On September 26, 2024, MISO and industry experts shared insights into Resource Adequacy risk metrics and criterion, and sought stakeholder feedback that can be incorporated into the creation of a roadmap to explore Resource Adequacy criteria beyond the current state (maintaining a loss-of-load expectation, or LOLE, of 1-day-in-10-years).
In particular, MISO requests input on the following:
Comments are due by October 22. You may submit feedback more than once as needed.
WEC Energy Group fully supports the recommendations of the OMS regarding the evaluation and prioritization of Resource Adequacy metrics:
As noted by the OMS and several stakeholders, changes to Resource Adequacy metrics and criterion will directly impact generation expansion planning and state regulatory decisions. MISO should follow the lead-role of the OMS on this issue, including the timeline for evaluation and implementation of any requisite changes. Time is needed to fully evaluate the impact of the seasonal Resource Adequacy approach, the RBDC, and the proposed DLOL methodology (which are already driving changes in resource planning and expansion).
American Municipal Power (AMP) appreciates the opportunity to provide feedback that can be incorporated into the creation of a roadmap to explore Resource Adequacy criteria and offers the following comments for consideration.
Southwest Louisiana Electric Membership Corporation is not yet convinced that other metrics are needed to determine appropriate resource adequacy levels. Significant concerns remain over the modeling assumptions that must be made for the analysis and the time required for the very necessary evaluation of the equity and implications of potential modifications on the many market participants in MISO as well as the timing of any implementation of any final proposal. Changes made to the capacity resource requirement without adequate time to adjust could negatively impact PRA clearing significantly as well as impact parties in ways that are not equitable. SLEMCO offers three areas of comment:
Michigan Public Power Agency supports the feedback of WEC and AMP.
DTE appreciates the opportunity to provide feedback on MISO’s exploration of new Resource Adequacy criteria.
While DTE supports discussion on this topic, MISO should not attempt to pursue this change alone. MISO should collaborate closely with the OMS, other ISOs, and FERC to ensure alignment of any proposed changes throughout the industry. The current one-day-in-10-year LOLE criteria is intrinsic to DTE’s planning processes, including our IRP and state regulatory processes. Changing the Resource Adequacy criteria would directly impact these, therefore we feel strongly that any change MISO proposes to make must be fully vetted and defendable in regulatory proceedings.
In addition to the comments above, DTE fully supports the feedback submitted by WEC Energy Group.
The OMS Resources Work Group (RWG) provides this feedback to MISO in response to its creation of a Resource Adequacy Criterion Roadmap. This feedback is from an OMS work group and does not represent a position of the OMS Board of Directors.
OMS is exploring the establishment of a Resource Adequacy Committee of OMS regulators to ensure OMS is leading on this topic, working in alignment with MISO, and considering input from the broader stakeholder community. OMS will vote on the creation of this committee at its October 24 Board Meeting, following the submittal of this feedback. OMS is looking forward to continuing to work closely with MISO through 2024 and 2025 on the roadmap and the work to be conducted in 2025.
MISO RA-Metrics Takeaways
OMS appreciates the information shared by MISO at the September workshop. MISO presented four takeaways based on their current review and analysis of industry work on this topic, including four MISO conclusions:
At the September workshop, no time was dedicated to discussion of these takeaways. The RWG would appreciate if MISO supplemented the workshop materials or reintroduced these takeaways and conclusions at the November RASC or an additional workshop for discussion. Since they could form a basis for work in 2025, the RWG believes additional conversation in a stakeholder forum is needed where real-time questions and comments are permitted and addressed.
What type of analysis should be included and how prioritized?
As noted in the OMS presentation at the workshop and in subsequent feedback, OMS’s early perspectives are that any analysis or conclusions should:
Any indicative information, as a preliminary step, would be beneficial in expressing the need or urgency of updated metrics as well as prompt discussions and would allow for continued and further modifications that may be needed to show seasonal information, geographical-based data, or other information. LOLE study outputs for the next planning year, outyear projections, and scenario analysis should include seasonal RA risk metrics that correspond to MISO’s assumptions for distributing LOLE risk across seasons.
Early feedback from the RWG has indicated support for some industry recommendations regarding methods to ensure that transmission adequacy and deliverability be considered as well as resource adequacy.
How would your entity be impacted by any potential changes?
To the extent that states do not elect to establish their own PRM, changes at MISO may factor in and influence planning and regulatory review at the states that elect to rely on the MISO market as a planning consideration.
What should be the timeline to identify and analyze resource adequacy criteria?
We appreciate the statement from MISO that the timeline for outcomes and evaluation of RA criteria will be driven by system needs. While most OMS members support the need for this discussion and are aware of the industry movement in this space, evaluating and analyzing data will be key to drive the conversations regarding if and when future specific changes are needed to the resource adequacy criteria (versus simply broader and more transparent information sharing).
MISO-OMS Collaboration
Lastly, the RWG would like to extend its support to MISO on this initiative, its outreach, and the work it has done to engage OMS on this topic. We look forward to future discussion through the rest of 2024 and into 2025 as we work together to ensure alignment of our organizations on this topic and for our system and sector needs.
The MISO Environmental Sector offers the following comments in response to MISO’s questions on the proposed Resource Adequacy Criterion Roadmap:
1. What type of analysis should be included? How should it be prioritized?
The Environmental Sector is concerned about conducting this analysis in the absence of proposed modeling improvements that have already been presented to a prior RASC meeting. Specifically, during the February 2024 RASC[1] stakeholder event, MISO shared a non-specific timeline (slide 4) for improvements to the LOLE model, including modeling of correlated events, planned outages, load forecasting, storage modeling, and demand-side validation.
Before the use of the LOLE model become more precise through the addition of new criteria, such as an EUE standard, MISO needs to complete these planned modeling enhancements. At the moment, risk shows up in the LOLE model because MISO is adding negative generators in every season. Many of these enhancements seem likely to add more risk, but the timing and magnitude of that risk is unclear. As such, it is impossible to weigh the economic tradeoffs of a new standard against the risk it ameliorates; indeed, the model, as currently conceived, is unlikely to result in identifying precise hours of risk, which is a challenge for DLOL (which identifies specific risk hours and weights those hours based on the LOLE study to determine accreditation values) let alone another risk criterion.[2]
Once MISO completes its planned enhancements above, it will need to choose some parameters for the modeling used to develop additional RA criteria including:
a. The study year, i.e., will the model continue to represent the following planning year only?
b. The manner in which MISO will weigh economics against risk, i.e., it is not appropriate to add negative/positive perfect generators; real resource types need to be added so that their cost relative to the improvement in risk can be evaluated.
c. Will MISO use any additional scenarios or sensitivities in order to conduct this evaluation, i.e., will it continue to rely on the load forecast error and weather-year differences to bring stochasticity to the model?
The MISO Environmental Sector believes it is very important to do this work using the model upon which accreditation and reserve requirements would ultimately be based, i.e., in SERVM. If MISO also uses PLEXOS for this work, we ask that it try to do this work in parallel with SERVM since that is likely to be the tool upon which a second RA criterion would be based. And MISO should take care to work to align the SERVM and PLEXOS models to ensure results across the two platforms are aligned and meaningful together.
2. How would your entity be impacted by any potential changes?
Members of the Environmental Sector have already observed how significantly changes to MISO’s RA requirements impact state level planning. Waiting for changes can result in paralysis with respect to acquiring new resources, e.g., utilities who have put a pause on attempting to acquire new LMRs because of pending changes to LMR accreditation rules.[3] And even before the DLOL proposal was filed at FERC, MISO LSEs were already using the indicative values presented by MISO in their planning even if accredited values weren’t also available. MISO should not fail to keep in mind how even the suggestion of a change in RA criteria immediately impacts state-level resource planning.
Importantly, this dynamic should not result in a rush to get through this process; instead, MISO should make clear that there is no specific timeline and let the analysis that needs to be conducted dictate the timeframe. We agree with a primary conclusion of E3’s presenter – that there is plenty of time to develop new criteria.[4] We also agree with one of the presenters at the RA workshop hosted by MISO that getting the fundamentals of the LOLE model right is critical, it is now, and will be even more so in the future.
3. What should be the timeline to identify and analyze resource adequacy criteria?
See response to previous question. The E3 presentation in particular makes clear that although alternative resource adequacy criteria should be considered when the resource mix dramatically alters from its current form, there is no reason or need for MISO to rush this process.
[1] https://cdn.misoenergy.org/20240228%20RASC%20Item%2005c%20RA%20Model%20Enhancement%20Presentation631891.pdf
[2] For example, during the October 2022 RASC meeting, MISO presented work it had conducted using PLEXOS showing the increase in net load ramps through 2041. As presently configured, SERVM is incapable of capturing any resource adequacy impacts from this dynamic.
[3] See for example, Petitioner’s Exhibit No. 10-R Rebuttal Testimony of Robert Sears on behalf of Northern Indiana Public Service Company in Indiana Utility Regulatory Commission Cause No. 45947.
[4] MISO has previously pointed to issues such as low wind events as justification for changes to its RA requirements; this is part of what led to the DLOL proposal. Before embarking on another change intended to address events like these, MISO should explain why DLOL is not sufficient: https://cdn.misoenergy.org/20240917%20Markets%20Committee%20of%20the%20BOD%20Item%2005%20MISO%20Operations%20Report647069.pdf
WPPI supports the comments submitted by WEC Energy Group, particularly around the importance of moving slowly and deliberately on this topic. We add a few additional comments below.
The key analysis WPPI will be looking for concerns potential changes in the relationship between LOLE, EUE & LOLH as load and resources change on the MISO system.
We stress that LOLE analyses that rely on large additions of perfect negative capacity should be avoided. Instead, MISO should develop plausible mixes of realistic resources for the analysis.
We emphasize the need to consider economics in setting resource adequacy standards, so that incremental capacity costs bear a reasonable resemblance to expected benefits.