RASC: RA Construct Proposal Tariff (RASC010, 011, 012) (20210901)

Xcel Energy appreciates the opportunity to review the Tariff red-lines for the RA Construct Proposal.  Please see attached documents with our questions and suggestions identified through the comment balloons.

WPPI augments its previous feedback with the following comment on the revised posted Module A revision draft:

MISO proposes a new definition for Capacity Replacement Non-Compliance Charge for Module A that refers to failure to fulfill performance obligations for more than 30 days in a season.  This is not appropriate since the 30-day criterion is already part of the defined Capacity Resource performance obligations in Module E-1, and thus it is incoherent to apply a 30-day criterion to the criteria that already incorporate the 30-day standard.  We recommend that MISO revise this to simply say that the charge is assessed for failure to replace ZRCs in a case in which the tariff imposes a replacement obligation.

Feedback from WEC Energy Group on the draft tariff language for the RA Construct proposal is within the document provided to stakeholder relations.

Savion, LLC (“Savion”) would like to thank MISO for bringing this item to stakeholders for discussion.  In the September 1 meeting of the Resource Adequacy Subcommittee (RASC), stakeholders were invited to submit feedback on proposed draft tariff language for the current resource adequacy construct proposal. The feedback request includes drafts that were provided for the September 8 tariff review workshop.  

Savion generally approves the recommended changes to the tariff.  A remaining concern is the lack of clarity in Module E-1 Section 69A 4.1 with respect to fuel availability.  Savion holds that applying a seasonal calculation on thermal units based on availability is the correct way to evaluate these resources.  But as the events of Winter Storm Uri uncovered, fuel availability can cause system wide reliability concerns and must be included in any availability calculation of thermal units.

Savion holds that RTOs risk working at cross purposes with the larger economy by hampering the transition to clean energy resources.  As climate change events grow in regularity and severity it will become imperative that MISO keep financial incentives for zero carbon resources.  As demonstrated by Winter Storm Uri, the default assumption that thermal generation is immune to reliability issues is in error.  Solar resources are less prone to mechanical failures caused by such weather events and therefore increase the reliability of the grid.

The Solar Energy Industries Association (SEIA) submits these comments on the Resource Availability and Need (RAN) and the Market Redefinition proposals placed before the Resource Adequacy Subcommittee. SEIA thanks MISO for its willingness to accept stakeholder feedback on these proposals.

SEIA appreciates that MISO must address the reliability and resource adequacy issues facing the region. However, MISO’s present proposals will harm the growth of renewable generation in the MISO region. This harm will come during the transition to a clean energy economy, which is a crucial element in meeting the aggressive climate goals of the Mid-Western states and the nation. Climate impacts are becoming more acute. It is imperative for MISO to keep in place the financial incentives for zero carbon resources to enter its market. But more than that, MISO’s proposals unjustifiably devalue renewable generation and create implicit assumptions that inflate the reliability of traditional thermal generation. The goal of the RAN initiative to improve reliability is incongruent with this proposed policy, which overestimates the reliability value of thermal generation, at a time that the country faces significant, and increasingly more frequent, climate events.

With MISO member utilities adopting policies to address climate change and the transition to cleaner resources, MISO appears to be running in the other direction. The proposed revisions to Tariff Section 69A.4.1(a) provide that the Seasonal Accredited Capacity for thermal generation will be based on “an evaluation of the type and volume of interconnection service, GVTC value, and Real-Time offered availability” of that resource. Whereas, under Tariff Section 69A.4.1(e), the Seasonal Accredited Capacity for intermittent resources, like standalone solar or wind, will be “determined by the Transmission Provider based on historical performance, availability, and type and volume of interconnection service.”

The transition to a seasonal market should be complimented by rules that ensure resources committing capacity during those seasons have a high certainty of providing energy during the peak demand hours of those seasons. This proposal does not ensure such reliability. As recent cold-weather events have shown, including Winter Storm Uri, thermal generation cannot always be counted on during the extreme times when they are needed.[i] Granting capacity credits without taking into account historical performance will result in rewarding thermal generation despite their failure to provide capacity or be available for dispatch during difficult operating conditions.

DTE appreciates the opportunity to provide feedback on proposed draft tariff language for the current resource adequacy construct proposal. DTE would like to first reiterate our support of the September RASC motion that requested MISO postpone the filing date due to the reasons outlined in the Stakeholder Presentation on the RA Construct presented in the September RASC. As requested, DTE reviewed the draft BPM language to ensure alignment with the current resource adequacy construct proposal. See below for our comments listed by section of the tariff.

Module E Section 69A.1.1.c

This section states that historical monthly peak hours for June - September will be provided to assist with the development of the Coincident Peak Demand and Local Resource Zone Peak Demand forecasts for each LRZ.  This section should be amended to cover all months in a year to address the need for seasonal peak demand forecasts.

Module E Section 69A.3.5 E

This section states “Limitations due to applicable regulatory restrictions that are more restrictive than the physical limitations of the Demand Resource will supersede the physical availability of the Demand Resource; however, the Demand Resource”. Please review and either remove the incomplete thought beginning with “however” or update as needed.

Module E-1 Section 69.A.4.1

Unforced Capacity of Capacity Resources definition should remain in tariff as there will be a UCAP to SAC conversion ratio applied to PRMR. Removing the sections describing Unforced Capacity calculations could raise confusion on how the UCAP to SAC ratio (as stated in section 68A.7) is calculated.

The following feedback is offered by the Entergy Operating Companies ("EOCs")^[1]in response to MISO’s request made during the September 1, 2021 Resource Adequacy Subcommittee meeting and the September 8, 2021 RA Construct Tariff Review Workshop.

The EOCs continue to have significant concerns with many of the policy details related to MISOs current resource adequacy construct proposal. Without attempting to list all of the EOCs concerns in this feedback request, [2] the EOCs would like to draw attention to an outstanding question related to seasonal LSE PRMR levels shown in the impact analysis provided to the EOCs by MISO. Under MISOs proposal, the Spring PRMR for certain MISO South LSEs is higher than the Summer and Winter PRMRs. This result seems to indicate that the highest risk period for these LSEs is during the Spring season, which is a questionable result given that the periods of greatest risk historically seen in MISO South have most commonly occurred during the Summer and Winter seasons. Moreover, this finding, viewed in isolation, would indicate that these LSEs should avoid taking planned maintenance outages during the Spring and should instead perform more planned maintenance outages in the Summer and Winter periods, an outcome that is counterintuitive at best, and that many would view as counterproductive to MISO’s stated goals of the seasonal construct. The EOCs are seeking additional explanation from MISO on this area of concern, including information on how the LSE PRMR requirements and surplus/deficit positions would change if MISO calculated the SAC/UCAP ratio on a regional basis (in alignment with how RA hours are selected), as opposed to on a MISO wide basis as currently proposed.  At a minimum, these counterintuitive results are a red flag with respect to MISO’s methodology and results – and a strong indication of the need to review and evaluate the proposal and its impacts more fully before moving forward with the proposal as currently formulated.

Additionally, the EOCs have concerns that MISO’s proposal overly restricts generation owners’ ability to take necessary planned maintenance outages exceeding 30 days due to the excessive financial penalties imposed by the daily non-compliance charges.  The ability of generation resources to take necessary planned outages is critical to maintaining reliability and ensuring those resources are available to run when they are most needed.  And some resources that serve in a baseload role, particularly nuclear resources, by their nature require occasional longer-duration outages to ensure safe and reliable operations.  The EOCs strongly urge MISO to revisit the provisions of its proposal addressing financial penalties for long-duration planned outages with this concern in mind.

Further, given that MISO’s proposed seasonal construct is projected to significantly change individual LSEs’ surplus/deficit positions and LRZs’ net positions relative to the LCR requirement, the EOCs believe that MISO should provide reasonable and appropriate transition mechanisms and time for LSEs to move from the current annual construct to a new seasonal construct. Otherwise, LSE’s may potentially suffer significant financial penalties in the PRA due to CONE pricing with no reasonable opportunity to mitigate those risks due to the long lead time involved in resource planning. This result would be unjust and unreasonable, and impose an unfair penalty and burden on LSEs. The EOCs have engaged in prudent long-term resource planning and have made system investments based on an annual resource adequacy construct. Moving to a seasonal construct represents a drastic and fundamental reworking of the MISO resource adequacy construct.  For MISO to make that type of foundational change without providing sufficient runway for LSEs to adapt would be unreasonable. MISO’s current seasonal construct implementation date, the start of the 2023/24 PY, would not provide enough time for LSEs to make the necessary investments and system upgrades in order to align with the new rules and financial incentives and penalties adopted in the seasonal construct. In particular, the EOCs believe that if an LSE experiences elevated PRA financial costs as a result of moving to a seasonal resource adequacy construct, that these elevated costs should be phased in across a reasonable transition period or collared in order to avoid unreasonably adverse impacts to customers in MISO and to ensure a reasonable opportunity for LSEs to plan for the new construct.

In addition, as requested by MISO, the EOCs have reviewed MISO’s proposed tariff redlines and have provided edits and comments (highlighted in blue) in the accompanying attachments. The edits in the Module E-1 attachment are contained on pages 55, 86, and 93. 

In light of the above concerns and others expressed by a large number of MISO stakeholders (as reflected in the overwhelming stakeholder vote in support of delaying the proposed FERC filing), the EOCs request that MISO continue to work with stakeholders to better address these concerns before filing the seasonal construct proposal with FERC.  However, with regard to the MISO’s proposed minimum capacity requirement (MCR), the EOCs believe this portion of MISO’s proposal differs from the others, especially the accreditation issues, in that it has been somewhat static and its implications and impacts fully understood for some time.  While we would acknowledge there are some stakeholders who oppose the requirement, there has been ample opportunity for all stakeholders to express their views, and no new issues or new concerns have been offered in quite some time.  Unlike the accreditation issues, there are no outstanding stakeholder questions, to Entergy’s knowledge, about the impacts of the MCR or how MISO would apply it. Accordingly, the EOC’s would suggest that the MCR has been thoroughly considered through the stakeholder process and is ready to be filed, separately from the other parts of the MISO RA proposal.  By filing the MCR separately from the other parts of the proposal, the MCR can proceed now and be considered by FERC on its own merits. 

The EOCs appreciate the opportunity to comment.

As previously stated, Wolverine supports MISO transition to a seasonal construct and its focus on the identification, value, and compensation of “available” capacity and its importance towards system reliability and long-term resource adequacy during an industry transition of increasing intermittent resource installations and dispatchable resource retirements. While MISO’s current seasonal proposal appropriately addresses “availability” within some of its elements, further considerations are needed for other elements.

Due to these further considerations, Wolverine continues to support a delay to the September filing where such delay may still allow implementation for the 2023/24 Planning Year.

General

1. Outage coordination – MISO has indicated multiple times that planned resource outages impact tight resource hours and proposes to penalize future accreditation of such resources after-the-fact (i.e. a reactive approach). As indicated by Stakeholders many times, planned outages are performed to maintain and improve the future availability of resources such that it would be counter-productive to penalize their accreditation for a future time period dissociated with the outage. Instead, MISO needs to take a proactive approach that utilizes/modifies existing Tariff provisions by more aggressively denying and/or rescheduling requested outages during expected tight resource hours or in the instance where a resource is not available (e.g., planned outage for the entire season) be precluded from participating in that season's auction.
2. LOLE Consideration of Unplanned (Forced) Outages and Derates – As shown in the recap of the February and June 2021 MaxGen events at multiple MISO forums (MSC, Board of Directors, Informational Forums) unplanned outages and derates were multiple times higher (e.g., in the case of June 10, unplanned outages can be viewed as a significant driver) than planned outages. MISO has stated that the reserve margin accounts for these scenarios, but if that were the case then it should be expected that MaxGen events should be less frequent and/or less severe. Is MISO’s LOLE analysis appropriately considering the high magnitude of unplanned outages and derates?
3. ELCC for Solar – MISO disclosed that they will consider the use of ELCC for solar in the future. Does MISO have an expected implementation date? For instance, is it expected that ELCC for solar may be used for the 2023/24 planning year? If yes, what is the reason for not including changes in the seasonal construct filing?
4. Penalties for LMR Resources – Since LMRs, as emergency resources, do not have must-offer obligations, it appears that a resource could clear the PRA and then show 0MW availability in the MISO portal year-round and not be penalized. If true, please explain why this is reasonable. If not true, please explain why not, including specific Tariff and/or BPM language that prevents a LMR from offering 0MW availability.

Tariff Specific

1. Module E-1, Section 68A.6 and 68A.7 – MISO proposes to not utilizing the SAC values within the LOLE models and instead proposes to multiply the PRM and LRR by the SAC/UCAP ratio to develop the PRMR and LCR. When SAC is lower than UCAP then the reserve margin will decrease indicating sufficient supply exists. However, this is a counterintuitive adjustment - when both the demand and the 1-day-in-10 requirement do not change but the supply, reliability will likely be at risk. If MISO continues move forward with the SAC/UCAP adjustment as is, instead of using SAC within the LOLE analysis, then Wolverine requests that MISO provide evidence confirming that the use of the SAC/UCAP ratio will provide comparable results to using SAC in the LOLE modeling. 

Again, Wolverine supports MISO’s efforts to transition to a seasonal construct and maintain the current implementation timeline but request it take some additional time to work out stakeholder concerns to avoid unintended implications after implementation.

Consumers Energy appreciates the opportunity to provide comments regarding the draft tariff language for current resource adequacy construct (RASC010, 011, 012).

Overall CE in favor of 4 seasonal auctions and the seasonal construct. CE also supports MCR 50% as Michigan requires 85% local capacity.

CE would strongly prefer more time to address outstanding concerns and tariff language related to the Seasonal Accredited Credit (SAC). Much of the specific tariff language presented had barely a week to review in detail and address internally.

CE supports a performance-based accreditation construct and an exemption for planned outages and derates. Without an exemption for planned outages, market participants are incented to take outages whenever convenient with no regard for diligent planning practices and coordination with MISO to ensure sufficient capacity and margin to meet projected and actual loads.

The limited MISO fleet-specific information provided under a different set of rules than what has been proposed going forward has made it challenging to evaluate impact on specific resources and the overall fleet. Additionally, the information provided was incomplete and requires additional analysis.

While Consumers Energy's understanding of the potential impact is growing, further analysis remains to fully understand the impact, which is why CE supported the stakeholder motion to delay the resource adequacy filing until 2022.

Taking additional time to review and refine language in greater detail to build better clarity and mutual agreement and understanding of the new definitions, processes and impacts up front will save time and additional effort later addressing unintended consequences and unanswered stakeholder concerns. It is questionable whether this accreditation as currently proposed will meet the stated need for MISO to have the required amount of offered and available resources during tight conditions.

While this request for a necessary pause to confirm the intended results are feasible with this current proposal, it would be helpful to likewise address renewable resource accreditation in a more comprehensive tariff filing rather than postponing this effort indefinitely as MISO's resource fleet continues to evolve. This would help current and speculative future Market Participants to better prudently plan resource fleet composition and outage coordination with as much forward-looking conditions and expectations clarified and communicated before Market Participants are held to retroactively applied standards and ambiguous planned outage expectations.

Pointe Coupee Electric Membership Corporation (PC Electric) submits the following comments in response to the RASC request for feedback on the draft tariff language for the current resource adequacy construct (RASC 010,011, 012).

PC Electric is a member owned distribution cooperative located in Louisiana in MISO South.  PC Electric asserts that section 69A7.1a of Module E-1 as presented at the September 8, 2021 RASC Construct Tariff Workshop should be deleted and eliminated from the proposed filing.

Please recall the origin of this issue:  Entergy (Document: Entergy original filing 20200122 SC Item 02g Submission - PRA Alignment419230)

The original request by the stakeholder that was pushed through MISO RASC was for a 90% requirement with a zonal local requirement. This proposal was summarily rejected by RASC only to reappear as a 50% threshold with a zonal local requirement.  After significant pushback from Stakeholders and the IMM, MISO eliminated the zonal local requirement.  After objections from the originator of the issue, the substitute subregional requirement was proposed and now is included in the Module E-1 filing 69A7.1a.

PC Electric has previously raised the issue at RASC of approximately 3000 megawatts of load in Louisiana that will be rolling off long term full requirements from a contract with an IPP in the 2025 time frame that will be directly impacted by this rule should it be adopted. The proposed implementation date of the Minimum Capacity Requirement contained within Module E-1, 69A7.1, 33(d) also is proposed to be effective for the 2025/2026 planning year, lining up exactly with the start of these LSE's new capacity resources. Contrary to the snapshot provided by MISO of the amount of load that would be impacted by this new requirement, this proposal will have a significant impact on all LSE’s as portfolios of capacity resources are unlikely to stay stagnant into the future as contract terms end and units retire and will have a direct impact on PC Electric and other cooperative LSE's in Louisiana. 

MISO is aware of this impact this rule will have on LSE’s in Louisiana as they have participated in the Louisiana dockets related to the three RFPs issued by the cooperatives for new power providers to replace their existing contracts that are ending, as well as in the ongoing dockets filed by the cooperatives to approve their portfolios selected, including filing for interested party status.[1] PC Electric asks stakeholders to take note of the recent testimony filed in LPSC Docket U-35927 on September 8, 2021 in which 5 Louisiana electric cooperatives are seeking approval of a new portfolio of resources, including physical assets located in zone 9.  In the testimony filed by an intervenor, the actions of RASC and the Minimum Capacity Requirement are used to object to the portfolio selected by the Louisiana cooperatives, attacking market based products, solar and new gas generation.  MISO has failed to address how the Minimum Capacity Requirement is ripe for abuse including anti-competitive behavior and would have a chilling effect on the market if adopted as proposed. 

For these reasons, PC Electric supports the removal of the Minimum Capacity Requirement from the MISO proposed tariff language.

Jennifer J. Vosburg

Jennifer J. Vosburg, LLC

Attorney for Pointe Coupee Electric Membership Corporation

Please see attached feedback.