MSC: Demand Response Participating as a Supply Resource in MISO Markets (MSC-2024-6) (20241010)

MPPA reiterates its objection to MISO’s proposed prohibition on thermal BTMG DRR self-scheduling (Tariff Sections 39.1.2, 39.2.5, 40.2.5), originally submitted in our formal feedback on 7/26/24.  Below we expand on the implications of this unnecessary prohibition.

Some MPPA Member Municipal Utilities prudently self-schedule their thermal BTMG to supply municipal load.  Those resources are currently registered in MISO as LMRs, but as MISO changes the LMR and DRR market participation models, DRR registration will likely become the better choice for these resources.  Eliminating the option to submit self-schedules will harm MPPA’s ability to manage the Members’ supply/demand balance.

The only issue MISO has presented to the Stakeholder community regarding self-scheduled DRRs is possible manipulation of baselines for Demand Response (DR) Measurement and Verification (M&V).  Thermal BTMG is measured and verified on metered output, so there is no M&V risk from self-scheduling, as there is with DR.

MISO’s inclusion of thermal BTMG in its proposed prohibition on DRR self-scheduling violates two of its professed Market Design Guiding Principles: 2. Facilitate nondiscriminatory market participation…, and 4. Support Market Participants in making efficient operational and investment decisions.

MPPA urges MISO to alter its proposal to remove the prohibition on thermal BTMG DRR self-scheduling, while retaining it for DR DRR, thereby eliminating the possibility of baseline manipulation and artificially high DR accreditation without harming BTMG DRR.

WPPI does not have any comments on the handful of changes made to the proposed Tariff revisions to address demand response participating as a supply resource in MISO markets (i.e., revisions per 10/10/2024 vs. 8/22/2024 MSC meetings). However, we missed making a few comments previously:

1. Suggest clarifying “load reduction”:

1. 1. Module C, 38.7.2: Replace “load reduction capability” with “BTMG and/or controllable Load capability,” which reflects the DRR-I and II definitions.
   2. Module C, 38.7.2: Similarly, replace “the load reduction method” with “whether BTMG and/or controllable Load.”
   3. Attachment TT: Replace “amount of load reduction achieved through the deployment of” with “performance of.”

2. Attachment TT: “A Market Participant representing a DRR or EDR has requirements for performance, namely by responding to a Transmission Provider Setpoint Instruction or EDR Dispatch Instruction by changing the end-use electric consumption behind the resource consistent with the issued instruction.”
   • The DRR-I, II, and EDR definitions each reference BTMG, and the BTMG definition references “wholesale or retail load.” Consequently, suggest deleting “end-use.”
3. Attachment TT: “For demand resources end use electric consumption must be reduced.  For behind the meter generation, the source of electric consumption must change.  The Transmission Provider assessment of the performance of these resources is measured through these Measurement and Verification procedures.”

1. 1. Instead of lower case “demand resources” and “behind the meter generation,” suggest use the capitalized, defined terms.
   2. Suggest adding a comma after “For [D]emand [R]esources,” for consistency with the sentence that follows.
   3. The Tariff uses a mix of “end-use” (Module A, 5/6) and “end use” (Module C, 36/37). At least within the proposed revisions, suggest going with one or the other.

Comments

of the

Association of Businesses Advocating Tariff Equity (ABATE),

Illinois Industrial Energy Consumers (IIEC),

Louisiana Energy Users Group (LEUG),

Texas Industrial Energy Consumers (TIEC),

Coalition of MISO Transmission Customers (CMTC),

Midwest Industrial Customers (MIC)

and

Midwest Large Energy Consumers (MLEC) [i]

Regarding

MSC: Demand Response Participating as a Supply Resource in MISO Markets (MSC-2024-6) (20241010)

October 31, 2024

ABATE, IIEC, LEUG, TIEC, CMTC and MIC and MLEC appreciate this opportunity to provide comments to MISO.

Sections 63.3.a.i. and 63.3.a.ii

We appreciate the adjustments MISO has made to its proposed Demand Response participation rule changes to date with respect to addressing issues we raised in past comments that we submitted to MISO on Issue MSC-2024-6.  However, as indicated in the verbal comments of one of our representatives during the October 10^th MISO Market Subcommittee (MSC) Meeting, there is a serious issue that remains from those we have identified to date.

The issue pertains to MISO’s proposed striking of the words “Demand Resource” in Sections 63.3.a.i. and 63.3.a.ii. of Module D of the MISO Tariff.  Those Tariff sections pertain to Physical Withholding and Economic Withholding.  We are very concerned that the striking of the words “Demand Resource” in those two Tariff sections would trigger the following two provisions to apply to LMR Demand Resources (DR) or loads that have the capability to register with MISO to be a LMR DR:

• Under Section 63.3.a.i (Physical Withholding):

• • “(vi) not submitting ZRC Offers to the Planning Resource Auction for universally deliverable Planning Resources that are not designated to satisfy the capacity obligations of an LSE in MISO or exported”

• Under Section 63.3.a.ii (Economic Withholding):

• • “(iii) the Planning Resource will not clear the Planning Resource Auction or the amount of Zonal Resource Credit cleared is or will be reduced” 

To be clear, our position is that neither MISO nor FERC can: (i) compel an end-use customer to register as a LMR DR or (ii) if an end-use customer has registered as a LMR DR, compel the end-use customer to offer ZRCs into the PRA or to offer ZRCs into the PRA at a particular price.  To put it another way, neither MISO nor FERC can compel an end-use customer to take non-firm electric service – electric service that is subject to interruption, in full or in part, by MISO as an LMR DR.

In MISO’s October 8^th posted response to Stakeholder Feedback (see attached presentation), MISO indicated the following at Slide 5:

• “Stakeholder Comment: On Module D proposed changes: does Physical Withholding provisions only apply to demand resources that have cleared the PRA? … MISO Response: Yes”

While MISO did not explicitly indicate whether this stated intent with respect to the proposed Physical Withholding provision change also applies to the proposed Economic Withholding provision change, we assume that it does.  However, MISO should clarify and confirm its actual intent with respect to MISO’s proposed applicability of the Economic Withholding provisions to LMR DRs.

If our understanding is correct that the intent of MISO is that the Physical Withholding and Economic Withholding provisions would only apply to LMR DRs that clear in the PRA, then we do not appear to have a disagreement with MISO over intent, but rather with respect to how MISO has proposed to implement its intent in its proposed tariff language changes to Sections 63.3.a.i and 63.3.a.ii.  Specifically, under MISO’s proposed changes to Section 63.3.a.i and 63.3.a.ii, as currently written, there is nothing in MISO’s proposed tariff language changes that clearly indicates that the following two provisions, which can apply only to Planning Resources that have not yet cleared in the PRA, do not apply to LMR DRs:

• Under Section 63.3.a.i (Physical Withholding):

• • “(vi) not submitting ZRC Offers to the Planning Resource Auction for universally deliverable Planning Resources that are not designated to satisfy the capacity obligations of an LSE in MISO or exported”

• Under Section 63.3.a.ii (Economic Withholding):

• • “(iii) the Planning Resource will not clear the Planning Resource Auction or the amount of Zonal Resource Credit cleared is or will be reduced”

We request that MISO add clarifying language to the proposed tariff language changes that make clear these two subsections of 63.3.a.i and 63.3.a.ii would not apply to LMR DRs.

Attachment TT and Firm Service Level Option

We have yet to see MISO’s proposed adjustment to its proposed Tariff language that MISO committed to below in its October 8^th response to feedback (at Slide 3), as shown below:

• “Stakeholder Comment: LMRs with the Firm Service Level attribute should not have to claim that the load drop was in direct response to a Scheduling Instruction … MISO Response: MISO agrees, and notes that the Attachment TT language will be updated to reflect this point”.

We ask that MISO as soon as practicable make updates to its proposed tariff language, including to Attachment TT, to address this concern.

Thank you for providing us an opportunity to provide the above comments.  If it would be of help, we would be glad to discuss the above comments further with MISO and other stakeholders.  If you have any questions regarding these comments, please do not hesitate to contact any of the following representatives:

Jim Dauphinais

Brubaker & Associates, Inc.

(Consultants to ABATE, IIEC, LEUG and TIEC)

(636) 898-6725

jdauphinais@consultbai.com

Ali Al-Jabir

Brubaker & Associates, Inc.

(Consultants to ABATE, IIEC, LEUG and TIEC)

(361) 994-1767

aaljabir@consultbai.com

Ken Stark

McNees Wallace & Nurick LLC (for CMTC)

(717) 237-5378

kstark@mcneeslaw.com

Kavita Maini

KM Energy Consulting, LLC (Consultants to MIC and MLEC)

(262) 646-3981

kmaini@wi.rr.com

Advanced Energy United appreciates the opportunity to submit these comments in response to the Midcontinent Independent System Operator, Inc.’s (MISO) request for stakeholder feedback on its proposed tariff changes for Demand Response Participating as a Supply Resource in MISO Markets (MSC-2024-6) following the October 10, 2024 Market Subcommittee meeting. 

Advanced Energy United is a national association of businesses making the energy we use secure, clean, and affordable. Advanced Energy United is the only industry association in the United States that represents the full range of advanced energy technologies and services, both grid-scale and distributed. Advanced energy includes energy efficiency, demand response, energy storage, wind, solar, hydro, nuclear, electric vehicles, and more. The comments expressed in this submission represent the position of Advanced Energy United but may not represent the views of any particular member. 

Advanced Energy United supports ensuring equitable and robust DR participation, but tariff changes to encourage this must be verifiable. We support reasonable measures to weed out bad actors that threaten the activity of market participants providing true value to the MISO region. Advanced Energy United supports this initiative's objectives, and our comments are intended to ensure that the proposed revisions will have the desired effect without harming the robust DR market in MISO. 

1. Issue: Payment for artificial curtailments – getting payment for not decreasing load
   1. Proposed Solution: Require meter data including non all event hours – non BTMG DRR must provide hourly meter data for all event and non-event hours for last 45 days and update every fortnight. BTM DRR must provide hourly meter data for last five days
      1. Comments: MISO should provide a technical solution involving an API to automate data submission and ensure there is no administrative burden. MISO should also consider a longer timeline such as 75 days instead of 45 for which to submit and update the required meter data. This would allow ample time for any necessary corrections and provision of accurate data to MISO.
   2. Proposed Solution: Require executive attestation on the reductions – tariff red lines say the MP must verify in writing to the TP that the amount of DR were made in during an event were made in direct response to Transmission Provider
      1. Comments: Support edit to redline language proposed for Attachment TT, 38.0.0 (4) to remove “the amount of” from the new sentence. The amount is calculated through the baseline determination so this should be removed for clarity.
2. Issue: Inflated Baselines – manipulations to make response appear larger than achieved
   1. No Comment
3. Issue: Fraudulent registration – creating assets without customer consent or contractual arrangement
   1. Proposed Solution: Require ARCs or any MP to provide signature pages with contracts from end use customers
      1. Comments: to ensure participants only create assets for which they retain the rights through customer consent or a contractual arrangement, it is reasonable for MISO to seek documentation demonstrating such a relationship. However, for small projects within aggregations where less formalized contracts may be used when participants consent to join a program, we support replacement of “contracts” with “agreements” in the redlines to speak more broadly to less formalized arrangements with customers.
4. Other changes
   1. Proposed Solution: Institute reference level calculations for DRRs – previously submitted feedback on this topic.

Advanced Energy United appreciates the opportunity to provide these comments and looks forward to continuing to work with MISO to explore options to facilitate demand response participation in these markets. Please reach out to Lisa Barrett with any questions.

Respectfully submitted,

Lisa Barrett

202.380.1950 x3177

lbarrett@advancedenergyunited.org

Voltus Comments to MSC Regarding MSC: Demand Response Participating as a Supply Resource in MISO Markets (MSC-2024-6) (20241010)

October 31, 2024

On October 10, 2024, MISO presented its proposed revisions to MISO tariffs to amend the Demand Participation Rules to the Market Subcommittee and invited comment. Voltus appreciates the opportunity to provide feedback on MISO’s proposals, as well as MISO’s receptiveness to stakeholder feedback related to these proposals, and offers the following additional comments:

If MISO reduces the cleared volume of Ancillary Services of a DRR asset in Real Time, that asset should remain eligible for DAMAP

Voltus supports MISO’s proposal to withhold DAMAP from DRRs that reduce their Ancillary Services offers in Real Time relative to cleared Day Ahead volumes. In such instances it is appropriate for the market participant to buy back the delta between their Real Time and Day-Ahead positions, and make whole payments are likely inappropriate.

However, in instances where assets maintain their offers in Real Time relative to cleared Day-Ahead volumes, yet are cleared for fewer MW by MISO in Real Time, DRRs should remain eligible for DAMAP. In such instances, MPs have no control over whether MISO clears their assets for fewer MW, and as a result make-whole payments are reasonable and appropriate.  

MISO’s currently-proposed Tariff language prevents self-scheduling into Operating Reserves

MISO’s currently proposed Tariff language in Section 39.1.2 and 40.2.8 would prevent DRRs from Self-Scheduling into MISO’s Operating Reserves markets, despite MISO previously indicating that this was reasonable¹. 

MISO should provide a simple path forward for DRRs to institute default reference levels at which it is virtually impossible to abuse market power

MISO and the Independent Market Monitor have stated previously that a primary objective for instituting Reference Levels for DRRs is to identify and prevent instances of abuse of market power. This goal is reasonable, and as discussed previously is one that Voltus supports.

However, MISO’s proposed mechanism and Tariff language for the institution for Reference levels for DRRs would require DRRs to set a reference level prior to self-scheduling into MISO’s Operating Reserves markets - an approach by which it is virtually impossible to abuse market power.

Voltus has previously commented² how certain end-use consumers of energy may have difficulties quantifying energy-related opportunity costs for their operations. To facilitate such consumers’ participation in Operating Reserves markets, MISO should allow DRRs to offer  Self-Schedules without the institution of a specific Reference Level. In doing so, MISO will maintain a straightforward path to market participation without inviting any meaningful risk of market power abuse by such assets.

This line of reasoning is the same by which Voltus has urged MISO to allow assets to participate in MISO’s Energy Market with an offer price equal to the Net Benefits Pricing Threshold. At the minimum possible offer price for a DRR, it is difficult, if not impossible, for any asset to abuse market power. By allowing assets to participate in the Energy market at this price without the institution of a Reference Level, a path will exist for assets with cumbersome-to-quantify Reference Levels to provide Energy to MISO’s system while also not introducing market power abuse risks. Without such a path, such assets will likely instead choose to sit on the sidelines and focus on their day-to-day business activities. This is precisely why SPP and the NYISO have both begun working towards a simpler path to institute similar “mitigated offer” levels, moving away from rigid constructs like MISO has proposed.

Respectfully Submitted,

Sean Shafer

Energy Markets Manager

Voltus, Inc.

sshafer@voltus.co

¹ MISO presentation on August 22, 2024 - https://cdn.misoenergy.org/20240822%20MSC%20Item%2007%20Demand%20Response%20Participation%20Rules%20(MSC-2024-6)643608.pd

² Voltus comments submitted by Sean Shafer, https://www.misoenergy.org/engage/stakeholder-feedback/2024/msc-demand-response-participating-as-a-supply-resource-in-miso-markets-msc-2024-6-20240822/