Comments of Illinois Industrial Energy Consumers
on
CRS Proposal Filing Timeline
and
May 26, 2016 CRS Draft Business Rules
June 5, 2016
Thank you for giving Illinois Industrial Energy Consumers (IIEC) an opportunity to
submit these comments. IIEC previously submitted comments to the MISO Staff on its CRS
Proposal on April 22, April 26 and May 13, 2016.1 IIEC’s previous comments still stand with
respect to MISO’s CRS Proposal and nothing in these comments should be interpreted as
superseding those previous comments. As detailed in its previous comments, IIEC continues to
believe the MISO Staff’s CRS Proposal is unnecessary for either Southern Illinois or the broader
MISO footprint and would act to unduly subsidize generation resources at the expense of
consumers even when the capacity market is not tight.2 In the forgoing context, IIEC offers the
additional comments below on the MISO Staff’s current filing timeline for the CRS Proposal and
its May 26, 2016 Draft Business Rules for its CRS Proposal.
1
In addition to these comments, IIEC also provided its comments on the CRS as part of its presentation to the MISO RASC on April 14, 2016. 2
IIEC would also note that the recent announcements of planned generation suspensions and retirements in Southern Illinois have not changed its view on this matter. IIEC still believes the existing MISO Planning Resource Auction (PRA) will allow Auction Clearing Prices in Local Resource Zones 2 through 7 to continue to rise as the market gets tighter and that this will send the appropriate price signals for forward bilateral contracting, demand response, capacity export reductions from MISO and new generation entry. While IIEC still does not support the CRS Proposal (or the current proposal of the MISO Independent Market Monitor), IIEC does support limited reforms to the PRA including: (i) better collection and dissemination of forward looking information, (ii) allowing the Auction Clearing Price (ACP) to exceed the Cost of New Entry (CONE) and, if shown to be truly necessary, (iii) adjustments to the PRA to ensure the ACP trends toward CONE as the capacity market truly tightens. 1 CRS Proposal Filing Timeline
MISO Staff’s current target to file its CRS proposal with the Federal Energy Regulatory
Commission (FERC) on or about July 15th is overly optimistic given: (i) the current incomplete
state of the draft business rules, (ii) the fact that those draft business rules were just posted for
the first time four (4) business days ago and (iii) the ongoing negotiations between the MISO
Staff and the MISO Independent Market Monitor (IMM) that may lead to significant changes to
the MISO Staff CRS as it is currently proposed. As IIEC suggested in the Competitive Retail
Solution Task Team (CRSTT) discussions, great caution is required when making major market
design changes to help ensure that they will provide a net benefit to consumers and not cause
harm to them. Unnecessary haste should be avoided. In this light, the MISO Staff’s current CRS
Proposal timeline should be revisited during the upcoming June 13, 2016 MISO RASC
conference call and the timeline should be revised to provide sufficient time for the full detailed
development of the proposal and meaningful stakeholder review of that proposal.
May 26, 2016 CRS Draft Business Rules
As noted above, as of the date of these comments, the CRS draft business rules are
incomplete and have only been publicly posted for four (4) business days. As a result, IIEC can
only provide limited preliminary comments on them at this time. Furthermore, the lack of
comment on any aspect of the draft business rules should not be interpreted as agreement with
that aspect of the draft business rules. IIEC’s preliminary comments are as follows:

Sections 1.1 through 1.3 – As noted during the June 2nd MISO RASC meeting, the
proposed Bright-Line Test and Materiality Requirement may not meet FERC’s
requirements for comparability and the avoidance of undue discrimination. With respect
2 to the Bright Line Test, the test effectively assumes that all non-retail choice Load
Serving Entities (LSEs) meet their resource adequacy requirements through ownership of
capacity resources and/or through forward bilateral contracting three or more years in
advance. However, nothing in the current MISO Tariff requires non-retail choice LSEs
to actually meet their resource adequacy requirements in those ways. As a result, the
proposed Bright Line Test acts to unduly discriminate against retail choice LSEs. The
proposed test places requirements upon the retail choice LSEs that do not apply to nonretail choice LSEs who do not meet their resource adequacy requirements through
ownership of capacity resources and/or through forward bilateral contracting three or
more years in advance. With respect to the Materiality Requirement, as it is currently
proposed, the requirement acts to discriminate against retail choice LSEs in different
locations by treating them differently, not based on their own actions or their individual
impacts on resource adequacy, but based on whether or not they are located within a
geographic area of MISO with widespread retail choice.

Section 1.5.8 – This section fails to consider that certain loads have Peak Load
Contribution (PLC) values that significantly change from year-to-year. Furthermore,
retail choice LSEs are constantly adding and dropping retail customers which causes
additional year-to-year fluctuations in the sum of the PLCs of the customers that they
serve. Therefore, it is impractical to enforce a consecutive year Forward Fixed Resource
Adequacy Plan (FFRAP) requirement based on MW of demand.
While it appears
Section 1.5.9 is intended to address this issue, it may not be a practical solution due to the
large number of FFRAP downward adjustments that might be requested each year.
3 
Section 1.5.10 through 1.5.12 – To the extent an Electric Distribution Company (EDC)
is allowed to change the PLC for retail customers between the Fixed Resource Auction
(FRA) and the Planning Resource Auction (PRA), provisions will be necessary to ensure
that retail customers, who have Load Modifying Resource Demand Resources (LMR
DRs) that curtail down to a firm service level, have the Zonal Resource Credits (ZRCs)
associated with their LMR DR automatically adjusted to reflect the change in their PLC
so the difference between their PLC and their LMR DR ZRCs remains equal to their firm
service level.

Section 1.6 – This section does not reflect current MISO practices. Retail choice LSEs
no longer submit load forecasts to MISO. That function is performed by EDCs through
the PLC process in coordination with the retail choice LSEs.

Section 1.7 – As a general note with respect to the deadlines found throughout the draft
business rules, if transitional FRAs are intended by MISO as part of the implementation
of the CRS proposal, deadline dates for those will need to be added to the business rules.

Section 1.8 – This section is highly problematic as it requires resources that opt into the
PRA to effectively commit to participation in the FRA six years into the future (for their
initial year of participation, which is three years out, and then for the next three years
beyond that initial year of participation). This creates a large unnecessary risk for
resources who have the option to participate or not participate in the FRA that may
strongly discourage participation in the FRA by those resources. Also, this provision
acts to bifurcate resources between the FRA and PRA since non-retail choice LSE load is
4 prohibited from participating in the FRA and retail choice LSE load is prohibited from
participating in the PRA (except to the extent a retail choice LSE’s Planning Resource
Margin Requirement (PRMR) is modified from its cleared FRA value by Sections 1.5.8
through 1.5.12 of MISO’s CRS draft business rules).

Section 1.9 – Since the FRA is now not just for the local requirement of retail choice
LSEs, but instead for the entire resource requirement of retail choice LSEs, all capacity
resources within MISO should now be required to participate in the FRA unless they
have been granted a safe harbor exception. In addition, provisions need to be added to
properly reflect in the FRA the portion of a Local Resource Zone’s (LRZ’s) total local
requirement that will be met by resources located within that LRZ that have been granted
a safe harbor exception. This needs to be done to ensure the FRA and PRA, on a
combined basis, do not procure capacity from resources within that LRZ in excess of the
total local requirement of that LRZ, except to the extent capacity from resources within
that LRZ is offered at a price lower than that of capacity resources located outside of the
LRZ.

Section 1.10 through 1.14 – This section is incomplete and confusing. MISO needs to
justify why it is not allowing the Auction Clearing Price (ACP) in the FRA to exceed
CONE. If new generation needs to on average to be able to earn CONE over an extended
period of years, the price in the market needs to be able to rise above CONE in some
years because in other years it will most certainly be below CONE. In addition, MISO
needs to be clear on whether it is proposing to use Gross CONE or Net CONE. MISO
needs to define the price point for Point B of its downward sloping demand curve.
5 
Section 2.9 – The purpose of Sub Regional Resource Zones (SRRZ) is not clear.

Section 3.3 – This section of the draft needs to be completed before it can be commented
upon.

Section 4.6 – This section regarding the application of ZDC hedges in the FRA is
currently nothing more than a placeholder. Details need to be added on specifically how
the MISO Staff proposes to apply ZDC hedges in the FRA.

Sections 4.7.4 through 4.7.5 - This section is confusing and does not appear to be
consistent with Sections 1.5.10 through 1.5.13.
Thank you for giving IIEC an opportunity to submit these comments. If you have any questions
or concerns, please do not hesitate to contact:
Jim Dauphinais, Brubaker and Associates, Inc., (Consultant to IIEC):
[email protected]
(636) 898-6725
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