RASC: CIL/CEL Process and Methodology Draft Problem Statement (20220309)

The Entergy Operating Companies ("EOCs")[1] appreciate the opportunity to provide feedback on the draft problem statement for Capacity Import Limity (CIL)/ Capacity Export Limit (CEL) process and methodology.

The EOC’s support MISO conducting a stakeholder process to review and improve the CIL/CEL process and methodology. The EOCs believe that the problem statement should include methodology revisions resulting from the study of seasonal Powerflow models.  For example, LRZ10 may run out of import headroom to facilitate a generator-to-generator transfer in a non-peak model due to the low ratio of in-zone demand to nuclear generation.  In this scenario nuclear fueled resources do not participate in the transfer analysis and lower demand scenarios result in less non-nuclear generation online to facilitate the transfer.  The Generation Limited Transfer (GLT) methodology does not provide instruction in this scenario.  MISO should work with stakeholders to determine an interpretation (no limit) or methodology (GLT) to account for this circumstance.

The Michigan Public Service Commission (Michigan PSC) appreciates MISO initiating a review of its CIL CEL study process and method. We generally agree with the draft problem statement, scope of the effort, and key considerations presented at the March 9, 2020, Resource Adequacy Subcommittee meeting. However, the draft problem statement does not address what we observe to be existing problems with CIL CEL values and their impact on resource adequacy requirements and costs to ratepayers.

As we have commented to MISO previously, volatility in annual CIL CEL values complicates state resource adequacy processes. For example, in Zone 7, for the 20/21 planning year the CIL it was calculated at 3,200 MW and Zone 7 cleared at CONE pricing. The following planning year (21/22), MISO switched to utilizing a gen-gen transfer methodology from a load-load transfer methodology in its transfer analysis study, and the CIL was calculated at 4,888 MW; reflecting a 1,688 MW increase in the CIL in one year where there were no major generation additions. We support MISO switching to the gen-gen transfer methodology as it is more reflective of system capability at peak hours. However, year-over-year CIL CEL volatility by amounts equivalent to a large conventional power plant are occurring without major study method changes and are having significant impact on the amount of capacity available in the zone to meet resource adequacy requirements and the resulting costs borne by ratepayers. The CIL in Zone 7 is again declining by over 1,100 MWs for the 22/23 planning year.

We appreciate that the transfer study results are in large part based on generation and load in the system at the time of study. However, volatility in annual CIL CEL values is problematic for implementing Michigan’s four-year forward capacity demonstrations, where Michigan’s LSEs are required to demonstrate that they have sufficient resources to serve load four years into the future. MISO's transfer studies reflect a snapshot of the system under a specific set of generation and load assumptions, and imprecision of results with respect to the level of imports and exports observed on the system in real-time operations should be considered given the impact of CIL values on resource adequacy requirements and ratepayer costs. As MISO continues to evaluate potential changes to the CIL CEL study process and method, the Michigan PSC suggests that MISO explore implementing a 3-year rolling average or other techniques to mitigate volatility in CIL CEL values to better align with the reality of system operations and state resources adequacy procedures.

Finally, volatility in the CIL CEL values and corresponding volatility in LCRs effectively gives states only months of notice that additional resources are needed in their local zone. However, new resources by and large take at least three years to develop and achieve commercial operation. This leaves states with two undesirable options. First, a state could implement its own higher resource adequacy requirements at extra costs to customers to ensure there are adequate resources to meet unknown future resource adequacy requirements; or the state could be left short on resources for up to three years, forcing CONE pricing for capacity on customers who are simultaneously subject to a higher loss of load probability.

Having a longer view into what resource adequacy requirement are going to look like will help states and LSEs ensure they are met without unnecessarily carrying extra resources at extra cost. A longer view is increasingly important given the volatility in resource adequacy requirements that is likely to come from implementing MISO’s SAC proposal, as well as from intermittent and distributed resources comprising an ever-growing share of the resource mix. Understanding that MISO’s resource adequacy construct is for the prompt year, a longer view and stability in the CIL CEL values and zonal resource requirements would be helpful in enabling states and LSEs to develop the resources they need to both preserve reliability and contain ratepayer costs.

The Michigan PSC thanks MISO for the opportunity to provide feedback and looks forward to the working with MISO to refine the CIL CEL study process and method.

Michigan Public Power Agency and Missouri River Energy Services generally support WPPI Energy's feedback.

Thanks,

David Sapper

dsapper@ces-ltd.com

WPPI offers the following thoughts with respect to the proposed problem statement:

1. MISO suggests that the need to review transfer-analysis methodology is a consequence of rapid change in the resource mix, but noted during the meeting that difficulties emerge primarily in non-summer cases.  This appears to indicate that movement to a seasonal construct is at least part of what is driving this issue.
2. MISO’s reference to scalability also is evidently related to the proposed seasonal construct.
3. The reference to “continued investments in transmission infrastructure” should have its relevance explained; we agree that increased transfer capability may be a basis for considering methodology changes.
4. We question whether “continues to produce accurate results” is appropriate in this problem statement.  Past transfer limits have sometimes been highly sensitive to input assumptions, results that may be regarded as accurate but still potentially not the most appropriate representations for assessing resource adequacy.  In addition, we suggest articulated goals should be forward-looking and need not presume we achieved particular results in the past.

In consideration of the above, we offer the proposed problem statement shown below.

Redlined:

• Continued conventional resource retirements year over year coupled with rapid growth of renewable generation has significant implications to MISO CIL study outcomes. In anticipation of evolving resource fleet, increases in inter-zonal transfer capability and continued investments in the transmission infrastructuremovement to a seasonal construct, MISO’s existing CIL CEL process and methodology should be evaluated to ensure the process continues to can produce accurate realistic results and is practical to apply to a seasonal constructscalable.

Clean:

• Continued conventional resource retirements year over year coupled with rapid growth of renewable generation has significant implications to MISO CIL study outcomes. In anticipation of evolving resource fleet, increases in inter-zonal transfer capability and movement to a seasonal construct, MISO’s existing CIL CEL process and methodology should be evaluated to ensure the process can produce realistic results and is practical to apply to a seasonal construct.

DTE Electric appreciates the opportunity to provide feedback on the draft problem statement for CIL/CEL process and methodology. DTE agrees with the draft problem statement and believes that this should be prioritized to enable visibility in planning during this significant fleet transformation.