In the July 10, 2024, meeting of the Resource Adequacy Subcommittee (RASC), MISO continued discusion of Load Modifying Resource (LMR) reforms and considerations for a revised proposal. Stakeholders were asked to provide feedback on the following by August 2.
Stakeholders are encouraged to submit feedback early to allow MISO time to digest and prepare responses for the next RASC meeting. Responders may submit more than one response to a feedback request as needed.
Questions:
Alcoa Power Generating, Inc. (APGI)
Feedback on
“Accreditation Reforms for LMRs (RASC-2019-9) (20240710)”
August 02, 2024
During the July 10, 2024, Resource Adequacy Subcommittee (RASC) meeting, MISO requested feedback on their proposal to reform the accreditation process for Load Modifying Resources (LMRs).[1]
As a MISO Member, MISO Market Participant, and Load Serving Entity with LMRs registered and participating in MISO, Alcoa Power Generating Inc (APGI) has specific interests in the accreditation process for LMRs.
APGI offers the following feedback to MISO’s specific questions:
APGI has co-generation BTMG that is utilized to serve on-site load. For APGI, the generators are always operating and self-scheduled to capacity when the generation is available. APGI relies upon the generation for electricity, voltage stability, and process steam. The APGI resources were constructed to serve the on-site industrial load. As MISO considers the accreditation value determination, it is important that MISO considers real examples of generating resources like APGI’s that serves on-site load in evaluating the accreditation methodology. For example, if the accredited values do not give sufficient accredited capacity for a generator that must be operational to serve the on-site demand, then the accreditation process may not be reasonable.
In considering the MISO options, APGI would likely fit its resources into one of the proposed options; however, it is not clear that the new options provide any additional information to MISO that doesn’t currently exist. A preliminary examination of the two options that MISO has proposed would lead APGI to potentially choose the Second Option, since APGI’s resources are always fully self-scheduled when available and the resources meet the “available in 30 minutes” requirement. However, these resources will never show additional generation available to MISO operations in the DSRI, since the resources are fully self-scheduled as the generation is today.
APGI does not agree with MISO’s proposal to not consider any options for energy payments to deployed resources, particularly those resources that have an obligation to respond to an unlimited number of EEA 2 events. Any resource owner must have a mechanism to evaluate potential impacts to their operations of any demand response participation that includes the risk of deployments. Leaving the number of operations entirely open for an uncertain number of deployments without any additional compensation beyond a fixed annual value for capacity potentially creates a high risk for participants and could be a disincentive to participation. If MISO wants to stimulate participation and flexibility in available resources, then MISO should implement a mechanism for resources to provide a price curve for response for MISO to prioritize selection of resources.
As mentioned above, APGI encourages MISO to consider real examples of BTMG and how the proposed testing processes would work for resources including the proposed 5-minute annual meter data requirement. This is especially critical for resources that are self-scheduled or working from a firm service level.
MISO should bring specific examples to the upcoming RASC that show the testing process and accredited values for various scenarios of resources registered at LMRs including Self-Scheduled BTMG, Batch-Load Demand Response, Cyclical Industrial Loads, and Firm Service Level Demand Response. APGI urges MISO not to penalize resource participants with rules that do not capture real-life operational characteristics.
In some instances of large industrial facilities, the Demand Response of the load may take time to safely shutdown. MISO should consider creating a review process that considers the local shutdown procedure and even consider allowing staged load reduction where a facility might reduce a number of MWs in 30 minutes and then additional MWs in an hour, and complete shutdown in 2 hr.
APGI appreciates the opportunity to provide feedback on this issue.
If there are any questions or comments, please feel free to reach out to:
Steve Dowell
ESS LLC, Alcoa Power Generating Inc.
(812) 853-1135
DeWayne Todd
DDT LLC
(812) 573-8052
Iappreciate the opportunity to Support MISO revising accreditation for LMRs. They are called only in capacity emergencies and thus, as ITC has stated in the past, they are arguably some of the most important resources on the system…(though it pains me I have said that in the past…)
ITC appreciates the opportunity to provide feedback on the accreditation reforms for LMRs. We believe that these reforms represent a significant step towards enhancing grid reliability and efficiency in an increasingly complex and uncertain energy environment. By redefining the LMR product, implementing performance-based accreditation, and aligning market requirements with system reliability needs, MISO will position the grid to handle future challenges better.
As the electric grid experiences its most significant transformation in half a century whereby the resource mix transitions from always available to intermittently available resources, MISO’s efforts to reform its markets are essential to keeping the lights on. In particular, MISO has made great strides with its capacity markets reforms by pursuing and implementing availability-based accreditation for Schedule 53, wind, solar, and hybrid capacity resources over the past several years. Therefore, Wolverine supports MISO’s efforts to modernize the accreditation methodology for the remaining group of capacity resources – LMRs.
LMRs consist of behind the meter generation (BTMG) and demand response (DR) resources that have inherently different capabilities – some physical, some financial. At the end of the day, registering as an LMR establishes an obligation that the resource will be available. If an LMR is unable to be available, or only has minimal availability requirements as required under today’s accreditation methodology, the risk to grid reliability is increased. Further, today’s LMR accreditation methodology results in LMRs receiving full compensation for a significantly reduced availability requirement as compared with all other capacity resources – this is unreasonable and unfair.
What Wolverine likes about MISO’s proposal:
What Wolverine would like MISO to further explain:
It would appear prudent and reasonable that MISO’s LMR accreditation methodology consider this scenario. Alignment could be achieved by modifying the PLC calculation methodology or by accrediting BTMG based on its availability independent of transmission system constraints.
Again, Wolverine thanks MISO for the renewed attention to ensuring LMRs have the appropriate availability-based accreditation that results in comparable and commensurate compensation with non-LMR capacity resources and benefits and looks forward to working with MISO to fine tune its proposed methodology.
WEC Energy Group provides this feedback on MISO’s proposed accreditation and operational reforms for LMRs as presented at the July 10, 2024 meeting of the Resource Adequacy Subcommittee (RASC).
Although we comment on MISO’s latest LMR “options” below, we continue to recommend more investigation on the availability of LMRs within the DSRI tool before declaring an availability issue that requires a full overhaul of the LMR capacity resource type. Without a full understanding of the apparent “gap” between the PRA and DSRI and the related operational access to LMRs, we face the potential to drive interruptible load (LMR-DR) from the system or worse yet, into the non-registered shadows. This will reduce visibility, increase complexity and have negative consequences throughout the spectrum of planning to real-time operations.
We encourage MISO to produce the LMR availability on a seasonal basis for the 2023-2024 Planning Year. The switch from an annual construct to seasonal allows Market Participants (MPs) with interruptible customers that have varying load throughout the year to report different amounts of load and corresponding LMR in each season. On a seasonal basis, the gap may be much less pronounced.
During the April 17 RASC meeting, it was noted that MISO’s emergency operating procedures allow MISO to issue LMR scheduling instructions for a future hour during the Capacity Advisory step. MISO stated that it has issued LMR scheduling instructions at the Capacity Advisory step only twice and that the process was “clunky”. This demonstrates that MISO and MPs can do more to formalize the advance scheduling of LMRs, improve operational effectiveness, educate operators and interruptible customers, better utilize the Operational Risk Assessment (ORA) team, and improve access to LMRs in advance of an EEA level 2. Full access to LMRs at EEA level 1 may provide operational value that is consistent with access to other emergency resources and emergency maximum limits.
MISO LMR Option #2 – “Super LMRs”:
MISO’s proposed LMR Option #2, with its 30-minute maximum response time, is not a viable option for WEC Energy Group’s interruptible customers. As we noted in our May 3, 2024 comments, a 30-minute response time, coupled with a mandatory random test, does not align with the economic or safety environments of most interruptible customers.
MISO LMR Option #1 – “V2.0 LMRs”:
WEC Energy Group believes there is value in the access of LMRs at EEA level 1, which is the MaxGen Event Step 1 where an energy emergency is declared and emergency resources are committed. This single change, coupled with enhancements to the DSRI tool to improve reporting visibility, could address the issues within the problem statement adopted by stakeholders through approval of the motion made at the July 10 RASC meeting. We support continued evaluation of this single change.
We have concerns with the “offer” component of MISO’s LMR Option #1. Hourly LMR offers consisting of response time and availability within the Market User Interface (MUI) or Market Portal may restrict the ability to group customers into a single LMR. This creates an administrative burden that will require additional staffing and cost. Additionally, the real-time “offer” component does not align with the PRA. Within the PRA, an interruptible customer with a firm service level (FSL) reports gross load and a LMR-DR, which is the difference between the gross load and the FSL. In real-time, the customer’s gross load may be smaller than that which cleared the PRA, not because demand response was self-scheduled, but because the customer simply requires less electricity. This means the difference between the lower gross load and the FSL yields a lower LMR-DR. The lower LMR-DR is still consistent with the PRA clearing but if the going-forward accreditation is reduced based on the lower real-time offer, a disconnect is created between accreditation and how the LMR-DR and associated load is offered in the PRA. We believe this disconnect is a fundamental flaw in MISO’s LMR Option #1.
Background
MISO has significantly revised its LMR capacity accreditation proposal but has not yet provided all details. MISO proposed consideration for LMR participation in one of three ways, all of which are a significant variation from the two LMR options available today:
Thoughts on the proposed participation options
MISO has not yet provided a full proposal, so it is difficult to provide extensive feedback. We need clarification on MISO’s accreditation methodology impacted by:
These are key factors (in addition to testing requirements) that will drive fragile customer participation.
A 30-minute response time program is not realistic for most utility LMR programs. Effectively it is as if this would be a non-existent program, and we expect no customer interest due to the impact on their business.
MISO’s proposal appears to have participants provide availability for emergency conditions on a same-day, by-event basis. This is not realistic because most utility LMR programs do not have real-time metering available. In reality what will happen is LSEs will establish “typical” availability curves that can be pulled from to submit to MISO’s projected emergency events. This will not have the precision MISO expects and is likely to leave available MWs on the table. LSEs will take a conservative approach to avoid hits to accredited capacity.
Thoughts on testing criteria and procedure
MISO made the correct decision to drop previously suggested testing requirements. One test per year is reasonable, with a deployment in response to an event counting as a test. Again, testing considerations have a heavy customer impact and are a consideration for those customers considering whether or not to remain in an LMR program.
How should accreditation vary based upon response time?
It is not clear that MISO yet understands the careful balance between accreditation rates and customer participation & availability confidence. If accreditation rates tighten due to response time, number of calls, duration of calls, and low tolerance for seasonal / weather / time of day variations, then customer participation will drop due to lack of flexibility. Further, LSEs will likely become more conservative on offered availability, leading to a downward spiral.
MISO needs to consider incentive-based programs instead of penalty-based programs, especially if MISO is focused on by-event capabilities.
MISO should not rush this response time accreditation question, and in fact should fully investigate WPPI’s suggested Problem Statement recommendation to understand the accreditation rate vs. customer participation & availability confidence balance.
Which of the two options should be the “new” option and which should continue to carry the name, Load Modifying Resource?
MISO should not re-use any existing program names because the programs are all changing significantly under MISO’s proposal.
MISO needs to provide more data
We look forward to the clarity MISO will provide in August, but also ask for additional information:
Advanced Energy Management Alliance
MISO Resource Adequacy Sub-Committee (RASC)
“LMR Reforms (RASC-2019-9) (20240710)”
August 02, 2024
Advanced Energy Management Alliance (“AEMA”) [1] respectfully submits the following comments to the MISO Resource Adequacy Sub-Committee (“RASC”) on the feedback request made by MISO at the July 10, 2024, meeting of the RASC.[2] AEMA is a trade association under Section 501(c)(6) of the Federal tax code whose members include national distributed energy resource companies and advanced energy management service and technology providers, including demand response (“DR”) providers, as well as some of the nation’s largest demand response and distributed energy resources. AEMA members support the beneficial incorporation of distributed energy resources (“DER” or “DERs”), including advanced energy management solutions, into wholesale markets as a means to achieving electricity cost savings for consumers, contributing to system reliability, and ensuring balanced price formation. These comments represent the collective consensus of AEMA as an organization, although they do not necessarily represent the individual positions of the full diversity of AEMA member companies.
At the July 10 meeting of the RASC, MISO presented their updated proposal for accreditation reforms for Load Modifying Resources (LMRs). AEMA appreciates the changes that MISO has made to its original proposal and is preliminarily supportive of MISO’s proposal to create two options for LMRs that could register as either Pre-Emergency (Option One) or Emergency (Option Two) resources. This proposal by MISO appears to be a reasonable approach to give MISO operations access to some resources ahead of emergencies, while preserving a participation option for those resources only available in emergencies.
AEMA does remain concerned about the unlimited number of responses proposed for Option Two. It is very difficult for customers to gauge the risk/impact of participation in the proposed LMR program without understanding the potential number of activations. Although the requirement for the MISO system to be at EEA-2 provides some controls on the number of operations, predicting emergencies can be very difficult and could potentially result in some customers over-calculating the potential cost of participation. Historic performance may not be a good indicator of future performance, particularly with the changing MISO resource mix. The lack of boundaries on the number of activations could drive some customers to withdraw from the programs and leave MISO with less flexibility in the future.
Although MISO has proposed no energy payments for these LMR type participation models, AEMA urges MISO to reconsider this element of the proposal. An energy price element would be very useful to participants in mitigating the impact on customer operations by balancing a deployment payment with the costs of deployment. The lack of an energy payment option could cause potential participants like large industrial customers who are impacted by interruptions to focus on limiting their participation, which would reduce available resources for MISO.
With an energy payment incentive, MISO could utilize the energy offer prices to prioritize the deployment of resources, which could potentially be more efficient than pro rata deployment. The establishment of a deployment payment is particularly reasonable for the “First Option” since the Market Participant will be submitting availability into the Market Portal and the resource will be dispatched through MISO’s Unit Dispatch System (UDS.)
AEMA continues to urge MISO to conduct a broad survey of the types of resources that are currently registered as LMRs and bring back participation examples for resource types like behind-the-meter-generation, self-scheduled demand response, batch load operations, intermittent load operations, and firm service level customers. These examples should include participation models, testing requirements, validation criteria, and accreditation values.
MISO has requested feedback on specific aspects of the proposed LMR accreditation reforms. AEMA offers the following comments:
As mentioned above, AEMA is generally supportive of the two options proposed by MISO that would allow market participants to register as either Pre-Emergency (Option One) or Emergency (Option Two) resources. As MISO considers their accreditation methodology, AEMA encourages MISO to seek equitable treatment with existing resources in terms of accredited values. For example, standard generation resources do not currently have a 30-minute response requirement for start-up, so rules for a BTMG should be similar.
AEMA does not support the potential removal of dual-participation options because the dual-participation option may be a mechanism for customers to participate in different MISO market services during different seasons, depending upon production schedules. More options for potential participants, particularly since the dual participation option is already an option, should be maintained if possible.
MISO has proposed that resources will only need to conduct one test per year and that operational (event) data can be utilized for the test. AEMA supports this set of testing requirements. The handling of self-scheduled resources is an important aspect of the testing process and MISO should allow real operational data to be used for test data as well. For example, a self-scheduled BTMG that demonstrates unit capacity should be able to utilize the information for testing requirements.
AEMA requests that MISO bring detailed examples of the testing criteria and procedures for various resource characteristics like BTMG, batch load demand response, intermittent consumer operations (industrial loads), and firm service level resources.
MISO has proposed very tight requirements for testing that only allow for two attempts. AEMA is concerned with creating extremely rigid requirements without a process to examine the reason for any failed attempt. AEMA supports the requirement for resources to verify performance and to perform when required. However, it remains unclear how the testing and potential retesting would correspond to an intermittent load or load that only operates during certain shifts. A factory that is not operating due to a holiday or because of maintenance should not be assigned a test failure to perform since it has no load during that period.
Penalties for failure to respond should be contingent upon the reason for the failure instead of simply assigned to all. For example, it is possible that the “failure” was not really a failure of response, but a failure to reenergize equipment or because the resource was already off-line.
It is critical that MISO provide a set of examples of the testing criteria and procedure for various types of resources.
AEMA recognizes that MISO is examining an accreditation process that varies according to resource response time. MISO should ensure that any tiered accreditation value recognizes the physical characteristics of the resource and is comparable with other resources within MISO. AEMA encourages MISO to examine staged Demand Response that can provide partial response in a short time and additional response over time. This element is particularly valuable for aggregations of resources and should be a part of the accreditation options.
AEMA does not have a strong preference for the naming convention. Option Two remains an emergency only resource, so perhaps it should carry the legacy designation of Load Modifying Resource. The Option One resource could be a Pre-Emergency LMR.
AEMA appreciates MISO’s consideration of these comments as part of the examination of resource accreditation issues within MISO. We welcome any questions, and encourage you to contact either Katherine Hamilton, Executive Director of AEMA, or DeWayne Todd, representative of AEMA, should you wish to discuss this with AEMA members.
Respectfully Submitted,
Katherine Hamilton
Executive Director, Advanced Energy Management Alliance
Katherine@aem-alliance.org
202-524-8832
or
DeWayne Todd
DDT LLC
dewaynetodd1297@gmail.com
812-573-8052
[1] For additional information, see AEMA website: http://aem-alliance.org
As an initial matter, WPPI notes that this request for feedback on MISO’s revised proposal is premature, and reflects a disregard of WPPI’s request—at the May RASC meeting—for consideration of this issue on a timeline consistent with the process outlined in the Stakeholder Governance Guide (a request that was broadly supported by other stakeholders). MISO should not be tinkering with its deeply flawed April proposal at this time, but instead outlining the specific problems it sees, with supporting data, that are prompting MISO to seek changes to the current rules.
We reiterate that MISO’s fundamental goal should be to design its rules to facilitate the best use of all existing legitimate resources, accounting for their specific characteristics. MISO’s April LMR proposal appears likely, if implemented, to have led to the loss of several gigawatts of capacity that MISO could ill afford at this time of transition, and we urge MISO design any revised LMR rules in a manner that maintains the value of the full range of existing LMRs, with accreditation based on capacity contribution.
MISO is apparently asking two distinct questions here compressed into one: (i) what are our thoughts on the proposed participation options, and (ii) what elements of the proposed options would be infeasible for our resources. We answer these separately below.
Thoughts on proposed participation options
Seasonal Deployment Caps
It’s not clear why MISO determined that 30-minute resources must be able to respond to all EEA2 events while longer-lead resources have flexibility in number of responses. Response time and ability to respond many times within a season are not necessarily closely related. Given MISO’s expressed concerned about the current seasonal deployment caps, the appropriate course of action for MISO would be to use LOLE analysis to determine the capacity value of incremental deployments beyond the current caps (this should account for higher resource clearing levels expected with RBDC). This information, which should be shared with stakeholders, could then be incorporated into accreditation for all LMRs.
As we noted in our prior feedback comments, some LMRs may be willing to accept much higher exposure to deployments, while some would not. The latter might fear that an absence of deployment caps might eventually lead MISO to rely on these LMRs in place of prudent commitment of long-lead-time market capacity resources. This could cause those resources that might be able to consistently respond within 30 minutes to nonetheless register as “first option” resources—perhaps with a longer notification time—in order to have the ability to specify a deployment cap. MISO should make an effort to accommodate the full range of these LMR circumstances—with accreditation adjustments as appropriate—consistent with making fullest use of existing LMRs.
Response Time
We are open to discussing deployment (or pre-scheduling) at an earlier stage in the emergency procedures for longer lead resources, but we have yet to see MISO put forward a substantial basis for this discussion—much less for moving all resources with longer lead times than 30 minutes to deployment at EEA1. We remain to be convinced that 30 minutes is the correct threshold here, and would request that MISO provide more information bearing on these questions.
Availability Reporting
MISO proposes to use the MUI or Portal for resources with lead times longer than 30 minutes while retaining the DSRI for 30-minute EEA 2 resources. This appears more complicated than necessary, which would seem to have adverse implications for efficient and reliable operation during capacity emergencies. We would request that MISO explain why they don’t propose to use a single tool for all resources.
Penalty Provisions
MISO refers to Replacement and Capacity Replacement Non-Compliance Charges at slide 12, but it remains unclear to us exactly what MISO is proposing, and we are unable to meaningfully comment until we see clarification. As an initial matter, all Planning Resources registered in MECT are eligible for conversion to ZRCs based on their accreditation, and any uncleared ZRCs are eligible to be used for replacement, so MISO’s comment about resource “allowed to replace” ZRCs appears superfluous, unless MISO is making a separate point there. We presume that MISO’s reference to Capacity Replacement Non-Compliance Charges, we presume that MISO is suggesting that a Replacement requirement would apply to the resources under discussion. We note that all suspending and retiring Planning Resources are already subject to a Replacement requirement under Module E-1 (though there are surely questions about how this should apply to Demand Resources). To the extent MISO is saying long planned outages would also incur a Replacement requirement, this would be objectionable. First, consistent with our protest in the DLOL docket, planned-outage Replacement requirements are improperly duplicative where accreditation already captures actual or simulated availability that fully accounts for any planned outages. Secondly, this requirement applies today only to Generator Planned Outages that are reported in CROW. Extending this to all LMRs raises a host of potential concerns and would require many more details from MISO on its intentions.
Standardized Registration and Accreditation Provisions
We think standardizing registration provisions and accreditation calculations would be beneficial, and generally support such an effort.
Potential feasibility concerns with proposed participation options
WPPI’s LMRs could not currently respond consistently within 30 minutes given that they involve interruption of complex industrial processes or starting remote generation with local personnel including during non-business hours. Addition of remote-start capability would typically be required to allow consistent 30-minute response of BTMG (which might not be acceptable to the resource owner in all cases). Consistent 30-minute response for Demand Resources is not practical in most cases given the full range of considerations in interruption of industrial processes.
MISO’s proposal to require annual testing of actual end-use demand interruption, on a schedule determined by MISO, would be highly disruptive and expensive and does not appear to be driven by any clear need that MISO has yet articulated. We would support demonstration of established communication protocols around interruption, but not requiring actual interruption for testing purposes. Close scrutiny in registration and exposure to non-performance penalties appear to us to be adequate to address concerns around the ability of Demand Resources to interrupt load as directed in emergencies. This is particularly true for LSE-registered resources, where those LSEs are already responsible for preparing demand forecasts, which are likely much more consequential than LMR capability reporting. To the extent MISO believes existing applicable penalties are inadequate, they should make this specific case to stakeholders.
MISO proposes penalties where reduction “is less than the stated available amount.” This is potentially problematic as it suggests that DSRI reporting rather than reduction to a firm service level would be used to determine compliance. This would introduce wholly unnecessary complication for DR LMRs that typically express capability in terms of a maximum firm service level. Accordingly, we maintain that Firm Service Level is an appropriate basis for accreditation and that there needs to be recognition that actual incremental demand-reduction capability will be somewhat variable and that there will be limitations around precisely reporting this number.
Finally, MISO says that LMR deployments will become much more common, such that the existing seasonal deployment limits would impair reliability. If this is true, then actual deployments should be sufficiently frequent as to render annual load-curtailment testing superfluous, and MISO’s emphasis on the need for separate testing is misplaced.
This question appears premature. MISO has yet to adequately explain why existing response-time rules, together with MISO’s ability to pre-schedule long-lead LMRs, require adjustment beyond improvements to MISO’s own operational tools and processes. Moreover, while we are open to considering sliding-scale accreditation based on response time, upon a substantial demonstration that this is appropriate, we have yet to see such a showing. Determining how much accreditation should vary with response time would require specific evidence around timing in MISO’s processes that has not yet been presented. Finally, MISO already has provisions—and is proposing to add more—allowing earlier deployment of longer-lead resources. This raises further doubt around the need to also reduce accreditation based on response time, as both types of provisions appear to address the same issue and thus should not be considered independently.
At a minimum, this question appears premature, given that we have yet to fully define future participation options. In any event, the current tariff framework has a logical distinction between Capacity Resources and Load Modifying Resources, under which both of MISO’s proposals should continue to be regarded as Load Modifying Resources as they are connected behind the meter, do not submit a DA Market offers or receive Market payments, and are available only in emergencies. It is not clear what purpose would be served by removing the LMR designation from a subset of these resources.
We offer a few additional comments on MISO’s proposal and presentation:
IMEA feedback on the LMR reform. MISO RASC
What are your thoughts on the proposed participation options? For your Demand Resource and/or BTMG, if you have any concerns with the proposed participation options, please provide operating characteristics (with all relevant details) of your resource, and rationale for why the proposed participation options would not be feasible for your resource.
IMEA provides the following feedback with respect to LMR accreditation. While it is too early to comment on the participation options without knowing the implementation details. MISO proposal from 6-hour notification to 30-minutes is not reasonable. We understand the need for these resources to be available more often in the future than in the past. All IMEA resources currently use 2 hours for notification. MISO has not shown why the 30minutes notification is necessary. MISO should first explore the option for these resources to come online at EEA 1 or pre-emergency and not lose any accreditation. It is unclear to us why MISO has not explored these options first. Having a resource much earlier in the stack is something that MISO should value. 30 minutes does more harm with uncoordinated pre-scheduling of resources, which IMEA does not believe that MISO wants as an intended outcome.
Finally, IMEA disagrees with elimination of dual registration. IMEA resource class has a few resources that may be online earlier than 2 hours. Allowing resources by its capability requires MISO to be flexible with registration as a DR and BTMG separately.
How should accreditation vary based upon response time?
30 minutes is unreasonable. MISO should explore alternative options greater than 30 minutes this must be justified by the actual conditions that made MISO to conclude that 30 minutes is necessary. It is unclear why MISO is proposing to restrict DR to EEA 2 only and not exploring alternatives with its proposal.
IMEA also supports the example provided by Wolverine in its feedback and how MISO would consider the scenario where LMRs match co-located load. MISO should consider these scenarios during accreditation. Otherwise, valuable resources will unnecessarily be stranded in case of emergency where resources are available but not necessarily accredited in the MISO process.
Proposed testing criteria and procedure?
IMEA is open to MISO’s testing. But should consider any self-scheduled tests as a part of readiness to minimize costs and duplication.
Bob Kosner IMEA
Cordelio Power appreciates this opportunity to provide feedback on LMR reforms, as presented at the July 10 meeting of the Resource Adequacy Subcommittee. In general, Cordelio supports MISO’s goals to reform LMR policies to enhance reliability. Cordelio encourages MISO to update policies to ensure batteries are eligible to participate as demand side resources. From the beginning of this process, MISO has expressed its need for demand side resources that can respond quickly and frequently, can be tested, and are able to provide visibility to MISO. Energy Storage Resources can provide all these attributes and Cordelio encourages MISO to develop a framework that enables these technologies.
Questions:
Voltus comments to RASC on RASC: Accreditation Reforms for LMRs (RASC-2019-9) (20240710)
August 2nd, 2024
On July 10th, 2024, MISO presented to the Resource Adequacy Subcommittee regarding proposed changes to capacity accreditation and participation for demand resources in MISO’s footprint. Voltus appreciates the opportunity to comment on these proposed changes.
Voltus offers the following feedback in response to MISO’s most recently stated challenges and proposed solutions:
What are your thoughts on the proposed participation options? For your Demand Resource and/or BTMG, if you have any concerns with the proposed participation options, please provide operating characteristics (with all relevant details) of your resource, and rationale for why the proposed participation options would not be feasible for your resource.
Elimination of Dual-Participation Options
In designing a framework without the existence of Dual-Participation, MISO must ensure that a path to both proper accreditation and everyday market participation exists for assets that can respond differently to emergency vs. economic conditions or provide both emergency energy and ancillary services.
For example, it is possible today for a university to enroll as a DRR and LMR and regularly participate in MISO’s Energy market by curtailing HVAC equipment in response to MISO instructions while simultaneously being on standby to curtail a much broader range of equipment in response to an emergency LMR deployment.
Such an asset, like the vast majority of demand resources, is unable to follow Setpoint instructions – its equipment, whether the smaller set of HVAC equipment or the broader set of equipment to be curtailed in an emergency, is either on or off, and cannot be “partially curtailed” – and as such this asset is not a candidate to participate as a DRR-II, and would participate as a DRR-I.
Today, it is only possible for a DRR-I asset to provide a single price-quantity pair as an offer. As a result, under MISO’s proposal to remove dual-participation, for such an asset to receive accreditation for what it could provide in a MISO emergency, it would need to actively adjust its offers during Capacity Advisory or Emergency conditions to reflect the ability to curtail the much broader set of equipment typically reserved for Emergency conditions in order to demonstrate full availability in line with its accreditation. During such circumstances, this asset’s typical offer to curtail HVAC at a lower price is replaced by an offer to curtail all equipment at a higher price – which drives higher Energy costs in the MISO footprint. This could be remedied by allowing DRR-I assets to provide multiple price-quantity pairs as offers into MISO’s Energy markets, as Voltus has previously proposed to the MSC1.
However, this concern is not only limited to Energy participation. As a second example, consider a steel mill, similarly dual-enrolled today as an LMR and DRR, that is capable of curtailing a rolling mill to participate in Spinning Reserves but would curtail its entire facility in response to an Emergency event as an LMR. Such a facility is unlikely to be willing to curtail its entire facility outside of emergency conditions due to high downtime costs, and as such would likely choose to be accredited as a “First Option” or “Second Option”. Under MISO’s current proposal, as the facility cannot dual-enroll, the facility would be required to choose between continuing to participate in Spinning Reserves with only its rolling mill versus receiving capacity accreditation for the entire facility but give up Spinning Reserves participation. In either outcome, MISO would lose access to a valuable resource. These scenarios are not hypothetical - Voltus has many customers whose participation as DRR-1s is significantly lower than their participation as LMRs.
To address this, MISO should evaluate replacing the “First Option” participation model with a mechanism for DRR-Is to provide (and receive accreditation for) an “Emergency-Only” price-quantity pair that is separate from its typical Energy offer and is only considered for commitment during Capacity Advisory or Emergency conditions. As mentioned above, this could easily be done by allowing the current DRR model to provide an offer curve including multiple price-quantity pairs.
Such a change is not a far cry from the currently-proposed “First Option”, as this proposed instrument would already set offers in the MUI, like DRRs. However, by including the ability to provide an additional “Emergency” offer, MISO could provide a path forward that combines the DRR and “First Option”. In addition to being simpler to manage for MISO and MPs by reducing the total number and variety of asset types, this proposal would provide a path forward for assets that can respond partially to economic or Contingency commitments, but can respond with more curtailment in emergency conditions, to fully participate in MISO’s Capacity, Energy, and Ancillary Services markets.
Proposed Capacity Participation Options
Regarding the “First Option” and “Second Option” capacity participation models that MISO has proposed, alongside the above proposal to replace the “First Option” with an “Emergency-Only” offer by DRR-I assets, Voltus notes that, based on its experience, demand response assets that can respond more quickly are also capable of responding more often than assets that need longer notifications before responding. As such, it would make more sense for assets with higher accreditation and shorter notification timing to be called during EEA Level 1 events, while longer notification assets should be called only during EEA Level 2 events.
In addition, MISO has proposed that the capacity options will be deployed in response to NERC EEA events, which are implemented at the LBA-footprint level. Accordingly, when deployed, MISO should allow for the performance of all “Capacity Option” assets within an MP’s portfolio to be aggregated up to the LBA-footprint level. In this way, MISO will be aligning the level at which assets are deployed in response to an emergency with the level at which MPs are assessed for the response of their assets. The reliability and predictability of performance for distributed assets increases with broadening aggregation and increased diversity of those assets – additionally, broadening aggregation criteria directly incentivizes over-performance for individual assets within an MP’s portfolio by allowing them to be compensated for that over-performance.
Energy Payments for Capacity Participation Options
MISO’s proposal to withhold payments for Energy provided by assets under the “First Option” or “Second Option” capacity participation models as a manner of incentivizing assets to instead register as DRRs is inconsistent with the manner in which traditional generation assets are compensated for providing Resource Adequacy to the MISO system. Such assets that receive capacity accreditation for taking on a “must-offer” requirement still receive energy payments when deployed, even during “must-offer” hours. Additionally, this is a critical way for assets to recover the incremental costs associated with providing energy for each additional emergency.
Consider, as an example, a large industrial facility such as a steel mill or metals manufacturer. These types of facilities have particularly high downtime costs – MISO quantified the Value of Lost Load (VOLL) for some industries in excess of $13,640/MWh2 – and facilities must cover those costs in order to be willing to curtail and provide services to the MISO system. In addition, due to their extreme downtime costs, these assets are limited to participation during system emergencies.
Voltus works with over 100 MW of such facilities in MISO’s footprint, who today, respectively, have the option to dual-register as an LMR and EDR in order to receive capacity compensation for being on standby during system emergencies, and additional energy payments to help cover opportunity costs incurred during curtailment – and, as a result, are willing to curtail as many as 16 times per Planning Year. Under the proposed participation model, however, these assets would need to instead participate as a “First Option” capacity asset because they would not have the flexibility to participate in an unlimited number of events without Energy payments and could not participate as DRR-1 assets given the Hard Offer Cap of $2,000/MWh. In order to ensure their downtime costs are covered, these assets would need to limit participation to a small number of events each planning year, which would in turn erode their capacity accreditation and could eventually push them out of participation entirely. In addition, particularly due to the partial accreditation they would receive for limiting the number of emergencies they can respond to, these assets would need to offer into MISO’s PRA only at a very high offer price. In this way, this system of inefficient compensation could drive higher pricing on MISO’s capacity supply curve.
Instead, if these assets were properly compensated for the Energy they provide during emergencies akin to generators, they could take on an obligation to respond to more events, and – with the higher accreditation that results – they could in turn lower their offer prices in the PRA. This more efficient compensation system, which would not result in demand resources uniquely increasing their offer prices, helps MISO maintain a more efficient capacity supply curve and, accordingly, lower capacity pricing.
Recognizing the importance of energy payments as a performance incentive and of treating Demand Resources and Generation Resources equitably, emergency capacity demand response programs in other markets pay demand resources for energy provided during emergencies – PJM’s Emergency Load Response Program pays participating assets for energy provided during emergencies the greater of $1,849/MWh or the asset’s LMP, and the New York ISO’s Special Case Resources program pays for energy provided at the greater of the asset’s LMP or its Energy offer price (up to $500/MWh).
Accordingly, MISO should allow for Energy payments for “First Option” and “Second Option” capacity participation models. Voltus notes that our above proposal to replace the “First Option'' instrument with an “Emergency-Only” DRR-I offer would address these concerns for that asset class, though this adjustment should still be made to the proposal for “Second Option” resources. When taken together with Voltus’s proposal, without the need for withholding Energy payments, MISO’s existing proposal already sufficiently incentivizes registration as a DRR with simpler options for testing, potential access to Energy and Ancillary Services markets, and flexibility in number of responses and response time.
Standard Registration Process
Voltus strongly supports MISO’s proposal for a “Standardized registration process for all Demand Resources”. MISO should model this process after the existing Demand Response Tool (DRT) and the Locational Enrollment Tool that is under development, both of which distinguish between individual Locations and aggregated Enrollments. Any long-term solution for a registration process must allow for Location-Based review and approvals of facilities being registered as Planning Resources, with enrollments created from aggregations of approved assets. Voltus has shared this proposal as part of its Issue Submission, “Assessing LMRs on a Location Basis RASC 2024-1”3 and there has been broad consensus for years among MISO staff, LBA/LSE/RERRAs, and registering MPs that Location-Based registrations will save all stakeholders significant effort and minimize unnecessary complexity.
Requirement of 5-minute meter data around deployments
Voltus sees significant merit in MISO’s proposal to require 5-minute meter data around deployments for “Capacity Option” participation models4. However, we strongly oppose this aspect of the proposal given existing meter accuracy standards. Most interval meters do not collect such granular load data, and as such the 5-minute granularity of data is generally not available to Market Participants. While it is possible to install equipment to provide more granular data compliant with MISO’s accuracy standards defined in BPM 5 section 2.10.3, today manufacturing and installing such equipment is too costly to justify for wholesale market participation for small assets. At today’s market pricing and given MISO’s existing meter standards, Voltus’ internal rule of thumb is that revenue grade metering is not cost-effective for resources smaller than 100 kW. Under the proposal from MISO, these smaller assets – including the rapidly growing residential DER industry – would effectively be barred from participating as any of the options put forth by MISO and would simply stop participating as Planning Resources.
Instead, MISO should consider revising its meter accuracy standards in such a way that allows all DERs, including demand response resources, more flexibility in metering hardware that can be used at small assets – for example, revenue grade metering that in ±0.5% accuracy should not be necessary for a 1 kW asset. Instead, MISO should implement metering standards on an aggregation-basis, rather than on a per-asset basis, given that aggregated meter data will always be more accurate than the underlying meters themselves5. In doing so, MISO can ensure that a requirement for 5-minute data is economically possible for smaller LMRs.
Incentive Structure Promoting Registration as DRR over “First Option” or “Second Option” Capacity Models
MISO staff have stated that one intended outcome of its proposal is to incentivize resources to register as DRRs in place of emergency-only participation options. If successful, this could result in anincrease in the number of DRRs being registered with MISO.
In preparation for this, MISO’s technical systems that handle the enrollment and management of DRRs should be upgraded. Voltus has highlighted changes to the DRT that would improve its handling of a higher number of complex assets in previous comments to FERC6. MISO should implement these improvements prior to the institution of the new participation models in order to ensure the DRT is capable of handling a higher volume of enrollments that the new proposal structure may produce, even while the kW participation of those newly enrolled facilities is less than their historical LMR participation.
In addition, MISO has recently proposed in a separate presentation to the MSC to institute Reference Levels for DRR-Is. Voltus has voiced concerns related to the potential for this proposal to become highly burdensome to MISO, the Independent Market Monitor, MPs, and end-use facilities in our comments on that item7. When considered alongside MISO’s proposal to incentivize many more resources to register as DRRs, we note the burden caused by instituting Reference Levels for DRRs would be augmented due to the potential volume of new DRRs.
Proposed Testing Criteria and Procedure
MISO’s proposed testing criteria are, in general, reasonable. However, Voltus offers the following suggestions on how the proposed criteria should be improved:
For testing of all resource types, MISO should ensure that tests occur during the kinds of conditions expected during Resource Adequacy hours - namely, during business hours and weather conditions resembling seasonal peak hours - or account for the fact that load profiles will be different outside of these hours. A school curtailing HVAC load, for example, will be unable to demonstrate performance at 11pm on a Saturday night, but is certainly capable of providing genuine resource adequacy benefits to the MISO system.
MISO should clarify how testing will work for newly-registered DRRs and “First Capacity Option” resources. Will such resources be required to demonstrate a test prior to becoming active in MISO’s Market User Interface (MUI)? Or, will they simply be tested during their first Planning Year of participation, early in the year?
In addition, when determining an appropriate accreditation for facilities that did not perform at 100% in previous tests, MISO should clarify that, instead of adjusting facilities’ enrollments by a test performance percentage, the kW reduction that each Location achieves in its test will be reflected in its maximum enrollment in future years. Registered kW for each Location, then, may be summed up to create Enrollments as discussed above. For example, a 1,000 kW site that demonstrates 800 kW of performance should be able to enroll for the full 800 kW in the subsequent year, as opposed to only 80% of future enrollment values - this could result in the site attempting to register for 800 kW, but only receiving accreditation 80% of that value, or 640 kW.
Finally, for assets utilizing the FSL M&V option, their performance in the test needs to be measured by whether they reached the stated Firm Service Level, not whether their drop was equivalent to accredited values. Alternatively, this could be accomplished by ensuring that the registered asset reduced load equivalent to its DSRI availability, which should be equal to the difference between its recent load and firm service level.
How should accreditation vary based on response time?
MISO should define discrete accreditation percentages according to a matrix of notification timing and the availability of an asset during Capacity Advisory and Emergency conditions. MISO should, at the time of registration, assign each Location an accreditation percentage according to its position within this matrix. This methodology should apply to both DRRs and Capacity Options registered for capacity accreditation.
The values within the aforementioned matrix should be derived proportional to how often an asset with a given notification timing and deployment limit would be utilized when compared to a 30-minute, uncapped resource. For example – if a MISO analysis of historical emergencies concludes that a 30-minute, uncapped “Second Capacity Option” resource would have been deployed an average of five times over the last three years, and MISO then determines that a resource with a 2-hour notification timing could have been deployed to support the system during three of those five times, then 2-hour notification assets should receive a 60% accreditation percentage.
Finally, MISO should ensure that distribution losses and Planning Resource Margin Requirements are reflected properly in accreditation values.
Which of the two options should be the “new” option and which should continue to carry the name, Load Modifying Resource?
Voltus is ambivalent to the naming constructs used for the capacity options, though as discussed we propose the “First Capacity Option” could be replaced by an “Emergency-Only” DRR-I Energy offer. In this way, the “Second Option” could retain the name Load Modifying Resource.
Conclusion
Voltus is encouraged that MISO’s most recent proposal considers much of the feedback that stakeholders have provided on this topic to date. However, MISO should take caution that implementing a multitude of changes, each of which has the potential to make participation more challenging for a subset of participating assets, may result in a significant decrease in the overall number of resources available to MISO when taken together.
As a result, MISO should particularly strive to ensure access to Energy and Ancillary Services for partial curtailment energy compensation for emergency curtailment is available to emergency-only resources. MISO should also be certain to create registration and meter data requirements that scale to all types of assets, to appropriately accredit resources for the frequency with which they can alleviate emergency conditions, and that resources are properly accredited for demonstrated load curtailment in place of percent curtailment versus registered amounts. Such considerations will allow MISO to rely even more strongly on Demand Resources as Planning Resources.
Respectfully Submitted,
Sean Shafer
Energy Markets Manager
Voltus, Inc
sshafer@voltus.co
Footnotes:
1 Submission Curves for DRR-1 Energy Offers (MSC-2024-5), presented by Voltus to the MISO MSC on July 9, 2024 https://cdn.misoenergy.org/20240709%20MSC%20Item%2012%20Submission%20Curves%20for%20DRR1%20Energy%20Offers%20(MSC-2024-5)_Voltus637241.pdf
2 Continued Reforms to Improve Scarcity Pricing and Price Formation (MSC -2019 -1) 1 EDR Offer Cap Options and VOLL Circuit Breaker, Presented by MISO to the Market Subcommittee on April 18, 2024 https://cdn.misoenergy.org/20240418%20MSC%20Item%2008%20Continued%20Reforms%20to%20Improve%20Scarcity%20Pricing%20and%20Price%20Formation%20(MSC-2019-1)632556.pdf
3 Voltus additionally presented on this issue to the Resource Adequacy Subcommittee on January 17th, 2024. “Location-Based LMR Approvals”, https://www.misoenergy.org/events/2024/resource-adequacy-subcommittee-rasc---january-17-2024/
4 Note that Voltus has advocated in the past for all DRR-1 Energy events to be settled on a 5-minutely basis, rather than hourly in the MISO Issue titled “5-min Interval vs Hourly Settlements for DRR-Type I Resources MSC-2021-10”
5 Voltus intends to submit an Issue Submission regarding this question to the Markets Subcommittee in August 2024.
6 Voltus, PROTEST AND COMMENTS OF VOLTUS, INC (Jul. 10, 2024), FERC eLibrary No. 20240711-5023
7 “Voltus Comments to MSC: Demand Response Participating as a Supply Resource in MISO Markets (MSC-2024-6)”, https://www.misoenergy.org/engage/stakeholder-feedback/2024/msc-demand-response-participating-as-a-supply-resource-in-miso-markets-msc-2024-6-20240709/
Consumers Energy appreciates the opportunity to provide feedback on the accreditation reforms for LMRs and the efforts MISO has made to consider stakeholder feedback. Consumers Energy also agrees that these reforms are necessary for continued grid reliability and appropriate accreditation.
The new proposed accreditation method that MISO presented at the 7/10/24 RASC was a step in the right direction from the original proposal. Consumers Energy is overall in support of the direction that MISO is heading and would like to provide answers to the specific questions asked by MISO along with some suggestions on enhancements or considerations that should be given as MISO works toward the LMR reform final proposal.
Consumers Energy supports the idea of having options to respond at the EEA1 and EEA2 levels, different accreditation criteria for each of these options, and the response times provided for each of these options. Consumers Energy would propose enhancements to these programs as MISO refines them to still allow for testing opt outs or large penalties for not meeting their obligation. Consumers Energy also believes that it is important that separate criteria for Commercial customers and residential customers due to the cost of testing and variability in participation for commercial vs. residential programs. The proposed EEA2 with testing 1x/year would not be feasible for our resource due to the cost of testing with no added customer benefit. The resource has very stringent procedures to meet their obligations for emergency events and has proven during all events, they are able to perform. Consumers Energy had an individual meeting to discuss the details of the operating characteristics and why it would not work. Some of the proposed solutions were centered around:
In addition, Consumers Energy would like to ask that MISO consider keeping the Firm Service Option while creating more stringent criteria around it. The proposed option of completely getting rid of the Firm Service Options seems to create many unnecessary complexities to the system that will add little overall value to grid reliability and greatly increase the likelihood of Market Participants not being able to comply. Many resources that participate in the Firm Service level, have high amount of load that they can shutdown very quickly, while varying overall load up to 10% or more per hour depending on current production output. This would create a burden on the resource and the market participant to constantly update the offer to MISO with little added benefit as their peak load is already forecasted and considered when setting the PRMR. Removing the Firm Service option increases the likelihood of not meeting the obligation or decrease accreditation due to variations in load that are not tracked at that granularity. Consumers Energy would propose the following options to ensure that MISO has a more accurate forecast for Firm Service Level:
Lastly, Consumers Energy would like to suggest that MISO reconsider usage of two different platforms for inputting the availability of LMR’s. This will create an increase potential for human error and confusion for Market Participants, which would result in MISO not having an accurate view of what is truly available during an emergency. Keeping offers simple and streamlined will allow maximization of available MWs for usage at MISO’s highest time of need.
to: | MISO Resource Adequacy SUBCOMMITTEE |
from: | The Entergy Operating Companies |
subject: | Load Modifying Resource Reforms (RASC 2019-9) |
date: | August 2, 2024 |
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The Entergy Operating Companies ("EOCs")[1] appreciate the opportunity to provide feedback on MISO’s Market Redefinition: Load Modifying Resource Reforms
The EOCs support MISO working with Stakeholders to reframe the issue and provide a potential pathway for Demand Response based Load Modifying Resources (LMRs) to participate.
The EOCs support maintaining the LMR naming convention, with a clear delineation for LMRs with 30-minute or less notification (perhaps LMR-I or LMR-a) and those with 30-minute to 6-hour notification times (LMR-II or LMR-b). This distinction would help differentiate obligations during different emergency levels for LMRs and facilitate the energy market participation of Demand Response Resources (DRRs).
Regarding the inclusion of EEA1 events, we request additional information on potential obligations, timing of decisions, event durations, and a comparison of historical versus future expected events.
We caution against imposing additional tasks related to LMR offers without improving the tools or processes involved. For many LMR Market Participants (MPs), the same personnel responsible for updating availability are also managing generation portfolios. MISO's request for LMR Offer updates from multiple LMR Units within a short time frame would further complicate this effort for market participants and their customers. Accurate capacity information from customers remains a concern for the EOCs.
The EOCs require more detail around participation and accreditation methodology.
Any change to existing LMR requirements could also cause retail tariffs to need to be updated with these changes specified. The complexity for these changes can be extensive so we would appreciate time to meet with our customers and regulatory staff to discuss any upcoming changes.
The revisions to testing requirements make sense.
The EOCs support MISO’s revision of the testing framework for demand resources. We would like to have additional discussions at future meetings to fully vet the proposed testing framework and the penalty provisions applicable to all DRRs participating in the capacity market. We have concerns about the consistent application of non-performance penalties relative to other non-performance penalties currently in the tariff.
MISO’s intention to eliminate the Firm Service Level option for Demand Resources needs to be reconsidered.
The EOCs’ primary concern with the current proposal revolves around MISO's declared intention to eliminate the Firm Service Level option. MISO has indicated that the capacity accreditation for demand resources will now be based on the available megawatts (MW) of demand reduction during Capacity Advisory periods and other emergency declarations. This new approach includes the removal of the Firm Service Level option for demand resources and that is very troubling for the EOCs and its customers who have a Firm Service Level option, who are currently participating as Load Modifying Resources. By eliminating this option, it likely will require Utilities to undergo extensive revisions associated with those tariffs. Elimination of FSL would also make it extremely hard on Utilities to get accurate availability of the resource for the correct availability offer to provide to MISO. Incorrect availability information for the resource could impact that resource accreditation and also incur potential penalties for non-performance.
MISO would need to provide to Stakeholders with detailed information on how demand resource capacity accreditation would work when the Firm Service level is no longer available to resources.
While some LMR changes require more time to evaluate and incorporate, the EOCs feel one change should be made immediately.
The EOCs see issues with the dual registration of LMR + Emergency Demand Response (EDR) units due to the ability to shift availability from LMR to EDR. This prevents the availability of LMR from being displayed and available to MISO, while the LMR registrant still receives a capacity payment, greatly reducing the chance of curtailment. This issue needs to be addressed as soon as possible. The EOCs propose that MISO move swiftly to change market rules to require dual registered EDR and LMR resources to “must offer” their availability as LMR. The EOCs believe MISO should carve this rule change out from its overall package of LMR reforms and pursue its implementation on a near term basis.
The EOCs appreciate MISO continually asking for feedback and taking Stakeholder opinions into account, we look forward to continuing to work with MISO on reasonable and beneficial LMR reforms
1 The Entergy Operating Companies are Entergy Arkansas, LLC, Entergy Louisiana, LLC, Entergy Mississippi, LLC, Entergy New Orleans, LLC, and Entergy Texas, Inc.
Proposed testing criteria and procedure
How should accreditation vary based upon response time?
Which of the two options should be the “new” option and which should continue to carry the name, Load Modifying Resource?
The Louisiana Public Service Commission Staff (LPSC Staff) hereby provides feedback to the RASC LMR Reforms discussed at the July 10, 2024 RASC meeting. The LPSC Staff appreciates the willingness of MISO to accept feedback on these evolving issues and its willingness to work with stakeholders to reach solutions on LMR accreditation reforms that maximize the availability of LMR resources in times of need and that provide appropriate capacity credit. Any reforms should be a product of collaboration with stakeholders to offer a broad array of lead times and interruptions, limit testing only to tests that are essential, and capacity credit and compensation should be in alignment with the value that the LMR resources can and do provide. While these preliminary designs are an improvement over MISO's previous Reform proposal, there are significant issues to resolved and questions to be answered. MISO has not substantiated its concerns regarding LMR performance, and, as a result has not clearly identified and supported the problem it is attempting to resolve.
At the July 10, 2024 meeting of the RASC, MISO made a presentation indicating that it is working on a modified LMR reform proposal, and it intends present detailed designs of that proposal at the August RASC. It presented "MISO Design Considerations for Reforms" that include two capacity-only participation options for demand resources, changes to DRR-Type I and Type-II options, changed testing, registration, auditing and communication procedures, accreditation alignment across all options, and elimination of all dual-registration options. It sought feedback on four questions, and the LPSC Staff responses are inserted in bold below:
Answer .While an improvement over the previous proposal, MISO should investigate and demonstrate that additional options provide no value. While compensation and accreditation differences may be warranted, a wider array of options may attract and retain LMR resources that will provide value. MISO should evaluate notification times of up to 6 hours. In addition, MISO indicated at the July RASC meeting that it may discontinue the longstanding Firm Service Level option for LMR demand resources. MISO has provided no justification for that change, and it should not considered for elimination without full analytical support. LPSC Staff remains concerned that MISO's July refined proposal framework may still exclude LMR resources that can provide meaningful capacity value during emergencies.
Answer. While response time is one criterion that should be explored and analyzed for accreditation differences, other criteria should also be analyzed including historic and future availability. In addition, response time may be considered in evaluating compensation in lieu of or in addition to accreditation.
Answer. LPSC Staff has no preference.
Once MISO and stakeholders reach a tentative agreement on LMR accreditation reforms, MISO shall allow sufficient time (prior to tariff and/or BPM changes) for State Regulatory Authorities, Load Serving Entities and LMRs to determine the full impact of such reforms including the opportunity to understand the level of potential loss of participating LMRs, replace capacity required and the cost of this replacement capacity. The knowledge gained from an analysis of potential loss of participating LMRs and associated costs for replacement capacity may warrant additional revisions to the tentative LMR accreditation reforms agreement.
Advanced Energy Management Alliance
MISO Resource Adequacy Sub-Committee (RASC)
“LMR Reforms (RASC-2019-9) (20240710)”
August 02, 2024
Advanced Energy Management Alliance (“AEMA”) [1] respectfully submits the following comments to the MISO Resource Adequacy Sub-Committee (“RASC”) on the feedback request made by MISO at the July 10, 2024, meeting of the RASC.[2] AEMA is a trade association under Section 501(c)(6) of the Federal tax code whose members include national distributed energy resource companies and advanced energy management service and technology providers, including demand response (“DR”) providers, as well as some of the nation’s largest demand response and distributed energy resources. AEMA members support the beneficial incorporation of distributed energy resources (“DER” or “DERs”), including advanced energy management solutions, into wholesale markets as a means to achieving electricity cost savings for consumers, contributing to system reliability, and ensuring balanced price formation. These comments represent the collective consensus of AEMA as an organization, although they do not necessarily represent the individual positions of the full diversity of AEMA member companies.
At the July 10th meeting of the RASC, MISO presented their updated proposal for accreditation reforms for Load Modifying Resources (LMRs). AEMA appreciates the changes that MISO has made to its original proposal and is preliminarily supportive of MISO’s proposal to create two options for LMRs that could register as either Pre-Emergency (Option One) or Emergency (Option Two) resources. This proposal by MISO appears to be a reasonable approach to give MISO operations access to some resources ahead of emergencies, while preserving a participation option for those resources only available in emergencies.
AEMA does remain concerned about the unlimited number of responses proposed for Option Two. It is very difficult for customers to gauge the risk/impact of participation in the proposed LMR program without understanding the potential number of activations. Although the requirement for the MISO system to be at EEA-2 provides some controls on the number of operations, predicting emergencies can be very difficult and could potentially result in some customers over-calculating the potential cost of participation. Historic performance may not be a good indicator of future performance, particularly with the changing MISO resource mix. The lack of boundaries on the number of activations could drive some customers to withdraw from the programs and leave MISO with less flexibility in the future.
Although MISO has proposed no energy payments for these LMR type participation models, AEMA urges MISO to reconsider this element of the proposal. An energy price element would be very useful to participants in mitigating the impact on customer operations by balancing a deployment payment with the costs of deployment. The lack of an energy payment option could cause potential participants like large industrial customers who are impacted by interruptions to focus on limiting their participation, which would reduce available resources for MISO.
With an energy payment incentive, MISO could utilize the energy offer prices to prioritize the deployment of resources, which could potentially be more efficient than pro rata deployment. The establishment of a deployment payment is particularly reasonable for the “First Option” since the Market Participant will be submitting availability into the Market Portal and the resource will be dispatched through MISO’s Unit Dispatch System (UDS.)
AEMA continues to urge MISO to conduct a broad survey of the types of resources that are currently registered as LMRs and bring back participation examples for resource types like behind-the-meter-generation, self-scheduled demand response, batch load operations, intermittent load operations, and firm service level customers. These examples should include participation models, testing requirements, validation criteria, and accreditation values.
MISO has requested feedback on specific aspects of the proposed LMR accreditation reforms. AEMA offers the following comments:
As mentioned above, AEMA is generally supportive of the two options proposed by MISO that would allow market participants to register as either Pre-Emergency (Option One) or Emergency (Option Two) resources. As MISO considers their accreditation methodology, AEMA encourages MISO to seek equitable treatment with existing resources in terms of accredited values. For example, standard generation resources do not currently have a 30-minute response requirement for start-up, so rules for a BTMG should be similar.
AEMA does not support the potential removal of dual-participation options because the dual-participation option may be a mechanism for customers to participate in different MISO market services during different seasons, depending upon production schedules. More options for potential participants, particularly since the dual participation option is already an option, should be maintained if possible.
MISO has proposed that resources will only need to conduct one test per year and that operational (event) data can be utilized for the test. AEMA supports this set of testing requirements. The handling of self-scheduled resources is an important aspect of the testing process and MISO should allow real operational data to be used for test data as well. For example, a self-scheduled BTMG that demonstrates unit capacity should be able to utilize the information for testing requirements.
AEMA requests that MISO bring detailed examples of the testing criteria and procedures for various resource characteristics like BTMG, batch load demand response, intermittent consumer operations (industrial loads), and firm service level resources.
MISO has proposed very tight requirements for testing that only allow for two attempts. AEMA is concerned with creating extremely rigid requirements without a process to examine the reason for any failed attempt. AEMA supports the requirement for resources to verify performance and to perform when required. However, it remains unclear how the testing and potential retesting would correspond to an intermittent load or load that only operates during certain shifts. A factory that is not operating due to a holiday or because of maintenance should not be assigned a test failure to perform since it has no load during that period.
Penalties for failure to respond should be contingent upon the reason for the failure instead of simply assigned to all. For example, it is possible that the “failure” was not really a failure of response, but a failure to reenergize equipment or because the resource was already off-line.
It is critical that MISO provide a set of examples of the testing criteria and procedure for various types of resources.
AEMA recognizes that MISO is examining an accreditation process that varies according to resource response time. MISO should ensure that any tiered accreditation value recognizes the physical characteristics of the resource and is comparable with other resources within MISO. AEMA encourages MISO to examine staged Demand Response that can provide partial response in a short time and additional response over time. This element is particularly valuable for aggregations of resources and should be a part of the accreditation options.
AEMA does not have a strong preference for the naming convention. Option Two remains an emergency only resource, so perhaps it should carry the legacy designation of Load Modifying Resource. The Option One resource could be a Pre-Emergency LMR.
AEMA appreciates MISO’s consideration of these comments as part of the examination of resource accreditation issues within MISO. We welcome any questions, and encourage you to contact either Katherine Hamilton, Executive Director of AEMA, or DeWayne Todd, representative of AEMA, should you wish to discuss this with AEMA members.
Respectfully Submitted,
Katherine Hamilton
Executive Director, Advanced Energy Management Alliance
Katherine@aem-alliance.org
202-524-8832
or
DeWayne Todd
DDT LLC
dewaynetodd1297@gmail.com
812-573-8052
[1] For additional information, see AEMA website: http://aem-alliance.org
This is public feedback.
Wabash Valley Power Alliance (“WVPA”) appreciates the opportunity to comment on the Resource Adequacy Subcommittee (RASC) Load Modifying Resource (LMR) Reforms and commends MISO’s responsiveness to date, in incorporating stakeholder feedback from previous commenting periods into the latest LMR Accreditation proposal.
What are your thoughts on the proposed participation options?
WVPA endorses the flexibility MISO has built into the proposal in accommodating resources that cannot meet a 30-minute response time. Specifically, WVPA supports the 2-tier approach for capacity only resources, (First Option and Second Option), recognizing that not every LMR qualifies to register as a DRR-Type 1 or DRR-Type 2. WVPA also appreciates the alternative of calling on resources earlier in an Energy Emergency Alert, at EEA 1 in the First Option, instead of having to wait until the customary EEA 2. This is especially impactful for device- based aggregations and industrial energy users who cannot cease operations on very short notice without incurring economic or safety risks.
Some LMR resource owners use back-up generators if called upon by MISO for EEA2 events. Current EPA guidance includes provisions during EEA2 events for generator emission limits. If MISO intends to utilize resources during EEA1 events, it would be helpful to engage EPA in discussions about allowing a provision for EEA1 designations similar to the current one. The following sections of the Code of Federal Regulation (CFR) apply to the Emergency Stationary Reciprocating Internal Combustion Engines (RICE) and include a definition for qualifying demand response events.
Emergency Spark Ignition Engines
Emergency Compression Ignition Internal Combustion Engines
For your Demand Resource and/or BTMG, if you have any concerns with the proposed participation options, please provide operating characteristics (with all relevant details) of your resource, and rationale for why the proposed participation options would not be feasible for your resource.
The operational characteristics of the WVPA Demand Response (DR) resources registered as LMRs are described in detail in the annual registration justification documents submitted to MISO as well as the public version of the 2023 Integrated Resource Plan, Section 2, p 31-46.
WVPA strongly recommends three specific actions for MISO.
How should accreditation vary based upon response time?
WVPA recommends a sliding scale for accreditation based on response time, with the highest accreditation going to the resources that can respond within 30 minutes and a reduced accreditation amount going to resources based on when you respond after the 30-minute mark.
MISO proposed these options in slide 8 of the July 10, 2024 RASC materials:
WVA recommends the following framework for the two options.
Option # | Response Time | Accreditation |
First Option | More than 30 Minutes | 100% for hours 1-2, 75% for hours 3-4, 50% for hours 5-6
|
Second Option | Max 30 minutes | Add 10% to capacity accreditation to reflect the increased value of quick “ramp” capability. OR Add the Planning Reserve Margin Requirement (PRMR) to the MW capability by season. For example, the PY 24/25 values would reflect 9% - summer, 14.2% - fall, 27.4% - winter, and 26.7% - spring for planning year 2024/2025 |
Which of the two options should be the “new” option and which should continue to carry the name, Load Modifying Resource?
The first option should continue to carry the name, Load Modifying Resource, because that will create the least amount of confusion, considering that option has more characteristics in common with the legacy load modifying resource product, including a longer response time. MISO may consider calling the new option LMR-30.
DTE appreciates the opportunity to provide feedback on MISO’s Load Modifying Resource (LMR) participation proposal and values MISO’s willingness to listen to stakeholders concerns and reform the previous proposal. DTE tentatively supports the direction and framework of MISO’s updated LMR participation model. The addition of an LMR participation category that allows LMRs with a response time of greater than 30 minutes to participate as a capacity-only resource will enable many resources to maintain their ability to contribute capacity, while still allowing MISO to incentivize LMRs to register as either fast responding resources or participate in the energy market. However, DTE has several questions regarding the proposal that MISO should address in the next RASC to garner full support.
Most importantly MISO needs to fully explain how the three new participation options will be accredited. DTE acknowledges the importance of accrediting Load Modifying Resources (LMRs) based on availability. However, further discussion is needed to determine whether accrediting LMRs solely based on availability during capacity advisory events or higher is appropriate. Additionally, there is concern that only using a retrospective approach for accrediting LMRs based on critical hours without incorporating a wider range of hours or a probabilistic approach may result in a small sample size, and lead to a high degree of variance in accreditation values and inaccurate determination of the capacity value individual LMRs can reliably provide.
MISO should also clarify how LMR availability will be communicated to ensure proper resource accreditation. For example, air conditioning programs will be registered at amounts equal to their curtailment potential during summer peak temperatures. However, during a cool summer day, this type of program would not be able to meet its maximum registered availability. In this situation, how should availability be communicated to MISO? Does MISO want the availability sent to them to include the amount already curtailed from the summer peak as “self-scheduled” MWs and the remaining amount as “available”, in total equaling the capacity offered in the Planning Resource Auction? DTE views clarity in such expectations as critical, especially as communication of available reduction vs reduction already implemented (due to lower availability, i.e. an interruptible air conditioner on a cooler day, such that the “load reduction” has already been implemented) is crucial to MISO’s proposal to eliminate the Firm Service Level option.
Additionally, MISO needs to clarify how they intend to use historical hourly and five-minute meter data to validate offers. Is MISO proposing a departure from the current Measurement and Verification methodology? If so, the departure should be clearly stated, and the process needs to be explained in full detail. DTE only has hourly meter data for majority of our LMR programs and upgrading to 5-minute meters is not feasible.
In addition, DTE agrees that response time should impact accreditation, but encourages MISO to give full accreditation to resources that can respond to EEA step 1 events within two hours. Accreditation should be lowered for each additional hour of response time beyond two hours. However, it is essential that MISO provides evidence supporting proper tiered accreditation amounts. Considering MISO’s extensive research and survey data on matters of Resource Adequacy (including annual LOLE studies, the annual Regional Resource Assessment, and the Renewable Integration Impact Assessment), MISO should be able to provide studies that show what level of emergency response time is necessary to aid operators when dealing with grid emergencies and determine the proper accreditation penalties for longer response times based on that information.
MISO should also consider that under the proposed participation model, they will move a large amount of capacity from being locked behind EEA step 2 to now being available in EEA step 1. Calling on all LMRs available in EEA step 1 as soon as an event is called could lead to an abrupt swing in grid conditions and lead to LMP suppression. MISO should ensure that all processes have been examined and the proper tools are in place so that the correct amount of resources are scheduled in EEA step 1 and overscheduling does not occur.
Lastly, in regard to testing, DTE is supportive of MISO’s move to testing only once per year, but clarification should be provided around when the test will occur for DRR and resources participating under the first capacity only participation option. In the RASC material, it states that resources “will be tested at the time of initial registration.” Does that mean the test will be performed in February prior to the PRA? Additionally, clarification should be provided around the availability LMRs are expected to meet when a test notification is issued.
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), as representatives of the End-Use Customer (EUC) Sector, and NISPCO Large Customer Group (NLCG), a MISO stakeholder, have submitted joint comments to MISO. Due to the length of the joint comments (12 pages), the EUC Sector has submitted the joint comments to MISO Stakeholder Relations on the form of an Adobe PDF file. The Adobe PDF file should be accessible under "Supplemental Stakeholder Feeback" once MISO Stakeholder Relations has a chance to post it.
Questions regarding the joint EUC Sector comments can be directed to any of the following representatives:
Jim Dauphinais
Brubaker & Associates, Inc.
(Consultants to ABATE, IIEC, LEUG, NLCG and TIEC)
(636) 898-6725
Ali Al-Jabir
Brubaker & Associates, Inc.
(Consultants to ABATE, IIEC, LEUG, NLCG and TIEC)
(361) 994-1767
Ken Stark
McNees Wallace & Nurick LLC (for CMTC)
(717) 237-5378
Kavita Maini
KM Energy Consulting, LLC (Consultants to MLEC and MIC)
(262) 646-3981
Wabash Valley Power Alliance (“WVPA”) appreciates the opportunity to comment on the Resource Adequacy Subcommittee (RASC) Load Modifying Resource (LMR) Reforms and commends MISO’s responsiveness to date, in incorporating stakeholder feedback from previous commenting periods into the latest LMR Accreditation proposal.
What are your thoughts on the proposed participation options?
WVPA endorses the flexibility MISO has built into the proposal in accommodating resources that cannot meet a 30-minute response time. Specifically, WVPA supports the 2-tier approach for capacity only resources, (First Option and Second Option), recognizing that not every LMR qualifies to register as a DRR-Type 1 or DRR-Type 2. WVPA also appreciates the alternative of calling on resources earlier in an Energy Emergency Alert, at EEA 1 in the First Option, instead of having to wait until the customary EEA 2. This is especially impactful for device-based aggregations and industrial energy users who cannot cease operations on very short notice without incurring economic or safety risks.
While finalizing the proposal, MISO should also consider that some LMR resource owners use back-up generators if called upon by MISO for EEA2 events. Current EPA guidance includes provisions during EEA2 events for generator emission limits. If MISO intends to utilize resources during EEA1 events, it would be helpful to engage EPA in discussions about allowing a provision for EEA1 designations like the current one. The following sections of the Code of Federal Regulation (CFR) apply to the Emergency Stationary Reciprocating Internal Combustion Engines (RICE) and include a definition for qualifying demand response events.
Emergency Spark Ignition Engines
Emergency Compression Ignition Internal Combustion Engines
For your Demand Resource and/or BTMG, if you have any concerns with the proposed participation options, please provide operating characteristics (with all relevant details) of your resource, and rationale for why the proposed participation options would not be feasible for your resource.
The operational characteristics of the WVPA Demand Response (DR) resources registered as LMRs are described in detail in the annual registration justification documents submitted to MISO as well as the public version of the 2023 Integrated Resource Plan, Section 2, p 31-46.
WVPA strongly recommends three specific actions for MISO.
How should accreditation vary based upon response time?
WVPA recommends a sliding scale for accreditation based on response time, with the highest accreditation going to the resources that can respond within 30 minutes and a reduced accreditation amount going to resources based on when you respond after the 30-minute mark. MISO proposed twp options on slide 8 of the July 10, 2024, RASC materials.
WVA recommends the following framework for the two options:
Option # | Response Time | Accreditation |
First Option | More than 30 Minutes | 100% for hours 1-2, 75% for hours 3-4, 50% for hours 5-6
|
Second Option | Max 30 minutes | Add 10% to capacity accreditation to reflect the increased value of quick “ramp” capability. OR Add the Planning Reserve Margin Requirement (PRMR) to the MW capability by season. For example, the PY 24/25 values would reflect 9% - summer, 14.2% - fall, 27.4% - winter, and 26.7% - spring for planning year 2024/2025 |
Which of the two options should be the “new” option and which should continue to carry the name, Load Modifying Resource?
The first option should continue to carry the name, Load Modifying Resource, because that will create the least amount of confusion, considering that option has more characteristics in common with the legacy load modifying resource product, including a longer response time. MISO may consider calling the new option LMR-30.
City of Lansing by its Board of Water and Light (LBWL) Submitted by Michael Fischette
In the July 10, 2024, meeting of the Resource Adequacy Subcommittee (RASC), MISO continued discussion of Load Modifying Resource (LMR) reforms and considerations for a revised proposal. Stakeholders were asked to provide feedback on the following by August 2.
Questions:
LBWL supports the submitted feedback from both WPPI & MPPA.
Minnesota Power appreciates the opportunity to provide stakeholder feedback for the MISO RASC issue of LMR accreditation. Minnesota Power has a significant amount of LMR accredited capacity that is incorporated into the Company’s integrate resource plan. Any unfavorable changes to the accreditation process could result in an immediate impact to the Company’s long-term plan, resulting in potential capacity shortfall that could be challenged to replace with other resources in the short to medium-term.
The following are the list of questions raised for the feedback request:
MISO Questions:
Bifurcated approach to LMR Accreditation
Minnesota Power continues to have concerns that the overall approach to LMR reform does not address the issue of alignment with the proposed DLOL accreditation. The proposed DLOL accreditation provides a class level accredited MW including Gas, Combined Cycle, Coal, etc. LMR is not included in the list and was excluded from the defined classes in current FERC filing. The LOLE modeling documentation shows that LMR is included in the LOLE model. This results in a technical challenge on how to properly quantify LMR accreditation outside the LOLE model and to understand the LMR impacts in the LOLE model. The LMR impacts to reliability in the LOLE model have not been reported in the DLOL summaries. As a helpful benchmark, the LMR performance and accredited MW should be provided to the MISO RASC to understand the amount of accredited capacity that an expanded DLOL accreditation approach would result in. The approach on how to properly address this accreditation challenge needs to be defined, because it is not be clear if the proposed changes are aligning with the impacts of how LMR is assessed in the LOLE model.
Value of Firm Service Level Approach to LMR Accreditation (Response to First Question Above)
The Firm Service Level (FSL) approach to LMR accreditation is well established across a wide range of constructs including regulated utility rate tariffs and RTO accreditation. The reported differences of the LMR accreditation and the DSRI available curtailable MW have not been properly evaluated. Stakeholder feedback and interaction to date has made it clear that there are a range of understandings on how the DSRI fields are being populated, and an outstanding request for additional fields to provide more clarity on available curtailable MW. MISO is continuing to pursue solutions without addressing what is occurring in the available capacity from FSL resources. The downside to this is that there is significant risk of losing FLS capacity with limited replacement capacity options available. The attributes and benefits of FSL LMR is not clearly considered or emphasized in the July MISO RASC presentation. The following is a specific list of actions and approaches to properly understand FSL LMR and maximize the system benefits.
Proposed Testing Procedure
One annual test is adequate and should demonstrate the process of notification, communication and all steps required to interrupt load. Minnesota Power believes that the test does not need to be random, but that any test or accreditation methodology should be able to be validated by reviewing metering data, and not by the randomness of the test. The very last step of interrupting the load involves the ability of the operator to “flip the switch” and the ability of the switch to properly operate. The specific reliability of the last step for the switch, relay and breaker is extremely high, and is directly tied to the reliable operation of the facility. This being said, there is no value in interrupting the load to show the full reliability of the system, compared to a mock test.
How should accreditation vary with response time?
This is a subset of a number of other important questions that need to be considered.
Which of the two options should be the “new” option and which should continue to carry the name, Load Modifying Resource?
Minnesota Power appreciates the opportunity to provide stakeholder feedback. Our intent is to provide useful feedback in light of the stated concerns of LMR accreditation.
The Environmental Sector appreciates the direction of MISO’s adjustments in its revised proposal presented on LMR reforms at the July RASC meeting. We do, however, think that more details on many of the aspects of the proposal need to be provided to stakeholders in advance of filing the proposal at FERC. Below are our initial responses to the questions posed by MISO in its feedback request.
1. What are your thoughts on the proposed participation options? For your Demand Resource and/or BTMG, if you have any concerns with the proposed participation options, please provide operating characteristics (with all relevant details) of your resource, and rationale for why the proposed participation options would not be feasible for your resource.
We appreciate that MISO has made changes to its proposal to create additional options for LMRs and DRs that may allow them to more fully participate in MISO’s markets and to contribute to addressing resource adequacy and reliability concerns, while at the same time creating a category of LMRs that can respond with 30 minutes advance notice as MISO is seeking.
2. Proposed testing criteria and procedure
The Environmental Sector appreciates and supports the adjustments to the testing criteria and procedures provided in MISO’s updated proposal for LMR reforms. Testing is costly for DR resources and should be appropriate to ensure their ability to participate, but not excessive. The new proposal strikes a better balance between cost and ensuring the capability of these resources to respond to a signal to reduce load.
3. How should accreditation vary based upon response time?
We recognize that there is added value to resources that can provide capacity on short notice, such as the Option 2 LMRs MISO has proposed in the July LMR Reform presentation. We have pointed out for years that the slow startup time for certain existing generators interferes with their ability to contribute to rapid-onset reliability risks to the grid. Thus, in theory we could support possible accreditation changes based on how quickly LMR resources can respond. However, if MISO does move forward with differential accreditation based on response time, it must do so for all resources, not just for LMRs. Even the slowest-response LMRs are likely to be faster-responding than large chunks of MISO’s existing coal and gas fleet; and MISO has not articulated any defensible justification for imposing higher response-time standards on LMRs than on other resource types. As a result, those coal and gas resources should be the first target of any accreditation reduction if MISO wants to avoid a clear case of resource discrimination against LMRs.
We are not yet prepared to take a specific position on how much higher accreditation should be for faster-responding resources. Is there a way to model the difference in availability in the LOLE model to ascertain changes in accreditation that way? (And again, we do not think there is a good reason for MISO to differentially accredit LMRs when other generation resources require even longer start times.) Given that MISO’s model assumes that thermal generators are fully on unless they are down for maintenance or outage, it’s clear that MISO is not capturing the impact of thermal resource start up times on their accreditation. The Environmental Sector can not at this time support a decrease in accreditation for LMRs that is artificial and based on a different approach than accreditation values for other generators nor an approach that penalizes LMRs for response time limitations that other generators are also unable to provide.
4. Which of the two options should be the “new” option and which should continue to carry the name, Load Modifying Resource?
“Load Modifying Resources” should be used for Option 1, which is more in line with MISO’s LMR criteria today for resources that require more than 30 minute notification. We suggest a name like “Fast Load Modifying Resources” or “FLMR” be used for Option 2, the newer category of resources that have the ability to respond very quickly and can meet a 30 minute notification window.
Additional comments:
It is important for MISO to work through the details of this proposal with stakeholders in advance of filing with FERC. Specifically, we ask that MISO provide proposed tariff and/or BPM language that discusses the details of how MISO will use the hourly data it wants LMRs to provide, how and when those data will have to be provided (because they may be voluminous and may depend on an LSE to provide them), how/if MISO will consider factors such as use of BTMG, new equipment, changes in building square footage, and other considerations that could radically affect the load shape.
Furthermore, the Environmental Sector supports and reiterates a theme that was emphasized to MISO over the course of the last three RASC meetings and in WPPI’s motion: MISO still does not have a clear problem statement, because it has not yet thoroughly and clearly identified the reasons that LMRs have less availability than that for which they are registered nor why MISO operators have difficulty using LMRs. Without completing this step, MISO continues to risk creating solutions to the wrong problem.
MidAmerican Energy appreciates the opportunity to provide feedback on Accreditation Reforms for LMRs (RASC-2019-9) (20240710).
MidAmerican has provided responses to the MISO’s question below however MidAmerican would first like to make the following points for MISO’s consideration when reviewing the reforms to LMRs.
What are your thoughts on the proposed participation options? For your Demand Resource and/or BTMG, if you have any concerns with the proposed participation options, please provide operating characteristics (with all relevant details) of your resource, and rationale for why the proposed participation options would not be feasible for your resource.
As Dairyland’s commented, MidAmerican thinks that if MISO is unwilling to change the overall requirement to 120 minutes that MISO should consider including BTMG in Option 2 if the unit can be available within 120 minutes. MISO also needs to tighten up the accreditation of demand response resources, so it more closely aligns with expected availability during tight hours.
It is important to note that some BTMG and most demand resources do not want to participate in the energy market, given the regulatory issues including justification of offer prices to the IMM. Additionally, utilities don’t want to open themselves up to more risk that would come with retail customers becoming DRR-I participants.
In addition, MISO needs to continue to give market participants the ability to choose between multiple demand response/BTMG resources to ensure equal deployments among customers if MISO only requires partial deployment of participants.
Proposed testing criteria and procedure
MidAmerican feels that it is reasonable to have one test per year with an event counting as a test. Anything above that requirement seems unreasonable.
How should accreditation vary based upon response time?
If MISO goes to the Option 1/Option 2 approach and the Option 1 resources are being deployed at the EEA 1 level, then Option 1 resources should be getting full accreditation even with a higher response time up to 6 hours. MISO should consider having Option 1 resources get full accreditation up to 120 minutes.
Which of the two options should be the “new” option and which should continue to carry the name, Load Modifying Resource?
MidAmerican is indifferent if the definitions are clearly defined.
The OMS Resources and DER Work Groups (OMS WGs) appreciate this opportunity to provide feedback on the various design elements contained in the Load Modifying Resource (LMR) reform proposal that MISO presented at the July 10, 2024 RASC meeting. This feedback is from multiple OMS work groups and does not represent a position of the OMS Board of Directors.
The OMS WGs appreciate MISO’s efforts to respond to stakeholders’ significant concerns about MISO’s initial proposed reforms to the existing LMR participation model. MISO has evolved its proposal by crafting new participation options, softening the proposed testing requirements, and adjusting the FERC filing date to Q4-2024 / Q1-2025. These decisions are positive developments from the initial proposal that reflect the importance of demand response (DR) in the MISO footprint and the impacts reforms will have on those resources.
The OMS WGs support the creation of new or revised participation options that will give DR resources the flexibility to participate to the fullest extent possible and incentivize their response during times where they are needed most. The OMS WGs appreciate MISO’s responsiveness to previously submitted feedback and think a slate of DR participation options is an improvement that may help retain the current level of DR participation while also meeting the objectives of the reform.
The OMS WGs see promise in MISO’s proposal to deploy Option 1 LMRs during an EEA1 and Option 2 LMRs during an EEA2. While this framework appears to be a significant improvement, we want to ensure that the majority of existing DR resources are able to fit into the existing DRR participations models or Options 1 or 2.
The OMS WGs hope the maximum notification time allowed for Option 1 LMRs allows enough flexibility for participants to practically use this option. Some industrial processes and processes related to contacting operators in multiple locations and municipalities require at least 3 hours of advanced notice before they could safely be deployed, so we encourage MISO to continue to work with LSEs to select an appropriate notification time.
The OMS WGs seek clarification regarding whether Option 1 LMRs could be deployed in EEA2 if they are available and how MISO envisions Option 1 LMRs would be called if MISO must skip an EEA1.
First, the OMS WGs would like to thank MISO for taking stakeholder feedback into account and decreasing the testing requirements from the previously proposed twice per season to a much more manageable once per year. This is responsive to previous feedback and a positive change. The OMS WGs have several clarification items below:
The OMS WGs seek clarification that DRR participation models and Option 1 resources would only be tested upon registration with only Option 2 resources being tested annually (see slide 11).
The OMS WGs understand that DR resources would be expected to recoup the cost of testing through their offers under the various Options as proposed. This is consistent with how other resources offer into the PRA, and if the cost of testing increases their offers above the PRA clearing price in a given season, the owner of the DR resource should prefer paying the PRA clearing price for capacity rather than being subject to the testing requirement. If these resources decide to offer as price takers ($0 offer), and the cost of running the test is more than what clears, then DR owner may be better off buying capacity from the market instead of offering in.
Under another scenario, if responding to an event qualifies as a test, would the LMR owner be able to or expected to lower their offer accordingly?
The OMS WGs welcome consideration of using a sliding scale for accreditation of DR resources based on response time and real time availability. However, the details will matter, and we encourage MISO to base these accreditation values on facts and data. Accreditation should be directly linked to the resource adequacy value that a DR resource brings to the grid and/or system operators. Flexibility and more accurate, availability-based accreditation are sound objectives, but the OMS WGs are very interested in how the accreditation changes will impact the total amount of DR MWs that are offered into and ultimately clear the PRA.
It is also important to consider anticipated market behavior based on the options available (i.e., which participants may choose Option 1 to get called earlier, but with longer lead times; and which participants may choose Option 2 to get called last, but with 30-minute lead times). The likelihood of these choices must be considered to evaluate potential contributions to resource adequacy that are realistic and helps avoid EEA3 events.
The OMS WGs support adjusting accreditation based on the number of deployments, but some OMS member staff have questions and concerns about accrediting based on notification time. One concern is that while MISO may seek to incentivize participation in the reduced-notification time “Option 2,” there could be a natural incentive structure for some participants to decrease the likelihood of being called. In line with this, MISO may want to consider limiting the deployments for Option 2 if there is concern participation would be limited.
Any limitations on deployments should also consider the needs of grid operators, but the OMS WGs express our misgivings about the implied need to declare an unlimited number of EEA2 events in order to satisfy resource adequacy in the region. With this line of thinking, the OMS WGs request that MISO provide an analysis of a reasonable number of calls that would balance the needs of participants and operators. A second concern is our understanding that adjusting accreditation based on the number of deployments for LMRs could be directly related to the LOLE model, whereas adjusting accreditation for an LMR based on notification time could not.
Relatedly, the OMS WGs encourage MISO to further educate stakeholders on how LMRs are modeled in the LOLE model, as this could generate ideas of how to appropriately accredit LMRs:
On the issue of basing accreditation on offers during capacity advisories, some OMS member staff caution that this approach could have unintended consequences if offers made during advisories do not accurately and reliably predict an LMR’s availability at the time of deployment (if deployment does in fact occur). The OMS WGs seek clarification when the “clock starts” for purposes of accreditation: Does this occur when DR resources are required to update their availability during a Capacity Advisory? Or does this availability check occur when those resources are actually deployed?
There could be many hours or even days between a capacity advisory and an EEA1, which could include hours when MISO would not need or expect an LMR to perform. Has MISO examined LMR availability data to see if LMR availability during instances when MISO issued a Capacity Advisories is highly correlated with LMR availability during EEA1 and EEA2 events, and if so, can MISO share those findings? If this is not an issue, some OMS member staff would also encourage checking the understanding of the current emergency operating procedures with LMR participants and whether it would be feasible to provide up-to-date information to LSEs and/or MISO ahead of and throughout an advisory situation.
A last question about LMRs and accreditation is about BTMG. Can MISO clarify what processes it proposes to accredit LMRs backed by BTMG?
The OMS WGs encourage MISO to ask the relevant stakeholders and state commission staff if the name change could have implications for retail tariffs and to work with stakeholders to mitigate name change-related revisions. As with all other changes to how LMRs are accounted for at MISO, OMS members and their utilities will require sufficient transition time before the effective date to effectuate these tariff changes.
The OMS WGs appreciate MISO’s consideration of these concerns, questions, and requests and look forward to further discussion with the stakeholder community.
Comments on MISO Proposal for LMR Reforms (RASC-2019-9)
Submitted by Thomas Siegrist, SMXB Consulting Engineer
As part of the July 10, 2024, RASC meeting, MISO requested feedback on its proposal for Load Modifying Resource (“LMR”) reforms. Our firm works with several industrial customers in the MISO footprint that qualify and perform as LMRs. Based on our experience, we offer the following initial comments and concerns. The fact that we are not addressing a specific issue should not be interpreted as an endorsement of that aspect of MISO’s proposal.
First and foremost, we are very concerned by MISO’s statements at the July 10, 2024, RASC meeting that the Firm Service Level (“FSL”) option for LMRs will be “eliminated” as a result of the proposed LMR reforms. For months (if not years), various stakeholders have highlighted the important role FSL LMRs play in MISO’s resource adequacy construct and have raised issues regarding MISO’s failure to properly measure FSL LMR availability and address the proper treatment of FSL LMRs going forward. FSL LMRs, regardless of notification times, provide value in terms of MISO reliability. MISO can call on such LMRs in anticipation of an EEA 2 event, and such LMRs have provided relief to MISO’s system and/or allowed MISO to avoid an emergency event altogether. If such resources are disqualified from being LMRs, MISO, Market Participants, and the respective FSL LMRs will all lose the vital benefits. Such an outcome must be avoided; particularly in a capacity constrained future.[1] It cannot be understated what a sea change in the demand response market MISO has proposed in seeking to eliminate FSL LMRs. “Down to” demand response has served as a vital planning tool for utilities and RTOs across the country to meet their reserve margins and act as extremely reliable tools for decades. To remove this option is a fundamental change that has not been justified in any way by MISO.
In hopes that MISO reverses its position on FSL LMRs, we also offer the following comments on the specific MISO feedback requests:
MISO is considering implementing two capacity-only participation options for demand resources with no energy market payments for either one. MISO is also considering changes to existing Demand Response Resource - Type I and II (“DRR Type-I” and “DRR Type-II”) options to “ensure alignment across all participation models for Demand Resources.”
We appreciate MISO’s efforts to accommodate LMRs in ways that have not been previously considered. However, significant additional work is required to make this effort fruitful.
Issue 1
As stated previously by us and other stakeholders, MISO’s proposed method to measure “real time” availability of FSL LMRs is fatally flawed. MISO is continuously conflating “down by” LMRs with “down to” LMRs (which are FSL) in their measurement processes. One of the major objectives of the development of the DSRI tool was to address the issue MISO perceives regarding measurement of actual MWs provided in real time by FSL LMRs. This is in spite of recommendations from stakeholders at the beginning of the current evaluation of LMR performance to conform the DSRI to accommodate FSL LMRs instead of attempting to force the FSL LMRs to conform to the tool.
Issue 2
It is not possible to forecast many batch processes and other intermittent loads with any degree of accuracy, even in the short term (real time market). This is one of the reasons Market Participants who utilize these loads use the FSL methodology
In order to use the DSRI as currently configured, these FSL LMR loads must be considerably under forecasted to avoid non-performance penalties. This does not recognize the true value of these resources and materially shortchanges these customers.
MISO must take into consideration that these FSL LMRs may be at a relatively reduced load from their Planning Resource Auction accreditation value at a given point in time, but these same LMRs may also return to their full load (FSL plus interruptible load) at any given point in time. This is not a function of gaming but is a result of the load’s inherent processes. Batch load demand response with a FSL may, depending on what point it is in its process, be “off” going into an emergency event; however, absent instruction from MISO as an LMR, that load could return to an “on” state during the emergency event. MISO’s proposal ignores this “but for” causation and instead, as we understand it, proposes to measure all demand response based on a Market Participant forecast prior to the emergency event as compared to the MW load during such event. Such a measurement would, in some cases, give batch load FSL a zero MW response/accreditation, when in fact the asset provided full participation by refraining from restarting its processes during the event. We do not believe that a MISO operator would appreciate variability of this kind (e.g., up to hundreds of MWs) during an emergency, and certainly would recognize the value of these loads being capped at a known value (e.g., tens of MWs or less) in that same emergency.
Issue 3
If circumstances have changed such that EEA events may occur more often, and may occur with reduced look-ahead, then the dispatch order should be changed to recognize the capacity value of LMRs in a manner similar to the way capacity accreditations are recognized for supply side resources, many of which also have relatively long lead times.
MISO’s proposal conflates the planning nature of LMRs with the operational “needs” of MISO operators. Planning Reserves are not the same as (and do not equal) Operating Reserves, in spite of the fact that LMRs are designated as emergency-only (EEA 2) resources in MISO Business Practices Manual No. 011. It is not proper to tie Planning Resource Auction accreditation to performance as Operating Reserves. EEA 2 events were chosen for LMR deployments to assure they were the last resource chosen prior to the use of Operating Reserves, reserve calls and emergency reserve purchases, and firm load shedding, and also assumes that all supply side resources have been deployed.
MISO is also conflating Balancing Contingency Events (“BCEs”) with EEA declarations. BCEs are unexpected events which require real-time (the operating term, not the RT market term) response. EEAs (or conservative operations or alerts) are typically declared many hours or days in advance due to a forecasted shortfall in capacity to cover forecasted load plus reserves. The latter is the circumstance envisioned for the proper deployment of LMRs. While some LMRs may be able to respond quickly during an Operating Reserve time horizon, LMRs generally should NOT be considered as Operating Reserves of any kind. If LMRs are placed in this circumstance de facto, they should receive additional compensation for providing this service. To set a 30-minute lead time as the default standard for an LMR to achieve maximum attainable accreditation is flawed, notwithstanding the previous comments concerning proper treatment of FSL LMRs.
Many long-standing LMRs are businesses and/or industrial customers that produce something other than demand response, and demand response participation is merely a secondary effort by these LMR participants to reduce their operating costs. Frequent changes to LMR rules, additional costly and unnecessary efforts, and adverse impacts on manufacturing operations and safety, are disincentives to, and negatively impact, continued effective participation. If testing of FSL LMRs is deemed necessary, some advance notification of an upcoming test prior to MISO’s provision of the specific 4-hour window for the actual test would be prudent. For example, PJM provides one-week advance notice of a two-week test window, and again provides notice the day before the test event.[2]
As a Planning Resource, accreditation for LMRs should not vary based on response times. MISO has adequate time to call upon LMRs, just as much as it does to call upon supply side resources. In our view, it is not necessary to await an EEA 2 declaration to call on LMRs, so long as all supply side resources have been committed beforehand.
Both options should be named some form of “Load Modifying Resource,” as both would be available during capacity and transmission Emergencies declared by MISO to meet Module E-1 requirements.
[1] See, e.g., Market Redefinition: Load Modifying Resource Reforms, at 4, presented by MISO at 7/10/24 RASC Meeting.
[2] PJM Manual 18: PJM Capacity Market at 188, available at https://www2.pjm.com/-/media/documents/manuals/m18.ashx
What are your thoughts on the proposed participation options? For your Demand Resource and/or BTMG, if you have any concerns with the proposed participation options, please provide operating characteristics (with all relevant details) of your resource, and rationale for why the proposed participation options would not be feasible for your resource.
Responding on behalf of BTMG LMRs, the biggest concern continues to be response time requirements and accreditation differences between the 2 options. 30-minute response time is a challenge for callout for our municipal staff, 2 hour response time is sufficient; we continue to believe a 2 hour response time is sufficient to receive full accreditation.
Proposed testing criteria and procedure
For BTMG units, GVTC testing should remain. We are supportive of testing to callout timing requirements under registration for BTMG units.
How should accreditation vary based upon response time?
This question seems to be premature, however we continue to believe a 2 hour response time for BTMG LMRs is sufficient to receive full accreditation.
Which of the two options should be the “new” option and which should continue to carry the name, Load Modifying Resource?
We are indifferent to this question.
CPower Comments to MISO Regarding Market Redefinition: Load Modifying Resources Reforms, Presented on April 17, 2024 to the MSC (RASC-2019-9)
August 2, 2024
During the July 10, 2024 RASC meeting, MISO presented its revised proposal for changes to Load Modifying Resources (“LMR”) participating in MISO’s markets. Enerwise Global Technologies, LLC d/b/a CPower (“CPower”) appreciates the opportunity to provide feedback to MISO on these issues. CPower thanks MISO staff for their review and consideration of the feedback below. Should you have any questions, please do not hesitate to contact Peter Dotson-Westphalen.
The comments below reflect CPower’s views of the proposed reforms as presented by MISO, recognizing that the detailed discussion of the proposal for accreditation reform for LMRs has yet to take place, as well as the fact that the Motion for WPPI Energy’s proposed problem statement for LMR reform passed as well, and may alter the course of MISO’s proposed solutions to address the problem it perceives with LMRs currently.
Proposed Design Element Feedback
What are your thoughts on the proposed participation options? For your Demand Resource and/or BTMG, if you have any concerns with the proposed participation options, please provide operating characteristics (with all relevant details) of your resource, and rationale for why the proposed participation options would not be feasible for your resource.
MISO’s two proposed capacity-only participation options for LMRs are appreciated as they reflect further thinking and stakeholder feedback on how to address MISO’s concerns. However, believes there are issues with each option that should be addressed in future iterations of these proposals. Below we provide feedback on each of the options, along with some additional commentary regarding the available baseline options and lack of a energy compensation component for capacity-only LMRs that do not dual-register as DRRs or EDRs.
Option #1:
MISO’s first option would retain the ability to specify longer lead times than 30-min, which is a feature that should be retained to be able to accommodate those LMRs that are comprised of customers or BTMG resources that cannot safely reduce their load or start up the generator resources within the 30-min window, but still are able to provide a response and contribute to reliable system operations. It may be appropriate to discount the capacity accredited for longer lead time LMRs, but exactly how the accreditation may be discounted should be discussed once MISO has presented the details of its accreditation proposal, as it intends to do so in an upcoming RASC meeting.
MISO’s first proposed option would also require it to be available for dispatch when MISO enters EEA 1 instead of EEA 2. Due to the potential for a higher number of events under this option, the accreditation impacts associated with longer lead times should also reflect that they are being utilized more often than LMRs registered under Option #2, and accreditation discounts should be looked at carefully to not overly-discount the reliability value provided. CPower also echoes the comments feedback submitted in response to this feedback request by Wabash Valley Power Alliance regarding the impacts on those customers that utilize emergency backup generators as part of their response during LMR events with respect to the EPA’s emission limits applicable to the Emergency Stationary Reciprocating Internal Combustion Engines (RICE) under the Code of Federal Regulation (CFR). This may relegate these customers to Option #2, which may not be feasible for many given the 30-min response time associated with that option and may lead to these customers no longer being able to participate and removing otherwise capable resources from contributing to Resource Adequacy and system reliability.
Option #2:
The second option proposed by MISO will still be deployed at EEA 2, but will limit the notification time to 30-min. There will not be a requirement to participate in the DA market, but will require offer submissions into the energy market during Capacity Advisory or emergency declaration hours. However, energy payments still will not be administered unless these LMRs are dually registered as DRRs. Additionally, LMRs registered under Option #2 will be required to participate in all emergency events, with no limit on the number of times they may be expected to perform.
The notification time of 30 minutes is reasonable for customers that have automation capabilities to achieve the load reductions or sufficient staffing and processes in place to do so. However, that is not the case for all LMRs currently. With no cap on the number of events LMRs registered under this option, the number of interruptions may not be feasible due to the impacts to customers primary business operations or comfort levels.
Additional Feedback on Options #1 and #2:
CPower understands MISO’s desire to bring those LMRs into greater levels of visibility to operators in real time through encouraging higher accreditation for reduced notification times and dual registering as DRRs to participate in the energy market. However, the lack of an energy payment for those resources either unwilling or incapable of participating as a DRR and instead remaining in one of the capacity-only options – particularly when the number of events is uncapped – may be untenable to customers participating as LMRs. There is a cost to reduce load and impact business operations or comfort levels, and in the case of customers utilizing generation, fuel costs as well that may not be covered based upon the price paid for their capacity alone. We recommend MISO continue to consider options that would allow for energy payments during emergency events for LMRs that do not register as DRRs.
Under both of the options, MISO is considering removing the Firm Service Level (FSL) baseline option. CPower understands and appreciates MISO’s need to have visibility into how much load is available to be reduced during an LMR event. However, for many existing LMRs, this option provides a firm target to reduce their load to, and may be tied to specific equipment or processes that they know they can achieve their FSL reliably. Having visibility in their availability, either through the DSRI or MUI, will remain an important step Market Participants must take to provide accurate information. However, the FSL option should remain in place for those LMRs that choose to utilize it.
Proposed testing criteria and procedure
CPower appreciates MISO’s recognition of stakeholder feedback concerning the prior iteration of the testing regime and proposing to only require one MISO-administered test per year, and allow for performance during an event during which LMRs are dispatched to satisfy the test requirement. However, in our response to the question above, CPower does have strong concerns regarding MISO’s statements during the presentation and stakeholder discussion of its intent to remove the Firm Service Level baseline option. Lastly, MISO should ensure that the same baseline methodology is employed for the purposes of both test and event performance.
How should accreditation vary based upon response time?
It may be appropriate to accredit LMRs with longer notification times less than those capable of shorter notification times. However, as noted in our feedback above regarding Option #1, the risk of increased dispatches by being available to be called at EEA 1 instead of EEA 2 should be carefully considered in terms of the variance between accreditation levels available between the two options, and within Option #1, how the sliding scale between short and long lead times is to be determined.
Which of the two options should be the “new” option and which should continue to carry the name, Load Modifying Resource?
CPower does not have an opinion in response to this question at this time.
Conclusion
CPower appreciates the opportunity to comment and looks forward to further discussion of this topic in the stakeholder process.
Respectfully,
Peter Dotson-Westphalen
Sr. Director, Regulatory & Government Affairs
CPower
Peter.D.Westphalen@CPowerEnergyManagement.com
781-214-7523
American Municipal Power, the City of Ames (IA) and Michigan Public Power Agency, members of the LSE Coalition, submit this feedback pointing to and supporting the LMR reform comments submitted by WPPI Energy. Please consider this feedback as if WPPI’s comments were incorporated in full herein.
We look forward to thorough discussion of the issues MISO has identified and the subsequent development of workable solutions. Thank you.