Resource Adequacy Construct Reforms Tariff Feedback and General Questions

AMES, AMP, MGE, MJMEUC, and MPPA support WPPI's feedback.

Thanks (to Amanda Jones!),

David Sapper

dsapper@ces-ltd.com

The following feedback is offered by the Entergy Operating Companies ("EOCs")^[1]in response to MISO’s request made during the October 20, 2021 Resource Adequacy Subcommittee workshop.

The EOCs believe that if MISO adopts the IMM’s proposal on adjusting for the UCAP to SAC shift, that the Local Clearing Requirement (LCR) should be scaled by the zonal SAC to UCAP ratio to ensure that the new SAC accreditation methodology does not result in a worse zonal LCR surplus/deficit position than the LCR surplus/deficit position calculated using the existing UCAP accreditation method.

The EOCs believe that MISO has failed to demonstrate that 31+ day outages, and more specifically nuclear refueling outages, are causing system reliability problems. Additionally, even if MISO is able to demonstrate that these longer planned outages are the source of system risk, the EOCs believe this issue would be better addressed through reforms to the outage coordination process, not the resource adequacy construct. If MISO insists on addressing 31+ day planned outages via reforms to the PRA, the EOCs believe it would be more reasonable to pro-rate a unit’s accredited capacity for the season in which the 31+ day outage occurs rather then requiring an owner to find and purchase replacement capacity or encouraging resources to be held back from the PRA.

The EOCs continue to support and would request that MISO consider the following transition mechanisms listed below. The EOCs believe that implementing these mechanisms will not delay the ultimate benefits that MISO is looking to accomplish via the proposed resource adequacy construct, instead these mechanisms will lower the risk of significant decreases in accredited capacity and large PRA price increases during the transition period.

• During the first three years under the new construct, use UCAP unit ratings measured on a seasonal basis; [2]
• During the first three years under the new construct, constrain the Local Clearing Requirements (LCR) for the non-summer seasons so the non-summer LCRs do not exceed the summer LCR value;
• During the first four years, do not implement the capacity replacement requirement for planned outages that exceed 30 days; and
• During the first four years under the new construct, do not adjust the daily CONE value based on the number of seasons an LRZ is deficient relative to the LCR requirement. To explain further, during this four-year period, the daily CONE value should always be equal to the annual CONE value divided by the number of days in the planning year.

The EOCs continue to have the following questions and requests related to MISO’s sub annual resource adequacy construct proposal:

• More information/explanation regarding MISO’s analysis showing that most of the Entergy Operating Companies would have their highest Planning Reserve Margin Requirements in the Spring season, which is traditionally considered an off peak season in the South region during which significant maintenance outages are taken. Additionally, an explanation of when is the best time for MISO South generation owners to be scheduling planned maintenance outages according to the insight provided by MISO’s proposed resource adequacy construct – recognizing that reasonable planned maintenance outages are essential to maintaining generation resources in good working order and thus to meeting customer demand at times of peak demand.
• Analysis showing the number of planned outages in recent years that exceeded 30 days across MISO and an estimate for how much replacement capacity would be needed as a result. More specifically, data showing the average length of time for nuclear refueling outages in MISO.
• Analysis comparing the level of volatility associated with UCAP unit ratings vs Seasonal Accredited Capacity (SAC) unit ratings.
• Analysis showing how MISO determined the 20/80 tier 1 to tier 2 weighting and data showing the impact of using a 50/50 tier 1 to tier 2 weighting.
• Analysis demonstrating how the LSE PRMR requirements and surplus/deficit positions would change if MISO calculated the SAC to UCAP ratio on a regional basis (in alignment with how RA hours are selected), as opposed to on a MISO wide basis as currently proposed.
• Updated analysis showing the projected LRZ surplus/deficit position relative to the LCR requirement when using the new RA hour selection methodology described by MISO in August 2021.
• RASC discussion and BPM updates on reforms to the seasonal ZIA methodology
• More explanation and clarity on whether replacement costs can be included in the offer price of a generation resource that will be in a planned outage for more than 30 days in a season.

The EOCs appreciate the opportunity to comment.

Consumers Energy appreciates the opportunity to provide feedback on the latest Resource Adequacy construct reform draft tariff language as well as additional general questions regarding the proposal. 
 
CE reiterates its support for working toward a new performance-based accreditation. The challenge at this time is that MISO has not presented finalized Tariff Language and proposal details, nor has MISO addressed outstanding stakeholder questions and concerns.  
 
This ambiguity limits stakeholders’ ability to evaluate the final proposal’s impact to their generation fleets and reduces the time to evaluate what changes operations will need to make.

Consumers Energy continues to recommend that MISO separate the Seasonal Auction component of the proposal filing from the Seasonal Accredited Capacity (SAC) portion and to delay filing of the SAC portion until the outstanding proposal details cited below are finalized and a reasonable and feasible transition plan has been presented and vetted through the stakeholder process. This allows sufficient time to finalize and address outstanding questions regarding the SAC portions of the proposed construct including outstanding final proposal details that MISO was still considering as of the October 20, 2021 workshop.  Such outstanding items include the IMM’s recommendations regarding discretion to replace capacity for committed resources, the IMM’s recommendation regarding the UCAP/SAC ratio, and the transition plan.

Furthermore, Consumers Energy disagrees with MISO’s assertation that that the seasonal and accreditation components of the proposal cannot be separated and the latter delayed.  In essence, MISO stated that filing the seasonal portion of the construct without the accreditation portion of the construct would mean that there is no performance metric or obligation on the generator.  This is incorrect.  Generation resources would still be subject to the existing EFORD/UCAP methodology which, while imperfect, also penalizes generation resources for unavailability.  Also, MISO has not presented evidence for Stakeholders to validate that the proposed SAC methodology would work any better than the existing EFORD/UCAP methodology. 

With the many layers of this still-to-be-finalized Resource Adequacy Construct Proposal, after separating the seasonal and accreditation portions of the filing (and delaying the latter), any new accreditation methodology implementation should be through a phased approach. For example, instead of beginning with an 80/20 accreditation (80% of accreditation determined during tight hours, 20% of accreditation determined during non-tight hours), a phase in of this accreditation allocation is more appropriate. 

The above three suggestions (separating the seasonal from the accreditation filings, delaying the accreditation portion of the filing for further development, phasing in the tight hour/non-tight hour accreditation allocation) will allow Generation Owners the ability to evaluate each component in isolation and lessen the likelihood of unintended negative resource adequacy consequences from occurring, especially when one considers that the current EFORD/UCAP methodology is the industry standard and the proposed SAC methodology is completely untested. 
 
This necessary delay might also allow for renewable resource seasonal accreditation review which would then align the accreditation of a Market Participant’s entire generation fleet (both thermal and renewable).

Public Service Commission of Wisconsin staff would like to see numerical examples of how IMM’s proposed PSAC ratio would uprate or derate above-average and below average performing thermal units.

WPPI does not have any specific feedback on the recent posted draft tariff language changes. However, we would ask in the future that these materials are posted for review more than three days before the feedback is due to allow stakeholders sufficient time to review

Additional general questions WPPI has are listed below.

1. We understand the current MISO rules to not allow generators to take Generator Planned Outages for other than “inspection, maintenance or repair,” thus precluding economic resource suspensions. This appears necessary in today’s resource-adequacy construct in which planned outages do not affect accreditation. At the October 20 workshop MISO suggested that, in MISO’s proposed construct, generators seeking to take economic suspensions would enter planned outages, while MISO’s IMM indicated that they would, instead, simply reflect their costs in their capacity offers. We request that MISO describe specifically how, under MISO’s proposed revised construct, a resource owner would implement an economic suspension and that MISO obtain the IMM’s concurrence on this approach. To the extent that this involves entering a Generator Planned Outage, we request that MISO’s response include specific outage parameters to be entered into CROW, and that MISO obtain the IMM’s concurrence on this approach.
2. At the October 20 workshop MISO suggested that an extension of a planned outage where the extension would put total length of the outage beyond 31 days, that this would not necessarily trigger a capacity replacement non-compliance charge to the extent that the extension might be entered into CROW as something other than a planned outage. To ensure that all stakeholders have a common understanding of the consequences of an outage extension, we request that MISO specify the criteria that would allow an outage extension to not trigger a capacity replacement non-compliance charge.
3. Can wind resources receive exemptions for planned outages? For instance, a wind generator that has had to take a planned outage due to transmission work on nearby transmission facilities, where the outage is not due to generator limitations but request from local TO.
4. MISO had indicated its inclination to adopt the IMM’s proposal to increase conventional-resource accreditation by the UCAP/SAC factor. Please explain why MISO thinks it makes sense to increase conventional-resource accreditation, which is newly adjusted under MISO’s proposal to account for some planned outages, but not accreditation of intermittent resources, which already reflects all planned outages. WPPI notes that our previous comments described how MISO could address this issue while retaining PRMR in UCAP terms.
5. In response to a question from MidAmerican Energy at the October 20 Workshop, MISO indicated that scheduling a generator outage in multiple contiguous pieces to isolate periods of below-threshold Maintenance Margin would be treated by MISO as multiple distinct outages, only one of which could qualify for exemption if within 120 days of one another. Isn’t the length of the outage what is significant for resource adequacy, rather than the number of pieces it is scheduled in, and shouldn’t MISO’s accreditation scheme reflect the material aspect of outages rather than arbitrarily base accreditation on an aspect not meaningful for resource adequacy?
6. In CROW the outage priority typically falls under one of four categories based on lead time required: forced, emergency, urgent and planned. This differs from definitions in RA construct of either forced or planned, can MISO provide which outage priority fit in either Forced or Planned?
7. Could MISO provide examples for when a resources will face a capacity replacement non-compliance charge for planned outages > 31 days? It is still unclear to some where certain thresholds of notification time before outage occurs will make one possibly face the capacity replacement non-compliance charge. Some examples are mentioned below:
1. If only learn that an outage >31 days was to occur 7 days before start of the season that the outage occurs, will you face the capacity replacement non-compliance charge?
1. What about <48 hours before season starts?
2. While we understand in the BPM-008 generators should “notify MISO immediately prior to the outage” but with the potential financial implications, it seems advantageous for a generator to take an accreditation hit by listing the outage as forced over letting MISO know right away and scheduling it as a planned outage thus having to pay the capacity replacement non-compliance charge. Therefore, this proposal incentivizes resources to limit notifying MISO of potential outages till the last minute.
1. How much visibility does MISO possess to make sure that resources did not delay notifying MISO of the potential outage?
8. Lastly, in Section M of the Q&A document for Post RA Construct Filing Initiatives, could MISO add the following:
1. If MISO does not adopt the IMM proposal for SAC to UCAP conversion, MISO will investigate if deliverability NRIS and ERIS levels should be impacted by SAC or whether it is simply better to just limit RT offer by the deliverability limit instead of applying a ratio after the fact?
2. If there should be any additional changes to Module D to allow for varying offers (to account for replacement costs or capacity replacement non-compliance charge in the offer price) and economic resource suspensions.
3. How will derates be handled in exemption process? It is our understanding derates are automatically accepted and not reviewed. How will MISO implement a system to allow exemptions for derates?
4. For resources that have increased output in non-summer months, RASC will look into whether there should be different seasonal deliverability values of NRIS/ERIS, since those are based on summer values.
5. Should September be in Fall season or Summer season? Since September is setting PRMR requirements for Fall season, is that fair since those values are based on summer-like conditions happening in September?

WEC Energy Group Feedback – Draft RA Tariff Language

General Comments:

We adopt by reference the general comments within our September 15, 2021 feedback.

69A.4.5.A(iii):

• Sections a and b - Both sections refer to a “Capacity Resource’s Network Resource Interconnection Service Unforced Capacity value” and a “Capacity Resource’s Energy Resource Interconnection Service Unforced Capacity value”.  We believe Unforced should be replaced with “Seasonal Accredited”.
• Section d requires a correction to the formula:
  ERIS SAC = Total Interconnection ICAP X (SAC/ICAP ratio X max(0,(ICAP-NRIS)))

 Module D, Section 64.1.1(g)(xii):

• Suggested language:
  Market Participants with capacity expected to be on outage for thirty-one (31) or more Calendar Days in a Season of the Planning Year may submit documentation of such circumstances to the IMM not later than forty-five (45) days prior to the deadline for submitting ZRC Offers, and the IMM shall provide a written explanation upon request of its determination to the Market Participant, not later than seven (7) days prior to the deadline for submitting ZRC Offers, regarding whether that capacity can forego participation without being deemed to have engaged in Physical Withholding.

MidAmerican Energy appreciates the opportunity to provide feedback on the resource adequacy reforms. As we transition to fewer controllable resources in the MISO footprint, it is necessary to change the way MISO looks at resource adequacy. We are concerned, however, about proposals that do not reflect an engineering-based solution and is based more on “feel” than a technical basis. We just have two additional questions that we would like answered.

1. Currently MISO is proposing that a unit that is offline but could be online within 24 hours would get credit during an RA hour based on the emergency max of that unit. Currently MidAmerican will offer in units that are in outage but can be recalled. For example, if a unit is undergoing a fire suppression inspection, the unit would be offered in as outage with a 1-hour recall, since we would just need to make sure the inspectors were in a safe location prior to starting the unit. If a unit is in an outage with a recall time of less than 24 hours, will MISO consider that unit as available for the purpose of determining accreditation during RA hours?
2. We have outages already in CROW for 2023 and there is no exemption flag on those CROW outages. Does MISO know if they are exempt? How do I know if they are exempt?