MISO requests feedback on specific design issues at slide 8 of the presentation (https://cdn.misoenergy.org/20221012%20RASC%20Item%2012a%20iii%20Non-Thermal%20Accreditation%20MISO%20Presentation626584.pdf).
MISO presented new tables at slides 10-12 in the October RASC presentation intended to show that adoption of Marginal ELCC accreditation “will not automatically result in reduced PRMR.” We don’t believe MISO has shown this, but in any case we note that what is relevant is not what might happen with existing processes, but rather how MISO would propose to implement a marginal accreditation, and what changes they would propose to accomplish this. As we noted during the October meeting, we would request that MISO and its IMM confer before MISO next presents on marginal accreditation, so as to be able to clearly identify and explain areas of agreement and disagreement to stakeholders.
We note that on 10/25 MISO posted an update to the presentation correcting an error in the table on slide 12. This reduces the magnitude of the negative PRM % shown on that slide, though it does remain negative. We note that it is unclear whether the case illustrated on that slide could be realistic. Perhaps the most obvious way that “the aggregate difference between average and marginal ELCC [could become] sizable” would be large ICAP increases in wind and solar generation along with modest decreases in conventional generation. But this does not appear to be what slide 12—with ICAP unchanged relative to slide 11—depicts. We understand that the intent was to show that PRM% can be negative under marginal ELCC accreditation in some circumstances. We would request, however, that future presentations illustrating this point endeavor to show this on the basis of a specific hypothetical resource mix. We think this, by illustrating actual resource-mix circumstances in which negative PRM % could arise, would provide the proper context and would promote better understanding of the issue among stakeholders.
Invenergy LLC (“Invenergy”) appreciates the opportunity to provide feedback on MISO’s proposal and the effort the MISO staff has put into thorough analysis and responding to stakeholder concerns.
Invenergy has maintained the accreditation of non-thermal and thermal resources should be comparable. After discussion at the October RASC, Invenergy remains concerned the proposed accreditation for renewables is not comparable to that of thermal resources, even if Schedule 53 is applied to both.
Invenergy feels that MISO has not provided sufficient evidence for the decision to differentiate thermal and non-thermal accreditation under the Schedule 53 approach. It remains unclear whether an RA Hours approach for thermal will continue to approximate the ELCC-adjusted RA Hours as risk shifts seasons and the resource mix changes. At past RASC meetings and workshops, MISO claimed that adding an ELCC scalar to the accreditation of thermals is an extraneous step because the resulting accreditation is similar to the RA-Hour approach. The justification MISO presented was limited, using external studies which were narrow in scope, did not consider a changing climate or resource mix, and were not based on the MISO system.
Invenergy remains unconvinced that a significant difference exists in the latent fuel reliability risk between renewables and thermals, particularly after major events like winter storm Uri. If there is reason to differentiate renewable accreditation from thermal through a prospective outlook for one and a historic lookback for the other, Invenergy believes that analysis would be pertinent to the accreditation discussion.
Invenergy echoes the comments of CGA and joins in calling for further exploration of the RA-only approach (without ELCC adjustment) to accredit non-thermal resources.
Clean Grid Alliance appreciates the opportunity to provide input on the questions posed in MISO’s presentation at the Non-Thermal Accreditation Workshop on September 21st and continued on October 5th and during the October RASC meeting. We remain concerned that the Seasonal Accreditation Construct approach is not sufficiently focused on RA Hours that will affect an improvement in reliability, and that MISO’s proposed non-thermal accreditation approach does not result in comparable treatment between thermal and non-thermal accreditation. For these reasons, we do not support MISO’s proposal, and we urge MISO to develop a single framework for comparable treatment of similarly situated resources.
MISO’s proposed use of the RA Hours approach combined with an ELCC fleet-wide capacity analysis for wind or solar is very similar to what is used to accredit wind resources today. Yet, the use of the RA Hours for non-thermal resources results in a very complicated methodology to explain, and MISO has not shown that it results in increased reliability. CGA supports further exploration of the IPP proposal presented at the October RASC, which suggested that MISO use only the RA Hours approach (without the ELCC adjustment) to accredit non-thermal resources.
Also, MISO has not shown that the ELCC adjustment is comparable to the ISAC adjustment used for thermal resources. ELCC is a prospective evaluation of capacity, yet thermal resource capacity is not also evaluated on a prospective basis. In fact, thermal resource accreditation is ultimately based on UCAP, due to the UCAP/ISAC ratio adjustment. And UCAP is a backward-looking value based on a generator’s historic forced outage rate.
Responses to Questions in the Presentation:
CGA argues that Tier 1 hours are not relevant to assessing the availability of any resource’s contribution to reliability as they are not high-risk hours. MISO included these in the recently approved Schedule 53 accreditation because it helped to mitigate the volatility of a resource’s accreditation. But Tier 1 hours don’t in fact increase the accuracy of the accreditation methodology or increase the reliability of the system relative to a resource's availability during high-risk hours.
We are agnostic regarding whether MISO should include nighttime Tier 1 hours for solar. Including them would result in comparable treatment. But, given these resources do not generate at night, and the lack of availability of these resources will be the same for all solar projects, including these hours in the Tier 1 RA Hours calculation for solar plants could be an unnecessary burden for MISO staff as it should not materially change the slicing of the fleetwide solar ELCC value among all solar resources in the fleet.
Using the Annual Average Offered Capacity from the entire planning year would be similar to the treatment of thermal resources. Yet, we know that resource availability for all resource types varies across the year. Thus, using the Annual Average Offered Capacity does not make sense for any resource type. Instead, the average availability for the resource during high-risk hours during the season it is being accredited for is logical, and more likely to represent its actual capacity contribution in that season.
MISO is using the ELCC value in the same way that it is using the UCAP value for thermal resource types. We recognize that more years of data can reduce volatility in the ELCC value for non-thermal resources and that this may be a benefit to utilities in their resource planning processes, but we urge MISO to implement an approach that results in comparable treatment.
Marginal and average ELCC approaches serve two different purposes. Average ELCC is appropriate for valuing the capacity a resource brings to serve load in the prompt year. It also results in comparable treatment for all resources in a particular class and values each MW of capacity from resources in this class equally. Additionally, an averaging approach captures the contributions to reliability from diversification of the supply portfolio, whereas a marginal approach does not capture such contributions and will undercount reliability contributions unless ELCC values are adjusted for diversity benefits—which is a form of averaging.[1] If ELCC is used and limited only to non-thermal resources, average ELCC is the most appropriate for use in MISO’s PRA to accurately match contributions to resource adequacy and payments for those contributions.
[1] See, for example, the adjustment method developed by E3 in Capacity and Reliability Planning in the Era of Decarbonization, Aug 2020, available at https://www.ethree.com/wp-content/uploads/2020/08/E3-Practical-Application-of-ELCC.pdf. A version of this method was adopted by PJM.
Michigan Public Power Agency supports prudent changes to Resource Adequacy (RA) accreditation when they demonstrably improve outcomes by, for example, incentivizing construction of additional reliable resources. We support the use of Average ELCC for solar resources, because the level of solar penetration in MISO is currently immaterial relative to thermal resources using SAC/UCAP accreditation, and many years of rapid development growth must occur before it becomes material. MPPA requests that MISO allow for sufficient time between the filing date and the requested Effective Date of its wind and solar accreditation proposal for MISO to provide Market Participants (MPs) with accurate analysis of how their wind and solar resources would have been accredited under the FERC-approved version of the proposal in at least one previous PRA. MPPA trusts MPs to make prudent reliability and commercial decisions when provided with accurate data and transparent methods, and MPPA believes MISO has the responsibility to ensure their accreditation calculations are replicable by each affected MP.
I'm happy to discuss.
David Sapper
dsapper@ces-ltd.com
AMP agrees with feedback submitted by MPPA and WPPI.
Prairie Power notes that the LOLE study for the 2023-24 Planning Year effectively assumes a Winter wind capacity value of 67%. Prairie Power thinks that value is too high considering the MISO-wide wind drought of January 28-30, 2020, when MISO’s wind output dropped to 1% or less for 39 consecutive hours.
I'm happy to discuss.
David Sapper
dsapper@ces-ltd.com
The Entergy Operating Companies ("EOCs")[1] appreciate the opportunity to provide feedback on MISO’s evaluation of potential non-thermal accreditation reforms. MISO’s determination regarding this issue may have a significant impact on member utilities as they pursue renewable resource development that is key to achieving their and their customers’ goals; the EOCs therefore encourage MISO to give careful consideration to the feedback of its stakeholders in making that determination.
Average ELCC vs Marginal ELCC
The EOCs continue to support MISO using an average ELCC approach, as opposed to a marginal ELCC approach, for determining the fleetwide accreditation of non-thermal resources. As the system operator, MISO’s goal for accreditation in the prompt year PRA should be to accurately determine the cumulative fleetwide reliability contribution of each resource type under the existing MISO system conditions. Average ELCC is the best methodology for accomplishing this goal. The EOCs disagree with the assertion that the primary goal of the prompt-year PRA is to send long-term economic signals for what types of resources should be constructed in MISO. As an annual mechanism in a market primarily made up of vertically integrated utilities, the PRA is ill-suited for this or any other long-term resource planning purpose. Further, the EOCs believe that implementing a marginal ELCC methodology adds unnecessary complexity to utilities’ resource planning decisions by limiting the ability of utilities and the states that regulate them to form their own economic viewpoint on the value of solar/wind resources over the long term.
Further, designing and implementing a marginal ELCC methodology is fraught with complications, fairness issues, and unintended consequences that can be avoided by using an average ELCC approach. Listed below are some of the problems associated with implementing a marginal ELCC methodology.
While expressing support for MISO to use an average ELCC approach for resource accreditation, the EOCs believe that there is value in utilizing a marginal ELCC methodology in other settings not related to MISO’s prompt-year resource adequacy construct. For example, when conducting long-term economic evaluations, LSEs and state regulators should consider the marginal ELCC value of solar and wind resources. For this reason, the EOCs support MISO providing informational studies that provide marginal ELCC data to enhance market participants’ and regulators’ understanding of the value that wind/solar provide on a marginal basis.
[1] The Entergy Operating Companies are Entergy Arkansas, LLC, Entergy Louisiana, LLC, Entergy Mississippi, LLC, Entergy New Orleans, LLC, and Entergy Texas, Inc.
Environmental Sector Comments on Non-Thermal Accreditation Proposal
MISO’s Proposal Maintains Inequitable Treatment of Schedule 53 and Non-Thermal Resources
Although the Environmental Sector appreciates the work MISO has done explaining the parallels between treatment of Schedule 53 and nonthermal resources, we remain concerned about what remains fundamentally inequitable treatment between the two resource classes.
As an initial matter, we understand and appreciate that MISO’s application of RA Hours specifically will be equivalent for Schedule 53 and nonthermal resources. As we understand the accreditation process, Schedule 53 and Non-Thermal resources are collectively given overall group accreditation levels (separated for wind and solar), which are calculated using UCAP and ELCC calculations respectively. Only after this overall accreditation level is determined, for each resource class, will MISO apply its proposed RA Hours methodology to determine the allocation of this overall accreditation amount among individual generators (by dividing the ISAC of each individual resource to the total ISAC of all resources in the class). Thus, we understand the RA Hour methodology to be relevant only as a comparator between different individual resources of the same type and not relevant to the overall accreditation, in megawatts, that each type of resource receives.
This equivalent application of the RA Hours methodology does not actually result in equal treatment: we do not believe it is appropriate to continue providing capacity accreditation to the thermal (Schedule 53) sector based on UCAP calculations, while doing so for the nonthermal sector based on ELCC calculations. This divergent accreditation policy perpetuates the unequal treatment of resources without apparent justification, and as such is not warranted. Nor are our concerns reduced by slides added to MISO’s September 21, 2022 presentation referencing a study conducted in NYISO that demonstrated only small differences between UCAP and ELCC values for thermal units. Calculating ELCC for a resource class is a complicated process, and—as MISO’s own presentations in the course of this stakeholder process have demonstrated—it can be done in several different ways, with potentially large impacts on the final ELCC value given minor changes in the variables. NYISO is a different market and has a different ELCC calculation procedure that is not seasonal: MISO cannot actually say whether a seasonal ELCC calculation methodology would reach substantially similar accreditation levels as its UCAP methodology for Schedule 53 resources without finalizing what that seasonal ELCC calculation would look like for each resource type.
One major difference between using UCAP and ELCC is the focus on high-risk hours: [NOTE 1] each of the four methods proposed by MISO to calculate nonthermal ELCC (discussed further below) depends on MISO’s LOLE study; but the UCAP calculation will simply look at outages over the course of the entire season. Thus, the overall accreditation of Schedule 53 resources will not suffer based on potential LOLE scenarios where those resources fail to perform during modeled high-risk hours (nor benefit based on scenarios where those resources successfully operate during modeled high-risk hours). For example, many thermal units have lower maximum output during hot periods due to overheating concerns; and it is well documented that large swaths of the gas sector failed to deliver during recent freezes, because they were unable to procure sufficient gas supplies to continue operating, and that even some coal plants could not operate because their coal piles were frozen over. But none of those predictable capacity reductions—to the extent that they unfavorably occur when the units are most needed—are captured by MISO’s UCAP value: in the eyes of the UCAP methodology, all forced outages are just as bad, so UCAP does not capture the potential for correlated outages. Meanwhile, MISO’s proposed nonthermal accreditation expressly limits the overall capacity contribution of the wind and solar sectors based on their anticipated performance during periods of resource scarcity, and are thus accredited more stringently as a resource class. [NOTE 2] This is not a reasonable or defensible distinction, and it is discriminatory between resource types. MISO should reopen Schedule 53 resource accreditation and propose to use ELCC fleetwide to determine overall capacity accreditation for all resource types.
If MISO Moves Forward with an ELCC Methodology, It Should Calculate Overall Accreditation Using the “Average” Value of Nonthermal Resources, and Devise a Separate Process to Drive Investment Decisions
A principal debate during the early stages of MISO’s nonthermal accreditation discussion has been the question whether to use “average” or “marginal” accreditation for nonthermal resources. To start with, the Environmental Sector does not believe this either/or approach to “average” and “marginal” accreditation is healthy or necessary. Fundamentally, MISO should select a final ELCC calculation that best serves the core purpose of the PRA. We believe the core purpose of the PRA is, and should remain, a tool first to identify reasonably prompt capacity needs (no more than a year out), and then to identify and compensate generators or other resources that are necessary and available to meet those needs. This has historically been the best use of the PRA; and as a result, properly accounting for the capacity contribution of all resources is the most important first step to running a balanced PRA.
MISO is likely aware that members of the Environmental Sector supported NYISO’s use of marginal accreditation (using the terminology as presented by the IMM, see discussion below) in its recent tariff filing at FERC. That support was based on an understanding that marginal accreditation values can be useful data points in the context of a capacity planning process, specifically to guide fine-grained decisions about where in a smaller region clean resources can most effectively help maintain system resource adequacy and avoid creating localized surpluses. And it made sense for NYISO to use marginal accreditation when calculating ELCC because the state of New York has far-ranging and cohesive policies pushing the state toward a wholescale transition to clean energy resources, which are the principal drivers of investment in the NYISO market. But the circumstances that justified NYISO moving forward with marginal accreditation do not apply to the MISO system: the fine-grained capacity planning that NYISO was seeking to enable in the NY market does not have the same power in an RTO spanning 15 states and one Canadian province; and the MISO region lacks NYISO’s clean energy incentives that would blunt potentially damaging market impacts.
That said, we do agree with the IMM that marginal capacity accreditation can be a useful planning tool as states and utilities think about resource selection decisions—we simply do not believe the PRA is the appropriate venue to offer that information. Instead, MISO should examine other mechanisms to offer this information to state and utility planning entities. For instance, MISO already publishes a ten-year examination of PRMs in its LOLE Study process; it could offer similar information on forward-looking capacity values through a similar process.
No matter what direction it proposes moving with the ELCC Calculation, MISO should spend some time going forward clearly defining what it means when it uses the terms “marginal” and “average” accreditation, and how its use of the terms might differ from how the IMM used those terms in his presentation on September 21. As we understand it, the IMM defines these terms as follows:
- “Average” accreditation is the capacity contribution (per MW of installed capacity) of the entire fleet of a single resource type (wind, solar, etc.); and
- “Marginal” accreditation is the capacity contribution (per MW of installed capacity) of a hypothetical addition to that fleet.
However, MISO has made reference in its presentation of this issue to a slightly different pair of definitions:
- “Average” accreditation is the contribution of a resource OR set of resources over an entire season/year; and
- “Marginal” accreditation is the contribution of that resource or set of resources exclusively during high-risk periods (RA Hours, Max-gen events, etc.).
For simplicity and to make sure these comments are clear, the Environmental Sector is using the two terms in the same way that the IMM did in his September 21 Presentation. But ultimately MISO should act to resolve any confusion that multiple definitions might cause.
In its September 21 Nonthermal Accreditation Workshop, MISO offered for feedback four different possible “methods” for calculating a fleetwide ELCC for nonthermal resources. Assuming MISO persists with an ELCC methodology for nonthermal resources, it should choose either Method 1 or Method 4 for the reasons given both above and below.
Method 1 represents essentially a continuation of the status quo: we continue to have the concerns shared above about persisting with an ELCC method for nonthermal resource sectors while the thermal class is accredited as a whole based on UCAP. But this calculation of ELCC at least credits all resources for the contribution they are currently making toward reduction of the LOLE. [NOTE 3]
Method 4 also appears to be an appropriate tool for calculating ELCC for nonthermal resources, although we cannot fully endorse this method without first understanding better how MISO is planning to select the Hourly LOL Periods from the LOLE model. In particular, we urge MISO to improve its weather modeling so that it can better identify potential LOL Periods and properly account for all available tools at its disposal, including storage, DER, and transmission alternatives to more generation. MISO also should allow for regional variation in its identification of Hourly LOL Periods, to better evaluate resource performance during crucial periods in different parts of the MISO footprint.
Methods 2 and 3 both identify an ELCC by looking at the value of a marginal addition of a nonthermal resource. As explained above, these two methods are likely to critically understate the capacity contributions of non-thermal resources, and (if uncorrected) could cause MISO to significantly over-procure capacity at a price that is not reasonable for ratepayers across the region. [NOTE 4] Method 3 has the additional flaw that it apparently compares the benefit a given resource addition would provide beyond the 0.1/year LOLE standard to that from adding “perfect capacity.” MISO should be valuing resources based on their contribution to meeting the LOLE standard, and not by their ability to help exceed it: doing the latter will only muddy further any signals MISO is hoping to send to developers and generation owners, even if the numbers come out similarly. All else being equal, MISO should limit itself to evaluating what is needed to reach the standard, rather than what is needed to exceed it.
As these comments make clear, the Environmental Sector does not believe marginal accreditation is an appropriate methodology for quantifying the capacity contributions of nonthermal resources; but in the event that MISO disagrees, we believe that, at an absolute minimum, it must act to avoid certain consequences that might result from the decision. The clearest risk of market failure from marginal accreditation is over-procurement of capacity, which will occur if MISO artificially craters capacity accreditation of nonthermal resource sectors using a marginal process, and then fails to make matching adjustments to the demand for such capacity (i.e., the PRMR value for each zone). If MISO does not ensure that any reduction in nonthermal capacity supply is matched by a corresponding drop in the PRMR, it could dramatically over-procure. This would be market inefficient, imposing unnecessarily high-capacity costs on consumers, and would also discriminate against non-thermal resources by effectively transferring the value of their “missing MWs” to Schedule 53 Resources. At all costs, MISO should avoid this eventuality.
We appreciate MISO’s discussion of this question in its presentation at the October 12 meeting of the RASC. We believe this issue merits further discussion only in the event that MISO persists in focusing on marginal accreditation; but as an initial observation, we support reducing the UCAP PRMR “on a 1-to-1 basis with the difference in ELCC accreditation,” as MISO suggested in that presentation. This is true even if it pushes the PRM into negative territory: the purpose of this adjustment is to ensure that existing nonthermal resources’ contribution to resource adequacy is captured, and there is nothing sacrosanct about the PRM that requires it remain a positive value.
Furthermore, the planning adjustment MISO selects should also ensure that any adjustment is specific to each Zone: Zones with higher integration of nonthermal resources will likely see larger drops in their capacity supplies when faced with marginal accreditation, and so they should see larger reductions in their PRMR.
Another major consideration MISO would have to consider if it moves forward with a marginal accreditation methodology (and further evidence of the drawbacks of such an approach) is how it determines the specifics of the marginal resource addition that is modeled. This is important because marginal accreditation by its nature must decide what specific resource attributes to model—thus differentiating it from average accreditation, which can be evaluated simply by summing the contributions of all existing resources as they are. And with this in mind, selecting a single set of resource attributes for the wind sector, and another for solar, is overly reductive: there are multiple different wind and solar technologies in the MISO footprint, and plenty of ways for a wind or solar resource to offer more capacity during a broader range of times; weatherization packages for wind turbines and rotating solar arrays are just two examples. In short, even outside of pairing solar or wind generation with storage to create a hybrid resource—which itself will require significant consideration by MISO with comprehensive stakeholder input—there is no one answer to how much capacity a “generic” wind or solar resource will offer compared to its ISAC. Thus, any decision to move forward with a marginal accreditation methodology (which we do not believe is appropriate) requires at a minimum that MISO establish subclassifications of the wind and solar sectors to better track the capacity contributions different types of resources are able to offer.
MISO Should Regionalize Its ELCC Calculation to Ensure That Planning Constraints in Part of Its Footprint Do Not Implicate Other Parts
Finally, the Environmental Sector notes, as MISO has also noted multiple times in the course of this stakeholder process, that MISO oversees a massive geographic footprint, in which different regions are likely to realize different values from addition of different resources by virtue of having different load and generation profiles, weather patterns, and level of interconnection with other regions. We understand this to be an active consideration based on MISO’s presentation at the October 12 RASC meeting; to the extent this remains an active planning discussion point, we urge MISO to prepare regional ELCC evaluations so that the capacity contributions of resources in each zone are appropriately accredited. We look forward to offering further input on this point as more detailed questions are propounded.
[NOTE 1] This criticism assumes that UCAP (as used in the (ΣUCAP) ÷ (ΣISAC) adjustment ratio for thermal resources in Schedule 53) is calculated on a seasonal, and not on an annualized, basis. If we are incorrect in that assumption, then MISO’s use of UCAP to determine Schedule 53 Resources’ overall contribution is significantly more problematic, because it is well documented that thermal resources have different production capabilities in different seasons, even during regular weather patterns—averaging out thermal resources’ ability to produce over an entire year risks overstating their capacity value in the part of the year when their output is more constrained (and understating it when their output is less constrained). We therefore request that MISO confirm in its response to comments whether thermal resources’ UCAP for Schedule 53 accreditation purposes (following FERC’s approval in Docket No. ER22-495) is calculated independently each season, or aggregated and averaged between seasons over the course of a year.
[NOTE 2] The Environmental Sector understands that the RA Hours methodology is intended to hold individual generating units accountable for non-performance during max-gen events by reducing their allocation of accreditation; but sector-wide accreditation matters too, and it is there that nonthermals will currently be held to a higher standard.
[NOTE 3] This assumes the LOLE Study is conducted fairly and appropriately accounts for regional variations in load and resource mixes.
[NOTE 4] We are aware that, if it moves forward with marginal accreditation, MISO is reviewing both (i) applying that methodology to the entire fleet, and (ii) limiting application of that methodology only to newly constructed (or to-be-constructed) facilities. Choosing which of these approaches to follow depends entirely on how the remainder of the market is structured; but we note at this stage that flaws in both options—either distinguishing between identical resources based on in-service dates or judging an entire fleet of resources based on the impact of adding to it—ably demonstrate just how problematic marginal accreditation is overall as a market structure.
Feedback by Public Service Commission of Wisconsin (PSCW) Office Regional Markets (ORM) Staff to Midcontinent Independent System Operator (MISO) on Accreditation Reforms for Non-thermal Resources:
Public Service Commission of Wisconsin (PSCW) Office of Regional Markets (ORM) Staff offers the following feedback on Accreditation Reforms for Non-thermal Resources per the feedback request set at the October RASC.
Marginal vs. Average ELCC
Based on various workshops and meetings that have been held in the past months, PSCW ORM Staff is evaluating the pros and cons of both the average and marginal ELCC. For this reason, ORM Staff would like for MISO to further expand its explanation and consideration on the following discussion points:
1) How will market signals be affected by the Marginal and/or Average ELCC under the potential reliability-based demand curve or the current vertical demand curve?
2) Some stakeholders have expressed their position in favor of the Marginal ELCC in long-term resource planning, while in favor of the Average ELCC in the short-term for resource planning. Could MISO provide insight into how these two methods can impact resource planning based on this argument?
3) How will a modified accreditation approach, whether Average or Marginal ELCC at the class level, affect the capacity credit of existing resources (i.e., resources that have been approved or built under different capacity assumptions)? Or how does MISO expect planning to be affected given a potential change to the capacity credit for existing resources? A primary concern we have is related to the fact that utility assets that are approved as prudent and used and useful by the PSCW have a 25-40 year lifetime where the costs of that asset are being recovered from ratepayers. If, years later, the accreditation “appears” to be much lower for such an investment, some stakeholders could argue that recovery for the asset could be disallowed because it is not as “used and useful” as was represented when it was approved. A recognition of this “vintage” problem and possible solutions to it would be very helpful.
Modeling: Number of years considered in the ELCC calculation and Loss of Load Expectation (LOLE) calculation
It is the understanding of ORM Staff that the current ELCC calculation averaging period, whether a Marginal or Average approach is implemented, has currently been changed from 17 to 10 years. While this reduction is seen as a more adequate representation of the select resource class, given the improved technology performance over recent years, it does not equal the number of years considered in the weather analysis performed as part of the LOLE. Within the process of the LOLE calculation, a total of 30 years is considered. While we recognize the ELCC method focuses on the resource performance system-wide, and the LOLE focuses on impact of weather-related events to the loss of load, we would like a further clarification on the different number of years considered within these related methods.
ORM Staff agrees with MISO’s proposed option to focus its calculation of the Class ELCC, Marginal or Average, to be performed on a regional basis, akin to how it is done at the unit level. The varying resource availability, and hence its performance, is not the same across the entire MISO footprint. Specifically, the solar or wind potential in MISO North/Central is drastically different from that in the MISO South region. However, staff has questions about whether MISO can be more granular and potentially accurate:
1) Similar to how the LOLE is calculated for Zones 1 through 10, ORM staff would like to know whether it would be reasonable to perform these calculations on a zonal basis.
2) How would accreditation differ between the regional vs. zonal spatial focus if performed as such at the class and unit level?
Michigan Public Power Agency supports prudent changes to Resource Adequacy (RA) accreditation when they demonstrably improve outcomes by, for example, incentivizing construction of additional reliable resources. We support the use of Average ELCC for solar resources, because the level of solar penetration in MISO is currently immaterial relative to thermal resources using SAC/UCAP accreditation, and many years of rapid development growth must occur before it becomes material. MPPA requests that MISO allow for sufficient time between the filing date and the requested Effective Date of its wind and solar accreditation proposal for MISO to provide Market Participants (MPs) with accurate analysis of how their wind and solar resources would have been accredited seasonally under the FERC-approved version of the proposal in at least one previous PRA. MPPA trusts MPs to make prudent reliability and commercial decisions when provided with accurate data and transparent methods, and MPPA believes MISO has the responsibility to ensure their accreditation calculations are replicable by each affected MP.
DTE Electric appreciates the opportunity to provide feedback on the accreditation reforms for non-thermal resources.
Wind and Solar Accreditation:
DTE agrees with the application of Schedule 53 accreditation methodology to wind and solar resources.
Should MISO utilize a marginal or average ELCC approach?
DTE appreciates that the marginal ELCC attempts to account for values provided during net peak load hours, however there are notable drawbacks such as misalignment between the basis for capacity accreditation and requirement determination through the LOLE study, as well as lack of recognition for the reliability value of resources during non-net peak load hours. An average ELCC still recognizes reliability value during non-net peak load hours and is in alignment with current MISO modeling; therefore, DTE supports an average ELCC.
WEC Energy Group remains opposed to use of marginal ELCC for wind/solar accreditation within MISO's prompt-year and residuals capacity market. As noted on slide 21 of the September 21 workshop presentation, average ELCC provides a near-term reliability market signal which is exactly the purpose of MISO's prompt-year RA construct. Marginal ELCC, while providing value in long-term resource planning investment decisions, is not appropriate for MISO's accreditation construct, which is designed to ensure that the accredited capacity value reflects the capability and availability of the resource during the periods of highest reliability risk. Average (seasonal) ELCC is representative of the availability of a resource-class during actual operations - marginal ELCC is not.
Wind and Solar Accreditation
As renewable penetrations increase, “normal” weather conditions such as calm and/or cloudy days, snowstorms, etc., which previously had little effect on the generation fleet, could now lead to significant loss of generating capability. Furthermore, since the outputs of similar renewable resources in the same region are highly correlated, one or more common weather events could have a greater reliability impact on MISO than the highly touted, but less frequent “extreme weather” events.
Consider the MISO-wide wind drought of January 28-30, 2020. This wind drought reduced MISO wind output by 99% for 39 consecutive hours. This led to an unavailability of 22 GW of wind capacity in 2020. A similar wind drought today would affect 30 GW. In the future, as installed wind capacity increases, the effects will be much greater. For example, with 50 GW of installed wind capacity, a much more common 50% wind reduction would lead to the unavailability of 25 GW of wind capacity.
Wind and solar farms should be assigned Forced Outage Rates just like conventional resources.
Put simply, a typical winter snowstorm moving across the MISO footprint could knock out hundreds or thousands of megawatts of solar capacity. Snow covering solar panels is akin to combustion turbines with interruptible gas service being curtailed right when the capacity is needed the most, i. e. during cold winter weather. To see this potential risk, see us january snow cover mp - Google Search.
Recommendation
MISO should take these weather effects into account when determining the capacity value to wind and solar plants especially during the winter season. It’s not the average conditions which lead to capacity shortfalls; it’s the extreme conditions. Thus, the winter capacity value for wind and solar should be low to account for calm and cloudy days and snow-covered solar panels.