time helping the participating end-use customers reduce their net cost for electricity such that they remain competitive in both the national and international markets for the product they provide. Unduly introducing new requirements on these participating end-use customers would unduly increase their net cost for electricity and as a result undermine their ability to remain competitive. Unduly reducing their capacity accreditation would have a similar adverse impact. Such impacts could potentially ultimately be damaging to the economy with respect to either lost expansion opportunities for the end-use customer’s facilities or shutdown (or contraction) of the end-use customer’s facilities. For these reasons, it is critical that MISO be extremely careful with respect to proposing reforms to the requirements or accreditation for this type of LMR to ensure that the need for those proposed reforms is fully supported by facts and the proposed reforms fully consider what this type of LMR actually provides (elimination of the need to carry capacity for the non-firm portion of the load associated with the LMR).
Having provided the foregoing background, our specific concern at this time is as follows. MISO in previous discussions at the RASC has shown an inclination that LMR MW availability during tight resource adequacy periods, as formerly reported in the MISO Communications System (MCS), but is now reported in the MISO Demand Side Resource Interface (DSRI), should be the basis of capacity accreditation for all LMR Demand Resources including LMR Demand resources that use the Firm Service Level option. Such an approach would not be reasonable for LMR Demand Resources using the Firm Service Level option.
As outlined above, LMR Demand Resources using the Firm Service Level option have committed to be sufficiently available to shut down all of their non-firm load such that it is not necessary carry any generation capacity (including for planning reserve margin and transmission losses) to cover that non-firm load. As such, these LMRs are not acting as an incremental MW resource for deployment by MISO. Rather, they are resources that, when deployed by MISO, remove all of the non-firm load associated with these LMRs from the system as necessary during MISO Maximum Generation Events such that MISO does not need to carry capacity (including planning reserve margin and transmission losses) to serve that non-firm load during such events.
Therefore, to the extent the availability of LMR Resources during tight resource adequacy periods is to be a factor in capacity accreditation, that factor should be applied to LMR Demand Resources using the Firm Service Level option based on their availability during tight resource adequacy hours to fully shut down their non-firm load to get down to their firm service level. It should not be based on the LMR MW availability they have submitted into the MISO MCS or DSRI, which only captures in each hour their forecasted total demand without curtailment less their firm service level (i.e., the forecasted demand of their non-firm load), not their availability in each hour to shut down all of their non-firm load to get down to their firm service level.
Thank you for providing us an opportunity to provide these comments. If it would be of help, we would be glad to discuss this further with MISO. We would be also glad to make a presentation at the RASC with respect to the issue to help both MISO and its stakeholders better understand our concern. With respect to either, please do not hesitate contact any of the following EUC Sector representatives:
Jim Dauphinais
Brubaker & Associates, Inc.
(Consultants to ABATE, IIEC, LEUG, NLCG and TIEC)
(636) 898-6725
Ali Al-Jabir
Brubaker & Associates, Inc.
(Consultants to ABATE, IIEC, LEUG, NLCG and TIEC)
(361) 994-1767
Kevin Murray
McNees Wallace & Nurick LLC (for CMTC)
(614) 719-2844
Kavita Maini
KM Energy Consulting, LLC (Consultants to MIC)
(262) 646-3981
[1] ABATE, IIEC, LEUG, TIEC, CMTC and MIC are all MISO Members in the End-Use Customer Sector. NLCG is a non-MISO Member stakeholder whose members include large end-use customers within Indiana that are interruptible and/or have cogeneration facilities and that take service under NIPSCO Rate Schedule 831, which allows limited market purchases through Northern Indiana Public Service Company (NIPSCO).
[2] MISO proposed this change from physical to virtual load netting in FERC Docket No. ER14-990-000. The change was conditionally approved by FERC in the March 14, 2014 order Midcontinent Independent System Operator, Inc., 146 ¶ 61,180 (2014).
DTE Electric appreciates the opportunity to provide feedback on the accreditation reforms for DIR resources. DTE Electric believes MISO should adapt the current ELCC methodology to use the same Tier 2 hours outlined in the SAC proposal for wind and solar resources (as opposed to the current 8-hour method). DTE Electric feels that using the same Tier 2 hours for all resource types will avoid preferential treatment towards non-thermal generators. The ELCC methodology reasonably accredits DIR performance, however we recommend evaluating and potentially reducing the historical period from 15 years, as this would provide a more indicative sample size for the current resource mix.
Xcel Energy's feedback was sent to Stakeholder Relations as a separate document. Thank you.
WEC Energy Group recommends shortening the revised problem statement into a single sentence and adding a reference to comparability:
MISO’s existing accreditation methods for non-thermal resources require further evaluation to ensure the accredited capacity values reflect the capability and availability of the resource during periods of highest reliability risk in a manner comparable to thermal resources.
The following sentences within the revised problem statement should be moved to Key Considerations (or added as a goal):
Resource accreditation should reflect the availability of resources when they are most needed (this is a goal).
Significant growth of variable, energy-limited resources in the MISO footprint, along with changing weather impacts and operational practices, are shifting risk profiles in highly dynamic ways with implications to Resource Adequacy and planning (this is a key consideration).
WEC Energy Group is very interested in the evaluation of the Schedule 53 methodology to accredit all resources. Resources that are intermittent may require more historical Tier 1 and Tier 2 hours to reduce volatility, but the intent of Schedule 53 is to determine the “availability of resources when they are most needed.” We believe a Schedule 53 approach effectively addresses concerns about the availability of resources during non-traditional RA hours, such as late evening summer time periods and early morning winter time periods.
We do not see a need to group resources for the purpose of reviewing the accreditation of non-thermal resources. We recognize that some resources have the ability to control their fuel supply and others do not but the goal is the same – “ensure resource accreditation reflects the availability of resources when they are most needed.” We should not attempt to group resources differently when the need for energy in any given hour, regardless of fuel type, is the same.
Non-thermal accreditation should be based on retrospective outlooks? Consider the MISO "wind drought" of January 28-30, 2020 when wind output across the entire MISO footprint dropped to 1% for 39 consecutive hours. Of course solar power dropped to zero over the overnight hours. And four hour battery storage would be exhausted over this extended period.
As renewable penetrations increase, it would take a much less severe winter wind drought in the future to cause a major capacity deficiency in MISO, which could leave to possibly a catastrophic blackout.
Since renewable outputs are highly correlated, maybe MISO should take the IMM's advise and assign zero capacity credit to renewables.