Home Stakeholder Engagement Issue Tracking Continued Reforms to Improve Scarcity Pricing and Price Formation

Issue Tracking Details

Continued Reforms to Improve Scarcity Pricing and Price Formation IR071

Last Modified - 09/08/2021
2020 2021 2022
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Continued reforms to improve scarcity pricing and price formation are necessary for Availability (the ability of transmission and energy resources to meet requirements at all hours). 

This project includes reviewing the Value of Lost Load (VOLL) assumption and its impact on demand curves. As such, "IR060 - Improved Contingency Reserve Demand Curve that reflects VOLL" has been closed and is being addressed here, through IR071.

This issue was submitted by Potomac Economics, MISO's Independent Market Monitor (IMM) and is synonymous with State of the Market (SOM) recommendations 2016-1.




Next Update


IM SOM Recommendation





Integrated Roadmap


Advisory Committee Priority

Improve market efficiency
Ensure equitable cost allocation



MISO submitted Tariff revisions regarding the Market-Wide Operating Reserve Demand Curve (“ORDC”) that is used to price reserves when the amount of cleared Operating Reserve is less than the Operating Reserve Requirement. MISO also submitted Tariff revisions to improve administrative pricing during Emergency conditions requiring firm Load Shedding. This filing addresses the applicability of Value of Lost Load (“VOLL”) pricing during distinct emergency event types.


MISO submitted Tariff revisions to the Module A definition of Fast Start Resource to disable offline Fast Start pricing logic until system issues are addressed.


MISO plans to file to address near-term scarcity pricing enhancements by end of July 2021. These include: • Modify Operating Reserve Demand Curve • Suspend Offline Fast Start Pricing • Draft Tariff redlines in appendix Work continues on other identified enhancements in near term and beyond.


MISO submitted Tariff revisions to modify the partial payment criteria for Real-Time Revenue Sufficiency Guarantee (“RSG”) make-whole payments (“RT RSG MWP”).


MISO discussed the Scarcity Pricing Enhancements. MISO has divided these enhancements into Near-term, Mid-Term and Long-Term enhancements. Near-Term will be filed with FERC in June 2021. Mid-Term items should see work in 2022 and Long-Term items will be after 2022. MISO will continue Conceptual Design for additional scarcity price formation enhancements.


MISO plans to publish a Scarcity Pricing Evaluation Paper in May for Stakeholder review. Value of Lost Load evaluation, analysis and estimation continues.


MISO hosted a Scarcity Pricing Workshop. The workshop was intended to provide a detailed presentation of MISO’s Scarcity Pricing Evaluation and allow for stakeholder discussion and feedback. The workshop was recorded and is available.


MISO reviewed the scope of its proposed scarcity pricing enhancements. Stakeholders were encouraged to attend the Scarcity Pricing Evaluation Workshop on January 22. MISO will post an evaluation whitepaper and move to conceptual design in Q1 2021. A filing is anticipated in Q2 2021. MISO discussed impacts and outcomes of administrative pricing during force majeure events. VOLL pricing and uplift charges are affected by these events. MISO shared a draft Issue Statement and requested Stakeholder feedback on this statement.


A status update on scarcity pricing evaluation and proposed enhancements was provided. Details were shared on evaluating uncertainty under different types of days and three factors used to determine reserve requirements and demand curves. MISO will refine the proposals and publish an evaluation paper in Q1 2021. Scarcity Pricing FERC filing is anticipated in Q2 2021.


A status update on scarcity pricing evaluations was provided and proposed enhancements were discussed. Stakeholder feedback requested on proposed enhancements. An evaluation whitepaper is expected to post in Q1 2021.


Discussed potentially viable Value of Lost Load (VOLL) approaches at the Market Subcommittee (MSC). Discussions will continue at the November MSC.


Review of how current Value of Lost Load (VOLL) was established and discussed proposed updates. Three potential paths forward were discussed. Feedback was requested on these proposed approaches. Discussions will continue at the October Market Subcommittee.


Discussed Emergency Pricing proposals at the MSC. Stakeholder Feedback requested on Value of Lost Load. Due August 20. Transitioned to the Evaluation phase. Discussions will continue at the September 10 MSC.


Updated priority to High based on the 2020 Integrated Roadmap cycle. Added Concept Design and FERC filing phases to the timeline with anticipated FERC filing in Q2 2021. Next update at August Market Subcommittee.


Presented at the Market Subcommittee. Stakeholder feedback and MISO's responses was reviewed. Next update at the June Market Subcommittee.


Presented at the Market Subcommittee. Next update at the April 9 Market Subcommittee.


Added to the Active Work plan and given a Low priority as part of the 2019 Integrated Roadmap prioritization process. Frame and Evaluate phases added for 2020 before detailing a complete development schedule.


New Integrated Roadmap candidate.