In the September 21 System Attributes Introduction Workshop, MISO presented an initial framework for better understanding of system attributes. From that framework, MISO recommended priority attributes for which solutions should be identified in the immediate term. An extended feedback window is open to envelop the September workshop and October RASC meeting. In your response, consider the following issue framing and priority questions:
Comments submitted by Wednesday, September 28 will be considered by MISO in developing materials for the October 12 RASC meeting.
Other comments are welcome through Friday, November 4.
November 4, 2022
RE: RASC: System Attributes Workshop Feedback (20220921)
Lignite Energy Council (LEC) and America’s Power support the efforts of MISO’s Resource Adequacy Subcommittee:
Recognizing that a problem exists is a critical first step and the RASC has wisely gone beyond that to quantifying the problem and seeking these comments on how to address it. LEC and America’s Power appreciate the opportunity to be a part of this critically-important system attributes discussion, which they strongly support. Defining technology-neutral attributes and developing market-based mechanisms to foster them will improve reliability in the near- and long-term. Through the development of policies that incent the retention of existing resources and encourage the entry of flexible, dispatchable generation with these same characteristics. MISO’s system will be able to withstand the stress caused by extreme weather events while maintaining operational flexibility.
Once facilities go through the retirement process, among other things, they typically lose their operational permits and make other binding decisions that preclude their ability to resume future operations, no matter the criticality of the future need. FERC’s Summer Energy Market and Reliability Assessment 2022, released on May 19, 2022, included a chart indicating that 4.1 GW of capacity in MISO has retired or announced plans to retire in the one year period between October 2021 and September 2022 alone.[i] FERC’s Winter Energy Market and Reliability Assessment 2022-2023 released on October 25, 2022 documented the continuing retirement trend when looking at the period from March of 2022 through February of 2023, a period during which FERC shows 4.2 GW of retirements or announced retirements in MISO.[ii] In fact, the reliability risks facing MISO are likely to become even more serious looking further into the future: announced coal retirements total approximately 15 GW over the next four years and more than 29 GW by 2030. (Announced dispatchable retirements, including coal, total more than 37 GW during 2022-2030.)
Figure 1 in the Appendix hereto is an excerpt from the FERC May 2022 report. It pictorially shows the phenomenon the RASC has recognized and is seeking to address. While at an initial glance the reader may see capacity additions that slightly exceed retirements in MISO, on closer inspection, one will see that the retiring assets are predominantly dispatchable, fuel-secure resources while the additions skew heavily to weather-dependent solar and wind resources. Not only is MISO barely adding new facilities at a sufficient pace to cover the capacity that it is losing due to retirements, but it is losing dispatchable capacity, and getting intermittent supply. And this is all happening while demand is not expected to remain static but to rise based on increasing electrification of everything from automobiles to buildings.
Figure 2 in the Appendix shows that more recently even more dispatchable generation has joined the retirement list in MISO, including additional nuclear capacity, natural gas, and coal units.
Figure 3 is MISO’s own chart, and shows the steep decline in accredited capacity versus installed capacity, juxtaposing them with load futures that paint a stark reliability picture. All of these justify the RASC’s concern and action in this forum.
As alarming as the trends demonstrated in these figures are, the situation when we consider outcomes further into the future is even more dire. Unless reliability voices gain traction in the dialogue relating to EPA rules, additional coal retirements are bound to rise sharply during 2026-2028.
The real potential for the retirement of more than half of the existing MISO coal fleet will exacerbate the reliability challenges facing MISO and other regions of the country. Thus, there is a pressing need to address the attributes that MISO needs to support a reliable system before facilities with needed attributes are permanently lost to the region.
Earlier this year, the North American Electric Reliability Corporation (NERC) issued its “2022 Summer Reliability Assessment.”[iii] NERC’s conclusion lends further support to the importance and timeliness of the work being done by the RASC:
Midcontinent ISO (MISO) faces a capacity shortfall in its North and Central areas, resulting in high risk of energy emergencies during peak summer conditions. Capacity shortfall projections reported in the 2021 LTRA and as far back as the 2018 LTRA have continued. Load serving entities in 4 of 11 zones entered the annual planning resource auction (PRA) in April 2022 without enough owned or contracted capacity to cover their requirements. Across MISO, peak demand projections have increased by 1.7% since last summer due in part to a return to normal demand patterns that have been altered in prior years by the pandemic. However, more impactful is the drop in capacity in the most recent PRA: MISO will have 3,200 MW (2.3%) less generation capacity than in the summer of 2021. System operators in MISO are more likely to need operating mitigations, such as load modifying resources or non-firm imports, to meet reserve requirements under normal peak summer conditions. More extreme temperatures, higher generation outages, or low wind conditions expose the MISO North and Central areas to higher risk of temporary operator-initiated load shedding to maintain system reliability.
A month before the May 2022 NERC report was issued, MISO also issued a warning that 11 of the states comprising its 15-state region face an increased risk of “temporary, controlled load sheds.” This means there is a greater chance during summer months that people living in these 11 states (Iowa, Illinois, Indiana, Kentucky, Michigan, Minnesota, Missouri, Montana, North Dakota, South Dakota and Wisconsin) could experience temporary blackouts. MISO attributed this heightened risk to “thermal retirements and the increasing transition to renewables.” In addition, MISO highlighted a number of challenges in its Reliability Imperative, including “declining reserve margins and fewer always-on baseload resources, due to retirements of thermal units.”[iv]
LEC and America’s Power highlight that industry developments since the identification of these severe reliability risks have exacerbated MISO’s concerns on the rate of thermal generation retirements and renewable new entry. MISO market signals are inadequate to incent the development of new thermal generation to replace the existing thermal assets that are leaving the market. At the same time, MISO saw 164.2 GWs of renewable and hybrid resources enter the 2022 Interconnection Queue.
MISO has correctly identified six reliability attributes as initial priorities: Availability, Fuel Assurance, Ramp Up Capability, Voltage Stability, Rapid Start-Up, and Long Duration Energy at High Output. These system attributes are key components to a resilient and reliable regional electric grid.
The introduction of large amounts of intermittent renewable generators will only occur seamlessly if existing resources with essential attributes are available to effectuate the transition.
As the penetration of intermittent renewable generation increases, it will be a challenge to add enough new resources with Rapid Start-Up and Rapid Ramp Capabilities to meet MISO’s requirements. This challenge will only be more difficult without the retention of the necessary thermal balancing resources that are on-line today.
Below, LEC and America’s Power respond directly to the questions posed by MISO.
1) What other considerations or factors should be added?
LEC and America’s Power ask MISO to provide more details to stakeholders in the coming weeks as to how the market mechanisms to promote and support the identified attributes would be designed and implemented. From our view, market tools can involve the development of new rate schedules and/or market design enhancements. To ensure our recommendations are in line with MISO’s vision for incenting the retention and development of system attributes, we ask for more clarity on the fastest potential paths forward.
Market design changes (e.g., new Planning Resource Auction requirements for attributes akin to the Local Clearing Requirement, new or enhanced Operating Reserve service definitions) should be reasonably certain to adequately compensate resources for providing desired attributes. Enhancing capacity accreditation by requiring resources to be capable of providing some or all attributes would need to ensure that a resource’s accreditation value increases as the number of its desired attributes or amount of any of its desired attributes increases.
MISO should take care to define the attributes as mutually exclusively as possible. That is important for proper market design and ultimately for reliability.
2) What additional attributes should also be considered in the immediate list of priorities?
LEC and America’s Power believe that MISO has identified the right list of system attributes that provide reliability to the grid.
3) What additional considerations do you have with the proposed priorities and timing?
Given the observation made earlier that units that retire cannot be brought back from the grave, LEC and America’s Power encourage MISO to both conduct a robust and prompt stakeholder process and develop and seek approval for the resulting proposal as soon as possible as the situation has been worsening with the passage of time. While optimally, MISO should beat its current proposed timeframe of Q2 in 2023 to file the proposal with FERC, it should make every effort to at least meet that target.
APPENDIX
Figure 1
See Attachment
Figure 2
See Attachment
Figure 3
See Attachment
[i] https: //www.ferc.gov/media/report-summer-assessment-2022 at p. 17. See Appendix, Figure 1.
[ii] https://www.ferc.gov/media/report-2022-2023-winter-assessment at p. 15. See Appendix, Figure 2.
[iii] “Mind the Gap,” OMS Resource Adequacy Summit, August 8, 2022.
[iv] “MISO’s Response to the Reliability Imperative - Updated January 2022.”
CGA/ACP System Attributes Comments
Clean Grid Alliance and American Clean Power Association support MISO’s effort to understand the details of the system attributes required to maintain reliability as the generation mix evolves, and how to provide appropriate incentives and market structures to ensure sufficient quantities of these attributes. MISO's focus is reliability and any action it takes needs to be in pursuit of ensuring reliability. While MISO’s proposed six priority attributes may be a good place to begin this discussion, we urge MISO to conduct more analysis and provide stakeholders with the results prior to finalizing any initial priority attributes.
First, baseline analysis is essential. This analysis should identify reliability concerns, and which limited system attributes are driving these concerns - studied across a range of resource mixes, load assumptions (including significant expansion of electrification), and a variety of weather and other high-risk situations.
Second, a gap and need analysis is needed. MISO should evaluate what attributes its existing markets and procedures do account for and incentivize, and then explain why these don't address the reliability concerns identified in the baseline analysis. What system needs are being met today with MISO’s various markets (PRM, day-ahead, real-time, etc.), and ancillary service products? And which are not and cannot be met with existing structures? Which needs are exclusive and do not interact with others? MISO must consider how all these products are designed to work together and ensure they do not create new products which undermine, or conflict with operational products, e.g., energy, regulation, and contingency reserves. MISO must make sure not to add new system attributes/market products on top of existing ones that already address the need. And MISO should also look beyond its markets. For example, why isn't voltage support being addressed through Attachment Y and interconnection procedures?
Recent work from the National Renewable Energy Laboratory[1] demonstrates the type of research that could be instructive for MISO as it considers these questions. For example, the multi-stage probabilistic assessment that NREL describes may provide a more robust evaluation of resource adequacy by capturing a wider range of operational and system interactions than the current stakeholder discussion in MISO is allowing. Additionally, NREL notes key concerns relevant to this discussion at MISO as it considers new attributes and products. NREL’s work illustrates that layering numerous market products and/or rules can significantly increase market complexity without providing additional benefit to the grid physics/economics/policy goals, and certain market products and policies can be substitutionary and/or yield non-intuitive outcomes.
Lastly, MISO must not define system attributes or create incentives and market products in such a way that resources capable of providing what the system needs are prohibited from participating and being paid for serving those needs. Constructs must be defined in such a way that all resources that can provide the service are incentivized to do so.
Additional Comments and Questions:
[1] See “Market Design Concepts for Evolving Power Systems,” NREL/PR-6A40-83643, 2022, available at https://www.esig.energy/download/market-design-concepts-for-evolving-power-systems-bethany-frew-and-yinong-sun/?wpdmdl=9302&refresh=630558a8d0ed41661294760
[2] https://gridlab.org/wp-content/uploads/2022/10/GridLab_RA-Toolkit-Fact-Sheet.pdf - “Deployment of additional batteries and renewable resources in California mitigated much of the needs associated with retiring a large portion of the Western US coal fleet, even before considering capacity additions from utility plans in the rest of the West. The remaining RA events were generally short in duration, with battery storage and flexible load well-suited to address them.”
Invenergy appreciates the opportunity to comment on the Initial Hypothesis for new System Attributes and commends MISO’s initiative on the issue.
Invenergy agrees that a reworking of necessary system attributes is imperative. The grid of tomorrow challenges the economic and operational assumptions that have kept the lights on for decades. However, while MISO’s Initial Hypothesis inspires conversation, the Hypothesis skips over the reevaluation of fundamental assumptions and starts with a solution proposal.
Invenergy urges MISO to first define a cohesive, forward-looking framework which lays out system needs before defining products. Invenergy agrees that prompt action is needed and is prepared to work through the stakeholder process expeditiously, but implores MISO not to forgo the development of a robust market foundation for the sake of urgency.
Invenergy encourages MISO to consider some of the foundational work on system attributes that has already been done.For example, NREL published several thorough reports on wholesale market designs which work with high proliferation of intermittent generation, framing the analysis through the “right quantity of flexibility.” Princeton’s Net-Zero America report found that reimagining the mobilization of capital investments would be a crucial component to several paths to a net-zero grid.Such learnings could be instrumental in precise market design and maintaining reliability amid an accelerating and inevitable technology transition.
Invenergy looks forward to engaging further on this vital issue.
Environmental Sector Comments on
MISO System Attributes proposals (Sep. 21, 2022; Oct. 12, 2022)
The Environmental Sector appreciates the opportunity to provide comment on MISO’s recent proposals at the September 21[1] and October 12[2] Resource Adequacy Subcommittee (“RASC”) meetings related to new system attributes that MISO proposes to prioritize and/or secure in future policy structures. The Environmental Sector agrees that, as the resource mix across the MISO footprint evolves away from its historic reliance on fossil-based generation and toward wind, solar, and storage resources (as well as load-modifying resources including demand response and distributed generation), MISO may need to consider, as part of its reliability mandate, what resource attributes are needed in its system beyond simply nameplate capacity figures. However, the Environmental Sector believes there are several important principles that MISO must uphold and affirmative steps it must take as it develops new approaches to evaluating the resources in its system.
1. Confirm System-Wide Character of Attributes
First, the Environmental Sector generally believes that most of the attributes cited recently by MISO (e.g., availability, fuel assurance, ramp-up capability, voltage stability, rapid start-up, long duration energy) should be viewed primarily, for purposes of ensuring reliability, as properties of the entire MISO system (or potentially of geographical sub-units), rather than as properties that each individual resource must satisfy. System-wide properties emerge from an aggregation of many individual resources; thus, not all resources need to contribute any amount of a given attribute; it should be expected that some resources will provide more or less of different attributes. We believe MISO stated orally during the September 21 RASC meeting that the identified attributes are generally intended to be evaluated at a system level; we respectfully ask that MISO clarify this important point in writing.
2. Define Attributes
Next, each attribute that MISO seeks to secure should be clearly defined so it is measurable and quantifiable for any resource, and/or for the whole system. Each attribute should also be entirely distinct from other identified attributes. Unfortunately, this does not appear to be how MISO has started thinking about attributes. For example, MISO has listed “availability” and “fuel supply” in some places as two different attributes; but it is unclear why the two different variables need to be defined and measured. MISO should also explain how it will measure each of these attributes, including whether it is already actively measuring these attributes. And if MISO is currently unable to fully monitor any given attribute, MISO should explain what additional tools, technology, or authority it may need to perform such monitoring. To the extent it identifies specific attributes for which it is intending to establish a market, it is crucial that MISO give management, stakeholders, and regulators a full ongoing picture of the state of the MISO system, including forward-looking projections of each necessary attribute, so that current or future needs can be proactively addressed.
3. Analyze and Explain Need for Attributes
Once the measurement of each attribute is clearly defined, including information on each attribute’s units and how they will be measured, MISO should express how much of each attribute is needed in the system and justify that level. (Potentially, the needed level of one attribute could be, rather than a fixed number, a function of some other variable. In other words, the need for one attribute could rise or fall depending on the level of another identified attribute.) Additionally, MISO should state the time scale over which a particular value of an attribute needs to be attained. Does the system need a certain level of (e.g.) ramp-up capability at all moments; or does it need that level averaged across certain time spans; or is that minimum value needed only at a limited number of times? MISO should also emphasize the relevant geographic unit where the need for an attribute will be defined. The enormous geographic diversity of the MISO footprint means that temperature and other meteorological conditions vary widely across the territory; MISO should consider whether attribute needs should be defined with a degree of geographic granularity, and then explain and justify the methodology it selects.
4. Take Policy Inventory
MISO already has several competitive markets, including for energy, capacity, and ancillary services, and more prescriptive requirements for asset owners, Load Serving Entities, and other market participants. For each desired system attribute, MISO should evaluate and articulate whether that attribute is already being selected or secured through existing processes under the MISO tariff. If an existing process already directly or indirectly selects for an attribute, but MISO believes a modified or additional process is needed to select for that attribute, MISO should explain why.
5. Find Non-Resource Solutions
While MISO has framed its problem statement as defining a certain set of supply “attributes” to be procured, MISO should expand its focus and consider in its solutions planning the ability of existing transmission or transmission network upgrades to help achieve desired attribute levels. For example, transmission itself can provide VAR support & voltage support. Transmission can also support importability of external resources into the MISO system. In general, the Environmental Sector applauds MISO’s long-term transmission planning efforts in forums outside the RASC, including the recent approval by the MISO Board of “Tranche 1” of the Long-Range Transmission Planning, following approval by FERC of new regional transmission cost allocation methodologies in Docket No. ER22-995. The Environmental Sector also encourages MISO to consistently integrate considerations of resource adequacy needs into its transmission planning efforts, to the extent that grid upgrades and/or new lines can help the system to attain identified needs of attributes.
6. Maintain Resource Neutrality
Although not directly stated by MISO in recent presentations, the tenor of recent MISO presentations seems to privilege the ability of gas generation to meet the purported necessary attributes.[3] The Environmental Sector wishes to emphasize the importance of MISO remaining resource-neutral as between multiple resource technologies that could all contribute (potentially to differing degrees) to the satisfaction of system-level attribute needs.[4]
Relatedly, any attribute selection processes that occur after defining attributes and establishing amounts needed of each should include a consideration of monetary cost, such that a resource’s disadvantage in the “density” of a particular attribute could be outweighed by a cost advantage vis-à-vis other resources or resource types. As the attributes and monetary costs of different resource classes change over time, MISO needs to remain flexible to react to these changes.
Additionally, to the extent that barriers exist in MISO’s current tariff to renewable or storage resources providing ancillary services such as frequency regulation, ramping, voltage support, and contingency reserves that are part of the attributes MISO seeks to fulfill in this policy-making process, MISO should remove such barriers as soon as possible. As stated above, MISO must give all resources an even playing field to meet the identified needs for the system, and the Environmental Sector believes an important first step toward achieving that is opening the ancillary services market to all technologies that can technically provide the needed services. While the opportunity cost of renewables providing such services (e.g., ramping and regulation services) may be relatively high today, that is likely to change as the system’s portfolio mix changes, and renewables (like all resource types) should be empowered to contribute toward the need.
7. Remove Inappropriate Attributes
The Environmental Sector strongly urges MISO to remove “long duration energy” from the system attributes list. As noted above in Section 1, all attributes considered by MISO should be principally evaluated at the system level (or some geographic sub-unit thereof). MISO, as the grid operator, should be concerned about the system having sufficient energy adequacy at all times; however, energy adequacy is a characteristic that is already analyzed in the analytical framework that MISO uses to assess resource adequacy. As articulated by ESIG and other industry thought leaders, resource adequacy of emerging power systems will not solely be driven by capacity needs. However, a well conducted resource adequacy analysis based on probabilistic production cost modeling is the best tool to assess energy adequacy needs. Augmenting metrics from the standard LOLE analysis to also include others such as expected unserved energy can help assess energy adequacy. Adequate energy in the system can be prosvided by many (and many different types of) resources acting in tandem (and the most favorable resource mix may depend on total cost); MISO has not supported the proposition that individual resources must have any minimum duration of energy output, nor should it. In short, MISO does not need a separate attribute (followed by additional resource procurement) to address energy adequacy, but it does need to conduct proper probabilistic resource adequacy analysis and needs a resource adequacy construct that supports reliability of the system, including increasingly low-carbon or carbon-free systems as required by environmental regulations.
8. Correctly Assess System Risks
On the topic of energy adequacy, MISO has alluded to periods of low wind output as a motivating factor for this exercise.[5] We support MISO conducting analysis to understand these types of phenomena. However, MISO should ensure that discussions of historical low renewable output are contextualized by accompanying discussions whether low wind resources actually drove output constraints during those periods. For example, the Vibrant Clean Energy analysis[6] of the effects of last year’s Storm Uri in the ERCOT system noted that low wind resource availability was not responsible for the resource adequacy challenges faced during Storm Uri. Rather, most of the issue was driven by issues in the thermal fleet.[7] Wind turbine cold temperature cut out (which is intended to prevent damage to key components due to operation in extreme cold) and blade icing played a secondary role in the decline of wind resource performance during Storm Uri.[8] Thawing of the wind equipment took, in many cases, several days after weather conditions were no longer actively adding to icing.[9] This raises a different question around winterization (cold weather insulation packages are available for wind turbines) and ensuring robustness of wind resources in extreme conditions, but is separate from meteorological phenomena in which the wind is simply unavailable. A market-based mechanism that appropriately incentivizes wind plants to invest in cold weather packages to ensure their availability during cold snaps should be considered, if such a mechanism is not already in place. As noted in the above Section 7, a well-designed resource adequacy analysis would capture events of low resource availability (including wind) in the planning time horizon; such a study must correctly understand why different technologies fail to perform.
The Environmental Sector thanks MISO for considering these comments and looks forward to continued engagement on this important topic as MISO considers how to plan for a rapidly changing resource mix.
[1] See https://cdn.misoenergy.org/20220921%20System%20Attributes%20Workshop%20Presentation626391.pdf.
[2] See https://cdn.misoenergy.org/20221012%20RASC%20Item%2008b%20System%20Attribute%20Overview%20Presentation626543.pdf.
[3] See, e.g., MISO MTEP22 Draft Report (Aug. 23, 2022), available at https://cdn.misoenergy.org//MTEP22%20FINAL%20DRAFT%20Full%20Report626706.pdf, at p. 22 (“These challenges could be mitigated by building more new resources with high degrees of availability and flexibility such as natural gas power plants and energy storage for example”); Jeffrey Tomich, “Midwest grid operator feels heat as it signals need for gas,” E&E News (Sep. 6, 2022), available at https://www.eenews.net/articles/midwest-grid-operator-feels-heat-as-it-signals-need-for-gas (describing multiple recent public communications by MISO explicitly supporting gas generation).
[4] MISO should also allow for the possibility that resources external to the MISO footprint could satisfy attribute needs.
[5] For example, slide 3 of MISO’s October 12, 2022 presentation.
[6] Vibrant Clean Energy, ERCOT Winter Storm Uri Blackout Analysis (February, 2021), available at https://www.vibrantcleanenergy.com/wp-content/uploads/2021/03/VCE-ERCOT-StormUri.pdf (“VCE Report”).
[7] See, e.g., VCE Report at Figures 2.8, 2.9.
[8] See VCE Report at pp. 15-18.
[9] See, e.g., VCE Report at p. 17.
American Municipal Power (AMP) appreciates the opportunity to provide feedback on the System Attributes Workshop.
AMP believes that this is an important initiative for MISO and agrees that the six priority system attributes of availability, fuel assurance, ramp up capability, voltage stability, rapid start-up, and long duration energy at high output are a good starting point for stakeholder discussions.
However, to accurately prioritize and evaluate the proposed attributes, AMP believes more details are needed regarding the definitions of the priority system attributes and the assumptions made in MISO’s initial analysis.
Additionally, as the resource transition continues to accelerate in the MISO region, AMP encourages MISO to accelerate stakeholder discussions on this critical topic to ensure continued system reliability.
The Entergy Operating Companies ("EOCs")[1] appreciate the opportunity to provide feedback on MISO’s system attributes workshop.
The EOCs support MISO’s effort to identify and quantify the system attributes that are needed to maintain ongoing system reliability as the resource mix across MISO evolves, and to consider a compensation structure that is appropriate for ensuring that these attributes are available to support system reliability. Additionally, the specific reliability attributes identified by MISO are a good starting point for establishing a high-level framework for investigating this topic. The EOCs expect that as stakeholders work with MISO in future workshops and other forums, we will be able to better quantify the electrical and operational characteristics that will be crucial to grid reliability under various operational market conditions.
As part of this effort, the EOCs believe that it is important for MISO to consider how the new seasonal construct and accreditation methodology may impact some of the identified reliability attributes, thus assisting in incentivizing market participants to prioritize resources that are able to provide such attributes to the grid. For example, under the seasonal construct, resources that are capable of long-duration energy output are likely to be beneficial in meeting the MISO system load requirements and will receive higher capacity ratings in future years than resources that are only available to generate power for short durations of time. With this understanding, it is important that MISO focus this effort on maintaining the system attributes which are not already incentivized by the current seasonal resource adequacy construct, and that discussion on these requirements is likely to require input and consideration from the stakeholder forums currently focused on maintaining system reliability, like the Reliability Subcommittee and the Planning Subcommittee, and as these issues are identified, they should be assigned to the appropriate forum for further development.
Lastly, the EOCs believe that MISO should promote market rules and obligations that result in all MISO LSEs planning and contributing their fair share towards maintaining the system attributes that are needed to support reliability. While an important part of this solution will certainly be a more robust ancillary service market, the EOCs believe that implementing some form of attribute-based requirements, applicable to all LSEs, would be the most effective way of ensuring that the responsibility of maintaining system reliability is equitably distributed across all MISO LSEs.
[1] The Entergy Operating Companies are Entergy Arkansas, LLC, Entergy Louisiana, LLC, Entergy Mississippi, LLC, Entergy New Orleans, LLC, and Entergy Texas, Inc.
WPPI supports MISO’s inquiry into required system attributes and steps that might be required to assure their presence as the resource fleet undergoes significant changes. We are comfortable with the six reliability attributes MISO has selected as initial priorities. We encourage MISO to accommodate discussion of these attributes such that the potential solutions considered include both those that would be implemented in the capacity construct as well as those that would be implemented in the Energy and Ancillary Services Markets.
Mississippi Public Service Commission and Mississippi Public Utilities Staff Feedback re: September 21, 2022, System Attributes Workshop
The Mississippi Public Service Commission and Mississippi Public Utilities Staff (collectively, “Mississippi”) appreciates the opportunity to comment on MISO’s initial system attributes framework. Mississippi commends MISO on its efforts to identify the resource attributes necessary to ensure reliability in a future with higher penetrations of intermittent resources. Mississippi believes that this effort, if properly framed and executed, will lower future capital and operating costs of the transmission system with a future lower carbon generating fleet.
While the September 21st Workshop was very informative, MISO and stakeholders were barely able to touch the surface on possibly the most important aspects of the transition to a lower carbon generating mix. Mississippi encourages MISO to hold additional workshops to allow for the deeper stakeholder involvement in this very important aspect of ensuring future resource adequacy and power system reliability.
What other considerations or factors should be added?
While MISO’s initial effort to identify critical attributes required for reliable future operations seem to have identified a comprehensive initial list, MISO should provide stakeholders with a better understanding of the winnowing process used to narrow the list of attributes to the six “initial priorities.”[1] While the qualifications of the entities MISO relied upon for input are well regarded, stakeholders would benefit from a better understanding of the thought process and methodology that led MISO to designate the six “initial priorities” for the near term. Additional explanation of how MISO arrived at the “Mid-Term Scenario Requirements” shown on Slide 20 of the presentation would also be very informative.
Further discussion on the necessary volume and timing of each attribute will ensure that the right resources are identified and timely developed and that, given the long economic lives of generating assets, that the initial attribute selection avoid favoring resource technologies that may fall short of additional attributes needed a few years further in the future.
What additional attributes should also be considered in the immediate list of priorities?
MISO should consider including Regulation and Small Signal Stability in the immediate list of priorities. Both attributes are uniquely well suited to battery storage systems and their ability to respond in the time scales of both attributes. While the timing of the need for these reliability services may be five years or further out in the future, their value – discounted in an NPV evaluation framework – could help the economic viability of battery energy storage systems today. Stakeholders would benefit from a deeper understanding of the need analysis conducted by MISO to establish the timeframe in which each of the attributes will be needed and the magnitude of that need. To be clear, a more thorough evaluation of need for specific resource attributes would not delay the acquisition of scarce attributes but would in fact facilitate the appropriate resource selection process and enable a smoother transition to the changing resource mix.
What additional considerations do you have with the proposed priorities and timing?
In addition to the feedback provided above, Mississippi stresses the importance of considering geographic variation in identifying the magnitude of the attributes needed across MISO’s diverse footprint. This information will be essential to future RA considerations at the state level.
Comments of MISO Environmental Sector on
System Attributes Stakeholder Workshop (September 21, 2022)
Comment Date: September 28, 2022
The Environmental Sector commends MISO in its overall goal of seeking to understand how to maintain a reliable grid as the MISO region undergoes a transformation towards higher penetration of renewables and storage.
However, the framework proposed by MISO at the September 21 workshop needs to additionally include a comprehensive analysis of gaps and needs that includes the following components:
The outcomes of this gap and needs analysis should inform the types of action needed. A tariff filing at FERC may in fact be only one of the range of solutions. Moreover, the mapping of pathways for each attribute may reveal that the Resource Adequacy Subcommittee is not the correct venue for some or all of this discussion (for example, to the extent interconnection standards, transmission, and/or ancillary markets are best suited to provide these services).
We also urge MISO not to assume that particular resource types are exclusively positioned to provide certain of the reliability attributes identified in the September 21 presentation; ultimately, MISO’s goal coming out of this process should be to identify reliability attributes that are needed and then design regulatory incentives and market structures that encourage the provision of those attributes in a resource-neutral manner.
Finally, until this analysis is complete and a range of possible solutions is identified, MISO should proceed cautiously with its public messaging and avoid making broad claims about what solutions are necessary to provide system reliability attributes. In keeping with the appropriate division of responsibilities under the Federal Power Act, MISO should not be placing its thumb on the scale of state planning processes that, with proper guidance, can readily identify a mix of resources that meet any systematic needs and attributes that MISO identifies.
The Environmental Sector intends to provide more detailed technical comments on this proposal in a subsequent submission by November 4. Thank you for considering the Sector’s comments on this very important set of issues.
Inertia
DTE Energy appreciates the opportunity to submit feedback regarding the system attributes discussion.
DTE agrees with the MISO characterization that the “(r)esource transition is accelerating, resulting in some attributes that used to come ‘for free’ possibly declining below needed levels”. Michigan, like the broader MISO region, is fast approaching levels of renewable penetration that could result in reliability concerns as identified by MISO in the Renewable Integration Impact Assessment (“RIIA”). With a confluence of factors – including state decarbonization goals, falling costs, and customer interest – driving an ever-increasing reliance on intermittent generation, there is certainly a need to identify the attributes necessary to maintain hour-by-hour system reliability, which the retirement of dispatchable, non-intermittent generation may reduce to the point of concern. DTE agrees that these additional system attributes need to be identified and incorporated into various MISO processes and market products to ensure continued reliability in the MISO footprint.
DTE believes that the six reliability attributes defined as priorities by MISO (availability, fuel assurance, ramp up capability, voltage stability, rapid start-up, and long duration energy at high output) are a good starting point for discussion amongst stakeholders, and would like to drive the conversation concerning flexible attributes (specifically ramp up capability) to the forefront. While MISO has implemented new market products in recent years such as Short-Term Reserves and Ramp Capability, a gap remains in setting appropriate forward price signals that incent flexible, dispatchable resources such as gas generation or energy storage technologies to be built. DTE would advocate that such incentives are incorporated into the existing capacity market framework (a straw proposal reflecting one such option is outline below) in order to send proactive signals related to the identified attributes. While additional ancillary services or other energy market products may be necessary to ensure adequate optimization of available resources in the operational horizon, DTE suggests that more explicit reliability attribute requirements are necessary in the planning horizon to make system needs visible to both resource planners and their regulatory entities, as well as to ensure adequate resources with the necessary attributes are available to optimize in real-time.
In relation to timing, DTE proposes that MISO – to the extent possible – accelerate stakeholder discussion given the rapidly approaching levels of renewable penetration that the RIIA identifies could result in reliability issues. Further, any product of stakeholder discussion must be implemented well enough in advance to drive the desired effect of bringing additional resources with the necessary attributes to the market. Therefore, MISO should target implementation well in advance of the ~2025 timing indicated on slide 16.
“Procuring Flexible Capacity in the PRA” Straw Proposal
In order to incent the necessary flexible generation to maintain reliability, DTE proposes that MISO consider implementing additional, co-optimized constraints within the PRA beyond the current capacity construct focus on peak load requirements. Such an approach would ensure that not only are adequate resources procured to meet peak load reliability requirements, but also that the correct mix of resources are available to meet the hour-by-hour needs of the system. One such constraint could be to quantify and set requirements within the PRA for ramp capability to meet peak net load ramping needs with increased renewable penetration. Setting this “Planning Reserve Margin Requirement for ramping” and procuring adequate resources with the desired attributes would ensure that sufficient capacity is available for hour-by-hour reliability, while also providing forward signals to indicate potential shortfalls.
Analogous to the peak load hour under the current capacity construct, ensuring adequate resources with ramp up capability could be accomplished by determining the seasonal maximum rate of change of net load, plus a reserve margin (e.g. Peak 4-hr Ramp + Flexible Reserve Margin = Flexible Reserve Margin Requirement or “FRMR”). Such a requirement – which itself would act as a constraint within the PRA, very similar to the current function of the LCR – would then be co-optimized along with the existing PRMR and LCRs. While this “FRMR” would likely not act as the binding constraint in the near term, the value of providing visibility and transparency around these flexibility requirements would be significant to Market Participants and regulatory agencies, alike.