RASC: LMR Reforms (RASC-2019-9) (20240821)

MPPA encourages MISO to include a new DRR market participation option without a Day Ahead (DA) must offer requirement, as contemplated by MISO in point 2 of slide 10 of its presentation at the 8/21 RASC (20240821 RASC Item 06a LMR Reforms643571).  The new DRR registration would enable BTMG currently registered as LMR, and unable to meet a 30 minute start requirement, to be deployed prior to EEA2 conditions without financial harm due to high start/operating costs.

MPPA also supports WPPI’s feedback.

Dairyland Power Cooperative, Big Rivers Electric Corporation, Hoosier Energy, and Southern Illinois Power Cooperative agree with and support the CUOS position as stated below:

The Coalition of Utilities with Obligation to Serve (CUOS), an ad-hoc group of TO and non-TO Load Serving Entities, including representatives from their state regulatory commissions, met on August 27, 2024 to discuss MISO’s revised LMR proposal presented at the August 21, 2024 RASC meeting.  In summary, the CUOS participants have fundamental concerns with MISO’s Type I and Type II LMR designs.  Those concerns include the deployment requirement for Type I LMRs at the MaxGen Alert level, which requires deployment of LMRs before the curtailment of non-firm MISO exports and before access to other emergency resources.  For most Demand Response programs, access at the Alert level is inconsistent with the design of those programs and a non-starter.  For Type II LMRs, CUOS participants continue to have concerns with the 30 minute maximum response time, which inappropriately puts those LMRs on par with MISO’s Short-Term Reserve product.  The CUOS notes that PJM provides flexibility and allows a 120 minute response time “to accommodate resources with legitimate, physical reasons as to why the load reduction cannot be achieved in 30 minute notification time period and require up to 120 minutes to fully provide the load reduction.” [see PJM Load Management 30 minute notification exception guidelines]

Thank you. 

Wolverine Power Supply Cooperative, Inc. (Wolverine) continues to appreciate and support MISO’s renewed effort to include LMRs as part of its accreditation changes as well as continuing to accommodate stakeholder input to refine the proposal. In addition to its prior feedback, Wolverine provides the following feedback regarding the LMR Reform presentation at the August 21, 2024 RASC meeting.

Wolverine supports separating the LMRs into two types, particularly so that MISO can access LMRs during earlier emergency steps when longer notification LMRs (Type 1) are more accessible. More specifically, Wolverine supports:

1. Access to all resources, including LMRs, earlier in MISO’s steps so that MISO has more operational flexibility and can proactively attempt to prevent of an emergency. Waiting until an emergency occurs is reactive and increases the risk of non-performance. Where there are concerns about the high cost of dispatching LMRs at earlier stages without commensurate compensation then LMRs should provide energy market offers that align with their cost to dispatch. To ensure prices are not suppressed, a price floor may be required.
2. Tiered accreditation based on notification time and number of calls per year/season. The more available the LMR can be, the higher accreditation it will receive. Incorporating these criteria would align LMR accreditation with the availability-based accreditation MISO implemented for all other resource types, which leads to consistency and certainty (i.e., fairness and equality). For example, LMRs that sign up for unlimited calls would receive full accreditation, like the must-offer obligations of Schedule 53 resources.

This feedback is submitted on behalf of the Coalition of Utilities with Obligation to Serve (CUOS) via sector comments (the Muni/Coop/TDU Sector has not formally adopted these comments although most active members of the Sector participate in CUOS).

The Coalition of Utilities with Obligation to Serve (CUOS), an ad-hoc group of TO and non-TO Load Serving Entities, including representatives from their state regulatory commissions, met on August 27, 2024 to discuss MISO’s revised LMR proposal presented at the August 21, 2024 RASC meeting.  In summary, the CUOS participants have fundamental concerns with MISO’s Type I and Type II LMR designs.  Those concerns include the deployment requirement for Type I LMRs at the MaxGen Alert level, which requires deployment of LMRs before the curtailment of non-firm MISO exports and before access to other emergency resources.  For most Demand Response programs, access at the Alert level is inconsistent with the design of those programs and a non-starter.  For Type II LMRs, CUOS participants continue to have concerns with the 30 minute maximum response time, which inappropriately puts those LMRs on par with MISO’s Short-Term Reserve product.  The CUOS notes that PJM provides flexibility and allows a 120 minute response time “to accommodate resources with legitimate, physical reasons as to why the load reduction cannot be achieved in 30 minute notification time period and require up to 120 minutes to fully provide the load reduction.” [see PJM Load Management 30 minute notification exception guidelines]

The CUOS is working on an alternative LMR proposal that will address these fundamental concerns and we look forward to the discussion at the September RASC.

WEC Energy Group provides this feedback on MISO’s proposed LMR accreditation and operational reforms as presented at the August 21, 2024 meeting of the Resource Adequacy Subcommittee (RASC). While we appreciate MISO’s attempt to address the latest round of stakeholder feedback, we remain concerned that the latest LMR Type I and Type II proposals will lead to end-use customers exiting their Demand Response (interruptible load) programs.  This in turn will increase risk and require even more new generation to move through the interconnection queue, a process that requires several years of lead-time.

LMR Type I Concerns:
Currently, LMRs are deployed at MaxGen Event Step 2, the level at which Load Management Measures, public appeals, and emergency energy purchases are made.  MISO proposes to deploy LMR Type I resources at the MaxGen Alert level, the lowest level of the MaxGen procedure at which maintenance is suspended.  The next step of the MaxGen procedure is the Warning level at which nonfirm exports from MISO are curtailed, external resources are scheduled in, and reconfiguration options are considered.  Emergency resources and emergency limits on generation offers are not deployed until the next MaxGen step, Event Step 1.

The deployment of LMRs (and in particular, Demand Response) concurrent with the suspension of maintenance, before the curtailment of non-firm MISO exports and before access to other emergency resources is inconsistent with the design of most Demand Response programs.  Demand Response programs are designed to compensate customers for avoided peaking generation capacity – generation that is deployed last to avoid load curtailment.  The LMR programs envisioned deployment as the last step before moving to firm load curtailment.  Modifying these programs for deployment at the MaxGen Alert level will likely result in loss of Demand Response due to economic and safety concerns.

LMR Type II Concerns:
As we have noted in previous comments, a 30-minute maximum response time is not a viable option for WEC Energy Group’s interruptible customers.  A 30-minute response time, coupled with a mandatory random test, does not align with the economic or safety environments of most interruptible customers.

A 30-minute response time inappropriately puts LMR Type II resources on par with MISO’s Short-Term Reserve (STR) product – a rampable market-based solution for addressing short-term needs and operational challenges.  LMR Type II resources are not compensated comparably to online and offline resources that clear for STR.  

WEC notes that while PJM prefers a 30-minute response time for demand response, PJM provides flexibility and allows a 120 minute response time “to accommodate resources with legitimate, physical reasons as to why the load reduction cannot be achieved in 30 minute notification time period and require up to 120 minutes to fully provide the load reduction.” [see PJM Load Management 30 minute notification exception guidelines]

MidAmerican Energy appreciates the opportunity to provide feedback on LMR Reforms (RASC-2019-9) (20240821).

MidAmerican would like to make the following comments:

• MISO should provide empirical evidence to indicate that the current LMR construct needs to change. Everything provided to date has been theoretical and part of the concern is based on the, now known, incorrect reporting in the DSRI tool.
• MidAmerican would like to emphasize that PJM has a system that allows for a 120-minute lead time for LMRs based on the resource physical capabilities to provide load reduction for demand resources. MISO must justify to stakeholders why they are not capable of operating within those same parameters.
• MISO should focus on increasing the accuracy of its load, wind, and solar forecasting. These improvements would significantly reduce the need for shorter notification times for demand resources and behind-the-meter generation.
• MidAmerican would like to understand why MISO feels that LMRs with a notification time of more than 30 minutes (LMR Type-I) should be called upon before cutting non-firm exports and the use of the emergency max limits on generation that is already online. MidAmerican would like MISO to call LMR Type-I resources between EEA 1 and EEA 2.
• MISO should clearly elaborate how they intend to handle DRR Type-I resources. The current statement that MISO has made is that accreditation will be based on response time and real-time availability but also not have a must offer until MISO issues a capacity advisory or higher. MidAmerican believes that DRR Type-I resources should be treated no differently than a non-dispatchable combustion turbine. In fact, many of the DRR Type-I units may ultimately be behind-the-meter generation.

SLEMCO is supportive of the LMR I and LMR II distinction that has been made in recognition
that end consumers either individually or in aggregate have differing abilities to respond from a
notification perspective. The proposed MaxGen deployments seem reasonable. However,
SLEMCO believes that more discussion needs to take place with stakeholders regarding what is
a reasonable demonstration of an LMRs ability to respond ahead of time and what the penalties
for non-response may be. These are the issue that may make LMR participation (either existing
or new) too costly or onerous for some to consider.

Wabash Valley Power Alliance (“WVPA”) appreciates the opportunity to comment on MISO’s revised Load Modifying Resource ("LMR") reforms proposal, presented at the August 21, 2024, RASC meeting. Generally, WVPA recommends that MISO consider taking a more holistic approach to responding to stakeholder comments.    Providing partial responses makes it difficult to understand total impacts on reforms. MISO should provide insight into why discarded suggestions were rejected to validate the approach MISO ultimately pursues.

Specific to this proposal, WVPA disagrees with the timing for calling on the LMR-I resources. In our August 2 comments (page 1 paragraph 2), WVPA recommended calling on resources at EEA 1 if they are unable to meet the requested 30-minute response time. Calling resources at the alert stage is far too early and wholly unacceptable. At that point in the Market Capacity Emergency Procedure steps, MISO has not yet curtailed export transactions. You cannot make the argument that you are calling on the LMRs because it is an emergency before you have curtailed exports. Curtail exports, see where you stand, then call on the LMR-1 Resources.

WVPA also encourages MISO to provide data and analysis to support selection of 30 minutes as the optimal response time. To date, MISO has explained that in an emergency MISO needs to have resources readily available, and that they need to know that the resources that they call on will show up when requested, but they have not yet provided any data to support why 30 minutes is the magic number. 

In addition, please note that WVPA supports comments being submitted by the Coalition of Utilities with an Obligation to Serve ("CUOS") and looks forward to engaging in discussions of an alternative stakeholder proposal at an upcoming RASC meeting.

Comments

of the

Association of Businesses Advocating Tariff Equity (ABATE),

Illinois Industrial Energy Consumers (IIEC),

Louisiana Energy Users Group (LEUG),

Texas Industrial Energy Consumers (TIEC),

Coalition of MISO Transmission Customers (CMTC),

Midwest Industrial Customers (MIC),

Midwest Large Energy Consumers (MLEC)

and

NIPSCO Large Customer Group (NLCG) [1]

Regarding

RASC: LMR Reforms (RASC-2019-9) (20240821)

September 5, 2024

ABATE, IIEC, LEUG, TIEC, CMTC, MLEC and MIC, as representatives of the End-Use Customer (EUC) Sector, and NLCG appreciate this opportunity to provide these comments to MISO. 

MISO at the August 21, 2024 MISO Resource Adequacy Subcommittee chose to pause before presenting its forthcoming Load Modifying Resource (LMR) capacity accreditation proposal in order to better explain the reasons for its proposed LMR changes for the 2028/2029 Planning Year and beyond.  We appreciate MISO doing so in order to help stakeholders better understand the data and reasoning underlying MISO’s proposed changes.

MISO also provided updated information on its latest proposals with respect to the questions of naming, maximum allowed notification time and timing of MISO interruption calls during emergencies.  Specifically, MISO indicated:

• It is now proposing to use the naming conventions of:

• • LMR Type-I (for notice times in excess of 30 minutes, less burdensome minimum requirements and interruption prior to NERC EEA 2)

• • LMR Type-II (for no more than 30 minute notice, more burdensome minimum requirements and interruption not until NERC EEA2)

• It is now proposing to allow up to a 6 hour notice time for LMR Type-I resources

• It is now proposing to call LMR Type-I resources in batches, as necessary, beginning at the time of MISO Maximum Generation Alerts, rather than NERC EEA 1, with the longer notice time LMR Type-I resources being called first and shorter notice time LMR Type-I resource being called last

We preliminarily support the proposed naming conventions of LMR Type-I and LMR Type-II.  We preliminarily believe it will simplify changes to existing state regulated interruptible service tariffs and contracts.

We strongly support allowing up to a 6 hour notice time for LMR Type-I resources.  Potentially, this will allow all existing LMRs to continue to be LMRs in MISO, provided the other aspects of MISO’s proposed LMR changes that apply to LMR Type-I resources versus the status quo are ultimately reasonably manageable for existing LMRs.

With respect to moving the starting time for calling interruption of LMR Type-I resources from the original proposed time of the declaration of NERC EEA 1 to the new proposed time of the declaration of MISO Maximum Generation Alerts, while MISO has requested feedback from stakeholders at this time with respect to whether that change is acceptable, we are unable to provide such feedback.  As our representatives indicated during the August 21, 2024 MISO RASC meeting, calling LMR Type-I resources at the time of the declaration of Maximum Generation Alerts rather than at the time of the declaration of NERC EEA 2 is a much bigger change in timing than MISO’s original proposal to change from the time of the declaration of NERC EEA 2 to the time of the declaration of NERC EEA 1.  As such, we need additional information from MISO in order to consider the reasonableness of MISO’s proposal and the potential impact of it on LMR Type-I resources.  As communicated to MISO by e-mail by our representatives on August 19, 2024, as a minimum, this includes the following:

1. For each MISO Season from December 2013 to date, separately for MISO North, MISO Central and MISO South:

1. 1.  The number of declared MISO Maximum Generation Alerts

1. 2. The number of declared MISO Maximum Generation Warnings

1. 3. The number of declared NERC EEA Level 1 Events (Maximum Generation Event Step 1)

1. 4. The number of declared NERC EEA Level 2 Events (Maximum Generation Event Step 2)

1. 5. The number of declared NERC EEA Level 3 Events (Maximum Generation Event Step 5)

2. Any analysis that MISO has performed that supports that it needs to be able to call 6 hour lead time LMRs at the time of the declaration of a MISO Maximum Generation Alert rather than not until the time of a MISO Maximum Generation Warning or not until the time of a NERC EEA 1 Event.

3. Confirmation with respect to whether: (i) all LMR Type-I resources would be called at the time of a MISO Maximum Generation Alert or (ii) MISO at the time of a MISO Maximum Generation Alert would call LMR Type-I resources in batches as necessary, starting with the longest lead time LMR Type-I resources (6 hour lead time) and then progressing, as necessary, to shorter lead time LMR Type-I resources (some which could have a lead time as short as 30 minutes).

4. Analysis that applies the proposed LMR Type-I and Type-II deployment approach to the three most recent MISO Maximum Generation Alert or higher declaration days that have occurred in: (i) MISO North, (ii) MISO Central and (ii) MISO South.  The purpose of the analysis would be to provide insight to stakeholders into how the LMR deployments would have been different on those days under the proposed approach than they actually were on those days.  The analysis should use the MW and notice time of LMRs as they historically existed on those days.  For purposes of this analysis, as a simplifying assumption, it would be reasonable for MISO to assume half of the 30-minute notice LMRs transitioned to being LMR Type-I resources with a 30-minute notice time and half to LMR Type-II resources with a 30-minute notice time.

We would appreciate MISO providing the information as soon it is able to complete its compilation in order to allow us to provide feedback to MISO on its proposed revised timing of curtailment calls for LMR Type-I resources.

As a final note, we would like to emphasize our August 2, 2024 comments to MISO on its proposed LMR changes for the 2028/2029 Planning Year and beyond continue to apply except as modified by our comments above.[2]  In particular, we would like to emphasize we continue to have very serious concerns with respect to MISO’s previously stated intent to eliminate the Firm Service Level option for LMR Demand Resources as part of MISO’s forthcoming LMR capacity accreditation proposal.  We continue to urge MISO to try to find a way to reasonably continue the Firm Service Level option as part of its forthcoming LMR capacity accreditation proposal.   Furthermore, as we indicated in our August 2, 2024 comments, if despite our urging, MISO fails to reasonably include the Firm Service Level option in its forthcoming capacity accreditation proposal, MISO will need to show the following:

1. The proposal does not inefficiently require retail electric customers to force run processes in order to comply with a requirement to be available to provide a specific MW amount of demand reduction.

2. The proposal would not place a retail customer in the position of having to curtail the portion of their load that is necessary for safe, reliable and environmentally compliant operation of their facilities.

3. Well in advance of curtailment, MISO provides a maximum demand MW value to the retail customer such that, if the customer maintains its demand at or below that value during the curtailment period, the retail customer is fully in compliance with the curtailment.

4. The proposal provides a capacity accreditation in full alignment with the allocation of capacity obligations to LSEs such that, if a retail customer that is a demand resource has a firm service level of zero (0) MW, there is no net capacity obligation for its load if the accredited capacity for the LMR is applied in its entirety to the load’s PRMR assuming the retail customer’s load is an Option 2 capacity-only demand resource (i.e., does not have a capacity accreditation reduction due to notification time).

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

Jim Dauphinais

Brubaker & Associates, Inc.

(Consultants to ABATE, IIEC, LEUG, NLCG and TIEC)

(636) 898-6725

jdauphinais@consultbai.com

Ali Al-Jabir

Brubaker & Associates, Inc.

(Consultants to ABATE, IIEC, LEUG, NLCG and TIEC)

(361) 994-1767

aaljabir@consultbai.com

Ken Stark

McNees Wallace & Nurick LLC (for CMTC)

(717) 237-5378

kstark@mcneeslaw.com

Kavita Maini

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

(262) 646-3981

kmaini@wi.rr.com

The OMS DER and Resources Work Groups (OMS WGs) provide this feedback regarding MISO’s recent revisions to its Load Modifying Resource reform proposal presented at the August 21, 2024 RASC meeting. This feedback is from OMS work groups and does not represent a position of the OMS Board of Directors.

While MISO has requested feedback on whether MaxGen Alert deployment is acceptable, the OMS WGs find it difficult to provide a direct response at this stage without seeing a comprehensive LMR reform proposal, including how these resources will be accredited. As such, the OMS WGs provide limited feedback to this current request and pose some questions for MISO’s consideration in future RASC meetings. OMS cannot sufficiently evaluate (much less support) the proposal without an understanding of the full reform package and intended implementation timeline.

Feedback on MaxGen Alert Deployments

The OMS WGs have concerns regarding the trade-offs associated with MaxGen Alert deployment. Based on MISO’s presentation at the August RASC, the revised LMR Type I would allow all existing LMRs (with 6 hours or less response time) to fit into this product with accreditation based on the resource’s availability to be called during a MaxGen event. However, this means that LMR Type I resources will be called more often, since it is further “up” in the emergency procedures “stack.”  MISO should demonstrate the expected impact that this change will have on all LMR participation.

Another caveat is that longer lead time LMRs would be at greater risk of receiving a “hit” that is detrimental to their accreditation since it is more likely that those resources may not be available for shorter lead time events. For example, if MISO needs to deploy LMR Type I within two hours, LMRs with lead times beyond 2 hours would accordingly not be ‘available’ for that event and thus would drive their accreditation downward (based on our understanding of the RASC discussion).

As an initial OMS WG position, this sequencing might be reasonable, but there has been no demonstration that the 6-hour DR is less useful to system operations, or how much less useful.  We note that deploying LMR Type I at the Alert stage places them before the curtailment of non-firm exports, which occurs during a MaxGen Warning. As this sequencing is counterintuitive, MISO should further explain why it selected the MaxGen Alert stage for LMR I deployment. MISO should explore revisions to its proposal or its emergency procedures only after carefully considering the interaction between LMR deployment and other emergency resources and actions available.

Since the chosen accreditation methodology is critical to the overall reform package, the OMS WGs withhold judgment on the merits of this proposal until the accreditation details are presented and discussed later this month. 

Lastly, since stakeholders will not have a complete LMR reform proposal until late September 2024 at the earliest, the OMS WGs would like to request that MISO not file this proposal until Q1 2025. This additional time will be key to gaining an in-depth understanding of the LMR reform proposal, answering unresolved questions, and increasing the chance of a successful filing at FERC. While the proposed implementation date of PY 2028/29 provides additional time for discussion, RERRAs and their distribution utilities must have a full opportunity to align retail tariffs with the new MISO DR requirements.     

Questions on MaxGen Alert Deployments

The OMS WGs raise the following questions for MISO and stakeholders to consider:

• Would LMR Type I resources all be called during the Alert stage before moving to other resources further in the emergency procedures?
  • When will the DR resource be called? Would MISO deploy LMR Type I beginning with MaxGen Alerts and continue to deploy LMR Type I after that stage given notification time, or only during MaxGen Alerts?
    • What if all LMR Type I resources are not needed? How will MISO determine which to call and which to hold in reserve?  
• How will calling DR further up the stack impact economics? Will this impact LMP and price signals?
• Does calling LMRs earlier affect when participants engage external resources and how long MISO stays in each step? Would MISO’s other emergency procedure steps potentially need to be amended given the shift in LMR deployment (e.g., curtailing non-firm exports), and what should happen in each step?
• If MISO skips the Alert step, would access to the LMR Type I resources be lost?
  • It would be helpful for MISO to respond to stakeholder requests for data about the history of MISO alerts, warnings, EEA1, EEA2, etc., so that stakeholders have a more complete idea of what deployment in MaxGen Alerts could entail, with the understanding that some of the past decisions MISO made regarding these steps could have been impacted by current LMR procedures (e.g., moving ahead to an EEA2 in order to access LMRs).
• Relatedly, the OMS WGs previously requested that MISO provide an analysis of a reasonable number of calls that would balance the needs of participants and operators. Offering data on this could help participants understand the economic feasibility of participation under this new paradigm.

Questions Related to LMR Accreditation

Looking ahead to accreditation discussions, the OMS WGs suggest that MISO closely examine related comments and questions about accreditation from the last round of feedback. The OMS WGs encouraged MISO to provide more education about LMRs in the LOLE model. This is particularly important considering MISO’s plan to use the LOLE model output to select which hours of LMR availability would be weighed more heavily for accreditation purposes. Some specific questions include:

• Is MISO proposing only an on-peak or off-peak consideration of hours for the forward-looking component, or something more granular?  
• Historically, how do LOLE hours of LMR deployment align with actual LMR historic deployment?
• Can MISO provide more information about assumptions regarding when and to what degree LMRs are deployed in the LOLE model?  
• Would deploying LMRs at an earlier stage necessitate a change in the LOLE model?
  • Would MISO expect to make other changes to the LOLE model based on these plans? Has Astrape been consulted regarding the feasibility of these changes?

Connection to PRMR Allocation

The OMS WGs recommend that MISO address the PRMR allocation issue jointly with LMR accreditation, as mentioned at the August RASC. While it wasn’t imperative to address during the D-LOL for other resource types, a misalignment between LMR accreditation and PRMR allocation is more problematic. For example, an LMR-DR that is being accredited by its availability during high-risk hours but allocated its share of the PRMR based on consumption during peak hours could cause a significant mismatch. With that in mind, will MISO’s timeline change for LMR reforms if MISO addresses PRMR allocation in tandem?

LMR Verification and Testing

We reiterate one last unresolved question from prior feedback: Please clarify that DRR participation models and LMR Type I resources would only be tested upon registration and that only LMR Type II resources would be tested annually (see slide 11).  

Voltus comments to RASC on RASC: Accreditation Reforms for LMRs (RASC-2019-9) (20240821)

September 5th, 2024

On August 21st, 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. 

Much of MISO’s proposal remains unchanged from the prior opportunity for stakeholder comment in August. We therefore incorporate by reference our August comments, which are available here: https://www.misoenergy.org/engage/stakeholder-feedback/2024/rasc-lmr-reforms-rasc-2019-9-20240710/. 

Voltus offers the following additional feedback in response to MISO’s most recently stated challenges and proposed solutions:

LMR Type 1s should be dispatched in the event of MaxGen Warnings or EEAs rather than MaxGen Alerts.

MISO must strike a balance between the usefulness of LMR Type 1s to the MISO grid and how attractive participation is for loads. Loads that cease participation in LMR will provide no benefit to the grid. Dispatching LMRs during all Max Gen Alerts while eliminating energy payments during dispatches will substantially reduce the amount of load willing or able to participate as LMRs.

There have been an average of 5 and maximum of 8 MaxGen Alerts between the planning years from 2021-2024. Nominally, LMR can be dispatched up to 16 times per year today, but in actuality dispatches happen 0-2 times per year. We estimate that a plurality–perhaps 25%–of loads would cease demand response participation if the norm for dispatch frequency increased from 0-2 to 5. For many loads, regardless of revenue demand response participation is not worthwhile if it is too operationally disruptive. Many such loads are comfortable participating in LMR or as dual-enrolled LMR-EDRs today because LMRs are now only dispatched during EEA 2 emergencies. Loads are more willing to curtail when they know they are the last line of defense before a blackout. 

Dispatching after MaxGen Warnings, rather than Alerts,or dispatching when EEAs occur, would increase MISO’s access to its LMRs relative to today without causing as much attrition as the latest proposal. There have been an average of 1.3 and a maximum of 2 MaxGen Warnings per year in the past few years. Dispatching after MaxGen Warnings or higher alert/emergency statuses strikes a more appropriate balance between attrition risk and grid services than would dispatching for all Alerts. 

Eliminating Energy Payments for LMR Dispatches Creates Economically Inefficient Auction Outcomes.

Energy payments are a necessary part of efficient market design, especially as rule changes increase demand response dispatch frequency. Some facilities are willing to curtail for any number of hours, so long as their costs are covered. Consider a large industrial facility such as a steel mill or metals manufacturer with a $3500/MWh opportunity cost of curtailment– a reasonable value given that MISO quantified the Value of Lost Load (VOLL) for some industries in excess of $13,640/MWh. The facility must cover their costs in order to be willing to curtail and provide services to the MISO system. 

Today, this facility could dual enroll in EDR and offer their energy at a $3500/MWh price, ensuring that they would be made whole for their variable costs regardless of dispatch frequency, and enabling them to participate as a price-taker in the Planning Resource Auction. 

With the elimination of dual-enrollment, such a load would have to offer into the PRA such that capacity pricing alone would cover its cost of curtailment on a dollar per megawatt-hour basis under the highest likely dispatch frequency. When conservatively forecasting 8 MaxGen Alerts per year (matching the maximum of the past few years)  they  would have to offer into the PRA at a price of $112,000/MW-year ($3500/MWh * 8 dispatches * 4 hours/dispatch). Such a resource would never have been cleared in the history of the PRA. In some years, however, an outcome where this facility didn’t clear would be economically inefficient. For example, in 2022/2023, there were 4 MaxGen Alerts (including 2 EEA events) in MISO Central,  and in Central zones the capacity price was $86,381/MW-year. Assuming that in the new paradigm such a year would have included 16 hours of LMR dispatch, this puts the value of LMR participation at $5,399/MWh ($86,381/MW / 4 dispatches/ 4 hours per dispatch). With the benefit of hindsight, the example facility would have wished they’d cleared the auction. If a facility overestimated dispatch frequency in setting their offer price and then became the marginal unit in an auction, the PRA would clear at an artificially high price. On the flip side, if there ended up being fewer dispatches than a facility estimated when setting their offer price, they would have to provide uneconomic curtailment when dispatched. Forcing industrial facilities or the market participants who represent them to predict the frequency of MISO’s MaxGen Alerts, rather than simply compensating them for energy when they are dispatched, guarantees economically inefficient auction results. 

Capacity demand response programs across the United States and Canada recognize that energy payments create efficient auction outcomes and appropriate incentives for performance during dispatches. For example, PJM’s Emergency Load Response program– which is quite similar to LMR in many ways–pays the greater of LMP or a resource’s strike price, which can be up to $1849/MWh. New York ISO’s Special Case Resources similarly pays the greater of LMP or a resource’s strike price, which can be up to $500/MWh. 

The way generators participate in wholesale markets, including MISO’s, also mixes capacity and energy payments. Generators reflect their variable costs in their energy offers, and use capacity markets to cover fixed costs. If capacity prices had to cover variable costs, they would be astronomical. 

The LMR products should include energy payments to provide equitable treatment for demand response and generators and to create efficient auction results.

The DRR model in its current state is not a substitute for LMR.

The proposed DRR accreditation option has the benefit of including energy payments for demand response participants, creating an incentive for all LMRs to switch to DRR in pursuit of these payments. DRR enrollment is not a perfect substitute for today’s LMR/EDR dual participation option, however, because DRR-1 assets have a $2000/MWh offer cap–lower than the $3500/MWh offer cap for EDRs. 

Additionally, the tools and processes to support DRR-1s today are not suitable for handling the volume of sites and megawatts that are handled in the MECT today for the LMR program. Voltus recommended detailed improvements to prepare the DRR-1 product to handle greater scale in our comments to FERC in the Order 2222 Docket, Docket ER22-1640, available here: https://elibrary.ferc.gov/eLibrary/filelist?accession_number=20240711-5023. Some necessary fixes before DRR can become the primary path for demand response capacity accreditation include:

•  An API or csv uploader to enable bulk creation of Locations and Enrollments in the DRT

• Better tools and processes for tracking enrollment review and approvals.

• Review and approval of specific locations rather than aggregate enrollments, such that rejection of a single location does not result in rejection of a larger aggregation.

• Much greater specificity in the Tariff, business practice manuals, and training materials about how DRRs can receive capacity accreditation. 

There is an ongoing need for a DRR-LMR dual participation option.

Voltus would like to reiterate our prior commentary regarding the ongoing need for a DRR-LMR dual participation option, available here: https://www.misoenergy.org/engage/stakeholder-feedback/2024/rasc-lmr-reforms-rasc-2019-9-20240710/. 

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 that can provide both emergency energy and ancillary services. 

For example, Voltus works with a university that is currently enrolled as both an LMR and a DRR. Through the DRR enrollment, they regularly participate in MISO’s ancillary services market and curtail HVAC equipment as needed in response to contingency events. As an LMR, they are simultaneously on standby to curtail a much broader range of equipment that they are only willing to curtail during grid emergencies.

Under MISO’s proposal to remove dual-participation, for such an asset to receive accreditation for its emergency condition capability, it would either need to substantially increase its offer volumes during Capacity Advisory or Emergency or opt to participate only as an LMR Type 2. 

If the facility were to choose the former, during Capacity Advisory hours it would need to increase its offer volume, which would require it to replace its typical low spinning reserves offer with a much higher-priced offer, given the expense of curtailing the additional volume. If the asset were instead to opt for participation as an LMR Type 2 only the facility would be forced to stop offering into spinning reserves, thereby lowering available volume for this product and driving higher spinning reserves costs. Under either scenario the net effect of eliminating dual-participation and requiring assets to adjust their offers in this way is an inefficient increase in the spinning reserves costs throughout the MISO footprint.

The same dynamics would occur with DRR1s currently dual participating in LMR and Energy. Either allowing continued dual enrollment or allowing DRR1s to offer multiple price-quantity pairs would solve this problem. 

Additional comments

The distinction between LMR types 1 versus 2 is illogical in the latest proposal, because the relative difficulty of providing each product is inconsistent. Type 1 has a longer notification time, but is subject to more frequency dispatches. Type 2 LMRs would have to respond quicker, but less often. In actuality, the types of loads that can respond more quickly are also typically capable of more frequency dispatching and vice versa. 

In these comments, we have assumed that the 4-hour maximum dispatch duration of today’s LMR program would continue. The MISO proposal does not mention this important parameter, however. Can MISO please clarify the maximum dispatch duration in the new framework?

The proposed accreditation approach, based upon historical availability, has two major deficiencies:

1. There is no explanation of how new resources, without any historical data, would be accredited. 

2. The proposal would accredit at the resource level. However, resources are composed of many individual facilities with different availability and performance. If the composition of an aggregate resource changed year-over-year, it would not be accurate or fair to accredit it based on historical data for a different mix of underlying facilities. As such, accreditation should be completed for individual facilities and then summed to the aggregate resource level.

Advanced Energy United appreciates the opportunity to submit these comments in response to the Midcontinent Independent System Operator, Inc.’s (MISO) request for stakeholder feedback on its revised Load Modifying Resource (LMR) reforms proposal (RASC-2019-9) following the August 21, 2024 Resource Adequacy Subcommittee (RASC) meeting.

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

MISO requested feedback specifically related to whether MaxGen Alert deployments for LMR Type 1 resources are acceptable. United appreciates MISO’s analysis of risk factors driving LMR reforms, including changing seasonal risk hours, greater operational uncertainty, and increased need to rely on demand side resources. However, this is a major change from the current Energy Emergency Alert-2 deployment parameters.

Given that nothing in MISO’s proposal changes the fact that LMRs receive only capacity payments, and not energy payments, United has concern that greater reliance on these resources during MaxGen alerts will be economically burdensome to many market participants. This is particularly true as the frequency of MaxGen Alerts has greatly increased in recent years. If many resources that would fall under the LMR Type 1 category are expensive to run, it will be difficult for those Market Participants (MP) to recover downtime costs without offering into the capacity auction, in which they would only clear at high pricing. Calling on longer lead time resources first during MaxGen Alerts may cause those MPs to exit the market, which could be costly from a reliability perspective.  United urges MISO consider how the frequency of MaxGen alerts would affect the economic viability of participating as an LMR Type 1. Further, as MISO’s reforms to LMR accreditation are forthcoming, it is difficult to understand the full impact of these proposed changes. Outstanding questions, such as whether there will be a firm service level option, severely limit the ability for MP’s to understand how their resources would fit into the proposed construct.

Additionally, United does not believe MISO has provided sufficient evidence that capacity risks during MaxGen Alerts necessarily need to be solved through use of LMRs. The new proposal would call upon LMRs before curtailing non-firm MISO exports and accessing other emergency resources. Between those options and MISO’s other workstreams, including Distributed Energy Resource integration and storage modeling and dispatch, accessing LMR Type 1’s that early in emergency procedure may not be necessary. United urges MISO to consider how strategic use of all resources at MISO’s disposal, particularly those receiving energy payments, may be able to address some of what MISO is currently seeking to resolve through LMR reforms.

Advanced Energy United appreciates the opportunity to provide these comments and looks forward to continuing to work with MISO to reform LMR participation. Please reach out to Conor McKenzie with any questions.

Respectfully submitted,

Conor McKenzie

202.380.1950 x3177

cmckenzie@advancedenergyunited.org

Are Max Gen alert LMR deployments acceptable?

Alliant Energy is concerned that this is not a sustainable long-term solution. MISO needs to consider that customers see LMR interruptible load programs as voluntary load shedding as a last resort before involuntary load shedding. It is not reasonable to ask customers for load shedding before MISO implements non-firm export curtailments and other emergency procedures. We are concerned that customers will drop from a LMR Type I program when they understand that 1) they are being called more frequently than in the past and that 2) MISO is not implementing other measures before customers voluntarily shed load.

MISO should add a “1b” step for LMR Type I so that MISO can take emergency steps before requesting for customers to shed load.

We would like to see MISO’s back-up proposal if LMR programs did not change. E.g., PRM change, etc.

Also, MISO needs to dedicate sufficient discussion time in RASC for expectations and procedures on how LMR Type I would be requested and deployed. This topic is generating a lot of questions for load management and operations staff.

30-minute LMRs are “science fiction” outside of some very particular circumstances

MISO’s April 17 presentation showed that only 1% of Demand Response was achieving 30-minute response time (76.2 MW out of 7,503.8 MW, slide 30). Again, MISO should view all LMRs as last resort load shedding that needs to planned carefully and with ample response time. Just because MISO Operations wants 30-minute response time for LMRs does not mean it is reasonably achievable, and just because pre-emergency conditions LMR calls are more operationally convenient and flexible does not mean that customers will find it acceptable.

Similar to PJM, MISO should allow 2 hour response time on LMR type II if Market Participants provide explanations on safety or process limitations.

MISO needs to provide more LMR proposal data

We look forward to the accreditation clarity MISO will provide in September, but also ask for additional information:

• What does MISO project for number of calls per season and year for each of the programs (DRR, LMR) relative to what has been seen in the last 5 years?
  • This is critical for customer communications.
• What are the acceptable ranges of $/MWh offer prices under DRR Type I/II
  • MISO states that high offer prices will be allowed, but the range is still not clear.
  • MISO should work with the IMM to publish acceptable ranges in advance, as opposed to each LSE finding out on their own.
• Does DRR-I/II (and other programs) have a limited energy option to cap usage which could help maintain customer retention?

The Entergy Operating Companies ("EOCs”)[1] appreciate the opportunity to provide feedback on MISO’s Market Redefinition Accreditation reforms for LMRs. 

MISO is requesting feedback on its revised LMR proposal, specifically if MaxGen Alert deployments are acceptable for LMRs

The EOCs recommend that MISO move the notification and deployment of LMR Type 1 resources to Event Step 1 (EEA Level 1). We believe this deployment is more reasonable as it aligns with the NERC Energy Emergency Alert (EEA) event. Additionally, we would like to see LMRs deployed after emergency resources and emergency limits are activated.

Additional Considerations Regarding the LMR Reforms

The EOCs would like to use this feedback submission to reiterate a few additional points that MISO should consider in its LMR reforms:

1. Increased Frequency of LMR Deployments:
• It has been indicated that MISO intends to deploy Load Modifying Resources more frequently than current operations. With the possibility of multiple deployments within a single season, MISO needs to understand that Stakeholders and Market Participants will need to revise Interruptible Rate tariffs with many customers. This revision process will be lengthy for all EOCs involved, and MISO should plan accordingly.
• Changes in retail customer rates and contracts, particularly concerning Interruptible Rates, could have significant implications. The potential loss of new industrial customers to regions offering more favorable LMR incentives, coupled with the competitive disadvantage posed by regions with less restrictive Interruptible Tariff (I.T.) rates, underscores the importance of careful consideration of these changes.
2. Elimination of Dual Registration of LMR + Emergency Demand Response (EDR) Units:
• The EOCs support the elimination of dual registration of LMR and Emergency Demand Response (EDR) units, as the ability to shift availability from LMR to EDR can prevent the visibility and availability of LMRs to MISO. This is a key issue in MISO's current reforms concerning the availability of LMRs. Given the challenges posed by the dual registration option, the EOCs propose that MISO pursue its elimination on a separate and much more aggressive timeline compared to the broader package of LMR-related reforms.   While the EOCs believe that the bulk of MISO’s proposed LMR reforms will require significant implementation lead times for market participants to adapt to new rules, we believe the elimination of the dual registration option can and should be done relatively quickly.  We request that MISO take steps to eliminate the dual registration feature from its markets as soon as possible and preferably in time for effect during the 2025/26 Planning Year. 
• Additionally, the EOCs advocate for the complete phase-out of the EDR product. Historically, EDRs have had minimal presence in the MISO market, as they are not deployed until after LMRs have been utilized. Given this, we find little to no value in the continued use of EDRs within the MISO framework.
3. Hourly Availability of Resources:
• The EOCs request that MISO consider allowing Market Participants to state the availability of resources on a per-hour basis. This would enable customers to adjust to variable load drops that occur during the curtailment process.
4. LMR Qualification Requirements
• The EOCs are seeking clarity on whether MISO intends to maintain a 4-hour availability requirement to qualify as an LMR resource. The EOCs do not believe this requirement should be included because it will prevent some DR programs from being able to register in MISO that could provide additional reliability benefits to the system.
5. Improvements to DSRI Application:
• The EOCs urge MISO to make significant improvements to the DSRI application used for issuing LMR scheduling instructions. The current process is overly cumbersome for Market Participants to be effective or useful.

6.       Clarification on LMR Deployment During Alert Stage

• The EOCs seek additional clarification on LMR deployment during the Alert stage. Specifically, when an Alert level is issued, is the expectation that LMR Type 1 resources begin the curtailment process based on resource specifications, or is MISO merely providing a heads-up to be ready to curtail?

Conclusion

In conclusion, the EOCs believe that the proposed modifications to the existing demand response program in the MISO market should prioritize optimizing the effectiveness of Load Management Resources (LMRs) during emergencies while simultaneously fostering economic growth and competitiveness.

To begin, we must reiterate that MISO is putting forward LMR reform proposals prematurely—before MISO and stakeholders have had a full discussion on the problems we are trying to address and the full range of ways to address them.  Proposed reforms should emerge from a full discussion of the underlying problems rather than strictly from MISO's list of preferred solutions.

We assume that elements of MISO’s proposal as shared at the July RASC remain part of MISO’s plan, unless explicitly modified.  Accordingly, we reiterate the concerns we expressed in response to the July proposal:

• As expressed in Minnesota Power’s comments in response to the July RASC LMR feedback request, there is little practical value in actually interrupting end-use demand for testing purposes, especially in comparison to the substantial cost.  We believe a number of enhancements to the existing framework are available that could provide MISO with more assurance around DR LMR capability, ranging from more careful registration processes, more uniform rules for accreditation, consideration of historical meter data, descriptions of processes to be interrupted and demonstration of communications drills.
• MISO continues to propose that only resources with notification times not exceeding 30 minutes be eligible for continued deployment at EEA 2.  As we have previously noted, we are open to discussing earlier deployment for longer-lead resources, but would like to see a detailed case for any specific proposal.
• We continue to maintain that Firm Service Level accounting is appropriate for DR LMRs, and that MISO’s proposal to eliminate Firm Service Level accounting will introduce more problems than it solves.

We have the following comments on the new elements that MISO introduced at the August RASC:

• WPPI believes that 6-hour lead time LMRs continue to have significant value for MISO and should be accommodated under any LMR construct.  Accordingly, we are pleased to see MISO’s proposal to continue to support participation of these LMRs.
• We are also pleased to see MISO providing flexibility in seasonal deployment caps.  This will help accommodate resources with very different characteristics.  More detail on this element of MISO’s proposal is needed, however, for us to fully understand it.
• Based only on the Max Gen Alert and Warnings issued the last Monday and Tuesday of August, we have significant doubts that deployment of LMRs would have been appropriate during those events, and we suspect such deployment likely have led to price drops that would have required generator make-whole payments.  We could provide a more detailed response only once MISO makes available information on historic MISO capacity emergency notifications, as requested by Jim Dauphinais,  We note that MISO’s current LMR pre-scheduling ability is described (in SO-P-EOP-00-002) as “in anticipation of a Max Gen Emergency Event Step 2a or higher.”  MISO’s proposal from the August RASC meeting includes no such qualification.  This raises a concern for us of unnecessary deployments or—at a minimum—deployment calls that are later cancelled, which may also be highly disruptive and which we should seek to avoid.  Premature deployment of demand interruption is not economic and will tend to cause valuable resources to cease offering capacity.

Minnesota Power Stakeholder Feedback on LMR Reforms

Minnesota Power Appreciates the opportunity to provide stakeholder feedback regarding LMR reforms.  The MISO review of stakeholder comments and subsequent presentations have shown a regard to the feedback.  There are still a number of remaining issues regarding what stakeholders regard as a workable offering and the most current proposal on the LMR Type I is not an acceptable proposal. 

The stakeholders have conducted additional discussions in regard to the proposed terms of LMR Type I, and there are specific recommendations common to many stakeholders.  The collective experience of the stakeholders is extremely deep in terms of utility planning and operations, and we urge MISO to respond to the directly accept and adopt the stakeholder proposals for LMR Type I attributes.  The back and forth of stakeholder feedback and resulting MISO proposal seems like the most efficient way to move forward to a viable solution, but the principles and basis for any changes need to pass the test of being technically credible and defensible in the overall assessment of the proposed changes.  As one example to drive home this last point, the proposed changes from the August 2024 RASC meeting, the proposed deployment for LMR Type I of increasing the deployment to 6 hours and moving the criteria to being MISO Gen Alert would result in a situation where the LMR Type I would be interrupted before the MISO Generation Warning notice that includes curtailing external transactions. 

The following have not been demonstrated or quantified at this point in the process:

1. The impact of an accurate self schedule in assessing the gap from the accredited LMR capacity and the amount available for curtailment in the operational realm
2. Auditing the historic data to provide more clarity on the amount that is expected and to allow stakeholders to refine their internal reporting processes to decrease the gap.
3. Quantifying the impacts of LMR on the MISO reliability via the LOLE modeling and analysis.
4. Demonstrating how the LMR accreditation flows through the current PRMR calculations given the fact that the LMR resources are in the LOLE modeling, and are given an accreditation level outside of the LOLE model. (Current action item that we provided)
5. Demonstrating the impact of response time of LMR and the impact on reliability.
6. Evaluation of proposed changes in the corresponding participation level for LMR. 
7. There are definitely connections in the LOLE model, the PRMR determinations and the yet to be proposed LSE allocation of the PRMR value and the LMR accreditation methodology.  The complexity of addressing LMR accreditation in conjunction with the PRMR LSE allocation is expected to be enormous, but to attempt to demonstrate how LMR accreditation properly fits into the allocation of PRMR LSE – after the LMR has been exogenously quantified outside of the LOLE model – is expected to be nearly impossible.
8. MISO needs to provide guidance on what periods should be used for determining the LMR accreditation to provide a means of seeking to align LMR accreditation and system needs.  Using MISO system peaks is a default approach, and that is clearly not an adequate means given the clear indication from the DA hour determination that a tight margin hour could occur over a wide range of hours and day types in any month. 

The most useful stakeholder feedback at this point in the process is to provide specific LMR Type I attribute recommendations.  The following are Minnesota Power’s recommended attributes

1. LMR Type I
   1. Firm service level approach of determining the LMR accreditation needs to be preserved in its current form.  The design of the firm service level is to establish a level of firm service for the specific load, thereby establishing the level of system capacity required to serve that load.
   2. Deployment of LMR Type I at EEA 1 Event Step 1B should be used. 
   3. Four hour response time with earlier MaxGen Alert and Warning two  hours before the anticipated event with the final determination and notice four hours before the event. 
2. LMR Type II
   1. Firm service level approach for accrediting resource
   2. Two hour response time unless any demonstrated requirements are in place for an EEA 2
   3. Deployment at EEA 2 emergency.
   4. Maximum number of events established as existing LMR design
      1. The need for MISO to have access to LMR deployment for unlimited number of events when the threshold is at EEA 2 is not a reasonable requirement.  The judgement of LMR being deployed or not is not a matter of operation judgement.  The number of EEA 2 events has been very low, and is an indication of a reliable system.  If the current standards of reliability are continued, it is unreasonable to believe that the number of EEA 2 events will increase suddenly. 

Minnesota Power appreciates the opportunity to provide stakeholder feedback.